As filed with the Securities and Exchange Commission on May 14, 1997.
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TF Financial Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 74-2705050
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3 Penns Trail
Newtown, Pennsylvania 18940
(215) 579-4000
(Address of principal executive offices)
TF Financial Corporation
1997 Stock Option Plan
------------------------
(Full Title of the Plan)
Richard Fisch, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
(Name, address and telephone number of agent for service)
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Title of Proposed Max- Proposed Max- Amount of
Securities to Amount to imum Offering imum Aggregate Registration
be Registered be Registered Price Per Unit Offering Price (2) Fee (2)(3)
Common Stock
<S> <C> <C> <C> <C>
$.10 par value 240,000(1) $(2) $4,019,250 $1,217.84
==========================================================================================================
</TABLE>
(1) The maximum number of shares of common stock issuable upon exercise of
options granted or to be granted under the TF Financial Corporation 1997
Stock Option Plan consists of 240,000 shares which are being registered
under this Registration Statement and for which a registration fee is
being paid. Additionally, an indeterminate number of additional shares
which may be offered and issued to prevent dilution resulting from stock
splits, stock dividends or similar transactions are being registered
hereunder for which no additional fee is required.
(2) Under Rule 457(h) of the 1933 Act, the registration fee may be
calculated, inter alia, based upon the price at which the stock options
may be exercised. A total of 240,000 shares are being registered hereby,
of which 161,000 shares are under option at an exercise price of $16.50
per share ($2,656,500 in the aggregate). The remainder of such shares,
which are not presently subject to options (79,000 shares), are being
registered based upon the last reported sale price of the common stock
of TF Financial Corporation as reported on the Nasdaq National Market on
May 10, 1997, of $17.25 per share ($1,362,750 in the aggregate) for a
total offering of $4,019,250.
(3) Under Rule 462 of the 1933 Act, the Registration Statement on Form S-8
shall be effective upon filing with the Commission.
<PAGE>
** THIS DOCUMENT CONSTITUTES THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.**
PROSPECTUS
- ----------
240,000 Shares
--------------
TF FINANCIAL CORPORATION
COMMON STOCK
(Par Value $.10 Per Share)
--------------
TF FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
--------------
This Prospectus relates to 240,000 shares of common stock, par value
$.10 per share (the "Common Stock"), of TF Financial Corporation (the
"Company"), a Delaware corporation which is the savings and loan holding company
of Third Federal Savings Bank (the "Savings Bank"), which may be issued from
time to time by the Company to holders of Options granted or to be granted by
the Company to officers, employees and directors of the Company and any
subsidiary of the Company pursuant to the TF Financial Corporation 1997 Stock
Option Plan (the "Plan"). Holders of options granted or to be granted under the
Plan (the "Options") are referred to herein as "Optionees." Each offer made
under the Plan pursuant to this Prospectus is made at the price and on the terms
and conditions contained in the stock option agreements entered into between the
Company and each Optionee.
This Prospectus is for use as of the date hereof and in subsequent
years. Information which is likely to change from year to year will be included
in appendices to this Prospectus.
The issued and outstanding Common Stock of the Company is traded in the
over-the-counter market, and transactions are reported on the Nasdaq National
Market under the symbol "THRD". Shares of Common Stock which may be issued upon
exercise of Options granted or to be granted under the Plan, will also be traded
in over-the-counter market. On May 14, 1997, the last reported sales price of
the Common Stock in the National Market System was $17.25 per share.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is May 14, 1997
<PAGE>
No person has been authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the Common Stock
offered by this Prospectus or an offer to sell or a solicitation of an offer to
buy such Common Stock in any jurisdiction to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company or that the information contained herein is correct as of any time
subsequent to the date hereof.
<PAGE>
TABLE OF CONTENTS
TF Financial Corporation
1997 Stock Option Plan
Page
----
General Plan Information.......................................... 1
Administration.................................................... 2
Purpose........................................................... 2
Securities to be Offered.......................................... 2
Eligibility to Participate in Plan................................ 2
Term of the Plan................................................ 3
Stock Option Agreements......................................... 3
Option Price.................................................... 3
Limitations on Grant of Options................................. 4
Option Period................................................... 4
Non-transferability............................................. 4
Conditions of Exercise.......................................... 4
Payment for Options............................................. 5
Cashless Exercise............................................... 5
Issuance of Common Stock........................................ 5
Options Granted to Directors................................... 5
Dividend Equivalent Rights...................................... 6
Recapitalization, Merger, Consolidation, Change in
Control and Similar Transactions................................. 6
Amendment and Termination of the Plan............................. 7
Restrictions on Resale............................................ 7
Federal Income Tax Consequences................................... 8
Annual Report to Shareholders..................................... 9
Additional Information............................................ 9
Legal Opinion..................................................... 9
Appendix A........................................................ A-1
Administration.................................................. A-1
Number of Shares Subject to Plan................................ A-1
Participation in the Plan....................................... A-1
Outstanding Awards.............................................. A-1
<PAGE>
TF Financial Corporation
1997 Stock Option Plan
General Plan Information
- ------------------------
This Prospectus relates to 240,000 shares of the Common Stock, par value
$.10 per share, of TF Financial Corporation (the "Company"), which will be
offered upon exercise of options granted or to be granted under the Company's
1997 Stock Option Plan (the "Plan"). Holders of options granted or to be granted
under the Plan (the "Options") are referred to herein as "Optionees." Each offer
made under the Plan pursuant to this Prospectus is made at the price and on the
terms and conditions contained in the stock option agreements entered into
between the Company and each Optionee.
The Company was formed under the laws of the State of Delaware for the
purpose of becoming a savings and loan holding company and became the parent
corporation of Third Federal Savings Bank (the "Savings Bank") on July 13, 1994,
(the "Effective Date") at which time the Company acquired all of the shares of
capital stock of the Savings Bank. The Board of Directors of the Company adopted
the Plan at its meeting on January 21, 1997. The Plan is to continue in effect
for a period of ten years from the Effective Date (i.e., January 21, 2007),
unless earlier terminated or extended by the Company.
Pursuant to the Plan, 240,000 shares of Common Stock were reserved for
issuance by the Company upon exercise of Stock Options ("Options") awarded to
officers, employees and directors of the Company and the Bank. Options granted
under the Plan may be Incentive Stock Options within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code") or options not so
qualifying ("Non-Incentive Stock Option").
Subject to certain limitations, no gain or loss is recognized for
federal income tax purposes by the recipient of Options (the "Optionee") under
the Plan upon the exercise of an Incentive Stock Option, and no tax deduction is
available to the Company as a result of the exercise. Upon the exercise of a
Non-Incentive Stock Option, the Optionee generally recognizes ordinary income to
the extent that the exercise price is less than the fair market value of the
Common Stock on the date of exercise. The Company is entitled to a federal
income tax deduction equal to the amount of ordinary income recognized by the
Optionee at the time of such income recognition. See "Federal Income Tax
Consequences."
The Plan is not qualified under Section 401(a) of the Code and it is
exempt from the provisions of the Employee Retirement Income Security Act of
1974, as amended.
The statements herein concerning the terms and provisions of the Plan
are summaries and do not purport to be complete. All such statements are
qualified in their entirety by reference to the full text of the Plan document
as filed as Exhibit 4.1 to the Registration Statement of which this Prospectus
is a part.
Additional updating and other information with respect to the Plan and
the Common Stock offered hereby may be provided in the future to holders of
Options by means of one or more supplements or appendices to this Prospectus.
Additional information about the Plan (including a copy of the Plan), plan
administration, and the Company may be obtained at the Company's principal
offices, which are located at 3 Penns Trail, Newtown, Pennsylvania 18940. The
Company's telephone number is (215) 579-4000.
1
<PAGE>
Administration
- --------------
The Plan is administered by a committee of the Company's Board of
Directors (the "Committee"). The Plan provides that the Committee will consist
of not less than two non-employee directors of the Company. The members of the
Committee are appointed by the Board and serve at the pleasure of the Board.
Members of the Committee shall be "Non-employee Directors" within the meaning of
Rule 16b-3 promulgated under Rule 16(b) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"). A majority of the entire Committee shall constitute
a quorum, and the action of a majority of the members present at any meeting at
which a quorum is present shall be deemed the action of the Committee.
Subject to the express provisions of the Plan and resolutions adopted by
the Board, the Committee has authority to interpret the Plan, to prescribe,
amend, and rescind the rules and regulations relating to the Plan, and to
determine the form and content of Options to be issued under the Plan. In
addition, the Committee is authorized to make all other determinations deemed
necessary or advisable for the administration of the Plan and shall have and may
exercise such other power and such authority as may be delegated to it by the
Board from time to time. All decisions, determinations, and interpretations of
the Committee shall be final and conclusive to all persons affected thereby.
Additional information about the Plan and the Committee may be obtained
from the Company at the address of the Company listed under "General Plan
Information." For a list of the current members of the Committee, see
"Administration" at Appendix A.
Purpose
- -------
The purpose of the Plan is to promote the interests of the Company by
attracting and retaining the best available personnel for positions of
substantial responsibility to serve as officers, directors, and employees of the
Company and to provide additional incentive to such officers, directors, and
employees of the Company to promote the success of the Company's business.
Securities to be Offered
- ------------------------
The aggregate number of shares of Common Stock which may be issued
pursuant to Options granted or to be granted under the Plan is 240,000 shares,
subject to certain adjustments for changes in the capital structure of the
Company, as described below. See "Recapitalization, Merger, Consolidation,
Change in Control and Similar Transactions." Any shares subject to an Option
award under the Plan which expire or are terminated unexercised will again be
available for issuance under the Plan.
Eligibility to Participate in Plan
- ----------------------------------
Options to purchase Common Stock under the Plan may be awarded to
officers, directors, key employees, and other persons of the Company, the
Savings Bank, and any present or future parent or subsidiary corporations.
Incentive Stock Options may only be granted to employees of the Company, the
Savings Bank, and any of their parent or subsidiary corporations. In selecting
participants under the Plan (the "Participants") and in determining the number
of Options to be granted to each Participant, the Committee may consider the
nature of the services rendered by each Participant, each Participant's current
and potential contribution to the Company, and such other factors as the
Committee, in its sole discretion, shall deem relevant. In no event shall shares
subject to Options granted to non-employee
2
<PAGE>
directors in the aggregate under the Plan exceed 30% of the total number of
shares authorized for delivery under the Plan. See "Purchases of Securities
Pursuant to the Plan and Payment for Securities Offered - Options Granted to
Directors."
For a description of the number of persons currently eligible to
participate in the Plan and the number of persons actually participating in the
Plan, see "Participation in the Plan" at Appendix A.
Purchases of Securities Pursuant to the Plan and Payment for Securities Offered
Term of the Plan. The Plan was effective January 21, 1997, and unless
previously terminated, the Plan shall continue in effect for a term of ten
years, after which no further awards may be granted. The future expiration of
the Plan, or its termination by the Board, will not affect any Option previously
granted. Notwithstanding the foregoing, the granting of Incentive Stock Options,
in order to qualify as such under the Code, shall not be made beyond ten years
after the date of adoption of the Plan by the Company.
Stock Option Agreements. The Options granted under the Plan are
evidenced by stock option agreements (the "Option Agreements") substantially in
the form of the Option Agreements filed as exhibits to the Registration
Statement of which this Prospectus is a part. Each Option Agreement, and any
amendment thereto, will contain terms and conditions consistent with the
requirements of the Plan as the Committee shall determine. The Option Agreements
shall constitute the only form of reports which Participants shall receive
related to the status of Options granted or which are exercisable under the
Plan.
The Plan provides that the Board of Directors of the Company may
authorize the Committee to direct the execution of an instrument providing for
the modification of any outstanding Option, provided that no such modification,
extension or renewal shall confer on the Optionee any right or benefit which
could not be conferred by the grant of a new Option at such time, and shall not
materially decrease the Optionee's benefits under the Option without the
Optionee's consent, except as provided under Section 18 of the Plan, which
permits modification of the Plan. See "Amendment and Termination of the Plan."
Option Price. The exercise price for the purchase of shares subject to
an Incentive Stock Option at the date of grant may not be less than 100 percent
(100%) of the Fair Market Value of the shares covered by the Incentive Stock
Option on that date. If an Optionee owns Common Stock representing more than ten
percent of the outstanding Common Stock at the time an Incentive Stock Option is
granted, then the Option Price shall not be less than 110 percent (110%) of the
Fair Market Value of the Common Stock at the time the Incentive Stock Option is
granted. No more than $100,000 of Incentive Stock Options can become exercisable
for the first time in any one year for any one person. Pursuant to the Plan, the
exercise price per share for Non-Incentive Stock Options shall be the price as
determined by the Committee, but in no event less than the Fair Market Value of
the Common Stock on the date of grant. See "Options Granted to Directors" below.
The exercise price of Options must be paid for in full in cash or shares of
Common Stock, or a combination of both.
If the Common Stock is listed on a national securities exchange at the
time of granting an Option awarded pursuant to the Plan, then the exercise price
per share shall be not less than the average of the highest and lowest selling
price on such exchange on the date such Option is granted; or if there were no
sales on said date, then the price shall be not less than the mean between the
bid and ask price on such date. If the Common Stock is traded otherwise than on
a national securities exchange at the time of the
3
<PAGE>
granting of an Option, then the exercise price per share shall be not less than
the mean between the bid and ask price on the date the Option is granted or, if
there is no bid and ask price on said date, then on the next prior business day
on which there was a bid and ask price. If no such bid and ask price is
available, then the exercise price per share shall be determined by the
Committee in good faith.
Limitations on Grant of Options. Except as may be specifically provided
by the terms of the Plan, the granting of Options is made at the sole discretion
of the Committee. Further, the aggregate Fair Market Value of the Common Stock
for which an employee may be granted Options which become first exercisable in
any calendar year may not exceed $100,000. Notwithstanding the foregoing
limitation, the Committee may grant Options in excess of this limitation,
provided said Options are clearly and specifically designated as not being
Incentive Stock Options, as defined in Section 422 of the Code.
Option Period. The term of exercisability of an Option granted under the
Plan shall be established by the Committee, but may not be for more than ten
years from the date of grant of the Option, except in the case of an Optionee
who owns stock representing more than 10% of the Common Stock outstanding at the
time an Incentive Stock Option is granted, the term of the Incentive Stock
Option shall not exceed five years from the date of the grant. In general,
Options will not be exercisable after the expiration of their term as set forth
in the Plan and/or the Option Agreement.
In the event that an Optionee ceases to serve as an employee of the
Company for any reason other than permanent and total disability or death, an
exercisable Incentive Stock Option will generally continue to be exercisable for
three months but in no event after the expiration date of the Option. In the
event of the permanent and total disability or death of an Optionee during such
service, an exercisable Incentive Stock Option will continue to be exercisable
for one year in the case of disability and two years in the case of death, to
the extent exercisable by the Optionee immediately prior to his or her permanent
and total disability or death, but in no event after the expiration date of such
Options. The terms and conditions of Non-Incentive Stock Options relating to the
impact of an Optionee's termination of employment or service, permanent and
total disability or death shall be such terms as the Committee, in its sole
discretion, shall determine at the time of the grant of such Options in the
Option Agreement or upon termination, permanent and total disability, or death.
Under the Plan, the Committee's determination regarding whether an
Optionee's employment or service has ceased, and the effective date thereof
shall be final and conclusive on all persons affected thereby.
Non-transferability. No Option granted under the Plan is transferable
other than by will or the laws of descent and distribution.
Conditions of Exercise. Options may be exercised only during the periods
specified in the Plan or the Option Agreement, certain information as to which
is provided above (see "Option Period"). Except as described above and as may be
limited by an Option Agreement, there is no limitation upon the number of
Options that may be exercised in any one year, and Options not exercised in any
one year may be exercised in subsequent years over the term of the Option. The
Committee may impose additional conditions upon the rights of an Optionee to
exercise any Option which are not inconsistent with the terms of the Plan, and
in the case of Incentive Stock Options, not inconsistent with the requirements
for qualification under Section 422 of the Code. Incentive Stock Options will be
first exercisable at the rate of 20% following one year after the date of grant
and 20% annually thereafter, provided such individual remains an employee,
director or director emeritus; however, the exercisability
4
<PAGE>
of such Options shall be accelerated in the event of the death or permanent and
total disability of the Optionee, or a change in control in accordance with the
Plan. Such Options will remain exercisable for up to ten years from the date of
grant.
Payment for Options. Under the Plan, full payment for each share of
Common Stock purchased upon the exercise of any Option shall be made at the time
of exercise of such Option and shall be paid in cash (in United States dollars),
Common Stock, or a combination of cash and Common Stock. Common Stock utilized
in full or partial payment of the exercise price shall be valued at its fair
market value at the date of exercise. The Company shall accept full or partial
payment in Common Stock only to the extent permitted by applicable law. No
shares of Common Stock shall be issued until full payment has been received by
the Company, and no Optionee shall have any of the rights of a shareholder of
the Company until the shares of Common Stock are issued to him or her.
Cashless Exercise. An Optionee who has held an Option for at least six
months may engage in the "cashless exercise" of the Option. In a cashless
exercise, an Optionee gives the Company written notice of the exercise of the
Option together with an order to a registered broker-dealer or equivalent third
party, to sell part or all of the Optioned Stock and to deliver enough of the
proceeds to the Company to pay the Option exercise price and any applicable
withholding taxes. If the Optionee does not sell the Optioned Stock through a
registered broker-dealer or equivalent third party, he can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
Issuance of Common Stock. Shares issued to Optionees upon exercise of
Options shall be either newly issued shares of the Company, treasury shares or
shares purchased in the market, at the Company's discretion. In either case, the
Optionee shall not pay any fees, commissions, or other charges for such Common
Stock other than the exercise price as stated in the Option Agreement. Cash
proceeds from the sale of Common Stock issued pursuant to the exercise of
Options will be added to the general funds of the Company to be used for general
corporate purposes. Shares of Common Stock shall not be issued with respect to
any Option granted under the Plan unless the issuance and delivery of such
Common Stock shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended (the "1933 Act"), the
rules and regulations promulgated thereunder, any applicable state securities
law, and the requirements of any stock exchange upon which the Common Stock may
then be listed.
Inability of the Company to obtain approval from any regulatory body or
authority deemed by the Company or counsel thereto to be necessary for the
lawful issuance and sale of any Common Stock hereunder shall relieve the Company
of any liability with respect to the non-issuance or sale of such Common Stock.
As a condition to the exercise of an Option, the Company may require the person
exercising the Option to make such representations and warranties as may be
necessary to assure the availability of an exemption from any additional
registration requirements of federal or state securities laws.
Options Granted to Directors. Non-Incentive Stock Options to purchase
12,000 shares of Common Stock will be granted to each Director of the Company
who is not an Employee as of the Effective Date, at an exercise price equal to
the Fair Market Value of the Common Stock on such date of grant. Non-Incentive
Stock Options to purchase 8,000 shares of Common Stock will be granted to each
Director of the Savings Bank who is not otherwise a Director of the Company or
an Employee as of the Effective Date, at an exercise price equal to the Fair
Market Value of the Common Stock on such
5
<PAGE>
date of grant. The Options will be first exercisable at the rate of 20% on the
one year anniversary of the Effective Date and 20% annually thereafter during
such periods of service as a Director or Director Emeritus of the Company or the
Savings Bank. Such Options shall continue to be exercisable for a period of ten
years following the date of grant without regard to the continued services of
such Director as a Director or Director Emeritus. Notwithstanding the foregoing,
upon the death or Disability of the Director or Director Emeritus, such Options
shall be deemed immediately 100% exercisable and shall remain exercisable for a
period of three years from such date of death or Disability. In the event of the
Optionee's death, such Options may be exercised by the personal representative
of his estate or person or persons to whom his rights under such Option shall
have passed by will or by the laws of descent and distribution. Options may be
granted to newly appointed or elected non-employee Directors within the sole
discretion of the Committee. The exercise price per Share of such Options
granted shall be equal to the Fair Market Value of the Common Stock at the time
such Options are granted. All Options awarded as of the Effective Date shall
have Dividend Equivalent Rights associated with such Options. All outstanding
Awards shall become immediately exercisable in the event of a Change in Control
of the Savings Bank or the Company. Unless otherwise inapplicable, or
inconsistent with the provisions of this paragraph, the Options to be granted to
Directors hereunder shall be subject to all other provisions of this Plan.
Dividend Equivalent Rights. The Committee, in its sole discretion, may
include as a term of any Option, the right of the Optionee to receive Dividend
Equivalent Rights. Such rights shall provide that upon the payment of a dividend
on the Common Stock, the holder of such Options shall receive payment of
compensation in an amount equivalent to the dividend payable as if such Options
had been exercised and such Common Stock held as of the dividend record date.
Such rights shall expire upon the expiration or exercise of such underlying
Options. Such rights are non-transferable and shall attach to Options whether or
not such Options are immediately exercisable. The dividend equivalent payments
associated with Options shall be paid to the Option holder at the dividend
payment date of the Common Stock. All Options granted by the Committee to
Employees as of the Effective Date shall have Dividend Equivalent Rights
associated with such Options. All Options granted to non-employee Directors of
the Company or the Savings Bank as of the Effective Date shall have Dividend
Equivalent Rights associated with such Options.
Recapitalization, Merger, Consolidation, Change in Control, and Similar
Transactions
- --------------------------------------------------------------------------------
Subject to any required action by the shareholders of the Company,
within the sole discretion of the Committee, the aggregate number of shares of
Common Stock for which Options may be granted under the Plan, the number of
shares of Common Stock covered by each outstanding Option and the exercise price
per share of Common Stock of each Option shall be proportionately adjusted for
any increase or decrease in the number of issued and outstanding shares of
Common Stock resulting from a subdivision or consolidation of shares or the
payment of a stock dividend on the Common Stock or any other increase or
decrease in the number of such shares of Common Stock effected without a receipt
of consideration by the Company (other than by shares held by dissenting
stockholders).
In the event of any change in control, recapitalization, merger,
consolidation, exchange of shares, spin-off, reorganization, tender offer,
liquidation, or other extraordinary corporate action, the Committee, in its sole
discretion, shall have the power, prior to or subsequent to such action or
events, to (i) appropriately adjust the number of shares of Common Stock subject
to each Option, the exercise price per share of Common Stock, and the
consideration to be given or received by the Company upon the
6
<PAGE>
exercise of any outstanding Options; (ii) cancel any or all previously granted
Options, providing that appropriate consideration is paid to the Optionee in
connection therewith; and/or (iii) make such other adjustments in connection
with the Plan as the Committee, in its sole discretion, deems necessary,
desirable, appropriate, or advisable. However, no action may be taken by the
Committee which would cause Incentive Stock Options granted pursuant to the Plan
to fail to meet the requirements of Section 422 of the Code.
The Committee has at all times the power to accelerate the exercise date
of all Options granted under the Plan; provided, however, the exercisability of
such Options may be accelerated only in the event of death, permanent and total
disability, or change in control in accordance with the Plan. In the case of any
change in control of the Company as determined by the Committee, all outstanding
options shall become immediately exercisable. A change in control is defined in
the Plan as: (i) the sale of all, or a material portion, of the assets of the
Company; (ii) the merger or recapitalization of the Company whereby the Company
is not the surviving entity; (iii) a change of control of the Company as
otherwise defined by the Office of Thrift Supervision ("OTS") or its
regulations; and (iv) the acquisition, directly or indirectly, of the beneficial
ownership (within the meaning of Section 13(d) of the 1934 Act and rules and
regulations promulgated thereunder) of 25% or more of the outstanding voting
securities of the Company by any person, trust, entity or group. This limitation
shall not apply to a transaction in which the purchase of shares by underwriters
in connection with a public offering of Common Stock, or the purchase of shares
of up to 25% of any class of securities of the Company by a tax-qualified
employee stock benefit plan. The determination of the Committee as to whether a
change in control has occurred shall be conclusive and binding.
Amendment and Termination of the Plan
- -------------------------------------
The Board of Directors may alter, suspend, or discontinue the Plan,
except that no action of the Board may increase the maximum number of shares
permitted to be optioned under the Plan, materially increase the benefits
accruing to Participants under the Plan or materially modify the requirements
for eligibility for participation in the Plan unless such action of the Board
shall be subject to approval or ratification by the shareholders of the Company.
Unless otherwise terminated by the Board of Directors, the Plan shall continue
in effect for a term of ten years from the Effective Date, after which no future
awards of Options may be granted.
Restrictions on Resale
- ----------------------
Unless specifically included as a term and condition of any Option,
there are no restrictions on the resale of Common Stock acquired upon the
exercise of Options. The Plan permits the Committee to provide as a condition to
the exercise of an Option that the shares acquired upon the exercise of such
Options may be subject to a "Right of Repurchase" by the Company. At this time,
the Company has no intention to grant Options subject to such "Right of
Repurchase." Such shares of Common Stock, however, may be resold only in
compliance with the registration requirements of the 1933 Act, and applicable
state securities laws.
Under the 1933 Act, affiliates of the Company generally may resell
shares of Common Stock purchased pursuant to the Plan only (i) in accordance
with the provisions of Rule 144 under the 1933 Act, or (ii) pursuant to an
applicable current and effective registration statement under the 1933 Act.
7
<PAGE>
As defined in Rule 405 under the 1933 Act, an affiliate of the Company
is a person who directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with the Company. The
determination of whether a person is an affiliate of the Company is primarily a
factual one based upon whether he possesses, directly or indirectly,
individually or in concert with others, the power to direct or cause the
direction of the management or policies of the Company, whether through the
ownership of voting stock, by executive position, by membership on the Board, by
contract or otherwise. Therefore, each Optionee should consult his counsel
concerning whether he is an affiliate of the Company and the attendant
restrictions on the resale under the 1933 Act of Common Stock acquired pursuant
to the Plan.
In addition, the receipt of an Option to purchase Common Stock by an
officer or director of the Company, or the beneficial owner of 10% or more of
the outstanding Common Stock, is a reportable transaction under Section 16 of
the 1934 Act, and Forms 3, 4, or 5 are required to be filed with the Securities
and Exchange Commission in connection with such transaction. The sale by an
officer, director, or 10% holder of Common Stock issued upon an exercise of an
Option within six months after the receipt of such Option may create liability
of such persons to the Company under the "short-swing profit" provisions of
Section 16(b) of the 1934 Act.
Federal Income Tax Consequences
- -------------------------------
Under present federal tax laws, awards under the Plan will have the
following consequences:
1. The grant of an Option will not by itself result in the
recognition of taxable income to the Optionee nor entitle the
Company to a deduction at the time of such grant.
2. The exercise of an Option which is an "Incentive Stock Option"
within the meaning of Section 422 of the Code generally will not,
by itself, result in the recognition of taxable income to the
Optionee nor entitle the Company to a deduction at the time of
such exercise. However, the difference between the exercise price
and the fair market value of the Option shares on the date of
exercise is an item of tax preference which may, in certain
situations, trigger the alternative minimum tax for the Optionee.
The Optionee will recognize capital gain or loss upon resale of
the shares received upon such exercise, provided that such shares
are held for at least one year after the Option exercise or two
years after the grant of the Option, whichever is later.
Generally, if the shares are not held for that period, the
Optionee will recognize ordinary income upon disposition in an
amount equal to the difference between the exercise price and the
fair market value on the date of exercise, or, if less, the sales
proceeds of the shares acquired pursuant to the exercise of such
Option.
3. The exercise of a Non-Incentive Stock Option will result in the
recognition of ordinary income by the Optionee on the date of
exercise in an amount equal to the difference between the
exercise price and the fair market value, on the date of
exercise, of the shares acquired pursuant to the exercise of such
Option.
4. Receipt of income as a result of Dividend Equivalent Rights held
by an Optionee will be taxable as ordinary income when received.
8
<PAGE>
5.The Company will be allowed a tax deduction for federal tax purposes
equal to the amount of ordinary income recognized by an Optionee at
the time the Optionee recognizes such ordinary income under either an
Incentive Stock Option or a Non- Incentive Stock Option .
The foregoing provides a general summary of the federal income tax
consequences applicable to Optionees under the Plan. Each Optionee is urged to
consult his or her own tax advisor for information regarding applicable federal
and state tax consequences.
Annual Report to Shareholders
- -----------------------------
The Company's financial statements for the period ended December 31,
1996, as contained in the Company's Form 10-K are incorporated by reference in
the Registration Statement to which this Prospectus is a part. In the future,
the Company's latest Annual Report to Stockholders, including financial
statements, will be mailed to all stockholders of record as of the close of
business on such record date. Any person wishing to receive a copy of such
Annual Report may obtain a copy by writing the Company at the address set forth
above under "Additional Information."
Additional Information
- ----------------------
Additional updating information with respect to the Common Stock and the
Plan covered herein may be provided in the future to participants under the Plan
by means of appendices to this Prospectus. The nature and frequency of any
reports to be made to participants as to their participation in the Plan will be
determined by the Committee.
The Company upon written or oral request, will provide without charge to
any person to whom this Prospectus is delivered: a copy of the Plan, a copy of
its latest Annual Report to Stockholders (when available) and a copy of any and
all of the documents that have been incorporated by reference in Item 3 of Part
II of the Registration Statement of which this Prospectus is a part, and that
such documents are deemed incorporated by reference in this 1933 Act Section
10(a) Prospectus. Further, other documents required to be delivered to Plan
participants as specified in Item 9 of Part II of the Registration Statement are
available upon request. Any such request can be oral or in writing and should be
addressed to the Corporate Secretary, TF Financial Corporation, 3 Penns Trail,
Newtown, Pennsylvania 18940. The Registrant's telephone number is (215)
579-4000.
Legal Opinion
- -------------
The validity of the Common Stock offered hereby has been passed on for
the Company by Malizia, Spidi, Sloane & Fisch, P.C., 1301 K Street, N.W., Suite
700 East, Washington, D.C. 20005.
9
<PAGE>
APPENDIX A
ADDITIONAL INFORMATION CONCERNING
THE
TF FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
(As of May 14, 1997)
Administration
- --------------
The Board has appointed Directors Dusek, Olsen, and Gola as members of
the Committee responsible for administration of the 1997 Stock Option Plan
("Plan").
Number of Shares Subject to Plan
- --------------------------------
On January 21, 1997, Options covering 161,000 shares of the Common Stock
were outstanding, which were granted at an exercise price of $16.50 per share.
As of the date of this Appendix, 240,000 shares of Common Stock remain issuable
under the Plan, which provides for the issuance of Options for a total of
240,000 shares of Common Stock.
Participation in the Plan
- -------------------------
As of April 30 , 1997, the Company and its subsidiaries had
approximately 157 employees who, in the opinion of the Company's management, are
eligible to participate in the Plan. Of such persons, as of April 30, 1997, five
executive officers of the Company and the Bank and seven non-employee members of
the Board of the Company and the Bank held Options to purchase Common Stock
under the Plan.
Outstanding Awards
- ------------------
The following table presents information with respect to the outstanding
Options under the Plan as of the date of this Appendix A.
<TABLE>
<CAPTION>
Number of Shares Presently Number of Persons Exercise Price
Grant Date Subject to Options Holding Awards Per Share
- ------------------------- -------------------------- ----------------- --------------
<S> <C> <C> <C>
January 21, 1997 161,000 12 $16.50
Total Awards Outstanding 161,000 12 $16.50
</TABLE>
A-1
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
- --------------------------------------------------------
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and, accordingly, files
periodic reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements, and other information
concerning the Company filed with the Commission may be inspected and copies may
be obtained (at present rates) at the Commission's Public Reference Section,
Room 1024, 450 Fifth Street, N.W., Washington, DC 20549.
The following documents filed with the Commission are
incorporated by reference in the Registration Statement and the Prospectus
constituting Part I of such Registration Statement:
(1) The Company's Registration Statement on Form S-1 (No. 33-76960) filed
with the Commission on March 28, 1994 and amendments thereto;
(2) The Company's Annual Report on Form 10-K filed with the Commission for
the fiscal ended December 31, 1996, as filed with the Commission;
(3) The Company's Definitive Proxy Statement related to the 1997 Annual
Meeting of Stockholders as filed with the Commission on;
(4) The Company's Registration Statement on Form 8-A as filed with the
Commission on March 16, 1994;
(5) Information as to the Options which will be included in the future
either in the Company's proxy statements, annual reports or appendices to this
Prospectus.
All documents filed by the Company pursuant to Sections 13, 14, or 15(d)
of the Securities Exchange Act of 1934 after the date hereof and prior to the
termination of the offering of the shares of Common Stock shall be deemed to be
incorporated by reference in this Registration Statement herein and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
- -----------------------------------
Not applicable because the Company's Common Stock is registered under
Section 12 of the 1934 Act.
Item 5. Interests of Named Experts and Counsel.
- ------------------------------------------------
Not applicable.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers.
- ---------------------------------------------------
Section 145 of the Delaware General Corporation Law authorizes a
corporation such as the registrant to indemnify officers, directors, employees,
and agents under certain circumstances. Section 145 requires indemnification of
directors, officers, employees, and agents who have been successful on the
merits or otherwise in defense of certain actions, suits, proceedings claims,
issues, and matters. Article XVIII of the registrant's Certificate of
Incorporation provides for indemnification.
Section 102(b)(7) of the Delaware General Corporation Law allows for the
limitation of liability of directors. Article XVII of the registrant's
Certificate of Incorporation provides for the limitation of liability of
directors.
The registrant believes that these provisions assist the registrant in,
among other things, attracting and retaining qualified persons to serve the
registrant and its subsidiary. However, a result of such provisions could be to
increase the expenses of the registrant and effectively reduce the ability of
stockholders to sue on behalf of the registrant because certain suits could be
barred or amounts that might otherwise be obtained on behalf of the registrant
could be required to be repaid by the registrant to an indemnified party.
Additionally, the Company has in force a Directors and Officers
Liability Policy underwritten by St. Paul Mercury Insurance Co. with a $7.5
million aggregate limit of liability and an aggregate deductible of $100,000 per
loss both for claims directly against officers and directors and for claims
where the Company is required to indemnify directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933 Act") may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is
therefore unenforceable.
Item 7. Exemption from Registration Claimed.
- ---------------------------------------------
Not applicable since no restricted securities within the meaning of Rule
144 of the Securities Act of 1933 will be reoffered or resold pursuant to this
Registration Statement.
Item 8. Exhibits
- -----------------
For a list of all exhibits filed or included as part of this
Registration Statement, see "Index to Exhibits" at the end of this Registration
Statement.
Item 9. Undertakings
- ---------------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
II-2
<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;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do no apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(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) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any delayed
offering or throughout a continuous offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) 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 1933 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,
II-3
<PAGE>
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 expressed in the 1933 Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, TF Financial
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing a Registration Statement 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 Newtown and the
Commonwealth of Pennsylvania, on the 14th day of May 1997.
TF Financial Corporation
By: /s/John R. Stranford
------------------------------------
John R. Stranford
President and Chief Executive Officer
(Duly Authorized Representative)
<PAGE>
POWER OF ATTORNEY
We, the undersigned directors and officers of TF Financial Corporation,
do hereby severally constitute and appoint John R. Stranford our true and lawful
attorney and agent, to do any and all things and acts in our names in the
capacities indicated below and to execute any and all instruments for us and in
our names in the capacities indicated below which said John R. Stranford may
deem necessary or advisable to enable TF Financial Corporation to comply with
the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
Registration Statement on Form S-8 relating to the offering of the Company's
Common Stock, including specifically, but not limited to, power and authority to
sign for us or any of us in our names in the capacities indicated below the
Registration Statement and any and all amendments (including post-effective
amendments) thereto; and we hereby ratify and confirm all that said John R.
Stranford shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
/s/John R. Stranford May 14, 1997 /s/Robert N. Dusek May 14, 1997
- -------------------------------- --------------------- ------------------------------------- ----------------
John R. Stranford Date Robert N. Dusek Date
President and Chief Executive Officer Chairman of the Board
(Principal Executive Officer) and Director
/s/Carl F. Gregory May 14, 1997 /s/George A. Olsen May 14, 1997
- -------------------------------- --------------------- -------------------------------------- ---------------
Carl F. Gregory Date George A. Olsen Date
Director Director
/s/Thomas J. Gola May 14, 1997 /s/William C. Niemczura May 14, 1997
- -------------------------------- --------------------- ------------------------------------ ----------------
Thomas J. Gola Date William C. Niemczura Date
Director Senior Vice President
(Principal Financial and Accounting Officer)
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit Description Page
4.1 TF Financial Corporation __
1997 Stock Option Plan
4.2 Form of Stock Option Agreement to be entered into __
with Optionees with respect to Stock Options
5.1 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the __
validity of the Common Stock being registered
23.1 Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears __
in their opinion filed as Exhibit 5.1)
23.2 Consent of Independent Accountants
24 Reference is made to the Signatures section of this __
Registration Statement for the Power of Attorney
contained therein
</TABLE>
EXHIBIT 4.1
TF Financial Corporation
1997 Stock Option Plan
<PAGE>
Exhibit A
TF FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
1. Purpose of the Plan. The Plan shall be known as the TF Financial
Corporation ("Company") 1997 Stock Option Plan (the "Plan"). The purpose of the
Plan is to attract and retain qualified personnel for positions of substantial
responsibility and to provide additional financial incentives to employees,
officers and directors providing services to the Company, or any present or
future parent or subsidiary of the Company to promote the success of the
business. The Plan is intended to provide for the grant of "Incentive Stock
Options," within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") and Non-Incentive Stock Options, options that do
not so qualify. The provisions of the Plan relating to Incentive Stock Options
shall be interpreted to conform to the requirements of Section 422 of the Code.
2. Definitions. The following words and phrases when used in this Plan with
an initial capital letter, unless the context clearly indicates otherwise, shall
have the meaning as set forth below. Wherever appropriate, the masculine pronoun
shall include the feminine pronoun and the singular shall include the plural.
(a) "Award" means the grant by the Committee of an Incentive Stock
Option or a Non-Incentive Stock Option, or any combination thereof, as provided
in the Plan.
(b) "Board" shall mean the Board of Directors of the Company, or any
successor or parent corporation thereto.
(c) "Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Company; (ii) the merger or recapitalization of
the Company whereby the Company is not the surviving entity; (iii) a change in
control of the Company, as otherwise defined or determined by the Office of
Thrift Supervision or regulations promulgated by it; or (iv) the acquisition,
directly or indirectly, of the beneficial ownership (within the meaning of that
term as it is used in Section 13(d) of the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder) of twenty-five percent (25%)
or more of the outstanding voting securities of the Company by any person,
trust, entity or group. This limitation shall not apply to the purchase of
shares by underwriters in connection with a public offering of Company stock, or
the purchase of shares of up to 25% of any class of securities of the Company by
a tax-qualified employee stock benefit plan which is exempt from the approval
requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in effect or
as may hereafter be amended. The term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a Change
in Control has occurred shall be conclusive and binding.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder.
(e) "Committee" shall mean the Board or the Stock Option Committee
appointed by the Board in accordance with Section 5(a) of the Plan.
(f) "Common Stock" shall mean the common stock of the Company, or any
successor or parent corporation thereto.
(g) "Continuous Employment" or "Continuous Status as an Employee"
shall mean the absence of any interruption or termination of employment with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave
<PAGE>
of absence approved by the Company or in the case of transfers between payroll
locations, of the Company or between the Company, its Parent, its Subsidiaries
or a successor.
(h) "Company" shall mean the TF Financial Corporation, the parent
corporation of the Savings Bank, or any successor or Parent thereof.
(i) "Director" shall mean a member of the Board of the Company, or any
successor or parent corporation thereto.
(j) "Director Emeritus" shall mean a person serving as a director
emeritus, advisory director, consulting director, or other similar position as
may be appointed by the Board of Directors of the Savings Bank or the Company
from time to time.
(k) "Disability" means (a) with respect to Incentive Stock Options,
the "permanent and total disability" of the Employee as such term is defined at
Section 22(e)(3) of the Code; and (b) with respect to Non-Incentive Stock
Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Savings Bank or the
Parent in his then current capacity as determined by the Committee.
(l) "Dividend Equivalent Rights" shall mean the rights to receive a
cash payment in accordance with Section 12 of the Plan.
(m) "Effective Date" shall mean the date specified in Section 15
hereof.
(n) "Employee" shall mean any person employed by the Company or any
present or future Parent or Subsidiary of the Company.
(o) "Fair Market Value" shall mean: (i) if the Common Stock is traded
otherwise than on a national securities exchange, then the Fair Market Value per
Share shall be equal to the last reported sale price of the Common Stock on the
date of valuation or the date of grant of an option, or if no such sale is
reported on such date than the mean between the last bid and ask price of such
Common Stock on such date or, if there is no bid and ask price on said date,
then on the immediately prior business day on which there was a sale or bid and
ask price. If no such sale or bid and ask price is available, then the Fair
Market Value shall be determined by the Committee in good faith; or (ii) if the
Common Stock is listed on a national securities exchange, then the Fair Market
Value per Share shall be not less than the average of the highest and lowest
selling price of such Common Stock on such valuation date, or if there were no
sales on said date, then the Fair Market Value shall be not less than the mean
between the last bid and ask price on such date. Notwithstanding the foregoing,
for transactions under the Plan occurring prior to the commencement of trading
on a business day, the Fair Market Value shall be determined based upon
information reported at the closing of the prior business day.
(p) "Incentive Stock Option" or "ISO" shall mean an option to purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and restrictions of Section 8 hereof and is intended to qualify
as an incentive stock option under Section 422 of the Code.
(q) "Non-Incentive Stock Option" or "Non-ISO" shall mean an option to
purchase Shares granted pursuant to Section 9 hereof, which option is not
intended to qualify under Section 422 of the Code.
(r) "Option" shall mean an Incentive Stock Option or Non-Incentive
Stock Option granted pursuant to this Plan providing the holder of such Option
with the right to purchase Common Stock.
(s) "Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.
(t) "Optionee" shall mean any person who receives an Option or Award
pursuant to the Plan.
<PAGE>
(u) "Parent" shall mean any present or future corporation which would
be a "parent corporation" as defined in Sections 424(e) and (g) of the Code.
(v) "Participant" means any employee, officer or director of the
Company or any Parent or Subsidiary of the Company who is selected by the
Committee to receive an Award, or who by the express terms of the Plan is
granted an Award.
(w) "Plan" shall mean the TF Financial Corporation 1997 Stock Option
Plan.
(x) "Savings Bank" shall mean Third Federal Savings Bank, Newtown,
Pennsylvania, or any successor corporation thereto.
(y) "Share" shall mean one share of the Common Stock.
(z) "Subsidiary" shall mean any present or future corporation which
constitutes a "subsidiary corporation" as defined in Sections 424(f) and (g) of
the Code.
3. Shares Subject to the Plan. Except as otherwise required by the
provisions of Section 13 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 240,000 Shares.
Such Shares may either be from authorized but unissued shares or shares
purchased in the market for Plan purposes.
If an Award shall expire, become unexercisable, or be forfeited for any
reason prior to its exercise, new Awards may be granted under the Plan with
respect to the number of Shares as to which such expiration has occurred.
4. Six Month Holding Period.
Subject to vesting requirements, if applicable, except in the event of
death or disability of the Optionee, a minimum of six months must elapse between
the date of the grant of an Option and the date of the sale of the Common Stock
received through the exercise of such Option.
5. Administration of the Plan.
(a) Composition of the Committee. The Plan shall be administered by
the Board of Directors of the Company or a Committee which shall consist of not
less than two Directors of the Company appointed by the Board and serving at the
pleasure of the Board. All persons designated as members of the Committee shall
meet the requirements of a "Non-Employee Director" within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended, as found at 17 CFR
ss.240.16b-3.
(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration of the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no event may the
Committee revoke outstanding Awards without the consent of the Participant.
<PAGE>
The President of the Company and such other officers as shall be
designated by the Committee are hereby authorized to execute written agreements
evidencing Awards on behalf of the Company and to cause them to be delivered to
the Participants. Such agreements shall set forth the Option exercise price, the
number of shares of Common Stock subject to such Option, the expiration date of
such Options, and such other terms and restrictions applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
6. Eligibility for Awards and Limitations.
(a) The Committee shall from time to time determine the
employees, officers and Directors of the Company and the Subsidiaries who shall
be granted Awards under the Plan, the number of Awards to be granted to each
such persons, and whether Awards granted to each such Participant under the Plan
shall be Incentive and/or Non-Incentive Stock Options. In selecting Participants
and in determining the number of Shares of Common Stock to be granted to each
such Participant, the Committee may consider the nature of the prior and
anticipated future services rendered by each such Participant, each such
Participant's current and potential contribution to the Company and such other
factors as the Committee may, in its sole discretion, deem relevant.
Participants who have been granted an Award may, if otherwise eligible, be
granted additional Awards.
(b) The aggregate Fair Market Value (determined as of the date
the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by each Employee during any calendar
year (under all Incentive Stock Option plans, as defined in Section 422 of the
Code, of the Company or any present or future Parent or Subsidiary of the
Company) shall not exceed $100,000. Notwithstanding the prior provisions of this
Section 6, the Committee may grant Options in excess of the foregoing
limitations, provided said Options shall be clearly and specifically designated
as not being Incentive Stock Options.
(c) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 30% of
the total number of Shares authorized for delivery under this Plan pursuant to
Section 3 herein or more than 5% to any individual non-employee Director. In no
event shall Shares subject to Options granted to any Employee exceed more than
25% of the total number of Shares authorized for delivery under the Plan.
7. Term of the Plan. The Plan shall continue in effect for a term of ten
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18 hereof. No Option shall be granted under the Plan after ten (10) years from
the Effective Date.
8. Terms and Conditions of Incentive Stock Options. Incentive Stock Options
may be granted only to Participants who are Employees. Each Incentive Stock
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each Incentive Stock
Option granted pursuant to the Plan shall comply with, and be subject to, the
following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive Stock Option
granted by the Committee under the Plan may be exercised shall not, as to any
particular Incentive Stock Option, be less than the Fair Market Value of the
Common Stock on the date that such Incentive Stock Option is granted.
(ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding Common Stock at the
time the Incentive Stock Option is granted, the Incentive Stock Option exercise
<PAGE>
price shall not be less than one hundred and ten percent (110%) of the Fair
Market Value of the Common Stock on the date that the Incentive Stock Option is
granted.
(b) Payment. Full payment for each Share of Common Stock purchased
upon the exercise of any Incentive Stock Option granted under the Plan shall be
made at the time of exercise of each such Incentive Stock Option and shall be
paid in cash (in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at the Fair Market Value at the date of exercise.
The Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No Shares of Common Stock shall be issued
until full payment has been received by the Company, and no Optionee shall have
any of the rights of a stockholder of the Company until Shares of Common Stock
are issued to the Optionee.
(c) Term of Incentive Stock Option. The term of exercisability of each
Incentive Stock Option granted pursuant to the Plan shall be not more than ten
(10) years from the date each such Incentive Stock Option is granted, provided
that in the case of an Employee who owns stock representing more than ten
percent (10%) of the Common Stock outstanding at the time the Incentive Stock
Option is granted, the term of exercisability of the Incentive Stock Option
shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in Section 10
hereof, no Incentive Stock Option may be exercised unless the Optionee shall
have been in the employ of the Company at all times during the period beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3) months prior to the date of exercise of any such Incentive Stock
Option. The Committee may impose additional conditions upon the right of an
Optionee to exercise any Incentive Stock Option granted hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by action of the Committee at the time of the grant of the Options, the
Options will be first exercisable at the rate of 20% on the one year anniversary
of the date of grant and 20% annually thereafter during such periods of service
as an Employee, Director or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held an Incentive Stock Option for at least six months may
engage in the "cashless exercise" of the Option. Upon a cashless exercise, an
Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(f) Transferability. An Incentive Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
9. Terms and Conditions of Non-Incentive Stock Options. Each Non-Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Non-Incentive
Stock Option granted pursuant to the Plan shall comply with and be subject to
the following terms and conditions.
(a) Options Granted to Directors. Subject to the limitations of
Section 6(c), Non-Incentive Stock Options to purchase 12,000 shares of Common
Stock will be granted to each Director of the Company who is not an Employee as
of the Effective Date, at an exercise price equal to the Fair Market Value of
the Common Stock on such date of grant. Non-Incentive Stock Options to purchase
8,000 shares of Common Stock will be granted to each Director of the Savings
<PAGE>
Bank who is not otherwise a Director of the Company or an Employee as of the
Effective Date, at an exercise price equal to the Fair Market Value of the
Common Stock on such date of grant. The Options will be first exercisable at the
rate of 20% on the one year anniversary of the Effective Date and 20% annually
thereafter during such periods of service as a Director or Director Emeritus of
the Company or the Savings Bank. Such Options shall continue to be exercisable
for a period of ten years following the date of grant without regard to the
continued services of such Director as a Director or Director Emeritus.
Notwithstanding the foregoing, upon the death or Disability of the Director or
Director Emeritus, such Options shall be deemed immediately 100% exercisable and
shall remain exercisable for a period of three years from such date of death or
Disability. In the event of the Optionee's death, such Options may be exercised
by the personal representative of his estate or person or persons to whom his
rights under such Option shall have passed by will or by the laws of descent and
distribution. Options may be granted to newly appointed or elected non-employee
Directors within the sole discretion of the Committee. The exercise price per
Share of such Options granted shall be equal to the Fair Market Value of the
Common Stock at the time such Options are granted. All Options awarded in
accordance with this Section 9(a) as of the Effective Date shall have Dividend
Equivalent Rights associated with such Options, as detailed at Section 12
herein. All outstanding Awards shall become immediately exercisable in the event
of a Change in Control of the Savings Bank or the Company. Unless otherwise
inapplicable, or inconsistent with the provisions of this paragraph, the Options
to be granted to Directors hereunder shall be subject to all other provisions of
this Plan.
(b) Option Price. The exercise price per Share of Common Stock for
each Non-Incentive Stock Option granted pursuant to the Plan shall be at such
price as the Committee may determine in its sole discretion, but in no event
less than the Fair Market Value of such Common Stock on the date of grant as
determined by the Committee in good faith.
(c) Payment. Full payment for each Share of Common Stock purchased
upon the exercise of any Non-Incentive Stock Option granted under the Plan shall
be made at the time of exercise of each such Non-Incentive Stock Option and
shall be paid in cash (in United States Dollars), Common Stock or a combination
of cash and Common Stock. Common Stock utilized in full or partial payment of
the exercise price shall be valued at its Fair Market Value at the date of
exercise. The Company shall accept full or partial payment in Common Stock only
to the extent permitted by applicable law. No Shares of Common Stock shall be
issued until full payment has been received by the Company and no Optionee shall
have any of the rights of a stockholder of the Company until the Shares of
Common Stock are issued to the Optionee.
(d) Term. The term of exercisability of each Non-Incentive Stock
Option granted pursuant to the Plan shall be not more than ten (10) years from
the date each such Non-Incentive Stock Option is granted.
(e) Exercise Generally. The Committee may impose additional conditions
upon the right of any Participant to exercise any Non-Incentive Stock Option
granted hereunder which is not inconsistent with the terms of the Plan. Except
as otherwise provided by the terms of the Plan or by action of the Committee at
the time of the grant of the Options, the Options will be first exercisable at
the rate of 20% on the one year anniversary of the date of grant and 20%
annually thereafter during such periods of service as an Employee, Director or
Director Emeritus.
(f) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held a Non-Incentive Stock Option for at least six months
may engage in the "cashless exercise" of the Option. Upon a cashless exercise,
an Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
<PAGE>
(g) Transferability. Any Non-Incentive Stock Option granted pursuant
to the Plan shall be exercised during an Optionee's lifetime only by the
Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
10. Effect of Termination of Employment, Disability or Death on Incentive
Stock Options.
(a) Termination of Employment. In the event that any Optionee's
employment with the Company shall terminate for any reason, other than
Disability or death, all of any such Optionee's Incentive Stock Options, and all
of any such Optionee's rights to purchase or receive Shares of Common Stock
pursuant thereto, shall automatically terminate on (A) the earlier of (i) or
(ii): (i) the respective expiration dates of any such Incentive Stock Options,
or (ii) the expiration of not more than three (3) months after the date of such
termination of employment; or (B) at such later date as is determined by the
Committee at the time of the grant of such Award based upon the Optionee's
continuing status as a Director or Director Emeritus of the Savings Bank or the
Company, but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of such termination of
employment, and further that such Award shall thereafter be deemed a
Non-Incentive Stock Option. In the event that a Subsidiary ceases to be a
Subsidiary of the Company, the employment of all of its employees who are not
immediately thereafter employees of the Company shall be deemed to terminate
upon the date such Subsidiary so ceases to be a Subsidiary of the Company.
(b) Disability. In the event that any Optionee's employment with the
Company shall terminate as the result of the Disability of such Optionee, such
Optionee may exercise any Incentive Stock Options granted to the Optionee
pursuant to the Plan at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment.
(c) Death. In the event of the death of an Optionee, any Incentive
Stock Options granted to such Optionee may be exercised by the person or persons
to whom the Optionee's rights under any such Incentive Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 10(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage of a specified period of time. At the discretion of the Committee, upon
exercise of such Options the Optionee may receive Shares or cash or a
combination thereof. If cash shall be paid in lieu of Shares, such cash shall be
equal to the difference between the Fair Market Value of such Shares and the
exercise price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes of
Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee shall be considered exercisable at the date of termination of
employment if any such Incentive Stock Option would have been exercisable at
such date of termination of employment without regard to the Disability or death
of the Participant.
(e) Termination of Incentive Stock Options. Except as may be specified
by the Committee at the time of grant of an Option, to the extent that any
Incentive Stock Option granted under the Plan to any Optionee whose employment
with the Company terminates shall not have been exercised within the applicable
period set forth in this Section 10, any such Incentive Stock Option, and all
rights to purchase or receive Shares of Common Stock pursuant thereto, as the
case may be, shall terminate on the last day of the applicable period.
<PAGE>
11. Effect of Termination of Employment, Disability or Death on
Non-Incentive Stock Options. The terms and conditions of Non-Incentive Stock
Options relating to the effect of the termination of an Optionee's employment or
service, Disability of an Optionee or his death shall be such terms and
conditions as the Committee shall, in its sole discretion, determine at the time
of termination of service, unless specifically provided for by the terms of the
Agreement at the time of grant of the Award.
12. Dividend Equivalent Rights. The Committee, in its sole discretion, may
include as a term of any Option, the right of the Optionee to receive Dividend
Equivalent Rights. Such rights shall provide that upon the payment of a dividend
on the Common Stock, the holder of such Options shall receive payment of
compensation in an amount equivalent to the dividend payable as if such Options
had been exercised and such Common Stock held as of the dividend record date.
Such rights shall expire upon the expiration or exercise of such underlying
Options. Such rights are non-transferable and shall attach to Options whether or
not such Options are immediately exercisable. The dividend equivalent payments
associated with Options shall be paid to the Option holder at the dividend
payment date of the Common Stock. All Options granted by the Committee to
Employees as of the Effective Date shall have Dividend Equivalent Rights
associated with such Options. All Options granted to non-employee Directors of
the Company or the Savings Bank as of the Effective Date in accordance Section
9(a) of the Plan shall have Dividend Equivalent Rights associated with such
Options.
13. Recapitalization, Merger, Consolidation, Change in Control and Other
Transactions.
(a) Adjustment. Subject to any required action by the stockholders of
the Company, within the sole discretion of the Committee, the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number
of Shares of Common Stock covered by each outstanding Option, and the exercise
price per Share of Common Stock of each such Option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt or payment of consideration by the Company (other
than Shares held by dissenting stockholders).
(b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a Change in Control of the Company, as determined by
the Committee. In the event of such a Change in Control, the Committee and the
Board of Directors will take one or more of the following actions to be
effective as of the date of such Change in Control:
(i) provide that such Options shall be assumed, or equivalent options
shall be substituted, ("Substitute Options") by the acquiring or succeeding
corporation (or an affiliate thereof), provided that: (A) any such Substitute
Options exchanged for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, and (B) the shares of stock issuable upon the
exercise of such Substitute Options shall constitute securities registered in
accordance with the Securities Act of 1933, as amended, ("1933 Act") or such
securities shall be exempt from such registration in accordance with Sections
3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered Securities"), or
in the alternative, if the securities issuable upon the exercise of such
Substitute Options shall not constitute Registered Securities, then the Optionee
will receive upon consummation of the Change in Control transaction a cash
payment for each Option surrendered equal to the difference between (1) the Fair
Market Value of the consideration to be received for each share of Common Stock
in the Change in Control transaction times the number of shares of Common Stock
subject to such surrendered Options, and (2) the aggregate exercise price of all
such surrendered Options, or
(ii) in the event of a transaction under the terms of which the
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment (the "Merger Price") for each share of Common Stock
exchanged
<PAGE>
in the Change in Control transaction, to make or to provide for a cash payment
to the Optionees equal to the difference between (A) the Merger Price times the
number of shares of Common Stock subject to such Options held by each Optionee
(to the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such surrendered Options in exchange for
such surrendered Options.
(c) Extraordinary Corporate Action. Notwithstanding any provisions of
the Plan to the contrary, subject to any required action by the stockholders of
the Company, in the event of any Change in Control, recapitalization, merger,
consolidation, exchange of Shares, spin-off, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or
event, the Committee, in its sole discretion, shall have the power, prior or
subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common Stock
subject to each Option, the Option exercise price per Share of Common Stock, and
the consideration to be given or received by the Company upon the exercise of
any outstanding Option;
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
(iii) make such other adjustments in connection with the Plan
as the Committee, in its sole discretion, deems necessary, desirable,
appropriate or advisable; provided, however, that no action shall be taken by
the Committee which would cause Incentive Stock Options granted pursuant to the
Plan to fail to meet the requirements of Section 422 of the Code without the
consent of the Optionee.
(d) Acceleration. The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan.
(e) Non-recurring Dividends. Upon the payment of a special or
non-recurring cash dividend that has the effect of a return of capital to the
stockholders, the Option exercise price per share shall be adjusted
proportionately, except to the extent that the Participant shall otherwise
receive payments associated with Dividend Equivalent Rights attributable to such
Options with regard to such special or non-recurring cash dividends.
Except as expressly provided in Sections 13(a), 13(b) and 13(e) hereof, no
Optionee shall have any rights by reason of the occurrence of any of the events
described in this Section 13.
14. Time of Granting Options. The date of grant of an Option under the Plan
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
15. Effective Date. The Plan shall become effective upon the date of
approval and adoption of the Plan by the Board of the Company, subject to
ratification of the Plan by the stockholders of the Company. The Committee may
make a determination related to Awards as of the Effective Date.
16. Ratification by Stockholders. The Plan shall be ratified by stockholders
of the Company within twelve (12) months before or after the date the Plan is
approved by the Board.
17. Modification of Options. At any time and from time to time, the Board
may authorize the Committee to direct the execution of an instrument providing
for the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be
<PAGE>
conferred on the Optionee by the grant of a new Option at such time, or shall
not materially decrease the Optionee's benefits under the Option without the
consent of the holder of the Option, except as otherwise permitted under Section
18 hereof.
18. Amendment and Termination of the Plan.
(a) Action by the Board. The Board may alter, suspend or discontinue
the Plan, except that no action of the Board may increase (other than as
provided in Section 13 hereof) the maximum number of Shares permitted to be
optioned under the Plan, materially increase the benefits accruing to
Participants under the Plan or materially modify the requirements for
eligibility for participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Company.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part of any
previously granted Option unlawful or subject the Company to any penalty, the
Committee may restrict any such exercise without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.
19. Conditions Upon Issuance of Shares; Limitations on Option Exercise;
Cancellation of Option Rights.
(a) Shares shall not be issued with respect to any Option granted under the
Plan unless the issuance and delivery of such Shares shall comply with all
relevant provisions of applicable law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed.
(b) The inability of the Company to obtain any necessary authorizations,
approvals or letters of non-objection from any regulatory body or authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares issuable hereunder shall relieve the Company of any liability with
respect to the non-issuance or sale of such Shares.
(c) As a condition to the exercise of an Option, the Company may require the
person exercising the Option to make such representations and warranties as may
be necessary to assure the availability of an exemption from the registration
requirements of federal or state securities law.
(d) Notwithstanding anything herein to the contrary, upon the termination of
employment or service of an Optionee by the Company or its Subsidiaries for
"cause" as defined at 12 C.F.R. 563.39(b)(1) as determined by the Board of
Directors, all Options held by such Participant shall cease to be exercisable as
of the date of such termination of employment or service.
(e) Upon the exercise of an Option by an Optionee (or the Optionee's
personal representative), the Committee, in its sole and absolute discretion,
may make a cash payment to the Optionee, in whole or in part, in lieu of the
delivery of shares of Common Stock. Such cash payment to be paid in lieu of
delivery of Common Stock shall be equal to the difference between the Fair
Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Company under Section 16(b) of the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
20. Reservation of Shares. During the term of the Plan, the Company will
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
<PAGE>
21. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
22. Withholding Tax. The Company shall have the right to deduct from all
amounts paid in cash with respect to the cashless exercise of Options and
Dividend Equivalent Rights under the Plan any taxes required by law to be
withheld with respect to such cash payments. Where a Participant or other person
is entitled to receive Shares pursuant to the exercise of an Option, the Company
shall have the right to require the Participant or such other person to pay the
Company the amount of any taxes which the Company is required to withhold with
respect to such Shares, or, in lieu thereof, to retain, or to sell without
notice, a number of such Shares sufficient to cover the amount required to be
withheld.
23. No Employment Rights. No Director, Employee or other person shall have a
right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in administration of the Plan shall be construed
as giving any person any rights of employment or retention as an Employee,
Director or in any other capacity with the Company, the Savings Bank or other
Subsidiaries.
24. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, except to the
extent that federal law shall be deemed to apply.
EXHIBIT 4.2
Form of Stock Option Agreement to be entered into with
Optionees with respect to tock Options
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
TF FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
STOCK OPTIONS for a total of _________ shares of Common Stock, par value
$.10 per share, of TF Financial Corporation (the "Company"), which Option is
intended to qualify as an Incentive Stock Option under Section 422 of the
Internal Revenue Code of 1986, as amended, is hereby granted to ______________
(the "Optionee") at the price determined as provided in, and in all respects
subject to the terms, definitions and provisions of the 1997 Stock Option Plan
(the "Plan") adopted by the Company which is incorporated by reference herein,
receipt of which is hereby acknowledged.
1. Option Price. The Option price is $16.50 for each Share, being 100% of
the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this Option (January 21, 1997).
2. Exercises of Option. This Option shall be exercisable in accordance with
provisions of the Plan, provided the holder of such Option is an employee of the
Company as of such date, as follows:
(a) Schedule of Rights to Exercise.
Date Percentage of
---- Total Shares
Awarded Which
Are Exercisable/
Options Non-forfeitable
------- ---------------
Upon grant.......................... 0 0%
As of January 21, 1998.............. ____ 20%
As of January 21, 1999.............. ____ 40%
As of January 21, 2000.............. ____ 60%
As of January 21, 2001.............. ____ 80%
As of January 21, 2002.............. ____ 100%
Options awarded to the Optionee shall continue to vest annually during
such period that the Optionee serves as an employee, director or director
emeritus of Third Federal Savings Bank or the Company. Notwithstanding any
provisions in this Section 2, in no event shall this Option be exercisable prior
to six months following the date of grant. Options shall be 100% vested and
exercisable upon the death or disability of the Optionee, or upon a Change in
Control of the Company. Options shall become "non-incentive" options and remain
exercisable for the remaining term upon retirement following not less than 10
years, if not exercised within 3 months of retirement.
<PAGE>
(b) Method of Exercise. This Option shall be exercisable by a
written notice which shall:
(i) State the election to exercise the Option, the
number of Shares with respect to which it is being exercised, the person
in whose name the stock certificate or certificates for such Shares of
Common Stock is to be registered, his address and Social Security Number
(or if more than one, the names, addresses and Social Security Numbers
of such persons);
(ii) Contain such representations and agreements as to
the holder's investment intent with respect to such shares of Common
Stock as may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person
or persons other than the Optionee, be accompanied by proof,
satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Option; and
(iv) Be in writing and delivered in person or by
certified mail to the Treasurer of the Company.
Payment of the purchase price of any Shares with respect to which the
Option is being exercised shall be by certified or bank cashier's or teller's
check. The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised if
the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or valid regulation. As
a condition to the Optionee's exercise of this Option, the Company may require
the person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
<PAGE>
4. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
5. Dividend Equivalent Rights. The Options represented by this Agreement
shall include the right of the Optionee to receive Dividend Equivalent Rights.
Such rights shall provide that upon the payment of a dividend on the Common
Stock, the holder of such Options shall receive payment of compensation in an
amount equivalent to the dividend payable as if such Options had been exercised
and such Common Stock held as of the dividend record date. Such rights shall
expire upon the expiration or exercise of such underlying Options. Such rights
are non-transferable and shall attach to Options whether or not such Options are
immediately exercisable. The dividend equivalent payments associated with
Options shall be paid to the Option holder at the dividend payment date of the
Common Stock.
6. Related Matters. Notwithstanding anything herein to the contrary,
additional conditions or restrictions related to such Options may be contained
in the Plan or the resolutions of the Plan Committee authorizing such grant of
Options.
TF Financial Corporation
Date of Grant: January 21, 1997 By:
---------------- --------------------------
Attest:
- ---------------------------------
[SEAL]
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
------------------------------------
PURSUANT TO THE
TF Financial Corporation
1997 STOCK OPTION PLAN
--------------
(Date)
TF Financial Corporation
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to
purchase _____________ shares, par value $.10, of Common Stock of TF Financial
Corporation under and pursuant to a Stock Option Agreement dated ______________,
19__.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$________ of cash or check
________ of Common Stock
$ Total
========
The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name___________________________________
Address________________________________
Social Security Number_________________
Very truly yours,
_____________________________
EXHIBIT 5.1
Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to
the validity of the Common Stock being registered
<PAGE>
MALIZIA, SPIDI, SLOANE & FISCH, P.C.
Attorneys at Law
One Franklin Square
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
Telephone: (202) 434-4660
Telecopier: (202) 434-4661
May 14, 1997
Board of Directors
TF Financial Corporation
3 Penns Trail
Newtown, Pennsylvania 18940
RE: Registration Statement on Form S-8:
-----------------------------------
TF Financial Corporation 1997 Stock Option Plan
Gentlemen:
We have acted as special counsel to TF Financial Corporation, a State of
Delaware corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to 240,000 shares of common stock, par value $.10 per share
(the "Common Stock") of the Company which may be issued upon the exercise of
options (the "Options") granted or which may be granted under the TF Financial
Corporation 1997 Stock Option Plan (the "Plan"), as more fully described in the
Registration Statement. You have requested the opinion of this firm with respect
to certain legal aspects of the proposed offering.
We have examined such documents, records, and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to the exercise of options
granted under and in accordance with the terms of the Plan will be duly and
validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included under
the caption "Legal Opinion" in the Prospectus which is a part of the
Registration Statement.
Sincerely,
/s/ Malizia, Spidi, Sloane & Fisch, P.C.
Malizia, Spidi, Sloane & Fisch, P.C.
Washington, D.C.
EXHIBIT 23.1
Consent of Malizia, Spidi, Sloane & Fisch, P.C.
(appears in their opinion filed as Exhibit 5.1)
EXHIBIT 23.2
Consent of Independent Accountants
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
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We have issued our report dated July 21, 1997 accompanying the consolidated
financial statements of TF Financial Corporation and Subsidiaries appearing in
the 1996 Annual Report of the Corporation to its shareholders included in the
Annual Report on Form 10-K for the year ended December 31, 1996 which is
incorporate by reference in this Registration Statement. We consent to the
incorporation by reference in the Registration Statement of the aforementioned
report.
GRANT THORNTON LLP
/s/ Grant Thornton LLP
Philadelphia, Pennsylvania
May 10, 1997
