As filed with the Securities and Exchange Commission on September 15, 1998
Registration No. 33-79570
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FSF Financial Corp.
(Exact name of registrant as specified in its charter)
Minnesota 41-1783064
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 Main Street South
Hutchinson, Minnesota 55350-2573
(320) 234-4500
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(Address of principal executive offices)
FSF Financial Corp.
----------------------------------------
1998 Stock Compensation Plan
(Full Title of the Plan)
Richard Fisch, Esq.
Ruel B. Pile, Esq.
Linda Delivorias, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
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(Name, address and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to Offering Aggregate Offering Registration
be Registered be Registered Price Per Unit Price (2) Fee (2)
- ------------- ------------- -------------- ---------- --------
Common Stock
<S> <C> <C> <C> <C>
$.10 par value 300,000 shares (1) (2) $4,933,816 $1,455.48
================================================================================================================================
</TABLE>
(1) The maximum number of shares of common stock issuable upon exercise of
options granted or to be granted under the FSF Financial Corp. 1998
Stock Compensation Plan consists of 300,000 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. 300,000 shares are being registered hereby, of which
116,301 shares are under option at an exercise price of $19.125 per
share ($2,224,256 in the aggregate). The remainder of such shares,
which are not presently subject to options (183,699 shares), are being
registered based upon the closing price of the common stock of FSF
Financial Corp. as reported on the NASDAQ System on September 10, 1998,
of $14.75 per share ($2,709,560 in the aggregate) for a total offering
of $4,933,816.
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
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300,000 Shares
------------------
FSF FINANCIAL CORP.
COMMON STOCK
(Par Value $.10 Per Share)
------------------
FSF Financial Corp.
1998 Stock Compensation Plan
This Prospectus relates to 300,000 shares of common stock, par value
$.10 per share (the "Common Stock"), of FSF Financial Corp. (the "Company"), a
Minnesota corporation which is the parent savings and loan holding company of
FSF Federal fsb, Hutchinson, Minnesota (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 selected officers, directors, key employees, and other persons
of the Company and any subsidiary of the Company pursuant to the FSF Financial
Corp. 1998 Stock Compensation 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 National
Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq")
National Market System under the symbol "FFHH." 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 the over-the-counter market. On September 10, 1998 the closing
price of the common stock on Nasdaq was $14.75 per share.
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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.
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The date of this Prospectus is September 15, 1998
<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
FSF Financial Corp.
1998 Stock Compensation Plan
Page
----
General Plan Information............................................... 1
Administration......................................................... 1
Purpose................................................................ 2
Securities to be Offered............................................... 2
Eligibility to Participate in Plan..................................... 2
Purchases of Securities Pursuant to the Plan
and Payment for Securities Offered.................................... 3
Term of the Plan..................................................... 3
Stock Option Agreements.............................................. 3
Option Price......................................................... 3
Limitations on Grant of Options...................................... 3
Option Period........................................................ 4
Non-transferability.................................................. 4
Conditions of Exercise............................................... 4
Payment for Options.................................................. 4
Cashless Exercise.................................................... 5
Issuance of Common Stock............................................. 5
Options Granted to Directors......................................... 5
Recapitalization, Merger, Consolidation, Change in
Control and Similar Transactions...................................... 6
Amendment and Termination of the Plan.................................. 6
Restrictions on Resale................................................. 7
Federal Income Tax Consequences........................................ 7
Annual Report to Shareholders.......................................... 8
Additional Information................................................. 8
Legal Opinion.......................................................... 9
<PAGE>
FSF Financial Corp.
1998 Stock Compensation Plan
Item 1. Plan Information
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General Plan Information
This Prospectus relates to 300,000 shares of the common stock ("Common
Stock"), par value $.10 per share, of FSF Financial Corp. (the "Company"), which
will be offered upon exercise of options granted or to be granted under the FSF
Financial Corp. 1998 Stock Compensation Plan (the "Plan").
The Board of Directors of the Company adopted the Plan at its meeting
on November 18, 1997. The Plan was approved by the stockholders of the Company
at a Special Meeting of Stockholders on January 20, 1998 (the "Effective Date").
The Plan is to continue in effect for a period of ten years from the Effective
Date (i.e., January 20, 2008), unless earlier terminated or extended by the
Company.
Pursuant to the Plan, 300,000 shares of Common Stock were reserved for
issuance by the Company upon exercise of stock options ("Options") awarded to
officers, directors, key employees and other persons of the Company and any
parent and subsidiary corporations. 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 Options").
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 Optionees
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 201 Main Street South, Hutchinson, Minnesota 55350. The Company's
telephone number is (320) 234-4500.
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
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<PAGE>
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."
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 key employees of
the Company and to provide additional incentive to such officers, directors, and
key 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 300,000 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
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, FSF
Federal fsb, Hutchinson, Minnesota (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 directors in the aggregate under the Plan exceed 100,000 shares
authorized for delivery under the Plan. See "Purchases of Securities Pursuant to
the Plan and Payment for Securities Offered - Options Granted to Directors."
2
<PAGE>
Purchases of Securities Pursuant to the Plan and Payment for Securities Offered
Term of the Plan. The Plan was effective January 20, 1998, 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.
Stock Option Agreements. The Options granted under the Plan are
evidenced by stock option agreements (the "Option Agreements") substantially in
the form 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 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,
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<PAGE>
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% on the date of grant and 20% annually
thereafter; however, the exercisability 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
4
<PAGE>
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
1,500 shares of Common Stock will be granted to each non-employee director of
the Company 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 date of grant and 20% annually
thereafter, during periods of continued service as a director or director
emeritus. Thereafter, such Options shall remain exercisable for up to ten years
following death, disability, or termination of service as a director or director
emeritus, but in no event beyond ten years from the date of grant. The
exercisability of such Options shall be accelerated only in the event of death
or the permanent and total disability of the Optionee, or a change in control in
accordance with the Plan. In the event of such directors' death, such Options
may be exercised by the personal representative of his estate or person(s) to
whom his rights under such Options shall have passed by will or by laws of
descent and distribution. 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 the Plan.
5
<PAGE>
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 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 execution of an agreement
for the sale of all, or a material portion, of the assets of the Company; (ii)
the execution of an agreement for 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.
6
<PAGE>
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.
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
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<PAGE>
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. 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.
Item 2. Registrant Information and Employee Plan Annual Information
- --------------------------------------------------------------------
Annual Report to Shareholders
The Company's consolidated financial statements for the period ended
September 30, 1997, 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
addition, the Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1997, March 31, 1998 and June 30, 1998 are also 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
consolidated 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 the Annual Report to Stockholders may obtain a copy by writing the
Company at the address set forth below 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
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
8
<PAGE>
Corporate Secretary, 201 Main Street South, Hutchinson, Minnesota 55350. The
Registrant's telephone number is (320) 234-4500.
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>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of 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 this Registration Statement and the Prospectus constituting Part I
of this Registration Statement:
(a) The Company's Registration Statement on Form S-1 (No. 33-79570)
as filed with the Commission and any amendments thereto;
(b) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, as filed with the Commission pursuant to Rule 15d-13;
(c) The Company's Quarterly Report on Form 10-Q for the quarters ended
December 31, 1997, March 31, 1998 and June 30, 1998, as filed with the
Commission;
(d) all other reports filed pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act") since the
end of the fiscal year covered by audited consolidated financial statements
contained in the Form S-1 referred to in Item 3(a) above; and
(e) the description of the Common Stock, contained in the Company's
Registration Statement on Form 8-A as filed with the Commission on August 8,
1994 and all amendments thereto or reports filed for the purpose of updating
such description.
All documents filed by the Company pursuant to Sections 13, 14, or
15(d) of the 1934 Act 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 into this Registration Statement and to be a part hereof from the date
of filing of such documents.
Item 4. Description of Securities.
- ----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- -----------------------------------------------
Not applicable.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers.
- --------------------------------------------------
Sections 302A.521 of the Minnesota Business Corporation Act authorizes
a corporation such as the registrant to indemnify officers, directors, employees
and agents under certain circumstances. Section 302A.521, subdivision 2 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 8 of the Registrant's Articles
of Incorporation provides for indemnification.
Section 308A.325 of the Minnesota Statutes, 1971 allows 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 since 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 Insurance Companies, Inc. with a $2.0
million aggregate limit of liability and an aggregate deductible of $40,000 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.
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 or F-3, 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.
(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 Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer,
or controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy expressed in the Securities
Act of 1933 Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hutchinson in the State of Minnesota, on the 24th day
of August, 1998.
FSF FINANCIAL CORP
By: /s/ Donald A. Glas
-------------------------------------------------
Donald A. Glas
Chief Executive Officer and Co-Chair of the Board
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of FSF Financial Corp., do
hereby severally constitute and appoint Donald A. Glas as 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 Donald A. Glas may deem
necessary or advisable to enable FSF Financial Corp. 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 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 Donald A. Glas 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>
/s/ Donald A. Glas /s/ George B. Loban
- -------------------------------------------------- ------------------------------------
Donald A. Glas George B. Loban
Chief Executive Officer and Co-Chair of the Board President and Co-Chair of the Board
(Principal Executive Officer)
/s/ Richard H. Burgart /s/ Roger R. Stearns
- -------------------------------------------------- ------------------------------------
Richard H. Burgart Roger R. Stearns
Secretary Director
/s/ James J. Caturia /s/ Jerome J. Dempsey
- -------------------------------------------------- ------------------------------------
James J. Caturia Jerome J. Dempsey
Director Director
/s/ Sever B. Knustson
- --------------------------------------------------
Director
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description Page
- ------- ----------- ----
4.1 FSF Financial Corp. 18
1998 Stock Compensation Plan
4.2 Form of Stock Option Agreement to be entered into 31
with respect to Incentive Stock Options
4.3 Form of Stock Option Agreement to be entered into with 36
respect to Non-Incentive Stock Options
5.1 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the 41
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 43
EXHIBIT 4.1
FSF Financial Corp.
1998 Stock Compensation Plan
<PAGE>
FSF FINANCIAL CORP.
1998 STOCK COMPENSATION PLAN
1. Purpose of the Plan. The Plan shall be known as the FSF Financial
Corp. ("Company") 1998 Stock Compensation Plan (the "Plan"). The purpose of the
Plan is to attract and retain qualified personnel for positions of substantial
responsibility and to provide additional incentive to officers, directors,
employees and other persons 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"), Non-Incentive Stock Options, options that do not
so qualify, and shares of Company Common Stock. 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, a Non-Incentive Stock Option, shares of Common Stock 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 Compensation
Committee appointed by the Board in accordance with Section 5(a) of the Plan.
1
<PAGE>
(f) "Common Stock" shall mean the common stock of the Company,
or any successor or parent corporation thereto.
(g) "Company" shall mean the FSF Financial Corp, the parent
corporation of the Savings Bank, or any successor or Parent thereof.
(h) "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 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.
(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) "Effective Date" shall mean the date specified in Section
15 hereof.
(m) "Employee" shall mean any person employed by the Company
or any present or future Parent or Subsidiary of the Company.
(n) "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 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 bid and
ask price. If no such 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 exchange on such 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.
(o) "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.
(p) "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.
2
<PAGE>
(q) "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.
(r) "Optioned Stock" shall mean stock subject to an Option
granted pursuant to the Plan.
(s) "Optionee" shall mean any person who receives an Option or
Award pursuant to the Plan.
(t) "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.
(u) "Participant" means any director, officer or key employee
of the Company or any Parent or Subsidiary of the Company or any other person
providing a service to 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.
(v) "Plan" shall mean the FSF Financial Corp 1998 Stock
Compensation Plan.
(w) "Savings Bank" shall mean FSF Federal fsb, Hutchinson,
Minnesota, or any successor corporation thereto.
(x) "Share" shall mean one share of the Common Stock.
(y) "Stock Award" shall mean an award of Common Stock in
accordance with Section 12 of the Plan.
(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 300,000 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 or a Change in Control of the
Company, 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.
3
<PAGE>
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.
The Chairman of the Board or 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 officers, Directors, key employees and other persons 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.
4
<PAGE>
(c) In no event shall Shares subject to Stock Awards
in accordance with Section 12 granted to non-employee Directors in the aggregate
under this Plan exceed more than 30,000 shares of Common Stock. In no event
shall Shares subject to Stock Options in accordance with the Plan granted to any
individual Optionee in the aggregate under this Plan exceed more than 100,000
shares of Common Stock.
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 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
5
<PAGE>
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 100% on the date of grant.
(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) 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.
(b) Payment. Full payment for each Share of Common Stock
purchased upon the exercise of any Non-Incentive Stock Option granted under the
Plan shall be made at the time of exercise of each such Non-Incentive Stock
Option and shall be paid in cash (in United States Dollars), Common Stock or a
combination of cash and Common Stock. Common Stock utilized in full or partial
payment of the exercise price shall be valued at its Fair Market Value at the
date of exercise. The 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.
(c) 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.
(d) Exercise Generally. The Committee may impose additional
conditions upon the right of any Participant to exercise any Non-Incentive Stock
Option granted hereunder which is not inconsistent with the terms of the Plan.
Except as otherwise provided by the terms of the Plan or by
6
<PAGE>
action of the Committee at the time of the grant of the Options, the Options
will be first exercisable at the rate of 100% on the date of grant.
(e) 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.
(f) 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
7
<PAGE>
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.
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. Stock Awards to Directors.
(a) Awards to Directors. Notwithstanding anything herein to the
contrary, as of the first business day after the date of the 1998 Annual Meeting
of Stockholders of the Company ("Date of Grant"), each Director of the Company
then serving that is not otherwise an Employee of the Company or any Subsidiary
shall be granted a Stock Award consisting of 1,500 shares of Common Stock.
Additionally, as of such Date of Grant, each recipient of such Stock Award shall
receive an option to purchase a number of shares of Common Stock represented by
the number of shares of Common Stock represented by the Stock Award ("Tandem
Stock Option"). The option exercise price for each share of Common Stock under
such Tandem Stock Option shall be equal to the average of the last reported sale
price of the Common Stock on the three business days immediately prior to the
Date of Grant ("Stock Price"). Such Stock Award and Tandem Stock Option shall be
earned and non-forfeitable at the rate of 20% of each such Award as of the Date
of Grant and 20% annually thereafter. Such Tandem Stock 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. Such Awards
shall be immediately 100% earned and non-forfeitable upon a Change in Control of
the Company or upon the death or Disability of such Director. In the event of
the Participant's death, such Tandem Stock 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.
8
<PAGE>
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 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:
9
<PAGE>
(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 as deemed equitable by the Committee at such time.
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
Board approval of the Plan.
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 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
10
<PAGE>
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.
11
<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
Stock Awards under the Plan any taxes required by law to be withheld with
respect to such cash payments. Where a Participant or other person is entitled
to receive Shares pursuant to the exercise of an Option or otherwise, 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 State of Minnesota, except to the extent that
federal law shall be deemed to apply.
12
EXHIBIT 4.2
Form of Stock Option Agreement to be entered into
with respect to Incentive Stock Options
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
FSF FINANCIAL CORP.
1998 STOCK COMPENSATION PLAN
STOCK OPTIONS ("Options") for a total of ___________ shares of Common
Stock, par value $.10 per share, of FSF Financial Corp. (the "Company"), which
Options are 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
1998 Stock Compensation Plan (the "Plan") adopted by the Company which is
incorporated by reference herein, receipt of which is hereby acknowledged.
1. Option Price. The Option price is $_____ for each share of Common
Stock, being 100% of the fair market value, as determined by the Committee, of
the Common Stock on the date of grant of these Options.
2. Exercise of Options. These Options shall be exercisable in
accordance with provisions of the Plan as follows:
(a) Schedule of Rights to Exercise.
Percentage of Total Shares
Awarded Which Are
Date Non-forfeitable
---- ---------------
Upon grant................................... 20%
As of __________ ___, ____................... 40%
As of __________ ___, ____................... 60%
As of __________ ___, ____................... 80%
As of __________ ___, ____................... 100%
Notwithstanding any provisions in this Section 2, in no event shall
these Options be exercisable prior to six months following the date of grant or
the date of ratification of the Plan by the Company's stockholders, whichever is
later. Options shall be 100% vested and exercisable upon death, disability, or a
Change in Control of the Corporation.
<PAGE>
(b) Method of Exercise. These Options shall be exercisable by
a written notice which shall:
(i) State the election to exercise the Options, the
number of shares of Common Stock 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 Options and, if the Options are 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 Options; 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 of Common Stock with
respect to which the Options are 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 Options shall be exercised shall be registered in
the name of the person or persons exercising the Options.
(c) Restrictions on Exercise. These Options may not be
exercised if the issuance of the shares of Common Stock 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 these
Options, the Company may require the person exercising these Options to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.
3. Non-transferability of Options. These Options 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 these Options shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
4. Term of Options. These Options may not be exercised more than ten
(10) years from the date of grant of these Options, as set forth below, and may
be exercised during such term only in accordance with the Plan and the terms of
these Options.
2
<PAGE>
5. 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.
FSF Financial Corp.
Date of Grant: __________ ___, ____ By: _________________________
Attest:
_______________________________
[SEAL]
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
------------------------------------
PURSUANT TO THE
FSF FINANCIAL CORP.
1998 STOCK COMPENSATION PLAN
_________________________
(Date)
FSF Financial Corp.
201 Main Street South
Hutchinson, Minnesota 55350
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to
purchase _______ shares, par value $.10, of Common Stock of FSF Financial Corp.
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 4.3
Form of Stock Option Agreement to be entered into
with respect to Non-Incentive Stock Options
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR NON-INCENTIVE STOCK OPTIONS PURSUANT TO THE
FSF FINANCIAL CORP.
1998 STOCK COMPENSATION PLAN
TO OFFICERS
STOCK OPTIONS ("Options") for a total of _______________________ shares
of Common Stock, par value $.10 per share, of FSF Financial Corp. (the
"Company") 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 1998 Stock Compensation Plan (the "Plan")
adopted by the Company which is incorporated by reference herein, receipt of
which is hereby acknowledged. Such Stock Options do not comply with Options
granted under Section 422 of the Internal Revenue Code of 1986, as amended.
1. Option Price. The Option price is $_____ for each share of Common
Stock, being 100% of the fair market value, as determined by the Plan Committee,
of the Common Stock on the date of grant of these Options.
2. Exercise of Options. These Options shall be exercisable in
accordance with provisions of the Plan as follows:
(a) Schedule of Rights to Exercise.
Percentage of Total Shares
Awarded Which Are
Date Non-forfeitable
---- ---------------
Upon grant..................................... 20%
As of __________ ___, ____..................... 40%
As of __________ ___, ____..................... 60%
As of __________ ___, ____..................... 80%
As of __________ ___, ____..................... 100%
Notwithstanding any provisions in this Section 2, in no event shall
these Options be exercisable prior to six months following the date of grant or
the date of ratification of the Plan by the Company's stockholders, whichever is
later. Options shall be 100% vested and exercisable upon death, disability, or a
Change in Control of the Corporation. Upon retirement following employment of
not less than ten years, such options shall remain exerciseable for the
remainder of its ten year term.
<PAGE>
(b) Method of Exercise. These Options shall be exercisable by
a written notice which shall:
(i) State the election to exercise the Option, the
number of shares of Common Stock 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 of Common Stock 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. These Options may not be
exercised if the issuance of the shares of Common Stock 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 these
Options, the Company may require the person exercising these Options to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.
3. Non-transferability of Options. These Options 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 these Options shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
4. Term of Options. These Options may not be exercised more than ten
(10) years from the date of grant of these Options, as set forth below, and may
be exercised during such term only in accordance with the Plan and the terms of
these Options.
2
<PAGE>
5. 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.
FSF Financial Corp.
Date of Grant: __________ ___, ____ By: __________________________
Attest:
_______________________________
[SEAL]
<PAGE>
NON-INCENTIVE STOCK OPTION EXERCISE FORM
----------------------------------------
PURSUANT TO THE
FSF FINANCIAL CORP.
1998 STOCK COMPENSATION PLAN
_____________________________
(Date)
FSF Financial Corp.
201 Main Street South
Hutchinson, Minnesota 55350
Dear Sir:
The undersigned elects to exercise the Non-Incentive Stock Option to
purchase _____________ shares, par value $.10, of Common Stock of FSF Financial
Corp. 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
1301 K STREET, N.W.
SUITE 700 EAST
WASHINGTON, D.C. 20005
(202) 434-4660
FACSIMILE: (202) 434-4661
WRITER'S DIRECT DIAL NUMBER
(202) 434-4660
September 15, 1998
Board of Directors
FSF Financial Corp.
201 Main Street South
Hutchinson, Minnesota 55350
RE: Registration Statement on Form S-8:
----------------------------------
FSF Financial Corp. 1998 Stock Compensation Plan
Board Members:
We have acted as special counsel to FSF Financial Corp., a Minnesota
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to 300,000 shares of common stock, par value $.10 per share
(the "Common Stock") of the Company which may be issued upon the exercise of
options granted or which may be granted under the FSF Financial Corp. 1998 Stock
Compensation 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 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
Malizia, Spidi, Sloane & Fisch, P.C.
EXHIBIT 23.2
Consent of Independent Accountants
<PAGE>
Bertram Cooper & Co. LLP
110 Second Avenue, SE
Waseca, MN 56093
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors and Stockholders
FSF Financial Corp.
Hutchinson, MN 55350
We consent to incorporation by reference in the Registration Statement
on Form S-8, of our report dated October 24, 1997, relating to the consolidated
balance sheets of FSF Financial Corp. and subsidiary as of September 30, 1997
and 1996 and the related consolidated statements of income, stockholders'
equity, and cash flows for the years then ended, which report appears in the
September 30, 1997 annual report on Form 10-K of FSF Financial Corp.
/s/ Bertram Cooper & Co. LLP
Bertram Cooper & Co. LLP
Wascea, Minnesota
September 8, 1998
