As filed with the Securities and Exchange Commission on March 10, 2000
REGISTRATION STATEMENT NO. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT ON
FORM S-8
UNDER THE SECURITIES ACT OF 1933
CASCADE FINANCIAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 91-1661954
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2828 Colby Avenue
Everett, Washington 98201
(425) 339-5500
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(Address of principal executive offices)
Cascade Financial Corporation 1997 Stock Option Plan, as amended
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(Full title of the Plan)
Frank M. McCord John F. Breyer, Jr., Esquire
Chairman and Chief Executive Officer Breyer & Associates PC
Cascade Financial Corporation 1100 New York Avenue, N.W.
2828 Colby Avenue Suite 700 East
Everett, Washington 98201 Washington, D.C. 20005
(425) 339-5500 (202) 737-7900
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Name, address and telephone number of agent for service
Calculation of Registration Fee
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Title of
Securities Amount Proposed Maximum Proposed Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered(1) Per Share Offering Price Fee
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Common Stock,
$0.01 par value 635,452 $9.07(2) $5,763,550 $1,522
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
Registration Statement covers, in addition to the number of shares set
forth above, an indeterminate number of shares which, by reason of
certain events specified in the Plan, may become subject to the Plan.
(2) Estimated in accordance with Rule 457(h), calculated on the basis of
$9.07 per share, which was the average of the high and low trading
prices of Cascade Financial Corporation's common stock as reported on
the Nasdaq Smallcap market on March 8, 2000.
----------------------
This Registration Statement shall become effective automatically upon the
date of filing in accordance with Section 8(a) of the Securities Act of 1933,
as amended, and 17 C.F.R. Section 230.462.
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<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants in the Cascade Financial Corporation
1997 Stock Option Plan, as amended (the "Plan") as specified by Rule 428(b)(1)
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act").
Such document(s) are not being filed with the Commission, but constitute
(along with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
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The following documents previously or concurrently filed by Cascade
Financial Corporation (the "Registrant") with the Commission are hereby
incorporated by reference in this Registration Statement.
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1999 (File No. 0-25286) filed pursuant to the Securities
Exchange Act of 1934, as amended;
(b) the Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999 (File No. 0-25286) filed pursuant to the Securities
Exchange Act of 1934, as amended;
(c) the Registrant's Amended Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999 (File No. 0-25286) filed pursuant to the
Securities Exchange Act of 1934, as amended;
(d) all other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, since the end of the fiscal
year covered by audited financial statements contained in the report
referred to in Item 3(a) above; and
(e) the description of the Registrant's common stock, par value $.01 per
share, as set forth in the Registration Statement on Form S-4 (File No.
33-83200),and all amendments thereto or reports filed for the purpose of
updating such descriptions.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed incorporated by reference into this
Registration Statement and to be a part thereof from the date of the filing of
such documents. Any statement contained in the documents incorporated, or
deemed to be incorporated, by reference herein or therein shall be deemed to
be modified or superseded for purposes of this Registration Statement and the
Prospectus to the extent that a statement contained herein or therein or in
any other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein or therein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement and the Prospectus.
The Registrant shall furnish without charge to each person to whom the
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated by reference, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference to the information that is incorporated). Requests should be
directed to the Secretary, Cascade Financial Corporation, 2828 Colby Avenue,
Everett, Washington 98201, telephone number (425) 339-5500.
All information appearing in this Registration Statement and the
Prospectus is qualified in its entirety by the detailed information, including
financial statements, appearing in the documents incorporated herein or
therein by reference.
Item 4. Description of Securities
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Not Applicable
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<PAGE>
Item 5. Interests of Named Experts and Counsel
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Not Applicable
Item 6. Indemnification of Directors and Officers
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Article XVII of the Registrant's Certificate of Incorporation provides
for indemnification of directors and officers of the Registrant against any
and all liabilities, judgments, fines and reasonable settlements, costs,
expenses and attorneys' fees incurred in any actual, threatened or potential
proceeding, except to the extent that such indemnification is limited by
Delaware law and such law cannot be varied by contract or bylaw. Article XVII
also provides for the authority to purchase insurance with respect thereto.
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation's board of directors to grant indemnity under certain
circumstances to directors and officers, when made, or threatened to be made,
parties to certain proceedings by reason of such status with the corporation,
against judgments, fines, settlements and expenses, including attorneys' fees.
In addition, under certain circumstances such persons may be indemnified
against expenses actually and reasonably incurred in defense of a proceeding
by or on behalf of the corporation. Similarly, the corporation, under certain
circumstances, is authorized to indemnify directors and officers of other
corporations or enterprises who are serving as such at the request of the
corporation, when such persons are made, or threatened to be made, parties to
certain proceedings by reason of such status, against judgments, fines,
settlements and expenses, including attorneys' fees; and under certain
circumstances, such persons may be indemnified against expenses actually and
reasonably incurred in connection with the defense or settlement of a
proceeding by or in the right of such other corporation or enterprise.
Indemnification is permitted where such person (i) was acting in good faith,
(ii) was acting in a manner be reasonably believed to be in or not opposed to
the best interests of the corporation or other corporation or enterprise, as
appropriate, (iii) with respect to criminal proceeding, had no reasonable
cause to believe his conduct was unlawful, and (iv) was not adjudged to be
liable to the corporation or other corporation or enterprise (unless the court
where the proceeding was brought determines that such person is fairly and
reasonably entitled to indemnity).
Unless ordered by a court, indemnification may be made only following a
determination that such indemnification is permissible because the person
being indemnified has met the requisite standard of conduct. Such
determination may be made (i) by the corporation's board of directors by a
majority vote of a quorum consisting of directors not at the time parties to
such proceeding; or (ii) if such a quorum cannot be obtained or the quorum so
directs, then by independent legal counsel in a written opinion; or (iii) by
the stockholders.
Section 145 also permits expenses incurred by directors and officers in
defending a proceeding to be paid by the corporation in advance of the final
disposition of such proceedings upon the receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that
he is not entitled to be indemnified by the corporation against such expenses.
Item 7. Exemption From Registration Claimed
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Not Applicable
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<PAGE>
Item 8. Exhibits
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The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:
Reference to Prior Filing
Regulation S-K or Exhibit Number as
Exhibit Number Description of Exhibits Attached Hereto
- -------------- ------------------------------------ -------------------------
4.1 Certificate of Incorporation of
Cascade Financial Corporation *
4.2 Bylaws of Cascade Financial Corporation *
4.3 Form of Certificate of Common Stock
for Cascade Financial Corporation *
5 Opinion of Breyer & Associates PC 5
23.1 Consent of KPMG, LLP 23.1
23.2 Consent of Breyer & Associates PC Contained in Exhibit 5
24 Power of attorney Contained on signature
page
99 Cascade Financial Corporation 1997
Stock Option Plan, as amended 99
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* Filed as exhibits to the Registrant's Registration Statement on Form S-4
(File No. 33-83200). All such previously filed documents are hereby
incorporated by reference in accordance with Item 601 of Regulation S-K.
Item 9. Undertakings
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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, (ii) to reflect
in the prospectus any facts or events arising after the effective date of the
Registration Statement (or most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement, and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change in such
information in the Registration Statement, provided, however, that clauses (i)
and (ii) do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
2. That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed 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.
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<PAGE>
4. That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to a new registration
statement relating to the securities offered therein, and that offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officer and controlling persons
of the registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by 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 questions whether such indemnification by it is
against public policy expressed in the Securities Act and will be governed by
the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cascade
Financial Corporation 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 Everett, and the State of Washington
the 10th day of March 2000.
CASCADE FINANCIAL CORPORATION
By /s/ Frank M. McCord
------------------------------------
Frank M. McCord
Chairman and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Frank M. McCord his true and
lawful attorney, with full power to sign for such person and in such person's
name and capacity indicated below, and with full power of substitution any and
all amendments to this Registration Statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.
By:/s/Frank M. McCord
--------------------------------------- March 10, 2000
Frank M. McCord
Chairman and Chief Executive Officer
(Principal Executive Officer)
By:/s/Russell E. Rosendal
--------------------------------------- March 10, 2000
Russell E. Rosendal
Executive Vice President
(Principal Financial and Accounting Officer)
By:/s/C. F. Safstrom
--------------------------------------- March 10, 2000
C. F. Safstrom
President and Director
By:/s/G. Brandt Westover
--------------------------------------- March 10, 2000
G. Brandt Westover
Director
By:/s/Paull Shin
--------------------------------------- March 10, 2000
Paull Shin
Director
<PAGE>
By:
--------------------------------------- ----- --, 2000
Dwayne Lane
Director
By:/s/Henry Robinett
--------------------------------------- March 10, 2000
Henry Robinett
Director
By:/s/D. R. Murphy
--------------------------------------- March 10, 2000
D. R. Murphy
Director
By:/s/Ronald E. Thompson
--------------------------------------- March 10, 2000
Ronald E. Thompson
Director
By:/s/David W. Duce
--------------------------------------- March 10, 2000
David W. Duce
Director
By:/s/Gary Meisner
--------------------------------------- March 10, 2000
Gary Meisner
Director
By:/s/David O'Connor
--------------------------------------- March 10, 2000
David O'Connor
Director
By:/s/Janice Halladay
--------------------------------------- March 10, 2000
Janice Halladay
Director
<PAGE>
Exhibit 5
Opinion of Breyer & Associates PC
<PAGE>
[Breyer & Associates PC Letterhead]
March 10, 2000
Board of Directors
Cascade Financial Corporation
2828 Colby Avenue
Everett, Washington 98201
Gentlemen and Ladies:
We have acted as special counsel to Cascade Financial Corporation, a
Delaware corporation (the "Company"), in connection with the preparation of
the Registration Statement on Form S-8 filed with the Securities and Exchange
Commission ("Registration Statement") under the Securities Act of 1933, as
amended, relating to shares of common stock, par value $0.01 per share (the
"Common Stock") of the Company which may be issued pursuant to the terms of
the Cascade Financial Corporation 1997 Stock Option Plan, as amended (the
"Plan"), all 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 and in accordance with
the terms of the Plan will be duly and validly issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8.
Sincerely,
/s/Breyer & Associates PC
BREYER & ASSOCIATES PC
<PAGE>
Exhibit 23.1
Consent of KPMG, LLP
<PAGE>
[LETTERHEAD OF KPMG, LLP]
Consent of Independent Auditors
The Board of Directors
Cascade Financial Corporation
2828 Colby Avenue
Everett, Washington 98201
Gentlemen:
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Cascade Financial Corporation relating to their 1997 Stock Option Plan,
as amended, of our report dated August 2, 1999, relating to the consolidated
balance sheets of Cascade Financial Corporation and subsidiary as of June 30,
1999 and 1998, and the related consolidated statements of income,
shareholders' equity and comprehensive income and cash flows for each of the
years in the three-year period ended June 30, 1999, which report appears in
the June 30, 1999 Annual Report to Stockholders of Cascade Financial
Corporation, which is incorporated by reference in Cascade Financial
Corporation's Annual Report on Form 10-K for the year ended June 30, 1999.
/s/KPMG, LLP
Seattle, Washington
March 8, 2000
<PAGE>
Exhibit 23.2
Consent of Breyer & Associates PC (see Exhibit 5)
<PAGE>
Exhibit 24
Power of Attorney (see signature page)
Exhibit 99
Cascade Financial Corporation 1997 Stock Option Plan, as amended
<PAGE>
Cascade Financial Corporation
1997 Stock Option Plan, As Amended
SECTION 1. Purpose. The purposes of the Cascade Financial Corporation 1997
Stock Option Plan, as amended, are to promote the interests of the Company,
its affiliates, and its stockholders by (i) attracting and retaining
exceptional executive personnel and other key employees and directors of the
Company and its affiliates; (ii) motivating such employees and Eligible
Directors by means of performance-related incentives to achieve longer-range
performance goals; and (iii) enabling such employees and Eligible Directors to
participate in the long-term growth and financial success of the Company.
SECTION 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:
"Affiliate" shall mean the Bank and any other "subsidiary" of the Company
as defined in Section 424(f) of the Code.
"Award" shall mean any grant of Options or Director Options.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Bank" shall mean Cascade Bank, Everett, Washington, or any successor
thereto.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall mean an event deemed to occur if and when (a)
an offeror other than the Company purchases shares of the common stock of the
Company or the Bank pursuant to a tender or exchange offer for such shares,
(b) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company or the Bank representing twenty-five percent (25%)
or more of the combined voting power of the Company's or the Bank's then
outstanding securities, (c) the membership of the board of directors of the
Company or the Bank changes as the result of a contested election, such that
individuals who were directors at the beginning of any twenty-four (24) month
period (whether commencing before or after the date of adoption of this Plan)
do not constitute a majority of the Board at the end of such period, or (d)
shareholders of the Company or the Bank approve a merger, consolidation, sale
or disposition of all or substantially all of the Company's or the Bank's
assets, or a plan of partial or complete liquidation. If any of the events
enumerated in clauses (a) - (d) occur, the Board shall determine the effective
date of the change in control resulting therefrom, for purposes of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean a committee of the Board consisting of at least
two non-employee directors designated by the Board to administer the Plan. If
a separate committee is not so designated, the Board shall serve as the
Committee for all purposes under the Plan.
"Company" shall mean Cascade Financial Corporation, a Delaware
corporation.
"Director Option" shall mean a Non-Qualified Stock Option granted to an
Eligible Director pursuant to Section 6(e).
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"Disability" shall have the meaning set forth in Section 22(e)(3) of the
Code. For purposes of the Plan, all determinations as to whether a
Participant has become disabled shall be made by a majority of the Board upon
the basis of such evidence as it deems necessary or desirable, and shall be
final and binding on all interested persons.
"Effective Date" shall mean the date specified in Section 9(a) of the
Plan.
"Eligible Director" shall mean, on any date, a person who is serving as a
member of the Board but shall not include a person who is an Employee.
"Employee" shall mean an employee of the Company or any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall be determined as follows:
(a) If the Shares are traded or quoted on the Nasdaq Stock
Market or other national securities exchange at the
time of grant of the Award, then the Fair Market Value
shall be the average of the highest and lowest selling
price on such exchange on the date such Award is
granted or, if there were no sales on such date, then on
the next prior business day on which there was a sale.
(b) If the Shares are not traded or quoted on the Nasdaq
Stock Market or other national securities exchange,
then the Fair Market Value shall be a value determined
by the Committee in good faith on such basis as it
deems appropriate.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to
meet the requirements of Section 422 of the Code or any successor provision
thereto.
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not
intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option but shall not include a Director Option.
"Participant" shall mean any Employee or Eligible Director selected by
the Committee to receive an Award of Options or Director Options, as
appropriate.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Plan" shall mean this Cascade Financial Corporation 1997 Stock Option
Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by the
SEC under the Exchange Act, or any successor rule or regulation thereto as in
effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto and shall include the staff thereof.
"Shares" shall mean common shares of the Company, or such other
securities of the Company as may be designated by the Committee from time to
time.
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<PAGE>
"Ten Percent Stockholder" shall mean any stockholder who, at the time an
Incentive Stock Option is granted to such stockholder, owns (within the
meaning of Section 424(d) of the Code) more than ten percent (10%) of the
voting power of all classes of stock of the Company.
"Termination for Cause" shall mean termination because of a Participant's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or material breach of any provision of any
employment agreement between the Company and/or, the Bank and a Participant.
SECTION 3. Administration.
(a) The Plan shall be administered by the Committee. Subject to the
terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee
shall: (i) designate Participants; (ii) determine the type or types of Awards
to be granted to an eligible Employee; (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights, or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property,
and other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (viii) establish, amend, suspend,
or waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (ix) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.
(b) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee,
may be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, and Participant, any holder or beneficiary of
any Award, any shareholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section
4(b), the number of Shares with respect to which Options and Director Options
may be granted under the Plan shall be 429,688. If, after the effective date
of the Plan, any Shares covered by an Option or Director Option granted under
the Plan, or to which such an Option or Director Option relates, are
forfeited, or if an Option or Director Option otherwise terminates or is
canceled without the delivery of Shares, then the Shares covered by such
Option or Director Option, or to which such Option or Director Option relates,
or the number of Shares otherwise counted against the aggregate number of
Shares with respect to which Options and Director Options may be granted, to
the extent of any such settlement, forfeiture, termination or cancellation,
shall again be, or shall become, Shares with respect to which Options and
Director Options may be granted. In the event that any Option or Director
Option is exercised through the delivery of Shares, the number of Shares
available for Awards under the Plan shall be increased by the number of Shares
surrendered.
(b) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
necessary in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall proportionately adjust any or all (as necessary) of (i) the
number of Shares or other securities of the Company (or number and kind of
other securities or property) with respect to which Awards may be granted,
(ii) the number of
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Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award; provided, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code, as from time to time amended.
(c) Sources of Shares. Any Shares delivered pursuant to an Option or
Director Option may consist, in whole or in part, of authorized and unissued
Shares or of treasury Shares.
SECTION 5. Eligibility. An Employee, including any officer or
employee-director of the Company, shall be eligible to be designated a
Participant. Each Eligible Director shall be eligible to receive Director
Options in accordance with Section 6(e) hereof.
SECTION 6. Options and Director Options.
(a) Grant. Subject to the provisions of the Plan and the recommendation
of the Board, the Committee shall determine the Employees to whom Options
shall be granted, the number of Shares to be covered by each Option, the
option price therefor and the conditions and limitations applicable to the
exercise of the option. The Committee shall have the authority to grant
Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant
both types of options. In such case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to and comply with such rules as
may be prescribed by Section 422 of the Code, as from time to time amended,
and any regulations implementing such statute, including without limitation,
the requirements of Code Section 422(d), which limits the aggregate fair
market value of Shares of which Incentive Stock Options are exercisable for
the first time to one hundred thousand dollars ($100,000) per calendar year.
Each provision of the Plan and of each written option agreement relating to an
Option designated an Incentive Stock Option shall be construed so that such
Option qualifies as an Incentive Stock Option, and any provision that cannot
be so construed shall be disregarded.
(b) Exercise Price. The Committee shall establish the exercise price at
the time each Option or Director Option is granted, which price shall not be
less than one hundred percent (100%) of the per Share Fair Market Value on the
date of grant. Notwithstanding any provision contained herein, in the case of
an Incentive Stock Option, the exercise price at the time such Incentive Stock
Option is granted to any Employee who, at the time of such grant, is a Ten
Percent Stockholder, shall not be less than one hundred ten percent (110%) of
the per Share Fair Market Value on the date of grant.
(c) Exercise. Subject to the provisions of the Plan, each Option shall
be exercisable at such times and subject to such terms and conditions as the
Committee may, in its sole discretion, specify in the applicable Award
Agreement or thereafter; provided, however, that in the case of an Incentive
Stock Option, a Participant may not exercise such Option as an Incentive Stock
Option after the earlier of (i) the date which is ten (10) years (five (5)
years in the case of a Participant who is a Ten Percent Stockholder) after the
date on which such Incentive Stock Option is granted, or (ii) the date which
is three (3) months (twelve (12) months in the case of a Participant who
becomes Disabled, or who dies) after the date on which he ceases to be an
employee of the Company or an Affiliate. Each Award shall be one hundred
percent (100%) vested upon a Participant's death or Disability. In the event
of an Employee's Termination for Cause, his Options shall be canceled on the
date he ceases to be an Employee. The Committee may impose such conditions
with respect to the exercise of Options, including without limitation, any
relating to the application of federal or state securities laws, as it may
deem necessary or advisable.
(d) Payment. No Shares shall be delivered pursuant to any exercise of
an Option or Director Option until payment in full of the option price
therefor is received by the Company. Such payment may be made in cash or its
equivalent, or, if and to the extent permitted by the Committee, by exchanging
Shares owned by the optionee (which are not the subject of any pledge or other
security interest), or by a combination of the foregoing, provided that the
combined value of all cash and cash equivalents and the Fair Market Value of
any such Shares so tendered to the Company as of the date of such tender is at
least equal to such option price. The Committee may, in its discretion,
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arrange procedures for the payment of the exercise price with one or more
stock brokerage firms for the purpose of allowing a Participant to make a
"cashless exercise" of an Option or Director Option.
(e) Director Options. Subject to the provisions of the Plan and the
recommendation of the Board, the Committee shall determine the Eligible
Directors to whom Director Options shall be granted, the number of shares to
be covered by each Director Option and the condition and limitations
applicable to the exercise of each Director Option. Each Award of Director
Options shall vest ratably over a five (5) year period whereby twenty percent
(20%) of the Award shall vest on each of the first through the fifth
anniversaries of the date of grant so long as the Eligible Director continues
to serve as a member of the Board; provided, however, that each Award shall be
one hundred percent (100%) vested in the event of the Eligible Director's
death or Disability. A Director Option shall be exercisable until the earlier
to occur of the following two (2) dates (i) the tenth anniversary of the date
of grant of such Director Option or (ii) one (1) year (two (2) years in the
case of an Eligible Director who becomes Disabled, or who dies) after the date
the Eligible Director ceases to be a member of the Board, except that if the
Eligible Director ceases to be a member of the Board upon Termination for
Cause, his Director Options shall be canceled on the date he ceases to be a
member of the Board. An Eligible Director may pay the exercise price of a
Director Option in the manner described in Section 6(d).
(f) Effect of a Change in Control. In the event of a Change in Control,
all then outstanding Options and Director Options shall become one hundred
percent (100%) vested and exercisable as of the effective date of the Change
in Control. If, in connection with or as a consequence of a Change in
Control, the Company or the Bank is merged into or consolidated with another
corporation, or if the Company or the Bank sells or otherwise disposes of
substantially all of its assets to another corporation, then unless provisions
are made in connection with such transaction for the continuance of the Plan
and/or the assumption or substitution of then outstanding Options and Director
Options with new options covering the stock of the successor corporation, or
parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices, such Options or Director Options shall be
canceled as of the effective date of the merger, consolidation, or sale and
the Participant or Eligible Director shall be paid in cash an amount equal to
the difference between the Fair Market Value of the Shares subject to the
Options or Director Options as of the effective date of such corporate event
and the exercise price of the Options or Director Options, as appropriate.
SECTION 7. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement with which the
Committee deems it necessary or appropriate to comply.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided, however, that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would impair the rights of
any Participant or any holder or beneficiary of any Award theretofore granted
shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.
(c) Cancellation. Any provision of this Plan or any Award Agreement to
the contrary notwithstanding, the Committee may cause any Award of Options
granted hereunder to be canceled in consideration of the granting to the
holder of an alternative Award of Options having a Fair Market Value equal to
the Fair Market Value of such canceled Award.
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SECTION 8. General Provisions.
(a) Nontransferability.
(i) Each Award, and each right under any Award, shall be
exercisable only by the Participant during his lifetime, or, if permissible
under applicable law, by the Participant's guardian or legal representative or
a transferee receiving such Award pursuant to a domestic relations order or
Section 8(a)(ii) as determined by the Committee.
(ii) No Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant otherwise than by will or
by the laws of descent and distribution or pursuant to a domestic relations
order, and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company; provided, however, that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance. Notwithstanding the preceding sentence, the Committee shall have
discretionary authority to permit the transfer of any Non-Qualified Stock
Option to members of a Participant's immediate family, including trusts for
the benefit of such family members and partnerships in which such family
members are the only partners; provided, however, that a transferred
Non-Qualified Stock Option may be exercised by the transferee on any date only
to the extent that the Participant would have been entitled to exercise the
Non-Qualified Stock Option on such date had the Non-Qualified Stock Option not
been transferred. Any transferred Non-Qualified Stock Option shall remain
subject to the terms and conditions of the Participant's Award Agreement.
(b) No Rights to Awards. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the
same with respect to each recipient.
(c) Share Certificates. All Shares or other securities of the Company
delivered under the Plan pursuant to any Award or the exercise thereof shall
be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the SEC, any stock exchange or national securities
association upon which such Shares or other securities are then listed, and
any applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any certificates representing such Shares or other
securities to make appropriate reference to such restrictions.
(d) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company,
or to a committee of such officers or managers, the authority, subject to such
terms and limitations as the Committee shall determine, to grant Awards to, or
to cancel, modify or waive rights with respect to, or to alter, discontinue,
suspend, or terminate Awards held by, Employees who are not officers or
directors of the Company for purposed of Section 16 of the Exchange Act, or
any successor section thereto, or who are otherwise not subject to such
Section.
(e) Withholding. A Participant shall be required to pay to the Company
and the Company is hereby authorized to withhold from any Award, from any
payment due or transfer made under any Award or from any compensation or other
amount owing to a Participant the amount of any applicable withholding taxes
in respect of an Award, its exercise, or any payment or transfer under an
Award and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes, including,
but not limited to, the withholding of the issuance of Shares to be issued
upon the exercise of any Option or Director Option until the Participant
reimburses the Company for any amount required to be withheld.
(f) Award Agreements. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto.
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(g) No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other compensation arrangements, which may, but need not,
provide for the grant of options, restricted stock, Shares and other types of
Awards provided for hereunder (subject to shareholder approval if such
approval is required), and such arrangements may be either generally
applicable or applicable only in specific cases.
(h) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or an Affiliate. Further, the Company may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(i) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he has become the holder of such Shares.
(j) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement
shall be determined in accordance with the laws of the State of Delaware,
without giving effect to the choice of law principles thereof.
(k) Severability. If any provisions of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to the applicable laws, or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and
effect.
(l) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recovery under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to
the relevant Participant, holder or beneficiary. Without limiting the
generality of the foregoing, no Award granted hereunder shall be construed as
an offer to sell securities of the Company, and no such offer shall be
outstanding, unless and until the Committee in its sole discretion has
determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S. federal securities laws.
(m) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments
from the Company pursuant to an Award, such rights shall be no greater than
the right of any unsecured general creditor of the Company.
(n) Rule 16b-3 Compliance. With respect to persons subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply
with all applicable terms and conditions of Rule 16b-3 and any successor
provisions. To the extent that any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.
(o) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
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(p) No Impact on Benefits. Unless specifically provided under any other
benefit plan of the Company or its Affiliates, Awards shall not be treated as
compensation for purposes of calculating an Employee's or Eligible Director's
rights under such benefit plans.
(q) Indemnification. Each person who is or shall have been a member of
the Committee or of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be made a party or
in which he may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company's approval, or paid by him in
satisfaction of any judgement in any such action, suit, or proceeding against
him, provided he shall give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his
own behalf. The foregoing right of indemnification shall not be exclusive and
shall be independent of any other rights of indemnification to which such
persons may be entitled under the Company's articles of incorporation or
bylaws, by contract, as a matter of law, or otherwise.
SECTION 9. Term of the Plan.
(a) Effective Date. The Plan shall become effective upon approval by a
majority of the Company's stockholders at an annual or special meeting of
stockholders of the Company held not more than twelve (12) months after the
date of adoption of the Plan by the Board.
(b) Expiration Date. The Plan shall terminate on and no Award shall be
granted under the Plan after the tenth anniversary of the Effective Date.
Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after the tenth anniversary of the Effective Date.
* * *
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