<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
----------
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CitiSave Financial Corporation
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
CitiSave Financial Corporation
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box): (previously paid by wire
transfer)
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction
applies:
-------------------------------
(2) Aggregate number of securities to which transactions applies:
---------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1/
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(4) Proposed maximum aggregate value of transaction:
---------------------------------------------
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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- - --------------------
1/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
CITISAVE FINANCIAL CORPORATION
665 FLORIDA STREET
BATON ROUGE, LOUISIANA 70801
(504) 383-4102
June 11, 1996
Dear Fellow Stockholder:
You are cordially invited to attend the Special Meeting of
Stockholders of CitiSave Financial Corporation. The meeting will be held at
the Main Office located at 665 Florida Street, Baton Rouge, Louisiana 70801, on
Tuesday, July 23, 1996 at 10:00 A.M., Central Time. The matters to be
considered by stockholders at the Special Meeting are described in the
accompanying materials.
It is very important that you be represented at the Special Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Special Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
Your continued support of and interest in CitiSave Financial
Corporation are sincerely appreciated.
Sincerely,
Lee F. Nettles, Chairman of the Board, President
and Chief Executive Officer
<PAGE> 3
CITISAVE FINANCIAL CORPORATION
665 FLORIDA STREET
BATON ROUGE, LOUISIANA 70801
(504) 383-4102
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on July 23, 1996
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders
("Special Meeting") of CitiSave Financial Corporation (the "Company") will be
held at the Company's Main Office located at 665 Florida Street, Baton Rouge,
Louisiana 70801 on Tuesday, July 23, 1996 at 10:00 A.M., Central Time, for the
following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To consider and approve the 1996 Key Employee Stock
Compensation Program;
(2) To consider and approve the 1996 Directors' Stock Option Plan;
(3) To consider and approve the 1996 Management Recognition Plan
for Officers and Trust Agreement;
(4) To adjourn the Special Meeting, if necessary, to solicit
additional proxies; and
(5) To transact such other business as may properly come before
the meeting or any adjournment thereof. Except with respect
to procedural matters incident to the conduct of the meeting,
management is not aware of any other such business.
Stockholders of record of the Company as of the close of business on
June 3, 1996 are entitled to notice of and to vote at the Special Meeting or
any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Lee F. Nettles, Chairman of the Board, President
and Chief Executive Officer
Baton Rouge, Louisiana
June 11, 1996
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YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU
OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE
AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU
ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY
GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE
EXERCISE THEREOF.
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<PAGE> 4
CITISAVE FINANCIAL CORPORATION
-------------------------
PROXY STATEMENT
-------------------------
SPECIAL MEETING OF STOCKHOLDERS
JULY 23, 1996
This Proxy Statement is furnished to holders of common stock, par value
$.01 per share ("Common Stock"), of CitiSave Financial Corporation (the
"Company"), which acquired all of the common stock of Citizens Savings
Association, F.A. (the "Association") issued in connection with the conversion
of the Association from a Louisiana-chartered mutual savings association to a
federally chartered stock savings association on July 14, 1995 (the
"Conversion").
Proxies are being solicited on behalf of the Board of Directors of the
Company to be used at the Special Meeting of Stockholders ("Special Meeting")
to be held at the Company's Main Office located at 665 Florida Street, Baton
Rouge, Louisiana 70801 on Tuesday, July 23, 1996 at 10:00 A.M., Central Time,
and at any adjournment thereof for the purposes set forth in the Notice of
Special Meeting of Stockholders. This Proxy Statement is first being mailed to
stockholders on or about June 11, 1996.
Each proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. IF NO CONTRARY INSTRUCTIONS ARE GIVEN, EACH
PROXY RECEIVED WILL BE VOTED FOR EACH OF THE MATTERS DESCRIBED HEREIN AND, UPON
THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING,
IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS APPOINTED AS PROXIES.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (Mary Anne Chiasson, Secretary, CitiSave Financial Corporation);
(ii) submitting a duly executed proxy bearing a later date; or (iii) appearing
at the Special Meeting and giving the Secretary notice of his or her intention
to vote in person. Proxies solicited hereby may be exercised only at the
Special Meeting and any adjournment thereof and will not be used for any other
meeting.
VOTING AND REQUIRED VOTES
Only stockholders of record at the close of business on June 3, 1996
("Voting Record Date") will be entitled to vote at the Special Meeting. On the
Voting Record Date, there were 964,707 shares of Common Stock issued and
outstanding, and the Company had no other class of equity securities
outstanding. Each share of Common Stock outstanding is entitled to one vote at
the Special Meeting on each matter properly presented at the Special Meeting.
A quorum consists of stockholders representing, either in person or by
proxy, a majority of the outstanding Common Stock entitled to vote at the
meeting. Abstentions are considered in determining the presence of a quorum.
The affirmative vote of the holders of a majority of the total votes eligible
to be cast in person or by proxy at the Special Meeting is required for
approval of the proposals to approve the 1996 Key Employee Stock Compensation
Program (the "Program"), the 1996 Directors' Stock Option Plan ("Directors'
<PAGE> 5
Option Plan") and the 1996 Management Recognition Plan for Officers and Trust
Agreement ("Officers' MRP") (collectively, the "Stock Benefit Plans"). The
affirmative vote of the holders of a majority of the total votes present in
person or by proxy is required to adjourn the Special Meeting, if such
adjournment is necessary. Because of the required votes, abstentions will have
the effect of a vote against the proposals with respect to the Stock Benefit
Plans. Under rules of the American Stock Exchange ("AMEX"), the proposal for
approval of the adjournment of the Special Meeting is considered a
"discretionary" item upon which brokerage firms may vote in their discretion on
behalf of their clients if such clients have not furnished voting instructions
and for which there will not be "broker non-votes." The proposals to approve
the Stock Benefit Plans, however, are considered "non-discretionary" and for
which there will be broker non-votes. A broker non-vote will have the same
effect as a vote against the proposals to approve the Stock Benefit Plans.
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) the only person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("1934 Act"), who or which was
known to the Company to be the beneficial owner of more than 5% of the issued
and outstanding Common Stock, (ii) the directors of the Company, and (iii) all
directors and executive officers of the Company and the Association as a group.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as of
June 3, 1996(1)
--------------------------------------
Name of Beneficial Owner Amount %
- - --------------------------------------------------------------- --------------------- --------------
<S> <C> <C>
CitiSave Financial Corporation 77,177(2) 8.0%
Employee Stock Ownership Plan Trust
665 Florida Street
Baton Rouge, Louisiana 70801
Directors:
Dr. Ernest D. Bateman, Jr. 23,500(3) 2.4%
S. Pendery Gibbens, Jr. 5,000(4) *
Dr. Clarence B. Hackett 2,500(5) *
Howard L. Harvill 1,000(6) *
Wayne P. Hirschey 20,000(7) 2.1%
Ferd B. Kramer, Jr. 7,500(8) *
Frank D. McArthur, II 15,000 1.6%
Lee F. Nettles 10,988(9) 1.1%
Charlotte H. Smith 20,000(6)(10) 2.1%
All directors and executive officers of the
Company and the Association as a group
(11 persons) 107,869(2)(11) 11.2%
</TABLE>
(Footnotes on following page)
2
<PAGE> 6
- - ---------------------
* Represents less than 1% of the outstanding Common Stock.
(1) For purposes of this table, pursuant to rules promulgated under the 1934
Act, an individual is considered to beneficially own shares of Common
Stock if he or she directly or indirectly has or shares (i) voting power,
which includes the power to vote or to direct the voting of the shares;
or (ii) investment power, which includes the power to dispose or direct
the disposition of the shares. Unless otherwise indicated, an individual
has sole voting power and sole investment power with respect to the
indicated shares. Does not include stock options or MRP shares to be
granted if the Stock Benefit Plans are approved at the Special Meeting.
(2) The CitiSave Financial Corporation Employee Stock Ownership Plan Trust
("Trust") was established pursuant to the CitiSave Financial Corporation
Employee Stock Ownership Plan ("ESOP") by an agreement between the
Company and Messrs. Nettles and Bellard and Ms. Smith, who act as
trustees of the plan ("Trustees"). As of the Voting Record Date, 73,301
shares of Common Stock held in the Trust were unallocated and 3,876
shares had been allocated to the accounts of participating employees.
Under the terms of the ESOP, the Trustees must vote the allocated shares
held in the ESOP in accordance with the instructions of the participating
employees. Unallocated shares held in the ESOP will be voted by the ESOP
Trustees in the same proportion for and against proposals to stockholders
as the ESOP participants and beneficiaries actually vote shares of Common
Stock allocated to their individual accounts. Any allocated shares which
either abstain on the proposal or are not voted will be disregarded in
determining the percentage of stock voted for and against each proposal
by the participants and beneficiaries. The amount of Common Stock
beneficially owned by directors and executive officers who serve as
trustees of the ESOP and by all directors and executive officers as a
group does not include the shares held by the Trust, except for the
shares actually allocated to the accounts of the executive officers.
(3) Includes 20,000 shares held by Mr. Bateman's individual retirement
account ("IRA") and 3,500 shares held by his spouse, which shares may be
deemed to be beneficially owned by Mr. Bateman. Excludes 2,500 shares
held by the Association's retirement plan, of which Mr. Bateman is one of
three trustees.
(4) Includes 3,900 shares held by Mr. Gibben's IRA.
(5) All 2,500 shares are held by Mr. Hackett's IRA.
(6) The shares are owned jointly with the person's spouse.
(7) Includes 10,000 shares held jointly with Mr. Hirschey's children.
(8) Includes 5,000 shares held by Mr. Kramer's IRA.
(9) Includes 2,240 shares held by Mr. Nettles' IRA and 788 shares allocated
to Mr. Nettles' ESOP account. Excludes the remaining shares held by the
ESOP, of which Mr. Nettles is one of three trustees, and 2,500 shares
held by the Association's retirement plan, of which Mr. Nettles is one
of three trustees.
(10) Excludes the shares held by the ESOP, of which Ms. Smith is one of three
trustees.
(11) Includes 1,419 shares allocated to the accounts of the executive officers
under the ESOP.
3
<PAGE> 7
PROPOSAL TO ADOPT THE 1996
KEY EMPLOYEE STOCK COMPENSATION PROGRAM
GENERAL
As a performance incentive and to encourage ownership of its Common
Stock, the Board of Directors has adopted the 1996 Key Employee Stock
Compensation Program (the "Program"). The Program is designed to attract and
retain qualified personnel in key positions, provide key employees with a
proprietary interest in the Company as an incentive to contribute to the
success of the Company and reward key employees for outstanding performance and
the attainment of targeted goals.
An aggregate of 67,529 shares of authorized but unissued Common Stock of
the Company has been reserved for future issuance under the Program, which is
equal to 7.0% of the Common Stock of the Company issued to the public in
connection with the Conversion. Shares will be issuable under the Program
pursuant to the exercise of incentive stock options intended to comply with the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), non-incentive or compensatory stock options and stock appreciation
rights (collectively, "Awards"). The Program shall remain in effect for a term
of ten years unless sooner terminated in accordance with its provisions.
Termination of the Program shall not affect any Awards previously granted, and
such Awards shall remain valid and in effect until they have been fully
exercised or earned, are surrendered or by their terms expire or are forfeited.
ADMINISTRATION AND ELIGIBILITY
The Program will be administered by a committee appointed by the Board of
Directors composed of not less than two directors of the Company, none of whom
is a full-time officer or employee of the Company ("Program Administrators"),
which committee will have absolute discretion under the Program to select the
persons to whom options and rights will be granted and to determine the number
of shares subject to each option or right. The Company estimates that there
are approximately 31 persons eligible to receive Awards under the Program. The
initial Program Administrators are Ms. Smith and Messrs. Harvill and McArthur,
II.
DESCRIPTION OF THE PROGRAM
The following description of the Program is a summary of its terms and is
qualified in its entirety by reference to the Program. A COPY OF THE PROGRAM
IS AVAILABLE UPON REQUEST TO THE COMPANY BY A STOCKHOLDER OF RECORD. Any such
request should be directed to Mary Anne Chiasson, Secretary, CitiSave Financial
Corporation, 665 Florida Street, Baton Rouge, Louisiana 70801.
INCENTIVE AND COMPENSATORY OPTIONS. One or more options may be granted
under the Program to any eligible person, provided that the aggregate fair
market value (determined at the time the options are granted) of the stock for
which incentive options (defined below) are first exercisable by any employee
during any calendar year under the terms of the Program and all such plans of
the Company shall not exceed $100,000. Options granted within the foregoing
limitation are intended to qualify as "incentive stock options" as defined
4
<PAGE> 8
in Section 422 of the Code. Additional nonstatutory stock options may be
granted under the Program ("compensatory options"). As described below, the
tax treatment of these types of options differs significantly.
An incentive stock option is defined in the Code as an option granted to
an employee in connection with his or her employment to purchase stock in the
Company and which satisfies certain conditions. The incentive stock option
must be granted pursuant to a plan specifying the aggregate number of shares to
be issued and the employees, or class of employees, eligible to receive
options. The plan must be approved by the stockholders of the granting
corporation within twelve months of the date of adoption of the plan. The
incentive stock option price must be not less than the fair market value of the
stock at the date of the grant, the incentive stock option must be granted
within ten years from the date of adoption of the plan and, by its terms, the
incentive stock option must not be exercisable after ten years from the date it
was granted. In the case of any employee who owns more than 10% of the
combined voting power of all classes of stock of the Company, or of its
subsidiaries, the option price may not be less than 110% of the fair market
value of the stock at the date of the grant and the employee must exercise any
options within five years from the date of the grant. The incentive stock
option cannot be transferable, except by will or by the laws of descent and
distribution, and must be exercised only by the optionee during his or her
lifetime. Finally, as noted, under the terms of the plan, the aggregate fair
market value (determined at the time of the grant) of stock for which incentive
options first become exercisable by any employee during any calendar year under
the terms of the Program and all such plans of the Company shall not exceed
$100,000. The Program conforms with the above requirements for incentive stock
options.
Compensatory stock options granted under the Program shall expire on the
date determined by the Program Administrators, but in no event shall such
options expire later than ten years and one month from the date on which such
compensatory stock options were granted. The purchase price for shares
acquired pursuant to the exercise of compensatory stock options shall be equal
to the fair market value of the shares at the time of the grant of the option,
as determined by the Program Administrators at the time of grant. Like
incentive stock options, compensatory stock options are not transferable,
except by will and the laws of descent and distribution, and must be exercised
only by the optionee during his or her lifetime.
Each stock option and stock appreciation right granted under the Program
shall become exercisable at the rate, to the extent and subject to such
limitations as may be determined by the Program Administrators, and the right
to exercise may be cumulative. No vesting shall occur after a participant's
employment with the Company is terminated for any reason, except that all
options and rights will become 100% exercisable (to the extent not previously
exercised) in the event employment is terminated due to death, disability or a
change in control or threatened change in control of the Company, as determined
by the Board of Directors. A "change in control" of the Company is defined as
the acquisition of 20% or more of the voting securities of the Company by any
person or by persons acting as a group within the meaning of Section 13(d) of
the Exchange Act; provided, however, that for purposes of the Program, no
change in control or threatened change in control shall be deemed to have
occurred if prior to the acquisition of, or offer to acquire, 20% or more of
the voting securities of the Company, the full Board of Directors of the
Company shall have adopted by not less than two-thirds vote a resolution
specifically approving such acquisition
5
<PAGE> 9
or offer. The Program also provides for an acceleration of unvested stock
options in the event of a merger, sale of substantially all assets, or other
reorganization of the Company where the then current stockholders of the
Company would not own at least 50% of the voting stock of any surviving entity.
If any optionee's employment is terminated due to disability, incentive
stock options and compensatory stock options may be exercised (to the extent
exercisable on the date of termination of employment) within one year following
such termination of employment, unless either the option or the Program
otherwise provides for earlier termination. If any optionee's employment is
terminated due to death, both incentive and compensatory stock options may be
exercised by the person(s) to whom the optionee's rights pass by will or by the
laws of descent and distribution for a period of one year following the date of
death, unless the option by its terms expires sooner and except as otherwise
limited by the Program Administrators at the time the option was granted.
However, incentive stock options would have to be exercised within three months
following termination of employment in order to continue to qualify as an
incentive stock option. If an optionee's employment is terminated for any
reason other than death or disability, both incentive and compensatory stock
options will terminate immediately upon termination of employment; provided,
however, that the Program Administrators may, in their discretion, extend the
time period for incentive stock options to up to three months and for
compensatory stock options to up to one year after the date of termination (to
the extent exercisable on the date of termination), unless either the option or
the Program otherwise provides for earlier termination.
Payment for shares purchased under the Program may be made either in
cash, by certified or cashier's check or, if permitted by the Program
Administrators, by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an option) with a fair market value equal to the
total option price, by withholding some of the shares of Common Stock which are
being purchased upon exercise of an option, or any combination of the
foregoing. To the extent an optionee already owns shares of Common Stock prior
to the exercise of his or her option, such shares could be used (if permitted
by the Program Administrators) as payment for the exercise price of the option.
If the fair market value of a share of Common Stock at the time of exercise is
greater than the exercise price per share, this feature would enable the
optionee to acquire a number of shares of Common Stock upon exercise of the
option which is greater than the number of shares delivered as payment for the
exercise price. In addition, an optionee can exercise his or her option in
whole or in part and then deliver the shares acquired upon such exercise (if
permitted by the Program Administrators) as payment for the exercise price of
all or part of his options. Again, if the fair market value of a share of
Common Stock at the time of exercise is greater than the exercise price per
share, this feature would enable the optionee to either (1) reduce the amount
of cash required to receive a fixed number of shares upon exercise of the
option or (2) receive a greater number of shares upon exercise of the option
for the same amount of cash that would have otherwise been used. Because
options may be exercised in part from time to time, the ability to deliver
Common Stock as payment of the exercise price could enable the optionee to turn
a relatively small number of shares into a large number of shares.
The granting of a stock option does not confer upon the optionee any
right to remain in the employ of the Company. The optionee will have no
dividend or voting rights with respect to the shares until the option price has
been paid in full upon exercise.
6
<PAGE> 10
STOCK APPRECIATION RIGHTS. Under the Program, the Program Administrators
may, in their sole discretion, accept surrender of the right to exercise any
incentive option or compensatory option by an optionee in return for payment by
the Company to the optionee of cash or, subject to certain conditions, Common
Stock of the Company in an amount equal to the excess of the fair market value
of the shares of Common Stock subject to exercise at the time over the exercise
price of such shares, or a combination of cash and Common Stock. An optionee
may exercise such stock appreciation rights only during the period beginning on
the third business day following the release of certain quarterly or annual
financial information and ending on the twelfth business day following such
date.
Upon the exercise of a stock appreciation right, the stock option to
which it relates terminates with respect to the number of shares as to which
the right is so exercised. Conversely, upon the exercise of a stock option,
any related stock appreciation right shall terminate as to any number of shares
subject to the right that exceeds the total number of shares for which the
stock option remains unexercised. Stock appreciation rights which relate to
incentive stock options must be granted concurrently with the incentive stock
options, while stock appreciation rights which relate to compensatory stock
options may be granted concurrently with the option or at any time thereafter
which is prior to the exercise or expiration of such options.
ADJUSTMENTS TO NUMBER OF SHARES AND EXERCISE PRICE. If the shares of
Common Stock are increased, decreased, changed into or exchanged for a
different number or kind of shares or securities through merger, consolidation,
combination, exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made in the maximum number
and kind of shares as to which options and appreciation rights may be granted
under the Program, including the maximum number of options and appreciation
rights that may be granted to any individual. A corresponding adjustment
changing the number or kind of shares allocated to unexercised options,
appreciation rights or portions thereof, which shall have been granted prior to
any such change, shall likewise be made. Any such adjustment in outstanding
options and appreciation rights shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the option or
appreciation right but with a corresponding adjustment in the price for each
share covered by the option or appreciation right. In the event the Company
declares a special cash dividend or return of capital in an amount per share
which exceeds 10% of the fair market value of a share of Common Stock as of the
date of declaration, the per share exercise price of all previously granted
stock options and stock appreciation rights which remain unexercised as of the
date of such declaration shall be proportionately adjusted to give effect to
such special cash dividend or return of capital as of the date of payment of
such special cash dividend or return of capital; provided, however, that if
such adjustment with respect to incentive stock options would be treated as a
modification of the outstanding incentive stock options with the effect that,
for purposes of Sections 422 and 425(h) of the Code and the rules and
regulations thereunder, new incentive stock options would be deemed to be
granted, then no adjustment to the per share exercise price of outstanding
incentive stock options shall be made.
7
<PAGE> 11
AWARDS UNDER THE PROGRAM
The Company anticipates that, upon receipt of stockholder approval of the
Program, stock options to purchase shares of the Company's Common Stock will be
granted to the executive officers of the Company with a per share exercise
price equal to the fair market value of the Common Stock on the date of grant,
as set forth in the following table. Such options shall vest and become
exercisable as of the date of grant. As of May 20, 1996, the last sales price
for the Common Stock was $14.75 per share.
<TABLE>
<CAPTION>
Number of Shares Percentage of
to be Subject to Shares Subject
Name Stock Options to the Program
---- ------------- --------------
<S> <C> <C>
Lee F. Nettles 24,117(1) 35.7%
All executive officers
as a group (three persons) 42,617(2) 63.1(2)
All employees, not including
executive officers, as a group
(28 persons) 17,950 26.6
------ ----
Total 60,567 89.7%
====== ====
</TABLE>
- - -----------------------------------------
(1) The maximum amount permissible will be incentive stock options.
(2) Includes the options to be granted to Mr. Nettles.
AMENDMENTS
The Program Administrators may at any time amend or terminate the Program
with respect to any shares of Common Stock as to which Awards have not been
granted, subject to any required stockholder approval or any stockholder
approval which the Board may deem to be advisable for any reason, such as for
the purpose of obtaining or retaining any statutory or regulatory benefits
under tax, securities or other laws or satisfying any applicable stock exchange
listing requirements. The Board may not, without the consent of the holder of
an Award, alter or impair any Award previously granted or awarded under the
Program except as specifically authorized in the Program.
FEDERAL INCOME TAX CONSEQUENCES
Under current provisions of the Code, the federal income tax treatment of
incentive stock options and compensatory stock options is substantially
different. As regards incentive stock options, an optionee who does not
dispose of the shares within two years after the option was granted, or within
one year after the option was exercised, will not recognize income at the time
the option is exercised, and no federal income tax deduction will be available
to the Company at any time as a result of such grant or exercise. However, the
excess of the fair market value of the stock subject to an incentive stock
option on the date such option is exercised over the exercise price of the
option will be treated as an item of tax preference in the year of exercise for
purposes of the alternative minimum tax. If stock acquired pursuant to an
incentive stock option is disposed of before the holding periods
8
<PAGE> 12
described above expire, then the excess of the fair market value (but not in
excess of the sales proceeds) of such stock on the option exercise date over
the option exercise price will be treated as compensation income to the
optionee in the year in which such disposition occurs and, if it complies with
applicable withholding requirements, the Company will be entitled to a
commensurate income tax deduction. If the holding periods are satisfied, any
difference between the sales proceeds and the fair market value of the stock on
the option exercise date will be treated as long-term capital gain or loss.
With respect to compensatory stock options, the difference between the
fair market value of the Common Stock on the date of exercise and the option
exercise price generally will be treated as compensation income upon exercise,
and the Company will be entitled to a deduction in the amount of income so
recognized by the optionee. Upon a subsequent disposition of the shares, the
difference between the amount received by the optionee and the fair market
value on the option exercise date will be treated as long or short-term capital
gain or loss, depending on whether the shares were held for more than one year.
No federal income tax consequences are incurred by the Company or the
holder at the time a stock appreciation right is granted. However, upon the
exercise of a stock appreciation right, the holder will realize income for
federal income tax purposes equal to the amount received by him, whether in
cash, shares of stock or both, and the Company will be entitled to a deduction
for federal income tax purposes at the same time and in the same amount.
The above description of tax consequences is necessarily general in
nature and does not purport to be complete. Moreover, statutory provisions are
subject to change, as are their interpretations, and their application may vary
in individual circumstances. Finally, the consequences under applicable state
and local income tax laws may not be the same as under the federal income tax
laws.
ACCOUNTING TREATMENT
Generally accepted accounting principles ("GAAP") require that the
estimated costs of stock appreciation rights be charged to the Company's
earnings based on the change in the market price of the Common Stock at the
beginning (or grant date if granted during the period) and end of each
accounting period, if it is higher than the exercise price. In the event of a
decline in the market price of the Company's Common Stock subsequent to a
charge against earnings related to the estimated costs of stock appreciation
rights, a reversal of prior charges is made in the amount of such decline (but
not to exceed aggregate prior increases).
Neither the grant nor the exercise of an incentive stock option or a
compensatory stock option under the Program requires any charge against
earnings. In October 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation," which is effective for transactions
entered into after December 15, 1995. This Statement establishes financial
accounting and reporting standards for stock-based employee compensation plans.
This Statement defines a fair value method of accounting for an employee stock
option or similar equity instrument and encourages all entities to adopt that
method of accounting for all of their employee stock compensation plans.
However, it also allows an entity to continue to
9
<PAGE> 13
measure compensation cost for those plans using the intrinsic value method of
accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees." Under the fair value method, compensation cost is measured at the
grant date based on the value of the award and is recognized over the service
period, which is usually the vesting period. Under the intrinsic value method,
compensation cost is the excess, if any, of the quoted market price of the
stock at grant date or other measurement date over the amount an employee must
pay to acquire the stock. The Company anticipates that it will use the
intrinsic value method, in which event pro forma disclosure will be included in
the footnotes to the Company's financial statements to show what net income and
earnings per share would have been if the fair value method had been utilized.
If the Company elects to utilize the fair value method, its net income and
earnings per share may be adversely affected.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ADOPTION
OF THE 1996 KEY EMPLOYEE STOCK COMPENSATION PROGRAM.
PROPOSAL TO ADOPT THE 1996 DIRECTORS' STOCK OPTION PLAN
GENERAL
In order to attract and retain qualified directors for the Company and
the Association, the Board of Directors of the Company has adopted the 1996
Directors' Stock Option Plan. An aggregate of 28,941 shares of authorized but
unissued Common Stock of the Company has been reserved for issuance under the
Directors' Option Plan, which is equal to 3.0% of the Common Stock of the
Company issued in the Conversion. Shares will be issuable under the Directors'
Option Plan pursuant to the exercise of stock options. Options granted under
the Directors' Option Plan are intended to not qualify as "incentive stock
options" as defined in Section 422 of the Code. The Directors' Option Plan
shall remain in effect for a term of ten years from the date it was adopted by
the Board of Directors, unless sooner terminated in accordance with its
provisions. Termination of the Directors' Option Plan shall not affect any
Options previously granted, and such Options shall remain valid and in effect
until they have been fully exercised or earned, are surrendered or by their
terms expire or are forfeited.
ADMINISTRATION AND ELIGIBILITY
The Directors' Option Plan will be administered by the entire Board of
Directors of the Company, subject to and within the limits of the express
provisions of the Directors' Option Plan. Options shall be granted pursuant to
the Directors' Option Plan to each director of the Company who is not an
employee of the Company or any subsidiary of the Company ("non-employee
director"). No honorary directors, advisory directors or directors emeritus
are entitled to receive options under the Directors' Option Plan.
DESCRIPTION OF THE DIRECTORS' OPTION PLAN
The following description of the Directors' Option Plan is a summary of
its terms and is qualified in its entirety by reference to the Directors'
Option Plan. A COPY OF THE DIRECTORS' OPTION PLAN IS AVAILABLE UPON REQUEST TO
THE COMPANY FROM A STOCKHOLDER OF
10
<PAGE> 14
RECORD. Any such request should be directed to Mary Anne Chiasson, Secretary,
CitiSave Financial Corporation, 665 Florida Street, Baton Rouge, Louisiana
70801.
Under the Directors' Option Plan, compensatory stock options will be
automatically granted to non-employee directors at the following times and in
the following amounts:
(a) on the date the Directors' Option Plan is approved by the
stockholders of the Company, each person who serves as a non-employee
director of the Company as of such date shall be granted an option for
the number of shares of Common Stock (rounded down to the nearest whole
share) determined by multiplying the number of shares which may be
issued pursuant to the plan by 90% and dividing such product by the
number of non-employee directors at such time;
(b) on the one-year anniversary of the date the Directors' Option
Plan is approved by the stockholders of the Company, each person who
serves as a non-employee director of the Company as of such date shall
be granted an option to purchase the number of shares of Common Stock
(rounded down to the nearest whole share) determined by dividing the
remaining number of shares which may be issued pursuant to the plan by
the number of non-employee directors at such time; and
(c) in the event any options granted to a non-employee director
expire or terminate for any reason before they have been exercised in
full, the unpurchased shares subject to those expired or terminated
options shall be granted to persons who become a non- employee director
for the first time following the date options are granted pursuant to
clause (b) above, as follows: (1) on the date such person is first
appointed or elected as a non-employee director, he shall receive an
option for 1,000 shares or such lesser number of shares as may be
available for grants under the plan; and (2) if such person does not
receive an option for 1,000 shares as of the date he is first appointed
or elected as a non-employee director because sufficient shares were
not available, he shall receive one or more additional grants as of
each day, if any, that an option subsequently expires or terminates
until the number of options granted to him shall aggregate 1,000
shares.
During the life of the Directors' Option Plan, no non-employee director
shall be granted stock options pursuant to such plan in an aggregate amount in
excess of 4,823 shares of Common Stock, subject to adjustment to reflect
changes in the Company's capitalization. It is anticipated that the eight
non-employee directors will each receive an option for 3,255 shares on the date
the Directors' Option Plan is approved by stockholders.
Each stock option granted under the Directors' Option Plan will be
exercisable at a price equal to the fair market value of a share of the
Company's Common Stock on the date of grant. The purchase price for shares of
Common Stock purchased pursuant to the exercise of an option must be paid in
full upon exercise of the option. Payment may be made in cash or by delivering
shares of Common Stock (including shares acquired pursuant to the exercise of
an option) equal in fair market value to the purchase price of the shares to be
acquired pursuant to the option, by withholding some of the shares of Common
Stock which are being purchased upon exercise of an option, or any combination
of the foregoing. To the extent an optionee already owns shares of Common
Stock prior to the exercise of his option, such shares could be used as payment
for the exercise price of the option. If the
11
<PAGE> 15
fair market value of a share of Common Stock at the time of exercise is greater
than the exercise price per share, this feature would enable the optionee to
acquire a number of shares of Common Stock upon exercise of the option which is
greater than the number of shares delivered as payment for the exercise price.
In addition, an optionee can exercise his option in whole or in part and then
deliver the shares acquired upon such exercise as payment for the exercise
price of all or part of his options. Again, if the fair market value of a
share of Common Stock at the time of exercise is greater than the exercise
price per share, this feature would enable the optionee to either (1) reduce
the amount of cash required to receive a fixed number of shares upon exercise
of the option or (2) receive a greater number of shares upon exercise of the
option for the same amount of cash that would have otherwise been used.
Because options may be exercised in part from time to time, the ability to
deliver Common Stock as payment of the exercise price could enable the optionee
to turn a relatively small number of shares into a large number of shares.
The aggregate number of shares of Common Stock available for issuance
under the Directors' Option Plan, the number of shares to which any option
relates, the exercise price per share of Common Stock under any option and the
maximum number of options which may be granted to any non-employee director
shall be proportionately adjusted for any increase or decrease in the total
number of outstanding shares of Common Stock resulting from a split,
subdivision or consolidation of shares or any other capital adjustment, the
payment of a stock dividend, or other increase or decrease in such shares
effected without receipt or payment of consideration by the Company. If, upon
a merger, consolidation, reorganization, liquidation, recapitalization or the
like of the Company, the shares of the Company's Common Stock shall be
exchanged for other securities of the Company or of another corporation, each
recipient of an option shall be entitled to purchase or acquire such number of
shares of Common Stock or amount of other securities of the Company or such
other corporation as were exchangeable for the number of shares of Common Stock
of the Company which such optionees would have been entitled to purchase or
acquire except for such action, and appropriate adjustments shall be made to
the per share exercise price of outstanding options. In the event the Company
declares a special cash dividend or return of capital in an amount per share
which exceeds 10% of the fair market value of a share of Common Stock as of the
date of declaration, the per share exercise price of all previously granted
options which remain unexercised as of the date of such declaration shall be
proportionately adjusted to give effect to such special cash dividend or return
of capital.
Options will be exercisable at any time on or after six months
following the date the option was granted until ten years after the date of
grant, except as set forth below. Options granted pursuant to the Directors'
Option Plan are not transferable except by will or the laws of descent and
distribution and during an optionee's lifetime may be exercised only by the
optionee or his guardian or legal representative. If a non-employee director
dies or terminates his service as a result of disability, retirement,
resignation or non-reelection without having fully exercised his options, then
the optionee or the executors, administrators, legatees or distributees of his
estate shall have the right, during the twelve-month period following such
death, disability, retirement, resignation or non-reelection, to exercise his
options, provided that no option shall be exercisable within six months after
the date of grant or more than ten years from the date it was granted. Options
granted to a non-employee director who is removed by stockholders for cause
shall terminate as of the effective date of such removal. Neither the
Directors' Option Plan nor the grant of any options thereunder, nor any action
taken by the Board of Directors in connection with the
12
<PAGE> 16
Directors' Option Plan, shall create any right on the part of any non-employee
director of the Company to continue as such.
AMENDMENTS
The Board of Directors may at any time terminate or amend the
Directors' Option Plan with respect to any shares of Common Stock as to which
options have not been granted, subject to any required stockholder approval or
any stockholder approval which the Board may deem to be advisable for any
reason, such as for the purpose of obtaining or retaining any statutory or
regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements. The Board may not, without the
consent of the holder of an option, alter or impair any option previously
granted under the Directors' Option Plan except as specifically authorized
therein. Certain provisions of the Directors' Option Plan cannot be amended
more than once every six months, other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the rules and regulations promulgated under such statutes.
FEDERAL INCOME TAX CONSEQUENCES
Under current provisions of the Code, the difference between the fair
market value of the Common Stock on the date of exercise of a non-qualified
stock option and the option exercise price generally will be treated as
compensation income upon exercise, and the Company will be entitled to a
deduction in the amount of income so recognized by the optionee. Upon a
subsequent disposition of the shares, the difference between the amount
received by the optionee and the fair market value of the Common Stock on the
option exercise date will be treated as long or short-term capital gain or
loss, depending on whether the shares were held for more than one year.
The above description of tax consequences is necessarily general in
nature and does not purport to be complete. Moreover, statutory provisions are
subject to change, as are their interpretations, and their application may vary
in individual circumstances. Finally, the consequences under applicable state
and local income tax laws may not be the same as under the federal income tax
laws.
ACCOUNTING TREATMENT
For a discussion of SFAS No. 123, see "Proposal to Adopt the 1996
Program - Accounting Treatment."
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
ADOPTION OF THE 1996 DIRECTORS' STOCK OPTION PLAN.
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<PAGE> 17
PROPOSAL TO ADOPT THE 1996 MANAGEMENT RECOGNITION
PLAN FOR OFFICERS AND TRUST AGREEMENT
GENERAL
The Board of Directors of the Company has adopted the Officers' MRP,
the objective of which is to enable the Company to provide officers and key
employees with a proprietary interest in the Company as compensation for their
contributions to the Company and its subsidiaries and as an incentive to
contribute to the Company's future success. Officers and key employees of the
Company who are selected by members of a committee appointed by the Board of
Directors of the Company will be eligible to receive benefits under the
Officers' MRP.
DESCRIPTION OF THE OFFICERS' MRP
The following description of the Officers' MRP is a summary of its
terms and is qualified in its entirety by reference to the Officers' MRP. A
COPY OF THE OFFICERS' MRP IS AVAILABLE UPON REQUEST TO THE COMPANY BY A
STOCKHOLDER OF RECORD. Any such request should be directed to Mary Anne
Chiasson, Secretary, CitiSave Financial Corporation, 665 Florida Street, Baton
Rouge, Louisiana 70801.
ADMINISTRATION. The initial administrators of the Officers' MRP will
be Ms. Smith and Messrs. Harvill and McArthur, II, who will also serve as
trustees of the trust established pursuant to the Officers' MRP ("Officers' MRP
Trust"). The trustees have the responsibility to invest all funds contributed
by the Company to the Officers' MRP Trust.
Upon stockholder approval of the Officers' MRP, the Company will
acquire Common Stock on behalf of the Officers' MRP, in an amount equal to 4.0%
of the Common Stock issued in the Conversion, or 38,588 shares. These shares
are expected to be acquired through open market purchases.
GRANTS. Shares of Common Stock granted pursuant to the Officers' MRP
will be in the form of restricted stock payable over a five-year period at a
rate of 20% per year, on each annual anniversary of the date the award was
granted. If a recipient's employment is terminated for reasons other than
death, disability or a change in control of the Company, the recipient will
forfeit all rights to the shares which have not been earned or vested. If the
recipient's termination is caused by death, disability or a change in control
of the Company, the awarded shares will be deemed 100% earned and all allocated
shares will become unrestricted. A "change in control of the Company" is
defined as a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act, or any successor thereto, whether or not the Company in
fact is required to comply with Regulation 14A thereunder; provided that,
without limitation, a change in control shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), or any group of "persons" acting in concert, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities, or (ii)
during any period of two consecutive years during the term of the Officers'
MRP, individuals who at the beginning of such period
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<PAGE> 18
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period. The Board of
Directors of the Company can terminate the Officers' MRP at any time, and if it
does so, any shares not allocated will revert to the Company.
A recipient will be entitled to all voting and other stockholder rights
with respect to shares which have been awarded under the Officers' MRP.
However, until such shares have been earned and allocated, they may not be
sold, pledged or otherwise disposed of and are required to be held in the
Officers' MRP Trust. After shares have been awarded to a recipient, the
recipient will be entitled to direct the trustees as to the voting of the
shares covered by the award which have not yet been earned and distributed. If
the trustees do not receive such voting instructions, the unearned shares will
not be voted. Any cash dividends, stock dividends or returns of capital on
unvested shares awarded to a recipient will be paid to the recipient as soon as
practicable after receipt of such dividends or returns of capital by the
Officers' MRP.
FEDERAL INCOME TAX CONSEQUENCES. Pursuant to Section 83 of the Code,
recipients of awards under the Officers' MRP will recognize ordinary income in
an amount equal to the fair market value of the shares of Common Stock granted
to them at the time that the shares vest and become transferable. A recipient
of an award may also elect, however, to accelerate the recognition of income
with respect to his grant to the time when shares of Common Stock are first
transferred to him, notwithstanding the vesting schedule of such awards. The
Company will be entitled to deduct as a compensation expense for tax purposes
the same amounts recognized as income by recipients of awards in the year in
which such amounts are included in income.
ACCOUNTING TREATMENT. For a discussion of SFAS No. 123, see "Proposal
to Adopt the 1996 Key Employee Stock Compensation Program - Accounting
Treatment." Under the intrinsic value method, the Company will also recognize
a compensation expense as shares of Common Stock granted pursuant to the
Officers' MRP vest. The amount of compensation expense recognized for
accounting purposes is based upon the fair market value of the Common Stock at
the date of grant to recipients, rather than the fair market value at the time
of vesting for tax purposes.
STOCKHOLDER APPROVAL. No shares will be granted under the Officers'
MRP unless the Officers' MRP is approved by stockholders. Stockholder
ratification of the Officers' MRP will enable recipients of shares under the
Officers' MRP to qualify for certain exemptive treatment from the short-swing
profit provisions of Section 16(b) of the Exchange Act.
SHARES TO BE GRANTED. The Board of Directors of the Company adopted
the Officers' MRP, and the Committee established thereunder intends to grant
shares to executive officers and employees of the Company as soon as
practicable following stockholder approval of the Officers' MRP. The table on
the following page sets forth certain information with respect to such proposed
grants.
15
<PAGE> 19
<TABLE>
<CAPTION>
Percentage of Shares
Number of Shares Subject to the
Name to be Awarded Officers' MRP
- - --------------------------------------- ------------------------------------- --------------------------
<S> <C> <C>
Lee F. Nettles 9,647 25.0%
All executive officers as
a group (three persons) 21,747(1) 56.4(1)
All employees, not including
executive officers, as a
group (28 persons) 11,100 28.8
------ ----
Total 32,847 85.1%
====== ====
</TABLE>
- - -------------------------
(1) Includes the shares to be awarded to Mr. Nettles.
The above grants of restricted stock will vest over five years at the
rate of 20% per year, commencing on the first anniversary of the date of grant.
During the life of the Officers' MRP, no employee may receive grants pursuant
to such plan for an aggregate number of shares in excess of 9,647 shares of
Common Stock, subject to adjustment to reflect changes in the Company's
capitalization.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION
OF THE 1996 MANAGEMENT RECOGNITION FOR OFFICERS AND TRUST AGREEMENT.
ADJOURNMENT OF SPECIAL MEETING
Each proxy solicited hereby requests authority to vote for an
adjournment of the Special Meeting, if an adjournment is deemed to be
necessary. The Company may seek an adjournment of the Special Meeting for not
more than 29 days in order to enable the Company to solicit additional votes in
favor of the proposals to adopt one or more of the Stock Benefit Plans in the
event that any of such proposals has not received the requisite vote of
stockholders at the Special Meeting and such proposal has not received the
negative votes of the holders of a majority of the Company's Common Stock. If
the Company desires to adjourn the meeting with respect to any of the proposals
relating to the Stock Benefit Plans, it will request a motion that the meeting
be adjourned for up to 29 days with respect to such proposal or proposals (and
solely with respect to such proposal or proposals, provided that a quorum is
present at the Special Meeting), and no vote will be taken on such proposal(s)
at the originally scheduled Special Meeting. Each proxy solicited hereby, if
properly signed and returned to the Company and not revoked prior to its use,
will be voted on any motion for adjournment in accordance with the instructions
contained therein. If no contrary instructions are given, each proxy received
will be voted in favor of any motion to adjourn the meeting. Unless revoked
prior to its use, any proxy solicited for the Special Meeting will continue to
be valid for any adjournment of the Special Meeting, and will be voted in
accordance with instructions contained therein, and if no contrary instructions
are given, for the proposal(s) in question.
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<PAGE> 20
Any adjournment will permit the Company to solicit additional proxies
and will permit a greater expression of the stockholders' views with respect to
such proposal(s). Such an adjournment would be disadvantageous to stockholders
who are against the proposal(s), because an adjournment will give the Company
additional time to solicit favorable votes and thus increase the chances of
passing such proposal(s).
If a quorum is not present at the Special Meeting, no proposal will be
acted upon and the Board of Directors of the Company will adjourn the Special
Meeting to a later date in order to solicit additional proxies on each of the
proposals being submitted to stockholders.
An adjournment for up to 29 days will not require either the setting of
a new record date or notice of the adjourned meeting as in the case of an
original meeting. The Company has no reason to believe that an adjournment of
the Special Meeting will be necessary at this time.
BECAUSE THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE PROPOSALS TO ADOPT EACH OF THE STOCK BENEFIT PLANS, AS DISCUSSED ABOVE, THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE POSSIBLE
ADJOURNMENT OF THE SPECIAL MEETING. THE HOLDERS OF A MAJORITY OF THE COMPANY'S
COMMON STOCK PRESENT, IN PERSON OR BY PROXY, AT THE SPECIAL MEETING WILL BE
REQUIRED TO APPROVE A MOTION TO ADJOURN THE SPECIAL MEETING.
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Association
for services rendered in all capacities during the periods indicated to the
President and Chief Executive Officer of the Association.
<TABLE>
<CAPTION>
Name and Principal Annual Compensation
------------------------------------- All Other
Position Year Salary Bonus Other(1) Compensation
- - ------------------------------------- -------- ---------- ---------- ------------- ---------------------
<S> <C> <C> <C> <C> <C>
Lee F. Nettles, Chairman of 1995 $85,500 $25,000 $ $11,623(2)
the Board, President and 1994 80,000 28,293 -- --
Chief Executive Officer
</TABLE>
- - ---------------------
(1) Annual compensation does not include amounts attributable to other
miscellaneous benefits received by Mr. Nettles, including automobile expenses
and the payment of club dues. The costs to the Association of providing such
benefits during each period indicated did not exceed 10% of the total salary
and bonus paid to or accrued for the benefit of such individual executive
officer.
(Footnotes continued on following page)
17
<PAGE> 21
(2) Represents the value of the 788 shares allocated to Mr. Nettles'
account under the ESOP as of December 31, 1995.
EMPLOYMENT AGREEMENT
The Company and the Association (collectively, the "Employers") entered
into an employment agreement with Mr. Nettles in connection with the
Conversion. The Employers have agreed to employ Mr. Nettles for a term of
three years in his current position at an initial salary of $92,000. At least
30 days prior to each annual anniversary date of the employment agreement, the
Boards of Directors of the Company and the Association shall determine whether
or not to extend the term of the agreement for an additional one year. Any
party may elect not to extend the agreement for an additional year by providing
written notice at least 30 days prior to any annual anniversary date.
The employment agreement is terminable with or without cause by the
Employers. The officer shall have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary termination
or termination by the Employers for cause, disability, retirement or death,
provided, however, that (i) in the event that the officer terminates his
employment because of failure of the Employers to comply with any material
provision of the employment agreement or (ii) the employment agreement is
terminated by the Employers other than for cause, disability, retirement or
death or by the officer as a result of certain adverse actions which are taken
with respect to the officer's employment following a Change in Control of the
Company, as defined, Mr. Nettles will be entitled to a cash severance amount
equal to three times his average annual compensation over his most recent five
taxable years. In addition, Mr. Nettles will be entitled to a continuation of
benefits similar to those he is receiving at the time of such termination for
the remaining term of the agreement or until the officer obtains full-time
employment with another employer, whichever occurs first.
A Change in Control is generally defined in the employment agreement to
include any change in control required to be reported under the federal
securities laws, as well as (i) the acquisition by any person of 25% or more of
the Company's outstanding voting securities and (ii) a change in a majority of
the directors of the Company during any two-year period without the approval of
at least two-thirds of the persons who were directors of the Company at the
beginning of such period.
The employment agreement provides that in the event that any of the
payments to be made thereunder or otherwise upon termination of employment are
deemed to constitute a "parachute payment" within the meaning of the Code, then
such payments and benefits received thereunder shall be reduced, in the manner
determined by the employee, by the amount, if any, which is the minimum
necessary to result in no portion of the payments and benefits being
non-deductible by the Employers for federal income tax purposes. Parachute
payments generally are payments equal to or exceeding three times the base
amount, which is defined to mean the recipient's average annual compensation
from the employer includable in the recipient's gross income during the most
recent five taxable years ending before the date on which a change in control
of the employer occurred (or such lesser time as the recipient has been
employed). Recipients of parachute payments are subject to a 20% excise tax on
the amount by which such payments exceed the base amount, in addition
18
<PAGE> 22
to regular income taxes, and payments in excess of the base amount are not
deductible by the employer as compensation expense for federal income tax
purposes.
Although the above-described employment agreement could increase the
cost of any acquisition of control of the Company, management of the Company
does not believe that the terms thereof would have a significant anti-takeover
effect.
EMPLOYEE STOCK OWNERSHIP PLAN
The Company established the ESOP for employees of the Company and the
Association effective January 1, 1995. Full-time employees of the Company and
the Association who have been credited with at least 1,000 hours of service
during a twelve month period and who have attained age 18 are eligible to
participate in the ESOP.
As part of the Conversion, in order to fund the purchase of up to 8% of
the Common Stock to be issued in the Conversion, the ESOP borrowed funds from
the Company in an amount equal to 100% of the aggregate purchase price of the
Common Stock acquired by the ESOP. The loan to the ESOP will be repaid
principally from the Company's and the Association's contributions to the ESOP
over a period of 10 years, and the collateral for the loan is the Common Stock
purchased by the ESOP. The loan to the ESOP bears a fixed interest rate of
8.5%. The Company may, in any plan year, make additional discretionary
contributions for the benefit of plan participants in either cash or shares of
Common Stock, which may be acquired through the purchase of outstanding shares
in the market or from individual stockholders, upon the original issuance of
additional shares by the Company or upon the sale of treasury shares by the
Company. Such purchases, if made, would be funded through additional
borrowings by the ESOP or additional contributions from the Company. The
timing, amount and manner of future contributions to the ESOP will be affected
by various factors, including prevailing regulatory policies, the requirements
of applicable laws and regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan are held in
a suspense account and released on a pro rata basis as debt service payments
are made. Discretionary contributions to the ESOP and shares released from the
suspense account are allocated among participants on the basis of compensation.
Forfeitures are reallocated among remaining participating employees and may
reduce any amount the Company might otherwise have contributed to the ESOP.
Participants will vest in their right to receive their account balances within
the ESOP at the rate of 20% per year starting with the completion of three
years of service and will be 100% vested upon the completion of seven years of
service. Credit is given for years of service with the Association prior to
adoption of the ESOP. In the case of a "change in control," as defined,
however, participants will become immediately fully vested in their account
balances. Benefits may be payable upon retirement or separation from service.
The Company's contributions to the ESOP are not fixed, so benefits payable
under the ESOP cannot be estimated.
Messrs. Nettles and Bellard and Ms. Smith serve as trustees of the
ESOP. Under the ESOP, the trustees must vote all allocated shares held in the
ESOP in accordance with the instructions of the participating employees, and
allocated shares for which employees do not give instructions, and unallocated
shares, will be voted in the same ratio on any matter as to those shares for
which instructions are given.
19
<PAGE> 23
GAAP requires that any third party borrowing by the ESOP be reflected
as a liability on the Company's statement of financial condition. Since the
ESOP is borrowing from the Company, such obligation is not treated as a
liability, but the amount of the borrowing is deducted from stockholders'
equity. If the ESOP purchases newly issued shares from the Company, total
stockholders' equity would neither increase nor decrease, but per share
stockholders' equity and per share net earnings would decrease as the newly
issued shares are allocated to the ESOP participants.
The ESOP is subject to the requirements of ERISA and the regulations of
the Internal Revenue Service and the Department of Labor thereunder.
DEFINED BENEFIT PENSION PLAN
The Association has a defined benefit pension plan ("Pension Plan") for
all full-time employees who have completed one year of service with the
Association and who have attained the age of 21. In general, the Pension Plan
provides a benefit at an employee's "normal retirement age" (age 65) equal to
the sum of (i) 1.1% of the average of an employee's five highest consecutive
annual amounts of base salary during the last 10 years of service ("Average
Compensation") times years of credited service up to 30 years, (ii) .65% of
Average Compensation in excess of "Covered Compensation" (defined as the
average of the maximum taxable wage base under Social Security for the 35-year
period that includes the year of retirement, which amount varies depending upon
a participant's year of birth) times years of credited service up to 30 years,
and (iii) .5% of Average Compensation times years of credited service in excess
of 30 years.
The following table illustrates annual pension benefits for retirement
at age 65 under various levels of compensation and years of credited service.
<TABLE>
<CAPTION>
Years of Credited Service
Average ---------------------------------------------------------------------------------
Compensation(1) 15 20 25 30 35
- - ---------------------- -------------- ------------- ------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
$ 20,000 $ 3,300 $ 4,400 $ 5,500 $ 6,600 $ 7,100
40,000 6,600 8,800 11,000 13,200 14,200
60,000 9,900 13,200 16,500 19,800 21,300
80,000 13,200 17,600 22,000 26,400 28,400
100,000 16,500 21,000 27,500 33,000 35,500
120,000 19,800 26,400 33,000 39,600 42,600
140,000 23,100 30,800 38,500 46,200 49,700
</TABLE>
- - --------------------
(1) No adjustment has been made to the extent that a participant's Average
Compensation exceeds his Covered Compensation.
The indicated amounts in the above table assume that participants elect
the normal retirement form of benefit and that the stated remuneration is not
in excess of (i) the monthly maximum taxable wage base under Social Security
for the 35-year period ending
20
<PAGE> 24
in the year of the executive's retirement, multiplied by (ii) 12. The plan
provides for an early retirement option with reduced benefits for eligible
participants who exceed 55 years of age. Employee benefits vest 100% after
five years of service. Pension expense amounted to $50,000, $45,000 and
$45,000 for 1995, 1994 and 1993 respectively.
The maximum annual compensation which may be taken into account under
the Code (as adjusted from time to time by the Internal Revenue Service) for
calculating benefits and contributions under qualified defined benefit plans
currently is $150,000, and the maximum annual benefit permitted under such
plans currently is $120,000.
The pension benefits listed in the table are not subject to any
deduction for Social Security benefits or other offset amounts.
At December 31, 1995, Mr. Nettles had 19 years of credited service under
the Retirement Plan.
The Board of Directors of the Association adopted a Supplemental
Executive Retirement Plan ("SERP") effective January 1, 1993, which provides
supplemental benefits for selected executives beyond those provided by the
Association's Pension Plan. Participation in the SERP is limited to certain
key executive officers of the Association selected by the Board of Directors.
The Association makes annual contributions to each participant's Supplemental
Executive Savings Account, and the balance of the account is adjusted to
reflect investment results. Upon termination of employment, a participant may
receive his total account balance, valued at the date of distribution, either
as a lump sum distribution or in as many as ten equal annual installments. In
1995, the Association contributed $12,380 to the SERP, all of which was
allocated to the account of Mr. Nettles.
INDEBTEDNESS OF MANAGEMENT
The Association, in the ordinary course of business, makes available
to its directors, officers and employees mortgage loans on their primary
residences and other types of loans. Such loans are made on the same terms as
comparable loans to other borrowers. It is the belief of management that these
loans neither involve more than the normal risk of collectibility nor present
other unfavorable features. At December 31, 1995, the Association's
outstanding loans to directors and executive officers of the Association, or
members of their immediate families, totalled approximately $529,000 or 6% of
the Association's total net worth at December 31, 1995.
21
<PAGE> 25
The following table sets forth certain information with respect to
each current director or executive officer of the Association, or members of
their immediate families, whose aggregate indebtedness exceeded $60,000 during
the period indicated.
<TABLE>
<CAPTION>
Highest
Principal
Year Balance from Principal Interest
Nature of Loan 1/1/95 to Balance at Rate as of
Name and Position Indebtedness Made 4/30/96 4/30/96 4/30/96
- - ----------------------------- ----------------------- ---------- -------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Howard L. Harvill, First mortgage(1) 1991 $151,125 $ 0 8.000%
Director
Ferd B. Kramer, Jr., First mortgage(2) 1988 149,973 0 9.625
Director
Lee F. Nettles, Chairman of the First mortgage(3) 1992 92,806 0 8.000
Board, President and Chief
Executive Officer
Charlotte H. Smith, First mortgage(4) 1988 69,722 67,301 8.250
Director First mortgage(4) 1993 61,819 58,076 7.000
Reginald M. Gremillion, Jr., First mortgage(1) 1986 85,682 83,619 8.250
Senior Vice President First 1994 93,328 91,816 8.000
mortgage(1)(3)
Automobile(3) 1994 9,800 7,622 9.500
Unsecured(3) 1994 10,000 0 11.000
Automobile(3) 1996 3,000 2,887 10.500
</TABLE>
- - --------------------------
(1) Secured by primary residence.
(2) Secured by commercial real estate.
(3) Loan made to an immediate family member.
(4) Secured by rental property.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which is scheduled to be held in April 1997, must be received at
the principal executive offices of the Company, 665 Florida Street, Baton
Rouge, Louisiana 70801, Attention: Mary Anne Chiasson, Secretary, no later than
November 14, 1996. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the 1934 Act, it will be included in the proxy
statement and set forth on the form of proxy issued for such annual meeting of
stockholders. It is urged that any such proposals be sent by certified mail,
return receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the 1934 Act may be
brought before an annual
22
<PAGE> 26
meeting provided that the requirements set forth in Article 9.D of the
Company's Articles of Incorporation are satisfied in a timely manner. To be
timely, a stockholder's notice must be delivered to, or mailed and received at,
the principal executive offices of the Company not less than 60 days prior to
the anniversary date of the mailing of the proxy materials by the Company for
the immediately preceding annual meeting.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on
the Board of Directors of the Company to vote the proxy with respect to the
approval of the minutes of the last meeting of stockholders, matters incident
to the conduct of the meeting, and upon such other matters as may properly come
before the Special Meeting. Management is not aware of any business that may
properly come before the Special Meeting other than those matters described
above in this Proxy Statement. However, if any other matters should properly
come before the Special Meeting, it is intended that the proxies solicited
hereby will be voted with respect to those other matters in accordance with the
judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by the Company.
The Company has retained D.F. King & Co., Inc. to assist in the solicitation of
proxies. Such firm will be paid a fee of $2,000 plus $3.00 per completed
contact to stockholders and will be reimbursed for its out-of-pocket expenses.
The Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending the proxy
materials to the beneficial owners of the Company's Common Stock. In addition
to solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED
PROXY CARD AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
23
<PAGE> 27
CITISAVE FINANCIAL CORPORATION REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CITISAVE FINANCIAL CORPORATION (THE "COMPANY") FOR USE AT THE SPECIAL MEETING
OF STOCKHOLDERS TO BE HELD ON JULY 23, 1996 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of the Company, or
any successors thereto as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Special Meeting of Stockholders of the
Company to be held at the Main Office located at 665 Florida Street, Baton
Rouge, Louisiana, on July 23, 1996 at 10:00 A.M., Central Time, and at any
adjournment thereof, with all the powers that the undersigned would possess if
personally present, as follows:
1. Proposal to approve the 1996 Key Employee Stock Compensation Program.
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
2. Proposal to approve the 1996 Directors' Stock Option Plan.
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
3. Proposal to approve the 1996 Management Recognition Plan for Officers
and Trust Agreement.
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
4. Proposal to adjourn the Special Meeting, if necessary, to solicit
additional proxies.
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
<PAGE> 28
In their discretion, the proxies are authorized to vote with respect
to approval of the minutes of the last meeting of stockholders, matters
incident to the conduct of the meeting, and upon such other matters as may
properly come before the meeting.
The Board of Directors recommends that you vote FOR Proposals 1, 2, 3
and 4. Shares of common stock of the Company will be voted as specified. IF
NO SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4 AND
OTHERWISE AT THE DISCRETION OF THE PROXIES. THIS PROXY MAY BE REVOKED AT ANY
TIME BEFORE IT IS EXERCISED.
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of the Stockholders of the Company called for July 23, 1996, and a
Proxy Statement for the Special Meeting.
Dated: , 1996
---------------------
------------------------------------------
-------------------------------------------
Signature(s)
PLEASE SIGN THIS EXACTLY AS YOUR NAME(S)
APPEAR(S) ON THIS PROXY. WHEN SIGNING IN A
REPRESENTATIVE CAPACITY, PLEASE GIVE
TITLE. WHEN SHARES ARE HELD JOINTLY, ONLY
ONE HOLDER NEED SIGN.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 29
THIS DOCUMENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY
AND IS NOT A PART OF THE PROXY STATEMENT.
APPENDIX 1
CITISAVE FINANCIAL CORPORATION
1996 KEY EMPLOYEE STOCK COMPENSATION PROGRAM
1. Purpose. This CitiSave Financial Corporation 1996 Key
Employee Stock Compensation Program ("Program") is intended to secure for
CitiSave Financial Corporation (the "Corporation"), and its subsidiaries,
including Citizens Savings Association, F.A. (the "Association"), and its
stockholders, the benefits arising from ownership of the Corporation's common
stock, par value $.01 per share ("Common Stock"), by those selected officers
and other key employees of the Corporation who will be responsible for its
future growth. The Program is designed to help attract and retain superior
personnel for positions of responsibility with the Corporation and to provide
key employees with an additional incentive to contribute to the success of the
Corporation.
2. Elements of the Program. In order to maintain flexibility in
the award of stock benefits, the Program is comprised of three parts. The
first part is the Incentive Stock Option Plan ("Incentive Plan"). The second
part is the Compensatory Stock Option Plan ("Compensatory Plan"). The third
part is the Stock Appreciation Rights Plan ("S.A.R. Plan"). Copies of the
Incentive Plan, Compensatory Plan and S.A.R. Plan are attached hereto as Part
I, Part II and Part III, respectively, and are collectively referred to herein
as the "Plans." The grant of an option or appreciation right under one of the
Plans shall not be construed to prohibit the grant of an option or appreciation
right under any of the other Plans.
3. Applicability of General Provisions. Unless any Plan
specifically indicates to the contrary, all Plans shall be subject to the
General Provisions of the Program set forth below.
4. Administration of the Plans. The Plans shall be administered,
construed, governed and amended in accordance with their respective terms.
GENERAL PROVISIONS OF THE PROGRAM
Article 1. Administration. The Program shall be administered
by a committee appointed by the Board of Directors of the Corporation and
composed of not less than two directors of the Corporation, none of whom is a
full-time officer or employee of the Corporation. The committee, when acting
to administer the Program, is referred to as the "Program Administrators."
Each Program Administrator shall be a "disinterested person" as set forth in
Rule 16b-3(c)(2)(i) under the Securities Exchange Act of 1934. Any action of
the Program Administrators shall be taken by majority vote or the unanimous
written consent of the Program Administrators. No Program Administrator shall
be liable for any action or determination made in good faith with respect to
the Program or to any option or stock appreciation right granted thereunder.
<PAGE> 30
2
Article 2. Authority of Program Administrators. Subject to the
other provisions of this Program and applicable laws and regulations, and with
a view to effecting its purpose, the Program Administrators shall have sole
authority in their absolute discretion: (a) to construe and interpret the
Program; (b) to define the terms used herein; (c) to prescribe, amend and
rescind rules and regulations relating to the Program; (d) to determine the
employees to whom options and appreciation rights shall be granted under the
Program; (e) to determine the time or times at which options and appreciation
rights shall be granted under the Program; (f) to determine the number of
shares subject to any option or stock appreciation right under the Program as
well as the option price, and the duration of each option and appreciation
right, and any other terms and conditions of options and appreciation rights;
(g) to terminate the Program; and (h) to make any other determinations
necessary or advisable for the administration of the Program and to do
everything necessary or appropriate to administer the Program. All decisions,
determinations and interpretations made by the Program Administrators shall be
binding and conclusive on all participants in the Program and on their legal
representatives, heirs and beneficiaries.
Article 3. Maximum Number of Shares Subject to the Program. The
maximum aggregate number of shares of Common Stock available pursuant to the
Plans, subject to adjustment as provided in Article 7 hereof, shall be 67,529
shares, which equals 7.0% of the Common Stock to be issued and sold by the
Corporation in the subscription offering and any community offering (the
"Offering") pursuant to the Plan of Conversion of the Association ("Plan of
Conversion"). If any of the options granted under this Program expire or
terminate for any reason before they have been exercised in full, the
unpurchased shares subject to those expired or terminated options shall again
be available for the purposes of the Program.
Article 4. Eligibility and Participation. Only regular
full-time employees of the Corporation, including officers whether or not
directors of the Corporation, or of any subsidiary, shall be eligible for
selection by the Program Administrators to participate in the Program.
Directors who are not full-time, salaried employees of the Corporation, or of
any subsidiary, shall not be eligible to participate in the Program.
Article 5. Maximum Number of Shares to Any Individual. During
the life of the Program, no employee or officer of the Corporation or of any
subsidiary shall be granted stock options or stock appreciation rights pursuant
to this Program in an aggregate amount in excess of 2.5% of the shares of
Common Stock issued and sold by the Corporation in the Offering, subject to
adjustment as provided in Article 7 hereof.
Article 6. Effective Date and Term of Program. After its
adoption by the Board of Directors of the Corporation, the Program shall become
effective upon the subsequent approval of the Program by the stockholders of
the Corporation by such vote as may be required by applicable laws and
regulations, which vote shall be taken within 12 months of adoption of the
Program by the Corporation's Board of Directors, provided, however, that
stockholder approval shall not be obtained prior to the one-year anniversary of
the
<PAGE> 31
3
consummation of the Offering. No stock options or appreciation rights shall be
granted under this Program prior to obtaining stockholder approval of the
Program. The Program shall continue in effect for a term of ten years
following the date it is adopted by the Board of Directors or approved by
stockholders, whichever is earlier, unless sooner terminated under Article 2 of
the General Provisions.
Article 7. Adjustments. If the shares of Common Stock of the
Corporation as a whole are increased, decreased, changed into or exchanged for
a different number or kind of shares or securities through merger,
consolidation, combination, exchange of shares, other reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse
stock split, an appropriate and proportionate adjustment shall be made in the
maximum number and kind of shares as to which options and appreciation rights
may be granted under this Program, including the maximum number of options and
appreciation rights that may be granted to any individual. A corresponding
adjustment changing the number or kind of shares allocated to unexercised
options, appreciation rights or portions thereof, which shall have been granted
prior to any such change, shall likewise be made. Any such adjustment in
outstanding options and appreciation rights shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the option or
appreciation right but with a corresponding adjustment in the price for each
share or other unit of any security covered by the option or appreciation
right. In making any adjustment to the number of shares pursuant to this
Article 7, any fractional shares shall be disregarded. In the event the
Corporation declares a special cash dividend or return of capital in an amount
per share which exceeds 10% of the fair market value of a share of Common Stock
as of the date of declaration, the per share exercise price of all previously
granted stock options and stock appreciation rights which remain unexercised as
of the date of such declaration shall be proportionately adjusted to give
effect to such special cash dividend or return of capital as of the date of
payment of such special cash dividend or return of capital; provided, however,
that if such adjustment with respect to incentive stock options would be
treated as a modification of the outstanding incentive stock options with the
effect that, for purposes of Sections 422 and 425(h) of the Internal Revenue
Code of 1986, as amended ("Code"), and the rules and regulations thereunder,
new incentive stock options would be deemed to be granted, then no adjustment
to the per share exercise price of outstanding incentive stock options shall be
made.
Article 8. Termination and Amendment of Program. The Program
shall terminate no later than ten years from the date such Program is adopted
by the Board of Directors or the date such Program is approved by the
stockholders, whichever is earlier. No options or appreciation rights shall be
granted under the Program after that date. Subject to the limitation contained
in Article 9 of the General Provisions, the Program Administrators may at any
time amend or revise the terms of the Program, including the form and substance
of the option and appreciation right agreements to be used hereunder; provided
that no amendment or revision shall (a) increase the maximum aggregate number
of shares that may be sold or appreciated pursuant to options or appreciation
rights granted under this Program, except as permitted under Article 7 of the
General Provisions or as may
<PAGE> 32
4
be approved by the stockholders of the Corporation; (b) change the minimum
purchase price for shares under Section 4 of Plan I; (c) increase the maximum
term established under the Plans for any option or appreciation right; or (d)
permit the granting of an option or appreciation right to anyone other than as
provided in Article 4 of the General Provisions.
Article 9. Prior Rights and Obligations. No amendment,
suspension or termination of the Program shall, without the consent of the
employee who has received an option or appreciation right, alter or impair any
of that employee's rights or obligations under any option or appreciation right
granted under the Program prior to such amendment, suspension or termination.
Article 10. Privileges of Stock Ownership. Notwithstanding the
exercise of any options granted pursuant to the terms of this Program, no
employee shall have any of the rights or privileges of a stockholder of the
Corporation in respect of any shares of stock issuable upon the exercise of his
or her option until certificates representing the shares have been issued and
delivered. No shares shall be required to be issued and delivered upon
exercise of any option unless and until all of the requirements of law and of
all regulatory agencies having jurisdiction over the issuance and delivery of
the securities shall have been fully complied with. No adjustment shall be
made for dividends or any other distributions for which the record date is
prior to the date on which such stock certificate is issued.
Article 11. Reservation of Shares of Common Stock. The
Corporation, during the term of this Program, will at all times reserve and
keep available such number of shares of its Common Stock as shall be sufficient
to satisfy the requirements of the Program. In addition, the Corporation will
from time to time, as is necessary to accomplish the purposes of this Program,
seek to obtain from any regulatory agency having jurisdiction any requisite
authority in order to issue and sell shares of Common Stock hereunder. The
inability of the Corporation to obtain from any regulatory agency having
jurisdiction the authority deemed by the Corporation's counsel to be necessary
to the lawful issuance and sale of any shares of its stock hereunder shall
relieve the Corporation of any liability in respect of the non-issuance or sale
of the stock as to which the requisite authority shall not have been obtained.
The shares of Common Stock issued under this Program may be authorized but
previously unissued shares, treasury shares or shares purchased by the
Corporation on the open market or from private sources for use under the
Program.
Article 12. Tax Withholding. The exercise of any option or
appreciation right granted under the Program is subject to the condition that
if at any time the Corporation shall determine, in its discretion, that the
satisfaction of withholding tax or other withholding liabilities under any
state or federal law is necessary or desirable as a condition of, or in any
connection with, such exercise or the delivery or purchase of shares pursuant
thereto, then in such event, the exercise of the option or appreciation right
shall not be effective unless such withholding tax or other withholding
liabilities shall have been satisfied in a manner acceptable to the
Corporation.
<PAGE> 33
5
Article 13. Employment. Nothing in the Program or in any option
or stock appreciation right shall confer upon any eligible employee any right
to continued employment by the Corporation, or by any subsidiary corporations,
or limit in any way the right of the Corporation or its subsidiary corporations
at any time to terminate or alter the terms of that employment.
PART I
INCENTIVE STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Incentive Plan is to
promote the growth and general prosperity of the Corporation by permitting the
Corporation to grant options to purchase shares of its Common Stock. This
Incentive Plan is designed to help attract and retain superior personnel for
positions of responsibility with the Corporation, or of any subsidiary, and to
provide key employees with an additional incentive to contribute to the success
of the Corporation. The Corporation intends that options granted pursuant to
the provisions of this Incentive Plan will qualify and will be identified as
"incentive stock options" within the meaning of Section 422 of the Code. This
Incentive Plan is Part I of the Corporation's Program. Unless any provision
herein indicates to the contrary, this Incentive Plan shall be subject to the
General Provisions of the Program.
Section 2. Option Terms and Conditions. The terms and
conditions of options granted under this Incentive Plan may differ from one
another as the Program Administrators shall, in their discretion, determine, as
long as all options granted under this Incentive Plan satisfy the requirements
of this Incentive Plan.
Section 3. Duration of Options. Each option and all rights
thereunder granted pursuant to the terms of this Incentive Plan shall expire on
the date determined by the Program Administrators, but in no event shall any
option granted under this Incentive Plan expire later than ten years from the
date on which the option is granted, except that any employee who owns more
than 10% of the combined voting power of all classes of stock of the
Corporation, or of its subsidiaries, must exercise any options within five
years from the date of grant. In addition, each option shall be subject to
early termination as provided in this Incentive Plan.
Section 4. Purchase Price. The purchase price for shares
acquired pursuant to the exercise, in whole or in part, of any option shall not
be less than the fair market value of the shares at the time of the grant of
the option; except that for any employee who owns more than 10% of the combined
voting power of all classes of stock of the Corporation, or of its
subsidiaries, the purchase price shall not be less than 110% of fair market
value. For purposes of this Part I, fair market value shall be the mean of the
high and low sales prices of a share of Common Stock on the date in question
(or, if such day is not a trading day in
<PAGE> 34
6
the U.S. markets, on the nearest preceding trading day), as reported with
respect to the principal market (or the composite of the markets, if more than
one) or national quotation system in which such shares are then traded, or if
no such prices are reported, the mean between the closing high bid and low
asked prices of a share of Common Stock on that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Board of Directors of the Corporation, or if no such
prices are available, the book value of a share of Common Stock as determined
under generally accepted accounting principles as of the latest practicable
date.
Section 5. Maximum Amount of Options in Any Calendar Year. The
aggregate fair market value (determined as of the time the option is granted)
of the Common Stock with respect to which incentive stock options, as defined
in Section 422(b) of the Code, are exercisable for the first time by any
employee during any calendar year (under the terms of this Plan and all such
plans of the Corporation and any subsidiaries) shall not exceed $100,000.
Section 6. Exercise of Options. Each option shall be
exercisable in one or more installments during its term, and the right to
exercise may be cumulative as determined by the Program Administrators. A
holder of an option may be required to agree not to dispose of either the
option (other than upon exercise or conversion) or the underlying Common Stock
until at least six months shall have elapsed from the date of grant of the
option. No option may be exercised for a fraction of a share of Common Stock.
The purchase price of any shares purchased shall be paid in full in cash or by
certified or cashier's check payable to the order of the Corporation or by
shares of Common Stock (including shares acquired pursuant to the exercise of
an option), if permitted by the Program Administrators, or by a combination of
cash, check or shares of Common Stock, at the time of exercise of the option,
provided that the form(s) of payment allowed the employee shall be established
when the option is granted. If any portion of the purchase price is paid in
shares of Common Stock, those shares shall be tendered at their then fair
market value as determined by the Program Administrators in accordance with
Section 4 of this Incentive Plan.
Section 7. Acceleration of Right of Exercise of Installments.
(a) Notwithstanding the first sentence of Section 6 of this Incentive Plan, in
the event an Optionee becomes disabled within the meaning of Section 22(e)(3)
of the Code or dies while employed by the Corporation or any subsidiary
corporation (or a corporation or a parent or subsidiary of such corporation
issuing or assuming a stock option in a transaction to which Section 424(a) of
the Code applies), the right to exercise the option shall be accelerated and
the option shall be 100% exercisable (to the extent not previously exercised)
as of the date of such disability or death.
(b) Notwithstanding the first sentence of Section 6 of this
Incentive Plan, in the event the Corporation or its stockholders enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Corporation by means of a sale, merger or
<PAGE> 35
7
other reorganization, liquidation or otherwise, any option granted pursuant to
the terms of this Incentive Plan shall become immediately exercisable with
respect to the full number of shares subject to that option during the period
commencing as of the date of the agreement to dispose of all or substantially
all of the assets or stock of the Corporation and ending when the disposition
of assets or stock contemplated by that agreement is consummated or the option
is otherwise terminated in accordance with its provisions or the provisions of
this Incentive Plan, whichever occurs first; provided, however, that no option
shall be immediately exercisable under this Section 7 on account of any
agreement to dispose of all or substantially all of the assets or stock of the
Corporation by means of a sale, merger or other reorganization, liquidation or
otherwise where the stockholders of the Corporation immediately before the
consummation of the transaction will own at least 50% of the total combined
voting power of all classes of stock entitled to vote of the surviving entity,
whether the Corporation or some other entity, immediately after the
consummation of the transaction. In the event the transaction contemplated by
the agreement referred to in this Section 7 is not consummated, but rather is
terminated, cancelled or expires, the options granted pursuant to this
Incentive Plan shall thereafter be treated as if that agreement had never been
entered into.
(c) Notwithstanding the first sentence of Section 6 of this
Incentive Plan, in the event of a change in control of the Corporation or
threatened change in control of the Corporation as determined by a vote of not
less than a majority of the Board of Directors of the Corporation, all options
granted prior to such change in control or threatened change of control shall
become immediately exercisable. The term "control" for purposes of this
Section shall refer to the acquisition of 20% or more of the voting securities
of the Corporation by any person or by persons acting as a group within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended;
provided, however, that for purposes of this Incentive Plan, no change in
control or threatened change in control shall be deemed to have occurred if
prior to the acquisition of, or offer to acquire, 20% or more of the voting
securities of the Corporation, the full Board of Directors of the Corporation
shall have adopted by not less than two-thirds vote a resolution specifically
approving such acquisition or offer. Agreements covered by Section 7(b) of
this Incentive Plan shall be governed by such section and not by this Section
7(c). The term "person" for purposes of this Section 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.
Section 8. Written Notice Required. Any option granted pursuant
to the terms of this Incentive Plan shall be exercised when written notice of
that exercise has been given to the Corporation at its principal office by the
person entitled to exercise the option and full payment for the shares with
respect to which the option is exercised has been received by the Corporation.
Section 9. Compliance With Applicable Laws. Shares of Common
Stock shall not be issued with respect to any option granted under this
Incentive Plan unless the exercise
<PAGE> 36
8
of that option and the issuance and delivery of those shares pursuant to that
exercise shall comply with all relevant provisions of state and federal law
including, without limitation, the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, and the requirements of any stock
exchange or national quotation system upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Corporation
with respect to such compliance. The Program Administrators may also require a
person to whom an option has been granted under this Incentive Plan
("Optionee") to furnish evidence satisfactory to the Corporation, including a
written and signed representation letter and consent to be bound by any
transfer restrictions imposed by law, legend, condition or otherwise, that the
shares are being purchased only for investment and without any present
intention to sell or distribute the shares in violation of any state or federal
law, rule or regulation. Further, each Optionee shall consent to the
imposition of a legend on the shares of Common Stock subject to his or her
option restricting their transferability to the extent required by law or by
this Section 9.
Section 10. Employment of Optionee. Each Optionee, if requested
by the Program Administrators when the option is granted, must agree in writing
as a condition of receiving his or her option that he or she will remain in the
employ of the Corporation or any subsidiary of the Corporation, as the case may
be, following the date of the granting of that option for a period specified by
the Program Administrators, which period shall in no event exceed three years.
Nothing in this Incentive Plan or in any option granted hereunder shall confer
upon any Optionee any right to continued employment by the Corporation, or its
subsidiary corporations, or limit in any way the right of the Corporation or
any of its subsidiary corporations at any time to terminate or alter the terms
of that employment.
Section 11. Option Rights Upon Termination of Employment. If an
Optionee ceases to be employed by the Corporation or any subsidiary corporation
(or a corporation or a parent or subsidiary of such corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies), for any reason other than death or disability, his or her option
shall immediately terminate; provided, however, that the Program Administrators
may, in their discretion, allow such option to be exercised (to the extent
exercisable on the date of termination of employment) at any time within three
months after the date of termination of employment, unless either the option or
this Incentive Plan otherwise provides for earlier termination.
Section 12. Option Rights Upon Disability. If an Optionee
becomes disabled within the meaning of Section 22(e)(3) of the Code while
employed by the Corporation or any subsidiary corporation (or a corporation or
a parent or subsidiary of such corporation issuing or assuming a stock option
in a transaction to which Section 424(a) of the Code applies), the option may
be exercised, to the extent exercisable on the date of termination of
employment, at any time within one year after the date of termination of
employment due to disability, unless either the option or this Incentive Plan
otherwise provides for earlier termination.
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9
Section 13. Option Rights Upon Death of Optionee. Except as
otherwise limited by the Program Administrators at the time of the grant of an
option, if an Optionee dies while employed by the Corporation or any subsidiary
corporation (or a corporation or a parent or subsidiary of such corporation
issuing or assuming a stock option in a transaction to which Section 424(a) of
the Code applies), or within three months after ceasing to be an employee
thereof, his or her option shall expire one year after the date of death unless
by its terms it expires sooner. During this one year or shorter period, the
option may be exercised, to the extent that it remains unexercised on the date
of death, by the person or persons to whom the Optionee's rights under the
option shall pass by will or by the laws of descent and distribution, but only
to the extent that the Optionee is entitled to exercise the option at the date
of death. However, in order for the option to continue to be treated as an
incentive stock option under Section 422 of the Code, the option must be
exercised no later than three months after the date of termination of
employment.
Section 14. Options Not Transferable. Options granted pursuant
to the terms of this Incentive Plan may not be sold, pledged, assigned or
transferred in any manner otherwise than by will or the laws of descent and
distribution and may be exercised during the lifetime of an Optionee only by
that Optionee or his guardian or legal representative.
PART II
COMPENSATORY STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Compensatory Plan is to
permit the Corporation to grant options to purchase shares of its Common Stock
to selected officers and full-time, key employees of the Corporation or any
subsidiary. This Compensatory Plan is designed to help attract and retain
superior personnel for positions of responsibility with the Corporation and its
subsidiaries and to provide key employees with an additional incentive to
contribute to the success of the Corporation. Any option granted pursuant to
this Compensatory Plan shall be clearly and specifically designated as not
being an incentive stock option, as defined in Section 422(b) of the Code.
This Compensatory Plan is Part II of the Corporation's Program. Unless any
provision herein indicates to the contrary, this Compensatory Plan shall be
subject to the General Provisions of the Program.
Section 2. Option Terms and Conditions. The terms and
conditions of options granted under this Compensatory Plan may differ from one
another as the Program Administrators shall, in their discretion, determine as
long as all options granted under this Compensatory Plan satisfy the
requirements of the Compensatory Plan.
Section 3. Duration of Options. Each option and all rights
thereunder granted pursuant to the terms of this Compensatory Plan shall expire
on the date determined by the Program Administrators, but in no event shall any
option granted under this Compensatory
<PAGE> 38
10
Plan expire later than ten years and one month from the date on which the
option is granted. In addition, each option shall be subject to early
termination as provided in this Compensatory Plan.
Section 4. Purchase Price. The purchase price for shares
acquired pursuant to the exercise, in whole or in part, of any option shall be
equal to the fair market value of the shares at the time of the grant of the
option. For purposes of this Part II, fair market value shall be the closing
sales price of a share of Common Stock on the date in question (or, if such day
is not a trading day in the U.S. markets, on the nearest preceding trading
day), as reported with respect to the principal market (or the composite of the
markets, if more than one) or national quotation system in which such shares
are then traded, or if no such closing prices are reported, the mean between
the closing high bid and low asked prices of a share of Common Stock on that
day on the principal market or national quotation system then in use, or if no
such quotations are available, the price furnished by a professional securities
dealer making a market in such shares selected by the Board of Directors of the
Corporation, or if no such prices are available, the book value of a share of a
share of Common Stock as determined under generally accepted accounting
principles as of the latest practicable date.
Section 5. Exercise of Options. Each option shall be
exercisable in one or more installments during its term, and the right to
exercise may be cumulative as determined by the Program Administrators. A
holder of an option may be required to agree not to dispose of either the
option (other than upon exercise or conversion) or the underlying Common Stock
until at least six months shall have elapsed from the date of grant of the
option. No option may be exercised for a fraction of a share of Common Stock.
The purchase price of any shares purchased shall be paid in full in cash or by
certified or cashier's check payable to the order of the Corporation or by
shares of Common Stock (including shares acquired pursuant to the exercise of
an option), if permitted by the Program Administrators, or by a combination of
cash, check or shares of Common Stock, at the time of exercise of the option.
If any portion of the purchase price is paid in shares of Common Stock, those
shares shall be tendered at their then fair market value as determined by the
Program Administrators in accordance with Section 4 of this Compensatory Plan.
Section 6. Acceleration of Right of Exercise of Installments.
(a) Notwithstanding the first sentence of Section 5 of this Compensatory Plan,
if an Optionee becomes disabled within the meaning of Section 22(e)(3) of the
Code or dies while employed by the Corporation or any subsidiary corporation
(or a corporation or a parent or subsidiary of such corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies), the right to exercise the option shall be accelerated and the option
shall be 100% exercisable (to the extent not previously exercised) as of the
date of such disability or death.
(b) Notwithstanding the first sentence of Section 5 of this
Compensatory Plan, in the event the Corporation or its stockholders enter into
an agreement to dispose of all or
<PAGE> 39
11
substantially all of the assets or stock of the Corporation by means of a sale,
merger or other reorganization, liquidation or otherwise, any option granted
pursuant to the terms of this Compensatory Plan shall become immediately
exercisable with respect to the full number of shares subject to that option
during the period commencing as of the date of the agreement to dispose of all
or substantially all of the assets or stock of the Corporation and ending when
the disposition of assets or stock contemplated by that agreement is
consummated or the option is otherwise terminated in accordance with its
provisions or the provisions of this Compensatory Plan, whichever occurs first;
provided, however, that no option shall be immediately exercisable under this
Section 6 on account of any agreement to dispose of all or substantially all of
the assets or stock of the Corporation by means of a sale, merger or other
reorganization, liquidation or otherwise where the stockholders of the
Corporation immediately before the consummation of the transaction will own at
least 50% of the total combined voting power of all classes of stock entitled
to vote of the surviving entity, whether the Corporation or some other entity,
immediately after the consummation of the transaction. In the event the
transaction contemplated by the agreement referred to in this Section 6 is not
consummated, but rather is terminated, cancelled or expires, the options
granted pursuant to this Compensatory Plan shall thereafter be treated as if
that agreement had never been entered into.
(c) Notwithstanding the first sentence of Section 5 of this
Compensatory Plan, in the event of a change in control of the Corporation or
threatened change in control of the Corporation as determined by a vote of not
less than a majority of the Board of Directors of the Corporation, all options
granted prior to such change in control or threatened change of control shall
become immediately exercisable. The term "control" for purposes of this
Section shall refer to the acquisition of 20% or more of the voting securities
of the Corporation by any person or by persons acting as a group within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended;
provided, however, that for purposes of this Compensatory Plan, no change in
control or threatened change in control shall be deemed to have occurred if
prior to the acquisition of, or offer to acquire, 20% or more of the voting
securities of the Corporation, the full Board of Directors of the Corporation
shall have adopted by not less than two-thirds vote a resolution specifically
approving such acquisition or offer. Agreements covered by Section 6(b) of
this Compensatory Plan shall be governed by such section and not by this
Section 6(c). The term "person" for purposes of this Section 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.
Section 7. Written Notice Required. Any option granted pursuant
to the terms of this Compensatory Plan shall be exercised when written notice
of that exercise has been given to the Corporation at its principal office by
the person entitled to exercise the option and full payment for the shares with
respect to which the option is exercised has been received by the Corporation.
<PAGE> 40
12
Section 8. Compliance With Applicable Laws. Shares shall not be
issued with respect to any option granted under this Compensatory Plan unless
the exercise of that option and the issuance and delivery of the shares
pursuant thereto shall comply with all relevant provisions of state and federal
law, including, without limitation, the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder and the requirements of any stock
exchange or national quotation system upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Corporation
with respect to such compliance. The Program Administrators may also require a
person to whom an option has been granted ("Optionee") to furnish evidence
satisfactory to the Corporation, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition or otherwise, that the shares are being purchased only for
investment purposes and without any present intention to sell or distribute the
shares in violation of any state or federal law, rule or regulation. Further,
each Optionee shall consent to the imposition of a legend on the shares of
Common Stock subject to his or her option restricting their transferability to
the extent required by law or by this Section 8.
Section 9. Employment of Optionee. Each Optionee, if requested
by the Program Administrators, must agree in writing as a condition of
receiving his or her option that he or she will remain in the employment of the
Corporation or any subsidiary, following the date of the granting of that
option for a period specified by the Program Administrators, which period shall
in no event exceed three years. Nothing in this Compensatory Plan or in any
option granted hereunder shall confer upon any Optionee any right to continued
employment by the Corporation or any of its subsidiaries, or limit in any way
the right of the Corporation or any subsidiary at any time to terminate or
alter the terms of that employment.
Section 10. Option Rights Upon Termination of Employment. If any
Optionee under this Compensatory Plan ceases to be employed by the Corporation
or any subsidiary (or a corporation or a parent or subsidiary of such
corporation issuing or assuming a stock option in a transaction to which
Section 424(a) of the Code applies), for any reason other than disability or
death, his or her option shall immediately terminate; provided, however, that
the Program Administrators may, in their discretion, allow such option to be
exercised, to the extent exercisable on the date of termination of employment,
at any time within one year after the date of termination of employment, unless
either the option or this Compensatory Plan otherwise provides for earlier
termination.
Section 11. Option Rights Upon Disability. If an Optionee
becomes disabled within the meaning of Section 22(e)(3) of the Code while
employed by the Corporation or any subsidiary corporation (or a corporation or
a parent or subsidiary of such corporation issuing or assuming a stock option
in a transaction to which Section 424(a) of the Code applies), the Program
Administrators, in their discretion, may allow the option to be exercised, to
the extent exercisable on the date of termination of employment, at any time
<PAGE> 41
13
within one year after the date of termination of employment due to disability,
unless either the option or this Compensatory Plan otherwise provides for
earlier termination.
Section 12. Option Rights Upon Death of Optionee. Except as
otherwise limited by the Program Administrators at the time of the grant of an
option, if an Optionee dies while employed by the Corporation or any subsidiary
corporation (or a corporation or a parent or subsidiary of such corporation
issuing or assuming a stock option in a transaction to which Section 424(a) of
the Code applies), his or her option shall expire one year after the date of
death unless by its terms it expires sooner. During this one year or shorter
period, the option may be exercised, to the extent that it remains unexercised
on the date of death, by the person or persons to whom the Optionee's rights
under the option shall pass by will or by the laws of descent and distribution,
but only to the extent that the Optionee is entitled to exercise the option at
the date of death.
Section 13. Options Not Transferable. Options granted pursuant
to the terms of this Compensatory Plan may not be sold, pledged, assigned or
transferred in any manner otherwise than by will or the laws of descent and
distribution and may be exercised during the lifetime of an Optionee only by
that Optionee or his guardian or legal representative.
PART III
STOCK APPRECIATION RIGHTS PLAN
Section 1. Purpose. The purpose of this S.A.R. Plan is to
permit the Corporation to grant stock appreciation rights for its Common Stock
to its full-time key employees. This S.A.R. Plan is designed to help attract
and retain superior personnel for positions of responsibility with the
Corporation and any subsidiary and to provide key employees with an additional
incentive to contribute to the success of the Corporation. This S.A.R. Plan is
Part III of the Corporation's Program. Unless any provision herein indicates
to the contrary, this S.A.R. Plan shall be subject to the General Provisions of
the Program.
Section 2. Terms and Conditions. The Program Administrators
may, but shall not be obligated to, authorize, on such terms and conditions as
they deem appropriate in each case, the Corporation to accept the surrender by
the recipient of a stock option granted under Part I or Part II of the right to
exercise that option, or portion thereof, in consideration for the payment by
the Corporation of an amount equal to the excess of the fair market value of
the shares of Common Stock subject to such surrendered option, or portion
thereof, over the option price of such shares. Such payment, at the discretion
of the Program Administrators, may be made in shares of Common Stock valued at
the then fair market value thereof, determined as provided in Section 4 of Part
I, in cash or partly in cash and partly in shares of Common Stock; provided
that with respect to rights granted in tandem with incentive stock options, the
Program Administrators shall establish the form(s)
<PAGE> 42
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of payment allowed the Optionee at the date of grant. The Program
Administrators shall not be authorized to make payment to any Optionee in
shares of the Corporation's Common Stock unless Section 83 of the Code would
apply to the Common Stock transferred to the Optionee.
Section 3. Time of Grant. With respect to options granted under
Part I, stock appreciation rights must be granted concurrently with the stock
options to which they relate; with respect to options granted under Part II,
stock appreciation rights may be granted concurrently or at any time thereafter
prior to the exercise or expiration of such options.
Section 4. Exercise of Stock Appreciation Rights; Effect on
Stock Options and Vice Versa. Each stock appreciation right shall be
exercisable in one or more installments, and the right to exercise may be
cumulative as determined by the Program Administrators. Upon the exercise of a
stock appreciation right, the number of shares available under the stock
option to which it relates shall decrease by a number equal to the number of
shares for which the right was exercised. Upon the exercise of a stock option,
any related stock appreciation right shall terminate as to any number of shares
subject to the right that exceeds the total number of shares for which the
stock option remains unexercised.
Section 5. Time Limitations. Any election by an Optionee to
exercise the stock appreciation rights provided in this S.A.R. Plan shall be
made during the period beginning on the third business day following the
release for publication of quarterly or annual financial information required
to be prepared and disseminated by the Corporation pursuant to the requirements
of the Exchange Act and ending on the twelfth business day following such date.
The required release of information shall be deemed to have been satisfied when
the specified financial data appears on or in a wire service, financial news
service or newspaper of general circulation or is otherwise first made publicly
available. In addition, no stock appreciation right may be exercised for the
first six months following the date the stock appreciation right is granted.
Section 6. Non-Transferable. The holder of a stock appreciation
right may not transfer or assign the right otherwise than by will or in
accordance with the laws of descent and distribution. Furthermore, in the
event of the termination of his or her service with the Corporation as an
officer and/or employee, the right may be exercised only within the period, if
any, which the option to which it relates may be exercised.
Section 7. Tandem Incentive Stock Option - Stock Appreciation
Right. Whenever an incentive stock option authorized pursuant to Part I and a
stock appreciation right authorized hereunder are granted together and the
exercise of one affects the right to exercise the other, the following
requirements shall apply:
(a) The stock appreciation right will expire no later than the
expiration of the underlying incentive stock option;
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15
(b) The stock appreciation right may be for no more than the
difference between the exercise price of the underlying option and the market
price of the stock subject to the underlying option at the time the stock
appreciation right is exercised;
(c) The stock appreciation right is transferable only when the
underlying incentive stock option is transferable and under the same
conditions;
(d) The stock appreciation right may be exercised only when the
underlying incentive stock option is eligible to be exercised; and
(e) The stock appreciation right may be exercised only when the
market price of the stock subject to the option exceeds the exercise price of
the stock subject to the option.
Section 8. Request for Reports. A copy of the Corporation's
annual report to stockholders shall be delivered to each Optionee. Upon
written request, the Corporation shall furnish to each Optionee a copy of its
most recent Form 10-K Annual Report and each Form 10-Q Quarterly Report and
Form 8-K Current Report filed with the Securities and Exchange Commission since
the end of the Corporation's prior fiscal year, or the comparable forms for
small business issuers if such forms are utilized by the Corporation.
<PAGE> 44
THIS DOCUMENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY
AND IS NOT A PART OF THE PROXY STATEMENT.
APPENDIX 2
CITISAVE FINANCIAL CORPORATION
1996 DIRECTORS' STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
CitiSave Financial Corporation (the "Corporation") hereby establishes
this 1996 Directors' Stock Option Plan (the "Plan") upon the terms and
conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of
the Corporation by attracting and retaining qualified Non-employee Directors
and providing such directors with a proprietary interest in the Corporation
through non-discretionary grants of non-qualified stock options (an "Option" or
"Options") to purchase shares of the Corporation's common stock, par value $.01
per share ("Common Stock").
ARTICLE III
ADMINISTRATION OF THE PLAN
3.01 ADMINISTRATION. This Plan shall be administered by the entire
Board of Directors of the Corporation (the "Board"). The Board shall have the
power, subject to and within the limits of the express provisions of this Plan,
to exercise such powers and to perform such acts as are deemed necessary or
expedient to promote the best interests of the Corporation with respect to this
Plan.
3.02 COMPLIANCE WITH LAW AND REGULATIONS. All Options granted
hereunder shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may
be required. The Corporation shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any federal or state law or any rule or regulation
of any government body, which the Corporation shall, in its sole discretion,
determine to be necessary or advisable. Moreover, no Option may be exercised
if such exercise or issuance would be contrary to applicable laws and
regulations.
3.03 RESTRICTIONS ON TRANSFEr. The Corporation may place a legend
upon any certificate representing shares acquired pursuant to an Option granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
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ARTICLE IV
ELIGIBILITY
Options shall be granted pursuant to the terms hereof to each director
of the Corporation as of the dates specified in Article VI hereof who is not an
employee of the Corporation or any subsidiary of the Corporation ("Non-employee
Director"), except as otherwise specified herein. No honorary directors,
advisory directors or directors emeritus shall be entitled to receive Options
hereunder.
ARTICLE V
COMMON STOCK COVERED BY THE PLAN
5.01 OPTION SHARES. The aggregate number of shares of Common Stock
of the Corporation which may be issued pursuant to this Plan, subject to
adjustment as provided in Article VIII, shall be 28,941 shares, which equals
3.0% of the Common Stock issued and sold by the Corporation in the subscription
offering and any community offering (collectively, the "Offering") pursuant to
the Plan of Conversion of Citizens Savings & Loan Association ("Plan of
Conversion"). None of such shares shall be the subject of more than one Option
at any time, but if an Option as to any shares is surrendered before exercise
or expires or terminates for any reason without having been exercised in full,
or for any other reason ceases to be exercisable, the number of shares covered
thereby shall again become available for grant under the Plan as if no Options
had been previously granted with respect to such shares.
5.02 SOURCE OF SHARES. The shares of Common Stock issued under this
Plan may be authorized but previously unissued shares, treasury shares or
shares purchased by the Corporation on the open market or from private sources
for use under the Plan.
ARTICLE VI
OPTION GRANTS
6.01 OPTION GRANTS. Options to purchase shares of Common Stock shall
be granted to Non-employee Directors of the Corporation at the following times
and in the following amounts:
(a) INITIAL GRANT. An Option shall be granted to each
Non-employee Director on the date this Plan is approved by the stockholders of
the Corporation. Specifically, each Non-employee Director shall receive an
Option for the number of whole shares of Common Stock (rounded down to the
nearest whole share) determined by multiplying the number of Options which may
be issued pursuant to this Plan by 90% and dividing such product by the number
of Non-employee Directors at such time.
<PAGE> 46
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(b) GRANT ON ONE-YEAR ANNIVERSARY DATE. An Option shall be
granted to each Non-employee Director on the one-year anniversary of the date
this Plan is approved by stockholders of the Corporation. Specifically, each
Non-employee Director shall receive an Option for the number of whole shares of
Common Stock (rounded down to the nearest whole share) determined by dividing
the remaining number of Options which may be issued pursuant to this Plan by
the number of Non-employee Directors at such time.
(c) SUBSEQUENT GRANTS. In the event any Options granted to a
Non-employee Director expire or terminate for any reason before they have been
exercised in full, the unpurchased shares subject to those expired or
terminated Options shall be granted to persons who become a Non-employee
Director for the first time following the date Options are granted pursuant to
Section 6.01(b) above, as follows: (1) on the date such person is first
appointed or elected as a Non-employee Director, he shall receive an Option for
1,000 shares or such lesser number of shares as may be available for grants
under the Plan; and (2) if such person does not receive an Option for 1,000
shares as of the date he is first appointed or elected as a Non-employee
Director because sufficient shares were not available, he shall receive one or
more additional grants as of each day, if any, that an Option subsequently
expires or terminates until the number of Options granted to him shall
aggregate 1,000 shares.
6.02 ALLOCATION OF GRANTS. If, on any date on which Options are to
be granted pursuant to this Plan, the number of shares of Common Stock
remaining available under this Plan (after taking into account both shares
theretofore issued and shares subject to issuance upon exercise of outstanding
Options) is insufficient for the grant of Options to purchase the entire number
of shares specified above, then Options to purchase a proportionate amount of
such available number of shares (rounded down to the greatest number of whole
shares) shall be granted to each Non-employee Director entitled to receive an
Option on such date.
6.03 MAXIMUM NUMBER OF SHARES TO ANY NON-EMPLOYEE DIRECTOR. During
the life of this Plan, no Non-employee Director of the Corporation or of any
subsidiary shall be granted Options pursuant to this Plan in an aggregate
amount in excess of .5% of the shares of Common Stock issued and sold by the
Corporation in the Offering, subject to adjustment as provided in Article VIII
hereof.
ARTICLE VII
OPTION TERMS
Each Option granted hereunder shall be on the following terms and
conditions:
7.01 OPTION AGREEMENT. The proper officers of the Corporation and
each optionee shall execute an Option Agreement which shall set forth the total
number of shares of Common Stock to which it pertains, the exercise price and
such other terms, conditions and
<PAGE> 47
4
provisions as are appropriate, provided that they are not inconsistent with the
terms, conditions and provisions of this Plan. Each optionee shall receive a
copy of his executed Option Agreement.
7.02 OPTION EXERCISE PRICE. The per share exercise price at which
the shares of Common Stock may be purchased upon exercise of an Option granted
pursuant to Section 6.01 hereof shall be equal to the fair market value of the
shares at the time of the grant of the Option. For purposes of this Plan, fair
market value shall be the mean of the high and low sales prices of a share of
Common Stock on the date in question (or, if such day is not a trading day in
the U.S. markets, on the nearest preceding trading day), as reported with
respect to the principal market (or the composite of the markets, if more than
one) or national quotation system in which such shares are then traded, or if
no such prices are reported, the mean between the closing high bid and low
asked prices of a share of Common Stock on that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Board of Directors of the Corporation, or if no such
prices are available, the book value of a share of Common Stock as determined
under generally accepted accounting principles as of the latest practicable
date.
7.03 VESTING OF OPTIONS. Options shall be immediately vested on the
date of grant.
7.04 EXERCISE AND DURATION OF OPTIONS.
(a) Each Option or portion thereof shall be exercisable at any
time on or after six (6) months after the date of grant until ten (10) years
after the date of grant, except as provided below.
(b) Exception for Termination Due to Death, Disability,
Retirement, Resignation or Non-Reelection. If an optionee dies while serving
as a Non-employee Director or if his service as a Non-employee Director is
terminated as a result of disability, retirement, resignation or non-reelection
without the optionee having fully exercised his Options, the optionee or the
executors, administrators, legatees or distributees of his estate shall have
the right to exercise such Options during the twelve-month period following
such death, disability, retirement, resignation or non-reelection, provided
that no Option shall be exercisable within six (6) months after the date of
grant or more than ten (10) years from the date it was granted.
(c) Options granted to a Non-employee Director who is removed for
cause pursuant to the Corporation's Bylaws shall terminate as of the effective
date of such removal.
<PAGE> 48
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7.05 NONASSIGNABILITY. Options shall not be transferable by an
optionee except by will or the laws of descent and distribution, and during an
optionee's lifetime shall be exercisable only by such optionee or the
optionee's guardian or legal representative.
7.06 MANNER OF EXERCISE. Options may be exercised in part or in
whole and at one time or from time to time. The procedures for exercise shall
be set forth in the written Option Agreement provided for in Section 7.01.
7.07 PAYMENT FOR SHARES. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of an Option shall be
made to the Corporation upon exercise of the Option. All shares sold under the
Plan shall be fully paid and non-assessable. Payment for shares may be made by
the optionee in cash, by certified or cashier's check payable to the
Corporation, by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an Option) equal in fair market value to the
purchase price of the shares to be acquired pursuant to the Option, by
withholding some of the shares of Common Stock which are being purchased upon
exercise of an Option, or any combination of the foregoing.
7.08 VOTING AND DIVIDEND RIGHTS. No optionee shall have any voting
or dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded
on the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.
ARTICLE VIII
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Option relates, the exercise
price per share of Common Stock under any Option and the maximum number of
Options which may be granted to any Non-employee Director shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the consummation of the
transactions contemplated by the Plan of Conversion resulting from a split,
subdivision or consolidation of shares or any other capital adjustment, the
payment of a stock dividend, or other increase or decrease in such shares
effected without receipt or payment of consideration by the Corporation. If,
upon a merger, consolidation, reorganization, liquidation, recapitalization or
the like of the Corporation, the shares of the Corporation's Common Stock shall
be exchanged for other securities of the Corporation or of another corporation,
each recipient of an Option shall be entitled, subject to the conditions herein
stated, to purchase or acquire such number of shares of Common Stock or amount
of other securities of the Corporation or such other corporation as were
exchangeable for the number of shares of Common Stock of the Corporation which
such optionees would have been entitled to purchase or acquire except for such
action, and appropriate adjustments shall be made to the per share exercise
price of outstanding
<PAGE> 49
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Options. In the event the Corporation declares a special cash dividend or
return of capital in an amount per share which exceeds 10% of the fair market
value of a share of Common Stock as of the date of declaration, the per share
exercise price of all previously granted Options which remain unexercised as of
the date of such declaration shall be proportionately adjusted to give effect
to such special cash dividend or return of capital.
ARTICLE IX
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate, amend or revise
this Plan with respect to any shares of Common Stock as to which Options have
not been granted, provided, however, that no amendment which (a) changes the
maximum number of shares that may be sold or issued under the Plan (other than
in accordance with the provisions of Article VIII) or (b) changes the class of
persons that may be granted Options shall become effective until it receives
the approval of the stockholders of the Corporation, and further provided that
the Board may determine that stockholder approval for any other amendment to
this Plan may be advisable for any reason, such as for the purpose of obtaining
or retaining any statutory or regulatory benefits under tax, securities or
other laws or satisfying any applicable stock exchange listing requirements.
The Board may not, without the consent of the holder of an Option, alter or
impair any Option previously granted under this Plan except as specifically
authorized herein. Notwithstanding anything contained in this Plan to the
contrary, the provisions of Articles IV, VI and VII of this Plan shall not be
amended more than once every six months, other than to comport with changes in
the Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations promulgated
under such statutes.
ARTICLE X
RIGHTS TO CONTINUE AS A DIRECTOR
Neither this Plan nor the grant of any Options hereunder nor any
action taken by the Board in connection with this Plan shall create any right
on the part of any Non-employee Director of the Corporation to continue as
such.
ARTICLE XI
WITHHOLDING
The Corporation may withhold from any cash payment made under this
Plan sufficient amounts to cover any applicable withholding and employment
taxes, and if the amount of such cash payment is insufficient, the Corporation
may require the optionee to pay to the Corporation the amount required to be
withheld as a condition to delivering the shares acquired pursuant to an
Option.
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ARTICLE XII
EFFECTIVE DATE OF THE PLAN; TERM
12.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective
on the date this Plan is approved by the stockholders of the Corporation, which
shall not be earlier than the one-year anniversary of the consummation of the
transactions contemplated by the Plan of Conversion (the "Effective Date"), and
Options may be granted hereunder as of or after the Effective Date and prior to
the termination of this Plan.
12.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of the
adoption of this Plan by the Board of Directors of the Corporation.
Termination of this Plan shall not affect any Options previously granted, and
such Options shall remain valid and in effect until they (a) have been fully
exercised, (b) are surrendered, or (c) expire or are forfeited in accordance
with their terms.
ARTICLE XIII
APPROVAL BY STOCKHOLDERS
The Corporation shall submit this Plan to its stockholders for
approval at a meeting of stockholders of the Corporation held within twelve
(12) months following the adoption of this Plan by the Board of Directors of
the Corporation in order to meet the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934 and, to the extent applicable, the requirements
of any natural securities exchange or quotation system on which the Common
Stock is listed or quoted.
ARTICLE XIV
MISCELLANEOUS
13.01 GOVERNING LAW. This Plan shall be construed under the laws of
the State of Louisiana.
13.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
<PAGE> 51
THIS DOCUMENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY
AND IS NOT A PART OF THE PROXY STATEMENT.
APPENDIX 3
CITISAVE FINANCIAL CORPORATION
1996 MANAGEMENT RECOGNITION
PLAN FOR OFFICERS AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 CitiSave Financial Corporation (the "Corporation") hereby
establishes the 1996 Management Recognition Plan (the "Plan") for the Officers
of the Corporation and its subsidiary, Citizens Savings Association, F.A. (the
"Association") and a Trust (the "Trust") upon the terms and conditions
hereinafter stated in this 1996 Management Recognition Plan for Officers and
Trust Agreement (the "Agreement").
1.02 The Trustees hereby accept this Trust and agree to hold the
Trust assets existing on the date of this Agreement and all additions and
accretions thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to retain personnel of
experience and ability in key positions by providing such key employees of the
Corporation and its Subsidiaries with a proprietary interest in the Corporation
as compensation for their contributions to the Corporation and its Subsidiaries
and as an incentive to make such contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in the Agreement, unless
the context clearly indicates otherwise, shall have the meanings set forth
below. Wherever appropriate, the masculine pronouns shall include the feminine
pronouns and the singular shall include the plural.
3.01 "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under the Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time
to time by similar written notice to the Committee. In the absence of a
written designation, the Beneficiary shall be the Recipient's surviving spouse,
if any, or if none, his estate.
3.02 "Board" means the Board of Directors of the Corporation.
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3.03 "Code" means the Internal Revenue Code of 1986, as amended.
3.04 "Committee" means the committee appointed by the Board
pursuant to Article IV hereof.
3.05 "Common Stock" means shares of common stock, par value $.01
per share, of the Corporation.
3.06 "Disability" means any physical or mental impairment which
qualifies an Employee for disability benefits under the applicable long-term
disability plan maintained by the Corporation or a Subsidiary or, if no such
plan applies, which would qualify such Employee for disability benefits under
the Federal Social Security System.
3.07 "Effective Date" means the date on which the stockholders
of the Corporation approve this Plan, which shall not be earlier than the
one-year anniversary of the consummation of the Offering.
3.08 "Employee" means any person who is employed by the
Corporation or a Subsidiary, including officers or other employees who may be
directors of the Corporation.
3.09 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
3.10 "Offering" means the offer and sale of 964,707 shares of
Common Stock to the public pursuant to the Plan of Conversion of Citizens
Savings & Loan Association.
3.11 "Plan Shares" or "Shares" means shares of Common Stock held
in the Trust which may be distributed to a Recipient pursuant to the Plan.
3.12 "Plan Share Award" or "Award" means a right granted under
this Plan to receive a distribution of Plan Shares upon completion of the
service requirements described in Article VII.
3.13 "Recipient" means an Employee who receives a Plan Share
Award under the Plan.
3.14 "Subsidiary" means those subsidiaries of the Corporation,
including the Association, which, with the consent of the Board, agree to
participate in this Plan.
3.15 "Trustee" means those persons (normally, members of the
Committee) nominated by the Committee and approved by the Board pursuant to
Sections 4.01 and 4.02 to hold legal title to the Plan assets for the purposes
set forth herein.
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ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, which shall consist of two or more members of the
Board, none of whom shall be an officer or employee of the Corporation and each
of whom shall be a "disinterested person" within the meaning of Rule 16b-3
under the Exchange Act. The Committee shall have all of the powers allocated
to it in this and other sections of the Plan. The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan
Share Award granted hereunder shall be final and binding. The Committee shall
act by vote or written consent of a majority of its members. Subject to the
express provisions and limitations of the Plan, the Committee may adopt such
rules, regulations and procedures as it deems appropriate for the conduct of
its affairs. The Committee shall report its actions and decisions with respect
to the Plan to the Board at appropriate times, but in no event less than one
time per calendar year. The Committee shall recommend to the Board one or more
individuals (normally, from among its members) to act as Trustees in accordance
with the provisions of this Plan and Trust and the terms of Article VIII
hereof.
4.02 ROLE OF THE BOARD. The members of the Committee and the
Trustee or Trustees shall be appointed or approved by, and will serve at the
pleasure of, the Board. The Board may in its discretion from time to time
remove members from, or add members to, the Committee, and may remove, replace
or add Trustees, provided that any directors who are selected as members of the
Committee shall not be officers or employees of the Corporation and shall be
"disinterested persons" within the meaning of Rule 16b-3 promulgated under the
Exchange Act.
4.03 LIMITATION ON LIABILITY. No member of the Board or the
Committee shall be liable for any determination made in good faith with respect
to the Plan or any Plan Shares or Plan Share Awards granted under it. If a
member of the Board or the Committee is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of anything
done or not done by him in such capacity under or with respect to the Plan, the
Corporation shall, subject to the requirements of applicable laws and
regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Corporation and its Subsidiaries and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
4.04 COMPLIANCE WITH LAWS AND REGULATIONS. All awards granted
hereunder shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency or
stockholders as may be required. The
<PAGE> 54
4
Corporation shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of or obtaining of consents or approvals with respect to such
shares under any federal or state law or any rule or regulation of any
government body, which the Corporation shall, in its sole discretion, determine
to be necessary or advisable.
ARTICLE V
CONTRIBUTIONS
5.01 AMOUNT OF TIMING OF CONTRIBUTIONS. The Board shall
determine the amount (or the method of computing the amount) and timing of any
contributions by the Corporation and its Subsidiaries to the Trust established
under this Plan. Such amounts may be paid in cash or in shares of Common Stock
and shall be paid to the Trust at the designated time of contribution. No
contributions by Employees shall be permitted.
5.02 INVESTMENT OF TRUST ASSETS; NUMBER OF PLAN SHARES.
Subject to Section 8.02 hereof, the Trustees shall invest all of the Trust's
assets primarily in Common Stock. The aggregate number of Plan Shares
available for distribution pursuant to this Plan, subject to adjustment as
provided in Section 9.01 hereof, shall not exceed 38,588 shares, which equals
4.0% of the shares of Common Stock issued by the Corporation in the Offering
(rounded down to the nearest whole number), which shares shall be acquired by
the Trust following receipt of stockholder approval of the Plan with funds
contributed by the Corporation or its Subsidiaries.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. Plan Share Awards may be made to such
Employees as may be selected by the Committee. In selecting those Employees to
whom Plan Share Awards may be granted and the number of Shares covered by such
Awards, the Committee shall consider the position and responsibilities of the
eligible Employees, the value of their services to the Corporation and its
Subsidiaries, and any other factors the Committee may deem relevant. The
Committee may but shall not be required to request the written recommendation
of the Chief Executive Officer of the Corporation other than with respect to
Plan Share Awards to be granted to him.
6.02 FORM OF ALLOCATION. As promptly as practicable after a
determination is made pursuant to Section 6.01 that a Plan Share Award is to be
issued, the Committee shall notify the Recipient in writing of the grant of the
Award, the number of Plan Shares covered by the Award, and the terms upon which
the Plan Shares subject to the Award shall be distributed to the Employee.
Such terms shall be reflected in a written agreement with the Employee. The
date on which the Committee so notifies the Recipient shall be considered
<PAGE> 55
5
the date of grant of the Plan Share Award. The Committee shall maintain
records as to all grants of Plan Share Awards under the Plan.
6.03 Maximum Number of Plan Shares to Any Individual. During
the life of this Plan, no Employee shall be granted Plan Share Awards pursuant
to this Plan covering an aggregate number of Plan Shares in excess of 1.0% of
the shares of Common Stock issued and sold by the Corporation in the Offering,
subject to adjustment as provided in Section 9.01 hereof.
6.04 ALLOCATIONS NOT REQUIRED TO ANY SPECIFIC EMPLOYEE.
Notwithstanding anything to the contrary in Section 6.01 hereof, no Employee
shall have any right or entitlement to receive a Plan Share Award hereunder,
such Awards being at the total discretion of the Committee.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Except as set forth below, Plan
Shares subject to an Award shall be earned by a Recipient at the rate of 20% of
the aggregate number of Shares covered by the Award as of each annual
anniversary of the date of grant of the Award. If the employment of a
Recipient is terminated prior to the fifth annual anniversary of the date of
grant of a Plan Share Award for any reason (except as specifically provided in
subsections (b), (c) and (d) below), the Recipient shall forfeit the right to
any Shares subject to the Award which have not theretofore been earned.
In determining the number of Plan Shares which are to be earned,
fractional Shares shall be rounded down to the nearest whole number, provided
that such fractional Shares shall be aggregated and distributed on the fifth
annual anniversary of the date of grant.
(b) EXCEPTION FOR TERMINATIONS DUE TO DEATH OR
DISABILITY. Not-withstanding the general rule contained in Section 7.01(a), all
Plan Shares subject to a Plan Share Award held by a Recipient whose employment
with the Corporation or any Subsidiary terminates due to death or Disability
shall be deemed earned as of the Recipient's last day of employment with the
Corporation or Subsidiary and shall be distributed as soon as practicable
thereafter; provided, however, that no Awards shall be distributed prior to six
months from the date of grant of the Plan Share Award.
(c) EXCEPTION FOR TERMINATIONS AFTER A CHANGE IN CONTROL.
Notwithstanding the general rule contained in Section 7.01(a), all Plan Shares
subject to a Plan Share Award held by a Recipient shall be deemed to be earned
in the event the Recipient's employment is terminated following a "change in
control" of the Corporation.
<PAGE> 56
6
A "change in control" of the Corporation is defined as a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, or any
successor thereto, whether or not the Corporation in fact is required to comply
with Regulation 14A thereunder; provided that, without limitation, a change in
control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), or any group of
"persons" acting in concert, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities, or (ii) during any period of two
consecutive years during the term of this Plan, individuals who at the
beginning of such period constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the period.
(d) REVOCATION FOR MISCONDUCT. Notwithstanding anything
in the Plan to the contrary, the Board may by resolution immediately revoke,
rescind and terminate any Plan Share Award, or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder to the Recipient, whether or not yet earned, in the case of an
Employee who is discharged from the employ of the Corporation or any Subsidiary
for cause (as hereinafter defined). Termination of employment for cause shall
include termination because of 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 final
cease-and-desist order or material breach of any employment agreement. For
purposes of this paragraph, no act or failure to act on the Employee's part
shall be considered "willful" unless done, or omitted to be done, by the
Employee not in good faith and without reasonable belief that the Employee's
action or omission was in the best interest of the Corporation and its
Subsidiaries.
7.02 DISTRIBUTION OF DIVIDENDS. Any cash dividends, stock
dividends or returns of capital declared in respect of each Plan Share held by
the Trust and subject to a previously granted Plan Share Award will be paid by
the Trust, as soon as practicable after the Trust's receipt thereof, to the
Recipient on whose behalf such Plan Share is then held by the Trust.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Except as
provided in Section 7.03(b), Plan Shares shall be distributed to a Recipient or
his Beneficiary, as the case may be, as soon as practicable after they have
been earned, provided, however, that no Plan Shares shall be distributed to a
Recipient or Beneficiary pursuant to a Plan Share Award within six months from
the date on which that Plan Share Award was granted to such
<PAGE> 57
7
person. In addition, no Plan Shares shall be distributed unless and until all
of the requirements of law and of all regulatory agencies having jurisdiction
over the issuance and delivery of the Plan Shares shall have been fully
complied with, including the receipt of approval of the Plan by the
stockholders of the Corporation by such vote, if any, as may be required by
applicable laws and regulations.
(b) TIMING: EXCEPTION FOR 10% STOCKHOLDERS.
Notwithstanding Sections 7.03(a) above, no Plan Shares may be distributed prior
to the date which is five years from the date of consummation of the Offering
to the extent the Recipient or Beneficiary, as the case may be, would after
receipt of such Shares own in excess of 10% of the issued and outstanding
shares of Common Stock. Any Plan Shares remaining undistributed solely by
reason of the operation of this Section 7.03(b) shall be distributed to the
Recipient or his Beneficiary on the date which is five years from the date of
consummation of the Offering.
(c) FORM OF DISTRIBUTIONS. All Plan Shares, together
with any Shares representing stock dividends, shall be distributed in the form
of Common Stock. One share of Common Stock shall be given for each Plan Share
earned and distributable. Payments representing cash dividends shall be made
in cash.
(d) WITHHOLDING. The Trustees may withhold from any cash
payment or Common Stock distribution made under this Plan sufficient amounts to
cover any applicable withholding and employment taxes, and if the amount of a
cash payment is insufficient, the Trustees may require the Recipient or
Beneficiary to pay to the Trustees the amount required to be withheld as a
condition of delivering the Plan Shares. The Trustees shall pay over to the
Corporation or any Subsidiary which employs or employed such Recipient any such
amount withheld from or paid by the Recipient or Beneficiary.
(e) RESTRICTIONS ON SELLING OF PLAN SHARES. Plan Share
Awards may not be sold, assigned, pledged or otherwise disposed of prior to the
time that they are earned and distributed pursuant to the terms of this Plan.
Following distribution, the Committee may require the Recipient or his
Beneficiary, as the case may be, to agree not to sell or otherwise dispose of
his distributed Plan Shares except in accordance with all then applicable
federal and state securities laws, and the Committee may cause a legend to be
placed on the stock certificate(s) representing the distributed Plan Shares in
order to restrict the transfer of the distributed Plan Shares for such period
of time or under such circumstances as the Committee, upon the advice of
counsel, may deem appropriate.
7.04 VOTING OF PLAN SHARES. After a Plan Share Award has been
made, the Recipient shall be entitled to direct the Trustees as to the voting
of the Plan Shares which are covered by the Plan Share Award and which have not
yet been earned and distributed to him pursuant to Section 7.03, subject to
rules and procedures adopted by the Committee for this purpose. If the
Recipient does not direct the Trustees as to the voting of Plan Shares which
have not yet been earned and distributed pursuant to Section 7.03, such shares
shall not be voted by the Trustees. In the event a tender offer is made for
Plan Shares, the
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Trustees shall tender Plan Shares held by the Plan which have not yet been
earned and distributed in accordance with instructions from the Recipient.
Plan Shares which are not the subject of a Plan Share Award shall be voted by
the Trustees in their sole discretion.
ARTICLE VIII
TRUST
8.01 TRUST. The Trustees shall receive, hold, administer,
invest and make distributions and disbursements from the Trust in accordance
with the provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
the Plan.
8.02 MANAGEMENT OF TRUST. It is the intent of this Plan and
Trust that the Trustees shall have complete authority and discretion with
respect to the arrangement, control and investment of the Trust, and that the
Trustees shall invest all assets of the Trust in Common Stock to the fullest
extent practicable, except (i) to the extent that the Trustees determine that
the holding of monies in cash or cash equivalents is necessary to meet the
obligations of the Trust and (ii) contributions to the Trust by the Corporation
and Subsidiary may be temporarily invested in such interest-bearing account or
accounts as the Trustees shall determine to be appropriate. In performing
their duties, the Trustees shall have the power to do all things and execute
such instruments as may be deemed necessary or proper, including the following
powers:
(a) To invest up to 100% of all Trust assets in Common
Stock without regard to any law now or hereafter in force limiting investments
for trustees or other fiduciaries. The investment authorized herein may
constitute the only investment of the Trust, and in making such investment, the
Trustees are authorized to purchase Common Stock from the Corporation or from
any other source, and such Common Stock so purchased may be outstanding, newly
issued or treasury shares.
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above, in such deposit accounts, certificates of deposit,
obligations of the United States Government or its agencies or such other
investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any
property at any time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be
registered in the name of a nominee, without the addition of words indicating
that such security is an asset of the Trust (but accurate records shall be
maintained showing that such security is an asset of the Trust).
<PAGE> 59
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(e) To hold cash without interest in such amounts as may
in the opinion of the Trustees be reasonable for the proper operation of the
Plan and Trust.
(f) To employ brokers, agents, custodians, consultants
and accountants.
(g) To hire counsel to render advice with respect to
their rights, duties and obligations hereunder, and such other legal services
or representation as they may deem desirable.
(h) To hold funds and securities representing the amounts
to be distributed to a Recipient or his Beneficiary as a consequence of a
dispute as to the disposition thereof, whether in a segregated account or held
in common with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the
Trustees shall not be required to make any inventory, appraisal or settlement
or report to any court, or to secure any order of a court for the exercise of
any power herein contained, or to give any bond.
8.03 RECORDS AND ACCOUNTS. The Trustees shall maintain accurate
and detailed records and accounts of all transactions of the Trust, which shall
be available at all reasonable times for inspection by any legally entitled
person or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.04 EXPENSE. All costs and expenses incurred in the operation
and administration of this Plan shall be borne by the Corporation and its
Subsidiaries.
8.05 INDEMNIFICATION. Subject to the requirements of applicable
laws and regulations, the Corporation shall indemnify, defend and hold the
Trustees harmless against all claims, expenses and liabilities arising out of
or related to the exercise of the Trustees' powers and the discharge of their
duties hereunder, unless the same shall be due to their gross negligence or
willful misconduct.
ARTICLE IX
MISCELLANEOUS
9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of
Plan Shares available for distribution pursuant to the Plan Share Awards, the
number of Shares to which any Plan Share Award relates and the maximum number
of Plan Shares which may be granted to any Employee shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the Offering resulting from any split,
subdivision or consolidation of shares or other capital adjustment, or other
increase or decrease in such shares effected without receipt or payment of
consideration by the Corporation.
<PAGE> 60
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9.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by
resolution, at any time amend or terminate the Plan, subject to (i) any
required stockholder approval or any stockholder approval which the Board may
deem to be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing requirements, and (ii)
compliance with all applicable federal and state laws, rules and regulations.
The Board may not, without the consent of the holder of a Plan Share Award,
alter or impair any Plan Share Award previously granted under this Plan except
as specifically authorized herein. Termination of this Plan shall not affect
Plan Share Awards previously granted, and such Plan Share Awards shall remain
valid and in effect until they (a) have been fully earned, (b) are surrendered,
or (c) expire or are forfeited in accordance with their terms.
9.03 NONTRANSFERABLE. Plan Share Awards and rights to Plan
Shares shall not be transferable by a Recipient, and during the lifetime of the
Recipient, Plan Shares may only be earned by and paid to a Recipient who was
notified in writing of an Award by the Committee pursuant to Section 6.02. No
Recipient or Beneficiary shall have any right in or claim to any assets of the
Plan or Trust, nor shall the Corporation or any Subsidiary be subject to any
claim for benefits hereunder.
9.04 EMPLOYMENT RIGHTS. Neither the Plan nor any grant of a
Plan Share Award or Plan Shares hereunder nor any action taken by the Trustees,
the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee to continue in the employ of the Corporation or any
Subsidiary.
9.05 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any
voting or dividend rights or other rights of a stockholder in respect of any
Plan Shares covered by a Plan Share Award, except as expressly provided in
Sections 7.02 and 7.04 above, prior to the time said Plan Shares are actually
earned and distributed to him.
9.06 GOVERNING LAW. The Plan and Trust shall be governed by the
laws of the State of Louisiana.
9.07 EFFECTIVE DATE. This Plan shall be effective as of the
Effective Date, and Awards may be granted hereunder as of or after the
Effective Date and as long as the Plan remains in effect.
9.08 TERM OF PLAN. This Plan shall remain in effect until the
earlier of (a) ten (10) years from the Effective Date, (b) termination by the
Board, or (c) the distribution to Recipients and Beneficiaries of all assets of
the Trust.
9.09 TAX STATUS OF TRUST. It is intended that the trust
established hereby be treated as a Grantor Trust of the Corporation under the
provisions of Section 671 et seq. of the Code, as the same may be amended from
time to time.
<PAGE> 61
11
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and the corporate seal to be affixed
and duly attested, and the initial Trustees of the Trust established pursuant
hereto have duly and validly executed this Agreement, all on this 23rd day of
May 1996.
<TABLE>
<S> <C>
ATTEST: CITISAVE FINANCIAL CORPORATION
/s/ Mary Anne Chiasson By:/s/ Lee F. Nettles
- - ---------------------------------------- ----------------------------------------------
Mary Anne Chiasson, Secretary Lee F. Nettles, President and
Chief Executive Officer
TRUSTEES:
/s/ Howard L. Harvill
------------------------------------------------
Howard L. Harvill
/s/ Frank D. McArthur, II
-----------------------------------------------
Frank D. McArthur, II
/s/ Charlotte H. Smith
------------------------------------------------
Charlotte H. Smith
</TABLE>
