<PAGE>
Registration No. 333-________
Filed October 1, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TEXARKANA FIRST FINANCIAL CORPORATION
-------------------------------------------------------------------------
(Exact Name of Registrant as specified in its Articles of Incorporation)
Texas 71-0771419
----------------------- ---------------------------------
(State of incorporation) (IRS Employer Identification No.)
3rd and Olive Streets
Texarkana, Arkansas 71854
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(Address of principal executive offices, including zip code)
1996 DIRECTORS' STOCK OPTION PLAN
1996 KEY EMPLOYEE STOCK COMPENSATION PROGRAM
------------------------------------------------------
(Full Title of the Plan)
Copies to:
James W. McKinney Kevin M. Houlihan, Esq.
President and Chief Executive Officer Elias, Matz, Tiernan & Herrick L.L.P.
Texarkana First Financial Corporation 734 15th Street, N.W.
3rd and Olive Streets Washington, D.C. 20005
Texarkana, Arkansas 71854 (202) 347-0300
(501) 773-1103
- ----------------------------------------
(Name, address, and telephone number
of agent for service)
Page 1 of 38 pages
Index to Exhibits is located on page 7.
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed Proposed
Securities Maximum Maximum Amount of
to be Amount to be Offering Price Aggregate Registration
Registered Registered(1) Per Share Offering Price Fee
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $0.01
per share 138,188(2) $ 14.40 (3) $1,989,907 $189.04
Common Stock,
par value $0.01
per share 20,512(2) $ 24.3125(4) $ 498,698 $ 47.38
Common Stock,
par value $0.01
per share 39,675(5) $ 14.34 (6) $ 568,940 $ 54.05
------ ---------- -------
Total 198,375 $ 15.41 $3,057,545 $290.47
------- ---------- -------
------- ---------- -------
- -------------------------------------------------------------------------------
</TABLE>
(1) Together with an indeterminate number of additional shares which
may be necessary to adjust the number of shares reserved for issuance
pursuant to the Texarkana First Financial Corporation (the "Company"
or "Registrant") 1996 Key Employee Stock Compensation Program ("1996
Program") and the 1996 Directors' Stock Option Plan ("Directors'
Plan") as a result of a stock split, stock dividend or similar
adjustment of the outstanding common stock, $0.01 par value per share
("Common Stock"), of the Company.
(2) Represents a portion of the 158,700 shares currently reserved for
issuance pursuant to the 1996 Program.
(3) Estimated solely for the purpose of calculating the registration
fee, which has been calculated pursuant to Rule 457(h)(1) promulgated
under the Securities Act of 1933, as amended ("Securities Act"). The
Proposed Maximum Offering Price Per Share with respect to which stock
options have been granted under the 1996 Program is $14.40 per share,
the weighted average exercise price for the options which are
outstanding under the 1996 Program as of the date hereof.
(4) Estimated solely for the purposes of calculating the registration
fee in accordance with Rule 457(c) promulgated under the Securities
Act. The Proposed Maximum Offering Price Per Share for the 20,512
shares for which stock options have not been granted under the 1996
Program is equal to the average of the high and low ($24.125 and
$24.50, respectively) prices of the Common Stock of the Company on
September 25, 1997 on the American Stock Exchange.
(5) Represents the 39,675 shares issued pursuant to the Directors'
Plan.
(6) Estimated solely for the purposes of calculating the registration
fee, which has been calculated pursuant to Rule 457(h)(1) promulgated
under the Securities Act. The Proposed Maximum Offering Price Per
Share with respect to which stock options have been granted under the
Directors' Plan is $14.34 per share, the weighted average exercise
2
<PAGE>
price for the options which are outstanding under the Directors' Plan
as of the date hereof.
__________________________
This Registration Statement shall become effective automatically
upon the date of filing in accordance with Section 8(a) of the
Securities Act and 17 C.F.R. Section 230.462.
3
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Securities
and Exchange Commission (the "Commission") are incorporated by
reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the year
ended September 30, 1996;
(b) All reports filed by the Company pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), since the end of the fiscal year covered by
the Company's Annual Report on Form 10-K for the year ended
September 30, 1996 through the date of this filing;
(c) The description of the Common Stock of the Company
contained in Item 1 in the Company's Registration Statement on
Form 8-A (File No. 1-13842) filed with the Commission on June 14,
1995; and
(d) All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
hereof and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold.
Any statement contained in this Registration Statement, or in a
document incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained
herein, or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable since the Company's Common Stock is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the Texas Business Corporation Act, Article
VIII of the Registrant's Articles of Incorporation provides as
follows:
4
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ARTICLE VIII
INDEMNIFICATION, ETC. OF
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
A. LIMITATION OF LIABILITY. No director shall be personally
liable to the Corporation or its stockholders for monetary damages for
any act or omission by such director as a director; provided that a
director's liability shall not be eliminated to the extent provided by
Section 7.06B. of the Texas Miscellaneous Corporation Laws Act or any
successor provision thereto. No amendment to or repeal of this
Subsection (A) to Article VIII shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director
occurring prior to such amendment.
B. INDEMNIFICATION. The Corporation shall indemnify any person
who was or is a party or is threatened to be a made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative, by
reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation or any predecessor of the
Corporation, or is or was serving at the request of the Corporation or
any predecessor of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against liability and expenses (including court
costs and attorney's fees), judgments, fines, excise taxes and amounts
paid in satisfaction, settlement or compromise actually and reasonably
incurred by such person in connection with such action, suit or
proceeding to the full extent authorized by law.
C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by a
director, officer, employee or agent of the Corporation in defending a
civil or criminal action, suit or proceeding described in Article
VIII.B. shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the
Board of Directors only upon receipt of written affirmation by or on
behalf of such person of his good faith belief that he or she has met
the standard of conduct necessary for indemnification under relevant
law and a written undertaking to repay such amount if it shall
ultimately be determined that the person has not met that standard or
if it is ultimately determined that indemnification of the person
against expenses incurred by him or her in connection with that
proceeding is prohibited by relevant law.
D. OTHER RIGHTS AND REMEDIES. The indemnification provided by
this Article VIII shall not be deemed to exclude any other rights to
which those seeking indemnification or advancement of expenses may be
entitled under the Corporation s Articles of Incorporation, any
insurance or other agreement, vote of stockholders or disinterested
directors or otherwise, both as to actions in their official capacity
and as to actions in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such person; provided that no
indemnification shall be made to or on behalf of an individual if a
judgment or other final adjudication establishes that his actions, or
omissions to act, were material to the cause of action as adjudicated
5
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and (i) the person is found liable on the basis that personal benefit
was improperly received by him or her; (ii) the person is found liable
to the Corporation; or (iii) the person is found liable for willful or
intentional misconduct in the performance of his duty to the
Corporation; provided, however, that persons found liable under
clauses (i) and (ii) above, may still be indemnified solely as to
reasonable expenses actually incurred by such person in connection
with the proceeding.
E. INSURANCE. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the
Corporation, or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or another enterprise, against any
liability asserted against him or her or incurred by him or her in any
such capacity, or arising out of his status, whether or not the
Corporation would have the power to indemnify him or her against such
liability under the provisions of this Article or the TBCA.
F. MODIFICATION. The duties of the Corporation to indemnify
and to advance expenses to a director or officer provided in this
Article VIII shall be in the nature of a contract between the
Corporation and each such director or officer, and no amendment or
repeal of any provision of this Article VIII shall alter, to the
detriment of such director or officer, the right of such person to the
advance of expenses or indemnification related to a claim based on an
act or failure to act which took place prior to such amendment or
repeal.
G. PROCEEDINGS INITIATED BY INDEMNIFIED PERSONS. Notwithstanding
any other provision of this Article VIII, the Corporation shall not indemnify
a director, officer, employee or agent for any liability incurred in an action,
suit or proceeding initiated by (which shall not be deemed to include
counter-claims or affirmative defenses), or participated in as an intervenor
or amicus curiae by, the person seeking indemnification unless such initiation
of or participation in the action, suit or proceeding is authorized, either
before or after its commencement, by the affirmative vote of a majority of the
directors then in office.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable since no restricted securities will be reoffered
or resold pursuant to this Registration Statement.
ITEM 8. EXHIBITS.
The following exhibits are filed with or incorporated by
reference into this Registration Statement on Form S-8 (numbering
corresponds to Exhibit Table in Item 601 of Regulation S-K):
<TABLE>
<CAPTION>
No. Exhibit Page No.
---- ---------- ----------
<S> <C> <C>
4 Common Stock Certificate*
5 Opinion of Elias, Matz, Tiernan & Herrick
L.L.P. as to the legality of the securities E-1
6
<PAGE>
23.1 Consent of Elias, Matz, Tiernan & Herrick
L.L.P. (contained in the opinion included
as Exhibit 5)
23.2 Consent of Wilf & Henderson, P.C. E-4
24 Power of attorney for any subsequent
amendments is located in the signature pages
99.1 1996 Directors' Stock Option Plan E-6
99.2 1996 Key Employee Stock Compensation Program E-15
</TABLE>
- ------------------------
* Incorporated by reference from the Company's Annual Report on
Form 10-K for the year ended September 30, 1995 (Commission File No.
1-13842) filed by the Company with the Commission on December 28,
1995.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement, and (iii) to include any
material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material
change in such information in the Registration Statement; provided,
however, that clauses (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those clauses
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated
by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
7
<PAGE>
4. That, for the purposes of determining any liability under
the Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the
opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by
it is against public policy expressed in the Securities Act and will
be governed by the final adjudication of such issue.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Texarkana,
State of Arkansas on September 26, 1997.
TEXARKANA FIRST FINANCIAL CORPORATION
/s/ James W. McKinney
By:---------------------------------------------------
James W. McKinney
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature
appears below hereby makes, constitutes and appoints James W. McKinney
his true and lawful attorney, with full power to sign for such person
and in such person's name and capacity indicated below, and with full
power of substitution any and all amendments to this Registration
Statement, hereby ratifying and confirming such person's signature as
it may be signed by said attorney to any and all amendments.
/s/ James W. McKinney
- ------------------------------------- September 26, 1997
James W. McKinney
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Josh R. Morriss, Jr.
- -------------------------------------- September 26, 1997
Josh R. Morriss, Jr.
Director
/s/ John E. Harrison
- -------------------------------------- September 26, 1997
John E. Harrison
Executive Vice President and Director
9
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/s/ John M. Andres
- -------------------------------------- September 26, 1997
John M. Andres
Director
/s/Arthur L. McElmurry
- --------------------------------------- September 26, 1997
Arthur L. McElmurry
Director
/s/Donald N. Morriss
- --------------------------------------- September 26, 1997
Donald N. Morriss
Director
/s/James L. Sangalli
- --------------------------------------- September 26, 1997
James L. Sangalli
Chief Financial Officer
(Principal Accounting Officer)
10
<PAGE>
Exhibit 5
Opinion of Elias, Matz, Tiernan & Herrick L.L.P.
<PAGE>
LETTERHEAD
October 1, 1997
*NOT ADMITTED IN D.C.
VIA EDGAR
Board of Directors
Texarkana First Financial Corporation
3rd and Olive Streets
Texarkana, Arkansas 71854
Re: Registration Statement on Form S-8
198,375 Shares of Common Stock
Gentlemen:
We are special counsel to Texarkana First Financial Corporation, a Texas
corporation (the "Corporation"), in connection with the preparation and
filing with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended, of a Registration Statement on Form S-8 (the
"Registration Statement"), relating to the registration of up to 198,375
shares of common stock, par value $.01 per share ("Common Stock"), to be
issued pursuant to the Corporation's 1996 Key Employee Stock Compensation
Program and 1996 Directors' Stock Option Plan (collectively, the "Plans")
upon the exercise of stock options and/or appreciation rights (referred to as
"Option Rights"). The Registration Statement also registers an indeterminate
number of additional shares which may be necessary under the Plans to adjust
the number of shares reserved thereby for issuance as the result of a stock
split, stock dividend or similar adjustment of the outstanding Common Stock
of the Corporation. We have been requested by the Corporation to furnish an
opinion to be included as an exhibit to the Registration Statement.
<PAGE>
Board of Directors
October 1, 1997
Page 2
For this purpose, we have reviewed the Registration Statement and related
Prospectuses, the Articles of Incorporation and Bylaws of the Corporation,
the Plans, a specimen stock certificate evidencing the Common Stock of the
Corporation and such other corporate records and documents as we have deemed
appropriate. We are relying upon the originals, or copies certified or
otherwise identified to our satisfaction, of the corporate records of the
Corporation and such other instruments, certificates and representations of
public officials, officers and representatives of the Corporation as we have
deemed relevant as a basis for this opinion. In addition, we have assumed,
without independent verification, the genuineness of all signatures and the
authenticity of all documents furnished to us and the conformance in all
respects of copies to originals. Furthermore, we have made such factual
inquiries and reviewed such laws as we determined to be relevant for this
opinion.
For purposes of this opinion, we have also assumed that (i) the shares of
Common Stock issuable pursuant to Option Rights granted under the terms of
the Plans will continue to be validly authorized on the dates the Common
Stock is issued pursuant to the Option Rights; (ii) on the dates the Option
Rights are exercised, the Option Rights granted under the terms of the Plans
will constitute valid, legal and binding obligations of the Corporation and
will (subject to applicable bankruptcy, moratorium, insolvency,
reorganization and other laws and legal principles affecting the
enforceability of creditors' rights generally) be enforceable as to the
Corporation in accordance with their terms; (iii) the Option Rights are
exercised in accordance with their terms and the exercise price therefor is
paid in accordance with the terms thereof; (iv) no change occurs in
applicable law or the pertinent facts; and (v) the provisions of "blue sky"
and other securities laws as may be applicable will have been complied with
to the extent required.
Based on the foregoing, and subject to the assumptions set forth herein,
we are of the opinion as of the date hereof that the shares of Common Stock
to be issued pursuant to the Plans, when issued and sold pursuant to the
Plans and upon receipt of the consideration required thereby, will be legally
issued, fully paid and non-assessable shares of Common Stock of the
Corporation.
We hereby consent to the reference to this firm under the caption "Legal
Opinion" in the Prospectuses for the two Plans and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/Kevin M. Houlihan
-------------------------------
Kevin M. Houlihan, a Partner
<PAGE>
Exhibit 23.2
Consent of Wilf & Henderson, P.C.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
for the common stock to be issued pursuant to the Texarkana First Financial
Corporation (the "Company") 1996 Directors' Stock Option Plan and the 1996
Key Employee Stock Compensation Program on Form S-8 of our report dated
November 15, 1996, on the financial statements included in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1996.
Wilf & Henderson, P.C.
Texarkana, Arkansas
October 1, 1997
<PAGE>
Exhibit 99.1
1996 Directors' Stock Option Plan
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
1996 DIRECTORS' STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Texarkana First 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.
<PAGE>
2
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 an amount equal to 2.0% 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 First Federal Savings and Loan Association of Texarkana ("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 allocated 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>
3
(b) Grant on One-Year Anniversary Date. An Option shall be
allocated 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
<PAGE>
4
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 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 Exercise and Duration of Options.
(a) Except as provided below, each Option shall become exercisable at the
rate of 20% per year on each annual anniversary of the date the Option was
granted, and the right to exercise shall be cumulative. No Option or portion
thereof shall be exercised more than ten (10) years after the date of grant.
(b) Exception for Termination Due to Death or Disability. 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 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 or
disability, 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) Exception for Termination Due to Retirement, Resignation or
Non-Reelection. If the service of a Non-employee Director is terminated as a
result of retirement, resignation or non-reelection before the Options granted
to such Non-employee Director have become fully exercisable, any portion of the
Options which had not yet become exercisable as of the date of such termination
shall expire and be terminated, and the Non-employee Director shall forfeit any
rights to that portion of his Options which had
<PAGE>
5
not yet become exercisable. Following the date his service is terminated as a
result of retirement, resignation or non-reelection, the Non-employee Director
shall have the right to exercise his Options, to the extent exercisable on the
date of such termination of service, during the twelve-month period following
such 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.
(d) 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.
7.04 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.
7.05 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.
7.06 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. Payment for shares may be made by
the optionee in cash, by certified or cashier's check payable to the
Corporation, 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, or any
combination of the foregoing.
7.07 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
<PAGE>
6
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 Options.
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.
<PAGE>
7
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.
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 sixth month 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 national
securities exchange or quotation system on which the Common Stock is listed or
quoted.
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ARTICLE XIV
MISCELLANEOUS
13.01 Governing Law. This Plan shall be construed under the laws of the
State of Arkansas.
13.02 Pronouns. Wherever appropriate, the masculine pronoun shall include
the feminine pronoun, and the singular shall include the plural.
<PAGE>
Exhibit 99.2
1996 Key Employee Stock Compensation Program
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
1996 KEY EMPLOYEE STOCK COMPENSATION PROGRAM
1. Purpose. This Texarkana First Financial Corporation 1996 Key Employee
Stock Compensation Program ("Program") is intended to secure for Texarkana First
Financial Corporation (the "Corporation"), and its subsidiaries, including First
Federal Savings and Loan Association of Texarkana (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
<PAGE>
action or determination made in good faith with respect to the Program or to any
option or stock appreciation right granted thereunder.
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 an amount
equal to 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
2
<PAGE>
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 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.
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 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
3
<PAGE>
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.
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.
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.
4
<PAGE>
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 Internal
Revenue Code of 1986, as amended ("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 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
5
<PAGE>
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.
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 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
6
<PAGE>
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.
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
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<PAGE>
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 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.
8
<PAGE>
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.
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.
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.
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
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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
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.
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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) 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
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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.
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;
(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;
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(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.
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