1995 DIRECTORS PERFORMANCE PLAN OF
AMERICAN FEDERAL BANK, FSB
1. PURPOSE. The purpose of the American Federal Bank, FSB
1995 Directors Performance Plan (the "Plan") is to advance the
interests of American Federal Bank, FSB (the "Company") by
encouraging ownership of the Company's $1.00 par value common stock
(the "Common Stock") by directors of the Company, thereby assisting
the Company in attracting and retaining directors of outstanding
ability and giving such directors an increased incentive to devote
their efforts to the success of the Company.
2. ADMINISTRATION. Grants of options under the Plan are
automatic. The Plan is intended to be a "formula plan' as
recognized by Rule 16b-3(c)(2)(ii) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and shall be
interpreted accordingly. The Company's Board of Directors or a
committee appointed by the Board of Directors composed of at least
two members of the Board of Directors (which may be the
Compensation and Benefits Committee of the Board of Directors)
shall have complete and conclusive authority to interpret the Plan
and to make all other determinations necessary or advisable for the
administration of the Plan.
3. ELIGIBILITY. Except as provided otherwise in this
Paragraph 3, options under the Plan shall be granted in accordance
with Paragraph 5 to each member of the Company's Board of
Directors; provided that shares of Common Stock remain available
for grant hereunder in accordance with Paragraph 4. A Director to
whom an option is granted under the Plan shall be referred to
hereinafter as a "Grantee."
4. SHARES SUBJECT TO PLAN. The shares subject to the Plan
shall be authorized but unissued or reacquired shares of Common
Stock. Subject to adjustment in accordance with the provisions of
Paragraph 6 of the Plan, the maximum number of shares of Common
Stock for which options may be granted under the Plan shall be
45,000 and the initial adoption of the Plan by the Board of
Directors of the Company shall constitute a reservation of 45,000
authorized but unissued, or reacquired, shares of Common Stock for
issuance only upon the exercise of options granted under the Plan.
In the event that any outstanding option granted under the Plan for
any reason expires or is terminated prior to the end of the period
during which options may be granted under the Plan, the shares of
Common Stock allocable to the unexercised portion of such option
may again be subject in whole or in part to any option granted
under the Plan.
5. TERMS AND CONDITIONS OF OPTIONS. Options granted
pursuant to the Plan shall be evidenced by Stock Option Agreements
in such form as shall comply with and be subject to the following
terms and conditions:
(a) Grant. Beginning with the adjournment of the 1995 Annual
Meeting of Shareholders of American Federal (the "1995 Annual
Meeting") and at the adjournment of the annual meetings for each of
the succeeding years during the term of the Plan in which (i) the
return on average assets and (ii) the return on average equity of
American Federal for the fiscal year preceding the annual meeting
as reported by American Federal in its earnings release for such
prior fiscal year are 1.1% and 15%, respectively, or greater, each
Director who was also serving in such capacity as of December 31 of
the preceding year shall be granted an option to purchase 1,500
shares of the Company's Common Stock, subject to adjustment as
provided in Section 6 and provided that no Director may receive
grants of options for shares of Common Stock under the Plan in
excess of 4,500. Each such day that options are to be granted
under the Plan is referred to hereinafter as a "Grant Date."
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If on any Grant Date, shares of Common Stock are not
available under the Plan to grant to Directors the full amount of
a grant contemplated by the immediately preceding paragraph, then
each Director shall receive an option (a "Reduced Grant") to
purchase shares of Common Stock in an amount equal to the number
of shares of Common Stock then available under the Plan divided
by the number of Directors as of the applicable Grant Date.
Fractional shares shall be ignored and not granted.
If a Reduced Grant has been made and, thereafter, during the
term of the Plan, additional shares of Common Stock become
available for grant (e.g., because of the forfeiture or lapse of
an option), then each person who was an Director both on the
Grant Date on which the Reduced Grant was made and on the date
additional shares of Common Stock become available (a "Continuing
Director") shall receive an additional option to purchase shares
of Common Stock. The number of newly available shares shall be
divided equally among the options granted to the Continuing
Directors; provided, however, that the aggregate number of shares
of Common Stock subject to a Continuing Director's additional
option plus any prior Reduced Grant to the Continuing Director on
the applicable Grant Date shall not exceed 1,500 shares of Common
Stock (subject to adjustment pursuant to paragraph 6). If more
than one Reduced Grant has been made, available options shall be
granted beginning with the earliest such Grant Date.
(b) Option Price. The option price for each option granted
under the Plan shall be the Fair Market Value (as defined below)
of the shares of Common Stock subject to the option on the Grant
Date of the option. For purposes of the Plan, the "Fair Market
Value" of the shares of Common Stock shall mean the last sales
price on the day on which such value is to be determined or, if
no shares were traded on such day, on the next preceding day on
which the shares were traded, as reported by the Nasdaq National
Market or other national quotation service. If the shares are
listed on a national securities exchange, "Fair Market Value"
means the closing price of the shares on such national securities
exchange on the day on which such value is to be determined or,
if no shares were traded on such day, on the next preceding day
on which shares were traded, as reported by National Quotation
Bureau, Inc. or other national quotation service.
(c) Medium and Time of Payment. The option price shall be
payable in full upon the exercise of an option in cash or by
check. To the extent permitted under Regulation T of the Federal
Reserve Board, and subject to applicable securities laws, options
may be exercised through a broker in a so-called "cashless
exercise" whereby the broker sells the option shares and delivers
cash sales proceeds to the Company in payment of the exercise
price. In no event may shares of Common Stock be used as payment
of the exercise price of the option.
(d) Term. Each option granted under the Plan shall, to the
extent not previously exercised, terminate and expire on the date
ten (10) years after the date of grant of the option, unless
earlier terminated as provided hereinafter in Section 5(g).
(e) Exercisability. Each option granted under the Plan
shall, unless earlier terminated as provided hereinafter in
Section 5(g), become exercisable on the date six (6) months and
one day following the date of grant.
(f) Method of Exercise. All options granted under the Plan
shall be exercised by an irrevocable written notice directed to
the Secretary of the Company at the Company's principal place of
business. Except in the case of a "cashless exercise" through a
broker, such written notice shall be accompanied by payment in
full of the option price for the shares for which such option is
being exercised. In the case of a "cashless exercise," payment
in full of the option price for the shares for which such option
is being exercised shall be paid in cash by the broker from the
sale proceeds. The Company shall make delivery of certificates
representing the shares for
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which an option has been exercised within a reasonable period of
time; provided, however, that if any law, regulation or agreement
requires the Company to take any action with respect to the
shares for which an option has been exercised before the issuance
thereof, then the date of delivery of such shares shall be
extended for the period necessary to take such action.
Certificates representing shares for which options are exercised
under the Plan may bear such restrictive legends as may be
necessary or desirable in order to comply with applicable federal
and state securities laws. Nothing contained in the Plan shall
be construed to require the Company to register any shares of
Common Stock underlying options granted under the Plan.
(g) Effect of Termination of Directorship or Death.
(i)
Termination of Directorship. Upon termination of
any Grantee's membership on the Board of Directors of the
Company for any reason other than for cause or death, the
options held by the Grantee under the Plan shall terminate
ninety (90) days following the date of termination of the
Grantee's membership on the Board or, if earlier, on the
date of expiration of the options as provided by Paragraph
5(d) of the Plan. If the Grantee exercises the options
after termination of the Grantee's service on the Board of
Directors, the Grantee may exercise the options only with
respect to the shares that were otherwise exercisable on the
date of termination of the Grantee's service, on the Board.
Such exercise otherwise shall be subject to the terms and
conditions of the Plan. If the Grantee's membership on the
Board of Directors is terminated for cause, all options
granted to such Grantee shall expire upon such termination.
(ii) Death. In the event of the death of a Grantee,
the Grantee's personal representatives, heirs or legatees
(the "Grantee's Successors") may exercise the options held
by the Grantee on the date of death, upon proof satisfactory
to the Company of their authority. The Grantee's Successors
must exercise any such options within one (1) year after the
Grantee's death and in any event prior to the date on which
the options expire as provided by Paragraph 5(d) of the
Plan. Such exercise otherwise shall be subject to the terms
and conditions of the Plan.
(h) Nonassignability of Options Rights. No option shall be
assignable or transferable by the Grantee except by will, by the
laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and
the Internal Revenue Code of 1986, as amended (the "Code").
During the lifetime of the Grantee, the option shall be
exercisable only by the Grantee.
(i) Rights as Shareholder. Neither the Grantee nor the
Grantee's Successors shall have rights as a shareholder of the
Company with respect to shares of Common Stock covered by the
Grantee's option until the Grantee or the Grantee's Successors
become the holder of record of such shares.
(j) No Options after Ten Years. No options shall be
granted except within a period of ten (10) years after the
effective date of the Plan.
6. ADJUSTMENTS.
(a) Certain Recapitalizations. If any change is made in
the Common Stock subject to the Plan, or subject to any option
granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate
structure or otherwise), the Plan and outstanding options will be
automatically and appropriately adjusted,
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in cluding the maximum number of shares subject to the Plan and
number of shares and price per share of stock subject to
outstanding options.
(b) Certain Reorganizations. In the event of: (i) a merger
or consolidation in which the Company is not the surviving
corporation; (ii) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's Common
Stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form
of securities, cash or otherwise; or (iii) any other capital
reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged, then any
surviving corporation shall assume any options outstanding under
the Plan or shall substitute similar options for those
outstanding under the Plan. If there is no surviving
corporation, all outstanding options shall expire.
7. EFFECTIVE DATE AND TERMINATION OF PLAN.
(a) Effective Date. If approved by the Board of Directors
and shareholders of the Company, the Plan shall become effective
upon the adjournment of the 1995 Annual Meeting.
(b) Termination. The Plan shall terminate ten (10) years
after its effective date, but the Board of Directors may
terminate the Plan at any time prior to such date. Termination
of the Plan shall not alter or impair any of the rights or
obligations under any option theretofore granted under the Plan
unless the Grantee shall so consent.
8. NO OBLIGATION TO EXERCISE OPTION. The granting of an
option shall impose no obligation upon the Grantee to exercise
such option.
9. AMENDMENT. The Board of Directors of the Company by
majority vote may amend the Plan; provided, however, that without
the approval of the shareholders of the Company, no such
amendment shall change:
(a) The maximum number of shares of Common Stock as to
which options may be granted under the Plan (except by operation
of the adjustment provisions of the Plan); or
(b) The date on which the Plan will terminate as provided
by paragraph 7(b) of the Plan; or
(c) The number of shares of Common Stock subject to each
option; or
(d) The option price as provided under Paragraph 5(b) of
the Plan; or
(e) The provisions of Paragraph 3 of the Plan relating to
the determination of
persons to whom options may be granted; or
(f) The provisions of the Plan in such a manner so as to
increase materially (within the meaning of Rule 16b-3 under the
Exchange Act) the benefits accruing under the Plan.
The provisions of the Plan determining (i) the persons
eligible to receive grants of options, (ii) the timing of option
grants, (iii) the number of shares subject to options, (iv) the
exercise price of options, (v) the periods during which options
are exercisable, and (vi) the dates on which options terminate,
may not be amended more than once every six (6) months other than
to comport with changes in the Code, the ERISA, or the rules and
regulations thereunder.
It is expressly contemplated that the Board may amend the
Plan in any respect that the Board deems necessary to cause the
Plan to meet the requirements of Rule 16b-3 (or any
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successor rule) under the Exchange Act and otherwise to comport
with the provisions of such Act and the applicable regulations
thereunder.
Any amendment to the Plan shall not, without the written
consent of the Grantee, affect such Grantee's rights under any
option theretofore granted to such Grantee.
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