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EXHIBIT 10.4
UNIONFED FINANCIAL CORPORATION
1992 STOCK INCENTIVE PLAN
1. PURPOSES OF THE PLAN
The purposes of this 1992 Stock Incentive Plan ("Plan") of UnionFed
Financial Corporation, a Delaware corporation (the "Company"), are to enable
the Company and its Subsidiaries to attract, retain and motivate their
officers, directors, key employees and consultants with compensatory
arrangements and benefits that make use of or are measured by Company stock so
as to provide for or increase the proprietary interests of such persons in the
Company and to align their interests with those of the Company's stockholders.
2. PLAN AWARDS
To carry out the purposes of the Plan, the Company will from time to
time enter into various arrangements with persons eligible to participate
therein and confer various benefits upon them. The following such arrangements
or benefits are authorized under the Plan if their terms and conditions are not
inconsistent with the provisions of the Plan: Stock Options, Sales of
Securities, Stock Bonuses, Performance Shares and Performance Units. Such
arrangements and benefits pursuant to the Plan are sometimes referred to herein
as "Awards." The authorized categories of benefits for which Awards may be
granted are defined as follows:
Stock Options: A Stock Option is a right granted under the
Plan to purchase a specified number of shares of Common Stock at such
exercise price, at such times, and on such other terms and conditions
as are specified in the Award. A Stock Option may, but need not, (a)
provide for the payment of some or all of the option exercise price in
cash or by promissory note or by delivery of previously owned shares
(including the technique known as "pyramiding") or other property or
by withholding some of the shares which are being purchased; (b)
include arrangements to facilitate the grantee's ability to borrow
funds for payment of the exercise price; or (c) be an Incentive Stock
Option.
Sales of Securities: A Sale of Securities is a sale under the
Plan of unrestricted shares of Common Stock or of debt or other
securities which are convertible into shares of Common Stock upon such
terms and conditions as may be established in the terms of the Award.
Stock Bonuses: A Stock Bonus is the issuance or delivery of
unrestricted or restricted shares of Common Stock under the Plan as a
bonus for services rendered or for any other valid consideration under
applicable law.
Performance Shares: A Performance Share is an Award that
represents a fixed number of shares of Common Stock which vests at a
specified time or over a period of time in accordance with performance
criteria established in connection with the granting of the Award.
Such criteria may measure the performance of the grantee, of the
business unit in which the grantee is employed, or of the Company, or
a combination of any of the foregoing. The vested portion of the
Award is payable to the grantee either in the shares it represents or
in cash in an amount equal to the Fair Market Value of those shares on
the date of vesting, or a combination thereof, as specified in the
Award.
Performance Units: A Performance Unit is an Award that
represents a fixed amount of cash which vests at a specified time or
over a period of time in accordance with performance criteria
established in connection with the granting of the Award. Such
criteria may measure the performance of
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the grantee, of the business unit in which the grantee is employed, or
of the Company or a combination of any of the foregoing. The vested
portion of the Award is payable to the grantee either in cash or in
shares valued at their Fair Market Value on the date of vesting, or a
combination thereof, as specified in the Award.
An Award may consist of one such arrangement or benefit or two or more
of them in tandem or in the alternative. Subject to the provisions of the
Plan, any Award granted pursuant to the Plan may contain such additional terms
and provisions as those administering the Plan for the Company may consider
appropriate. Among other things, any such Award may but need not also provide
for (i) the satisfaction of any applicable tax withholding obligation by the
retention of shares to which the grantee would otherwise be entitled or by the
grantee's delivery of previously owned shares or other property and (ii)
acceleration of vesting, lapse of restrictions, cash settlement or other
adjustment to the terms of the Award in the event of a merger, sale of assets
or change of control of the Company.
3. STOCK SUBJECT TO THE PLAN
The kind and maximum number of shares of stock that may be sold or
issued under the Plan, whether upon exercise of Stock Options or in settlement
of other Awards, shall be 2,645,913 shares of Common Stock (subject to the
adjustments set forth hereinbelow). If the outstanding shares of stock of the
class then subject to the Plan are increased or decreased, or are changed into
or are exchanged for a different number or kind of shares or securities or
other forms of consideration, as a result of one or more recapitalizations,
restructurings, reclassifications, stock splits, reverse stock splits, stock
dividends or the like, appropriate adjustments shall be made in the number
and/or kind of shares or securities or other forms of consideration which may
thereafter be sold or issued under the Plan and for which Awards (including
Incentive Stock Options) may thereafter be granted and for which outstanding
Awards previously granted under the Plan may thereafter be exercised or
settled.
If, on or before termination of the Plan, any shares of Common Stock
subject to an Award shall not be issued or transferred and shall cease to be
issuable or transferable for any reason, or if such shares shall have been
reacquired by the Company pursuant to restrictions imposed on such shares under
the Plan or the terms of an Award, the shares not so issued or transferred and
the shares so reacquired shall no longer be charged against the limitation
provided for in this Section 3 and may be again made the subject of Awards
under this Plan, except as necessary to avoid double counting of shares that
would have been issued pursuant to an expiring tandem Award. The shares of
stock sold or issued under the Plan may be obtained from the Company's
authorized but unissued shares, from reacquired or treasury shares, or from
outstanding shares acquired in the market or from private sources.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the
Company (the "Board") or, in the discretion of the Board, a committee appointed
thereby (the "Committee"). Subject to the provisions of the Plan, the Board,
or the Committee, shall have full and final authority in its discretion to
select the eligible persons to whom Awards shall be granted hereunder, to grant
such Awards, to determine the terms and provisions of such Awards and the
number of shares to be sold or issued pursuant thereto. The Board (and the
Committee) shall also be empowered with full and final authority to adopt,
amend, and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan. The Board or the Committee, as
the case may be, may delegate to Company officers or others its authority with
respect to any Awards that may be granted to employees who are not then
officers of the Company or subject to Section 16 of the 1934 Act, subject to
applicable legal requirements. The interpretation and construction by the
Board or the Committee of any term or provision of the Plan or of any Award
granted thereunder shall be final and binding upon all participants in the
Plan.
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Pursuant to the authority described above, the Board or the Committee
may adopt such amendments to, and rules and regulations governing, the Plan as
may be considered advisable for purposes of compliance with applicable federal
or state securities laws.
5. PERSONS ELIGIBLE TO PARTICIPATE
Directors, officers and key employees of the Company and its
Subsidiaries shall be eligible for the grant of Awards under the Plan at the
discretion of the Board or Committee provided, however, that no Incentive Stock
Options may be granted to any person who is not an employee of the Company.
Non-employee consultants to the Company or its Subsidiaries who are deemed by
the Board or Committee to be of such significance to the Company or its
Subsidiaries that grants of Awards hereunder are appropriate and in the
interest of the Company shall also be eligible on an ad hoc basis for the grant
of Awards hereunder, except that no Incentive Stock Options may be granted to
non-employee consultants.
6. PLAN EFFECTIVENESS AND DURATION
The Plan shall become effective as of the date of its approval by the
Board, and shall continue (unless earlier terminated by the Board) until its
expiration as set forth below; provided, that this Plan shall be submitted for
the approval of each class of capital stock eligible to vote on matters
submitted to a vote of the Company's stockholders as soon as reasonably
practicable; and provided further that any Awards granted prior to such
stockholder approval shall be considered subject to such approval. Unless
previously terminated, the Plan will expire ten years after its effective date,
but such expiration shall not affect any Award previously made or granted which
is then outstanding.
7. SECTION 16 PERSONS
Notwithstanding any other provision herein, any Award granted
hereunder to an officer or director of the Company who is then subject to
Section 16 of the 1934 Act shall be subject to the following limitations:
(a) The Award may provide for the issuance of shares of
Common Stock as a Stock Bonus for no consideration other than services
rendered. In the event of an Award under which shares of Common Stock
are or may in the future be issued for any other type of
consideration, the amount of such consideration shall either (1) be
equal to the amount required to be received by the Company in order to
assure compliance with applicable state law or (2) be equal to or
greater than 50% of the Fair Market Value of such shares on the date
of grant of such Award.
(b) Any derivative security (as defined in the rules and
regulations of the Securities and Exchange Commission with respect to
Section 16 of the 1934 Act) granted under this Plan shall be
transferable by the recipient thereof only to the extent such transfer
is not prohibited by Rule 16b-3 under Section 16 of the 1934 Act.
8. AMENDMENT AND TERMINATION
The Board may amend, suspend or terminate the Plan, provided that no
amendment of the Plan may, unless approved by the stockholders of the Company,
increase the maximum number of shares that may be sold or issued under the
Plan, or alter the class of persons eligible to participate in the Plan. The
Board may in its discretion determine, with respect to any amendments of the
Plan (whether or not requiring stockholder approval under this Plan or
applicable law or governmental regulations), that such amendments shall become
effective upon approval by the stockholders of the Company.
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9. CERTAIN DEFINITIONS
The authorized categories of benefits for which Awards may be granted
under this Plan are defined in Section 2 above. In addition, the following
terms used in this Plan shall have the following meanings:
"Common Stock" is the Company's common stock, as constituted
on the effective date of this Plan, and as thereafter adjusted as a
result of any one or more events requiring adjustment of outstanding
Awards under Section 3 above.
"Fair Market Value" of shares of stock shall be calculated on
the basis of the closing price of stock of that class on the day in
question (or, if such day is not a trading day in the U.S. securities
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) in which such shares are then traded; or, if no such
closing prices are reported, on the basis of the mean between the high
bid and low asked prices that day on the principal market or national
quotation system on which such shares are then quoted; or, if not so
quoted, as furnished by a professional securities dealer making a
market in such shares selected by the Board or the Committee; or if no
such dealer is available, then the Fair Market Value shall be
determined in good faith by the Board.
An "Incentive Stock Option" is a Stock Option that qualifies
as an "incentive stock option" as defined under Section 422 (or any
applicable successor provisions) of the Internal Revenue Code and that
includes an express provision that it is intended to be an Incentive
Stock Option.
A "Subsidiary" of the Company is any corporation, partnership
or other entity in which the Company directly or indirectly owns 50%
or more of the total combined power to cast votes in the election of
directors, trustees, managing partners or similar officials.
The "1934 Act" means the Securities Exchange Act of 1934, as
amended.
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(1) Section 3 was amended by Board of Directors on June 14, 1993 and
approved by UnionFed Stockholders at a Special Meeting on July 27,
1993 to increase the number of shares under the Plan from 500,000 to
2,645,913 (10% of shares outstanding after recapitalization (KBW
shares were excluded for this purpose)).
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