Exhibit 10.4
BANDO McGLOCKLIN CAPITAL CORPORATION
1997 STOCK OPTION PLAN
1. Purpose. The purpose of the Bando McGlocklin Capital
Corporation 1997 Stock Option Plan (the "Plan") is to induce key employees
to remain in the employ of Bando McGlocklin Capital Corporation (the
"Company") or of any subsidiary of the Company as hereinafter defined, and
to encourage such employees to secure or increase on reasonable terms
their stock ownership in the Company. The Board of Directors of the
Company (the "Board") believes that the Plan will promote continuity of
management and increased incentive and personal interest in the welfare of
the Company by those who are primarily responsible for shaping and
carrying out the long-range plans of the Company and securing its
continued growth and financial success. It is intended that only
nonqualified stock options may be issued pursuant to the Plan.
2. Effective Date of the Plan. The effective date of the Plan
is the date of its adoption by the Board, February 3, 1997, subject to the
approval and ratification of the Plan by the shareholders of the Company,
and any and all grants made under the Plan prior to such approval shall be
subject to such approval.
3. Stock Subject to Plan.
(a) Plan Limit. Subject to adjustment in accordance with the
provisions of Section 7, shares of the Company's common stock, 6-2/3 cents
par value per share, not to exceed 200,000 shares, may be issued pursuant
to the Plan. Such shares may be authorized and unissued or treasury
shares. If any options expire, are canceled, or terminate for any reason
without having been exercised in full, the shares subject to the
unexercised portion thereof shall again be available for the purposes of
the Plan.
(b) Employee Limit. No Employee shall receive in any single
fiscal year of the Company options for more than 160,000 shares of stock,
subject to adjustment in accordance with the provisions of Section 7.
Determinations under this Section shall be made in a manner that is
consistent with the exemption for performance-based compensation provided
by Section 162(m) of the Internal Revenue Code of 1986 (the "Code") and
any regulations promulgated thereunder.
4. Administration. The Plan shall be administered by the
Board and/or the Compensation Committee of the Board (the "Committee")
consisting of not less than two directors, each of whom shall qualify as a
"non-employee director" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule or regulation, and an "outside director" within the meaning
of Section 162(m) of the Code and any regulations promulgated thereunder.
If at any time the Committee shall not be in existence or not consist of
directors who are qualified as "non-employee directors" and "outside
directors" as defined above, the Board shall administer the Plan. To the
extent permitted by applicable law, the Board may, in its discretion,
delegate to another committee of the Board or to one or more senior
officers of the Company any or all of the authority and responsibility of
the Committee with respect to options to participants other than
participants who are subject to the provisions of Section 16 of the
Exchange Act. To the extent that the Board has delegated to such other
committee or one or more officers the authority and responsibility of the
Board and/or Committee, all references to the Committee herein shall
include such other committee or one or more officers.
Subject to the express provisions of the Plan, the Committee and
the Board each shall have authority to establish such rules and
regulations as they deem necessary or advisable for the proper
administration of the Plan, and, in their discretion, to determine those
key employees to whom and the price at which options will be granted, the
time or times at which options will be granted, the exercise periods,
limitations on exercise, the number of shares to be subject to each option
and any other terms, limitations, conditions and restrictions on options
as the Committee or the Board, in its discretion, deems appropriate. In
making such determinations, the Committee and the Board may take into
account the nature of the services rendered by the respective employees,
their present and potential contributions to the success of the Company or
its subsidiaries as defined in Section 424(f) of the Code ("Subsidiary" or
"Subsidiaries"), and such other factors as the Committee or the Board in
its discretion shall deem relevant. Subject to the express provisions of
the Plan, the Committee and the Board each shall also have authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective
option agreements (which need not be identical), to waive any conditions
or restrictions with respect to any option and to make all other
determinations necessary or advisable for the administration of the Plan.
The Committee and Board determinations on the matters referred to in this
Section 4 shall be conclusive.
5. Eligibility. Options may be granted to any key employee
("Employee") of the Company and of any of its present and future
Subsidiaries including any such Employee who is also an officer or
director of the Company or any of its Subsidiaries.
6. Grants of Options.
(a) Grant. Subject to the provisions of the Plan, the
Committee and the Board each may grant stock options to Employees in such
amounts as they shall determine. The Committee and the Board each shall
have full discretion to determine the terms and conditions (including
vesting) of all options. More than one option may be granted to the same
Employee.
(b) Option Price. The per share option price, as determined by
the Committee or Board, shall be an amount not less than 100% of the fair
market value of the stock on the trading date immediately prior to the
date such option is granted, as such fair market value is determined by
such methods or procedures as shall be established from time to time by
the Committee or Board ("Fair Market Value").
(c) Option Period. The term of each option shall be as
determined by the Committee or Board.
(d) Exercise of Option. The Committee or Board shall prescribe
the manner in which an Employee may exercise an option which is not
inconsistent with the provisions of this Plan. An option may be
exercised, subject to limitations on its exercise and the provisions of
subparagraph (g), from time to time, only by (i) providing written notice
of intent to exercise the option with respect to a specified number of
shares, and (ii) payment in full to the Company of the option price at the
time of exercise. Payment of the option price may be made (i) by delivery
of cash and/or securities of the Company having a then Fair Market Value
equal to the option price, or (ii) by delivery (including by fax) to the
Company or its designated agent of an executed irrevocable option exercise
form together with irrevocable instructions to a broker-dealer to sell or
margin a sufficient portion of the shares and deliver the sale or margin
loan proceeds directly to the Company to pay for the option price.
(e) Transferability of Option. The options are not
transferable otherwise than by will or the laws of descent and
distribution, and may be exercised during the life of the Employee only by
the Employee, except that an Employee may, to the extent allowed by the
Committee or Board and in a manner specified by the Committee or Board,
(a) designate in writing a beneficiary to exercise the option after the
Employee's death, and (b) transfer any option.
(f) Termination of Employment. In the event an Employee leaves
the employ of the Company and/or its Subsidiaries whether voluntarily or
by reason of dismissal, disability or retirement, all rights to exercise
an option shall terminate immediately unless otherwise determined by the
Committee or Board or provided in the option agreement granted to such
Employee.
7. Capital Adjustment Provisions. In the event of any change
in the shares of common stock of the Company by reason of a declaration of
a stock dividend (other than a stock dividend declared in lieu of an
ordinary cash dividend), stock split, reorganization, merger,
consolidation, spin-off, recapitalization, split-up, combination or
exchange of shares, or otherwise, the aggregate number and class of shares
available under this Plan, the number and class of shares subject to each
outstanding option, and the exercise price for shares subject to each
outstanding option, shall be appropriately adjusted by the Committee or
Board, whose determination shall be conclusive. No such adjustment shall
change the aggregate option price for the shares covered by any option
agreement or require the Company to sell any fractional shares, and the
adjustment with respect to each option agreement shall be limited
accordingly.
8. Termination and Amendment of Plan. The Plan shall
terminate on February 3, 2007, unless sooner terminated as hereinafter
provided. The Board may at any time terminate the Plan, or amend the Plan
as it shall deem advisable including (without limiting the generality of
the foregoing) any amendments deemed by the Board to be necessary or
advisable to assure the Company's deduction under Section 162(m) of the
Code for all options granted under the Plan and to assure conformity with
any requirements of other state or federal laws or regulations; provided,
however, that shareholder approval of any amendment of the Plan shall also
be obtained if otherwise required by (i) the Code or any rules promulgated
thereunder (in order to enable the Company to comply with the provisions
of Section 162(m) of the Code), or (ii) the listing requirements of any
principal securities exchange or market on which the shares are then
traded (in order to maintain the listing or quotation of the shares
thereon). No termination or amendment of the Plan may, without the
consent of the Employee, adversely affect the rights of such Employee
under any option previously granted. Termination of the Plan shall not
affect the rights of Employees under options granted before termination
and all unexpired options shall continue in force and operation after
termination of the Plan except as they may lapse or be terminated by their
own terms and conditions.
9. Rights of Employees. Nothing in this Plan or in any
options shall interfere with or limit in any way the right of the Company
and any of its Subsidiaries to terminate any Employee's employment at any
time, nor confer upon any Employee any right to continue in the employ of
the Company or any of its subsidiaries.
10. Rights as a Shareholder. An Employee shall have no rights
as a shareholder with respect to shares covered by any option until the
date of issuance of the stock certificate to such Employee and only after
such shares are fully paid. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock is
issued.
11. Tax Withholding. The Company may deduct and withhold from
any cash otherwise payable to an Employee such amount as may be required
for the purpose of satisfying the Company's obligation to withhold
Federal, state or local taxes in connection with any option. Further, in
the event the amount so withheld is insufficient for such purpose, the
Company may require that the Employee pay to the Company upon its demand
or otherwise make arrangements satisfactory to the Company for payment of
such amount as may be requested by the Company in order to satisfy its
obligation to withhold any such taxes.
An Employee may be permitted to satisfy the Company's
withholding tax requirements by electing to have the Company withhold
shares of stock otherwise issuable to the Employee. The election shall be
made in writing and shall be made according to such rules and in such form
as the Committee or Board may determine.
12. Miscellaneous. The grant of any option under the Plan may
also be subject to other provisions as the Committee or Board determines
appropriate, including, without limitation, provisions for (a) one or more
means to enable Employees to defer recognition of taxable income relating
to options, which means may provide for a return to an Employee on amounts
deferred as determined by the Committee or Board; (b) the purchase of
stock under options in installments; and (c) compliance with federal or
state securities laws and stock exchange or market requirements.
13. Agreements. Options granted pursuant to the Plan shall be
evidenced by written agreements in such form as the Committee or Board
shall from time to time adopt.
14. Powers of Company Not Affected. The existence of the Plan
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the stock or the rights thereof, or
dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
15. Requirements of Law. The granting of options and the
issuance of shares of stock upon the exercise of an option shall be
subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges or
markets as may be required.
16. Governing Law. The Plan and all determinations made and
actions taken pursuant thereto shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin.