Exhibit 99.2
1996 Key Employee Stock Compensation Program
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
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
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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
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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.
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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
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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
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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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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.
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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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