EXHIBIT 4.1
GILMER FINANCIAL SERVICES, INC.
RECOGNITION AND RETENTION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining executive officers and directors of the Corporation and
its Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
"Award" - means the grant of Restricted Stock by the Committee, as provided
in the Plan.
"Affiliate" - means any "parent corporation" or "subsidiary corporation" of
the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Bank" - means Gilmer Savings Bank FSB, a savings institution and its
predecessors and successors.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 7 hereof.
"Continuous Service" - means the absence of any interruption or termination
of service as a director, advisory director, executive officer or employee of
the Corporation or any Affiliate. Service shall not be considered interrupted in
the case of sick leave, military leave or any other leave of absence approved by
the Corporation or any Affiliate or in the case of transfers between payroll
locations of the Corporation or between the Corporation, its subsidiaries or its
successor.
"Corporation" - means Gilmer Financial Services, Inc., a Delaware
corporation.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Non-Employee Director" - means a director who (i) is not currently an
Employee; (ii) does not receive compensation from the Corporation or any
Affiliate in any capacity other than as a director (except for an amount that
does not exceed the dollar amount for which disclosure would be required
pursuant to Item 404(a) of Regulation S-K; and (iii) does not possess an
interest in any other transactions and is not engaged in a business relationship
for which disclosure would be required pursuant to Items 404(a) or (b) of
Regulation S-K.
"Participant" - means any director, advisory director, executive officer or
employee of the Corporation or any Affiliate who is selected by the Committee to
receive an Award.
"Plan" - means the Recognition and Retention Plan of the Corporation.
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"Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 3
hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently awarded to a
Participant by the Committee subject to the restrictions referred to in Section
3 hereof, so long as such restrictions are in effect.
"Shares" - means the common stock, par value $0.01 per share, of the
Corporation.
3. Terms and Conditions of Restricted Stock. The Committee shall have full
and complete authority, subject to the limitations of the Plan and OTS
regulations, to grant awards of Restricted Stock and, in addition to the terms
and conditions contained in paragraphs (a) through (f) of this Section 3, to
provide such other terms and conditions (which need not be identical among
Participants) in respect of such Awards, and the vesting thereof, as the
Committee shall determine.
(a) At the time of an award of Restricted Stock, the Committee shall
establish for each Participant a Restricted Period, during which or at the
expiration of which, as the Committee shall determine and provide in the
agreement referred to in paragraph (d) of this Section 3, the Shares awarded as
Restricted Stock shall vest, and subject to any such other terms and conditions
as the Committee shall provide, shares of Restricted Stock may not be sold,
voted, assigned, transferred, pledged or otherwise encumbered by the
Participant, except as hereinafter provided, during the Restricted Period.
Except for such restrictions, and subject to paragraphs (c) and (e) of this
Section 3 and Section 4 hereof, the Participant as owner of such shares shall
have all the rights of a stockholder.
No director who is not an employee of the Corporation shall be
granted Awards with respect to more than 5% of the total shares subject to the
Plan. All non-employee directors of the Corporation, in the aggregate, may not
be granted Awards with respect to more than 30% of the total shares subject to
the Plan and no individual shall be granted Awards with respect to more than 25%
of the total shares subject to the Plan. No Awards shall begin vesting earlier
than one year from the date the Plan is ratified by stockholders of the
Corporation and no Awards shall vest at a rate in excess of 20% per year
beginning from the date of grant. In the event Office of Thrift Supervision
Regulations are amended (the "Amended Regulations") to permit shorter vesting
periods, any Award made pursuant to this Plan, which Award is subject to the
requirements of such Amended Regulations, may vest, at the sole discretion of
the Committee, in accordance with such Amended Regulations.
Subject to compliance with Office of Thrift Supervision Regulations,
the Committee shall have the authority, in its discretion, to accelerate the
time at which any or all of the restrictions shall lapse with respect thereto,
or to remove any or all of such restrictions, whenever it may determine that
such action is appropriate by reason of changes in applicable tax or other laws
or other changes in circumstances occurring after the commencement of such
Restricted Period.
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(b) If a Participant ceases to maintain Continuous Service for any
reason (other than death or total or partial disability), unless the Committee
shall otherwise determine, all Shares of Restricted Stock theretofore awarded to
such Participant and which at the time of such termination of Continuous Service
are subject to the restrictions imposed by paragraph (a) of this Section 3 shall
upon such termination of Continuous Service be forfeited and returned to the
Corporation. If a Participant ceases to maintain Continuous Service by reason of
death or total or partial disability, Restricted Stock then still subject to
restrictions imposed by paragraph (a) of this Section 3 will be free of those
restrictions.
(c) Each certificate in respect of Shares of Restricted Stock
awarded under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Recognition and Retention Plan of Gilmer
Financial Services, Inc. Copies of such Plan are on file in the offices of
the Secretary of Gilmer Financial Services, Inc., 218 West Cass Street,
Gilmer, Texas, 75644."
(d) At the time of any Award, the Participant shall enter into an
Agreement with the Corporation in a form specified by the Committee, agreeing to
the terms and conditions of the Award and such other matters as the Committee,
in its sole discretion, shall determine (the "Restricted Stock Agreement").
(e) At the time of an award of shares of Restricted Stock, the
Committee shall determine that the payment to the Participant of dividends
declared or paid on such shares by the Corporation shall be deferred until the
lapsing of the restrictions imposed under paragraph (a) of this Section 3, and
shall be held by the Corporation for the account of the Participant until such
time. There shall be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a market
rate per annum as the Committee, in its discretion, may determine. Payment of
deferred dividends, together with interest accrued thereon, shall be made upon
the earlier to occur of the lapsing of the restrictions imposed under paragraph
(a) of this Section 3 or upon death or disability of the Participant.
(f) At the expiration of the restrictions imposed by paragraph (a)
of this Section 3, the Corporation shall redeliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 3 applies in the case of
a deceased Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to paragraph (c) of
this Section 3 and the Shares represented by such certificate(s) shall be free
of the restrictions referred to in paragraph (a) of this Section 3.
4. Adjustments Upon Changes in Capitalization. In the event of any change
in the outstanding Shares subsequent to the effective date of the Plan by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger,
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consolidation or any change in the corporate structure or Shares of the
Corporation, the maximum aggregate number and class of shares as to which Awards
may be granted under the Plan and the number and class of shares with respect to
which Awards have been granted under the Plan shall be appropriately adjusted by
the Committee, whose determination shall be conclusive. Any shares of stock or
other securities received, as a result of any of the foregoing, by a Participant
with respect to Restricted Stock shall be subject to the same restrictions and
the certificate(s) or other instruments representing or evidencing such shares
or securities shall be legended and deposited with the Corporation in the manner
provided in Section 3 hereof.
5. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code or Title I of ERISA or
the rules thereunder.
6. Administration. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be (i) a Non-Employee
Director and (ii) an "outside director" as set forth in Section 162(m) of the
Code and defined in the regulations promulgated thereunder. The members of the
Committee shall be appointed by the Board of Directors of the Corporation.
Except as limited by the express provisions of the Plan, the Committee shall
have sole and complete authority and discretion to (i) select Participants and
grant Awards; (ii) determine the number of shares to be subject to types of
Awards generally, as well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be granted under the
Plan; (iv) prescribe the form and terms of instruments evidencing such grants;
and (v) establish from time to time regulations for the administration of the
Plan, interpret the Plan, and make all determinations deemed necessary or
advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
7. Shares Subject to Plan. Subject to adjustment by the operation of
Section 4 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 4% of the total Shares issued in the Bank's conversion
to stock form. The shares with respect to which Awards may be made under the
Plan may be either authorized and unissued shares or issued shares reacquired
and held as treasury shares. An Award shall not be considered to have been made
under the Plan with respect to Restricted Stock which is forfeited and new
Awards may be granted under the Plan with respect to the number of Shares as to
which such forfeiture has occurred.
8. Employee Rights Under the Plan. No director, officer or employee shall
have a right to be selected as a Participant nor, having been so selected, to be
selected again as a Partici pant and no director, officer, employee or other
person shall have any claim or right to be granted an Award under the Plan or
under any other incentive or similar plan of the Corporation or any
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Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any employee any right to be retained in the employ of the
Corporation, the Bank or any Affiliate.
9. Withholding Tax. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Corporation shall have the right to withhold from any payment or
distribution made under this Plan sufficient Shares or withhold sufficient cash
to cover any applicable withholding and employment taxes. The Corporation shall
have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments. No discretion or choice shall
be conferred upon any Participant with respect to the form, timing or method of
any such tax withholding.
10. Amendment or Termination. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that no such amendment, suspension or termination shall
impair the rights of any Participant, without his consent, in any Award
previously made pursuant to the Plan.
11. Term of Plan. The Plan shall become effective upon its approval by the
stockholders of the Corporation. It shall continue in effect for a term of ten
years unless sooner terminated under Section 10 hereof.
12. Initial Grants. By, and simultaneously with, the approval of this Plan
by the stockholders of the Corporation, each member of the Board of Directors of
the Corporation at the time of the Bank's conversion to stock form who is not a
full-time Employee, is hereby granted an Award equal to 0.2% of the shares
issued in the mutual to stock conversion of the Bank. Each such Award shall be
evidenced by a Restricted Stock Agreement in a form approved by the Board of
Directors and shall be subject in all respects to the terms and conditions of
this Plan, which are controlling. All Awards of Restricted Stock granted
pursuant to this Section 12 shall be rounded down to the nearest whole share to
the extent necessary to ensure that no shares of Restricted Stock representing
fractional shares are issued. Except as provided in this paragraph 12, each of
the Awards granted hereunder shall vest in five equal installments, with the
first installment vesting on the one-year anniversary of the date of stockholder
approval of the Plan and each additional installment vesting ratably over the
next four twelve-month periods. Awards which are not vested shall be subject to
such Director maintaining Continuous Service with the Bank; provided, however,
no Plan Shares shall be earned in any fiscal year in which the Bank fails to
meet all of its fully phased-in capital requirements.
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EXHIBIT 4.2
GILMER FINANCIAL SERVICES, INC.
RECOGNITION AND RETENTION PLAN
RESTRICTED STOCK AGREEMENT
RS No. ________
Shares of Restricted Stock are hereby awarded on October 12, 1995 by
Gilmer Financial Services, Inc. (the "Corporation"), to _____________________
(the "Grantee"), in accordance with the following terms and conditions, and the
conditions contained in the Gilmer Financial Services, Inc. Recognition and
Retention Plan (the "Plan"):
1. Share Award. The Corporation hereby awards the Grantee ________ shares
(the "Shares") of Common Stock, par value $.01 per share ("Common Stock"), of
the Corporation pursuant to the Plan, as the same may from time to time be
amended, and upon the terms and conditions and subject to the restrictions
therein and hereinafter set forth. A copy of the Plan as currently in effect is
incorporated herein by reference and is attached hereto.
2. Restrictions on Transfer and Restricted Period. During the period (the
"Restricted Period") commencing on October 12, 1995 (the "Commencement Date")
and terminating on October 12, 2000, the Shares may not be sold, assigned,
transferred, pledged, or otherwise encumbered by the Grantee, except as
hereinafter provided.
The Shares will vest at a rate of 20% of the initial award per year of
Continuous Service (as defined in the Plan) commencing on October 12, 1996
pursuant to the following schedule:
Amount
of Initial
Date of Vesting Award Vested
October 12, 1996 20%
October 12, 1997 20%
October 12, 1998 20%
October 12, 1999 20%
October 12, 2000 20%
Subject to compliance with the Office of Thrift Supervision Regulations,
the Committee referred to in Section 6 of the Plan or its successor (the
"Committee") shall have the authority, in its discretion, to accelerate the time
at which any or all of the restrictions shall lapse with respect to any Shares
thereto, or to remove any or all of such restrictions, whenever the Committee
may determine that such action is appropriate by reason of changes in applicable
tax or other laws, or other changes in circumstances occurring after the
commencement of the Restricted Period.
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3. Termination of Service. Except as provided in Section 8 below, if the
Grantee ceases to maintain "Continuous Service" (as defined in the Plan as in
effect on the date of the award of the Shares) for any reason (other than death,
or total or partial disability), all shares which at the time of such
termination of Continuous Service are subject to the restrictions imposed by
Section 2 above shall upon such termination of Continuous Service be forfeited
to the Corporation. If the Grantee ceases to maintain "Continuous Service" (as
defined in the Plan as in effect on the date of the award of shares) by reason
of death, or total or partial disability, the Shares then still subject to
restrictions imposed by Section 2 will be free of those restrictions.
4. Certificates for the Shares. The Corporation shall issue five
certificates in the name of the Grantee, each in respect of 20% of the Shares,
and shall hold such certificates on deposit for the account of the Grantee until
the expiration of the Restricted Period with respect to the Shares represented
thereby. Such certificates shall bear the following legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Recognition and Retention Plan of Gilmer
Financial Services, Inc. Copies of such Plan are on file in the offices of
the Secretary of Gilmer Financial Services, Inc., 218 West Cass Street,
Gilmer, Texas 75644.
The Grantee further agrees that simultaneously with the execution of this
Agreement, the Grantee shall execute five stock powers in favor of the
Corporation with respect to the Shares and that the Grantee shall promptly
deliver such stock powers to the Corporation.
5. Grantee's Rights. Except as otherwise provided herein, the Grantee, as
owner of the Shares, shall have all rights of a stockholder. During the
Restricted Period, the Grantee shall not himself vote such Shares as to which
the Restricted Period has not yet lapsed or expired (the "Restricted Shares").
The Grantee hereby appoints a trust officer of First Bankers Trust Company,
N.A., Quincy, Illinois to vote all Restricted Shares, in his or her sole
discretion, at any annual and special meetings of the stockholders of the
Corporation and at any continuations and adjournments of such meetings, upon any
matters coming before such meetings or adjournments. The Grantee agrees that he
shall from time to time appoint such other person or persons to vote the
Restricted Shares as the Committee in its sole discretion may designate. The
Grantee further agrees that with respect to Restricted Shares, he shall grant no
proxy to vote such shares except pursuant to this Section 5 of this Agreement,
nor shall he revoke any proxy granted pursuant to this Section 5 except with the
consent of the Committee.
Dividends, if any, paid on the Restricted Shares shall be held by the
Corporation for the account of the Grantee. All such withheld dividends shall
earn interest at an annual rate determined by the Committee.
6. Expiration of Restricted Period. Upon the lapse or expiration of the
Restricted Period with respect to a portion of the Shares, the Corporation shall
deliver to the Grantee (or in the case of a deceased Grantee, to his legal
representative) the certificate in respect of such shares and the related stock
power held by the Corporation pursuant to Section 4 above. The Shares as to
which
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the Restricted Period shall have lapsed or expired shall be free of the
restrictions referred to in Section 2 above and such certificate shall not bear
the legend provided for in Section 4 above.
7. Adjustments for Changes in Capitalization of the Corporation. In the
event of any change in the outstanding shares of Common Stock by reason of any
reorganization, recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation, or any change in the corporate
structure of the Corporation or in the shares of Common Stock, the number and
class of shares covered by this Agreement shall be appropriately adjusted by the
Committee, whose determination shall be conclusive. Any shares of Common Stock
or other securities received, as a result of the foregoing, by the Grantee with
respect to Shares subject to the restrictions contained in Section 2 above also
shall be subject to such restrictions and the certificate or other instruments
representing or evidencing such shares or securities shall be legended and
deposited with the Corporation in the manner provided in Section 4 above.
8. Delivery and Registration of Shares of Common Stock. The Corporation's
obligation to deliver shares of Common Stock hereunder shall, if the Committee
so requests, be conditioned upon the receipt of a representation as to the
investment intention of the Grantee or any other person to whom such shares are
to be delivered, in such form as the Committee shall determine to be necessary
or advisable to comply with the provisions of the Securities Act of 1933, as
amended, or any other Federal, state or local securities legislation or
regulation. It may be provided that any representation requirement shall become
inoperative upon a registration of such shares or other action eliminating the
necessity of such representation under such Securities Act or other securities
regulation. The Corporation shall not be required to deliver any shares under
the Plan prior to (i) the admission of such shares to listing on any stock
exchange on which the shares of Common Stock may then be listed, and (ii) the
completion of such registration or other qualification of such shares under any
state or federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.
9. Plan and Plan Interpretations as Controlling. The Shares hereby awarded
and the terms and conditions herein set forth are subject in all respects to the
terms and conditions of the Plan, which are controlling. All determinations and
interpretations of the Committee shall be binding and conclusive upon the
Grantee or his legal representatives with regard to any question arising
hereunder or under the Plan.
10. Grantee Service. Nothing in this Agreement shall limit the right of
the Corporation or any of its Affiliates to terminate the Grantee's service as a
director, officer or employee, or otherwise impose upon the Corporation or any
of its Affiliates any obligation to employ or accept the services of the
Grantee.
11. Withholding and Social Security Taxes. Upon the termination of the
Restricted Period with respect to any Shares (or any such earlier time, if any,
that an election is made under Section 83(b) of the Code, or any successor
provision thereto, to include the value of such Shares in taxable income), the
Corporation shall have the right to withhold from the Grantee's compensation an
amount sufficient to fulfill its or its Affiliate's obligations for any
applicable withholding and employment taxes. Alternatively, the Corporation may
require the Grantee to pay the Corporation
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the amount of any taxes which the Corporation is required to withhold with
respect to the Shares, or, in lieu thereof, to retain or sell without notice a
sufficient number of Shares to cover the amount required to be withheld. The
Corporation shall withhold from any cash dividends paid on the Restricted Stock
an amount sufficient to cover taxes owed as a result of the dividend payment.
The Corporation's method of satisfying its withholding obligations shall be
solely in the discretion of the Corporation, subject to applicable federal,
state and local laws.
12. Grantee Acceptance. The Grantee shall signify his acceptance of the
terms and conditions of this Agreement by signing in the space provided below
and signing the attached stock powers and returning a signed copy thereof and of
the attached stock powers to the Corporation. IF A FULLY EXECUTED COPY HEREOF
AND THE ATTACHED STOCK POWERS HAVE NOT BEEN RECEIVED BY THE CORPORATION BY
DECEMBER 31, 1996, THE CORPORATION MAY REVOKE THIS AWARD, AND AVOID ALL
OBLIGATIONS UNDER THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this RESTRICTED STOCK
AGREEMENT to be executed as of the date first above written.
GILMER FINANCIAL SERVICES, INC.
By: ___________________________________
ACCEPTED:
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(Street Address)
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(City, State & Zip Code)
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STOCK POWER
For value received, I hereby sell, assign, and transfer to Gilmer
Financial Services, Inc. (the "Corporation") ____ shares of the capital stock of
the Corporation, standing in my name on the books and records of the aforesaid
Corporation, represented by Certificate No. _________, and do hereby irrevocably
constitute and appoint the Secretary of the Corporation attorney, with full
power of substitution, to transfer this stock on the books and records of the
aforesaid Corporation.
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Dated:
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In the presence of:
- ------------------------------
SP-1
STOCK POWER
For value received, I hereby sell, assign, and transfer to Gilmer
Financial Services, Inc. (the "Corporation") _____ shares of the capital stock
of the Corporation, standing in my name on the books and records of the
aforesaid Corporation, represented by Certificate No. _________, and do hereby
irrevocably constitute and appoint the Secretary of the Corporation attorney,
with full power of substitution, to transfer this stock on the books and records
of the aforesaid Corporation.
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Dated:
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In the presence of:
- ------------------------------
SP-2
STOCK POWER
For value received, I hereby sell, assign, and transfer to Gilmer
Financial Services, Inc. (the "Corporation") _____ shares of the capital stock
of the Corporation, standing in my name on the books and records of the
aforesaid Corporation, represented by Certificate No. _________, and do hereby
irrevocably constitute and appoint the Secretary of the Corporation attorney,
with full power of substitution, to transfer this stock on the books and records
of the aforesaid Corporation.
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Dated:
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In the presence of:
- ------------------------------
SP-3
STOCK POWER
For value received, I hereby sell, assign, and transfer to Gilmer
Financial Services, Inc. (the "Corporation") _____ shares of the capital stock
of the Corporation, standing in my name on the books and records of the
aforesaid Corporation, represented by Certificate No. _________, and do hereby
irrevocably constitute and appoint the Secretary of the Corporation attorney,
with full power of substitution, to transfer this stock on the books and records
of the aforesaid Corporation.
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Dated:
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In the presence of:
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SP-4
STOCK POWER
For value received, I hereby sell, assign, and transfer to Gilmer
Financial Services, Inc. (the "Corporation") _____ shares of the capital stock
of the Corporation, standing in my name on the books and records of the
aforesaid Corporation, represented by Certificate No. _________, and do hereby
irrevocably constitute and appoint the Secretary of the Corporation attorney,
with full power of substitution, to transfer this stock on the books and records
of the aforesaid Corporation.
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Dated:
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In the presence of:
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SP-5