EXHIBIT 4.2
Form of Stock Option Agreement to be entered into
with respect to Incentive Stock Options
STOCK OPTION AGREEMENT
----------------------
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
FSF FINANCIAL CORP.
1998 STOCK COMPENSATION PLAN
STOCK OPTIONS ("Options") for a total of ___________ shares of Common
Stock, par value $.10 per share, of FSF Financial Corp. (the "Company"), which
Options are intended to qualify as an Incentive Stock Option under Section 422
of the Internal Revenue Code of 1986, as amended, is hereby granted to ____
________________________ (the "Optionee") at the price determined as provided
in, and in all respects subject to the terms, definitions and provisions of the
1998 Stock Compensation Plan (the "Plan") adopted by the Company which is
incorporated by reference herein, receipt of which is hereby acknowledged.
1. Option Price. The Option price is $_____ for each share of Common
Stock, being 100% of the fair market value, as determined by the Committee, of
the Common Stock on the date of grant of these Options.
2. Exercise of Options. These Options shall be exercisable in
accordance with provisions of the Plan as follows:
(a) Schedule of Rights to Exercise.
Percentage of Total Shares
Awarded Which Are
Date Non-forfeitable
---- ---------------
Upon grant................................... 20%
As of __________ ___, ____................... 40%
As of __________ ___, ____................... 60%
As of __________ ___, ____................... 80%
As of __________ ___, ____................... 100%
Notwithstanding any provisions in this Section 2, in no event shall
these Options be exercisable prior to six months following the date of grant or
the date of ratification of the Plan by the Company's stockholders, whichever is
later. Options shall be 100% vested and exercisable upon death, disability, or a
Change in Control of the Corporation.
(b) Method of Exercise. These Options shall be exercisable by
a written notice which shall:
(i) State the election to exercise the Options, the
number of shares of Common Stock with respect to which it is being
exercised, the person in whose name the stock certificate or
certificates for such shares of Common Stock is to be registered, his
address and Social Security Number (or if more than one, the names,
addresses and Social Security Numbers of such persons);
(ii) Contain such representations and agreements as
to the holder's investment intent with respect to such shares of Common
Stock as may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to
exercise the Options and, if the Options are being exercised by any
person or persons other than the Optionee, be accompanied by proof,
satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Options; and
(iv) Be in writing and delivered in person or by
certified mail to the Treasurer of the Company.
Payment of the purchase price of any shares of Common Stock with
respect to which the Options are being exercised shall be by certified or bank
cashier's or teller's check. The certificate or certificates for shares of
Common Stock as to which the Options shall be exercised shall be registered in
the name of the person or persons exercising the Options.
(c) Restrictions on Exercise. These Options may not be
exercised if the issuance of the shares of Common Stock upon such exercise would
constitute a violation of any applicable federal or state securities or other
law or valid regulation. As a condition to the Optionee's exercise of these
Options, the Company may require the person exercising these Options to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.
3. Non-transferability of Options. These Options may not be transferred
in any manner otherwise than by will or the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of these Options shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
4. Term of Options. These Options may not be exercised more than ten
(10) years from the date of grant of these Options, as set forth below, and may
be exercised during such term only in accordance with the Plan and the terms of
these Options.
2
5. Related Matters. Notwithstanding anything herein to the contrary,
additional conditions or restrictions related to such Options may be contained
in the Plan or the resolutions of the Plan Committee authorizing such grant of
Options.
FSF Financial Corp.
Date of Grant: __________ ___, ____ By: _________________________
Attest:
_______________________________
[SEAL]
INCENTIVE STOCK OPTION EXERCISE FORM
------------------------------------
PURSUANT TO THE
FSF FINANCIAL CORP.
1998 STOCK COMPENSATION PLAN
_________________________
(Date)
FSF Financial Corp.
201 Main Street South
Hutchinson, Minnesota 55350
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to
purchase _______ shares, par value $.10, of Common Stock of FSF Financial Corp.
under and pursuant to a Stock Option Agreement dated ____________, _____ 19____.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$_________ of cash or check
_________ of Common Stock
$ Total
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The name or names to be on the stock certificate or certificates and
the address and Social Security Number of such person(s) is as follows:
Name __________________________________________
Address _______________________________________
Social Security Number ________________________
Very truly yours,
________________________