**Exhibit 10.121**

 

**FIRST INVESTORS FINANCIALSERVICES GROUP, INC.2005 STOCK OPTION PLAN**

 

### **ARTICLE I. ESTABLISHMENTAND PURPOSE**

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**1.1****                               Establishmentand Purpose.**  First InvestorsFinancial Services Group, Inc. (“First Investors”) hereby establishes the FirstInvestors Financial Services Group, Inc. 2005 Stock Option Plan, as setforth in this document.  The purposes ofthe Plan are to attract able persons to enter the employ of the Company, toencourage Employees to remain in the employ of the Company and to providemotivation to Employees to put forth maximum efforts toward the continuedgrowth, profitability and success of the Company, by providing incentives tosuch persons through the ownership and performance of the Common Stock of FirstInvestors.  A further purpose of the Planis to provide a means through which the Company may attract able persons tobecome directors and officers of the Company and to provide such individualswith incentive and reward opportunities. Toward these objectives, Options may be granted under the Plan toEmployees, directors and other individuals serving as officers for the Company onthe terms and subject to the conditions set forth in the Plan.

 

**1.2****                               Effectivenessand Term.**  The Plan shall becomeeffective as of July 12, 2005, the date of its adoption by the Board (the “EffectiveDate”), provided it is duly approved by the holders of at least a majority ofthe shares of Common Stock present or represented and entitled to vote at ameeting of the stockholders of First Investors duly held in accordance withapplicable law within twelve months after the date of adoption of the Plan bythe Board.  If the Plan is not soapproved, the Plan shall terminate and any Option granted hereunder shall be nulland void.

 

### **ARTICLE II. DEFINITIONS**

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**2.1****                              **“**Affiliate**” means (i) with respect to Incentive StockOptions, a “parent corporation” or a “subsidiary corporation” of FirstInvestors, as those terms are defined in sections 424(e) and (f) ofthe Code, respectively, and (ii) with respect to Nonqualified Stock Options,(A) a “parent corporation” or a subsidiary corporation” of First Investorsas defined in (i) above, (B) a limited liability company, partnershipor other entity in which First Investors controls 50% or more of the votingpower or equity interests.

 

**2.2****                              **“**Board**” means the Board of Directors of First Investors.

 

**2.3****                              **“**Cause**” means a finding by the Committee of acts or omissionsconstituting willful misconduct or gross negligence in the course of the Optionee’semployment or service with the Company.

 

**2.4****                              **“**Change of Control**” means any of the following events:

 

(a)                                  theconsummation of a reorganization, merger, consolidation or other form ofbusiness transaction or series of business transactions, in each case, withrespect to which persons who were stockholders of First Investors immediatelyprior to such 

 

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reorganization, merger or consolidation orother transaction do not, immediately thereafter, own more than 50% of thecombined voting power entitled to vote generally in the election of directorsof the reorganized, merged or consolidated company’s then outstanding votingsecurities; or

 

(b)                                 thesale, lease or disposition (in one or a series of related transactions) by theCompany of all or substantially all of the Company’s assets to any person orits Affiliates, other than the Company or its Affiliates; or

 

(c)                                  theapproval by the Board or the stockholders of First Investors of a complete orsubstantially complete liquidation or dissolution of First Investors; or

 

(d)                                 anyevent similar to the foregoing that the Committee determines in its absolutediscretion would, if consummated, materially alter the structure or business FirstInvestors.

 

**2.5****                              **“**Code**” means the Internal Revenue Code of 1986, as amendedfrom time to time, including regulations thereunder and successor provisionsand regulations.

 

**2.6****                               “Committee”**means the Compensation Committee of the Board or such other committee ofthe Board as may be designated by the Board to administer the Plan, whichcommittee shall consist of two or more members of the Board.  During such time as the Common Stock isregistered under Section 12 of the Exchange Act, each member of theCommittee shall be an Outside Director.  Tothe extent that no Committee exists that has the authority to administer thePlan, the functions of the Committee shall be exercised by the Board.

 

**2.7****                              **“**Common Stock**” means the common stock of First Investors, $0.001par value per share, or any stock or other securities of hereafter issued orissuable in substitution or exchange for the Common Stock.

 

**2.8****                              **“**Company**” means First Investors and any Affiliate.

 

**2.9****                              **“**EffectiveDate**” means the date this Plan becomes effective as provided in Section 1.2.

 

**2.10****                       **“**Employee**” means an employee of the Company; provided,however, that the term “Employee” does not include an Outside Director or anindividual performing services for the Company who is treated for tax purposesas an independent contractor at the time of performance of the services.

 

**2.11****                       **“**Exchange Act**” means the Securities Exchange Act of 1934, asamended.

 

**2.12****                       **“**Fair Market Value**” means the fair market value of the CommonStock, as determined in good faith by the Committee or (i) if the CommonStock is traded in the over-the-counter market, the average of therepresentative closing bid and asked prices as reported by NASDAQ for the datethe Option is granted (or if there was no quoted price for such date of 

 

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grant, then for the last preceding business day on which there was aquoted price), or (ii) if the Common Stock is traded in the NASDAQNational Market System, the average of the highest and lowest selling pricesfor such stock as quoted on the NASDAQ National Market System for the date the Optionis granted (or if there are no sales for such date of grant, then for the lastpreceding business day on which there were sales), or (iii) if the CommonStock is listed on any national stock exchange, the average of the highest andlowest selling prices for such stock as quoted on such exchange for the datethe Option is granted (or if there are no sales for such date of grant, thenfor the last preceding business day on which there were sales).

 

**2.13****                       **“**First Investors**” means First Investors Financial ServicesGroup, Inc., a Texas corporation, or any successor thereto.

 

**2.14****                       **“**Grant Date**” means the date an Option is determined to beeffective by the Committee upon the grant of such Option.

 

**2.15****                       **“**Incentive Stock Option**” means an Option that is intended tomeet the requirements of section 422(b) of the Code.

 

**2.16****                       **“**NASDAQ**” means The NASDAQ Stock Market, Inc.

 

**2.17****                       **“**Nonqualified Stock Option**” means an Option that is not anIncentive Stock Option.

 

**2.18****                       **“**Option**” means an option to purchase shares of Common Stockgranted to an Optionee pursuant to the Plan. An Option may be either an Incentive Stock Option or a NonqualifiedStock Option, as determined by the Committee.

 

**2.19****                       **“**Option Agreement**” means a written agreement between FirstInvestors and an Optionee that sets forth the terms, conditions, restrictionsand limitations applicable to an Option.

 

**2.20****                        “Optionee”**means an Employee, director or officer performing services for theCompany that has been granted an Option.

 

**2.21****                       **“**Outside Director**” means a member of the Board who: (i) meetsthe independence requirements of the principal exchange or quotation systemupon which the shares of Common Stock are listed or quoted, (ii) from andafter the date on which the remuneration paid pursuant to the Plan becomessubject to the deduction limitation under Section 162(m) of the Code,qualifies as an “outside director” under Section 162(m) of the Code, (iii) qualifiesas a “non-employee director” of First Investors under Rule 16b-3, and (iv) satisfiesindependence criteria under any other applicable laws or regulations relatingto the issuance of shares of Common Stock to Employees.

 

**2.22****                       **“**Permitted Transferee**” shall have the meaning given such termin Section 9.4.

 

**2.23****                       **“**Plan**” means this First Investors Financial Services Group, Inc.2005 Stock Option Plan, as in effect from time to time.

 

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**2.24****                       **“**Rule 16b-3**” means Rule 16b-3 promulgated by theSecurities and Exchange Commission under the Exchange Act, or any successor rule orregulation that may be in effect from time to time.

 

**ARTICLE III.  PLAN ADMINISTRATION**

 

**3.1****                               PlanAdministrator and Discretionary Authority.** The Plan shall be administered by the Committee.  The Committee shall have total and exclusiveresponsibility to control, operate, manage and administer the Plan inaccordance with its terms.  The Committeeshall have all the authority that may be necessary or helpful to enable it todischarge its responsibilities with respect to the Plan.  Without limiting the generality of thepreceding sentence, the Committee shall have the exclusive right to:  (i) interpret the Plan and the OptionAgreements executed hereunder; (ii) decide all questions concerningeligibility for, and the amount of, Options granted under the Plan; (iii) construeany ambiguous provision of the Plan or any Option Agreement; (iv) prescribethe form of Option Agreements; (v) correct any defect, supply any omissionor reconcile any inconsistency in the Plan or any Option Agreement; (vi) issueadministrative guidelines as an aid to administering the Plan and make changesin such guidelines as the Committee from time to time deems proper; (vii) makeregulations for carrying out the Plan and make changes in such regulations asthe Committee from time to time deems proper; (viii) determine whether Optionsshould be granted singly or in combination; (ix) to the extent permittedunder the Plan, grant waivers of Plan terms, conditions, restrictions andlimitations; (x) accelerate the exercise or vesting of an Option when suchaction or actions would be in the best interests of the Company; (xi) require Optioneesto hold a stated number or percentage of shares of Common Stock acquiredpursuant to an Option for a stated period; and (xii) take any and all otheractions the Committee deems necessary or advisable for the proper operation oradministration of the Plan.  TheCommittee shall have authority in its sole discretion with respect to allmatters related to the discharge of its responsibilities and the exercise ofits authority under the Plan, including without limitation its construction ofthe terms of the Plan and its determination of eligibility for participation in,and the terms of Options granted under, the Plan.  The decisions of the Committee and itsactions with respect to the Plan shall be final, conclusive and binding on allpersons having or claiming to have any right or interest in or under the Plan,including without limitation Optionees and their respective PermittedTransferees, estates, beneficiaries and legal representatives.

 

**3.2****                               Liability;Indemnification.**  No member of theCommittee, nor any person to whom it has delegated authority, shall bepersonally liable for any action, interpretation or determination made in goodfaith with respect to the Plan or Options granted hereunder, and each member ofthe Committee (or delegatee of the Committee) shall be fully indemnified andprotected by First Investors with respect to any liability he may incur withrespect to any such action, interpretation or determination, to the maximumextent permitted by applicable law.

 

**ARTICLE IV.  SHARES SUBJECT TO THE PLAN**

 

**4.1****                               AvailableShares**.  Subject to adjustment asprovided in Section 4.2, the maximum number of shares of Common Stock thatshall be available for grant of Options under 

 

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the Plan, including Incentive Stock Options, shall be 200,000 shares ofCommon Stock.  Shares of Common Stockissued pursuant to the Plan may be original issue or treasury shares or acombination of the foregoing, as the Committee, in its sole discretion, shallfrom time to time determine.  During theterm of this Plan, First Investors will at all times reserve and keep availablesuch number of shares of Common Stock as shall be sufficient to satisfy therequirements of the Plan.

 

**4.2****                               Adjustmentsfor Recapitalizations and Reorganizations.**  If there is any change in the number or kindof shares of Common Stock outstanding (i) by reason of a stock dividend,spin-off, recapitalization, stock split, or combination or exchange of shares, (ii) byreason of a merger, reorganization, or consolidation, (iii) by reason of areclassification or change in par value, or (iv) by reason of any otherextraordinary or unusual event affecting the outstanding Common Stock as aclass without First Investors’ receipt of consideration, or if the value ofoutstanding shares of Common Stock is reduced as a result of a spin-off or FirstInvestors’ payment of an extraordinary cash dividend, or distribution ordividend or distribution consisting of any assets of First Investors other thancash, the maximum number and kind of shares of Common Stock available forissuance under the Plan, the maximum number and kind of shares of Common Stockavailable for issuance under the Plan as Options, including Incentive StockOptions, the number and kind of shares of Common Stock covered by outstanding Options,and the price per share or the applicable market value or performance target ofsuch Options may be appropriately adjusted by the Committee to reflect anyincrease or decrease in the number of, or change in the kind or value of,issued shares of Common Stock to preclude, to the extent practicable, theenlargement or dilution of rights under such Options; provided, however, thatany fractional shares resulting from such adjustment shall be eliminated.

 

**4.3****                               Adjustmentsfor Options.**  The Committee shallhave sole discretion to determine the manner in which shares of Common Stockavailable for grant of Options under the Plan are counted.  Without limiting the discretion of theCommittee under this Section 4.3, unless otherwise determined by theCommittee, the following rules shall apply for the purpose of determiningthe number of shares of Common Stock available for grant of Options under thePlan:

 

(a)                                  **Options.**  The grant ofOptions shall reduce the number of shares of Common Stock available for grantunder the Plan by the number of shares of Common Stock subject to such an Option.

 

(b)                                 **Cancellation, Forfeiture and Termination.**  If any Option referred to in Section 4.3(a) iscanceled or forfeited, or terminates, expires or lapses, for any reason, theshares then subject to such Option shall again be available for grant of Optionsunder the Plan.

 

(c)                                  **Payment of Exercise Price and Withholding Taxes.**  If previously acquired shares of Common Stockare used to pay the exercise price of an Option, the number of shares availablefor grant of Options under the Plan shall be increased by the number of sharesdelivered as payment of such exercise price. If previously acquired shares of Common Stock are used to paywithholding taxes payable upon exercise or 

 

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vesting of an Option, or shares of CommonStock that would be acquired upon exercise, vesting or payment of an Option arewithheld to pay withholding taxes payable upon exercise or vesting of such Option,the number of shares available for grant of Options under the Plan shall beincreased by the number of shares delivered or withheld as payment of suchwithholding taxes.

 

**ARTICLE V.  ELIGIBILITY**

 

The Committee shall select Optionees fromthose Employees, directors and officers performing services for the Company that,in the opinion of the Committee, are in a position to make a significantcontribution to the success of the Company. Once a Optionee has been selected for an Option by the Committee, theCommittee shall determine the type and size of Option to be granted to the Optioneeand shall establish in the related Option Agreement the terms, conditions,restrictions and limitations applicable to the Option, in addition to those setforth in the Plan and the administrative guidelines and regulations, if any,established by the Committee.

 

**ARTICLE VI.  OPTIONS**

 

**6.1****                               General.**  Options may be granted in the form of IncentiveStock Options or Nonqualified Stock Options, or a combination of both;provided, however, that Incentive Stock Options may only be granted toEmployees.  All Options shall be subjectto the terms, conditions, restrictions and limitations of the Plan.

 

**6.2****                               Termsand Conditions of Options.**

 

(a)                                  AnOption shall be exercisable in whole or in such installments and at such timesas may be determined by the Committee. The price at which a share of Common Stock may be purchased uponexercise of an Option shall be determined by the Committee, but such exerciseprice shall not be less than 100%of the Fair Market Value per share of Common Stock on the Grant Date unless theOption was granted through the assumption of, or in substitution for,outstanding awards previously granted to individuals who became Employees as aresult of a merger, consolidation, acquisition, or other corporate transactioninvolving the Company.  Except asotherwise provided in Section 6.3, the term of each Option shall be asspecified by the Committee; provided, however, that no Options shall beexercisable later than ten years after the Grant Date.

 

(b)                                 TheCommittee may, in its sole discretion, subject any Option to such other terms,conditions, restrictions and/or limitations (including without limitation thetime and conditions of exercise, vesting or payment of an Option andrestrictions on transferability of any shares of Common Stock issued ordelivered pursuant to an Option), provided they are not inconsistent with theterms of the Plan.  The Committee may,but is not required to, subject an Option to such conditions as it determinesare necessary or appropriate to ensure than an Option constitutes “qualifiedperformance based compensation” within the meaning of section 162(m) ofthe Code and the regulations thereunder. Any combination of Options may be granted at one time and on 

 

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more than one occasion to the sameOptionee.  The Committee may permit orrequire an Optionee to defer receipt of the payment of cash or the delivery ofshares of Common Stock that would otherwise be due to the Optionee inconnection with any Option; provided, however, that any permitted deferralsshall be structured to avoid negative tax consequences to the Optionee under Section 409Aof the Code.

 

**6.3****                               RestrictionsRelating to Incentive Stock Options.**

 

(a)                                  Optionsgranted in the form of Incentive Stock Options shall, in addition to beingsubject to the terms and conditions of Section 6.2, comply with section 422(b) ofthe Code.  To the extent the aggregate FairMarket Value (determined as of the times the respective Incentive Stock Optionsare granted) of Common Stock with respect to which Incentive Stock Options areexercisable for the first time by an individual during any calendar year underall incentive stock option plans of First Investors and its Affiliates exceeds$100,000, such excess Incentive Stock Options shall be treated as options thatdo not constitute Incentive Stock Options. The Committee shall determine, in accordance with the applicableprovisions of the Code, which of an Optionee’s Incentive Stock Options will notconstitute Incentive Stock Options because of such limitation and shall notifythe Optionee of such determination as soon as practicable after suchdetermination.  The price at which ashare of Common Stock may be purchased upon exercise of an Incentive StockOption shall be determined by the Committee, but such exercise price shall notbe less than 100% of the Fair Market Value of a share of Common Stock on theGrant Date.  No Incentive Stock Optionshall be granted to an Employee under the Plan if, at the time such Option isgranted, such Employee owns stock possessing more than 10% of the totalcombined voting power of all classes of stock of First Investors or anAffiliate, within the meaning of section 422(b)(6) of the Code,unless (i) on the Grant Date of such Option, the exercise price of suchOption is at least 110% of the Fair Market Value of the Common Stock subject tothe Option and (ii) such Option by its terms is not exercisable after theexpiration of five years from the Grant Date of the Option.

 

(b)                                 EachOptionee awarded an Incentive Stock Option shall notify First Investors inwriting immediately after the date he or she makes a disqualifying dispositionof any shares of Common Stock acquired pursuant to the exercise of suchIncentive Stock Option.  A disqualifyingdisposition is any disposition (including any sale) of such Common Stock beforethe later of (i) two years after the Grant Date of the Incentive StockOption or (ii) one year after the date of exercise of the Incentive StockOption.

 

**6.4****                               Exerciseof Options.**

 

(a)                                  Subjectto the terms and conditions of the Plan, Options shall be exercised by thedelivery of a written notice of exercise to First Investors, setting forth thenumber of whole shares of Common Stock with respect to which the Option is tobe exercised, accompanied by full payment for such shares.

 

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(b)                                 Uponexercise of an Option, the exercise price of the Option shall be payable to FirstInvestors in full either: (i) in cash or an equivalent acceptable to theCommittee, or (ii) in the sole discretion of the Committee and inaccordance with any applicable administrative guidelines established by theCommittee, by tendering one or more previously acquired nonforfeitable,unrestricted shares of Common Stock that have been held by the Optionee for atleast six months having an aggregate Fair Market Value at the time of exerciseequal to the total exercise price, or (iii) in a combination of the formsof payment specified in clauses (i) and (ii) above.

 

(c)                                  Duringsuch time as the Common Stock is registered under Section 12 of theExchange Act, to the extent permissible under applicable law, payment of theexercise price of an Option may also be made, in the absolute discretion of theCommittee, by delivery to First Investors or its designated agent of anexecuted irrevocable option exercise form together with irrevocableinstructions to a broker-dealer to sell or margin a sufficient portion of theshares with respect to which the Option is exercised and deliver the sale ormargin loan proceeds directly to First Investors to pay the exercise price andany required withholding taxes.

 

(d)                                 Assoon as reasonably practicable after receipt of written notification ofexercise of an Option and full payment of the exercise price and any requiredwithholding taxes, First Investors shall (i) deliver to the Optionee, inthe Optionee’s name or the name of the Optionee’s designee, a stock certificateor certificates in an appropriate aggregate amount based upon the number ofshares of Common Stock purchased under the Option, or (ii) cause to beissued in the Optionee’s name or the name of the Optionee’s designee, inbook-entry form, an appropriate number of shares of Common Stock based upon thenumber of shares purchased under the Option.

 

**6.5****                               Terminationof Employment.**

 

(a)                                  EachOption Agreement embodying the award of an Option shall set forth the extent towhich the Optionee shall have the right to exercise the Option followingtermination of the Optionee’s employment or service with the Company.  Such provisions shall be determined by theCommittee in its absolute discretion, need not be uniform among all Optionsgranted under the Plan and may reflect distinctions based on the reasons fortermination of employment or service.  Inthe event an Option Agreement does not set forth such termination provisions,then the following provisions shall apply with respect to such Option: if theemployment or service of an Optionee shall terminate for any reason, with orwithout Cause, each outstanding Option held by the Optionee may be exercised,to the extent then vested, until the earlier of (i) the expiration of threemonths from the date of such termination of employment or service or (ii) theexpiration of the term of such Option.

 

(b)                                 Notwithstandingthe foregoing, an Option will not be treated as an Incentive Stock Optionunless at all times beginning on the Grant Date and ending on the day threemonths (one year in the case of an Optionee who is “disabled” within themeaning of Section 22(e)(3) of the Code) before the date of exerciseof the Option, the 

 

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Optionee is an Employee of First Investors oran Affiliate (or a corporation or a parent or subsidiary corporation of suchcorporation issuing or assuming an option in a transaction to which Section 424(a) ofthe Code applies).

 

**6.6****                               NoRepricing.**  Except for adjustmentsmade pursuant to Section 4.2, no Option may be repriced, replaced,regranted through cancellation or otherwise modified without stockholderapproval, if the effect would be to reduce the exercise price for the shares underlyingsuch Option; and, the Committee may not cancel an outstanding Option that isunder water for the purpose of granting a replacement Option of a differenttype.

 

**6.7****                               Loans.**  The Committee may, in its sole discretion,approve the extension of a loan by the Company to an Optionee who is anEmployee to assist the Optionee in paying the exercise price or purchase priceof an Option; provided, however, that no loan shall be permitted if theextension of such loan would violate any provision of applicable law.  Any loan will be made upon such terms andconditions as the Committee shall determine.

 

**ARTICLE VII.  CHANGE OF CONTROL**

 

**7.1****                               Vestingof Options. **Except as providedotherwise below in this Article or in an Option Agreement at the time anOption is granted, notwithstanding anything to the contrary in this Plan, uponany Change of Control, any time periods, conditions or contingencies relatingto the exercise of any Option shall be automatically accelerated so that theOption may be exercised at the effective time of the Change of Control;provided, however, that in the event all outstanding Options are replaced as ofthe effective time of a Change of Control by comparable types of awards ofgreater or at least substantially equivalent value, as determined by the Committeein its sole discretion, no such automatic acceleration shall occur except tothe extent the Committee, in its sole discretion, provides for suchacceleration or unless such acceleration is expressly provided for inconnection with such replacement.

 

**7.2**                               **Cancellation of Options. **Notwithstandingthe foregoing, on or prior to the date of a Change of Control, with respect toany or all outstanding Options, the Committee may, without the consent of anyOptionee, require that Optionees surrender their outstanding Options inexchange for payment by the Company, in cash, Common Stock, the securities ofanother company, or a combination thereof, as determined by the Committee, inan amount equal to the amount, if any, by which the then Fair Market Value ofthe shares of Common Stock subject to the Optionee’s unexercised Optionsexceeds the exercise price.

 

## **ARTICLE VIII.  AMENDMENT AND TERMINATION**

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**8.1****                              ****PlanAmendment and Termination.**  The Board mayat any time suspend, terminate, amend or modify the Plan, in whole or in part;provided, however, that no amendment or modification of the Plan shall becomeeffective without the approval of such amendment or modification by the holdersof at least a majority of the shares of Common Stock if (i) such amendmentor modification increases the maximum number of shares subject to the Plan(except as provided in Article IV) or changes the designation or class ofpersons eligible to receive Options under the Plan, or (ii) counsel for FirstInvestors determines that such approval is 

 

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otherwise requiredby or necessary to comply with applicable law or the listing requirements ofNASDAQ or such other exchange or association on which the Common Stock is thenlisted or quoted.  An amendment tothe Plan shall not require stockholder approval if it curtails rather thanexpands the scope of the Plan, nor if it is made to conform the Plan to newstatutory or regulatory requirements that arise after submission of the Plan tostockholders for their approval, such as, without limitation, changes to section 409Aof the Code, or regulations or other guidance issued thereunder.  Upontermination of the Plan, the terms and provisions of the Plan shall,notwithstanding such termination, continue to apply to Options granted prior tosuch termination.  Except as otherwiseprovided herein, no suspension, termination, amendment or modification of thePlan shall adversely affect in any material way any Option previously grantedunder the Plan, without the consent of the Optionee (or the PermittedTransferee) holding such Option.

 

**8.2****                              ****OptionAmendment and Cancellation.**  The Committeemay amend the terms of any outstanding Option granted pursuant to the Plan, butexcept as otherwise provided herein, no such amendment shall adversely affectin any material way the Optionee’s (or a Permitted Transferee’s) rights underan outstanding Option without the consent of the Optionee (or the PermittedTransferee) holding such Option.

 

**ARTICLE IX. MISCELLANEOUS**

 

**9.1****                              ****OptionAgreements.**  After the Committee grants an Option underthe Plan to an Optionee, First Investors and the Optionee shall enter into an OptionAgreement setting forth the terms, conditions, restrictions and limitationsapplicable to the Option and such other matters as the Committee may determineto be appropriate.  The terms andprovisions of the respective Option Agreements need not be identical.  All Option Agreements shall be subject to theprovisions of the Plan, and in the event of any conflict between an OptionAgreement and the Plan, the terms of the Plan shall govern.

 

**9.2****                              ****Listing; Suspension.**

 

(a)                                  As long as the Common Stock is listed on a national securitiesexchange or system sponsored by a national securities association, the issuanceof any shares of Common Stock pursuant to an Option shall be conditioned uponsuch shares being listed on such exchange or system.  First Investors shall have no obligation toissue such shares unless and until such shares are so listed, and the right toexercise any Option or other Option with respect to such shares shall besuspended until such listing has been effected.

 

(b)                                 If at any time counsel to First Investors or its Affiliates shallbe of the opinion that any sale or delivery of shares of Common Stock pursuantto an Option is or may in the circumstances be unlawful or result in theimposition of excise taxes on First Investors or its Affiliates under the lawsof any applicable jurisdiction, First Investors or its Affiliates shall have noobligation to make such sale or delivery, or to make any application or toeffect or to maintain any qualification or registration under the SecuritiesAct of 1933, as amended, or otherwise, with respect to shares of Common Stockor Options, and the right to exercise any Option or other Option shall besuspended 

 

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until, inthe opinion of such counsel, such sale or delivery shall be lawful or will notresult in the imposition of excise taxes on First Investors or its Affiliates.

 

(c)                                  Upon termination of any period of suspension under this Section,any Option affected by such suspension that shall not then have expired orterminated shall be reinstated as to all shares available before such suspensionand as to shares that would otherwise have become available during the periodof such suspension, but no such suspension shall extend the term of any Optionunless otherwise determined by the Committee in its sole discretion.

 

**9.3****                              ****AdditionalConditions.**  Notwithstanding anything in the Plan to thecontrary:  (i) the Committee may, ifit shall determine it necessary or desirable in its sole discretion, at thetime of grant of any Option or the issuance of any shares of Common Stockpursuant to any Option, require the recipient of the Option or such shares ofCommon Stock, as a condition to the receipt thereof, to deliver to FirstInvestors a written representation of present intention to acquire the Optionor such shares of Common Stock for his own account for investment and not fordistribution, (ii) the certificate for shares of Common Stock issued to anOptionee may include any legend that the Committee deems appropriate to reflectany restrictions on transfer, and (iii) all certificates for shares ofCommon Stock delivered under the Plan shall be subject to such stop transferorders and other restrictions as the Committee may deem advisable under therules, regulations and other requirements of the Securities and ExchangeCommission, any stock exchange or association upon which the Common Stock isthen listed or quoted, any applicable federal or state securities law, and anyapplicable corporate law, and the Committee may cause a legend or legends to beplaced on any such certificates to make appropriate reference to suchrestrictions.

 

**9.4****                              ****Transferability.**

 

(a)                                  All Options granted to an Optionee shallbe exercisable during his lifetime only by such Optionee, or if applicable, aPermitted Transferee as provided in subsection (c) of this Section;provided, however, that in the event of an Optionee’s legal incapacity, an Optionmay be exercised by his guardian or legal representative.  When an Optionee dies, thepersonal representative, beneficiary, or other person entitled to succeed tothe rights of the Optionee may acquire the rights under an Option. Any suchsuccessor must furnish proof satisfactory to First Investors of the successor’sentitlement to receive the rights under an Option under the Optionee’s will orunder the applicable laws of descent and distribution.

 

(b)                                 Except as otherwise provided in thisSection, no Option shall be subject to execution, attachment or similarprocess, and no Option may be sold, transferred, pledged, exchanged,hypothecated or otherwise disposed of, other than by will or pursuant to theapplicable laws of descent and distribution. Any attempted sale, transfer, pledge, exchange, hypothecation or otherdisposition of an Option not specifically permitted by the Plan or the OptionAgreement shall be null and void and without effect.

 

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(c)                                  If provided in the Option Agreement,Nonqualified Stock Options may be transferred by an Optionee to a PermittedTransferee.  For purposes of the Plan, “PermittedTransferee” means (i) a member of an Optionee’s immediate family, (ii) anyperson sharing the Optionee’s household (other than a tenant or employee of theOptionee), (iii) trusts in which a person listed in (i) or (ii) abovehas more than 50% of the beneficial interest, (iv) a foundation in whichthe Optionee or a person listed in (i) or (ii) above controls themanagement of assets, (v) any other entity in which the Optionee or aperson listed in (i) or (ii) above owns more than 50% of the votinginterests, provided that in the case of the preceding clauses (i) through(v), no consideration is provided for the transfer, and (vi) anytransferee permitted under applicable securities and tax laws as determined bycounsel to First Investors.  Indetermining whether a person is a “Permitted Transferee,” immediate familymembers shall include an Optionee’s child, stepchild, grandchild, parent,stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, orsister-in-law, including adoptive relationships.

 

(d)                                 Incident to anOptionee’s divorce, the Optionee may request that First Investors agree toobserve the terms of a domestic relations order which may or may not be part ofa qualified domestic relations order (as defined in Code section 414(p))with respect to all or a part of one or more Options made to the Optionee underthe Plan.  First Investors’ decisionregarding such a request shall be made by the Committee, in its sole andabsolute discretion, based upon the best interests of First Investors.  The Committee’s decision need not be uniformamong Optionees.  As a condition ofparticipation, an Optionee agrees to hold First Investors harmless from anyclaim that may arise out of First Investors’ observance of the terms of anysuch domestic relations order.

 

**9.5****                              ****WithholdingTaxes.**  The Company shall be entitled to deduct fromany payment made under the Plan, regardless of the form of such payment, theamount of all applicable income and employment taxes required by law to bewithheld with respect to such payment, may require the Optionee to pay to theCompany such withholding taxes prior to and as a condition of the making of anypayment or the issuance or delivery of any shares of Common Stock under thePlan, and shall be entitled to deduct from any other compensation payable tothe Optionee any withholding obligations with respect to Options.  In accordance with any applicableadministrative guidelines it establishes, the Committee may allow an Optioneeto pay the amount of taxes required by law to be withheld from or with respectto an Option by (i) withholding shares of Common Stock from any payment ofCommon Stock due as a result of such Option, or (ii) permitting the Optioneeto deliver to the Company previously acquired shares of Common Stock, in eachcase having an aggregate Fair Market Value equal to the amount of such requiredwithholding taxes.  No payment shall bemade and no shares of Common Stock shall be issued pursuant to any Optionunless and until the applicable tax withholding obligations have beensatisfied.

 

**9.6****                              ****NoFractional Shares.**  No fractional shares of CommonStock shall be issued or delivered pursuant to the Plan or any Option grantedhereunder, provided that the Committee in its sole discretion may roundfractional shares down to the nearest whole share or settle fractional sharesin cash.

 

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**9.7****                              ****Notices.** All notices required or permitted to be given or made under the Plan or pursuantto any Option Agreement (unless provided otherwise in such Option Agreement)shall be in writing and shall be deemed to have been duly given or made if (i) deliveredpersonally, (ii) transmitted by first class registered or certified UnitedStates mail, postage prepaid, return receipt requested, (iii) sent byprepaid overnight courier service, or (iv) sent by telecopy or facsimiletransmission, with confirmation receipt, to the person who is to receive it atthe address that such person has theretofore specified by written noticedelivered in accordance herewith.  Suchnotices shall be effective (i) if delivered personally or sent by courierservice, upon actual receipt by the intended recipient, (ii) if mailed,upon the earlier of five days after deposit in the mail or the date of deliveryas shown by the return receipt therefor, or (iii) if sent by telecopy orfacsimile transmission, when the answer back is received.  First Investors or an Optionee may change, atany time and from time to time, by written notice to the other, the addressthat it or such Optionee had theretofore specified for receiving notices.  Until such address is changed in accordanceherewith, notices hereunder or under an Option Agreement shall be delivered orsent (i) to an Optionee at his address as set forth in the records of theCompany or (ii) to First Investors at the principal executive offices of FirstInvestors clearly marked “Attention:  StockOption Plan Administration.”

 

**9.8****                              ****Compliance with Law and StockExchange or Association Requirements.** Inaddition, it is the intent of the First Investors that Options designatedIncentive Stock Options comply with the applicable provisions of Section 422of the Code, and that Options intended to constitute “qualifiedperformance-based awards” comply with the applicable provisions of Section 162(m)of the Code and that any deferral of the receipt of the payment of cash or thedelivery of shares of Common Stock that the Committee may permit or require,and any Option granted that is subject to Section 409A of the Code, complywith the requirements of Section 409A of the Code. To the extent that anylegal requirement of Section 16 of the Exchange Act or Sections 422,162(m) or 409A of the Code as set forth in the Plan ceases to be required underSection 16 of the Exchange Act or Sections 422, 162(m) or 409A of theCode, that Plan provision shall cease to apply. Any provision of this Plan to the contrary notwithstanding, theCommittee may revoke any Option if it is contrary to law, governmental regulation,or stock exchange or association requirements or modify an Option to bring itinto compliance with any government regulation or stock exchange or associationrequirements.  The Committee may agree tolimit its authority under this Section.

 

**9.9****                              ****BindingEffect.**  The obligations of First Investors under thePlan shall be binding upon any successor corporation or organization resultingfrom the merger, consolidation or other reorganization of First Investors, orupon any successor corporation or organization succeeding to all orsubstantially all of the assets and business of First Investors.  The terms and conditions of the Plan shall bebinding upon each Optionee and his Permitted Transferees, heirs, legatees,distributees and legal representatives.

 

**9.10****                       ****Severability.** If any provision of the Plan or any Option Agreement is held to beillegal or invalid for any reason, the illegality or invalidity shall notaffect the remaining provisions of the Plan or such agreement, as the case maybe, but such provision shall be fully 

 

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severable and thePlan or such agreement, as the case may be, shall be construed and enforced asif the illegal or invalid provision had never been included herein or therein.

 

**9.11****                       ****NoRestriction of Corporate Action.**  Nothingcontained in the Plan shall be construed to prevent First Investors or anyAffiliate from taking any corporate action (including any corporate action tosuspend, terminate, amend or modify the Plan) that is deemed by First Investorsor such Affiliate to be appropriate or in its best interest, whether or notsuch action would have an adverse effect on the Plan or any Options made or tobe made under the Plan.  No Optionee orother person shall have any claim against First Investors or any Affiliate as aresult of such action.

 

**9.12****                       ****GoverningLaw.**  The Plan shall be governed by and construedin accordance with the internal laws (and not the principles relating toconflicts of laws) of the State of Texas except as superseded by applicablefederal law.

 

**9.13****                       ****NoRight, Title or Interest in Company Assets.** No Optionee shall have any rights as a stockholder of First Investors asa result of participation in the Plan until the date of issuance of CommonStock in his name.  To the extent anyperson acquires a right to receive payments from the Company under the Plan,such rights shall be no greater than the rights of an unsecured generalcreditor of the Company, and such person shall not have any rights in oragainst any specific assets of the Company. All Options shall be unfunded.

 

**9.14****                       ****Riskof Participation.**  Nothing contained in the Planshall be construed either as a guarantee by First Investors or the Affiliates,or their respective stockholders, directors, officers or employees, of thevalue of any assets of the Plan or as an agreement by First Investors or theAffiliates, or their respective stockholders, directors, officers or employees,to indemnify anyone for any losses, damages, costs or expenses resulting fromparticipation in the Plan.

 

**9.15****                       ****NoGuarantee of Tax Consequences.**  No personconnected with the Plan in any capacity, including without limitation FirstInvestors and the Affiliates and their respective directors, officers, agentsand employees, makes any representation, commitment or guarantee that any taxtreatment, including without limitation federal, state and local income, estateand gift tax treatment, will be applicable with respect to any Options orpayments thereunder made to or for the benefit of an Optionee under the Plan orthat such tax treatment will apply to or be available to an Optionee on accountof participation in the Plan.

 

**9.16****                       ****ContinuedEmployment.**  Nothing contained in the Plan or in any OptionAgreement shall confer upon any Optionee the right to continue in the employ orservice of the Company, or interfere in any way with the rights of the Companyto terminate an Optionee’s employment at or service any time, with or withoutcause.  The loss of existing or potentialprofit in Options will not constitute an element of damages in the event oftermination of employment or service for any reason, even if the termination isin violation of an obligation of First Investors or an Affiliate to the Optionee.

 

**9.17****                       ****Miscellaneous.** Headings are given to the articles and sections of the Plan solely as aconvenience to facilitate reference. Such headings shall not be deemed in any way material 

 

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or relevant to theconstruction of the Plan or any provisions hereof.  The use of the masculine gender shall alsoinclude within its meaning the feminine. Wherever the context of the Plan dictates, the use of the singular shallalso include within its meaning the plural, and vice versa.

 

INWITNESS WHEREOF, this Plan has been executed as of the Effective Date.

 
|   | FIRST INVESTORS FINANCIAL SERVICES  GROUP, INC. |
|--------|-------------------------------------------------|
|   |                                            |
|   |                                            |
|   | By:                                             | /s/ TOMMY A.  MOORE, JR. |   |
|   |                                            | Name: | Tommy A. Moore, Jr. |
|   |                                            | Title: | President and |
|   |                                            | Chief Executive Officer |
|        |                                                 |  |  |  |

 

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