Incentive Stock Option and Nonstatutory Stock Option Plan



 EXHIBIT 10.1 
  
 Conformed Copy 
  
 WOODFOREST BANCSHARES, INC. 
 HOUSTON,
TEXAS 
  
 INCENTIVE STOCK OPTION AND 
 NONSTATUTORY STOCK OPTION PLAN 
  
 1.    Purpose and Scope 
  
 The purpose of this Plan is to promote the interests of the Company and its shareholders by strengthening its ability to attract and retain key officers
and directors by furnishing additional incentives whereby such present and future officers, key employees, and directors may be encouraged to acquire, or to increase their acquisition of, the Company’s common stock, thus maintaining their
personal and proprietary interest in the Company’s continued success and progress. The Plan provides for the grant of Incentive Stock Options and the grant of Nonstatutory Stock Options in accordance with the terms and conditions set forth
below. 
  
 2.    Definitions 
  
 Unless otherwise required by the context: 
  
 2.01.    “Company” shall mean
Woodforest Bancshares, Inc., a Texas corporation, and any subsidiary corporation. 
  
 2.02.    “Board” shall mean the Board of Directors of the Company. 
  
 2.03.    “Committee” shall mean the Stock Option Plan Committee, which consists of three members appointed by
the Board. 
  
 2.04.    “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 2.05.    “Incentive Stock Option” shall mean a right to purchase stock, granted pursuant to the Plan, which
qualifies under Section 422 of the Code and the regulations thereunder. 
  
 2.06.    “Nonstatutory Stock Option” shall mean a right to purchase Stock, granted pursuant to the Plan, which does not qualify under Section 422 of the Code and the regulations thereunder.








 2.07.    “Options” shall mean either an Incentive Stock
Option or Nonstatutory Stock Option. 
  
 2.08.    “Option Price” shall mean the purchase price for Stock under an Incentive Stock Option or Nonstatutory Stock Option, as determined in Section 6 below. 
  
 2.09.    “Participant” shall mean
anyone to whom an Incentive Stock Option or Nonstatutory Stock Option is granted under the Plan. 
  
 2.10.    “Plan” shall mean the Woodforest Bancshares, Inc. Stock Option Plan. 
  
 2.11.    “Stock” shall mean the
common stock of Woodforest Bancshares, Inc. 
  
 3.    Stock to be Optioned 
  
 Subject to the provisions of Section 14 of the Plan, the maximum number of shares of Stock that may be optioned or sold under the Plan is 1,926,000 shares. Such shares may be treasury, or authorized, but unissued, shares of Stock of the
Company. If any Incentive Stock Option or Nonstatutory Stock Option granted under the Plan shall expire or terminate for any reason without having been exercised in full, the shares not purchased shall again be available for purposes of the Plan.

  
 4.    Administration 
  
 The Plan shall be administered by the Committee. Two members of the
Committee shall constitute a quorum for the transaction of business. The Committee shall be responsible to the Board for the operation of the Plan, and shall make recommendations to the Board with respect to participation in the Plan by employees
and directors of the Company, and with respect to the extent of that participation. The interpretation and construction of any provision of the Plan by the Committee shall be final, unless otherwise determined by the Board. No member of the Board or
the Committee shall be liable for any action or determination made by him in good faith. 
  
 5.    Eligibility 
  
 The Board, upon recommendation of the Committee, may grant Nonstatutory Stock Options to any director and Incentive Stock Options or Nonstatutory Stock Options to any officer, key executive, administrative or other
employee (including an employee who is a director of the Company). Options may be awarded by the Board at any time 
  

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 and from time to time to new Participants, or to then Participants, or to a greater or lesser number of Participants, and
may include or exclude previous Participants, as the Board, upon recommendation by the Committee shall determine. Options granted at different times need not contain similar provisions. 
  
 6.    Option Price 
  
 The purchase price for Stock under each Nonstatutory Stock Option shall be 100 percent of the fair market value of the Stock
at the time the Option is granted, unless the Committee determines otherwise. The purchase price for stock under each Incentive Stock Option shall not be less than 100 percent of the fair market value of the Stock at the time the Incentive Stock
Option is granted. 
  
 7.    Terms and Conditions of
Options 
  
 Options granted pursuant to the Plan shall be
authorized by the Board and shall be evidenced by a Stock Option Agreement in such form as the Board, upon recommendation of the Committee, shall from time to time approve. Such agreements shall comply with and be subject to the following terms and
conditions: 
  
 7.01.    Employment
Agreement.     The Board may, in its discretion, include in any Option granted under the Plan a condition that the Participant shall agree to remain in the employ of, and to render services to, the Company for a period of
time (specified in the agreement) following the date the Option is granted. No such agreement shall impose upon the Company, however, any obligation to employ the Participant for any period of time. 
  
 7.02.    Noncompetition.    The Board may, in its discretion, include in any Option granted under the Plan a condition that the Participant agree not to compete with the Company for a
specific period of time and/or within a specific geographic area. 
  
 7.03.    Time and Method of Payment.    The Option Price shall be paid in cash at the time an Option is exercised under the Plan and/or may be paid for by tendering of one or more shares
of Stock. Upon a tender of Stock, the fair market value of the Stock at the time of tender shall be used to determine the value of the Stock as payment. The Committee shall have sole discretion to determine the fair market value of the shares of
Stock taking into consideration such factors as the most recent appraisal of the Stock for purposes of the Company’s Employee Stock Ownership Plan, the Company’s year-to-date 
  

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 earnings, and recent trading prices of the Stock. Promptly after the exercise of an Option and the payment of the full
Option Price either in Stock or cash, the Participant shall be entitled to the issuance of a stock certificate evidencing his ownership of such share of Stock. A Participant shall have none of the rights of a shareholder until shares are issued to
him, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 
  
 7.04.    Number of Shares.    Each Option shall state the total number of shares of Stock to which
it pertains. 
  
 7.05.    Option Period
and Limitations on Exercise of Options.    The Board may, in its discretion, provide that an Option may not be exercised in whole or in part for any period or periods of time specified in the Option Agreement. Except as
provided in the Option Agreement, an Option may be exercised in whole or in part at any time during its term. No Option may be exercised after the expiration of ten years from the date it is granted. No Option may be exercised for a fractional share
of Stock. 
  
 8.    Provisions Applicable to Incentive
Stock Options 
  
 It is intended that Incentive Stock
Options granted under the Plan shall constitute Incentive Stock Options within the meaning of Section 422 of the Code. The following provisions are applicable to any Incentive Stock Option granted under the Plan. 
  
 8.01.    Term of Incentive Stock
Option.    No Incentive Stock Option shall be exercisable prior to the date one year, or after the date ten years, from the date such Incentive Stock Option is granted. 
  
 8.02.    Ten Percent
Shareholder.    Notwithstanding any other provision herein contained, no Plan Participant may receive an Incentive Stock Option under the Plan if such Participant, at the time the award is granted, owns (as defined in
Section 424(d) of the Code) stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company, unless the option price for such Incentive Stock Option is at least 110 percent of the fair market value of
the Stock subject to such Incentive Stock Option on the date of the grant and such Incentive Stock Option is not exercisable after the date five years from the date such Incentive Stock Option is granted. 
  
 8.03.    Limitation on
Amounts.    The aggregate fair market value (determined with respect to each Incentive Stock Option as of the time such Incentive Stock Option is 
  

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 granted) of the Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year shall not exceed $100,000. 
  
 8.04.    Grant of Incentive Stock Option.    An Incentive Stock Option granted pursuant to the Plan must be granted within ten years from the date the Plan is adopted or the date the
Plan is approved by Company shareholders, whichever is earlier. 
  
 9.      Exercise of Options 
  
 The Committee, in granting Options hereunder, shall have discretion to determine the terms upon which such Options shall be exercisable, subject to the applicable provisions of the Plan. If a Participant is discharged
for just cause at any time, the entire number of shares of Stock granted to a Participant shall be forfeited. For this purpose, “just cause” shall mean theft, fraud, embezzlement or willful misconduct causing significant property damage to
the Company or personal injury to any employee of the Company. The Committee shall have sole discretion in determining “just cause” within the terms of this Section. 
  
 10.    Termination of Employment 
  
 Following the date of cessation of employment, the Participant may at any time within three months exercise his Options to
the extent that he was entitled to exercise them on the date of cessation of employment, but in no event shall any Option be exercisable more than ten (10) years from the date it was granted. In the sole discretion of the Committee, the Stock Option
Agreement may provide that should the Participant engage in employment or activities contrary, in the opinion of the Committee, to the best interests of the Company or any of its subsidiaries, then any Stock issued or to be issued to the Participant
shall become null and void. The Committee shall determine in each case whether a termination of employment shall be considered a retirement with the consent of the Company or a subsidiary, and, subject to applicable law, whether a leave of absence
shall constitute a termination of employment. Any such determination of the Committee shall be final and conclusive, unless overruled by the Board. 
  
 11.    Rights in Event of Death 
  
 If a Participant dies while employed by the Company or any of its subsidiaries, or within three months after having retired with the consent of the
Company or any of its subsidiaries, without having fully exercised his Options, the executors or administrators, 
  

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 or legatees or heirs, of his estate shall have the right to exercise such Options to the extent that such deceased
Participant was entitled to exercise the Options on the date of his death; provided, however, that in no event shall the Options be exercisable more than ten years from the date they were granted. 
  
 12.    No Obligations to Exercise Option 
  
 The granting of an Option shall impose no obligation upon the Participant to
exercise such Option. 
  
 13.    Nonassignability

  
 Options shall not be transferable other than by will or
by the laws of descent and distribution, and during a Participant’s lifetime shall be exercisable only by such Participant. 
  
 14.    Effect of Change in Stock Subject to the Plan 
  
 The aggregate number of shares of Stock available for Options under the Plan, the shares subject to any Option and the price
per share shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock subsequent to the effective date of the Plan resulting from (1) a subdivision or consolidation of shares or any other capital
adjustment, (2) the payment of a stock dividend, or (3) other increase or decrease in such shares effected without receipt of consideration by the Company. If the Company shall be the surviving corporation in any merger or consolidation, any Option
shall pertain, apply, and relate to the securities to which a holder of the number of shares of Stock subject to the Option would have been entitled after the merger or consolidation. Upon dissolution or liquidation of the Company, or upon a merger
or consolidation in which the Company is not the surviving corporation, all Options outstanding under the Plan shall terminate; provided, however, that each Participant (and each other person entitled under Section 11 to exercise an Option) shall
have the right, immediately prior to such dissolution or liquidation, or such merger or consolidation, to exercise such Participant’s Options in whole or in part, but only to the extent that such Options are otherwise exercisable under the
terms of the Plan. 
  

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 15.    Amendment and Termination 
  
 Neither the Board nor the Committee may, without the consent of the holder
of an Option, alter or impair any Option previously granted under the Plan, except as authorized herein. Unless sooner terminated, the Plan shall remain in effect for a period of ten (10) years from the earlier of the date of the Plan’s
adoption by the Board or approval by the Company shareholders. Termination of the Plan shall not affect any Option previously granted. 
  
 With respect to any shares of Stock to which Options have not been granted under the Plan, the Board, without further action on the part of the
shareholders of the Company, may from time to time alter, amend, or suspend certain provisions of the Plan except that it may not, without the approval of the shareholders of the Company: (i) change the number of shares of Stock available for
grant under the Plan, (ii) extend the duration of the Plan, (iii) increase the maximum term of Incentive Stock Options under the Plan, (iv) decrease the minimum option price of Incentive Stock Options, (v) change the class of
employees eligible to be granted Incentive Stock Options under the Plan, or (vi) effect a change relating to Incentive Stock Options granted under the Plan which is inconsistent with Code Section 422 or the regulations thereunder. 

 
 16.    Agreement and Representation of Employees

  
 As a condition to the exercise of any portion of an
Option, the Company may require the person exercising such Option to represent and warrant at the time of such exercise that any shares of Stock acquired at exercise are being acquired only for investment and without any present intention to sell or
distribute such shares, if, in the opinion of counsel for the Company, such a representation is required under the Securities Act of 1933 or any other applicable law, regulation, or rule of any governmental agency. 
  
 17.    Reservation of Shares of Stock 
  
 The Company, during the term of this Plan, will at all times reserve and
keep available, and will seek or obtain from any regulatory body having jurisdiction any requisite authority necessary to issue and to sell, the number of shares of Stock that shall be sufficient to satisfy the requirements of this Plan. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority deemed necessary by counsel for the Company for the lawful issuance and sale of its Stock hereunder shall 
  

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 relieve the Company of any liability in respect of the failure to issue or sell Stock as to which the requisite authority
has not been obtained. 
  
 18.    Withholding Taxes

  
 Whenever under the Plan shares are to be issued upon the
exercise of Options thereunder, the Company shall have the right to require the Optionee to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements, if any, prior to the delivery of any Stock
certificate or certificates for such shares. Whenever under the Plan payments are made in cash such payment shall be net of an amount sufficient to satisfy federal, state and local withholding tax requirements. 
  
 19.    Effective Date of Plan 
  
 The Plan shall be effective from the earlier of the date of the Plan’s
adoption by the Board or approval by the shareholders of the Company. 
  
 Date
Approved By Board of
Directors:    10-18-95                                 
                    
  
 Date Approved by Company
Shareholders:    4-17-96                                
                 
  

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