Exhibit 10.121


 


FIRST INVESTORS FINANCIAL
SERVICES GROUP, INC.

2005 STOCK OPTION PLAN


 


ARTICLE I. ESTABLISHMENT
AND PURPOSE


 


1.1                               Establishment
and Purpose.  First Investors
Financial Services Group, Inc. (“First Investors”) hereby establishes the First
Investors Financial Services Group, Inc. 2005 Stock Option Plan, as set
forth in this document.  The purposes of
the Plan are to attract able persons to enter the employ of the Company, to
encourage Employees to remain in the employ of the Company and to provide
motivation to Employees to put forth maximum efforts toward the continued
growth, profitability and success of the Company, by providing incentives to
such persons through the ownership and performance of the Common Stock of First
Investors.  A further purpose of the Plan
is to provide a means through which the Company may attract able persons to
become directors and officers of the Company and to provide such individuals
with incentive and reward opportunities. 
Toward these objectives, Options may be granted under the Plan to
Employees, directors and other individuals serving as officers for the Company on
the terms and subject to the conditions set forth in the Plan.


 


1.2                               Effectiveness
and Term.  The Plan shall become
effective as of July 12, 2005, the date of its adoption by the Board (the “Effective
Date”), provided it is duly approved by the holders of at least a majority of
the shares of Common Stock present or represented and entitled to vote at a
meeting of the stockholders of First Investors duly held in accordance with
applicable law within twelve months after the date of adoption of the Plan by
the Board.  If the Plan is not so
approved, the Plan shall terminate and any Option granted hereunder shall be null
and void.


 


ARTICLE II. DEFINITIONS


 


2.1                               “Affiliate” means (i) with respect to Incentive Stock
Options, a “parent corporation” or a “subsidiary corporation” of First
Investors, as those terms are defined in sections 424(e) and (f) of
the Code, respectively, and (ii) with respect to Nonqualified Stock Options,
(A) a “parent corporation” or a subsidiary corporation” of First Investors
as defined in (i) above, (B) a limited liability company, partnership
or other entity in which First Investors controls 50% or more of the voting
power 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 omissions
constituting willful misconduct or gross negligence in the course of the Optionee’s
employment or service with the Company.


 


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


 


(a)                                  the
consummation of a reorganization, merger, consolidation or other form of
business transaction or series of business transactions, in each case, with
respect to which persons who were stockholders of First Investors immediately
prior to such 


 





















 


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


 


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


 


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


 


(d)                                 any
event similar to the foregoing that the Committee determines in its absolute
discretion would, if consummated, materially alter the structure or business First
Investors.


 


2.5                               “Code” means the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor provisions
and regulations.


 


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


 


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


 


2.8                               “Company” means First Investors and any Affiliate.


 


2.9                               “Effective
Date” 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 an
individual performing services for the Company who is treated for tax purposes
as an independent contractor at the time of performance of the services.


 


2.11                        “Exchange Act” means the Securities Exchange Act of 1934, as
amended.


 


2.12                        “Fair Market Value” means the fair market value of the Common
Stock, as determined in good faith by the Committee or (i) if the Common
Stock is traded in the over-the-counter market, the average of the
representative closing bid and asked prices as reported by NASDAQ for the date
the 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 a
quoted price), or (ii) if the Common Stock is traded in the NASDAQ
National Market System, the average of the highest and lowest selling prices
for such stock as quoted on the NASDAQ National Market System for the date the Option
is granted (or if there are no sales for such date of grant, then for the last
preceding business day on which there were sales), or (iii) if the Common
Stock is listed on any national stock exchange, the average of the highest and
lowest selling prices for such stock as quoted on such exchange for the date
the Option is granted (or if there are no sales for such date of grant, then
for the last preceding business day on which there were sales).


 


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


 


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


 


2.15                        “Incentive Stock Option” means an Option that is intended to
meet 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 an
Incentive Stock Option.


 


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


 


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


 


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


 


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


 


2.22                        “Permitted Transferee” shall have the meaning given such term
in 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 the
Securities and Exchange Commission under the Exchange Act, or any successor rule or
regulation that may be in effect from time to time.


 


ARTICLE III.  PLAN ADMINISTRATION


 


3.1                               Plan
Administrator and Discretionary Authority. 
The Plan shall be administered by the Committee.  The Committee shall have total and exclusive
responsibility to control, operate, manage and administer the Plan in
accordance with its terms.  The Committee
shall have all the authority that may be necessary or helpful to enable it to
discharge its responsibilities with respect to the Plan.  Without limiting the generality of the
preceding sentence, the Committee shall have the exclusive right to:  (i) interpret the Plan and the Option
Agreements executed hereunder; (ii) decide all questions concerning
eligibility for, and the amount of, Options granted under the Plan; (iii) construe
any ambiguous provision of the Plan or any Option Agreement; (iv) prescribe
the form of Option Agreements; (v) correct any defect, supply any omission
or reconcile any inconsistency in the Plan or any Option Agreement; (vi) issue
administrative guidelines as an aid to administering the Plan and make changes
in such guidelines as the Committee from time to time deems proper; (vii) make
regulations for carrying out the Plan and make changes in such regulations as
the Committee from time to time deems proper; (viii) determine whether Options
should be granted singly or in combination; (ix) to the extent permitted
under the Plan, grant waivers of Plan terms, conditions, restrictions and
limitations; (x) accelerate the exercise or vesting of an Option when such
action or actions would be in the best interests of the Company; (xi) require Optionees
to hold a stated number or percentage of shares of Common Stock acquired
pursuant to an Option for a stated period; and (xii) take any and all other
actions the Committee deems necessary or advisable for the proper operation or
administration of the Plan.  The
Committee shall have authority in its sole discretion with respect to all
matters related to the discharge of its responsibilities and the exercise of
its authority under the Plan, including without limitation its construction of
the 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 its
actions with respect to the Plan shall be final, conclusive and binding on all
persons having or claiming to have any right or interest in or under the Plan,
including without limitation Optionees and their respective Permitted
Transferees, estates, beneficiaries and legal representatives.


 


3.2                               Liability;
Indemnification.  No member of the
Committee, nor any person to whom it has delegated authority, shall be
personally liable for any action, interpretation or determination made in good
faith with respect to the Plan or Options granted hereunder, and each member of
the Committee (or delegatee of the Committee) shall be fully indemnified and
protected by First Investors with respect to any liability he may incur with
respect to any such action, interpretation or determination, to the maximum
extent permitted by applicable law.


 


ARTICLE IV.  SHARES SUBJECT TO THE PLAN


 


4.1                               Available
Shares.  Subject to adjustment as
provided in Section 4.2, the maximum number of shares of Common Stock that
shall be available for grant of Options under 


 


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the Plan, including Incentive Stock Options, shall be 200,000 shares of
Common Stock.  Shares of Common Stock
issued pursuant to the Plan may be original issue or treasury shares or a
combination of the foregoing, as the Committee, in its sole discretion, shall
from time to time determine.  During the
term of this Plan, First Investors will at all times reserve and keep available
such number of shares of Common Stock as shall be sufficient to satisfy the
requirements of the Plan.


 


4.2                               Adjustments
for Recapitalizations and Reorganizations.  If there is any change in the number or kind
of shares of Common Stock outstanding (i) by reason of a stock dividend,
spin-off, recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization, or consolidation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Common Stock as a
class without First Investors’ receipt of consideration, or if the value of
outstanding shares of Common Stock is reduced as a result of a spin-off or First
Investors’ payment of an extraordinary cash dividend, or distribution or
dividend or distribution consisting of any assets of First Investors other than
cash, the maximum number and kind of shares of Common Stock available for
issuance under the Plan, the maximum number and kind of shares of Common Stock
available for issuance under the Plan as Options, including Incentive Stock
Options, 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 of
such Options may be appropriately adjusted by the Committee to reflect any
increase 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, the
enlargement or dilution of rights under such Options; provided, however, that
any fractional shares resulting from such adjustment shall be eliminated.


 


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


 


(a)                                  Options.  The grant of
Options shall reduce the number of shares of Common Stock available for grant
under 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) is
canceled or forfeited, or terminates, expires or lapses, for any reason, the
shares then subject to such Option shall again be available for grant of Options
under the Plan.


 


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


 


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vesting of an Option, or shares of Common
Stock that would be acquired upon exercise, vesting or payment of an Option are
withheld 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 be
increased by the number of shares delivered or withheld as payment of such
withholding taxes.


 


ARTICLE V.  ELIGIBILITY


 


The Committee shall select Optionees from
those Employees, directors and officers performing services for the Company that,
in the opinion of the Committee, are in a position to make a significant
contribution to the success of the Company. 
Once a Optionee has been selected for an Option by the Committee, the
Committee shall determine the type and size of Option to be granted to the Optionee
and shall establish in the related Option Agreement the terms, conditions,
restrictions and limitations applicable to the Option, in addition to those set
forth 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 Incentive
Stock Options or Nonqualified Stock Options, or a combination of both;
provided, however, that Incentive Stock Options may only be granted to
Employees.  All Options shall be subject
to the terms, conditions, restrictions and limitations of the Plan.


 


6.2                               Terms
and Conditions of Options.


 


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


 


(b)                                 The
Committee may, in its sole discretion, subject any Option to such other terms,
conditions, restrictions and/or limitations (including without limitation the
time and conditions of exercise, vesting or payment of an Option and
restrictions on transferability of any shares of Common Stock issued or
delivered pursuant to an Option), provided they are not inconsistent with the
terms of the Plan.  The Committee may,
but is not required to, subject an Option to such conditions as it determines
are necessary or appropriate to ensure than an Option constitutes “qualified
performance based compensation” within the meaning of section 162(m) of
the 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 same
Optionee.  The Committee may permit or
require an Optionee to defer receipt of the payment of cash or the delivery of
shares of Common Stock that would otherwise be due to the Optionee in
connection with any Option; provided, however, that any permitted deferrals
shall be structured to avoid negative tax consequences to the Optionee under Section 409A
of the Code.


 


6.3                               Restrictions
Relating to Incentive Stock Options.


 


(a)                                  Options
granted in the form of Incentive Stock Options shall, in addition to being
subject to the terms and conditions of Section 6.2, comply with section 422(b) of
the Code.  To the extent the aggregate Fair
Market Value (determined as of the times the respective Incentive Stock Options
are granted) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an individual during any calendar year under
all incentive stock option plans of First Investors and its Affiliates exceeds
$100,000, such excess Incentive Stock Options shall be treated as options that
do not constitute Incentive Stock Options. 
The Committee shall determine, in accordance with the applicable
provisions of the Code, which of an Optionee’s Incentive Stock Options will not
constitute Incentive Stock Options because of such limitation and shall notify
the Optionee of such determination as soon as practicable after such
determination.  The price at which a
share of Common Stock may be purchased upon exercise of an Incentive Stock
Option shall be determined by the Committee, but such exercise price shall not
be less than 100% of the Fair Market Value of a share of Common Stock on the
Grant Date.  No Incentive Stock Option
shall be granted to an Employee under the Plan if, at the time such Option is
granted, such Employee owns stock possessing more than 10% of the total
combined voting power of all classes of stock of First Investors or an
Affiliate, within the meaning of section 422(b)(6) of the Code,
unless (i) on the Grant Date of such Option, the exercise price of such
Option is at least 110% of the Fair Market Value of the Common Stock subject to
the Option and (ii) such Option by its terms is not exercisable after the
expiration of five years from the Grant Date of the Option.


 


(b)                                 Each
Optionee awarded an Incentive Stock Option shall notify First Investors in
writing immediately after the date he or she makes a disqualifying disposition
of any shares of Common Stock acquired pursuant to the exercise of such
Incentive Stock Option.  A disqualifying
disposition is any disposition (including any sale) of such Common Stock before
the later of (i) two years after the Grant Date of the Incentive Stock
Option or (ii) one year after the date of exercise of the Incentive Stock
Option.


 


6.4                               Exercise
of Options.


 


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


 


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


 


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


 


(d)                                 As
soon as reasonably practicable after receipt of written notification of
exercise of an Option and full payment of the exercise price and any required
withholding taxes, First Investors shall (i) deliver to the Optionee, in
the Optionee’s name or the name of the Optionee’s designee, a stock certificate
or certificates in an appropriate aggregate amount based upon the number of
shares of Common Stock purchased under the Option, or (ii) cause to be
issued in the Optionee’s name or the name of the Optionee’s designee, in
book-entry form, an appropriate number of shares of Common Stock based upon the
number of shares purchased under the Option.


 


6.5                               Termination
of Employment.


 


(a)                                  Each
Option Agreement embodying the award of an Option shall set forth the extent to
which the Optionee shall have the right to exercise the Option following
termination of the Optionee’s employment or service with the Company.  Such provisions shall be determined by the
Committee in its absolute discretion, need not be uniform among all Options
granted under the Plan and may reflect distinctions based on the reasons for
termination of employment or service.  In
the event an Option Agreement does not set forth such termination provisions,
then the following provisions shall apply with respect to such Option: if the
employment or service of an Optionee shall terminate for any reason, with or
without Cause, each outstanding Option held by the Optionee may be exercised,
to the extent then vested, until the earlier of (i) the expiration of three
months from the date of such termination of employment or service or (ii) the
expiration of the term of such Option.


 


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


 


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


 


6.6                               No
Repricing.  Except for adjustments
made pursuant to Section 4.2, no Option may be repriced, replaced,
regranted through cancellation or otherwise modified without stockholder
approval, if the effect would be to reduce the exercise price for the shares underlying
such Option; and, the Committee may not cancel an outstanding Option that is
under water for the purpose of granting a replacement Option of a different
type.


 


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


 


ARTICLE VII.  CHANGE OF CONTROL


 


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


 


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


 


ARTICLE VIII.  AMENDMENT AND TERMINATION


 


8.1                               Plan
Amendment and Termination.  The Board may
at 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 become
effective without the approval of such amendment or modification by the holders
of at least a majority of the shares of Common Stock if (i) such amendment
or modification increases the maximum number of shares subject to the Plan
(except as provided in Article IV) or changes the designation or class of
persons eligible to receive Options under the Plan, or (ii) counsel for First
Investors determines that such approval is 


 


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otherwise required
by or necessary to comply with applicable law or the listing requirements of
NASDAQ or such other exchange or association on which the Common Stock is then
listed or quoted.  An amendment to
the Plan shall not require stockholder approval if it curtails rather than
expands the scope of the Plan, nor if it is made to conform the Plan to new
statutory or regulatory requirements that arise after submission of the Plan to
stockholders for their approval, such as, without limitation, changes to section 409A
of the Code, or regulations or other guidance issued thereunder.  Upon
termination of the Plan, the terms and provisions of the Plan shall,
notwithstanding such termination, continue to apply to Options granted prior to
such termination.  Except as otherwise
provided herein, no suspension, termination, amendment or modification of the
Plan shall adversely affect in any material way any Option previously granted
under the Plan, without the consent of the Optionee (or the Permitted
Transferee) holding such Option.


 


8.2                               Option
Amendment and Cancellation.  The Committee
may amend the terms of any outstanding Option granted pursuant to the Plan, but
except as otherwise provided herein, no such amendment shall adversely affect
in any material way the Optionee’s (or a Permitted Transferee’s) rights under
an outstanding Option without the consent of the Optionee (or the Permitted
Transferee) holding such Option.


 


ARTICLE IX. 
MISCELLANEOUS


 


9.1                               Option
Agreements.  After the Committee grants an Option under
the Plan to an Optionee, First Investors and the Optionee shall enter into an Option
Agreement setting forth the terms, conditions, restrictions and limitations
applicable to the Option and such other matters as the Committee may determine
to be appropriate.  The terms and
provisions of the respective Option Agreements need not be identical.  All Option Agreements shall be subject to the
provisions of the Plan, and in the event of any conflict between an Option
Agreement 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 securities
exchange or system sponsored by a national securities association, the issuance
of any shares of Common Stock pursuant to an Option shall be conditioned upon
such shares being listed on such exchange or system.  First Investors shall have no obligation to
issue such shares unless and until such shares are so listed, and the right to
exercise any Option or other Option with respect to such shares shall be
suspended until such listing has been effected.


 


(b)                                 If at any time counsel to First Investors or its Affiliates shall
be of the opinion that any sale or delivery of shares of Common Stock pursuant
to an Option is or may in the circumstances be unlawful or result in the
imposition of excise taxes on First Investors or its Affiliates under the laws
of any applicable jurisdiction, First Investors or its Affiliates shall have no
obligation to make such sale or delivery, or to make any application or to
effect or to maintain any qualification or registration under the Securities
Act of 1933, as amended, or otherwise, with respect to shares of Common Stock
or Options, and the right to exercise any Option or other Option shall be
suspended 


 


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until, in
the opinion of such counsel, such sale or delivery shall be lawful or will not
result 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 or
terminated shall be reinstated as to all shares available before such suspension
and as to shares that would otherwise have become available during the period
of such suspension, but no such suspension shall extend the term of any Option
unless otherwise determined by the Committee in its sole discretion.


 


9.3                               Additional
Conditions.  Notwithstanding anything in the Plan to the
contrary:  (i) the Committee may, if
it shall determine it necessary or desirable in its sole discretion, at the
time of grant of any Option or the issuance of any shares of Common Stock
pursuant to any Option, require the recipient of the Option or such shares of
Common Stock, as a condition to the receipt thereof, to deliver to First
Investors a written representation of present intention to acquire the Option
or such shares of Common Stock for his own account for investment and not for
distribution, (ii) the certificate for shares of Common Stock issued to an
Optionee may include any legend that the Committee deems appropriate to reflect
any restrictions on transfer, and (iii) all certificates for shares of
Common Stock delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange or association upon which the Common Stock is
then listed or quoted, any applicable federal or state securities law, and any
applicable corporate law, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions.


 


9.4                               Transferability.


 


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


 


(b)                                 Except as otherwise provided in this
Section, no Option shall be subject to execution, attachment or similar
process, and no Option may be sold, transferred, pledged, exchanged,
hypothecated or otherwise disposed of, other than by will or pursuant to the
applicable laws of descent and distribution. 
Any attempted sale, transfer, pledge, exchange, hypothecation or other
disposition of an Option not specifically permitted by the Plan or the Option
Agreement 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 Permitted
Transferee.  For purposes of the Plan, “Permitted
Transferee” means (i) a member of an Optionee’s immediate family, (ii) any
person sharing the Optionee’s household (other than a tenant or employee of the
Optionee), (iii) trusts in which a person listed in (i) or (ii) above
has more than 50% of the beneficial interest, (iv) a foundation in which
the Optionee or a person listed in (i) or (ii) above controls the
management of assets, (v) any other entity in which the Optionee or a
person listed in (i) or (ii) above owns more than 50% of the voting
interests, provided that in the case of the preceding clauses (i) through
(v), no consideration is provided for the transfer, and (vi) any
transferee permitted under applicable securities and tax laws as determined by
counsel to First Investors.  In
determining whether a person is a “Permitted Transferee,” immediate family
members 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, or
sister-in-law, including adoptive relationships.


 


(d)                                 Incident to an
Optionee’s divorce, the Optionee may request that First Investors agree to
observe the terms of a domestic relations order which may or may not be part of
a 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 under
the Plan.  First Investors’ decision
regarding such a request shall be made by the Committee, in its sole and
absolute discretion, based upon the best interests of First Investors.  The Committee’s decision need not be uniform
among Optionees.  As a condition of
participation, an Optionee agrees to hold First Investors harmless from any
claim that may arise out of First Investors’ observance of the terms of any
such domestic relations order.


 


9.5                               Withholding
Taxes.  The Company shall be entitled to deduct from
any payment made under the Plan, regardless of the form of such payment, the
amount of all applicable income and employment taxes required by law to be
withheld with respect to such payment, may require the Optionee to pay to the
Company such withholding taxes prior to and as a condition of the making of any
payment or the issuance or delivery of any shares of Common Stock under the
Plan, and shall be entitled to deduct from any other compensation payable to
the Optionee any withholding obligations with respect to Options.  In accordance with any applicable
administrative guidelines it establishes, the Committee may allow an Optionee
to pay the amount of taxes required by law to be withheld from or with respect
to an Option by (i) withholding shares of Common Stock from any payment of
Common Stock due as a result of such Option, or (ii) permitting the Optionee
to deliver to the Company previously acquired shares of Common Stock, in each
case having an aggregate Fair Market Value equal to the amount of such required
withholding taxes.  No payment shall be
made and no shares of Common Stock shall be issued pursuant to any Option
unless and until the applicable tax withholding obligations have been
satisfied.


 


9.6                               No
Fractional Shares.  No fractional shares of Common
Stock shall be issued or delivered pursuant to the Plan or any Option granted
hereunder, provided that the Committee in its sole discretion may round
fractional shares down to the nearest whole share or settle fractional shares
in cash.


 


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9.7                               Notices. 
All notices required or permitted to be given or made under the Plan or pursuant
to 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) delivered
personally, (ii) transmitted by first class registered or certified United
States mail, postage prepaid, return receipt requested, (iii) sent by
prepaid overnight courier service, or (iv) sent by telecopy or facsimile
transmission, with confirmation receipt, to the person who is to receive it at
the address that such person has theretofore specified by written notice
delivered in accordance herewith.  Such
notices shall be effective (i) if delivered personally or sent by courier
service, 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 delivery
as shown by the return receipt therefor, or (iii) if sent by telecopy or
facsimile transmission, when the answer back is received.  First Investors or an Optionee may change, at
any time and from time to time, by written notice to the other, the address
that it or such Optionee had theretofore specified for receiving notices.  Until such address is changed in accordance
herewith, notices hereunder or under an Option Agreement shall be delivered or
sent (i) to an Optionee at his address as set forth in the records of the
Company or (ii) to First Investors at the principal executive offices of First
Investors clearly marked “Attention:  Stock
Option Plan Administration.”


 


9.8                               Compliance with Law and Stock
Exchange or Association Requirements.  In
addition, it is the intent of the First Investors that Options designated
Incentive Stock Options comply with the applicable provisions of Section 422
of the Code, and that Options intended to constitute “qualified
performance-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 the
delivery 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, comply
with the requirements of Section 409A of the Code. To the extent that any
legal 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 under
Section 16 of the Exchange Act or Sections 422, 162(m) or 409A of the
Code, that Plan provision shall cease to apply. 
Any provision of this Plan to the contrary notwithstanding, the
Committee may revoke any Option if it is contrary to law, governmental regulation,
or stock exchange or association requirements or modify an Option to bring it
into compliance with any government regulation or stock exchange or association
requirements.  The Committee may agree to
limit its authority under this Section.


 


9.9                               Binding
Effect.  The obligations of First Investors under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger, consolidation or other reorganization of First Investors, or
upon any successor corporation or organization succeeding to all or
substantially all of the assets and business of First Investors.  The terms and conditions of the Plan shall be
binding 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 be
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of the Plan or such agreement, as the case may
be, but such provision shall be fully 


 


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


 


9.11                        No
Restriction of Corporate Action.  Nothing
contained in the Plan shall be construed to prevent First Investors or any
Affiliate from taking any corporate action (including any corporate action to
suspend, terminate, amend or modify the Plan) that is deemed by First Investors
or such Affiliate to be appropriate or in its best interest, whether or not
such action would have an adverse effect on the Plan or any Options made or to
be made under the Plan.  No Optionee or
other person shall have any claim against First Investors or any Affiliate as a
result of such action.


 


9.12                        Governing
Law.  The Plan shall be governed by and construed
in accordance with the internal laws (and not the principles relating to
conflicts of laws) of the State of Texas except as superseded by applicable
federal law.


 


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


 


9.14                        Risk
of Participation.  Nothing contained in the Plan
shall be construed either as a guarantee by First Investors or the Affiliates,
or their respective stockholders, directors, officers or employees, of the
value of any assets of the Plan or as an agreement by First Investors or the
Affiliates, or their respective stockholders, directors, officers or employees,
to indemnify anyone for any losses, damages, costs or expenses resulting from
participation in the Plan.


 


9.15                        No
Guarantee of Tax Consequences.  No person
connected with the Plan in any capacity, including without limitation First
Investors and the Affiliates and their respective directors, officers, agents
and employees, makes any representation, commitment or guarantee that any tax
treatment, including without limitation federal, state and local income, estate
and gift tax treatment, will be applicable with respect to any Options or
payments thereunder made to or for the benefit of an Optionee under the Plan or
that such tax treatment will apply to or be available to an Optionee on account
of participation in the Plan.


 


9.16                        Continued
Employment.  Nothing contained in the Plan or in any Option
Agreement shall confer upon any Optionee the right to continue in the employ or
service of the Company, or interfere in any way with the rights of the Company
to terminate an Optionee’s employment at or service any time, with or without
cause.  The loss of existing or potential
profit in Options will not constitute an element of damages in the event of
termination of employment or service for any reason, even if the termination is
in 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 a
convenience to facilitate reference. 
Such headings shall not be deemed in any way material 


 


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


 


IN
WITNESS 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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