Document:

Exhibit 4.12

 

TEXAS
REGIONAL BANCSHARES, INC.

 

2005
INCENTIVE STOCK OPTION PLAN

AMENDMENT
NUMBER 1

 

 

The following amendment
to the Texas Regional Bancshares, Inc. 2005 Incentive Stock Option Plan
(the “Plan”) is adopted by the Board of Directors of Texas Regional Bancshares, Inc.
(the “Corporation”), acting pursuant to section 14 of the Plan.  This Amendment Number 1 is adopted to be
effective as of April 26, 2005.

 

Section 14 of the
Plan is hereby amended to read in its entirety as follows:

 

“14.                           Amendment
of the Plan.  The Board of Directors
of the Corporation may from time to time alter, amend, suspend or discontinue
the Plan and make rules for its administration, except that (a) the
Board shall not amend the Plan in any manner which would have the effect of
preventing options issued under the Plan from being “incentive stock options”
as defined in Section 422 of the Internal Revenue Code of 1986 (as
amended); and (b) no alteration or amendment that constitutes a material
alteration or material amendment to the Plan shall be effective unless and
until such material alteration or material amendment is approved by the
shareholders of the Corporation.  Any of
the following shall be considered a material alteration or material amendment
to the Plan: (i) any modification as to eligibility for participation
under the Plan; (ii) any increase in the number of shares under the Plan;
and (iii) any addition to or modification of the Plan to permit repricing
of options granted under the Plan.”

 

The undersigned hereby certifies
that this Amendment Number 1 to the Plan is the true and correct Texas Regional
Bancshares, Inc. 2005 Incentive Stock Option Plan Amendment Number 1 as
voted upon and adopted at a meeting of the Board of Directors duly held on the
26th day of April, 2005.

 

 

	
   

  	
  /s/ Carolyn Joyner

  	
   

  
	
   

  	
  SecretaryExhibit 4.11

 

TEXAS
REGIONAL BANCSHARES, INC.

 

2005
NONSTATUTORY STOCK OPTION PLAN

 

Texas Regional Bancshares, Inc.,
a Texas corporation (hereinafter called the “Corporation”) believes that
allowing directors, certain key advisors, consultants and independent
contractors, and certain key employees to obtain shares of the Class A
Voting Common Stock of the Corporation through the use of stock options
hereinafter provided for will be beneficial to the initial and continued
success of the Corporation.  In furtherance
of the foregoing, the Corporation hereby establishes the Texas Regional
Bancshares, Inc. 2005 Nonstatutory Stock Option Plan (the “Plan”).

 

1.                                       Purpose.  The purpose of the Plan is to secure for the
Corporation and its stockholders the benefits which flow from providing
directors, certain key advisors, consultants and independent contractors, and
certain key employees of the Corporation and its subsidiaries with the
incentive inherent in common stock ownership.  
It is generally recognized that stock option plans aid in retaining
competent persons and furnish a device to attract directors, advisors,
consultants, independent contractors and employees of exceptional ability to
the Corporation because of the opportunity offered to acquire a proprietary interest
in the business.  For purposes of the
Plan, a subsidiary is any corporation in which the Corporation owns, directly
or indirectly, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock or over which the Corporation has
effective operating control.  The
Corporation intends that stock options granted or exercised under this Plan not
qualify as “Incentive Stock Options” under Section 422 of the Internal
Revenue Code of 1986, as amended from time to time, and pertinent regulations.

 

2.                                       Amount
of Stock.

 

(a)                                  The
total number of shares of Class A Voting Common Stock to be subject to
options granted pursuant to the Plan shall not exceed Three Hundred Thousand
(300,000) shares of the Corporation’s Class A Voting Common Stock
(hereinafter referred to as the “Common Stock” or the “Stock”) each having a
par value of $1.00.

 

(b)                                 In
the event of (i) stock dividends, stock splits, or subdivisions,
combinations or reclassifications of the Stock, or (ii) the merger or
consolidation of the Corporation with any other business entity, the sale of
all or substantially all of the Corporation’s assets, the liquidation or
dissolution the Corporation, or any other form of corporate reorganization or
other similar capital change, the number and kind of shares of stock of the
Corporation described in the Plan or to be granted under the Plan, the number
and kind of shares of stock of the Corporation subject to options then
outstanding under the Plan, the maximum number of shares for which options may
be issued under the Plan, the option price and other relevant provisions shall
be appropriately adjusted.  The
determination of the Board of Directors, or the Committee appointed by the
Board as herein provided, as to any dispute related to adjustments shall be
binding on all persons.

 

(c)                                  In
the event that options granted under this Plan shall expire, terminate
unexercised or otherwise lapse without being exercised in whole or in part, the
shares covered by the unexercised portion of the expired, terminated or lapsed
options shall be available for future grants under the Plan, within the limits
herein described.

 

(d)                                 The
stock to be issued under the Plan may constitute an original issue of
authorized stock or may consist of previously issued stock acquired by the
Corporation, as shall be determined by the Board or the Committee.

 

3.                                       Stock
Option Committee.  The Board of
Directors of the Corporation (the “Board”) shall from time to

 

 

time appoint a Stock
Option Committee (the “Committee”) to serve under this Plan.  The Committee shall consist of three or more
directors, each of whom is (i) an independent director as that term is
defined in Rule 4200(a)(15) of the Marketplace Rules applicable to
companies the shares of which are traded on The NASDAQ Stock Market, Inc.’s
National Market System; (ii) a “Non-Employee Director” for purposes of Rule 16b-3(d)(1) as
promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended; and (iii) an outside director
as that term is defined for purposes of section 162(m) of the Internal
Revenue Code of 1986, as amended.

 

The Committee shall have
authority, consistent with the Plan:

 

(a)                                  to
determine which of the directors, advisors, consultants, independent
contractors, and key employees of the Corporation and its subsidiaries shall be
granted options;

 

(b)                                 to
determine the time or times when options shall be granted and the number of
shares of Common Stock to be subject to each option;

 

(c)                                  to
determine the option price of the shares subject to each option and the method
of payment of such price;

 

(d)                                 to
determine the time or times when each option becomes exercisable and the
duration of the exercise period, subject to the limitations contained in
Paragraph 6(b);

 

(e)                                  to
prescribe the form or forms of the instruments evidencing any options granted
under the Plan and of any other instruments required under the Plan and to
change such forms from time to time;

 

(f)                                    to
adopt, amend and rescind rules and regulations for the administration of
the Plan and the options and for its own acts and proceedings;

 

(g)                                 to
decide all questions and settle all controversies and disputes which may arise
in connection with the Plan; and

 

(h)                                 to
take other actions permitted of the Committee by this Plan, authority hereafter
granted by the Board or as permitted by law.

 

All decisions,
determinations and interpretations of the Committee shall be final and binding
on all parties concerned.

 

4.                                       Eligibility
and Participation.  Options may be
granted pursuant to the Plan to directors, advisors, consultants, independent
contractors and employees of the Corporation and any parent or subsidiary of
the Corporation (hereinafter sometimes called an “qualified optionee” or
collectively the “qualified optionees”). 
The recipient of an option granted pursuant to this plan is sometimes
herein called an “optionee.”

 

From time to time the
Committee shall select the qualified optionees to whom options may be granted
by the Board and shall determine the number of shares to be covered by each
option so granted.  Future as well as
present qualified optionees shall be eligible to participate in the Plan.  Members of the Committee shall be allowed to
participate in the Plan.

 

The adoption of the Plan
does not confer upon any employee of the Corporation or a subsidiary any right
to continue employment with the Corporation or a subsidiary, as the case may
be, nor does it interfere in any way with the right of the Corporation or a
subsidiary to terminate the employment of any of its employees at any
time.   Similarly, the adoption of the
Plan does not confer upon any other qualified optionee any right to continue
his or her relationship with the Corporation or a subsidiary, as the case may
be, nor does it interfere in any way with the right of the Corporation or a
subsidiary to terminate the Corporation’s relationship with any qualified
optionee at any time.

 

The maximum number of
shares which respect to which options may be granted under this Plan during any

 

 

calendar year to any
person is all shares for which options may be granted under this Plan.

 

5.                                       Option
Agreement.  The terms and provisions
of options granted pursuant to the Plan shall be set forth in agreements (which
need not be identical) in such form and containing such provisions as are
consistent with this Plan as the Board or the Committee may from time to time
approve (individually an “Option Agreement” and collectively the “Option
Agreements”).  An Option Agreement may
incorporate all or any of the terms hereof by reference and shall comply with
and be subject to the terms and conditions herein provided.

 

6.                                       Price.  The purchase price per share of Common Stock
purchasable under options granted pursuant to the Plan shall be an amount equal
to one hundred percent (100%) of the fair market value of the stock, as
determined by the Board or the Committee, at the time the options are
granted.  The full purchase price of
shares purchased shall be paid upon exercise of the option in the manner and by
the means set forth in the qualified optionee’s Option Agreement.  The consideration shall be paid either in
cash, by check, or for such other consideration as the Board or Committee may
approve.  Under certain circumstances the
purchase price per share shall be subject to adjustment as referred to in Section 11
or 13 of this Plan and as described in the Option Agreement executed pursuant
to a grant under this Plan; however, the price per share of Common Stock
purchasable under options granted pursuant to the Plan shall not be subject to
adjustment after the date of grant in the absence of the occurrence of an event
described in Section 11 or 13.

 

7.                                       Exercise
Period.  The right to purchase any
Common Stock pursuant to the exercise of an option granted under this Plan may
be either cumulative or non-cumulative, as determined by the Board or the
Committee.  Any Common Stock purchasable
pursuant to the exercise of an option granted under this Plan will be
purchasable in accordance with the schedule set forth in the Option
Agreement between the Corporation and the qualified optionee receiving the
option, subject to any other limitation provided in this Plan or in the
qualified optionee’s Option Agreement.  A
person electing to exercise an option shall give notice as described in his or
her Option Agreement, such notice to be accompanied by such instruments or
documents as may be required by the Option Agreement and the Committee, and
unless otherwise directed by the Committee, the qualified optionee shall at the
time of exercise tender the purchase price of the shares he or she has elected
to purchase.  Unless otherwise provided
in the particular Option Agreement, in the event the portion of Common Stock
purchasable under the Option Agreement involves a fraction of a share, the
amount purchasable at that time shall be rounded upward to the next complete
share to allow the purchase of a complete share of Common Stock.

 

8.                                       Option
Period.  No option granted pursuant
to the Plan shall be exercisable after the expiration of ten (10) years
from the date the option is first granted. 
The expiration date for any option or portion thereof, which may be any
period not in excess of ten (10) years following the date of grant of the
option, shall be stated in the Option Agreement and is hereinafter called the “Expiration
Date”.

 

Notwithstanding any other
provision of this Plan, no option shall be granted under this Plan more than
ten (10) years after the date this Plan is adopted by the Board, or the
date this Plan is approved by the Common Stock stockholders, whichever is
earlier.

 

9.                                       Termination
of Employment.  The Option Agreement
may provide that:

 

(a)                                  For
any option granted to an employee of the Corporation, if, prior to the
Expiration Date for any option granted hereunder, the employee shall for any
reason whatever, other than (1) his or her permanent and total disability
as defined in (c) below, or (2) his or her death, cease to be
employed by the Corporation, or a parent or subsidiary corporation of the
Corporation, then any unexercised portion of such option shall automatically
terminate upon the date of such termination of employment.

 

(b)                                 If,
prior to the Expiration Date for any option granted hereunder, the option
holder shall die at a time when he or she holds options exercisable under this
Plan, then the legal representatives of his or her estate or a legatee or
legatees of the option shall have the right, for a period of three (3) months
after his or her death, to purchase all or any part of the Stock subject to the
option outstanding and unexpired as of the date of death.

 

 

(c)                                  If,
prior to the Expiration Date for any option granted hereunder, the option
holder shall become permanently and totally disabled, as hereafter defined, at
a time when he or she holds options exercisable under this Plan, then the
option holder or his or her legal representative shall have the right, for a
period of one (1) year from the date of such termination of employment by
reason of disability, to exercise any right to purchase Stock pursuant to the
option.

 

An option holder is “permanently
and totally disabled” if he or she is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12)
months.  Such determination of permanent
and total disability shall be made as allowable under Section 22, and
applicable regulations, of the Internal Revenue Code of 1986, as amended, or
any other method determined by the Board or Committee.  In the absence of any specific requirements
for this determination, the decision of the Board or the Committee, as aided by
any physicians they designate, shall be conclusive.

 

Nothing in (a), (b), or (c) shall extend the time for exercising any option granted pursuant to the Plan beyond the Expiration Date for the option. Any Option Agreement may contain or otherwise provide for conditions giving rise to the forfeiture of Stock or a repurchase right with respect to Stock acquired pursuant to an Option Agreement executed pursuant to this Plan, and may also provide for such restrictions on the transferability of shares of Stock acquired pursuant to an Option Agreement executed pursuant to this Plan, that the Board or the Committee in its sole and absolute discretion may deem proper or advisable.  The conditions giving rise to forfeiture or right of repurchase may include, but need not be limited to, the requirement that the optionee render substantial services to the Corporation or any subsidiary of the Corporation for a specified period of time.  The restrictions on transferability may include, but need not be limited to, options and rights of first refusal in favor of the Corporation.
 
10.                                 Assignability.  The Option Agreement shall provide that the option granted thereby shall not be transferable or assignable by the optionee otherwise than by will or by the laws of descent and distribution, and during the lifetime of the optionee shall be exercisable only by him or her.
 

11.                                 Adjustments
and Modifications.  The Option
Agreement may contain such provisions as the Board or the Committee may approve
concerning the effect upon the option granted thereby and upon the per share or
per unit option price, of (i) stock dividends, stock splits, or
subdivisions, combinations or reclassifications of the Stock, or (ii) the
merger or consolidation of the Corporation with any other business entity, the
sale of all or substantially all of the Corporation’s assets, the liquidation
or dissolution the Corporation, or any other form of corporate reorganization
or other similar capital change. Subject to the terms and conditions and within
the limitations of this Plan, the Board or Committee may modify, extend, or
renew outstanding rights granted under this Plan, or accept the surrender of
outstanding rights (to the extent not theretofore exercised); however, the
price per share of Common Stock purchasable under options granted pursuant to
the Plan shall not be subject to adjustment after the date of grant in the
absence of the occurrence of an event described in the preceding sentence of
this Section 11 or in Section 13. 
Notwithstanding the foregoing, no modification of an option shall,
without the consent of the optionee, alter or impair any rights of the optionee
under the option.

 

12.                                 Issuance
Requirements.  The Corporation shall
not be obligated to issue any shares unless and until, in the opinion of the
Corporation’s counsel, (i) all applicable laws and regulations have been
complied with, (ii) in the event the Corporation’s Common Stock is at the
time listed upon any stock exchange or approved for trading on the Nasdaq Stock
Market, the shares to be issued have been listed or trading shall otherwise be
authorized upon official notice of issuance, and (iii) all other legal
matters in connection with the issuance and delivery of shares shall have been
approved by the Corporation’s counsel. 
The participant shall take any action reasonably requested by the
Corporation in connection therewith. 
Without limiting the generality of the foregoing, the Corporation may
require from the participant such investment representation or such agreement,
if any, as counsel for the Corporation may consider necessary in order to
comply with the Securities Act of 1933 as then in effect, and may require that
the participant agree that any sale of the shares will be made only in such
manner permitted by law.  A legend to
this effect may be affixed to the certificates evidencing such shares.  A participant shall have the rights of a
stockholder only as to shares actually acquired by him under the Plan.

 

 

13.                                 Corporate
Merger, Consolidation, Reorganization, etc.

 

(a)                                  In
the event of a dissolution or liquidation of the Corporation or a merger or
consolidation in which the Corporation is not the surviving corporation, any
outstanding options hereunder may be terminated by the Corporation as of the
effective date of such dissolution, liquidation, merger or consolidation by
giving notice to each holder thereof or his or her personal representative of
its intention to do so and by permitting the exercise during a period of not
more than a specified number of days determined by the Board next preceding
such effective date, or the Expiration Date, whichever is earlier, of all of
such outstanding options in whole or in part without regard to the provisions
of Section 7 hereof.  Subject to the
preceding sentence, if the Corporation is reorganized or merged or consolidated
with another corporation, while unexercised options are outstanding under the
Plan, and the Corporation is not the surviving corporation, there shall be
substituted for the Common Stock subject to the unexercised and outstanding
options an appropriate number of shares of each class of stock or other
securities of the reorganized or merged or consolidated corporation which were
distributed to shareholders of the Corporation in respect of the Common
Stock.  Such substitution may be accomplished
by the assumption of such options by the surviving corporation or the
substitution for the old options of new options by the surviving corporation.

 

(b)                                 The
existence of the Plan and any options granted hereunder shall not affect in any
way the right or power of the Board or the stockholders of the Company to make
or authorize any adjustment, recapitalization, reorganization, reclassification
or other change in the Company’s capital structure or its business, any merger,
consolidation or separation of the Company, any issue of bonds, debentures,
preferred or prior preference stocks ahead of or affecting Common Stock or the
rights thereof, the dissolution or liquidation of the Company or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding.

 

14.                                 Amendment
of the Plan.  The Board of Directors
of the Corporation may from time to time alter, amend, suspend or discontinue
the Plan and make rules for its administration.

 

15.                                 Options
Discretionary.  The granting of
options under the Plan shall be entirely discretionary and nothing in the Plan
shall be deemed to give any qualified optionee any right to participate in the
Plan or to receive options.

 

16.                                 Stockholder
Approval.  The Plan will be submitted
to the Common Stock stockholders of the Corporation within twelve (12) months
of the date of the adoption of the Plan by the Board.

 

17.                                 Termination
of Plan.  This Plan shall terminate
ten (10) years after its approval by the Common Stock stockholders or
adoption by the Board, whichever is earlier. 
Any option outstanding under this Plan at the time of its termination
shall remain in effect until the option shall have been exercised or the
Expiration Date, whichever is earlier.

 

18.                                 Replacement Options. 
The Corporation may grant options under the Plan on terms differing from
those provided for in this Plan where such options are granted in substitution
for options held by employees of other corporations who have become employees
of the Corporation or a subsidiary as the result of a merger, consolidation or
other reorganization of the employing corporation with the Corporation or
subsidiary, or the acquisition by the Corporation or a subsidiary of the
business, property or stock of the employing corporation.  The Committee may direct that the substitute
options be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

 

19.                                 Adoption
of Plan by Board.  The undersigned
hereby certifies that this Plan is the true and correct 2005 Texas Regional
Bancshares, Inc., Nonstatutory Stock Option Plan of the Corporation voted
upon and adopted at a meeting of the Board of Directors duly held on the 8th
day of February, 2005.

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