Document:

Exhibit 10.1

 

Exhibit A:              List of
Licensed United Patents

	
  Title

  	
   

  	
  Patent No.

  	
   

  	
  Expir. Date

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  4,861,041

  	
   

  	
  04/18/2008

  	
   

  
	
   

  	
   

  	
  5,022,653

  	
   

  	
  Expired

  	
   

  
	
   

  	
   

  	
  4,948,134

  	
   

  	
  Expired

  	
   

  
	
   

  	
   

  	
  5,288,077

  	
   

  	
  Expired

  	
   

  
	
   

  	
   

  	
  5,364,105

  	
   

  	
  Expired

  	
   

  
	
   

  	
   

  	
  5,584,485

  	
   

  	
  Expired

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  5,795,225

  	
   

  	
  04/18/2008

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  5,913,726

  	
   

  	
  04/18/2008

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  6,045,130

  	
   

  	
  04/18/2008

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  6,234,895

  	
   

  	
  04/18/2008

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  5,078,405

  	
   

  	
  04/18/2008

  	
   

  
	
  Method for Progressive
  Jackpot 21

  	
   

  	
  5,364,104

  	
   

  	
  04/18/2008

  	
   

  
	
  Method for Playing a
  Card Game

  	
   

  	
  5,374,067

  	
   

  	
  04/18/2008

  	
   

  
	
  Method and Apparatus
  for Playing Casino Card Games Including

  	
   

  	
  5,377,973

  	
   

  	
  04/18/2008

  	
   

  
	
  Method for Playing A
  Card Game

  	
   

  	
  5,380,012

  	
   

  	
  04/18/2008

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  5,544,893

  	
   

  	
  04/18/2008

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  5,626,341

  	
   

  	
  04/18/2008

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  5,794,964

  	
   

  	
  04/18/2008

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  5,795,225

  	
   

  	
  04/18/2008

  	
   

  
	
  Coin Acceptor Including
  Multi-State Visual Indicator Apparatus and

  	
   

  	
  5,836,818

  	
   

  	
  04/18/2008

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  6,070,878

  	
   

  	
  04/18/2008

  	
   

  
	
  Apparatus for Progressive
  Jackpot Gaming

  	
   

  	
  6,073,930

  	
   

  	
  04/18/2008

  	
   

  
	
  Method for Progressive
  Jackpot Gaming

  	
   

  	
  6,312,330

  	
   

  	
  04/18/2008

  	
   

  
	
  Method for Progressive
  Jackpot Gaming

  	
   

  	
  6,336,859

  	
   

  	
  04/18/2008

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  6,475,088

  	
   

  	
  04/18/2008

  	
   

  
	
  Method for Progressive
  Jackpot Gaming

  	
   

  	
  6,485,368

  	
   

  	
  04/18/2008

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  5,078,405

  	
   

  	
  04/18/2008

  	
   

  
	
  Methods for Providing a
  Jackpot in a Progressive Game needed for LRIB with TCP side bet

  	
   

  	
  6,729,620

  	
   

  	
  7/24/2015

  	
   

  
	
  Method of Progressive
  Twenty-One (need for Royal Match 21)

  	
   

  	
  5,577,731

  	
   

  	
  7/24/2015

  	
   

  
	
  Maximum Bet Table Game
  and Apparatus

  	
   

  	
  6,568,682

  	
   

  	
  04/15/2019

  	
   

  
	
  Maximum Bet Table Game
  and Apparatus

  	
   

  	
  6,726,564

  	
   

  	
  04/15/2019

  	
   

  
	
  Table Game Apparatus

  	
   

  	
  5,377,994

  	
   

  	
  12/11/2011

  	
   

  
	
   

  	
   

  	
  6,375,189

  	
   

  	
  11/20/2017

  	
   

  
	
   

  	
   

  	
  6,402,150

  	
   

  	
  11/20/2017

  	
   

  
	
   

  	
   

  	
  5,964,464

  	
   

  	
  10/13/2015

  	
   

  

 

Exhibit B:              List of
Foreign Patents

	
  Title

  	
   

  	
  Patent No.

  	
   

  	
  Expir. Date

  	
   

  	
  Country

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  2,088,063

  	
   

  	
  4/18/09

  	
   

  	
  Japan

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  621599

  	
   

  	
  4/18/09

  	
   

  	
  Australia

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  694895

  	
   

  	
  4/18/08

  	
   

  	
  Australia

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  E96049

  	
   

  	
  4/18/09

  	
   

  	
  Austria

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  0
  338 644

  	
   

  	
  4/18/09

  	
   

  	
  Belgium

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  1,335,381

  	
   

  	
  4/18/09

  	
   

  	
  Canada

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  P689099924

  	
   

  	
  4/18/09

  	
   

  	
  Germany

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  EP0338644

  	
   

  	
  4/18/09

  	
   

  	
  Italy

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  192893

  	
   

  	
  4/18/09

  	
   

  	
  Netherlands
  and NA

  	
   

  
	
  Apparatus for
  Progressive Jackpot Gaming

  	
   

  	
  EP0338644

  	
   

  	
  4/18/09

  	
   

  	
  Spain

  	
   

  
	
  Electronic Poker
  Game

  	
   

  	
  693882

  	
   

  	
  4/18/08

  	
   

  	
  Australia

  	
   

  
	
  Poker Game

  	
   

  	
  4900

  	
   

  	
  9/06/08

  	
   

  	
  Dominican
  Republic

  	
   

  
	
  Gaming Table
  Apparatus

  	
   

  	
  4825

  	
   

  	
  3/02/08

  	
   

  	
  Dominican
  Republic

  	
   

  
	
  Electronic Poker
  Game

  	
   

  	
  628044

  	
   

  	
   

  	
   

  	
  Australia

  	
   

  
	
  Electronic Poker Game

  	
   

  	
  1,334,983

  	
   

  	
   

  	
   

  	
  Canada

  	
   

  

 

 

Exhibit C:              List of
Foreign Applications

	
  Title

  	
   

  	
  Applic. No.

  	
   

  	
  Country

  	
   

  
	
  Methods of
  Progressive Jackpot Gaming

  	
   

  	
  617,164

  	
   

  	
  Canada

  	
   

  
	
  Electronic Poker
  Game

  	
   

  	
  616,862

  	
   

  	
  Canada

  	
   

  
	
  Methods of
  Progressive Jackpot Gaming

  	
   

  	
  3,271,374

  	
   

  	
  Australia

  	
   

  
	
  Methods of Progressive
  Jackpot Gaming

  	
   

  	
  616,861

  	
   

  	
  CanadaEXHIBIT 4.1

FIRST
INVESTORS FINANCIAL SERVICES GROUP, INC.

2005
EMPLOYEE STOCK OPTION PLAN

(Amended and Restated Through September 6, 2006)

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 Employee 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 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
 

 

 

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

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 the Plan, including Incentive Stock Options,
shall be 400,000 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 

 3
 

 

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 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
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 

 4
 

 

(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.

(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.

 5
 

 

 

(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 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 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 

 6
 

 

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 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.

(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 

 7
 

 

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.

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.

 8
 

 

 

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 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 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.

  
	
   

  	
   

  	
  Tommy A. Moore,
  Jr.

  
	
   

  	
   

  	
  President and
  Chief Executive Officer

  

 

 9

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