EXHIBIT 4.2
Form of Stock Option Agreement to be entered into with
Optionees with respect to tock Options
STOCK OPTION AGREEMENT
----------------------
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
TF FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
STOCK OPTIONS for a total of _________ shares of Common Stock, par value
$.10 per share, of TF Financial Corporation (the "Company"), which Option is
intended to qualify as an Incentive Stock Option under Section 422 of the
Internal Revenue Code of 1986, as amended, is hereby granted to ______________
(the "Optionee") at the price determined as provided in, and in all respects
subject to the terms, definitions and provisions of the 1997 Stock Option Plan
(the "Plan") adopted by the Company which is incorporated by reference herein,
receipt of which is hereby acknowledged.
1. Option Price. The Option price is $16.50 for each Share, being 100% of
the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this Option (January 21, 1997).
2. Exercises of Option. This Option shall be exercisable in accordance with
provisions of the Plan, provided the holder of such Option is an employee of the
Company as of such date, as follows:
(a) Schedule of Rights to Exercise.
Date Percentage of
---- Total Shares
Awarded Which
Are Exercisable/
Options Non-forfeitable
------- ---------------
Upon grant.......................... 0 0%
As of January 21, 1998.............. ____ 20%
As of January 21, 1999.............. ____ 40%
As of January 21, 2000.............. ____ 60%
As of January 21, 2001.............. ____ 80%
As of January 21, 2002.............. ____ 100%
Options awarded to the Optionee shall continue to vest annually during
such period that the Optionee serves as an employee, director or director
emeritus of Third Federal Savings Bank or the Company. Notwithstanding any
provisions in this Section 2, in no event shall this Option be exercisable prior
to six months following the date of grant. Options shall be 100% vested and
exercisable upon the death or disability of the Optionee, or upon a Change in
Control of the Company. Options shall become "non-incentive" options and remain
exercisable for the remaining term upon retirement following not less than 10
years, if not exercised within 3 months of retirement.
(b) Method of Exercise. This Option shall be exercisable by a
written notice which shall:
(i) State the election to exercise the Option, the
number of Shares with respect to which it is being exercised, the person
in whose name the stock certificate or certificates for such Shares of
Common Stock is to be registered, his address and Social Security Number
(or if more than one, the names, addresses and Social Security Numbers
of such persons);
(ii) Contain such representations and agreements as to
the holder's investment intent with respect to such shares of Common
Stock as may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person
or persons other than the Optionee, be accompanied by proof,
satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Option; and
(iv) Be in writing and delivered in person or by
certified mail to the Treasurer of the Company.
Payment of the purchase price of any Shares with respect to which the
Option is being exercised shall be by certified or bank cashier's or teller's
check. The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised if
the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or valid regulation. As
a condition to the Optionee's exercise of this Option, the Company may require
the person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
4. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
5. Dividend Equivalent Rights. The Options represented by this Agreement
shall include the right of the Optionee to receive Dividend Equivalent Rights.
Such rights shall provide that upon the payment of a dividend on the Common
Stock, the holder of such Options shall receive payment of compensation in an
amount equivalent to the dividend payable as if such Options had been exercised
and such Common Stock held as of the dividend record date. Such rights shall
expire upon the expiration or exercise of such underlying Options. Such rights
are non-transferable and shall attach to Options whether or not such Options are
immediately exercisable. The dividend equivalent payments associated with
Options shall be paid to the Option holder at the dividend payment date of the
Common Stock.
6. Related Matters. Notwithstanding anything herein to the contrary,
additional conditions or restrictions related to such Options may be contained
in the Plan or the resolutions of the Plan Committee authorizing such grant of
Options.
TF Financial Corporation
Date of Grant: January 21, 1997 By:
---------------- --------------------------
Attest:
---------------------------------
[SEAL]
INCENTIVE STOCK OPTION EXERCISE FORM
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PURSUANT TO THE
TF Financial Corporation
1997 STOCK OPTION PLAN
--------------
(Date)
TF Financial Corporation
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to
purchase _____________ shares, par value $.10, of Common Stock of TF Financial
Corporation under and pursuant to a Stock Option Agreement dated ______________,
19__.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$________ of cash or check
________ of Common Stock
$ Total
========
The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name___________________________________
Address________________________________
Social Security Number_________________
Very truly yours,
_____________________________
