Exhibit 10.1
TEXAS CAPITAL BANCSHARES, INC.
2006 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Texas Capital Bancshares, Inc. (hereinafter referred to as Bancshares) hereby adopts and
establishes the Texas Capital Bancshares, Inc. 2006 Employee Stock Purchase Plan (the Plan)
effective February 1, 2006 upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of the Plan is to provide employees of Bancshares and its Subsidiaries (together
with Bancshares referred to herein as the Company) with an opportunity to purchase Common Stock
of Bancshares. It is the intention of the Company to have the Plan qualify as an Employee Stock
Purchase Plan under Section 423 of the Internal Revenue Code of 1986, as amended (the Code) and
to qualify as a noncompensatory plan under Financial Accounting Standards Board (FASB)
Statement No. 123 (revised 2004). The provisions of the Plan shall, accordingly, be construed so
as to extend and limit participation in a manner consistent with the requirements of Section 423 of
the Code and FASB Statement No. 123 (revised 2004).
ARTICLE III
DEFINITIONS
(a) Account shall mean the bookkeeping account maintained by the Company, or by a record
keeper on behalf of the Company, for a Participant pursuant to Article VII(a).
(b) Board shall mean the Board of Directors of Bancshares.
(c) Code shall mean the Internal Revenue Code of 1986, as amended. References herein to any
section of the Code shall also refer to any successor provision thereof.
(d) Committee shall mean the committee that may be appointed by the Board to administer this
Plan pursuant to Article XII.
(e) Common Stock shall mean the common stock of Bancshares.
(f) Compensation shall mean an Eligible Employees regular earnings, overtime pay, sick pay
and vacation pay. Compensation also includes any amounts contributed as salary reduction
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contributions to a plan qualifying under Section 401(k) of the Code. Any other form of
remuneration is excluded from Compensation, including (but not limited to) the following:
commissions, incentive compensation, bonuses, prizes, awards, housing allowances, stock option
exercises, stock appreciation rights, restricted stock exercises, performance awards, auto
allowances, tuition reimbursement and other forms of imputed income.
(g) Contributions shall mean all bookkeeping amounts credited to the Account of a
Participant pursuant to Article VII(a).
(h) Eligible Employee shall mean any common law employee of the Company. Notwithstanding
the foregoing, Eligible Employee shall not include any employee who (i) has not as of the Grant
Date completed at least 90 days of continuous full-time employment with the Company, (ii) whose
customary employment is for less than 20 hours per week, or (iii) whose customary employment is for
not more than five months in a calendar year.
(i) Effective Date shall mean February 1, 2006.
(j) Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
(k) Exercise Date shall mean, with respect to an Offering Period, the last Trading Day of
that Offering Period.
(l) Fair Market Value shall mean the value of Bancshares Common Stock on a particular date
as determined by the Committee in good faith; provided that, in the event the Common Stock becomes
registered under Section 12 of the Exchange Act, the Fair Market Value of Bancshares Common Stock
shall mean (i) the last reported sale price per share of Common Stock on such date, or (ii) in case
no such sale takes place on such date, the average of the closing and asking prices, in either case
as reported in the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on a national securities exchange or included for quotation on the
Nasdaq market, or (iii) if the Common Stock is not listed or admitted for trading or included for
quotation, the last quote price, or (iv) if the Common Stock is not so quoted, the average of the
high bid and low asked prices, in the over-the-counter market, as reported by the NASD Automatic
Quotation System or, (v) if such system is no longer in use, the principal other automated
quotations system that may then be in use or, (vi) if the Common Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock as selected in good faith by the Committee.
If the relevant date is not a Trading Day, the determination shall be made as of the last Trading
Day of the Offering Period.
(m) Grant Date shall mean the first Trading Day of each Offering Period.
(n) Offering Period shall mean the six-consecutive month period commencing on each January 1
and July 1, unless such other period is provided by the Committee in accordance with Article V.
Notwithstanding the foregoing, the first Offering Period shall be a short Offering Period,
beginning on the date set forth in Article V below and ending June 30, 2006.
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(o) Option shall mean the stock option to acquire Shares granted to a Participant pursuant
to Article VIII.
(p) Option Price shall mean the per Share exercise price of an Option as determined in
accordance with Article VIII(b).
(q) Participant shall mean an Eligible Employee who has elected to participate in this Plan
and who has filed a valid and effective Subscription Agreement to make Contributions pursuant to
Article VI.
(r) Plan shall mean this Texas Capital Bancshares, Inc. 2006 Employee Stock Purchase Plan,
as amended from time to time.
(s) Reporting Participant means a Participant who is subject to the reporting requirements
of Section 16.
(t) Rule 16b-3 shall mean Rule 16b-3 promulgated under Section 16.
(u) Section 16 shall mean Section 16 of the Exchange Act.
(v) Share shall mean a share of Common Stock.
(w) Subscription Agreement shall mean the written agreement filed by an Eligible Employee
with the Company pursuant to Article VI to participate in this Plan.
(x) Subsidiaries shall mean any present or future corporation(s) which (i) would be a
subsidiary corporation of Texas Capital Bancshares, Inc. as that term is defined in Section 424
of the Code and is (ii) designated as a participating employer in the Plan by the Committee.
(y) Trading Day shall mean a day on which public trading of securities occurs and as
reported in the principal consolidated reporting system referred to above, or if the Common Stock
is not listed or admitted to trading on a national market securities exchange or included for
quotation on the Nasdaq National Market, any business day.
ARTICLE IV
ELIGIBILITY
(a) Any person who is an Eligible Employee as of the Grant Date of a given Offering Period
shall be eligible to participate in such Offering Period under the Plan, subject to the
requirements of Article VI and the limitations imposed by Section 423(b) of the Code.
(b) All Eligible Employees granted any Option under this Plan shall have the same rights and
privileges, provided, however; that an Eligible Employee shall not be deemed to have different
rights and privileges merely because the amount of Common Stock that may be purchased by such
Eligible Employee under the Plan is determined on the basis of a uniform relationship to the
Eligible Employees Compensation, or the basic or regular rate of compensation of all employees.
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(c) Notwithstanding anything else contained herein, a person who is otherwise an Eligible
Employee shall not be granted any Option or other right to purchase Shares under this Plan to the
extent it would, if exercised, cause the person to own stock (as such term is defined for
purposes of Section 423(b)(3) of the Code) possessing 5% or more of the total combined voting power
or value of all classes of stock of Bancshares. In addition, no Employee shall be granted an Option
which permits his rights to purchase Shares under the Plan (and under all employee stock purchase
plans of the Company qualified under Section 423 of the Code) to accrue at a rate which exceeds
$25,000 of the fair market value of the stock of Bancshares (determined at the time the right to
purchase such Stock is granted) for each calendar year during which such right is outstanding. For
this purpose, a right to purchase Shares accrues when it first becomes exercisable during the
calendar year. In determining whether the stock ownership of an Eligible Employee equals or
exceeds the 5% limit set forth above, the rules of Section 424(d) of the Code (relating to
attribution of stock ownership) shall apply.
ARTICLE V
OFFERING PERIODS
The Plan shall be implemented by a series of Offering Periods of six (6) months duration (or,
such shorter duration as may be approved by the Committee), with new Offering Periods commencing on
or about the first Trading Day following January 1 and July 1 of each year (or at such other time
or times as may be determined by the Committee). Notwithstanding the foregoing, the initial
Offering Period shall commence on February 7, 2006 or, if later, the first Trading Day following
the completion of any filings or waiting periods required by the Exchange Act or any established
securities market on which the Shares are listed or traded.
The Committee shall have the power to change the duration and/or the frequency of
Offering Periods with respect to future offerings without stockholder approval. Notwithstanding
anything to the contrary contained herein, the Committee shall have the power to terminate an
Offering Period at any time, even after the Offering Period has commenced, in the event it
determines that continuance of the Offering Period would cause the Plan to violate any applicable
law or the rules or requirements of any securities exchange or inter-dealer quotation system on
which the Common Stock is listed or traded. In the event the Committee terminates an Offering
Period pursuant to this Article V, any Contributions for such Offering Period may be credited to
such Participants Account for the next Offering Period or, if the Committee so elects in its sole
and absolute discretion, refunded to the Participants for such Offering Period
ARTICLE VI
PARTICIPATION
An Eligible Employee may become a Participant in this Plan by completing a Subscription
Agreement on a form approved by and in a manner prescribed by the Committee. To become effective,
Subscription Agreements must be filed with the Committee (or such officer of the Company designated
by the Committee) prior to the next occurring Grant Date and must set forth
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the percentage or dollar amount of the Eligible Employees Compensation (which shall not be
less than 1% and not more than 10% of such Eligible Employees Compensation) to be credited to the
Participants Account as Contributions for each pay period. Subscription Agreements shall contain
the Eligible Employees authorization and consent to the Companys withholding from his or her
Compensation the amount of his or her Contributions. A Subscription Agreement shall automatically
remain valid for subsequent Offering Periods until revoked by a Subscription Agreement filed
pursuant to Article VII(d) or otherwise terminated by the Participant pursuant to Article VII.
ARTICLE VII
PAYMENT OF CONTRIBUTIONS
(a) The Company shall maintain on its books, or cause to be maintained by a record keeper, an
Account in the name of each Participant. The percentage of Compensation elected to be applied as
Contributions by a Participant shall be deducted from such Participants Compensation on each
payday during the period for payroll deductions set forth below and such payroll deductions shall
be credited to that Participants Account as soon as administratively practicable after such date.
A Participant may not make any additional payments to his or her Account. A Participants Account
shall be reduced by any amounts used to pay the Option Price of Shares acquired, or by any other
amounts distributed pursuant to the terms hereof.
(b) Payroll deductions with respect to an Offering Period shall commence as of the first day
of the payroll period which coincides with or immediately follows the applicable Grant Date and
shall end on the last day of the payroll period which coincides with or immediately precedes the
applicable Exercise Date, unless sooner terminated by the Participant as provided in this Article
or the Committee as provided in Article V or until a Participants participation terminates
pursuant to Article XI.
(c) A Participant may terminate his or her Contributions during an Offering Period by
completing and filing with the Committee (or such officer designated by the Committee), in such
form and on such terms as the Committee may prescribe, a written withdrawal form which shall be
signed by the Participant. Such termination shall be effective as soon as administratively
practicable after its receipt by the Committee (or such officer designated by the Committee).
(d) A Participant may change the level of his or her Contributions by completing and filing
with the Committee (or such officer designated by the Committee), in such form and on such terms as
the Committee may prescribe, a new Subscription Agreement which shall be signed by the Participant.
The Subscription Agreement must set forth the percentage or dollar amount of the Eligible
Employees Compensation (which shall not be less than 1% and not more than 10% of such Eligible
Employees Compensation) to be credited to the Participants Account as Contributions for each pay
period. Any such changes must be filed with the Committee (or such officer designated by the
Committee) prior to the next occurring Grant Date. Such change shall be effective as of the next
occurring Grant Date. Any Subscription Agreement made pursuant to this Article VII(d) will revoke
any then outstanding Subscription Agreement.
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ARTICLE VIII
GRANT OF OPTION
(a) On each Grant Date, each Eligible Employee who is a participant during that Offering
Period shall be granted an Option to purchase a number of Shares. The Option shall be exercised on
the Exercise Date. The number of Shares subject to the Option shall be determined by dividing the
Participants Account balance as of the applicable Exercise Date by the Option Price.
(b) The Option Price per Share of the Shares subject to an Option shall be 95% of the Fair
Market Value of a Share on the applicable Exercise Date of each Offering Period, unless the
per-share amount of share issuance costs that would have been incurred to raise a significant
amount of capital by a public offering during the applicable Offering Period would justify a
purchase discount of more than 5%, as determined by the Committee, it is sole discretion.
(c) Notwithstanding anything to the contrary contained herein, in no event shall the terms of
an Option be more favorable than those available to all holders of the Common Stock.
ARTICLE IX
EXERCISE OF OPTION
Unless a Participants participation is terminated as provided in Article XI, his or her
Option to purchase Shares shall be exercised automatically on the Exercise Date for that Offering
Period, without any further action on the Participants part, and the maximum number of Shares
subject to such Option shall be purchased at the Option Price with the balance in such
Participants Account. The Committee, in its discretion and prior to the applicable Offering
Period, shall limit the purchase of fractional Shares under the Plan; provided that if any amount
(which is not sufficient to purchase a whole Share) remains in a Participants Account after the
exercise of his or her Option on the Exercise Date: (i) such amount shall be credited to such
Participants Account for the next Offering Period, if he or she is then a Participant; or (ii) if
such Participant is not a Participant in the next Offering Period, or if the Committee so elects,
such amount shall be refunded to such Participant as soon as administratively practicable after
such date.
ARTICLE X
DELIVERY
As soon as administratively practicable after an Exercise Date, the Company shall deliver to
each Participant a certificate representing the Shares purchased upon exercise of his or her
Option. The Company may make available an alternative arrangement for delivery of Shares to a
recordkeeping service. The Committee, in its discretion, either may require or permit the
Participant to elect that such certificates be delivered to such recordkeeping service. The
Company may serve
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as the recordkeeping service. In the event Bancshares is required to obtain from any
commission or agency the authority to issue any such certificate, Bancshares will seek to obtain
such authority. Inability of Bancshares to obtain from any such commission or agency the authority
which counsel for Bancshares deems necessary for the lawful issuance of any such certificate shall
relieve Bancshares from liability to any Participant except to return to the Participant the amount
of the balance in his or her Account.
ARTICLE XI
TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS
(a) Upon a Participants termination from employment with the Company for any reason or in the
event that a Participant is no longer an Eligible Employee or if the Participant elects to
terminate Contributions pursuant to Article VII, at any time prior to the last day of an Offering
Period in which he or she participates, such Participants Account shall be paid to him or her in
cash, or, in the event of such Participants death, paid to the person or persons entitled thereto
under Article XIII, and such Participants Option for that Offering Period shall be automatically
terminated.
(b) A Participants termination of Plan participation precludes the Participant from again
participating in this Plan during that Offering Period. However, such termination shall not have
any effect upon his or her ability to participate in any succeeding Offering Period, provided that
the applicable eligibility and participation requirements are again met. A Participants
termination from Plan participation shall be deemed to be a revocation of that Participants
Subscription Agreement and such Participant must file a new Subscription Agreement to resume Plan
participation in any succeeding Offering Period.
(c) For purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved by the Company.
Where the period of leave exceeds ninety (90) days and the individuals right to reemployment is
not guaranteed either by statute or by contract, the employment relationship will be deemed to have
terminated on the 91st day of such leave.
ARTICLE XII
ADMINISTRATION
The Board, or such committee of the Board as is designated by the Board to administer the Plan
(the Committee), shall supervise and administer the Plan and shall have full power to adopt,
amend and rescind any rules deemed desirable and appropriate for the administration of the Plan and
not inconsistent with the Plan, to construe and interpret the Plan, and to make all other
determinations necessary or advisable for the administration of the Plan. At any time that there
is no Committee to administer the Plan, any references in this Plan to the Committee shall be
deemed to refer to the Board.
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If necessary to satisfy the requirements of Rule 16b-3, membership on the Committee shall be
limited to those members of the Board who are non-employee directors as defined in Rule 16b-3.
In the event no member of the Committee is a non-employee director as defined in Rule 16b-3, the
Committee may appoint one or more of the other members of the Board to the Committee who are
non-employee directors as defined in Rule 16b-3 in substitution for the current members of the
Committee for purposes of satisfying the requirements of Rule 16b-3. The Committee shall select
one of its members to act as its Chairman. A majority of the Committee shall constitute a quorum,
and the act of a majority of the members of the Committee present at a meeting at which a quorum is
present shall be the act of the Committee.
The Committee, in its discretion, shall (i) interpret the Plan, (ii) prescribe, amend, and
rescind any rules and regulations necessary or appropriate for the administration of the Plan, and
(iii) make such other determinations or certifications and take such other action as it deems
necessary or advisable in the administration of the Plan. Any interpretation, determination, or
other action made or taken by the Committee shall be final, binding, and conclusive on all
interested parties.
The Committee may delegate to officers of the Company, pursuant to a written delegation, the
authority to perform specified functions under the Plan. Any actions taken by any officers of the
Company pursuant to such written delegation of authority shall be deemed to have been taken by the
Committee. Notwithstanding the foregoing, to the extent necessary to satisfy the requirements of
Rule 16b-3, any function relating to a Reporting Participant shall be performed solely by the
Committee.
With respect to restrictions in the Plan that are based on the requirements of Rule 16b-3,
Section 423 of the Code, the rules of any exchange or inter-dealer quotation system upon which the
Companys securities are listed or quoted, or any other applicable law, rule or restriction
(collectively, applicable law), to the extent that any such restrictions are no longer required
by applicable law, the Committee shall have the sole discretion and authority to grant Options that
are not subject to such mandated restrictions and/or to waive any such mandated restrictions with
respect to outstanding Options.
ARTICLE XIII
DESIGNATION OF BENEFICIARY
(a) A Participant may file, in a manner prescribed by the Committee, a written designation of
a beneficiary who is to receive any Shares or cash from such Participants Account under this Plan
in the event of such Participants death. If a Participants death occurs subsequent to the end of
an Offering Period but prior to the delivery to him or her of any Shares deliverable under the
terms of this Plan, such Shares and any remaining balance of such Participants Account shall be
paid to such beneficiary (or such other person as set forth in Article XIII(b)) as soon as
administratively practicable after the Committee (or such officer designated by the Committee)
receives notice of such Participants death and any outstanding unexercised Option shall terminate.
If a Participants death occurs at any other time, the balance of such Participants Account shall
be paid to such beneficiary (or such other person as set forth in Article XIII(b)) in cash as soon
as administratively practicable after the Committee (or such officer designated by the Committee)
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receives notice of such Participants death and such Participants Option shall terminate. If a
Participant is married and the designated beneficiary is not his or her spouse, spousal consent
shall be required for such designation to be effective.
(b) Beneficiary designations may be changed by the Participant (and his or her spouse, if
required) at any time on forms provided and in the manner prescribed by the Committee. If a
Participant dies with no validly designated beneficiary under this Plan who is living at the time
of such Participants death, the Company shall deliver all Shares and/or cash payable pursuant to
the terms hereof to the executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed, the Committee, in its sole discretion, may deliver
such Shares and/or cash to the spouse or to any one or more dependents or relatives of the
Participant, or if no spouse, dependent or relative is known to the Committee, then to such other
person as the Committee may designate.
ARTICLE XIV
TRANSFERABILITY
Neither Contributions credited to a Participants Account nor any Options or rights with
respect to the exercise of Options or right to receive Shares under this Plan may be anticipated,
alienated, encumbered, assigned, transferred, pledged or otherwise disposed of in any way (other
than by will, the laws of descent and distribution, or as provided in Article XIII) by the
Participant. Any such attempt at anticipation, alienation, encumbrance, assignment, transfer,
pledge or other disposition shall be without effect and all amounts shall be paid and all shares
shall be delivered in accordance with the provisions of this Plan. Amounts payable or Shares
deliverable pursuant to this Plan shall be paid or delivered only to the Participant or, in the
event of the Participants death, to the Participants beneficiary pursuant to Article XIII.
ARTICLE XV
USE OF FUNDS; INTEREST
All Contributions received or held by the Company under this Plan will be included in the
general assets of the Company and may be used for any corporate purpose. No interest will be paid
to any Participant or credited to his or her Account under this Plan.
ARTICLE XVI
STATEMENTS
Statements shall be provided to Participants as soon as administratively practicable following
an Exercise Date. Each Participants statement shall set forth, as of such Exercise Date, the
Participants Account balance immediately prior to the exercise of his or her Option, the Fair
Market
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Value of a Share, the Option Price, the number of Shares purchased and his or her remaining
Account balance, if any.
ARTICLE XVII
ADJUSTMENTS OF AND CHANGES IN THE STOCK
(a) The following provisions will apply if any extraordinary dividend or other extraordinary
distribution occurs in respect of the Shares (whether in the form of cash, Common Stock, other
securities, or other property), or any reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common
Stock or other securities of Bancshares, or any similar, unusual or extraordinary corporate
transaction (or event in respect of the Common Stock) or a sale of substantially all the assets of
Bancshares occurs. The Board will, in such manner and to such extent (if any) as it deems
appropriate and equitable:
(i) proportionately adjust any or all of: (a) the number and type of Shares (or other
securities) that thereafter may be made the subject of Options; (b) the number, amount and
type of Shares (or other securities or property) subject to any or all outstanding Options;
(c) the Option Price of any or all outstanding Options; or (d) the securities, cash or other
property deliverable upon exercise of any outstanding Options, or
(ii) in the case of an extraordinary dividend or other distribution, recapitalization,
reclassification, merger, reorganization, consolidation, combination, sale of assets, split
up, exchange, or spin off, make provision for the substitution, settlement, or exchange of
any or all outstanding Options or the cash, securities or property deliverable to the holder
of any or all outstanding Options based upon the distribution or consideration payable to
holders of the Common Stock upon or in respect of such event.
In each case, no such adjustment will be made that would cause this Plan to violate Section 423 of
the Code or any successor provisions without the written consent of a simple majority of the
Participants materially adversely affected thereby. In any of such events, the Committee may take
such action sufficiently prior to such event if necessary to permit the Participant to realize the
benefits intended to be conveyed with respect to the underlying shares in the same manner as is
available to stockholders generally.
(b) Upon a dissolution of Bancshares, or any other event described in Article XVII(a) that
Bancshares does not survive, the Plan and, if prior to the last day of an Offering Period, any
outstanding Option granted with respect to that Offering Period shall terminate, subject to any
provision that has been expressly made by the Board through a plan or reorganization approved by
the Board or otherwise for the survival, substitution, assumption, exchange or other settlement of
the Plan and Options. In the event a Participants Option is terminated pursuant to this Article
XVII(b), such Participants Account shall be paid to him or her in cash.
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ARTICLE XVIII
TERM OF PLAN; AMENDMENT OR TERMINATION
(a) This Plan shall become effective as of the Effective Date. No new Offering Periods shall
commence on or after the tenth (10
th
) anniversary of the Effective Date and this Plan
shall terminate on such date unless sooner terminated pursuant to this Article.
(b) The Board may amend, modify or terminate this Plan at any time without notice. Stockholder
approval for any amendment or modification shall not be required, except to the extent deemed
necessary or advisable by the Board or required by (i) any securities exchange or inter-dealer
quotation system on which the Common Stock is listed or traded; (ii) Section 423 of the Code or
(iii) any other applicable law. Except as otherwise provided by Article V, no amendment,
modification, or termination pursuant to this Article shall, without the written consent of the
Participants, affect in any manner materially adverse to the Participants any rights or benefits of
such Participants or obligations of the Company under any Option granted under this Plan prior to
the effective date of such change. Changes contemplated by Article XVII shall not be deemed to
constitute changes or amendments requiring Participant consent. Notwithstanding the foregoing, the
Board shall have the right to designate from time to time the Subsidiaries, if any, whose employees
may be eligible to participate in this Plan and such designation shall not constitute any amendment
to this Plan requiring stockholder approval.
ARTICLE XIX
NOTICES
All notices or other communications by a Participant to the Company or the Committee
contemplated by the Plan shall be deemed to have been duly given when received in the form and
manner specified by the Committee at the location, or by the person, designated by the Committee
for that purpose.
ARTICLE XX
CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an Option unless the exercise of such Option and
the issuance and delivery of such Shares complies with all applicable provisions of law, domestic
or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange
Act, any applicable state securities laws, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed.
As a condition precedent to the exercise of any Option, if, in the opinion of counsel for the
Company such a representation is required under applicable law, the Company may require any person
exercising such Option to represent and warrant that the Shares subject thereto are being acquired
only for investment and without any present intention to sell or distribute such Shares.
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ARTICLE XXI
PLAN CONSTRUCTION
(a) It is the intent of the Company that transactions in and affecting Options in the case of
Participants who are or may be subject to the prohibitions of Section 16 satisfy any then
applicable requirements of Rule 16b-3 so that such persons (unless they otherwise agree) will be
entitled to the exemptive relief of Rule 16b-3 in respect of those transactions and will not be
subject to avoidable liability thereunder. Accordingly, this Plan shall be deemed to contain and
the Shares issued upon exercise thereof shall be subject to, such additional conditions and
restrictions as may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16
with respect to Plan transactions.
(b) If any provision of this Plan or of any Option would otherwise frustrate or conflict with
the intents expressed above, that provision to the extent possible shall be interpreted so as to
avoid such conflict. If the conflict remains irreconcilable, the Board may disregard the provision
if it concludes that to do so furthers the interest of the Company and is consistent with the
purposes of this Plan as to such persons in the circumstances.
ARTICLE XXII
EMPLOYEES RIGHTS
Nothing in this Plan (or in any agreement related to this Plan) shall confer upon any Eligible
Employee or Participant any right to continue in the service or employ of the Company or constitute
any contract or agreement of service or employment, or interfere in any way with the right of the
Company to reduce such persons compensation or other benefits or to terminate the services or
employment of such Eligible Employee or Participant, with or without cause, but nothing contained
in this Plan or any document related hereto shall affect any other contractual right of any
Eligible Employee or Participant. No Participant shall have any rights as a stockholder until a
certificate for Shares has been issued in the Participants name following exercise of his or her
Option. No adjustment will be made for dividends or other rights as a stockholder for which a
record date is prior to the issuance of such Share certificate. Nothing in this Plan shall be
deemed to create any fiduciary relationship between the Company and any Participant.
ARTICLE XXIII
COMMON STOCK AVAILABLE FOR THE PLAN
(a) The aggregate number of Shares of Common Stock which may be issued pursuant to this Plan
shall be 400,000 Shares of Bancshares Common Stock. If, and to the extent, that the number of
issued Shares of Common Stock shall be increased or reduced by change in par value, split up,
reclassification, distribution of a dividend payable in Common Stock, or the like, the
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number of Shares subject to grant hereunder and the Option Price thereof shall be
proportionately adjusted.
(b) To the extent that any Option under this Plan shall expire or be canceled, in whole or in
part, then the number of Shares covered by the Option so expired or canceled may again be awarded
pursuant to the provisions of this Plan.
ARTICLE XXIV
DISPOSITIONS OF STOCK, RIGHT OF FIRST REFUSAL AND REPURCHASE
(a) Prior to the date on which Bancshares Common Stock is offered for sale to the public
following successful registration of the stock with the Securities and Exchange Commission, the
Participant may not sell, exchange, transfer, pledge or otherwise dispose of any Common Stock
acquired through the exercise of an Option granted hereunder until after the expiration of a six
(6) month holding period measured from the Exercise Date following the transfer of such Common
Stock to the Participant.
(b) In the event that, prior to the date on which Bancshares Common Stock is offered for sale
to the public following successful registration of the Common Stock with the Securities and
Exchange Commission, the Participant shall incur a termination of employment for any reason, the
Company, following the six (6) month holding period described in Article XXIV(a), shall have the
right, but not the obligation, to repurchase at any time some or all of Participants Shares of
Common Stock acquired through the exercise of an Option granted herein at the Fair Market Value of
such Common Stock at the date of repurchase.
(c) Prior to the date on which Bancshares Common Stock is offered for sale to the public
following successful registration of the stock with the Securities and Exchange Commission,
Bancshares, following the six (6) month holding period described in Article XXIV(a), shall have the
right of first refusal with respect to Participants Shares of Common Stock at a purchase price
equal to the lower of the Fair Market Value at date of repurchase or the price offered by a bona
fide purchaser. The Participant shall, as a condition precedent to his or her right to sell such
shares of Common Stock to purchaser, comply with the following procedure:
(i) By written notice (the Notice), the Participant shall inform the Committee of the
purchasers offer, the number of Shares of Common Stock proposed to be transferred , the
price per Share, the proposed closing date (which shall be no sooner than fifty (50) days
from the date of the Notice), all other terms and conditions of the purchasers offer and
shall further contain an offer to sell all of the offered Shares to the Committee or its
assign pursuant to the terms and provisions of this Article XXIV and on the same terms and
conditions contained in the purchasers offer.
(ii) The Company at its option, exercisable within twenty (20) days of the receipt of
the Notice, may purchase all or any part of the offered Shares. In addition, the Company
shall be entitled to assign its right to purchase the offered Shares to one or more third
parties.
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(iii) If the Company shall elect to purchase some or all of the offered Shares, it
shall deliver notice of the exercise of its option to the Participant not later than the
twentieth day following receipt of the Notice. In addition, if the Company shall assign
some or all of its right to purchase the offered Shares to a third party, it shall deliver
notice of such assignment, together with the number of the offered Shares to be purchased by
such third party, not later than the twentieth day following receipt of the Notice.
Following delivery of the Companys (or the third party) notice of exercise of the option
granted herein to purchase the offered Shares, the Company shall set a closing date, which
shall not be later than twenty days following the delivery of the Companys (or the third
partys) notice of intent to purchase offered Shares.
(iv) To the extent that the Company and its assigns shall elect to purchase less than
all of the offered Shares, the Participant shall thereafter be entitled to sell those
offered Shares not being so purchased upon the terms and conditions set forth in the Notice.
Any modification of such terms and conditions shall require additional compliance with the
provisions set forth in this Article XXIV.
(d) In the event that the Company exercises its rights under this Article XXIV with regard to
the Participants Shares, it has the right to tender such purchase price in installments, with
interest, over a period not to exceed twelve (12) months. For purposes of such an installment
payment, interest shall be calculated and paid not less frequently than annually, and shall equal
the prime rate of interest charged by the Companys primary bank.
ARTICLE XXV
MISCELLANEOUS
(a) If a Share acquired pursuant to this Plan is disposed of by a Participant prior to the
expiration of either two (2) years from the Grant Date of the Option relating to such Share or one
(1) year from the transfer of such Share to the Participant on the Exercise Date (a Disqualifying
Disposition), such Participant shall notify the Company in writing of the date and terms of such
disposition. A Disqualifying Disposition by a Participant shall not affect the status of any other
Option granted under the Plan.
(b) This Plan and related documents shall be governed by, and construed in accordance with,
the laws of the State of Delaware. If any provision shall be held by a court of competent
jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue
to be fully effective.
(c) Captions and headings are given to the articles of this Plan solely as a convenience to
facilitate reference. Such captions and headings shall not be deemed in any way material or
relevant to the construction of interpretation of this Plan or any provision hereof.
(d) The adoption of this Plan shall not affect any other compensation or incentive plans in
effect for the Company. Nothing in this Plan shall be construed to limit the right of the Company
(i) to establish any other forms of incentives or compensation for employees of the
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Company, or (ii) to grant or assume options (outside the scope of and in addition to those
contemplated by this Plan) in connection with any proper corporate purpose.
**********
IN WITNESS WHEREOF, Bancshares has caused its duly authorized officers to execute this Texas
Capital Bancshares, Inc. 2006 Employee Stock Purchase Plan, and to apply the Corporate seal hereto
as of ___, 2006.
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TEXAS CAPITAL BANCSHARES, INC.
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By:
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Joseph M. Grant
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Chairman and Chief Executive Officer
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