-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nxq0MW1pVYY9tMS+97ZMwqLbC6O/MLjZaM36EDYosqzjdPhi1IPLm5kUX689+EG1 x4UG6HWsmJ0eD2uRJVTrQA== 0000946275-05-000591.txt : 20050520 0000946275-05-000591.hdr.sgml : 20050520 20050520163320 ACCESSION NUMBER: 0000946275-05-000591 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20050520 DATE AS OF CHANGE: 20050520 EFFECTIVENESS DATE: 20050520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TF FINANCIAL CORP CENTRAL INDEX KEY: 0000921051 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 742705050 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-125116 FILM NUMBER: 05848611 BUSINESS ADDRESS: STREET 1: 3 PENNS TRAIL CITY: NEWTOWN STATE: PA ZIP: 18940 BUSINESS PHONE: 2155794000 MAIL ADDRESS: STREET 1: 3 PENNS TRAIL CITY: NEWTOWN STATE: PA ZIP: 18940 S-8 1 s8_052005-0084.txt FORM As filed with the Securities and Exchange Commission on May 20, 2005 Registration No. 333-______ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 TF Financial Corporation ------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 74-2705050 - ------------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3 Penns Trail Newtown, Pennsylvania 18940 ---------------------------- (Address of principal executive offices) TF Financial Corporation 2005 Stock-Based Incentive Plan -------------------------------------------------------- (Full Title of the Plan) Dennis R. Stewart Executive Vice President and Chief Financial Officer 3 Penns Trail Newtown, Pennsylvania 18940 (215) 579-4000 --------------------------- (Name, address and telephone number of agent for service) Copies to: Richard Fisch, Esq. Evan M. Seigel, Esq. Malizia Spidi & Fisch, PC 1100 New York Avenue, N.W., Suite 340 West Washington, D.C. 20005 (202) 434-4660 --------------------------- CALCULATION OF REGISTRATION FEE
==================================================================================================== Title of Proposed Maximum Proposed Maximum Securities to Amount to be Offering Aggregate Offering Amount of Registration be Registered Registered (1) Price Per Share(2) Price (2) Fee (2) - ------------- -------------- ------------------ ---------- -------- Common Stock $0.10 par value per share 240,000 shares $28.56 $6,854,400 $806.76
- ------------ 1) The maximum number of shares of Common Stock issuable upon awards to be granted under the TF Financial Corporation 2005 Stock- Based Incentive Plan (the "Plan") consists of 240,000 shares which are being registered under this Registration Statement and for which a registration fee is being paid. Additionally, an indeterminate number of additional shares which may be offered and issued to prevent dilution resulting from stock splits, dividends or similar transactions. (2) An aggregate of 240,000 shares are being registered hereby, based upon the average of the low selling prices of the Common Stock of the Registrant as reported on the Nasdaq National Market on May 18, 2005, of $28.56 per share for a total offering of $6,854,400. This Registration Statement shall become effective automatically upon the date of filing, in accordance with Section 8(a) of the Securities Act of 1933 ("1933 Act") and Rule 462 of the 1933 Act. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information. * - ------ Item 2. Registrant Information and Employee Plan Annual Information. * - ------ *This Registration Statement relates to the registration of 240,000 shares of TF Financial Corporation (the "Company" or "Registrant") common stock, $0.10 par value per share (the "Common Stock") issuable to employees, officers and directors of the Registrant or its subsidiary as compensation for services in accordance with the TF Financial Corporation 2005 Stock-Based Incentive Plan under which 240,000 shares are issuable (the "Plan"). Documents containing the information required by Part I of this Registration Statement will be sent or given to participants in the Plan as specified by Rule 428(b)(1). Such documents are not filed with the Securities and Exchange Commission (the "Commission") either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424, in reliance on Rule 428. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Certain Documents by Reference. - ------ The Company became subject to the informational requirements of the Securities Exchange Act of 1934 (the "1934 Act") on November 22, 1995 and, accordingly, files periodic reports and other information with the Commission. Reports, proxy statements and other information concerning the Company filed with the Commission may be inspected and copies may be obtained (at prescribed rates) at the Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. The following documents filed by the Company are incorporated in this Registration Statement by reference: (a) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004; (b) Form 8-K filed on April 28, 2005; (c) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31. 2005; and (d) The description of the Company's securities as contained in the Company's Registration Statement on Form 8-A, as filed with the Commission on November 22, 1995. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14, and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all 2 securities offered have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Item 4. Description of Securities. - ------ Not Applicable Item 5. Interests of Named Experts and Counsel. - ------ Not Applicable Item 6. Indemnification of Directors and Officers. - ------ Section 145 of the Delaware General Corporation Law authorizes a corporation such as the registrant to indemnify officers, directors, employees, and agents under certain circumstances. Section 145 requires indemnification of directors, officers, employees, and agents who have been successful on the merits or otherwise in defense of certain actions, suits, proceedings claims, issues, and matters. Article XVIII of the registrant's Certificate of Incorporation provides for indemnification. Section 102(b)(7) of the Delaware General Corporation Law allows for the limitation of liability of directors. Article XVII of the registrant's Certificate of Incorporation provides for the limitation of liability of directors. The registrant believes that these provisions assist the registrant in, among other things, attracting and retaining qualified persons to serve the registrant and its subsidiary. However, a result of such provisions could be to increase the expenses of the registrant and effectively reduce the ability of stockholders to sue on behalf of the registrant because certain suits could be barred or amounts that might otherwise be obtained on behalf of the registrant could be required to be repaid by the registrant to an indemnified party. Additionally, the Company has in force a Directors and Officers Liability Policy underwritten by St. Paul Mercury Insurance Co. with a $7.5 million aggregate limit of liability and an aggregate deductible of $100,000 per loss both for claims directly against officers and directors and for claims where the Company is required to indemnify directors and officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933 ("1933 Act") may be permitted to directors, officers, or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is therefore unenforceable. 3 Item 7. Exemption from Registration Claimed. - ------ Not Applicable Item 8. Exhibits. - ------ For a list of all exhibits filed or included as part of this Registration Statement, see "Index to Exhibits" at the end of this Registration Statement. Item 9. Undertakings. - ------ (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post- effective amendment to this Registration Statement; (i) To include any prospectus required by Section 10(a)(3) of the 1933 Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3, Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of the 1934 Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the 1933 Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the 1933 Act each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the 1934 Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the 1934 Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 4 (c) The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the 1934 Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. (d) Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy expressed in the 1933 Act and will be governed by the final adjudication of such issue. 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Newtown in the Commonwealth of Pennsylvania, as of April 27, 2005. TF Financial Corporation By: /s/ Kent C. Lufkin ------------------------------------- Kent C. Lufkin President and Chief Executive Officer (Duly Authorized Representative) POWER OF ATTORNEY We, the undersigned directors and officers of TF Financial Corporation do hereby severally constitute and appoint Kent C. Lufkin as our true and lawful attorney and agent, to do any and all things and acts in our names in the capacities indicated below and to execute any and all instruments for us and in our names in the capacities indicated below which said Kent C. Lufkin may deem necessary or advisable to enable TF Financial Corporation to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with the Registration Statement on Form S-8 relating to the offering of the Company's Common Stock, including specifically, but not limited to, power and authority to sign, for any of us in our names in the capacities indicated below, the Registration Statement and any and all amendments (including post-effective amendments) thereto; and we hereby ratify and confirm all that said Kent C. Lufkin shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated as of the date indicated.
By: /s/ Kent C. Lufkin By: /s/ Dennis R. Stewart -------------------------------------------- ----------------------------------- Kent C. Lufkin Dennis R. Stewart President, Chief Executive Officer Executive Vice President, Chief (Principal Executive Officer) Financial Officer and Treasurer (Principal Financial and Accounting Officer April 27, 2005 April 27, 2005 -------------------------------------------- ----------------------------------- (Date) (Date) By: /s/ Carl F. Gregory By: /s/ Robert N. Dusek -------------------------------------------- ----------------------------------- Carl F. Gregory Robert N. Dusek Director Chairman of the Board April 27, 2005 April 27, 2005 -------------------------------------------- ----------------------------------- (Date) (Date) By: /s/ Dennis L. McCartney By: /s/ George A. Olsen -------------------------------------------- ----------------------------------- Dennis L. McCartney George A. Olsen Director Director April 27, 2005 April 27, 2005 -------------------------------------------- ----------------------------------- (Date) (Date) By: /s/ Albert M. Tantala By: /s/ John R. Stranford -------------------------------------------- ----------------------------------- Albert M. Tantala John R. Stranford Director Director April 27, 2005 April 27, 2005 -------------------------------------------- ----------------------------------- (Date) (Date)
INDEX TO EXHIBITS Exhibit Description - ------- ----------- 4.1 TF Financial Corporation 2005 Stock-Based Incentive Plan 4.2 Form of Stock Option Agreement to be entered into with respect to Incentive Stock Options under the Stock Option Plan 4.3 Form of Stock Option Agreement to be entered into with respect to Non-Incentive Stock Options under the Stock Option Plan 4.4 Form of Stock Award Agreement 4.5 Form of Stock Award Tax Notice 5.1 Opinion of Malizia Spidi & Fisch, PC as to the validity of the Common Stock being registered 23.1 Consent of Malizia Spidi & Fisch, PC (appears in their opinion filed as Exhibit 5.1) 23.2 Consent of Grant Thornton LLP 24 Reference is made to the Signatures section of this Registration Statement for the Power of Attorney contained therein EX-4 2 ex4-1.txt 2005 STOCK-BASED INCENTIVE PLAN TF FINANCIAL CORPORATION 2005 STOCK-BASED INCENTIVE PLAN 1. DEFINITIONS. "Affiliate" means any "parent corporation" or "subsidiary corporation" of the Corporation, as such terms are defined in Sections 424(e) and 424(f) of the Code. "Award" means, individually or collectively, a grant under the Plan of Non-Statutory Stock Options, Incentive Stock Options and Stock Awards. "Award Agreement" means an agreement evidencing and setting forth the terms of an Award. "Bank" means Third Federal Savings Bank, Newtown, Pennsylvania "Board of Directors" means the board of directors of the Corporation. "Change in Control" of the Corporation or the Bank shall mean an event of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); (ii) involves the sale of all, or a material portion, of the assets of the Corporation or the Bank; (iii) involves the merger or re-capitalization of the Corporation whereby the Corporation is not the surviving entity; (iv) results in a change in control of the Corporation, as otherwise defined or determined by the Office of Thrift Supervision ("OTS") or regulations promulgated by it; or (v) without limitation, such a Change in Control shall be deemed to have occurred at such time as (A) any "person" (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Bank or the Corporation representing 10% or more of the Bank's or the Corporation's outstanding securities except for any securities of the Bank purchased by the Corporation and any securities purchased by any tax qualified employee benefit plan of the Bank or the Corporation; or (B) individuals who constitute the Board of Directors on the date hereof (the "Incumbent Board") cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Corporation's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (B), considered as though he were a member of the Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Corporation or similar transaction occurs in which the Bank or Corporation is not the resulting entity; or (D) solicitations of shareholders of the Corporation, by someone other than the current management of the Corporation, seeking stockholder approval of a plan or reorganization, merger of consolidation of the Corporation or Bank or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan or transaction are exchanged for or converted into cash or property or securities not issued by the Bank or the Corporation shall be distributed; or (E) a tender offer is made for 10% or more of the voting securities of the Bank or the Corporation, other than by the Corporation. "Code" means the Internal Revenue Code of 1986, as amended. "Committee" means the committee designated by the Board of Directors, pursuant to Section 2 of the Plan, to administer the Plan. "Common Stock" means the Common Stock of the Corporation. "Corporation" means TF Financial Corporation. "Date of Grant" means the effective date of an Award. "Director" means a member of the Board of Directors. "Disability" means any mental or physical condition with respect to which the Participant qualifies for and receives benefits for under a long-term disability plan of the Corporation or an Affiliate, or in the absence of such a long-term disability plan or coverage under such a plan, "Disability" shall mean a physical or mental condition which, in the sole discretion of the Committee, is reasonably expected to be of indefinite duration and to substantially prevent the Participant from fulfilling his duties or responsibilities to the Corporation or an Affiliate. "Effective Date" means the date of approval of the Plan by a vote of the stockholders of the Corporation. "Employee" means any person employed by the Corporation or an Affiliate. Unless otherwise noted herein, a Director who is also employed by the Corporation or an Affiliate shall be considered an Employee under the Plan. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exercise Price" means the price at which a Participant may purchase a share of Common Stock pursuant to an Option. "Fair Market Value" means the market price of Common Stock, determined by the Committee as follows: (i) if the Common Stock is traded otherwise than on a national securities exchange, then the Fair Market Value per Share shall be equal to the mean between the last bid and ask price of such Common Stock on such date or, if there is no bid and ask price on said date, then on the immediately prior business day on which there was a bid and ask price. If no such bid and ask price is available, then the Fair Market Value shall be determined by the Committee in good faith; or (ii) if the Common Stock is listed on a national securities exchange, including the Nasdaq National Market, then the Fair Market Value per Share shall be not less than the average of the highest and lowest selling price of such Common Stock on such exchange on such date, or if there were no sales on said date, then the Fair Market Value shall be not less than the mean between the last bid and ask price on such date. If no such bid and ask price is available, then the Fair Market Value shall be determined by the Committee in good faith. Whenever possible, the determination of Fair Market Value by the Committee shall be based on the prices reported in The Wall Street Journal. The Committee=s determination of Fair Market Value shall be conclusive and binding on all persons. "Incentive Stock Option" means a stock option granted to a Participant, pursuant to Section 7 of the Plan, that is intended to meet the requirements of Section 422 of the Code. "Non-Statutory Stock Option" means a stock option granted to a Participant pursuant to the terms of the Plan but which is not intended to be and is not identified as an Incentive Stock Option or a stock option granted under the Plan which is intended to be and is identified as an Incentive Stock Option but which does not meet the requirements of Section 422 of the Code. "Option" means an Incentive Stock Option or Non-Statutory Stock Option. "Outside Director" means a member of the board(s) of directors of the Corporation or an Affiliate who is not also an Employee of the Corporation or an Affiliate. -2- "Participant" means any person who holds an outstanding Award. "Plan" means this TF Financial Corporation 2005 Stock-Based Incentive Plan. "Retirement" means retirement from employment or service with the Corporation or an Affiliate following attainment of not less than age 55 and completion of not less than ten years of service with the Corporation or Affiliate, as applicable. "Stock Award" means an Award granted to a Participant pursuant to Section 8 of the Plan. "Termination for Cause" shall mean termination because of a Participant's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or material breach of any provision of any employment agreement between the Corporation and/or any subsidiary of the Corporation and a Participant. "Trust" means a trust established by the Board of Directors in connection with this Plan to hold Common Stock or other property for the purposes set forth in the Plan. "Trustee" means any person or entity approved by the Board of Directors or its designee(s) to hold any of the Trust assets. 2. ADMINISTRATION. (a) The Committee shall administer the Plan. The Committee shall consist of two or more disinterested Directors of the Corporation, who shall be appointed by the Board of Directors. A member of the Board of Directors shall be deemed to be "disinterested" only if he satisfies (i) such requirements as the Securities and Exchange Commission may establish for non-employee directors administering plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act and (ii) such requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code. The Board of Directors may also appoint one or more separate committees of the Board of Directors, each composed of one or more directors of the Corporation or an Affiliate who need not be disinterested, that may grant Awards and administer the Plan with respect to Employees, Outside Directors, and other individuals who are not considered officers or directors of the Corporation under Section 16 of the Exchange Act or for whom Awards are not intended to satisfy the provisions of Section 162(m) of the Code. (b) The Committee shall (i) select the individuals who are to receive Awards under the Plan, (ii) determine the type, number, vesting requirements and other features and conditions of such Awards, (iii) interpret the Plan and Award Agreements in all respects and (iv) make all other decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee's determinations under the Plan shall be final and binding on all persons. (c) Each Award shall be evidenced by a written agreement ("Award Agreement") containing such provisions as may be required by the Plan and otherwise approved by the Committee. Each Award Agreement shall constitute a binding contract between the Corporation or an Affiliate and the Participant, and every Participant, upon acceptance of an Award Agreement, shall be bound by the terms and restrictions of the Plan and the Award Agreement. The terms of each Award Agreement shall be in accordance with the Plan, but each Award Agreement may include any additional provisions and restrictions determined by the Committee, in its discretion, provided that such additional provisions and restrictions are not inconsistent with the terms of the -3- Plan. In particular, and at a minimum, the Committee shall set forth in each Award Agreement: (i) the type of Award granted; (ii) the Exercise Price of any Option; (iii) the number of shares subject to the Award; (iv) the expiration date of the Award; (v) the manner, time, and rate (cumulative or otherwise) of exercise or vesting of such Award; and (vi) the restrictions, if any, placed upon such Award, or upon shares which may be issued upon exercise of such Award. The President of the Corporation, the Chairman of the Committee and such other directors and officers as shall be designated by the Committee is hereby authorized to execute Award Agreements on behalf of the Corporation or an Affiliate and to cause them to be delivered to the recipients of Awards. (d) The Committee may delegate all authority for: (i) the determination of forms of payment to be made by or received by the Plan and (ii) the execution of any Award Agreement. The Committee may rely on the descriptions, representations, reports and estimates provided to it by the management of the Corporation or an Affiliate for determinations to be made pursuant to the Plan, including the satisfaction of any conditions of an Award; provided, however, only the Committee or a portion of the Committee may certify the attainment of any conditions of an Award intended to satisfy the requirements of Section 162(m) of the Code. 3. TYPES OF AWARDS. The following Awards may be granted under the Plan: (a) Non-Statutory Stock Options. (b) Incentive Stock Options. (c) Stock Awards. 4. STOCK SUBJECT TO THE PLAN; AWARD MAXIMUMS. Subject to adjustment as provided in Section 13 of the Plan, the maximum number of shares reserved for Awards under the Plan is 240,000. Subject to adjustment as provided in Section 14 of the Plan, the maximum number of shares reserved hereby for purchase pursuant to the exercise of Options, including Incentive Stock Options, granted under the Plan is 240,000, reduced by the issuance of any Stock Awards. The maximum number of the shares reserved for Stock Awards is 40,000 in the aggregate. The maximum number of shares that may be delivered to any person in accordance with Awards under the Plan shall not exceed 120,000 shares of Common Stock. No individual shall be granted an amount of Stock Options which exceeds 50% of the total shares reserved for Awards under the Plan. No individual shall be granted an amount of Stock Awards in excess of 50% of the total number of the shares reserved for Stock Awards under the Plan. The shares of Common Stock issued under the Plan may be either authorized but unissued shares or authorized shares previously issued and acquired or reacquired by the Trustee or the Corporation, respectively. To the extent that Options and Stock Awards are granted under the Plan, the shares underlying such Awards will be unavailable for any other use including future grants under the Plan except that, to the extent that Stock Awards or Options terminate, expire or are forfeited without having vested or without having been exercised, new Awards may be made with respect to these shares. [Notwithstanding anything herein to the contrary, no Awards shall be made under the Plan prior to June 1, 2005]. 5. ELIGIBILITY. Subject to the terms of the Plan, all Employees and Outside Directors shall be eligible to receive Awards under the Plan. -4- 6. NON-STATUTORY STOCK OPTIONS. The Committee may, subject to the limitations of this Plan and the availability of shares of Common Stock reserved but not previously awarded under the Plan, grant Non-Statutory Stock Options to eligible individuals upon such terms and conditions as it may determine to the extent such terms and conditions are consistent with the following provisions: (a) Exercise Price. The Committee shall determine the Exercise Price of each Non-Statutory Stock Option. However, the Exercise Price shall not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant. (b) Terms of Non-Statutory Stock Options. The Committee shall determine the term during which a Participant may exercise a Non-Statutory Stock Option, but in no event may a Participant exercise a Non-Statutory Stock Option, in whole or in part, more than ten (10) years from the Date of Grant. The Committee shall also determine the date on which each Non-Statutory Stock Option, or any part thereof, first becomes exercisable and any terms or conditions a Participant must satisfy in order to exercise each Non-Statutory Stock Option. The shares of Common Stock underlying each Non-Statutory Stock Option may be purchased in whole or in part by the Participant at any time during the term of such Non-Statutory Stock Option, or any portion thereof, once the Non-Statutory Stock Option becomes exercisable. (c) Non-Transferability. Unless otherwise determined by the Committee in accordance with this Section 6(c), a Participant may not transfer, assign, hypothecate, or dispose of in any manner, other than by will or the laws of intestate succession, a Non-Statutory Stock Option. The Committee may, however, in its sole discretion, permit transferability or assignment of a Non-Statutory Stock Option if such transfer or assignment is, in its sole determination, for valid estate planning purposes and such transfer or assignment is permitted under the Code and Rule 16b-3 under the Exchange Act. For purposes of this Section 6(c), a transfer for valid estate planning purposes includes, but is not limited to: (a) a transfer to a revocable intervivos trust as to which the Participant is both the settlor and trustee, or (b) a transfer for no consideration to: (i) any member of the Participant's Immediate Family, (ii) any trust solely for the benefit of members of the Participant's Immediate Family, (iii) any partnership whose only partners are members of the Participant's Immediate Family, and (iv) any limited liability corporation or corporate entity whose only members or equity owners are members of the Participant's Immediate Family. For purposes of this Section 6(c), "Immediate Family" includes, but is not necessarily limited to, a Participant's parents, grandparents, spouse, children, grandchildren, siblings (including half bothers and sisters), and individuals who are family members by adoption. Nothing contained in this Section 6(c) shall be construed to require the Committee to give its approval to any transfer or assignment of any Non-Statutory Stock Option or portion thereof, and approval to transfer or assign any Non-Statutory Stock Option or portion thereof does not mean that such approval will be given with respect to any other Non-Statutory Stock Option or portion thereof. The transferee or assignee of any Non-Statutory Stock Option shall be subject to all of the terms and conditions applicable to such Non-Statutory Stock Option immediately prior to the transfer or assignment and shall be subject to any other conditions proscribed by the Committee with respect to such Non-Statutory Stock Option. (d) Termination of Employment or Service (General). Unless otherwise determined by the Committee, upon the termination of a Participant's employment or other service for any reason other than Retirement, disability or death, or Termination for Cause, the Participant may exercise only those Non-Statutory Stock Options that were immediately exercisable by the Participant at the date of such termination and only for a period of three (3) months following the date of such termination, or, if sooner, until the expiration of the term of the Option. (e) Termination of Employment or Service (Retirement). Unless otherwise determined by the Committee, in the event of a Participant's Retirement, the Participant may exercise only those Non-Statutory Stock Options that were immediately exercisable by the Participant at the date of Retirement and only for a -5- period of one (1) year following the date of Retirement, or, if sooner, until the expiration of the term of the Non-Statutory Stock Option. (f) Termination of Employment or Service (Disability or Death). Unless otherwise determined by the Committee, in the event of the termination of a Participant's employment or other service due to disability or death, all Non-Statutory Stock Options held by such Participant shall immediately become exercisable and remain exercisable for a period one (1) year following the date of such termination, or, if sooner, until the expiration of the term of the Non-Statutory Stock Option. (g) Termination of Employment or Service (Termination for Cause). Unless otherwise determined by the Committee, in the event of a Participant's Termination for Cause, all rights with respect to the Participant's Non- Statutory Stock Options shall expire immediately upon the effective date of such Termination for Cause. (h) Acceleration Upon a Change in Control. In the event of a Change in Control, all Non-Statutory Stock Options held by a Participant as of the date of the Change in Control shall immediately become exercisable. (i) Delivery of Shares. Upon the exercise of a Non- Statutory Stock Option, payment by the Corporation shall be made in the form of shares of Common Stock. 7. INCENTIVE STOCK OPTIONS. The Committee may, subject to the limitations of the Plan and the availability of shares of Common Stock reserved but unawarded under this Plan, grant Incentive Stock Options to an Employee upon such terms and conditions as it may determine to the extent such terms and conditions are consistent with the following provisions: (a) Exercise Price. The Committee shall determine the Exercise Price of each Incentive Stock Option. However, the Exercise Price shall not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant; provided, however, that if at the time an Incentive Stock Option is granted, the Employee owns or is treated as owning, for purposes of Section 422 of the Code, Common Stock representing more than 10% of the total combined voting securities of the Corporation ("10% Owner"), the Exercise Price shall not be less than 110% of the Fair Market Value of the Common Stock on the Date of Grant. (b) Amounts of Incentive Stock Options. To the extent the aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock Options that are exercisable for the first time by an Employee during any calendar year under the Plan and any other stock option plan of the Corporation or an Affiliate exceeds $100,000, or such higher value as may be permitted under Section 422 of the Code, such Options in excess of such limit shall be treated as Non-Statutory Stock Options. Fair Market Value shall be determined as of the Date of Grant with respect to each such Incentive Stock Option. (c) Terms of Incentive Stock Options. The Committee shall determine the term during which a Participant may exercise an Incentive Stock Option, but in no event may a Participant exercise an Incentive Stock Option, in whole or in part, more than ten (10) years from the Date of Grant; provided, however, that if at the time an Incentive Stock Option is granted to an Employee who is a 10% Owner, the Incentive Stock Option granted to such Employee shall not be exercisable after the expiration of five (5) years from the Date of Grant. The Committee shall also determine the date on which each Incentive Stock Option, or any part thereof, first becomes exercisable and any terms or conditions a Participant must satisfy in order to exercise each Incentive Stock Option. The shares of Common Stock underlying each Incentive Stock Option may be purchased in whole or in part at any time during the term of such Incentive Stock Option after such Option becomes exercisable. -6- (d) Non-Transferability. No Incentive Stock Option shall be transferable except by will or the laws of descent and distribution and is exercisable, during his lifetime, only by the Employee to whom the Committee grants the Incentive Stock Option. The designation of a beneficiary does not constitute a transfer of an Incentive Stock Option. (e) Termination of Employment (General). Unless otherwise determined by the Committee, upon the termination of a Participant's employment or other service for any reason other than Retirement, disability or death, or Termination for Cause, the Participant may exercise only those Incentive Stock Options that were immediately exercisable by the Participant at the date of such termination and only for a period of three (3) months following the date of such termination, or, if sooner, until the expiration of the term of the Incentive Stock Option. (f) Termination of Employment (Retirement). Unless otherwise determined by the Committee, in the event of a Participant's Retirement, the Participant may exercise only those Incentive Stock Options that were immediately exercisable by the Participant at the date of Retirement and only for a period of one (1) year following the date of Retirement, or, if sooner, until the expiration of the term of the Incentive Stock Option. Any Option originally designated as an Incentive Stock Option shall be treated as a Non-Statutory Stock Option to the extent the Participant exercises such Option more than three (3) months following the Participant's cessation of employment. (g) Termination of Employment (Disability or Death). Unless otherwise determined by the Committee, in the event of the termination of a Participant's employment or other service due to disability or death, all Incentive Stock Options held by such Participant shall immediately become exercisable and remain exercisable for a period one (1) year following the date of such termination, or, if sooner, until the expiration of the term of the Incentive Stock Option. (h) Termination of Employment (Termination for Cause). Unless otherwise determined by the Committee, in the event of an Employee's Termination for Cause, all rights under such Employee's Incentive Stock Options shall expire immediately upon the effective date of such Termination for Cause. (i) Acceleration Upon a Change in Control. In the event of a Change in Control all Incentive Stock Options held by a Participant as of the date of the Change in Control shall immediately become exercisable. (j) Delivery of Shares. Upon the exercise of an Incentive Stock Option, payment shall be made in the form of shares of Common Stock. (k) Disqualifying Dispositions. Each Award Agreement with respect to an Incentive Stock Option shall require the Participant to notify the Committee of any disposition of shares of Common Stock issued pursuant to the exercise of such Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), within 10 days of such disposition. 8. STOCK AWARDS. The Committee may make grants of Stock Awards, which shall consist of the grant of some number of shares of Common Stock, to a Participant upon such terms and conditions as it may determine to the extent such terms and conditions are consistent with the following provisions: -7- (a) Grants of the Stock Awards. Stock Awards may only be made in whole shares of Common Stock. Stock Awards may only be granted from shares reserved under the Plan and available for award at the time the Stock Award is made to the Participant. (b) Terms of the Stock Awards. The Committee shall determine the dates on which Stock Awards granted to a Participant shall vest and any terms or conditions which must be satisfied prior to the vesting of any Stock Award or portion thereof. Any such terms or conditions shall be determined by the Committee as of the Date of Grant. To the extent that Stock Awards shall vest based upon performance goals which must be satisfied prior to the vesting of any installment or portion of a Stock Award, such performance goals shall be determined by the Committee either on an individual level, for all Participants, for all Stock Awards made for a given period of time, or as otherwise determined by the Committee. No Stock Award or portion thereof that is subject to the satisfaction of any condition shall be considered to be earned or vested until the Committee certifies in writing that the conditions to which the earning or vesting of such Stock Award is subject have been achieved. (c) Termination of Employment or Service (General). Unless otherwise determined by the Committee, upon the termination of a Participant's employment or service for any reason other than Retirement, disability or death, or Termination for Cause, any Stock Awards in which the Participant has not become vested as of the date of such termination shall be forfeited and any rights the Participant had to such Stock Awards shall become null and void. (d) Termination of Employment or Service (Retirement). Unless otherwise determined by the Committee, in the event of a Participant's Retirement, any Stock Awards in which the Participant has not become vested as of the date of Retirement shall be forfeited and any rights the Participant had to such unvested Stock Awards shall become null and void. (e) Termination of Employment or Service (Disability or Death). Unless otherwise determined by the Committee, in the event of a termination of the Participant's service due to disability or death, all unvested Stock Awards held by such Participant shall immediately vest as of the date of such termination. (f) Termination of Employment or Service (Termination for Cause). Unless otherwise determined by the Committee, or in the event of the Participant's Termination for Cause, all Stock Awards in which the Participant had not become vested as of the effective date of such Termination for Cause shall be forfeited and any rights such Participant had to such unvested Stock Awards shall become null and void. (g) Acceleration Upon a Change in Control. In the event of a Change in Control, all unvested Stock Awards held by a Participant shall immediately vest. (h) Issuance of Certificates. Except in the case where a valid Section 83(b) election is made by a Participant in accordance with Section 14 of the Plan or as otherwise determined by the Committee, reasonably promptly after the applicable date that a Stock Award shall be earned and non-forfeitable, the Corporation shall cause to be issued a stock certificate, registered in the name of the Participant to whom such Stock Award was granted, evidencing the applicable shares of Common Stock represented by such Stock Award. In the event that any such shares are issued in advance that such Stock Awards are earned, any such stock certificate issued shall bear the following legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture provisions and restrictions against transfer) contained in the TF Financial Corporation 2005 Stock-Based Incentive Plan, and Award Agreement entered into between the registered owner of such shares and TF -8- Financial Corporation or its Affiliates. A copy of the Plan and Award Agreement is on file in the office of the Corporate Secretary of TF Financial Corporation, 3 Penns Trail, Newtown, PA 18940. Such legend shall not be removed until the Participant becomes vested in such shares pursuant to the terms of the Plan and Award Agreement. Each certificate issued pursuant to this Section 8(i), in connection with a Stock Award, shall be held by the Corporation or its Affiliates, unless the Committee determines otherwise. (i) Non-Transferability. Except to the extent permitted by the Code, the rules promulgated under Section 16(b) of the Exchange Act or any successor statutes or rules: The recipient of a Stock Award shall not sell, transfer, assign, pledge, or otherwise encumber shares subject to the Stock Award until full vesting of such shares has occurred. For purposes of this section, the separation of beneficial ownership and legal title through the use of any "swap" transaction is deemed to be a prohibited encumbrance. Unless determined otherwise by the Committee and except in the event of the Participant's death or pursuant to a domestic relations order, a Stock Award is not transferable and may be earned in his lifetime only by the Participant to whom it is granted. Upon the death of a Participant, a Stock Award is transferable by will or the laws of descent and distribution. The designation of a beneficiary shall not constitute a transfer. If a recipient of a Stock Award is subject to the provisions of Section 16 of the Exchange Act, shares of Common Stock subject to such Stock Award may not, without the written consent of the Committee (which consent may be given in the Award Agreement), be sold or otherwise disposed of within six (6) months following the date of grant of the Stock Award. (j) Dividend Rights on Stock Awards. The holder of a Stock Award, whether or not earned, shall also be entitled to receive an amount equal to any cash dividends declared and paid with respect to shares of Common Stock represented by such Stock Award between the date the relevant Stock Award was granted to such Participant and the date the shares of Stock Awards are distributed. Such cash dividend amounts applicable to Stock Awards shall constitute compensation that shall be paid by the Trust or the Company to the Participant within 30 days of the respective dividend payment date. (k) Voting of Stock Awards. After a Stock Award has been granted but for which the shares covered by such Stock Award have not yet been vested, earned and distributed to the Participant pursuant to the Plan, the Trustee shall vote such shares of Common Stock held by any such Trust. (l) Delivery of Shares. Payment due to a Participant upon the redemption of a Stock Award shall be made in the form of shares of Common Stock. 9. METHOD OF EXERCISE OF OPTIONS. Subject to any applicable Award Agreement, any Option may be exercised by the Participant in whole or in part at such time or times, and the Participant may make payment of the Exercise Price in such form or forms permitted by the Committee, including, without limitation, payment by delivery of cash or Common Stock having a Fair Market Value on the day immediately preceding the exercise date equal to the total Exercise Price, or by any combination of cash and shares of Common Stock, including exercise by means of a cashless exercise arrangement with a qualifying broker-dealer in accordance with procedures approved by the -9- Corporation. Payment of the Exercise Price in full or partial payment in the form of Common Stock shall be made utilizing Common Stock that has been owned by the party exercising such Option for not less than six months prior to the date of exercise of such Option. No shares of Common Stock shall be issued until full payment of the Exercise Price has been received by the Corporation. 10. RIGHTS OF PARTICIPANTS. No Participant shall have any rights as a shareholder with respect to any shares of Common Stock covered by an Option until the date of issuance of a stock certificate for such Common Stock. Nothing contained herein or in any Award Agreement confers on any person any right to continue in the employ or service of the Corporation or an Affiliate or interferes in any way with the right of the Corporation or an Affiliate to terminate a Participant's employment or services. 11. DESIGNATION OF BENEFICIARY. A Participant may, with the consent of the Committee, designate a person or persons to receive, in the event of death, any Award to which the Participant would then be entitled. Such designation will be made upon forms supplied by and delivered to the Corporation and may be revoked in writing. If a Participant fails effectively to designate a beneficiary, then the Participant's estate will be deemed to be the beneficiary. 12. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, re-capitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares, or other similar corporate change, or other increase or decrease in such shares without receipt or payment of consideration by the Corporation, or in the event an extraordinary capital distribution is made, the Committee may make such adjustments to previously granted Awards to prevent dilution, diminution, or enlargement of the rights of the Participant, including any or all of the following: (a) adjustments in the aggregate number or kind of shares of Common Stock or other securities that may underlie future Awards under the Plan; (b) adjustments in the aggregate number or kind of shares of Common Stock or other securities underlying Awards already made under the Plan; (c) adjustments in the Exercise Price of outstanding Incentive and/or Non- Statutory Stock Options. No such adjustments may, however, materially change the value of benefits available to a Participant under a previously granted Award. All Awards under this Plan shall be binding upon any successors or assigns of the Corporation. 13. TAXES. (a) Whenever under this Plan, cash or shares of Common Stock are to be delivered upon exercise or payment of an Award or any other event with respect to rights and benefits hereunder, the Committee shall be entitled to require as a condition of delivery (i) that the Participant remit an amount sufficient to satisfy all federal, state, and local withholding tax requirements related thereto, (ii) that the withholding of such sums come from compensation otherwise due to the Participant or from any shares of Common Stock due to the Participant under this Plan or (iii) any combination of the foregoing; provided, however, that no amount shall -10- be withheld from any cash payment or shares of Common Stock relating to an Award which was transferred by the Participant in accordance with this Plan. (b) If any disqualifying disposition described in Section 7(k) is made with respect to shares of Common Stock acquired under an Incentive Stock Option granted pursuant to this Plan, or any transfer described in Section 6(c) is made, or any election described in Section 14 is made, then the person making such disqualifying disposition, transfer, or election shall remit to the Corporation or its Affiliates an amount sufficient to satisfy all federal, state, and local withholding taxes thereby incurred; provided that, in lieu of or in addition to the foregoing, the Corporation or its Affiliates shall have the right to withhold such sums from compensation otherwise due to the Participant, or, except in the case of any transfer pursuant to Section 6(c), from any shares of Common Stock due to the Participant under this Plan. (c) The Trustee may deduct from any distribution of shares of Common Stock awarded to an Outside Director under this Plan, sufficient amounts of shares of Common Stock to cover any applicable tax obligations incurred as a result of vesting of the Stock Award. 14. NOTIFICATION UNDER SECTION 83(b). A Participant may, in connection with the receipt of an Award, or thereafter, make the election permitted under Section 83(b) of the Code, provided that such Participant shall notify the Committee of such election within 10 days of filing notice of the election with the Internal Revenue Service, in addition to any filings and notifications required pursuant to regulations issued under the authority of Section 83(b) of the Code. 15. AMENDMENT OF THE PLAN AND AWARDS. (a) Except as provided in paragraph (c) of this Section 15, the Board of Directors may at any time, and from time to time, modify or amend the Plan in any respect, prospectively or retroactively; provided however, that provisions governing grants of Incentive Stock Options shall be submitted for shareholder approval to the extent required by such law, regulation or otherwise. Failure to ratify or approve amendments or modifications by shareholders shall be effective only as to the specific amendment or modification requiring such ratification. Other provisions of this Plan will remain in full force and effect. No such termination, modification or amendment may adversely affect the rights of a Participant under an outstanding Award without the written permission of such Participant. (b) Except as provided in paragraph (c) of this Section 15, the Committee may amend any Award Agreement, prospectively or retroactively; provided, however, that no such amendment shall adversely affect the rights of any Participant under an outstanding Award without the written consent of such Participant. (c) In no event shall the Board of Directors amend the Plan or shall the Committee amend an Award Agreement in any manner that has the effect of: (i) Allowing any Option to be granted with an exercise price below the Fair Market Value of the Common Stock on the Date of Grant. (ii) Allowing the exercise price of any Option previously granted under the Plan to be reduced subsequent to the Date of Award. -11- 16. EFFECTIVE DATE OF PLAN. The Board of Directors approved and adopted the Plan with an Effective Date being the date of approval of the Plan by a vote of a majority of the stockholders of the Corporation present in person or by proxy and entitled to vote at a meeting of such stockholders. All amendments to the Plan are effective upon approval by the Board of Directors, subject to shareholder approval when specifically required under the Plan or applicable federal or state statutes, rules or regulations. The failure to obtain shareholder approval for such purposes will not affect the validity or other provisions of the Plan and any Awards made under the Plan. 17. TERMINATION OF THE PLAN. The right to grant Awards under the Plan will terminate upon the earlier of: (i) ten (10) years after the Effective Date; (ii) the issuance of a number of shares of Common Stock pursuant to the exercise of Options and the distribution of Stock Awards is equivalent to the maximum number of shares reserved under the Plan as set forth in Section 4 hereof. The Board of Directors has the right to suspend or terminate the Plan at any time, provided that no such action will, without the consent of a Participant, adversely affect a Participant's vested rights under a previously granted Award. 18. NO EMPLOYMENT RIGHTS. No Employee or other person shall have a right to be selected as a Participant under the Plan. Neither the Plan nor any action taken by the Committee in administration of the Plan shall be construed as giving any person any rights of employment or retention as an Employee or in any other capacity with the Corporation or any Affiliate. 19. APPLICABLE LAW. The Plan will be administered in accordance with the laws of the Commonwealth of Pennsylvania to the extent not pre-empted by applicable federal law. -12- EX-4 3 ex4-2.txt FORM OF STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT ---------------------- FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422 OF THE INTERNAL REVENUE CODE PURSUANT TO THE TF FINANCIAL CORPORATION 2005 STOCK-BASED INCENTIVE PLAN ------------------------------- FOR OFFICERS AND EMPLOYEES STOCK OPTIONS for a total of _______________shares of Common Stock 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 2005 Stock- Based Incentive 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 $_______ 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. 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 or director of the Company as of such date, as follows: (a) Schedule of Rights to Exercise. Percentage of Total Shares Awarded Which Are Exercisable/ Date Options Non-forfeitable ---- ------- --------------- Upon grant................................. _____ __% As of ________________..................... _____ __% As of ________________..................... _____ __% As of ________________..................... _____ __% Options awarded to the Optionee shall continue to vest annually during such period that he serves as an employee or director of Third Federal Bank (the "Bank") or the Company. Notwithstanding any provisions in Section 2, in no event shall common stock acquired upon exercise of this Option be sold within six months from the date of grant. Options shall be 100% vested and exercisable upon the death or disability of the Optionee for a period of one year, or, if sooner, the expiration of the option. Upon a Change in Control of the Company or the Bank such Options shall be 100% vested and exercisable. Upon Retirement at age 55 and 10 years of service, vested options shall be exercisable for one year, or, if sooner, the expiration of the option. (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. 2 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. 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: By: --------------- ----------------------------- Attest: - ------------------------------ [SEAL] Optionee Acknowledgement - ----------------------------------------------------------- Optionee Date 3 INCENTIVE STOCK OPTION EXERCISE FORM ------------------------------------ PURSUANT TO THE TF FINANCIAL CORPORATION 2005 STOCK-BASED INCENTIVE PLAN _________________________ (Date) TF Financial Corporation 3 Penns Trail Newtown, Pennsylvania 18940 Dear Sir: The undersigned elects to exercise the Incentive Stock Option to purchase ________ shares of Common Stock of TF Financial Corporation under and pursuant to a Stock Option Agreement dated ________________. 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, -------------------------------- EX-4 4 ex4-3.txt FORM OF STOCK AWARD TAX NOTICE STOCK OPTION AGREEMENT ---------------------- FOR NON-STATUTORY STOCK OPTIONS PURSUANT TO THE TF FINANCIAL CORPORATION 2005 STOCK-BASED INCENTIVE PLAN ------------------------------- NON-EMPLOYEE DIRECTORS STOCK OPTIONS for a total of __________ shares of Common Stock of TF Financial Corporation (the "Company") 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 2005 Stock-Based Incentive Plan (the "Plan") adopted by the Company which is incorporated by reference herein, receipt of which is hereby acknowledged. Such Stock Options do not comply with Options granted under Section 422 of the Internal Revenue Code of 1986, as amended. 1. Option Price. The Option price is $_______ 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. 2. Exercise of Option. This Option shall be exercisable in accordance ------------------ with provisions of the Plan as follows: (a) Schedule of Rights to Exercise. Percentage of Total Shares Awarded Which Are Date Options Non-forfeitable Upon grant........................ _____ __% As of ________________............ _____ __% As of ________________............ _____ __% As of ________________ ........... _____ __% Options awarded to the Optionee shall continue to vest annually during such period that he serves as an employee or director of Third Federal Bank (the "Bank") or the Company. Notwithstanding any provisions in Section 2, in no event shall common stock acquired upon exercise of this Option be sold within six months from the date of grant. Options shall be 100% vested and exercisable upon the death or disability of the Optionee for a period of one year, or, if sooner, the expiration of the option. Upon a Change in Control of the Company or the Bank such Options shall be 100% vested and exercisable. Upon Retirement at age 55 and 10 years of service, vested options shall be exercisable for one year, or, if sooner, the expiration of the option. (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 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. 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. 2 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. 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: By: --------------------- ----------------------------- Attest: - ----------------------------- [SEAL] Optionee Acknowledgement - -------------------------------------------- Optionee Date 3 NON-STATUTORY STOCK OPTION EXERCISE FORM ---------------------------------------- PURSUANT TO THE TF FINANCIAL CORPORATION 2005 STOCK-BASED INCENTIVE PLAN ---------------------------- (Date) TF Financial Corporation 3 Penns Trail Newtown, Pennsylvania 18940 Dear Sir: The undersigned elects to exercise the Non-Statutory Stock Option to purchase ________ shares of Common Stock of TF Financial Corporation under and pursuant to a Stock Option Agreement dated ________________. 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, ------------------------------ EX-4 5 ex4-4.txt FORM OF STOCK AWARD AGREEMENT STOCK AWARD AGREEMENT --------------------- PURSUANT TO THE TF FINANCIAL CORPORATION 2005 STOCK-BASED INCENTIVE PLAN ------------------------------- FOR OFFICERS AND EMPLOYEES This Agreement shall constitute an award of Restricted Stock ("Award") for a total of __________ shares of Common Stock of TF Financial Corporation (the "Corporation"), which is hereby granted to __________________________ (the "Participant") at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the 2005 Stock-Based Incentive Plan (the "Plan") adopted by the Corporation which is incorporated by reference herein, receipt of which is hereby acknowledged. 1. Purchase Price. The purchase price for each share of Common Stock --------------- awarded by this Agreement is $0.00. 2. Vesting of Plan Awards. The Award of such Common Stock shall be ----------------------- deemed non- forfeitable in accordance with the provisions of the Plan, provided the holder of such Award is an employee or director of the Corporation as of such date, as follows: (a) Schedule of Vesting of Awards. Number Percentage of Total Shares of Awarded Which Are Date Shares Non-forfeitable ---- ------ --------------- Upon Grant......................... _____ __% As of ________________............. _____ __% As of ________________............. _____ __% As of ________________ ............ _____ __% As of ________________............. _____ __% As of ________________............. _____ __% (b) Restrictions on Awards. This Award may not be delivered to the recipient if the issuance of the Shares pursuant to the Award would constitute a violation of any applicable federal or state securities or other law or valid regulation. As a condition to the Participant's receipt of this Award, the Corporation may require the person receiving this Award to make any representation and warranty to the Corporation as may be required by any applicable law or regulation. 3. Non-transferability of Award. This Award may not be transferred in ----------------------------- any manner prior to such Award, or portion thereof, being deemed non-forfeitable. Notwithstanding anything herein or in the Plan to the contrary, all Shares subject to an Award held by a Participant whose employment or service with the Corporation or Third Federal Bank (the "Bank") terminates due to death shall be deemed 100% earned and nonforfeitable as of the Participant's last date of employment or service with the Corporation or the Bank and shall be distributed as soon as practicable thereafter to the Beneficiary as set forth in accordance with the Plan. 4. Other Restrictions on Award. This Award shall be subject to such ----------------------------- other restrictions and limitations as are contained in the Plan or as determined by the Plan Committee administering such Plan. Such Award shall be immediately 100% vested upon death or disability (as determined by the Plan Committee) of the Participant or upon a Change in Control of the Corporation or the Bank. TF Financial Corporation Date of Grant: By: --------------- -------------------------------------- Attest: - ------------------------------------ [SEAL] Participant Acknowledgement - ------------------------------------------------- Participant Date 2 EX-4 6 ex4-5.txt FORM OF STOCK AWARD TAX NOTICE TAX ISSUES RELATED TO EXERCISE OF STOCK OPTIONS This memorandum reviews the tax effects upon the exercise of "Non-Incentive Stock Options" ("NSOs") (those options awarded to non-employee directors and perhaps to some officers) and "Incentive Stock Options" ("ISOs") (those options generally awarded to officers and employees). A. Exercise of an NSO ------------------ Upon the exercise of an NSO, the amount by which the fair market value of the shares on the date of exercise exceeds the exercise price will be taxed to the optionee as ordinary income. The Company will be entitled to a deduction in the same amount, provided it makes all required withholdings on the compensation element of the exercise. In general, the optionee's tax basis in ---------------------------------------- the shares acquired by exercising an NSO is equal to the fair market value of - -------------------------------------------------------------------------------- such shares on the date of exercise. Upon a subsequent sale of any such shares - ----------------------------------- in a taxable transaction, the optionee will realize capital gain or loss (long-term or short-term, depending on whether the shares were held for more than 12 months before the sale) in an amount equal to the difference between his or her basis in the shares and the sale price. Special rules apply if an optionee pays the exercise price upon exercise of NSOs with previously acquired shares of stock. Except as described below with respect to shares acquired pursuant to ISOs, such a transaction is treated as a tax-free exchange of the old shares for the same number of new shares. To that extent, the optionee's basis in the new shares is the same as his or her basis in the old shares, i.e., there is a carryover of basis, and the capital gain holding period runs without interruption from the date when the old shares were acquired. The value of any new shares received by the optionee in excess of the number of old shares surrendered less any cash the optionee pays for the new shares will be taxed as ordinary income. The optionee's basis in the additional shares is equal to the fair market value of such shares on the date the shares were transferred, and the capital gain holding period commences on the same date. The effect of these rules is to defer the date when any gain in the old shares that are used to buy new shares must be recognized for tax purposes. Stated differently, these rules allow an optionee to finance the exercise of an NSO by using shares of stock that he or she already owns, without paying current tax on any unrealized appreciation in the value of all or a portion of those old shares. B. Exercise of an ISO ------------------ The holder of an ISO will not be subject to federal income tax upon the exercise of the ISO, and the Company will not be entitled to a tax deduction by reason of such exercise, provided that the holder is still employed by the Company (or terminated employment no longer than three months before the exercise date). Additional exceptions to this exercise timing requirement apply upon the death or disability of the optionee. A sale of the shares received upon the exercise of an ISO which occurs both more than one year after the exercise of the ISO and more than two years after the grant of the ISO will result in the realization of long-term capital gain or loss in the amount of the difference between the amount realized on the sale and the exercise price for such shares. Generally, upon a sale or disposition of the shares prior to the foregoing holding requirements (referred to as a "disqualifying disposition"), the optionee will recognize ordinary income, and the Company will receive a corresponding deduction equal to the lesser of (i) the excess of the fair market value of the shares on the date of transfer to the optionee over the exercise price, or (ii) the excess of the amount realized on the disposition over the exercise price for such shares. Currently, ISO exercises are exempt from FICA and FUTA taxes and a disqualifying disposition is exempt from employer withholding. A special rule applies if an optionee pays all or part of the exercise price of an ISO by surrendering shares of stock that he or she previously acquired by exercising any other ISO. If the optionee has not held the old shares for the full duration of the applicable holding periods before surrendering them, then the surrender of such shares to exercise the new ISO will be treated as a disqualifying disposition of the old shares. As described above, the result of a disqualifying disposition is the loss of favorable tax consequences with respect to the acquisition of the old shares pursuant to the previously exercised ISO. Where the applicable holding period requirements have been met, the use of previously acquired shares of stock to pay all or a portion of the exercise price of an ISO may offer significant tax advantages, particularly a deferral of the recognition of any appreciation in the surrendered shares in the same manner as discussed above with respect to NSOs. C. Alternative Minimum Tax ----------------------- The "alternative minimum tax" is paid when such tax exceeds a taxpayer's regular federal income tax. The alternative minimum tax is calculated based on alternative minimum taxable income, which is taxable income for federal income tax purposes, modified by certain adjustments and increased by tax preference items. The spread under an ISO - i.e., the difference between (a) the fair ---- market value of the shares at exercise and (b) the exercise price - is classified as alternative minimum taxable income for the year of exercise. Alternative minimum taxable income may be subject to the alternative minimum tax. However, a disqualifying disposition of the shares subject to the ISO during the same year in which the ISO was exercised will generally cancel the alternative minimum taxable income generated upon exercise of the ISO. When a taxpayer sells stock acquired through the exercise of an ISO, generally only the difference between the fair market value of the shares on the date of exercise and the date of sale is used in computing the alternative minimum tax. The portion of a taxpayer's minimum tax attributable to certain items of tax preference (including the spread upon the exercise of an ISO) can be credited against the taxpayer's regular liability in later years to the extent that liability exceeds the alternative minimum tax. 2 TAX NOTICE FOR STOCK AWARDS The awards granted under the TF Financial Corporation 2005 Stock-Based Incentive Plan (the "Plan") will be in the form of Common Stock and will be subject to a vesting schedule. Taxable compensation equal to the fair market value of the Common Stock at the date of vesting of each installment of such stock award will be recognized by each recipient. Federal Tax Consequences of Awards. ----------------------------------- 1. Stock awarded under the Plan is generally taxable to the recipient at the time that such awards become 100% vested and non-forfeitable, based upon the fair market value of such stock at the time of such vesting. Therefore, the vesting of stock as of each vesting date constitutes a tax event. 2. A recipient may make an election pursuant to Section 83(b) of the Internal Revenue Code ("Code") within 30 days of the date of the transfer of an award to elect to include in gross income for the current taxable year the fair market value of such stock as of the date of the transfer of an award. Such election must be filed with the Internal Revenue Service within 30 days of the date of the transfer of the stock award. Therefore, such an election may be filed for stock awards to vest at a future date. 3. Tax withholding obligations related to stock awards that vest may be satisfied by either the Participant paying the Company (by check) an amount sufficient to satisfy applicable withholding taxes, or receiving a fewer number of shares upon vesting of stock awards. The latter choice would work as follows: an employee could elect to receive, upon vesting of an award, a number of shares equal to the excess of the total number of shares subject to the award less a number of shares having a fair market value sufficient to satisfy applicable withholding and employment taxes. For example, suppose that an employee was scheduled to vest in 1,000 shares having a fair market value equal to $20 per share ($20,000 in the aggregate). Assuming the employee's liability for withholding and employment taxes totaled 45% of the ordinary income being recognized, the amount necessary to pay such taxes would be 45% of $20,000 or $9,000. The employee could either pay the Company $9,000, or direct the Plan trustees to reduce the number of shares to be transferred from the Plan to the employee. If an employee elected the latter choice, the employee would receive 550 shares from the Plan, with the other 450 shares withheld in satisfaction of the employee's $9,000 tax obligation. In either event, the employee would recognize $20,000 of ordinary income. For individuals who are subject to the short-swing profit rule imposed under Section 16 of the Securities Exchange Act of 1934, if shares are withheld in satisfaction of the withholding taxes then such withholding should be reported on a Form 4 to be filed with the SEC. EX-5 7 ex5-1.txt OPINION OF MALIZIA SPIDI & FISCH, PC MALIZIA SPIDI & FISCH, PC ATTORNEYS AT LAW 1100 NEW YORK AVENUE, N.W. 1900 SOUTH ATHERTON STREET SUITE 340 WEST SUITE 101 WASHINGTON, D.C. 20005 STATE COLLEGE, PA 16801 (202) 434-4660 (814) 272-3502 FACSIMILE: (202) 434-4661 FACSIMILE: (814) 272-3514 May 20, 2005 Board of Directors TF Financial Corporation 3 Penns Trail Newtown, Pennsylvania 18940 RE: Registration Statement on Form S-8: ---------------------------------- TF Financial Corporation 2005 Stock-Based Incentive Plan Gentlemen: We have acted as special counsel to TF Financial Corporation, a Delaware company (the "Company"), in connection with the preparation of the Registration Statement on Form S-8 to be filed with the Securities and Exchange Commission (the "Registration Statement") under the Securities Act of 1933, as amended, relating to 240,000 shares of common stock, par value $0.10 per share (the "Common Stock") of the Company which may be issued (i) upon the exercise of options for up to 200,000 shares of Common Stock granted under the TF Financial Corporation 2005 Stock-Based Incentive Plan (the "Plan"), and (ii) upon the award of up to 40,000 stock awards for shares of Common Stock under the Plan, as more fully described in the Registration Statement. You have requested the opinion of this firm with respect to certain legal aspects of the proposed offering. We have examined such documents, records, and matters of law as we have deemed necessary for purposes of this opinion and based thereon, we are of the opinion that the Common Stock when issued pursuant to the stock awards granted under and in accordance with the terms of the Plan will be duly and validly issued, fully paid, and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement on Form S-8. Sincerely, /s/Malizia Spidi & Fisch, PC ------------------------------- Malizia Spidi & Fisch, PC EX-23 8 ex23-2.txt CONSENT OF GRANT THORNTON LLP CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have issued our report dated March 25, 2005 accompanying the consolidated financial statements of TF Financial Corporation and subsidiaries appearing in the 2004 Annual Report of the Company to its shareholders included in the Annual Report on Form 10-K for the year ended December 31, 2004, which are incorporated by reference in this Registration Statement. We consent to the incorporation by reference in the Registration Statement of the aforementioned report. /s/ GRANT THORNTON LLP Philadelphia, Pennsylvania May 19, 2005 -----END PRIVACY-ENHANCED MESSAGE-----