-----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, Dx5/4qGZAv6ALHNVW/HPXPg9AYw3VKfdZCzhnGn09lKEJo03M4cWVv6Fsghro7+6 zWam4zEjLEEr0A4VWUEkcw== 0000950134-99-007075.txt : 19990812 0000950134-99-007075.hdr.sgml : 19990812 ACCESSION NUMBER: 0000950134-99-007075 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990810 EFFECTIVENESS DATE: 19990810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RUSHMORE FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000884892 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 752375969 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-84899 FILM NUMBER: 99683229 BUSINESS ADDRESS: STREET 1: 13355 NOEL RD STREET 2: STE 650 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9724506000 MAIL ADDRESS: STREET 1: 13355 NOEL RD STREET 2: STE 650 CITY: DALLAS STATE: TX ZIP: 75240 S-8 1 FORM S-8 1 As filed with the Securities and Exchange Commission on August 10, 1999 Registration No. 33-________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------- RUSHMORE FINANCIAL GROUP, INC. (Exact name of the Company as specified in its charter) TEXAS 75-2375969 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ----------------- 13355 NOEL RD., SUITE 650 DALLAS, TX 75240 (Address of principal executive offices) ----------------- 1997 STOCK OPTION PLAN ----------------- D. M. RUSTY MOORE, JR. RUSHMORE FINANCIAL GROUP, INC. 13355 NOEL RD., SUITE 650 DALLAS, TX 75240 (Name and address of agent for service) (972)450-6000 (Telephone number, including area code, of agent for service) With copies to: RONALD L. BROWN, ESQ. GLAST, PHILLIPS & MURRAY, P.C. 13355 NOEL ROAD, SUITE 2200 DALLAS, TEXAS 75240 (972)419-8300 CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE (1)(2) REGISTRATION FEE(2) - ------------------- ------------- ---------------- ------------------ ------------------- COMMON STOCK, $0.01 500,000 $4.75 $2,375,000 $660.25
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the "Securities Act"), this Registration Statement also covers an indeterminate number of additional shares that may be issuable in connection with share splits, share dividends or similar transactions. (2) Estimated pursuant to Rule 457(c) under the Securities Act, solely for the purpose of calculating the registration fee, based on the average of the bid and asked prices for the Company's common stock as reported within five business days prior to the date of this filing. 2 PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS ITEM 1. PLAN INFORMATION. * ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION. * *The document(s) containing the information specified in Part 1 of Form S-8 will be sent or given to participants as specified by Rule 428(b)(1) promulgated by the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"). Such document(s) are not being filed with the Commission, but constitute (along with the documents incorporated by reference into the Registration Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the requirements of Section 10(a) of the Act. 2 3 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. The following documents previously or concurrently filed by Rushmore Financial Group, Inc. (the "Company") with the Commission are hereby incorporated by reference into this Registration Statement: (a) The Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998 (the "Annual Report") filed by the Company (SEC File No. 000-24057) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with the Commission on March 31, 1999. (b) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Annual Report referred to in (a) above. (c) The description of the Company's Common Stock set forth under the caption "Description of Capital Stock" at page 34 of the Company's Registration Statement on Form SB-2, filed with the Commission and effective on February 17, 1998, is hereby incorporated by reference. All documents subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities them remaining unsold, shall be deemed incorporated by reference into this Registration Statement and to be a part thereof from the date of the filing of such documents. Any statement contained in the documents incorporated, or deemed to be incorporated, by reference herein or therein shall be deemed to be modified or superseded for purposes of this Registration Statement and the prospectus which is a part hereof (the "Prospectus") to the extent that a statement contained herein or therein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein or therein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement and the Prospectus. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. In accordance with the Texas Business Corporation Act, Article IV of the Company's Bylaws provides that the Company may advance expenses to and indemnify directors, officers, employees, agents and other persons who may have advanced expenses and be indemnified under applicable law. Section 2.02-1 of the Texas Business Corporation Act permits indemnification of directors and officers of the Company and officers and directors of another corporation, partnership, joint venture, trust, or other enterprise who serve at the request of the Company, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonable incurred by such person in connection with any action, suit or proceeding in which such person is a party by reason of such person being or having been a director or officer of the Company or at the request of the Company, if he conducted himself in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable 3 4 cause to believe his conduct was unlawful. The Company may not indemnify an officer or a director with respect to any claim, issue or matter as to which such officer or director shall have been adjudged to be liable to the Company, unless and only to the extent that the court in which such action or suit was brought shall determine upon application, that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. The extent that an officer or director is successful on the merits or otherwise in defense on the merits or otherwise in defense of any action, suit or proceeding with respect to which such person is entitled to indemnification, or in defense of any claim, issue or matter therein, such person is entitled to be indemnified against expenses, including attorney's fees, actually and reasonably incurred by him in connection therewith. The circumstances under which indemnification is granted in an action brought on behalf of the Company are generally the same as those set forth above; however, expenses incurred by an officer or a director in defending a civil or criminal action, suit or proceeding may be paid by the Company in advance of final disposition upon receipt of an undertaking by or on behalf of such officer or director to repay such amount if it is ultimately determined that such officer or director is not entitled to indemnification by the Company. No director of the Company shall be personally liable to the Company or any of its shareholders for damages for any act or omission in such capacity except to the extent Texas law expressly precludes limitation of such personal liability, which it does when the director is found liable for a breach of duty of loyalty, an act or omission not in good faith that constitutes a breach of duty or intentional misconduct or knowing violation of law, a transaction from which the director received an improper benefit or any other case where liability is provided by statute. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not Applicable. ITEM 8. EXHIBITS. See the Exhibit Index following the signature page in this Registration Statement, which Exhibit Index is incorporated herein by reference. ITEM 9. UNDERTAKINGS. (a) The undersigned Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement to: (i) include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) reflect in the prospectus any facts or events arising after the effective date of the Registration Statement which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reelected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration" table in the effective registration statement; and (iii) 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 provisions (i) and (ii) of this undertaking are inapplicable if the information to be filed thereunder is contained in periodic reports filed by the 4 5 Company pursuant to the Exchange Act that are incorporated by reference into the Registration Statement. (2) That, for the purpose of determining any liability under the Securities 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 post-effective amendment any of the securities being registered which remains unsold at the termination of the offering. (b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than director, officer or controlling person 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 Company 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 is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (c) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this 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. 5 6 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas, on July 21, 1999. RUSHMORE FINANCIAL GROUP, INC. By: /s/ D.M. (Rusty) Moore, Jr. ---------------------------------- D.M. (Rusty) Moore, Jr., President, Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Each person whose signature to the Registration Statement appears below hereby appoints D. M. (Rusty) Moore, Jr., as such person's attorney-in-fact with full power to act alone, with full power of substitution or resubstitution, for such person and in such person's name, place and stead, in any and all capacities to sign on such person's behalf, individually and in the capacities stated below, and to file any and all amendments and post-effective amendments to this Registration Statement, which amendment or amendments may make such changes and additions as such attorney-in-fact may deem necessary or appropriate.
Name Office Date - ---- ------ ---- /s/ D. M. (Rusty) Moore, Jr. President, Chief Executive July 21, 1999 - ------------------------------------ Officer and Director D. M. (Rusty) Moore, Jr. (Principal Executive Officer) /s/ Robert W. Hendren Executive Vice President and July 21, 1999 - ------------------------------------ Chief Financial Officer Robert W. Hendren (Principal Financial and Accounting Officer) /s/ Timothy J. Gardiner Director July 21, 1999 - ------------------------------------ Timothy J. Gardiner Director July 21, 1999 - ------------------------------------ Mark S. Adler /s/ Gayle C. Tinsley Director July 21, 1999 - ------------------------------------ Gayle C. Tinsley /s/ F. E. Mowery Director July 21, 1999 - ------------------------------------ F. E. Mowery /s/ William C. Keane Director July 21, 1999 - ------------------------------------ William C. Keane /s/ James M. Fehleison Director July 21, 1999 - ------------------------------------ James M. Fehleison /s/ James W. Clark Director July 21, 1999 - ------------------------------------ James W. Clark /s/ Charles M. Duke, Jr. Director July 21, 1999 - ----------------------------------- Charles M. Duke, Jr.
6 7 RUSHMORE FINANCIAL GROUP, INC. EXHIBIT INDEX TO FORM S-8 REGISTRATION STATEMENT
EXHIBIT NO. DESCRIPTION - ----------- ----------- 4.1 1997 Stock Option Plan 5.1 Opinion of Glast, Phillips, & Murray, P.C. 23.1 Consent of KPMG LLP 23.2 Consent of Cheshier & Fuller, L.L.P. 23.3 Consent of Glast, Phillips, & Murray, P.C. (included in Exhibit 5.1) 24.1 Power of Attorney (included on Signature Page to the Registration Statement)
EX-4.1 2 1997 STOCK OPTION PLAN 1 RUSHMORE FINANCIAL GROUP, INC. 1997 STOCK OPTION PLAN 500,000 SHARES ARTICLE I GENERAL 1.1 PURPOSE OF THE PLAN. The purpose of the Rushmore Financial Group, Inc. 1997 Stock Option Plan (the "Plan") is to assist Rushmore Financial Group, Inc., a Texas corporation (the "Company") in securing and retaining key Participants and agents of outstanding ability by making it possible to offer them an increased incentive to join or continue in the service of the Company and to increase their efforts for its welfare through participation or increased participation in the ownership and growth of the Company. 1.2 DEFINITIONS. (a) "Acceleration Event" means any event which in the opinion of the Board of Directors of the Company is likely to lead to changes in control of share ownership of the Company, whether or not such change in control actually occurs. (b) "Award" means an Option granted to a Key Participant under the Plan. (c) "Board of Directors" or "Board" means the Board of Directors of the Company. (d) "Code" means the Internal Revenue Code of 1986, as amended. (e) "Committee" means the committee referred to in Section 1.3. (f) "Common Stock" means the Common Stock of the Company. (g) "Fair Market Value" means the closing price of the shares on the NASDAQ or other national Securities Exchange on which the Common Stock is primarily traded on the day on which such value is to be determined or, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported by National Quotation Bureau, Inc. or other national quotation service. If the shares of Common Stock are traded 2 in the over-the-counter market, "fair market value" means the closing "asked" price of the shares in the over-the-counter market on the day on which such value is to be determined or, if such "asked" price is not available, the last sales price on such day or, if no shares were traded on such day, on the next preceding day on which the shares were traded, as reported by the National Association of Securities Dealers Automatic Quotation System (NASDAQ) or other national quotation service. If at any time shares of Common Stock are not traded on an exchange or in the over-the-counter market, Fair Market Value shall be the value determined by the Board of Directors or Committee administering the Plan, taking into consideration those factors affecting or reflecting value which they deem appropriate. (h) "Grantee" means a Key Participant to whom an Award is granted under the Plan. (i) "Incentive Share" means a share of Common Stock awarded to a Key Participant under Article VI hereof on such terms as are determined by the Committee. (j) "Incentive Share Agreement" means a written agreement in such form as the Committee shall approve that evidences the terms and conditions of an award of Incentive Shares hereunder. (k) "Incentive Stock Option" means an option to purchase shares of Common Stock which is intended to qualify as an incentive stock option as defined in Section 422 of the Code. (l) "Key Participant" means any person, including officers, directors, agents and consultants who are designated a Key Participant by the Committee and is or is expected to be primarily responsible for the management, growth, or supervision of some part or all of the business of the Company. The power to determine who is and who is not a Key Participant is reserved solely for the Committee. (m) "Nonqualified Stock Option" means an option to purchase shares of Common Stock which is not intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. (n) "Option" means an Incentive Stock Option or a Nonqualified Stock Option. (o) "Optionee" means a Key Participant to whom an Option is granted under the Plan. (p) "Parent" means any corporation which qualifies as a parent of a corporation under the definition of "parent corporation" contained in Section 425(e) of the Code. (q) "Subsidiary" means any corporation which qualifies as a subsidiary of a corporation under the definition of "subsidiary corporation" contained in Section 425(f) of the Code. 2 3 (r) "Term" means the period during which a particular option may be exercised as determined by the Committee and as provided in the option agreement. 1.3 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Compensation Committee (the "Committee") appointed by the Board of Directors consisting of at least one member from the Board of Directors, who shall not be eligible to participate in the Plan. In the absence of an appointment of a Committee, the Board shall serve as the Committee. No person while a member of the Committee shall be eligible to participate in the Plan. Subject to the control of the Board, and without limiting the control over decisions described in Section 1.7, the Committee shall have the power to interpret and apply the Plan and to make regulations for carrying out its purpose. More particularly, the Committee shall determine which Key Participants shall be granted Options and the terms of such grants. When granting Options, the Committee shall designate the Option as either an Incentive Stock Option or a Nonqualified Stock Option. Determinations by the Committee under the Plan (including, without limitation, determinations of the person to receive Awards, the form, amount and timing of such Awards, and the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. In serving on the Committee, members thereof shall be considered to be acting in their capacity as members of the Board of Directors and shall be entitled to all rights of indemnification provided by the Bylaws of the Company or otherwise to members of the Board of Directors. 1.4 SHARES SUBJECT TO THE PLAN. The total number of shares that may be purchased pursuant to Options under the Plan shall not exceed 500,000 shares of Common Stock. (The Original Plan called for 1,000,000 shares, which was reduced to 500,000 in connection with a one-for-two reverse split in 1997.) Shares subject to the Options which terminate or expire prior to exercise shall be available for future Awards under the Plan without again being charged against the limitation of 500,000 shares set forth above. Shares issued pursuant to the Plan may be either unissued shares of Common Stock or reacquired shares of Common Stock held in treasury. 1.5 TERMS AND CONDITIONS OF OPTIONS. All Options shall be evidenced by agreements in such form as the Committee shall approve from time to time subject to the provisions of Article II and Article III, as appropriate, and the following provisions: (a) Exercise Price. The exercise price of the Option shall not be less than the Fair Market Value (as determined by the Committee) of the Common Stock at the time the Option is granted. 3 4 (b) Exercise. The Committee shall determine whether the Option shall be exercisable in full at any time during the Term or in cumulative or noncumulative installments during the Term. (c) Termination of Employment or Contractor Relationship. An Optionee's Option shall expire on the expiration of the Term specified in Section 2.1 or 3.1 as the case may be, or upon the occurrence of such events as are specified in the agreement. In the event of exercise of the Option after termination of employment or contractor relationship, the Optionee may exercise the Option only with respect to the shares which could have been purchased by the Optionee at the date of such termination. However, the Committee may, but is not required to, waive any requirements made pursuant to Section 1.5(b) so that some or all of the shares subject to the Option may be exercised within the time limitation described in this subsection. An Optionee's employment or contractor relationship shall be deemed to terminate on the last date for which he receives a regular wage, salary or contract payment. Whether military, government or other service or other leave of absence shall constitute a termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A termination of employment or contractor relationship shall not occur where the Optionee transfers from the Company to one of its Subsidiaries or transfers from a Subsidiary to the Company. (d) Death or Disability. Upon termination of an Optionee's employment or contractor relationship by reason of death or disability (as determined by the Committee consistent with the definition of Section 422(c)(7) of the Code), the Option shall expire on the earlier of the expiration of (i) the date specified in the Option which in no event shall be later than 12 months after the date of such termination, or (ii) the Term specified in Section 2.1 or 3.1 as the case may be. The Optionee or his successor in interest, as the case may be, may exercise the Option only as to the shares that could have been purchased by the Optionee at the date of his termination of employment. However, the Committee may, but is not required to, waive any requirements made pursuant to Section 1.5(b) so that some or all of the shares subject to the Option may be exercised within the time limitation described in this subsection. (e) Payment. Payment for shares as to which an Option is exercised shall be made in such manner and at such time or times as shall be provided in the option agreement, including cash, Common Stock of the Company which was previously acquired by the Optionee, or any combination thereof. The Fair Market Value of the surrendered Common Stock as of the date of exercise shall be determined in valuing Common Stock used in payment for Options. (f) Nontransferability. No Option granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee. 4 5 (g) Additional Provisions. Each option agreement may contain such other terms and conditions not inconsistent with the provisions of the Plan, including the award of cash amounts, as the Committee may deem appropriate from time to time. 1.6 STOCK ADJUSTMENTS; MERGERS. (a) Generally. Notwithstanding Section 1.4, in the event the outstanding shares are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of any other corporation by reason of any merger, sale of stock, consolidation, liquidation, recapitalization, reclassification, stock split up, combination of shares, stock dividend, or transaction having similar effect, the total number of shares set forth in Section 1.4 shall be proportionately and appropriately adjusted by the Committee. (b) Options. Following a transaction described in subsection (a) above, if the Company continues in existence, the number and kind of shares that are subject to any Option and the option price per share shall be proportionately and appropriately adjusted without any change in the aggregate price to be paid therefor upon exercise of the Option. If the Company will not remain in existence or substantially all of its voting Common Stock and Common Stock will be purchased by a single purchaser or group of purchasers acting together, then the Committee may (i) declare that all Options shall terminate 30 days after the Committee gives written notice to all Optionee's of their immediate right to exercise all Options then outstanding (without regard to limitations on exercise otherwise contained in the Options), or (ii) notify all Optionee's that all Options granted under the Plan shall apply with appropriate adjustments as determined by the Committee to the securities of the successor corporation to which holders of the numbers of shares subject to such Options would have been entitled, or (iii) take action that is some combination of aspects of (i) and (ii). The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding. Any fractional shares resulting from any of the foregoing adjustments under this section shall be disregarded and eliminated. 1.7 ACCELERATION EVENT. If an Acceleration Event occurs in the opinion of the Board of Directors, based on circumstances known to it, the Board of Directors may direct the Committee to declare that any or all Options granted under the Plan shall become exercisable immediately notwithstanding the provisions of the respective agreements granting any such Awards. 1.8 NOTIFICATION OF EXERCISE. Options shall be exercised by written notice directed to the Secretary of the Company at the principal executive offices of the Company. Such written notice shall be accompanied by any payment required pursuant to Section 1.5(e). Exercise by an Optionee's heir or the representative of his estate shall be accompanied by evidence of his authority to so act in form reasonably satisfactory to the Company. 5 6 1.9 MODIFICATION, EXTENSION AND RENEWAL OF AWARDS. Subject to the terms and conditions and within the limitations of the Plan, the Committee may modify, extend or renew outstanding Awards or accept the surrender of outstanding Awards (to the extent not theretofore exercised) granted under the Plan or under any other plan of the Company or a Subsidiary, and authorize the granting of new Awards pursuant to the Plan in substitution therefor, and the substituted Awards may bear such different or additional terms and conditions as the Committee shall deem appropriate within the limitations of the Plan. Notwithstanding the foregoing, however, no modification of an Award shall, without the consent of the Grantee holding the Award, adversely affect the rights or obligations of such Grantee. 1.10. COMPLIANCE WITH RULE 16b-3. It is intended that the provisions of the Plan and any Award shall comply in all respects with the terms and conditions of Rule 16b-3 under the Securities Exchange Act of 1934, as in effect on April 1, 1997 and as amended, or any successor provisions, as it relates to persons subject to the reporting requirements of Section 16(a) of such Act. Any agreement granting an Award shall contain such provisions as are necessary or appropriate to assure such compliance. To the extent that any provision hereof is found not to be in compliance with such rule as it relates to such Act, such provision shall be deemed to be modified so as to be in compliance with such rule, or if such modification is not possible, shall be deemed to be null and void, as it relates to such Grantee. ARTICLE II INCENTIVE STOCK OPTIONS 2.1 TERMS OF INCENTIVE STOCK OPTIONS. Each Incentive Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee; provided, however, that the Term shall end no later than 10 years after the date the Incentive Stock Option is granted. 2.2 LIMITATION ON OPTIONS. The aggregate Fair Market Value of Common Stock (determined at the time the Incentive Stock Option is granted) subject to Incentive Stock Options granted to a Key Participant under all plans of the Key Participant's employer corporation and its Parent or Subsidiary corporations and that become exercisable for the first time by such Key Participant during any calendar year may not exceed $100,000. 6 7 2.3 SPECIAL RULE FOR TEN PERCENT SHAREHOLDER. If at the time an Incentive Stock Option is granted, an participant or owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of his employer corporation or of its Parent or any of its Subsidiaries, as determined using the attribution rules of Section 425(d) of the Code, then the terms of the Incentive Stock Option shall specify that the option price shall be at least 110% of the Fair Market Value of the stock subject to the Incentive Stock Option and such Incentive Stock Option shall not be exercisable after the expiration of five years from the date such Incentive Stock Option is granted. 2.4 INTERPRETATION. In interpreting this Article II of the Plan and the provisions of individual option agreements, the Committee and the Board shall be governed by the principles and requirements of Sections 421, 422 and 425 of the Code, and applicable Treasury Regulations. ARTICLE III NONQUALIFIED STOCK OPTIONS 3.1 TERMS AND CONDITIONS OF OPTIONS. In addition to the requirements of Section 1.5, each Nonqualified Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee. 3.2 SECTION 83(b) ELECTION. The Company recognizes that certain persons who receive Nonqualified Stock Options may be subject to restrictions regarding their right to trade Common Stock under applicable securities laws. Such may cause Optionee's exercising such Options not to be taxable under the provisions of Section 83(c) of the Code. Accordingly, Optionee's exercising such Nonqualified Stock Options may consider making an election to be taxed upon exercise of the Option under Section 83(b) of the Code and to effect such election will file such election with the Internal Revenue Service within thirty (30) days of exercise of the Option and otherwise in accordance with applicable Treasury Regulations. ARTICLE IV ADDITIONAL PROVISIONS 4.1 STOCKHOLDER APPROVAL. The Plan shall be submitted for the approval of the stockholders of the Company at the first annual meeting of stockholders held subsequent to the adoption of the Plan and in all events 7 8 within one year of its approval by the Board of Directors. If at said meeting the stockholders of the Company do not approve the Plan, the Plan shall terminate. 4.2 COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and exercise of Options hereunder, and the obligation of the Company to sell and deliver shares under such Options, shall be subject to all applicable Federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required. The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (a) the listing of such shares on any stock exchange on which the Common Stock may then be listed and (b) the completion of any registration or qualification or exemption of such shares under any Federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable. 4.3 AMENDMENTS. The Board of Directors may discontinue the Plan at any time, and may amend it from time to time, but no amendment, without approval by stockholders, may (a) increase the total number of shares which may be issued under the Plan or to any individual under the Plan, (b) reduce the Option price for shares which may be purchased pursuant to Options under Articles II or III of the Plan, (c) extend the period during which Awards may be granted, or (d) change the class of Participants to whom Awards may be granted, except as provided in Section 1.6. Other than as expressly permitted under the Plan, no outstanding Award may be revoked or altered in a manner unfavorable to the Grantee without the consent of the Grantee. 4.4 NO RIGHTS AS SHAREHOLDER. No Grantee shall have any rights as a shareholder with respect to any share subject to his or her Option prior to the date of issuance to him or her of a certificate or certificates for such shares. 4.5 WITHHOLDING. Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the Grantee to remit to the Company an amount sufficient to satisfy any Federal, state or local withholding tax liability in such form as the Company may determine or accept in its sole discretion, including payment by surrender or retention of shares of Common Stock prior to the delivery of any certificate or certificates for such shares. 8 9 4.6 CONTINUED EMPLOYMENT NOT PRESUMED. This Plan and any document describing this Plan and the grant of any Award hereunder shall not give any Optionee or other Participant a right to continued employment or directorship by the Company or its Subsidiaries or affect the right of the Company or its Subsidiaries to terminate the employment or directorship of any such person with or without cause. 4.7 EFFECTIVE DATE; DURATION. The Plan shall become effective as of April 5, 1997 pursuant to Board of Director approval received on such date and shall expire on April 5, 2007. No Awards may be granted under the Plan after April 5, 2007, but Awards granted on or before that date may be exercised according to the terms of the related agreements and shall continue to be governed by and interpreted consistent with the terms hereof. 9 EX-5.1 3 OPINION/CONSENT OF GLAST, PHILLIPS & MURRAY, P.C. 1 EXHIBIT 5.1 [GLAST, PHILLIPS & MURRAY LETTERHEAD] August 4, 1999 Rushmore Financial Group, Inc. 13355 Noel Road, Suite 650 Dallas, Texas 75240 Re: Form S-8 Registration Statement relating to the registration of 500,000 shares of common stock, $.01 par value of Rushmore Financial Group, Inc. pursuant to the 1997 Stock Option Plan. Gentlemen: We are acting as counsel for Rushmore Financial Group, Inc., a Texas corporation (the "Company"), in connection with the filing under the Securities Act of 1933, as amended, of a Registration Statement for the Company on Form S-8 filed with the Securities and Exchange Commission ("SEC") (the "Registration Statement"), covering an aggregate of 500,000 shares (the "Shares") of common stock, par value $.01 per share (the "Common Stock"), of the Company which will be issued pursuant to the 1997 Stock Option Plan. In that connection, we have examined the Form S-8 Registration Statement in the form to be filed with the SEC. We have also examined and are familiar with the originals or authenticated copies of all corporate or other documents, records and instruments that we have deemed necessary or appropriate to enable us to render the opinion expressed below. We have assumed that all signatures on all documents presented to us are genuine, that all documents submitted to us as originals are accurate and complete, that all documents submitted to us as copies are true and correct copies of the originals thereof, that all information submitted to us was accurate and complete and that all persons executing and delivering originals or copies of documents examined by us were competent to execute and deliver such documents. In addition, we have assumed that the Shares will not be issued for consideration equal to less than the par value thereof and that the form of consideration to be received by the Company for the Shares will be lawful consideration under the Texas Business Corporation Act. 2 Rushmore Financial Group, Inc. August 4, 1999 Page Two Based on the foregoing and having due regard for the legal considerations we deem relevant, we are of the opinion that the Shares, or any portion thereof, when issued as described in the Registration Statement, will be validly issued by the Company, fully paid and nonassessable. This opinion is limited in all respects to the laws of the United States of America and the State of Texas. This opinion may be filed as an exhibit to the Registration Statement. Sincerely, GLAST, PHILLIPS & MURRAY, P.C. /s/ Glast, Phillips & Murray EX-23.1 4 CONSENT OF KPMG LLP 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Rushmore Financial Group, Inc. We consent to incorporation by reference into the registration statement on Form S-8 of Rushmore Financial Group, Inc. of our report dated March 17, 1999, relating to the consolidated balance sheet of Rushmore Financial Group, Inc.and subsidiaries as of December 31, 1998 and the related consolidated statements of income, shareholders' equity, and cash flows for the years ended December 31, 1998 and 1997, which report appears in the December 31, 1998 annual report on Form 10-KSB of Rushmore Financial Group, Inc. /s/ KPMG LLP Dallas, Texas August 4, 1999 EX-23.2 5 CONSENT OF CHESHIER & FULLER, L.L.P. 1 EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT The Board of Directors Rushmore Financial Group, Inc. We consent to incorporation by reference into the registration statement on Form S-8 of Rushmore Financial Group, Inc. of our report dated January 15, 1999, relating to the statement of financial condition of Rushmore Securities Corporation as of December 31, 1998 and the related consolidated statements of income, shareholders' equity, and cash flows for the years ended December 31, 1998 and 1997, which report appears in the December 31, 1998 annual report on Form 10-KSB of Rushmore Financial Group, Inc. /s/ CHESHIER & FULLER, L.L.P. Dallas, Texas August 4, 1999 -----END PRIVACY-ENHANCED MESSAGE-----