Exhibit 10.1
MBNA CORPORATION
1997 LONG TERM INCENTIVE PLAN
(as amended effective April 24, 2000 and restated,as adjusted for July 2002 stock split and as further amended effective April 15, 2005 and restated)
1. Establishment
MBNA Corporation (the "Corporation") hereby establishes the 1997 LONG TERM INCENTIVE PLAN (the "Plan"). The Plan permits the grant of stock options and restricted share awards for shares of the Corporation’s Common Stock ("Common Stock").
2. Administration
The Plan shall be administered by the Board of Directors of the Corporation or a committee ("Committee") of the Board of Directors. All references herein to "Committee" shall mean the Board of Directors if no committee of the Board of Directors is appointed or otherwise authorized to act on a particular matter. The Committee shall have all power and authority necessary to administer the Plan, including but not limited to the power to select persons to participate in the Plan, determine the terms of grants made under the Plan, interpret the Plan and adopt such policies for carrying out the Plan as it may deem appropriate. The decisions of the Committee on all matters relating to the Plan shall be conclusive.
3. Shares Available for the Plan; Limitations
(a) Shares of Common Stock may be issued by the Corporation pursuant to incentive or nonqualified stock options or restricted share awards granted under the Plan.
(b) On any given date, the maximum number of shares of Common Stock with respect to which option and restricted share awards may be made pursuant to the Plan shall beequal to the number of shares of Common Stock which, when added to the number of shares of Common Stock subject to outstanding option and restricted share awards immediately prior to the grant, equals 10% of "fully diluted shares outstanding" immediately after the grant. "Fully diluted shares outstanding" for purposes of the Plan shall mean all issued and outstanding shares of Common Stock, including restricted shares, and shares of Common Stock subject to all outstanding options. If the Corporation has outstanding securities convertible into or exercisable for shares of Common Stock, the shares of Common Stock into which the securities may be converted or for which the securities may be exercised shall also be included in "fully diluted shares outstanding."
(c) In addition to the limitation in Section 3(b), the maximum number of restricted shares which may be granted in any calendar year beginning in 1999 is 3,000,000.
(d) For purposes of the formula and limitation in Sections 3(b) and 3(c), restricted shares shall not include restricted shares issued in lieu of payment of cash bonuses under the Corporation’s Senior Executive Performance Plan or other annual bonus plans.
(e) In addition to the limitation in Section 3(b), the maximum number of shares of Common Stock with respect to which incentive stock options may be granted from April 26, 1999 through the remaining term of the Plan is 15,000,000.
(f) The maximum number of shares of Common Stock with respect to which options may be granted pursuant to the Plan in any calendar year to any one participant is 3,375,000.
(g) In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, share exchange, consolidation, substantial distribution of assets, or any other change in the corporate structure or shares of the Corporation, the maximum numbers of shares provided in Sections 3(b), 3(c), 3(e) and 3(f), but not Section 5(e), and the kinds of shares under the Plan shall be appropriately adjusted.
4. Participation
Participation in the Plan is limited to officers, directors, key employees, consultants and advisors of the Corporation and its subsidiaries selected by the Committee. Only officers and key employees of the Corporation and its subsidiaries are eligible to receive incentive stock options.
5. Stock Options
(a) The Committee may from time to time grant to participants non-qualified stock options or incentive stock options.
(b) The price per share payable upon the exercise of each option shall not be less than 100% of the fair market value of a share of Common Stock on the date the option is granted.
(c) The Committee shall determine all terms and conditions of options, including but not limited to the period for exercise, the expiration date and any conditions to exercise. The Committee may amend or modify the terms of any outstanding option grant except that the Committee may not reprice any outstanding option grant.
(d) Options may be exercised in any manner approved by the Committee. If authorized by the Committee, a participant may deliver Common Stock, including shares acquired upon exercise of the option, to pay the exercise price or withholding taxes in connection with exercise of an option.
(e) Each person who becomes a nonemployee director of the Corporation shall be granted an option to purchase 5,000 shares of Common Stock on the date the person becomes a director and each person who is a nonemployee director on January 2 of each year beginning in 1998 shall be granted an option to purchase 5,000 shares of Common Stock on that date or the next day the New York Stock Exchange is open for trading. The exercise price shall be the closing price of the Common Stock on the New York Stock Exchange on the grant date. All nonemployee director’s options are exerciseable immediately following the effective date of the grant, shall have a term of ten years, and shall expire 90 days after the grantee is no longer a director.
6. Restricted Share Awards
The Committee may from time to time make restricted share awards of shares of Common Stock to participants in such amounts and on such terms as it determines. Each award of shares shall specify the restrictions on the shares. The Committee may waive or modify anyrestriction. A restricted share award may provide for the issuance of Common Stock at the time such award is made, when such award vests, or at any other date thereafter, as determined by the Committee.
7. Deferral of Shares
A director, employee or other holder of a stock option or restricted share award may defer delivery of shares of Common Stock issuable upon exercise of a stock option or upon the vesting of a restricted share award pursuant to policies approved by the Committee. Deferral arrangements may include the issuance of deferred share units, the issuance of shares to a trust, or other arrangements approved by the Committee. The arrangements may include the payment of dividend equivalents on deferred share units if approved by the Committee.
8. Amendment and Termination of the Plan
The Plan may be amended or terminated at any time by the Board of Directors. The Board of Directors may condition any amendment of the Plan on approval by the stockholders of the Corporation. No further grants may be made under the Plan after December 31, 2006.
Exhibit 10.2
MBNA CORPORATION
1997 LONG TERM INCENTIVE PLAN
POLICIES
(as amended and restated effective April 15, 2005)
1. General
Unless otherwise provided by the committee (the "Committee") administering the MBNA Corporation 1997 Long Term Incentive Plan ("Plan"), the grants of stock options and restricted or unrestricted share awards shall be governed by the terms and policies set forth herein.
2. Definitions
(a) "Cause" means the occurrence of one of the following:
(i) the willful and continued failure by the participant to substantially perform the person's duties with the Corporation as such duties may be reasonably defined from time to time; or
(ii) a significant violation of the Corporation's code of ethics; or
(iii) a felony conviction or guilty plea that results in a sentence that is not suspended of incarceration of 6 months or more.
(b) "Change in Control" means:
(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (A) the then outstanding shares of common stock of the Corporation (the "Outstanding Corporation Common Stock") or (B) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Corporation Voting Securities"); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Corporation, (B) any acquisition by the Corporation or any corporation or other entity controlled by the Corporation, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation or other entity controlled by the Corporation, (D) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this section (b), or (E) any acquisition by an underwriter temporarily holding securities pursuant to an offering; or
(ii) Individuals who, as of the date of the amendment of this section 2(b), constitute the Board of Directors of the Corporation (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of the Corporation (the "Board"); provided, however, that any individual becoming a director subsequent to the date of such amendment whose election, or nomination for election by the Corporation's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by specific vote or by approval, without prior written notice to the Board objecting to the nomination, of a proxy statement in which the individual was named as a nominee) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation or other entity resulting from such Business Combination (or a corporation or other entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries (either corporation or other entity, a "Resulting Corporation")) in substantially the same proportion as their ownership, immediately prior to such Business Combination, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the case may be, (B) no Person (excluding any Resulting Corporation or any employee benefit plan (or related trust) of the Corporation, such Resulting Corporation or any corporation controlled by either) beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the Resulting Corporation or the combined voting power of the then outstanding voting securities of such corporation or other entity except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation or other entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(iv) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation.
Without in any way broadening the definition of "beneficial owner", for purposes of this definition, no Person will be the "beneficial owner" of any security solely (1) because the security has been tendered into a tender or exchange offeruntil the tendered security is accepted for payment or exchange or (2) because of the power to vote or direct the voting of the security pursuant to a revocable proxy given in response to a public proxy or consent solicitation that was made to more than ten holders of a class of security that is then registered under Section 12 of the Exchange Act. In addition, a Change in Control shall not be deemed to occur solely because any Person acquires beneficial ownership of more than 40% of the Outstanding Corporation Common Stock or Outstanding Corporation Voting Securities as a result of the acquisition of securities by the Corporation or any corporation or other entity controlled by the Corporation; provided that, if after such acquisition by the Corporation or corporation or other entity such Person becomes the beneficial owner of additional Outstanding Corporation Common Stock or Outstanding Corporation Voting Securities that increases the percentage beneficially owned by such Person and the percentage continues to be above 40%, a Change in Control of the Corporation shall then occur.
(c) "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute.
(d) "Corporation" means, for purposes of Sections 2(b) and 8 hereof, MBNA Corporation, and for all other purposes, MBNA Corporation and any "subsidiary corporation" of MBNA Corporation as defined in Section 424(f) of the Code, or any successor statute of similar import.
(e) "Competition" means acting as a director, trustee, partner, officer, employee, consultant or advisor with or to, or acquiring an ownership interest in excess of 5% of, a corporation, partnership, firm or other entity that engages in any business which competes with the Corporation or any subsidiary of the Corporation as determined by the Committee in its sole discretion.
(f) "Disability" means a permanent and total disability as defined in the Corporation's long term disability or similar plan, as from to time in effect, or by the Committee.
(g) "Retirement" means voluntary termination of employment with the Corporation and its Subsidiaries at or after age 60 except with the approval of the Committee.
3. Stock Options
(a)Exercise Price. The exercise price of stock options may be paid in cash or, with respect to incentive stock options, by delivery of any previously owned shares of Common Stock acquired upon exercise of an incentive stock option provided that the shares have been held by the optionee for at least twelve months. The fair market value of shares of Common Stock delivered as payment of the exercise price of options shall be determined on the date of exercise. Any fractional share will be paid in cash.
(b)Term. The Committee shall determine when each option may be exercised at the time of grant. Unless otherwise determined by the Committee at the time of grant and specified in the document evidencing the grant, each option shall have a term of ten years from the date of grant. The Committee may amend any outstanding option to accelerate the date on which an option becomes exercisable.
(c) Termination of Employment. If a participant ceases to be an employee of the Corporation due to death or Disability, each of the participant's options shall become fully vested and exercisable and shall remain so for a period of one year from the date of termination of employment, but in no event after its expiration date.
If a participant ceases to be an employee of the Corporation upon Retirement, each of the participant's options shall become fully vested and exercisable and shall remain so for a period of two years from the date of Retirement, but in no event after its expiration date.
If a participant ceases to be an employee of the Corporation due to Cause, each of the participant's options shall be forfeited immediately, whether or not vested.
If a participant ceases to be an employee of the Corporation for any reason other than death, Disability, Retirement or Cause, each option of the participant which is vested and exercisable at the termination date shall remain so for a period of ninety days from the date of termination of employment, but in no event after its expiration date. Options which have not vested at the termination date will be forfeited.
If a participant engages in Competition without written approval from the Corporation to do so, each of the participant's options shall be forfeited immediately, whether or not vested.
The Committee may amend any outstanding option to extend the period for exercise following termination of employment.
(d)Restrictions on Incentive Stock Options.The aggregate fair market value (determined as of the grant date) of shares of Common Stock with respect to which all incentive stock options first become exercisable by any participant in any calendar year under this or any other plan of the Corporation or any related or predecessor corporation of the Corporation or any related corporation (as defined in the applicable regulations under the Code) may not exceed $100,000.
The exercise price of any incentive stock option granted to a participant who owns (within the meaning of Section 422(b)(6) of the Code, after the application of the attributionrules in Section 424(d) of the Code) more than 10% of the combined voting power of all classes of shares of the Corporation or any related corporation shall be not less than 110% of the fair market value of the Common Stock on the grant date and the term of such option shall not exceed five years.
4. Restricted and Unrestricted Share Awards
Each award of shares shall specify the applicable restrictions, if any, on suchaward, the duration of such restrictions, and the time or times at which such restrictions shall lapse with respect to all or a portion of the shares that are part of the award. The Committee may reduce or shorten the duration of any restriction applicable to anyrestricted share award to any participant under the Plan.
Shares of Common Stock subject to restricted share awards shall be issued at the timethe award is granted, subject to forfeiture if the restrictions do not lapse, or at the time the forfeiture restrictions lapse, as determined by the Committee. If shares of Common Stock are issued at the time the award is granted, the holder of the restricted shares will be required to deposit the certificates with the Corporation during the period of any restriction thereon and to execute a blank stock power therefor. During such period of restriction the participant shall have all of the rights of a holder of Common Stock, including but not limited to the rights to receive cash dividends and to vote, except that additional shares of stock distributed to the participant pursuant to a stock dividend or stock split shall be restricted shares and shall be deposited with the Corporation during the period of any restriction thereon. If the shares of Common Stock subject to a restricted share award are issued to the participant at the time the restrictions lapse, the participant will have the rights of a holder of Common Stock only after the shares of Common Stock are issued to him. During the period of restriction, unless the Committee determines otherwise, the participant shall receive a cash payment equivalent to the dividends payable on the number of shares of Common Stock subject to the restricted share award with respect to each dividend record date during the period of restriction. Any such cash dividend equivalent payment shall be made on the dividend payment date that corresponds to the relevant dividend record date.
Except as otherwise provided by the Committee, on termination of a grantee's employmentduring a period of restrictiondue to death, Disability or Retirement, all restrictions onrestricted share awardsto such grantee shall lapse. On termination of a grantee's employment for any other reason, allrestricted share awards granted to such grantee which are subject to restriction shall be forfeited to the Corporation.
5. Withholding of Taxes
The Corporation shall require that the grantee pay to the Corporation any federal, state, localor foreigntaxes of any kind required by law to be withheld with respect to any grant, payment or issuance or delivery of shares. The payment may be made in cash or, with respect to the exercise of stock options or vesting of restrictedshare awards, by delivering shares of Common Stock, including shares of Common Stock otherwise deliverable in connection with the exercise of the stock options or vesting of the restricted shares, at fair market value on the date as of which the withholding tax liability is determined. In the event of vesting of restrictedshare awards upon the death of the holder of theaward, the holder's estate or other successor in interest shall have up to 90 days after the vesting date to deliver shares of Common Stock to satisfy the tax withholding payment, with the shares valued at fair market value on the date of delivery of the shares or the date the Corporation receives instructions to withhold shares otherwise deliverable upon vesting. The Corporation, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to a grantee any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to any grant or payment or the issuance or delivery of shares under the Plan, or to retain or sell without notice a sufficient number of shares to be issued to such grantee to cover any such taxes.
6. Transferability
Except as provided below, no option or restricted share award (prior to lapse of the restrictions) granted under the Plan shall be transferable by the recipient otherwise than by will or the laws of descent and distribution. The holder of non-qualified options orrestrictedshare awards may designate a beneficiary to receive nonqualified options or restrictedshare awards in the event of his or her death, with such designation to be made on a form provided bythe Corporation and signed by the holder, and in accordance with such other procedures as the Corporation may determine. A beneficiary designation form will be effective when received and accepted by the Corporation's Benefits Department. An option may be exercised during the lifetime of an optionee only by the optionee or his or her guardian or legal representative, and after the optionee's death only by the optionee's designated beneficiary or the person to whom such option is transferred pursuant to the optionee's will or by laws of descent or distribution.
7. Transfer of Employee; Rights
Transfer of an employee from the Corporation to a subsidiary, from a subsidiary to the Corporation, or from one subsidiary to another shall not be considered a termination of employment. Nor shall it be considered a termination of employment if an employee is placed on military or sick leave or such other leave of absence which is considered by the Corporation as continuing intact the employment relationship, until the employee's right to reemployment shall no longer be guaranteed by law, contract or Corporation policy.
Nothing in the Plan or in any grant thereunder shall confer any right on an employee to continue in the employ of the Corporation or shall interfere in any way with the right of the Corporation to terminate an employee at any time.
8. Adjustments; Change in Control
In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, share exchange, consolidation, substantial distribution of assets, or any other change in the corporate structure or shares of the Corporation, the number and kind of shares covered byoutstanding options andrestrictedshare awards made under the Plan, and the exercise price of outstanding options, shall be appropriately adjusted.
In the event of a Change in Control, all outstanding optionsshall vest and become exercisable,and all restrictedshare awards shall vest, notwithstanding any restriction on exercise or vesting,immediately before the effective date of the Change in Control.
The Committee may amend or modify the grant of any outstanding option or restricted share award in any manner determined by the Committee. No modification may be made that would materially adversely affect any grant previously made under the Plan without the approval of the grantee.
9. Deferral of Shares Upon Exercise of Director Stock Options
(a) A nonemployee director may make an advance election to defer receipt of the shares deliverable by the Corporation upon exercise of a stock option. A deferral election with respect to a stock option must be made (i) at least six months prior to the date the director exercises the stock option and (ii) in a calendar year prior to the year in which the director exercises the stock option. A deferral election may not be revoked or changed after it is made.
