EXHIBIT 10.16
F.N.B. CORPORATION
DIRECTORS' COMPENSATION PLAN
1. PURPOSE
The purpose of the F.N.B. Corporation Directors' Compensation Plan
(the "Plan") is to promote the interests of F.N.B. Corporation (the "Company")
and its shareholders by attracting and retaining Directors capable of furthering
the future success of the Company and by aligning their economic interests more
closely with those of the Company's shareholders.
2. DEFINITIONS
"Board of Directors" means the Board of Directors of the Company or any of
the Company's subsidiaries.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations thereunder. References to any provision of the Code or rule or
regulation thereunder shall be deemed to include any amended or successor
provision, rule or regulation.
"Committee" means the Compensation Committee of the Board of Directors of
the Company.
"Director" means a member of the Board of Directors or a former member to
whom fees are paid for attendance at Board or Committee meetings.
"DRP" means the Company's Voluntary Dividend Reinvestment and Stock
Purchase Plan, as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Initial Period" means, as to any Director who is a Section 16 Person and
who has made a Share Election, the period beginning on the date such Share
Election is made and ending on the date six months following such date.
"Prior Agreement" shall have the meaning set forth in Section 6(c) hereof.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act and any successor
rule.
"Section 16 Person" means any person who is subject to the provisions of
Section 16 of the Exchange Act and the rules of the Securities and Exchange
Commission thereunder as amended from time to time.
"Share" means a share of common stock of the Company, par value $2.00 per
share, and such other securities as may be substituted for a Share or such other
securities pursuant to the adjustment provisions of Section 10.
"Share Deferral Election" shall have the meaning set forth in Section 6(a)
hereof.
"Share Election" shall have the meaning set forth in Section 4 hereof.
3. EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall become effective from the date approved by the Board of
Directors of the Company subject to approval of the Plan by the shareholders of
the Company within twelve months following such approval of the Plan by the
Board of Directors. The term of the Plan shall expire on December 31, 2010.
4. ELECTION TO RECEIVE SHARES AFTER INITIAL PERIOD
Each Director of the Company or any subsidiary of the Company may at any
time elect (a "Share Election") to receive Shares in lieu of cash as his or her
sole compensation for attendance at meetings of the Board of Directors and
Committees of the Board of Directors for any period after the Initial Period.
Notwithstanding any contrary provision of the Plan, any Share Election (or any
election made under Section 6(c) below) by a Director who is a Section 16
Person shall be irrevocable and shall be made by such Director at least six (6)
months prior to the effective date of such Share Election (or Section 6(c)
election). Any Share Election shall be made by a Director by executing and
delivering to the Company a Share Election Notice in the form of Exhibit A
hereto. The number of Shares to be granted to each Director who makes such
election shall equal the number of Shares that may be purchased for (or having
a market value equal to) the amount of cash otherwise payable to such Director
by the Company for attendance at such meetings.
5. PAYMENT OF FEES DURING INITIAL PERIOD
All compensation payable to each Director who is a Section 16 Person for
attendance at meetings of the Board of Directors and Committees of the Board of
Directors of the Company and its subsidiaries during the Initial Period
applicable to such Director ("Initial Period Fees") shall be payable in cash;
provided, however, that any Director who is a Section 16 Person may elect
pursuant to the following provisions to delay receipt of Initial Period Fees
for six months after the Director first makes a Share Election pursuant to
Section 4 above and to receive such Initial Period Fees in Shares rather than
cash.
(a) A Director who is a Section 16 Person and who has made a Share
Election may elect to delay for six months his or her receipt of all or
a portion of the Initial Period Fees payable to the Director for the
Initial Period preceding the effective date of such Share Election by
executing and delivering to the Company, at the time the Share Election
is made, a Notice of Share Election For Initial Period Fees in the form
of Exhibit B hereto. Any Initial Period Fees which are the subject of
such an election shall be maintained and held in a separate memorandum
account and shall accumulate interest at a rate per annum equal to the
longest term individual retirement account rate paid from time to time by
First National Bank of Pennsylvania until the effective date of the
election described in paragraph (b) below.
(b) A Director who has executed and delivered a Notice of Share
Election For Initial Period Fees pursuant to paragraph (a) above shall
be deemed to have irrevocably elected to receive such Initial Period
Fees in Shares rather than in cash. Such election to receive Initial
Period Fees in Shares rather than cash shall become effective on the
date six (6) months after the Company's receipt of the Director's Notice
of Share Election For Initial Period Fees. Such Director shall be issued
on the effective date of such election, in lieu of the cash amount
credited to his or her memorandum account pursuant to paragraph (a)
above, a number of Shares as shall be determined in accordance with
Section 7(a) below (subject to any Share Deferral Election made by such
Director pursuant to Section 6 below).
6. DEFERRAL OF RECEIPT OF SHARES OR INITIAL PERIOD FEES
Payment of Shares granted under the Plan pursuant to Section 4 or Section 5
above may be deferred by election of a Director in accordance with the
provisions of this Section 6.
(a) The Director may elect, by executing and delivering to the Company a
Notice of Election to Defer Annual Fees in the form of Exhibit C hereto, on or
before December 31st of any year to defer receipt of all (but not less than all)
of his or her annual fees payable under the Plan in Shares pursuant to Section 4
or Section 5 above for the period beginning on January 1 of the following
calendar year and continuing until the Company receives written notice from
the Director terminating such deferral (a "Share Deferral Election"); provided,
however, that (i) any Share Deferral Election for fees payable pursuant to
Section 4 or Section 5 above in respect of calendar year 1996 must be made on
or before the date thirty days after the date on which the Plan is approved by
the shareholders of the Company and (ii) the Director may make a Share Deferral
Election for the calendar year in which he or she is first elected to the Board
of Directors at any time on or before the date thirty days after the date on
which he or she is first elected to the Board of Directors. Such deferred fees
will be maintained and held in a separate memorandum account. Such fees will
be received in Shares as provided below.
(b) The Shares to be received by a Director who has made a Share Deferral
Election with respect to such Shares shall be issued to the Director in annual
installments as nearly equal in number as possible over a ten-year period
(or such longer or shorter period as the Committee may determine) beginning
with the first day of the first calendar year immediately following the year
in which the Director ceases to be a director. The Director shall not be
deemed to be the legal or beneficial owner of any Shares until such Shares are
distributed by the Company to the Director except that all cash and stock
dividends otherwise payable on such Shares shall be credited to the Director's
memorandum account.
(c) If the Director has previously deferred cash fees pursuant to an
Agreement to Defer Annual Fees with the Company (a "Prior Agreement"), the
Director also may elect to receive all or a percentage of the cash fees which
were deferred by the Director under such Prior Agreement prior to the effective
date of his or her initial Share Deferral Election under this Section 6 and
which are currently held in a memorandum account for the Director, together
with accumulated interest thereon, in Shares rather than in cash. Such
election may be made by checking the appropriate box on the Election form
attached hereto as Exhibit C at the time the Director first makes a Share
Deferral Election under this Section 6, which election shall be irrevocable
(if the Director is a Section 16 Person) and shall become effective on the date
on which such Director's initial Share Election becomes effective. The number
of Shares as to which such election is made will be equal to the amount of
cash fees (and accumulated interest) as to which such election is made divided
by the average of the "bid" and "ask" prices of the Common Stock on the
over-the-counter market on the date on which such Election becomes effective
(or, if such day is not a trading day, on the first trading day immediately
following such date). If such election is made by the Director, interest on
such deferred fees under such Director's Prior Agreement shall cease to
accumulate from and after the effective date of the Director's election, and
the Shares to which the Director will be entitled will be deferred and
distributed in accordance with paragraph (b) above, except that if such
election becomes effective during the period during which such deferred fees
are payable in accordance with the Director's Prior Agreement, the Director
shall receive such Shares over the remainder of such original deferral period.
(d) In the event the Director ceases to be a director of the Company and
becomes a proprietor, officer, partner, employee, or otherwise becomes
affiliated with any business that is in competition with the Company, the
entire balance of his or her deferred fees may, if directed by the Board of
Directors, in its sole discretion, be issued immediately to the Director.
(e) Upon the death of the Director prior to the expiration of the period
during which the deferred amounts are payable, the balance of the shares
issuable to the Director shall be issuable to his or her estate or other
beneficiary designated by the Director in writing to the Company in full on the
first day of the calendar year following the year in which he dies.
(f) Except as otherwise provided in Section 5 with respect to Initial
Period Fees and in any Prior Agreement to which a Director is a party with
respect to cash fees previously deferred by such Director, no Director shall
be entitled after the effective date of the Plan to defer receipt of
compensation for attendance of meetings of the Board of Directors or any
Committee of the Board of Directors unless and to the extent such Director has
made a Share Election as to such fees.
7. OTHER PROVISIONS RELATING TO SHARES
(a) The Shares issued under the Plan may be treasury shares or
newly-issued shares or may be shares purchased by the Company on the open
market for a purchase price equal to the amount of the compensation which the
Director has elected to receive in Shares (or, in the case of Shares issuable
in respect of Initial Period Fees pursuant to Section 5 and Shares the receipt
of which has been deferred pursuant to Section 6, the amount credited to the
Director in his or her memorandum account at the time such Shares are purchased)
and delivered to any Director. In cases where authorized but unissued or
treasury Shares are used, the Common Stock shall be valued at the average of
the "bid" and "ask" prices of the Common Stock in the over-the-counter market
on the business day next preceding the date of the Board or Committee meeting
or such other date on which such Shares shall become issuable to the Director
under the Plan (or, if the Common Stock ceases to trade in the over-the-counter
market and is traded on another exchange or on the Nasdaq National Market, by
such other reasonable method or formula as may be determined by the Committee
in its discretion). In cases where the Company purchases the Shares, it shall
do so as of a date reasonably close to the date of the Board or Committee
meeting.
(b) None of the Shares issued under the Plan shall be subject to
forfeiture upon the termination of a Director's service prior to completion of
his or her term.
(c) The obligation of the Company to deliver Shares to any Director who
has elected to receive Shares pursuant to the Plan shall be subject to all
applicable laws, rules and regulations, and to such approvals by governmental
agencies as may be deemed necessary or appropriate by the Company, including,
among others, such steps as counsel for the Company shall deem necessary or
appropriate to comply with requirements of relevant securities laws. Such
obligation shall also be subject to the condition that any Shares reserved for
issuance under the Plan shall have been duly listed on any national securities
exchange or automated quotation system (including Nasdaq) which then
constitutes the principal trading market for the Shares.
(d) The Company, in its sole discretion, may register any Shares to be
issued pursuant to the Plan under the Securities Act of 1933, as amended. In
the event the Company elects not to register such Shares, each Director agrees
to execute and deliver to the Company a certificate containing such
representations as to his or her investment intent and other matters as the
Company may reasonably require.
8. ENROLLMENT IN DRP
All Shares issued to each Director pursuant to the Plan shall, within five
business days following the date of issuance to the Director (but in any event
before the next record date for payment of dividends on the Common Stock), be
enrolled in the Director's name in the DRP. The Director shall be entitled to
exercise all rights to such Shares, including the right to withdraw such Shares
from the DRP, in accordance with the terms of the DRP.
9. MAXIMUM SHARES
The maximum number of Shares that may be issued under the Plan during any
calendar year may not exceed one percent (1%) of the highest number of the
Corporation's issued and outstanding common stock calculated on a fully diluted
basis, subject to adjustment as set forth in Section 10 below.
10. ADJUSTMENTS
The number and kind of Shares which may be issued under the Plan shall be
automatically adjusted to prevent dilution or enlargement of the rights of
Directors in the event of any changes in the number or kind of outstanding
Shares resulting from a merger, recapitalization, stock exchange, stock split,
stock dividend, other extraordinary dividend or distribution, corporate
division or other change in the Company's corporate or capital structure.
11. AMENDMENT, SUSPENSION AND DISCONTINUANCE
The Board of Directors may at any time amend, suspend or discontinue the
Plan, provided that, if shareholder approval of such action is necessary in
order to ensure compliance with Rule 16b-3, such action shall be subject to
approval by the holders of the Shares by the vote and in the manner required by
Rule 16b-3.
12. COMPLIANCE WITH RULE 16b-3
The Company intends that the Plan and all transactions hereunder meet all
of the requirements of Rule 16b-3 in order that the receipt of Shares by any
Director hereunder be exempt from the provisions of Section 16(b) of the
Exchange Act, and that any Director who elects to receive Shares under the Plan
shall not, as a result thereof, lose his or her status as a "disinterested
person" as defined in Rule 16b-3. Accordingly, if any provision of the Plan
does not meet a requirement of Rule 16b-3 as then applicable to any such
transaction, or would cause a Director who receives any Shares hereunder not to
be a "disinterested person," such provision shall be construed or deemed
amended to the extent necessary to meet such requirement and to preserve such
status.
13. GOVERNING LAW
The Plan shall be applied and construed in accordance with and governed
by the law of the Commonwealth of Pennsylvania and applicable Federal law.
SHARE ELECTION NOTICE
The undersigned director ("Director") of F.N.B. Corporation (the
"Corporation") and/or a subsidiary of the Corporation hereby elects, pursuant
to the F.N.B. Corporation Directors' Compensation Plan (the "Plan"), to receive
his or her compensation for attendance at meetings of the Board of Directors
and Committees of the Board of Directors of the Corporation and its
subsidiaries in shares of the Corporation's Common Stock rather than in cash.
I acknowledge and agree that if I am a Section 16 Person (as defined in
the Plan), my Share Election shall not become effective until the date six (6)
months following the date this Notice has been executed and delivered to the
Corporation and my Share Election shall remain effective until the date six (6)
months after I have executed and delivered to the Corporation a notice
terminating my Share Election. I further acknowledge that the provisions of
the Plan shall govern my Share Election and all shares to be granted to me
pursuant thereto.
Executed as of the date and year set forth below.
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Signature of Director
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Name of Director
Date:
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Exhibit A
NOTICE OF SHARE ELECTION FOR INITIAL PERIOD FEES
The undersigned director ("Director") of F.N.B. Corporation (the
"Corporation") and/or a subsidiary of the Corporation hereby elects, pursuant
to the F.N.B. Corporation Directors' Compensation Plan (the "Plan"), to delay,
for a period of six months after the date hereof, his or her receipt of the
cash fees payable to the Director for attendance at meetings of the Board of
Directors of the Corporation or its subsidiaries or committees thereof during
the six months prior to the effective date of the Share Election Notice which
the undersigned has executed and delivered along with this Notice ("Initial
Period Fees"). The undersigned acknowledges and agrees that this election
shall constitute an irrevocable election to receive such Initial Period Fees
in shares of the Corporation's common stock rather than in cash as set forth
in the Plan, which election shall become effective on the date six months
following the date the Corporation receives this Notice.
I acknowledge and agree that the provisions of the Plan shall govern my
election to delay receipt of the fees which are subject to this Notice and to
receive such fees in shares of Common Stock, the terms under which such fees
will be held and my receipt of such shares of Common Stock.
Executed as of the date and year set forth below.
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Signature of Director
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Name of Director
Date:
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Exhibit B
NOTICE OF ELECTION TO DEFER ANNUAL FEES
The undersigned director ("Director") of F.N.B. Corporation (the
"Corporation") and/or a subsidiary of the Corporation hereby elects, pursuant
to the F.N.B. Corporation Directors' Compensation Plan (the "Plan"), to defer
receipt of all shares of the Corporation's Common Stock which may be issuable
to the undersigned pursuant to the Plan for the calendar year beginning on the
January 1 first following the date of this Notice (or, if this election is made
within 30 calendar days after the date the Plan is approved by the shareholders
of the Corporation or within 30 calendar days after the date on which the
undersigned is first elected or appointed to the Board of Directors of the
Corporation and/or a subsidiary of the Corporation, for the current calendar
year) and each subsequent calendar year until the Corporation receives a notice
from the undersigned revoking this Election to Defer Annual Fees.
(Check if applicable:)
______ I hereby elect to receive _____% of the cash fees previously
deferred by me under my Agreement with Director to Defer
Annual Fees and held by the Corporation, together with
accumulated interest thereon, in Shares rather than in cash
as provided in and pursuant to the terms of Section 6 of
the Plan.
I acknowledge and agree that the provisions of the Plan shall govern my
receipt of the shares of Common Stock which are subject to this Notice and all
such Shares.
Executed as of the date and year set forth below.
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Signature of Director
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Name of Director
Date:
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Exhibit C