EXHIBIT 10.3
STOCK OPTION PLAN OF THE COMPANY
MID AM, INC.
1992 STOCK OPTION PLAN
As Amended by the Board of Directors
16 June 1994
and
19 October 1995
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TABLE OF CONTENTS
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.01 ESTABLISHMENT. . . . . . . . . . . . . . . . . . . 1
1.02 PURPOSE. . . . . . . . . . . . . . . . . . . . . . 1
1.03 DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
1.04 ADMINISTRATION . . . . . . . . . . . . . . . . . . 3
1.05 TOTAL NUMBER OF SHARES TO BE OPTIONED. . . . . . . 3
1.06 ELIGIBILITY. . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
PROVISIONS RELATING TO OPTIONS
2.01 CHARACTER OF OPTIONS . . . . . . . . . . . . . . . 9
2.02 TERMS AND CONDITIONS OF OPTIONS. . . . . . . . . . 9
2.03 DATE OF GRANTING OF OPTIONS. . . . . . . . . . . . 12
2.04 EXERCISE OF OPTION - PURCHASE OF SHARES. . . . . . 12
2.05 NO OBLIGATION TO EXERCISE OPTION . . . . . . . . . 16
ARTICLE III
GENERAL PROVISIONS
3.01 WITHHOLDING TAXES FOR AWARDS . . . . . . . . . . . 16
3.02 CHANGE IN STOCK, ADJUSTMENTS, ETC. . . . . . . . . 18
3.03 DURATION, AMENDMENT AND TERMINATION. . . . . . . . 20
3.04 APPLICATION OF FUNDS . . . . . . . . . . . . . . . 21
3.05 LEGAL AND OTHER REQUIREMENTS . . . . . . . . . . . 21
3.06 EFFECTIVE DATE OF PLAN . . . . . . . . . . . . . . 22
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ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.01 ESTABLISHMENT
Mid Am, Inc. (the "Company"), an Ohio corporation,
hereby establishes a plan to be called the 1992 Mid Am, Inc.
Stock Option Plan (the "Plan").
1.02 PURPOSE
The purpose of the Plan is to promote the long term
growth and prosperity of Mid Am, Inc. by providing Officers,
Directors and key employees, who are in a position to contribute
materially to the prosperity of the Company, a financial
incentive through stock ownership to make significant
contributions toward this success. The Plan is designed to
attract and retain key employees and directors and to encourage
them to acquire an ownership interest. The Plan provides for
granting these individuals options for the purchase of common
shares of the Company. The Plan also allows Officers, Directors,
and all employees to elect option grants in lieu of cash
compensation.
1.03 DEFINITIONS
Unless the context clearly indicates otherwise, the
following terms have the meanings set forth below:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Committee" shall mean the Committee, of not less
than three (3) directors, which is appointed by
the Board to administer the Plan. These directors
shall be "disinterested persons" within the
meaning of Rule 16b-3 of the Securities Exchange
Act of 1934.
(c) "Company" shall mean Mid Am, Inc., an Ohio
corporation, and its subsidiaries.
(d) "Key Employees" shall mean employees at the level
of senior vice president or above and any other
officers of the Company who, in the sole
determination of the Special Projects Committee
have rendered valuable service to the Company, or
whose present or potential service to the Company
merits the grant of options.
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(e) "Non-employee Directors" shall mean all statutory
directors of the Company and its subsidiaries who
are not employees of the Company or any of its
subsidiaries.
(f) "Incentive Stock Option" shall mean an Option that
qualifies as an Incentive Stock Option as
described in Section 422A of the Code.
(g) "Nonqualified Stock Option" means an Option other
than an Incentive Stock Option.
(h) "Option" shall mean a right to purchase shares of
common stock, granted pursuant to the Plan, in the
form of grant options or elective options as
defined in the Plan.
(i) "Optionee" shall mean a Participant to whom
Options have been granted in accordance with the
provisions of the Plan.
(j) "Option Price" shall mean the purchase price for
Stock under an Option, determined pursuant to the
Plan.
(k) "Participant" shall mean any employee of Mid Am,
Inc., whether a Key Employee or not, and any
Director of the Company to whom an Option is
granted under the Plan.
(l) "Plan" shall mean this 1992 Mid Am, Inc. Stock
Option Plan and the 1994 Amendment to the 1992
Stock Option Plan (the "Amendment").
(m) "Stock" shall mean the common stock of the
Company, no par value.
1.04 ADMINISTRATION
The Plan shall be administered by the Board of
Directors of the Company (the "Board"), which, to the extent it
shall determine, may delegate its powers with respect to the
administration of the Plan to a committee of directors (the
"Committee") appointed by the Board and composed of not less than
three (3) members of the Board. If the Board chooses to appoint
a Committee, all references to the Board shall be deemed to refer
to the Committee.
The Board from time to time may adopt (and thereafter
amend and rescind) rules and regulations for carrying out the
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Plan and take such action in the administration of the Plan, not
inconsistent with the provisions hereof, as it shall deem proper.
The interpretation and construction of any provisions of the Plan
by the Board shall be final and conclusive. No member of the
Board shall be liable for any action or determination made in
good faith with respect to the Plan or any option granted under
it.
1.05 TOTAL NUMBER OF SHARES TO BE OPTIONED
The maximum number of shares of common stock of the
Company which may be issued upon exercise of options under the
Plan shall not exceed seven percent of the total shares
outstanding, subject to adjustment as provided in Section 3.02
(a). The shares to be transferred or sold under the Plan shall
be authorized but unissued shares of common stock or authorized
shares held as treasury stock. The Company shall purchase any
other shares required for the Plan on the open market or from
private sources. In the event that any options under the Plan
expire or are terminated, the shares of common stock of the
Company allocable to the unexercised portion of all such options
may again be subject to an option or transfer under the Plan.
1.06 ELIGIBILITY
(a) "Grant Options" may be awarded from time to time
only to Officers, Directors and Key Employees of
the Company. The Board will, in its discretion,
determine the Officers and Key Employees to be
awarded "Grant Options", the time or times at
which such options shall be granted and in
connection therewith, the number of shares to be
covered by each grant of such options and the
manner in which they may be exercised. In making
this determination, the Board may take into
consideration the value of the services rendered
by the respective individuals, their present
and/or potential contributions to the success of
the Company and such other factors which the Board
may deem relevant in accomplishing the purpose of
the Plan. All terms and conditions of "Grant
Options", other than options granted to
Non-employee Directors, shall be subject to all
restrictions and conditions imposed by the
Board,and these terms and conditions need not be
the same for all Optionees of "Grant Options".
Eligible Directors are all Non-employee Directors
of the Company. The award of "Grant Options" to
these Non-employee Directors is not subject to the
discretion of the Board. Directors serving on the
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Committee who are Non-employee Directors may
receive "Grant Options".
(b) Grant Options to Non-employee Directors "Grant
Options" to Non-employee Directors shall be
awarded as follows:
(1) Following adoption of the Plan, each
non-employee director of the Company shall be
granted an option for 1,000 shares of stock.
Also, following adoption of the Plan, each
non-employee director of each of the
subsidiaries of the Company shall be granted
an option for 700 shares of stock.
(2) Each person subsequently elected or appointed
to serve as a non-employee director of the
Company or its subsidiaries after adoption of
this Plan shall, upon his or her initial
appointment or election automatically be
granted an option for 1,000 shares of stock
if a director of the Company or for 700
shares of stock if a director of any of the
Company's subsidiaries, if elected or
appointed more than six months prior to the
third Thursday of November in any given
year.If elected or appointed less than six
months prior to the third Thursday of
November in any given year, the director
shall receive the initial grant of 1,000 or
700 shares respectively, on the annual grant
date of the third Thursday of November, in
lieu of the annual grant of 500 or 350
shares, respectively.
(3) Beginning on the third Thursday in November
in the year immediately succeeding adoption
of this Plan, and continuing each third
Thursday in November thereafter, each
non-employee director of the Company shall
automatically granted an option for 500
shares of stock and each non-employee
director of any subsidiary of the Company
shall automatically be granted an option for
350 shares of stock.
(4) If any director serves as a director of both
the Company and of one or more subsidiaries,
he or she shall be entitled only to one
initial and one yearly grant, which shall in
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each case be the larger grant to which he or
she is entitled.
(c) Elective Options
"Elective Options" may be granted to Non-employee
Directors and to all employees of the Company in
lieu of cash compensation. The Board will, in its
discretion, determine which employees are entitled
to elect options in lieu of cash compensation, the
amount of cash compensation for which "Elective
Options" may be elected as a substitution, the
time or times at which such elections must be
made and such options shall be granted in this
manner, the number of shares to be covered by each
grant of "Elective Options", and the manner in
which such options may be exercised. In making
this determination, the Board may take into
consideration the current and prospective economic
condition of the Company and such other factors
which the Board may deem relevant in accomplishing
the purpose of the Plan. All terms and conditions
of options granted, other than options granted to
Non-employee Directors, shall be subject to all
restrictions and conditions imposed by the Board,
and these terms and conditions need not be the
same for all Optionees. Any Optionee subject to
Section 16 of the Exchange Act receiving Elective
Options" shall not sell any shares of the
Company's stock (whether related to an option or
not) within six months of an "Elective Option"
grant, without the prior approval of the
Company's General Counsel. Directors eligible
for "Elective Options" are all Non-employee
Directors of the Company. Directors serving on
the committee who are Non-employee Directors may
receive "Elective Options".
(d) Elective Options to Non-employee Directors
(1) In accordance with Rule 16b-3(c)(2)(i)(C),
promulgated under Section 16 of the Securities
Exchange Act of 1934, each Non-employee Director
may elect to receive options for a number of
shares equivalent to a portion or the entire
amount of retainer and attendance fees the
Non-employee Director would normally be entitled
to receive in cash. Equivalency will be
determined by a wholly independent third party
using a fixed schedule of payments for retainers
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and attendance fees.
(2) By June 30, 1994 or by December 31st of each
year thereafter, to the extent that "Elective
Options" are offered, a Non-employee Director may
elect, in writing, to receive all or a percentage
of his or her retainer and attendance fees, for
the immediately following six-month period, in
"Elective Options" in lieu of cash. The written
election to receive "Elective Options" in lieu of
cash must state the portion of compensation that a
Non-employee Director wishes to receive in
"Elective Options".
(3) A written election to receive "Elective
Options" remains in effect and is irrevocable for
the immediately following period and applies to
each subsequent period unless the election
expressly provides otherwise or until it is
revoked or changed, prior to the commencement of
the next period. It must include a designation of
beneficiary or beneficiaries to receive amounts
distributable in the event of Optionee's death.
(e) Nothing in the Plan, or in any grant of options
shall confer on any person any right to continue
in the employ of the Company, nor interfere with
the right of the Company to terminate the person's
employment at any time. No employee shall have a
right to be selected as an Optionee, nor, having
been so selected, to be selected again as an
Optionee.
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ARTICLE II
PROVISIONS RELATING TO OPTIONS
2.01 CHARACTER OF OPTIONS
It is the intent of the Plan that options granted shall
be Incentive Stock Options as that term is defined in Section
422A of the Internal Revenue Code of 1986, as amended from time
to time (the "Code"), to the extent, and only to the extent, that
these options are so identified in writing. All options not
identified as Incentive Stock Options at the time of grant are
intended to be "nonqualified" or "nonstatutory" stock options
which are not Incentive Stock Options.
2.02 TERMS AND CONDITIONS OF OPTIONS
Each Option granted under the Plan shall be evidenced
by a Stock Option Agreement in a form not inconsistent with the
Plan, provided that the substance of the following terms and
conditions be included:
(a) Option Price: The price at which each share of
common stock covered by the Option may be
purchased shall be determined by the Board, but
shall not be less than 100 percent of the fair
market value of the common stock subject to the
stock option on the date of grant. Fair market
value shall be defined as the closing price on
the National Market System's NASDAQ quotation
service on the trading day immediately preceding
grant.
(b) Term of Option: The Option and any related right
shall not be exercisable after the expiration of
ten (10) years from the date the option was
granted.
(c) Nontransferable: The Option and any related right
shall not be transferable by Optionee otherwise
than by will or by the laws of descent and
distribution and may be exercised, during
Optionee's lifetime, only by Optionee.
(d) Upon the termination of Optionee's employment by
the Company or relationship with the Board for any
reason other than death, Optionee may exercise
available Options pursuant to Section 2.04 of the
Plan until the earlier of the expiration of its
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original term or:
1) if termination is due to retirement, one (1)
year after termination;
2) if termination is due to total and permanent
disability as determined by the Board, one
(1) year after termination;
3) if termination is for any other reason, two
(2) months after the date of notice of
termination, provided however, that in the
case of Elective Options and termination is
not for cause, one (1) year after
termination. Leaves of absence for periods
and purposes conforming to the personnel
policy of the Company as may be approved by
the Committee shall not be deemed
terminations or interruptions of employment.
(e) Death of Optionee: In the event of the death of
an Optionee during the period in which an option
is exercisable (as set forth in Subsection (b)
above), the option granted to that person and any
related right shall be exercisable only within
the twelve (12) months next succeeding such
death, and then only:
1) by the executor, executrix, administrator, or
administratrix of Optionee's estate or by the
person or persons to whom Optionee's rights
under the option shall pass by Optionee's
will or the laws of descent and
distribution,and
2) if and to the extent that Optionee was
entitled to exercise the option at the date
of Optionee's death, provided that in no
event shall the option be exercisable more
than ten (10) years after the date it was
granted.
2.03 DATE OF GRANTING OF OPTIONS
The granting of an option pursuant to the Plan shall
take place on the date the Board decides to grant the option.
Within thirty (30) days of the granting of the option, the
Company shall notify Optionee of the grant of the option and,
within sixty (60) days of the granting of the option, submit to
Optionee a Stock Option Agreement duly executed by and on behalf
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of the Company, with the request that Optionee execute the
agreement within thirty (30) days after the mailing by the
Company of the agreement to Optionee. If Optionee shall fail to
execute the written option agreement within this 30-day period,
Optionee's option shall be automatically terminated unless
otherwise determined by the Board.
2.04 EXERCISE OF OPTION - PURCHASE OF SHARES
(a) Unless otherwise determined by the Board, and
except for "Elective Options" in lieu of cash
compensation elected pursuant to subsections 1.06
(c) or (d), one-fifth of the total number of
shares subject to a "Grant Option" awarded under
the Plan to an Officer or Key Employee shall
become exercisable one year from date of grant
and one-fifth on each of the four succeeding
anniversaries, provided the Officer or Key
Employee remains in the employ of the Company on
those respective dates. An Officer or Key
Employee Optionee's right to purchase shares with
respect to options which become exercisable shall
be cumulative during the term of the option.
Grant Options" awarded to Non-employee Directors
shall become exercisable immediately following
the date of the grant. "Elective Options"
elected by employees shall become exercisable
immediately following the date of the grant.
"Elective Options" elected by Non-employee
Directors shall become exercisable on the
date after the date of grant on which cash
compensation for retainers and attendance fees
would have been payable to the participant. Any
"Elective Option" granted for attendance fees not
actually earned will lapse in an amount equivalent
to the unearned fees.
(b) An option shall be exercisable by purchase of
shares only upon payment to the Company of the
full option price, as defined in Section 2.02, of
the shares with respect to which the option is
exercised; provided, however, that the Company
shall not be required to deliver any certificates
for shares of Company common stock purchased upon
the exercise of an option prior to:
1) if requested by the Company, the filing with
the Company by Optionee or purchaser acting
under Subsection 2.02(e) of a representation
in writing that at the time of exercise it is
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Optionee's or purchaser's then present
intention to acquire the shares being
purchased for investment and not for resale,
or
2) the completion of any registration or other
qualification of shares under any state or
Federal laws or rulings or regulations of any
government regulatory body, which the Company
shall determine to be necessary or advisable.
An Optionee shall have none of the rights of
a shareholder until shares are issued to
Optionee, and no adjustment will be made for
dividends or other rights for which the
record date is prior to the date a stock
certificate is issued.
(c) Payment for shares shall be in United States
dollars, payable in cash or by check, determined
as of the date of exercise, equal to the number of
shares with respect to which the option is
exercised multiplied by the Option Price per
share. An option shall be deemed exercised on
the date payment and written request are received
by the Board or by any person designated by the
Board.
(d) Optionee may elect to use common stock valued at
the Fair Market Value on the last business day
preceding the exercise date to pay all or part of
the exercise price of an option, subject to
conditions the Committee may impose through the
adoption of rules or regulations or otherwise,
provided, however, that this form of payment shall
not be permitted unless at least one hundred (100)
shares of common stock are delivered for this
purpose.
(e) No Optionee or Optionee's executor, executrix,
administrator, or administratrix, legatees or
distributees, as the case may be, will be, or will
be deemed to be, a holder of any shares subject to
an option unless and until a stock certificate or
certificates for the shares are issued to this
person or them under the terms of the Plan.
(f) No option may, at any time, be exercised with
respect to a fractional share. No fractional
shares will be issued.
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(g) Notwithstanding the provisions of subsections (c)
and (d) of this Section 2.04, Optionees not
subject to Section 16 of the Exchange Act may,
with the consent of the Company, simultaneously
exercise options and sell the underlying shares
to the Company, and the Company shall withhold
from the gross proceeds an amount equal to the
number of shares with respect to which the options
are exercised multiplied by the Option Price per
share.
2.05 NO OBLIGATION TO EXERCISE OPTION
Granting of an option shall impose no obligation on
Optionee to exercise the option.
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ARTICLE III
GENERAL PROVISIONS
3.01 WITHHOLDING TAXES FOR AWARDS
Each Optionee shall, as a condition of exercising an
Option, pay to the Company the amount, if any, required to be
withheld from distributions resulting from exercise under
applicable Federal and state income tax laws ("Withholding
Taxes"). Withholding Taxes shall be payable as of the date
income from the exercise is included in Optionee's gross income
for federal income tax purposes (the "Tax Date"). Optionee may
satisfy this requirement by electing one of the following methods
(or a combination), which election is subject to the approval of
the Board:
(a) remitting to the Company in cash or by check the
amount of the Withholding Taxes;
(b) remitting to the Company a number of shares of
common stock having an aggregate Fair Market Value
as of the last business day preceding the Tax Date
equal to the amount of the Withholding Taxes;
(c) electing to have the Company withhold from the
distribution the number of shares of common stock
having an aggregate Fair Market Value as of the
last business day preceding the Tax Date equal to
the amount of the Withholding Taxes.
Any election by Optionee pursuant to clause (b) or (c)
of this Section 3.01 must be made on or prior to the Tax Date and
is irrevocable. In addition, if Optionee is subject to Section
16 of the Exchange Act, an election pursuant to clause (b) or (c)
of this Section 3.01 cannot be made until at least six (6) months
after the Grant Date (except that this limitation shall not apply
in the event the death or disability of Optionee occurs prior to
the expiration of the six (6) month period), and election must be
made either by the date which is at least six (6) months prior to
the Tax Date or during any period beginning prior to the Tax Date
which begins on the third business day following the date of
release for publication by the Company of quarterly or annual
summary statements of earnings and ending on the twelfth business
day following this date.
<PAGE 15>
3.02 CHANGE IN STOCK, ADJUSTMENTS, ETC.
(a) In the event that the outstanding shares of common
stock of the Company are increased or decreased or
changed into or exchanged for a different number
of shares or kind of shares or other securities
of the Company or of another corporation, by
reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split,
combination of shares, or a dividend payable in
capital stock, appropriate adjustment shall be
made by the Board in the number and kind of
shares for the purchase of which options may be
granted under the Plan. In addition, the Board
shall make appropriate adjustment in the number
and kind of shares as to which outstanding
options, or portions thereof then unexercised,
shall be exercisable, to the end that the
Optionee's proportionate interest shall be
maintained as before the occurrence of such
event, and this adjustment of outstanding options
shall be made without change of the total price
applicable to the unexercised portion of the
option and with a corresponding adjustment in the
Option Price per share; provided, however, that
each such adjustment in the number and kind of
shares subject to outstanding options, including
any adjustment in the Option Price, shall be made
in a manner which will not establish a new
measurement date for the purposes of determining
compensation expense under the provisions of the
Accounting Principles Board Opinion No. 25 -
Accounting for Stock Issued to Employees, as
amended. The grant of an option pursuant to the
Plan shall not affect in any way the right or
power of the Company to make adjustments,
reclassifications, reorganizations or changes of
its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell,
or transfer all or any part of its business or
assets.
(b) Change in Control. Upon the Change in Control of
the Company, as defined below, each stock option
granted shall be immediately vested and fully
exercisable as of the effective date of the Change
in Control. After the effective date of the
Change in Control, the option shall remain fully
exercisable until it would otherwise expire by
reason of lapse of time. "Change in Control"
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means any one or more of the following events:
(a) the merger or consolidation of Employer with
or into any other corporation and Employer is not
the surviving corporation; (b) in excess of
24.99 percent of the outstanding common stock of
Employer is owned, held or controlled by an
entity, person or group acting in concert with the
power to control the Company as that term is
defined in Rule 405 of the Securities Act of 1933;
(c) the sale or exchange of in excess of 24.99
percent of the assets of Employer to any entity,
person, or group acting in concert; (d) the
recapitalization, reclassification of securities
or reorganization of Employer which has the effect
of either subpart (b) or (c) above; (e) the
issuance by Employer of securities in an amount in
excess of 24.99 percent of the outstanding common
stock of Employer to any entity, person, or group
acting in concert and intending to exercise
control of Employer or (f) the removal,
termination or retirement of more than 49 percent
of the members of the Board of Directors.
3.03 DURATION, AMENDMENT AND TERMINATION
The Company may at any time terminate the Plan or make
amendments as it shall deem advisable and in the best interests
of the Company without further action on the part of the holders
of Company voting stock; provided, however, that no termination
or amendment shall, without the consent of the individual to whom
any option shall have been granted, affect or impair the rights
of that individual under the option, and provided further, that
unless the holders of Company voting stock shall have approved in
accordance with Rule 16b-3(b) of the Exchange Act, no amendment
of this Plan shall be made whereby:
1) the total number of shares which may be optioned under
the Plan to all individuals, or any of them, shall be
increased, except by operation of the adjustment
provisions of Section 3.02 (a) hereof;
2) the terms of the options shall be extended;
3) the minimum Option Price shall be decreased; or
4) the class of individuals to whom options may be granted
shall be changed.
<PAGE 17>
3.04 APPLICATION OF FUNDS
The proceeds received by the Company from the sale of
stock subject to option are to be added to the general funds of
the Company.
3.05 LEGAL AND OTHER REQUIREMENTS
The obligation of the Company to sell and deliver
common stock under the Plan shall be subject to all applicable
laws, regulations, rules and approvals, including, but not by way
of limitation, the effectiveness of a registration statement
under the Securities Act of 1933 if deemed necessary or
appropriate by the Company.
3.06 EFFECTIVE DATE OF PLAN
This Plan shall become effective October 15, 1992,
provided that it has been adopted by the affirmative vote of a
majority of the outstanding shares of the Company present and
entitled to vote at a meeting of stockholders at which a quorum
is present within one (1) year of its adoption by the Company.
The Plan shall be null and void and of no effect if this
condition is not fulfilled, and in this event each stock option
granted shall, notwithstanding any of the preceding provisions of
the Plan, be null and void and of no effect.
Executed at _________________________ this ______ day of
___________________, 19____.
MID AM, INC.
______________________________________
By____________________________________