EMPIRE BANC CORPORATION
DIRECTORS' DEFERRED COMPENSATION AND STOCK INVESTMENT PLAN
1. Establishment. Empire Banc Corporation (the Company), hereby
establishes the Empire Banc Corporation Directors' Deferred Compensation
and Stock Investment Plan (the "Plan") for Eligible Directors of the
Company.
2. Effective Date. The Plan shall become effective May 1, 1995, provided
that it has been approved by the shareholders of the Company.
3. Purpose. The purpose of the Plan is to provide Eligible Directors
with a means of expressing their commitment to the Company and an
additional incentive to perform their duties in a manner that maximizes
shareholder value by relating the rate of return on their deferred retainer
fees to the stock market performance of the Company's stock.
4. Definitions.
Reserve account. The term "Reserve Account" shall have meaning given in
Paragraph 6 of the Plan.
Committee. The term "Committee" shall mean the directors described in
Section 8.
Company. The term "Company" shall mean Empire Banc Corporation, and its
successors and assigns.
Dividend Payment Date. The term "Dividend Payment Date" shall mean the
date on which dividends are paid to the Company's shareholders.
Election Agreement. The term "Election Agreement" shall mean each and
every Election Agreement executed by an Eligible Director and delivered
to the Company hereunder, the form of which is attached to the Plan as
Exhibit A, and is incorporated by reference herein.
Eligible Director. The term "Eligible Director" shall mean any present
or future director of the Company, Empire National Bank or any affiliate
of Company that adopts this Plan, who is not an employee of the Company
or any affiliate of the Company.
Market Price. The term "Market Price" shall mean the average of the bid
and ask price, on the OTC Bulletin Board, or if the Stock is reported on
the NASDAQ/National Market System or any other national securities
exchange, the closing price of the Stock on such national securities
exchange, on the date of the required calculation or, if there were no
Stock transactions on such day, on the next preceding day on which there
were Stock transactions.
Participating Director. The term "Participating Director" shall mean an
Eligible Director who has executed and delivered an Election Agreement to
the Company.
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Payment Date. The term "Payment Date" shall mean the earliest to occur
of the following dates:
(i) The date of the Director's sixty-fifth birthday; or
(ii) The date of the Participating Director's Retirement; or
(iii) The Participating Director's death; or
(iv) The Participating Director's total and permanent disability.
Plan. The term "Plan" shall mean the Empire National Bank Director's
Deferred Corporation and Stock Investment Plan, as it may be amended from
time to time.
Record Date. The term "Record Date" shall mean the date as of which the
Shareholders of record are determined for purposes of paying Stock
dividends.
Plan Year. The Plan Year shall be May 1 to April 30, of each year.
Retainer Fee. The entire "Retainer Fee" amount that would be paid to a
Participating Director by the Company, Empire National Bank or any
affiliate of the Company that has adopted the Plan during the Plan Year
in question. In no event does the term Retainer Fee include any per diem
amounts paid with respect to Board or committee meeting attendance.
Retirement. The term "Retirement" shall mean the voluntary or
involuntary resignation of a director, the removal of a director with or
without cause or the conclusion of a director's term or office where the
director is not reelected by shareholders of the Company to a succeeding
term.
Stock. The term "Stock" shall mean the $5 par value common stock of the
Company.
5. Directors' Elections.
(a) Retainer Fee Deferral Election. Each Eligible Director shall
be given an opportunity by the Company on an annual basis to defer receipt
of all (but not less than all) of the Retainer Fee which such Eligible
Director has the opportunity to earn during the next succeeding Plan Year
through service as an Eligible Director. In order to participate in the
Plan for a particular Plan Year, an Eligible Director must elect in writing
to participate, and such election must be made at least six months prior
to the first day of the applicable Plan Year, except that the election for
the first Plan Year may be made at any time prior to the first day of the
Effective Date.
To make an effective election, a properly completed and executed Election
Agreement must be received by the Company at the address specified on such
Election Agreement.
6. Reserve Account.
(a) Establishment of Account. The Company shall establish and
maintain a Reserve Account for each Participating Director. The Reserve
Account shall reflect all entries required to be made pursuant to the
terms and conditions of the Participating Director's Election Agreement.
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(b) Credits to Account. The Company shall credit to a Participating
Director's Reserve Account a number (to four decimal places) of units
that is equal to 110% of the amount of the Participating Director's
Retainer Fee deferred pursuant to an Election Agreement, divided by the
Market Price on the day when such amounts are earned. For this purpose,
the amounts of a Participating Director's Retainer Fee are deemed earned
when paid.
The Company shall credit to the Reserve Account on each Dividend Payment
Date that number (to four decimal places) of units that is equal to the
total number of units in the Participating Director's Reserve Account
on the Record Date for such dividend, multiplied by the cash dividend
per share of Stock divided by the Market Price on the Dividend Payment
Date for such dividend. The number of units credited to a Reserve Account
shall be adjusted appropriately by the Company in the event of any change
in the Stock by reason of stock dividends, split-ups, recapitalizations,
combinations, exchanges of shares and other like capital changes, but no
adjustment shall be required by reason of any sales of shares of Stock
by the Company at any price, whether below, at or above Market Price,
and whether by or pursuant to warrant, option, right, conversion right
or privilege or otherwise, and a Participating Director shall have no
rights as a holder of Stock unless and until a certificate for shares of
Stock is issued by the Company.
7. Payment of Account Value.
(a) General. The Company shall, with respect to each Reserve
Account for each Participating Director, cause to be delivered to such
Participating Director (or any applicable alternate payee, as determined
under the Plan or the applicable Election Agreement) on or promptly after
the Applicable Payment Date, the Payment Date value of such Reserve
Account in the form of shares of Stock, all pursuant to the express terms
and conditions of the Plan and the applicable Election Agreement. A
Participating Director may elect not to receive payment of his Reserve
Account as of his sixty-fifth birthday, and instead to receive payments
under this Plan as of the next applicable Payment Date. Such election
must be made at least 90 days before, and in the calendar year prior to,
his sixty-fifth birthday.
(b) Disability. If a Payment Date occurs by reason of a
determination by the Company that the Participating Director has become
totally and permanently disabled, and if the disability is due to
mental incapacity, the shares of Stock deliverable under the Plan and
the applicable Election Agreement shall be issued in the name of and
delivered to the Participating Director's legally appointed personal
representative. If no such representative has been appointed, then
delivery date shall be in the name of and to the participating Director's
spouse, or if the Participating Director is then unmarried, then such
shares of stock shall be held until the persons who would be entitled
thereto, if the Participating Director were then to die interstate, make
proper claim of the Company for such shares of stock or dollar amount.
Such payment shall be made to the Participating Director if the disability
is not due to mental incapacity.
(c) Death. If a Payment Date occurs because the Participating
Director shall die, the shares of Stock required to be delivered under
the Plan and the applicable Election Agreement shall be promptly issued
in the name of and delivered to the Participating Director's beneficiary
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(or beneficiaries) as designated in the applicable Election Agreement, or,
if none are so designated, in the name of and to the legally appointed
personal representative of the Participating Director's estate. If no
legal proceedings for such appointment have been instituted within sixty
days after receipt by the Company of notice of the Participating Director's
death, such delivery shall be in accordance with the last sentence of
Paragraph 7(b) above.
8. Administration. Directors of the Company, Empire National Bank, or
any affiliate of the Company that adopts this Plan, who are not Eligible
Directors shall be solely responsible for the administration of the Plan,
but may delegate any portion of such responsibility that they determine to
be appropriate. To the extent consistent with the terms of the Plan, such
directors shall have the power to interpret any Plan provision, to
prescribe, amend and rescind rules and regulations relating to the Plan
and to make all other determinations that it deems necessary or advisable
to administer the Plan. Such directors shall constitute the Committee for
the Plan.
9. Status of Account. The Company shall have full and unrestricted use
of all property or amounts payable pursuant to the Plan, and title to and
beneficial ownership of any assets which the Company may earmark to pay
the amounts hereunder shall at all times remain in the Company and no
Eligible Director shall have any property interest whatsoever in any
specific assets of the Company. The Reserve Account is not intended to be
a trust account or escrow account for the benefit of a Participating
Director or any other person, or an asset segregation for the benefit of a
Participating Director or any other person. The sole right of a
Participating Director, or a Participating Director's heirs or personal
representatives, is a right as an unsecured general creditor of the
Company to claim any shares of Stock or dollar amount to which the
Participating Director's Election Agreement and the Plan. Notwithstanding
the above provisions, the Company may establish a grantor trust to provide
additional security to Participating Directors that amounts under this
Plan will be properly paid, provided that the status of Participating
Directors with respect to assets of the grantor trust remains that of
general unsecured creditors. The Company shall provide each Participating
Director with an annual report of his or her Reserve Account balance
within 30 days following the end of each Plan Year.
10. Amendment or Termination. The Committee may, at any time and from
time to time, terminate the Plan or make such amendments as it deems
advisable; provided, however, that no such termination or amendment shall
adversely affect or impair the contract rights of a Participating Director
with respect to an effective Election Agreement, unless such Participating
Director shall consent in writing to such termination or amendment. Such
amendment may not, without the approval of the Company's shareholders,
materially increase the benefits accruing to Eligible Directors under the
Plan, increase the number of shares of Stock distributed under the Plan,
or materially modify the requirements as to eligibility under the Plan.
11. Stock Subject to Plan. The maximum number of shares of Stock that
shall be reserved for issuance under the Plan shall be 40,000 shares,
subject to adjustment upon changes in the capitalization of the Company
as provided in Paragraph 6 of the Plan.
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12. Compliance with Securities Laws. With respect to persons subject
to Section 16 of the Securities Exchange Act of 1934 ("1934 Act"),
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the
extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
13. Non-Plan Deferral Arrangements. The Company does not intent that
this Plan replace or supersede any presently existing retainer deferral
arrangement or preclude the Company from implementing additional deferral
arrangements.
14. Costs of Enforcement. The Company shall pay all expenses of a
Director, including but not limited to attorney fees, incurred in enforcing
payments by the Company pursuant to this Plan.
15. Future Director Terms. Nothing in this Plan or in any Election
Agreement shall obligate a director to continue as such, or to accept
any nomination for a future term as a director of the Company, or require
the Company to nominate or cause the nomination of the director for a
future term as a director of the Company. For purposes of this provision,
the term "Company" shall include Empire National Bank and any affiliate
of the Company that adopts this Plan.
16. No Alienation. No shares of Stock amount deliverable under the
Plan or under an Election Agreement shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrances
or change, other than by will or the laws of descent and distribution.
17. Withholding. The Company is entitled to withhold and deduct from any
amounts due from the Company to a Participating Director, all legally
required amounts necessary to satisfy any federal, state or local
withholding and employment-related taxes arising directly or indirectly in
connection with the Plan or any Election Agreement, and the Company may
require the Participating Director to remit promptly to the Company the
amount of such taxes before taking any future actions with respect to the
Participating Director's Reserve Account or Election Agreement. For
purposes of this provision, the term "Company" shall include Empire
National Bank, and any affiliate of the Company that has adopted this
plan.
18. Binding Effect. This Agreement shall bind the Director, the
Company, Empire National Bank, and any affiliate of the Company that
has adopted the Plan, and their beneficiaries, survivors, executors,
administrators and transferees.
19. Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Michigan, except to the extent preempted by the
laws of the United States of America.
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CERTIFICATION
The foregoing Plan was duly adopted by the Board of Directors on the
26th day of January, 1995, subject to approval by the Company's
shareholders.
EMPIRE BANC CORPORATION
By: /s/ William T. Fitzgerald, Jr.
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Its: Secretary