MID-CENTRAL FINANCIAL CORPORATION
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
Table of Contents
Page
SECTION 1.
General Purpose of Plan; Definitions................................ 1
SECTION 2.
Administration...................................................... 3
SECTION 3.
Stock Subject to Plan............................................... 4
SECTION 4.
Eligibility......................................................... 4
SECTION 5.
Stock Options....................................................... 4
SECTION 6.
Transfer, Leave of Absence, Etc..................................... 8
SECTION 7.
Amendments and Termination.......................................... 8
SECTION 8.
Unfunded Status of Plan............................................. 9
SECTION 9.
General Provisions.................................................. 9
SECTION 10.
Effective Date of Plan..............................................10
MID-CENTRAL FINANCIAL CORPORATION
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
SECTION 1. General Purpose of Plan; Definitions
The name of this plan is the Mid-Central Financial Corporation Amended
and Restated 1994 Stock Option Plan (the "Plan"). The purpose of the Plan is to
enable Mid-Central Financial Corporation (the "Company") and its Subsidiaries to
retain and attract executives, other key employees and non-employee directors
who contribute to the Company's success by their ability, ingenuity and
industry, and to enable such individuals to participate in the long-term success
and growth of the Company by giving them a proprietary interest in the Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Board" means the Board of Directors of the Company as it may be
comprised from time to time.
(b) "Cause" means a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, or a
participant's willful misconduct or dishonesty, any of which is
directly and materially harmful to the business or reputation of
the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee referred to in Section 2 of the
Plan. If at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan shall be
exercised by the Board, unless the Plan specifically states
otherwise.
(e) "Company" means Mid-Central Financial Corporation, a corporation
organized under the laws of the State of Minnesota (or any
successor corporation).
(f) "Disability" means permanent and total disability as determined
by the Committee.
(g) "Early Retirement" means retirement, with consent of the
Committee at the time of retirement, from active employment with
the Company and any Subsidiary or Parent Corporation of the
Company.
(h) "Fair Market Value" of Stock on any given date shall be
determined by the Committee as follows: (a) if the Stock is
listed for trading on one of more national securities exchanges,
or is traded on the Nasdaq Stock Market, the last reported sales
price on the principal such exchange or the Nasdaq Stock Market
on the date in question, or if such Stock shall not have been
traded on such principal exchange on such date, the last
reported sales price on such principal exchange or the Nasdaq
Stock Market on the first day prior thereto on which such Stock
was so traded; or (b) if the Stock is not listed for trading on
a national securities exchange or the Nasdaq Stock Market, but
is traded in the over-the-counter market, including the Nasdaq
Small Cap Market, the closing bid price for such Stock on the
date in question, or if there is no such bid price for such
Stock on such date, the closing bid price for such Stock on such
date, the closing bid price on the first day prior thereto on
which such price existed; or (c) if neither (a) nor (b) is
applicable, by any means fair and reasonable by the Committee,
which determination shall be final and binding on all parties.
(i) "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning
of Section 422 of the Code.
(j) "Non-Employee Director" means a "Non-Employee Director" within
the meaning of Rule 16b-3(b)(3) under the Securities Exchange Act
of 1934.
(k) "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option, and is intended to be and is
designated as a "Non-Qualified Stock Option."
(l) "Normal Retirement" means retirement from active employment with
the Company and any Subsidiary or Parent Corporation of the
Company on or after age 65.
(m) "Parent Corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the
Company if each of the corporations (other than the Company) owns
stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in the
chain.
(n) "Retirement" means Normal Retirement or Early Retirement.
(o) "Stock" means the Common Stock, $.10 par value per share, of the
Company.
(p) "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5 below.
(q) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each
of the corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in the chain.
SECTION 2. Administration
The Plan shall be administered by the Board of Directors or by a
Committee appointed by the Board of Directors of the Company consisting of at
least two Directors, all of whom shall be Non-Employee Directors, who shall
serve at the pleasure of the Board. Any or all of the functions of the Committee
specified in the Plan may be exercised by the Board, unless the Plan
specifically provides otherwise.
The Committee shall have the power and authority to grant Stock Options
to eligible employees and members of the Board, pursuant to the terms of the
Plan.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of
the Company and its Subsidiaries and other eligible
persons to whom Stock Options may from time to time
be granted hereunder;
(ii) to determine whether and to what extent Incentive
Stock Options, Non-Qualified Stock Options, or a
combination of the foregoing, are to be granted
hereunder;
(iii) to determine the number of shares to be covered by
each such award granted hereunder;
(iv) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any
award granted hereunder (including, but not limited
to, any restriction on any Stock Option and/or the
shares of Stock relating thereto); and
(v) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with
respect to an award under this Plan shall be
deferred either automatically or at the election of
the participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
delegate to executive officers of the Company the authority to exercise the
powers specified in (i), (ii), (iii), (iv) and (v) above with respect to persons
who are not either the chief executive officer of the Company or the four
highest paid officers of the Company other than the chief executive officer.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and Plan
participants.
SECTION 3. Stock Subject to Plan
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 51,038. Such shares may consist, in whole
or in part, of authorized and unissued shares. If any shares that have been
optioned cease to be subject to Stock Options, such shares shall again be
available for distribution in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding options granted under the Plan, as may be determined to
be appropriate by the Committee, in its sole discretion, provided that the
number of shares subject to any award shall always be a whole number.
SECTION 4. Eligibility
Officers, other key employees of the Company and Subsidiaries and
members of the Board who are responsible for or contribute to the management,
growth and profitability of the business of the Company and its Subsidiaries are
eligible to be granted Stock Options under the Plan. The optionees and
participants under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of shares covered by each
award.
SECTION 5. Stock Options
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock
Options shall be granted under the Plan after December 22, 2003.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of options. To the
extent that any option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code. The preceding sentence shall not preclude any
modification or amendment to an outstanding Incentive Stock Option, whether or
not such modification or amendment results in disqualification of such Stock
Option as an Incentive Stock Option, provided the optionee consents in writing
to the modification or amendment.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
Committee at the time of grant and may, except as provided
in this paragraph, be less than the Fair Market Value of the
Stock on the date the Stock Option is granted. In the event
that the Committee does not determine the exercise price per
share of Stock purchasable under a Stock Option, the
exercise price shall be the Fair Market Value of the Stock
on the date the Stock Option is granted except as otherwise
required in this paragraph. In no event shall the Stock
Option price per share of Stock purchasable under an
Incentive Stock Option or a Non-Qualified Stock Option be
less than 100% or 85%, respectively, of the Fair Market
Value of the Stock on the date the Stock Option is granted.
If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the
Code) more than 10% of the combined voting power of all
classes of stock of the Company or any Parent Corporation or
Subsidiary and an Incentive Stock Option is granted to such
employee, the exercise price shall be no less than 110% of
the Fair Market Value of the Stock on the date the Stock
Option is granted.
(b) Option Term. The term of each Stock Option shall be fixed by
the Committee, but no Incentive Stock Option shall be
exercisable more than ten years after the date the Stock
Option is granted. In the event that the Committee does not
fix the term of a Stock Option, the term shall be ten years
from the date the Stock Option is granted. Notwithstanding
the foregoing, if an employee owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all
classes of stock of the Company or any Parent Corporation or
Subsidiary and an Incentive Stock Option is granted to such
employee, the term of such Stock Option shall be no more
than five years from the date of grant.
(c) Exercisability. Stock Options shall be exercisable at such
time or times as determined by the Committee at or after
grant, subject to the restrictions stated in Section 5(b)
above. In the event that the Committee does not determine
the time at which a Stock Option shall be exercisable, such
Stock Option shall be exercisable one year after the date of
grant. If the Committee provides, in its discretion, that
any Stock Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at
any time. Notwithstanding the foregoing, unless the Stock
Option provides otherwise, any Stock Option granted under
this Plan shall be exercisable in full, without regard to
any installment exercise provisions, for a period specified
by the Committee, but not to exceed sixty (60) days, prior
to the occurrence of any of the following events: (i)
dissolution or liquidation of the Company other than in
conjunction with a bankruptcy of the Company or any similar
occurrence, (ii) any merger, consolidation, acquisition,
separation, reorganization, or similar occurrence, where the
Company will not be the surviving entity, (iii) the transfer
of substantially all of the assets of the Company or the
acquisition of beneficial ownership of more than 50% of any
class of equity security of the Company or its Subsidiaries.
The grant of a Stock Option pursuant to the Plan shall not
limit 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, exchange
or consolidate or to dissolve, liquidate or transfer all or
any part of its business or assets.
(d) Method of Exercise. Stock Options may be exercised in whole
or in part at any time during the option period by giving
written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, either
by certified or bank check, or by any other form of legal
consideration deemed sufficient by the Committee and
consistent with the Plan's purpose and applicable law,
including promissory notes or a properly executed exercise
notice together with irrevocable instructions to a broker
acceptable to the Company to promptly deliver to the Company
the amount of sale or loan proceeds to pay the exercise
price. As determined by the Committee at the time of grant
or exercise, in its sole discretion, payment in full or in
part may also be made in the form of unrestricted Stock
already owned by the optionee (which in the case of Stock
acquired upon exercise of an option have been owned for more
than six months on the date of surrender based on the Fair
Market Value of the Stock on the date the option is
exercised, as determined by the Committee), provided,
however, that, in the case of an Incentive Stock Option, the
right to make a payment in the form of already owned shares
may be authorized only at the time the option is granted. If
the terms of a Stock Option so permit, an optionee may elect
to pay all or part of the exercise price by having the
Company withhold from the shares of Stock that would
otherwise be issued upon exercise that number of shares of
Stock having a Fair Market Value equal to the aggregate
exercise price for the shares with respect to which such
election is made. No shares of Stock shall be issued until
full payment therefor has been made. An optionee shall
generally have the rights to dividends and other rights of a
shareholder with respect to shares subject to the option
when the optionee has given written notice of exercise, has
paid in full for such shares, and, if requested, has given
the representation described in paragraph (a) of Section 9.
(e) Non-Transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by
the laws of descent and distribution, and all Stock Options
shall be exercisable, during the optionee's lifetime, only
by the optionee.
(f) Termination by Death. If an optionee's employment by the
Company and any Subsidiary or Parent Corporation terminates
by reason of death, the Stock Option may thereafter be
immediately exercised, to the extent then exercisable (or on
such accelerated basis as the Committee shall determine at
or after grant), by the legal representative of the estate
or by the legatee of the optionee under the will of the
optionee, for a period of three years (or such shorter
period as the Committee shall specify at grant) from the
date of such death or until the expiration of the stated
term of the option, whichever period is shorter. In the
event of termination of employment by reason of death, if an
Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422
of the Code, the option will thereafter be treated as a
Non-Qualified Stock Option.
(g) Termination by Reason of Disability. If an optionee's
employment by the Company and any Subsidiary or Parent
Corporation terminates by reason of Disability, any Stock
Option held by such optionee may thereafter be exercised, to
the extent it was exercisable at the time of termination due
to Disability (or on such accelerated basis as the Committee
shall determine at or after grant), but may not be exercised
after three years (or such shorter period as the Committee
shall specify at grant) from the date of such termination of
employment or the expiration of the stated term of the
option, whichever period is shorter. In the event of
termination of employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422
of the Code, the option will thereafter be treated as a
Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. If an optionee's
employment by the Company and any Subsidiary or Parent
Corporation terminates by reason of Retirement, any Stock
Option held by such optionee may thereafter be exercised, to
the extent it was exercisable at the time of such
Retirement, until the expiration of the stated term of the
option (or such shorter period as the Committee shall
specify at grant). In the event of termination of employment
by reason of Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, the option
will thereafter be treated as a Non-Qualified Stock Option.
(i) Other Termination. Unless otherwise determined by the
Committee, if an optionee's employment by the Company and
any Subsidiary or Parent Corporation terminates for any
reason other than death, Disability or Retirement, the Stock
Option shall thereupon terminate, except that the option may
be exercised to the extent it was exercisable at such
termination for the lesser of three months or the balance of
the option's term if the optionee is involuntarily
terminated without Cause by the Company and any Subsidiary
or Parent Corporation. In the event an optionee's employment
is terminated for Cause, all unexercised Stock Options
granted to such Optionee shall immediately terminate.
(j) Annual Limit on Incentive Stock Options. The aggregate Fair
Market Value (determined as of the time the Stock Option is
granted) of the Common Stock with respect to which an
Incentive Stock Option under this Plan or any other plan of
the Company and any Subsidiary or Parent Corporation is
exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000.
(k) Directors Who Are Not Employees. Each person who is not an
employee of the Company, any parent Corporation or any
Subsidiary and who is either (i) serving on the Board on the
date of shareholder approval of the amendment to this
Section 5(k) adopted by the Board on November 19, 1996, or
(ii) elected as a director by the Board or the shareholders
subsequent to the date of shareholder appoval of such
amendment, shall automatically be granted an Option to
purchase 1,000 shares of Stock as of such date at an option
price per share equal to 100% of the Fair Market Value of a
share of Stock on such date. All such options shall be
designated as Non-Qualified Stock Options and shall be
subject to the same terms and provisions as are then in
effect with respect to the grant of Non-Qualified Stock
Options to officers and key employees of the Company, except
that (i) the term of each such Option shall be ten (10)
years after the date of grant, which term shall not expire
upon termination of service as a director and (ii) the
Option shall become exercisable as to 50% of the shares
subject to the Option beginning on the date the option is
granted, and the remaining 50% of the shares subject to the
Option shall become exercisable one year after the date the
Option is granted. All provisions of this Plan not
inconsistent with the foregoing shall apply to Options
granted pursuant to this Section 5(k).
SECTION 6. Transfer, Leave of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer of an employee from the Company to a Parent
Corporation or Subsidiary, or from a Parent Corporation or
Subsidiary to the Company, or from one Subsidiary to
another;
(b) a leave of absence, approved in writing by the Committee,
for military service or sickness, or for any other purpose
approved by the Company if the period of such leave does not
exceed ninety (90) days (or such longer period as the
Committee may approve, in its sole discretion); and
(c) a leave of absence in excess of ninety (90) days, approved
in writing by the Committee, but only if the employee's
right to reemployment is guaranteed either by a statute or
by contract, and provided that, in the case of any leave of
absence, the employee returns to work within 30 days after
the end of such leave.
SECTION 7. Amendments and Termination
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made (i) which would impair the rights
of an optionee or participant under a Stock Option award theretofore granted,
without the participant's consent, or (ii) which, without the approval of the
stockholders of the Company, would cause the Plan to no longer comply with Rule
16b-3 under the Securities Exchange Act of 1934, Section 422 of the Code, or any
other regulatory requirements.
The Committee may amend the terms of any award or Stock Option
theretofore granted, prospectively or retroactively, to the extent such
amendment is consistent with the terms of the Plan, but no such amendment shall
impair the rights of any holder without his or her consent except to the extent
authorized under the Plan. The Committee may also substitute new Stock Options
for previously granted stock options, including previously granted stock options
having higher exercise prices.
SECTION 8. Unfunded Status of Plan
The Plan is intended to constitute an Aunfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or an optionee by the Company, nothing contained herein shall give
any such participant or optionee any rights that are greater than those of a
general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock, or payments in lieu of or with respect
to awards hereunder, provided, however, that the existence of such trusts or
other arrangements is consistent with the unfunded status of the Plan.
SECTION 9. General Provisions
(a) The Committee may require each person purchasing shares
pursuant to a Stock Option under the Plan to represent to
and agree with the Company in writing that the optionee is
acquiring the shares without a view to distribution thereof.
The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock delivered under the
Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under
the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed, and any applicable federal
or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board of
Directors from adopting other or additional compensation
arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
The adoption of the Plan shall not confer upon any employee
of the Company or any Subsidiary any right to continued
employment with the Company or a Subsidiary, as the case may
be, nor shall it interfere in any way with the right of the
Company or a Subsidiary to terminate the employment of any
of its employees at any time.
(c) Each participant shall, no later than the date as of which
any part of the value of an award first becomes includable
as compensation in the gross income of the participant for
federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment
of, any federal, state, or local taxes of any kind required
by law to be withheld with respect to the award. The
obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company
and Subsidiaries shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any
kind otherwise due to the participant. With respect to any
award granted under the Plan, if the terms of such award or
Option so permit, a participant may elect by written notice
to the Company to satisfy part or all of the withholding tax
requirements associated with the award by (i) authorizing
the Company to retain from the number of shares of Stock
that would otherwise be deliverable to the participant, or
(ii) delivering to the Company from shares of Stock already
owned by the participant, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax
payable by the participant under this Section. Any such
election shall be in accordance with, and subject to,
applicable tax and securities laws, regulations and rulings.
(d) At the time of grant, the Committee may provide in
connection with any grant made under this Plan that the
shares of Stock received as a result of such grant shall be
subject to a repurchase right in favor of the Company,
pursuant to which the participant shall be required to offer
to the Company upon termination of employment for any reason
any shares that the participant acquired under the Plan,
with the price being the then Fair Market Value of the Stock
or, in the case of a termination for Cause, an amount equal
to the cash consideration paid for the Stock, subject to
such other terms and conditions as the Committee may specify
at the time of grant. The Committee may, at the time of the
grant of an award under the Plan, provide the Company with
the right to repurchase, or require the forfeiture of,
shares of Stock acquired pursuant to the Plan by any
participant who, at any time within two years after
termination of employment with the Company or any Subsidiary
or Parent Corporation, directly or indirectly competes with,
or is employed by a competitor of, the Company or any
Subsidiary or Parent Corporation.
SECTION 10. Effective Date of Plan
The Plan shall be effective on the date it is approved by a vote of the
holders of a majority of the Stock present and entitled to vote at a meeting of
the Company's shareholders.
Adopted by the Board of Directors on December 22, 1993.
Ratified by the Shareholders on January 6, 1995.
Amended by the Board of Directors on November 19, 1996.
Amendment ratified by the Shareholders on _____________, ___.