EXHIBIT 4.15
D&N FINANCIAL CORPORATION
AMENDED AND RESTATED
1994 MANAGEMENT STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of the Amended and Restated 1994 Management Stock Incentive
Plan (the "Plan") of D&N Financial Corporation (the "Corporation") shall be
to promote and enhance the long term interests of the Corporation and its
stockholders by providing a means of retaining and motivating directors,
officers and employees. The Plan is intended to award to eligible
participants or allow them to acquire shares of the Corporation's stock
pursuant to the Plan provisions outlined herein. This Plan is an amendment
and restatement of the Corporation's 1994 Management Stock Incentive Plan,
which was initially approved by stockholders at the April 26, 1994 Annual
Meeting.
2. DEFINITIONS
Unless the context of the applicable section clearly indicates
otherwise, the terms below, when used within this Plan, shall have the
meaning set forth in this Section 2.
2.01 AFFILIATE means any "parent corporation" or "subsidiary corporation"
of the Corporation as such terms are defined within Sections 424(e)
and (f), respectively, of the Code, including any corporation that
becomes an Affiliate after the adoption of this Plan.
2.02 AGREEMENT means a written agreement or other form of instrument
(including any amendments or supplements) between the Corporation and
a Participant specifying the terms and conditions of an Award of
Restricted Stock or an Option to the Participant.
2.03 AWARD means the granting, by the Committee, of an Incentive Stock
Option, a Nonqualified Stock Option, or Restricted Stock, or any
combination thereof, pursuant to the provisions of the Plan.
2.04 BENEFICIARY means the person or persons designated in writing by the
Participant or, in the absence of such a designation or if the
designated person or persons predecease the Participant, the
Participant's beneficiary shall be the person or persons who inherit
the Participant's right by will or applicable law.
2.05 BOARD OF DIRECTORS or BOARD means the Board of Directors of D&N
Financial Corporation.
2.06 CAUSE means, in the context of termination of employment for cause,
termination of employment because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure
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to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or
cease-and-desist order, or material breach of any agreement with the
Bank or the Corporation.
2.07 CODE means the Internal Revenue Code of 1986, as amended from time to
time.
2.08 COMMITTEE means a Committee of the Board, as described in Section 3,
responsible for the administration of the Plan.
2.09 COMMON STOCK means the Common Stock, par value $.01 per share, of the
Corporation.
2.10 CONTINUOUS SERVICE means the absence of any interruption or
termination of service as a director, officer or employee of the
Corporation or an Affiliate, except that when used with respect to
persons granted an Incentive Stock Option shall mean the absence of
any interruption or termination as an employee. Service shall not be
considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Corporation or in the case
of transfers between payroll locations of the Corporation, or between
the Corporation, its parent, its subsidiaries or its successor.
2.11 DISABILITY means a disability as defined in the Corporation's Long
Term Disability Insurance Plan, as amended from time to time.
2.12 DISINTERESTED PERSON means any person who is an "outside director" for
purposes of Section 162(m) of the Code and as defined in such
regulations as may be promulgated thereunder, and who, within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 ("1934
Act") or any successor rule or regulation ("Rule 16b-3") and while
exercising discretion under the Plan, is not employed by the
Corporation or any Affiliate and at any time during the twelve month
period prior to any exercise of discretion regarding or participation
in Plan administration has not been granted stock, restricted stock,
stock options, stock appreciation rights, or any other derivative
security of the Corporation or any Affiliate, except as permitted for
disinterested persons under Rule 16b-3.
2.13 EMPLOYEE means any person, including an officer or director, who is
employed by the Corporation or any Affiliate.
2.14 EXERCISE PERIOD means that period of time as designated by the
Committee for the exercise of Options pursuant to the Plan.
2.15 EXERCISE PRICE means, in the case of an Option, the price per Share at
which the shares subject to such Option may be purchased upon
exercise.
2.16 FAIR MARKET VALUE means, for any given date, the average of the high
and low quoted sales price on such date of a Share on the composite
tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape on the New York
Stock Exchange or, if the Shares are not
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listed or admitted to trading on such Exchange, on the principal
United States securities exchange registered under the 1934 Act on
which the Shares are listed or admitted to trading, or, if the Shares
are not listed or admitted to trading on such exchange, the mean
between the closing high bid and low asked quotations for a Share on
such date on the National Association of Securities Dealers, Inc.
Automated Quotations System, or any similar system. If the Common
Stock was not traded on such date, then the Fair Market Value is
determined with reference to the next preceding day that the Common
Stock was so traded. If no such quotations are available, the Fair
Market Value is determined based upon a date and in a manner as
determined by the Committee.
2.17 INCENTIVE STOCK OPTION means an Option to purchase shares of Common
Stock granted by the Committee pursuant to Section 6 of the Plan and
intended to qualify under Section 422 of the Code.
2.18 NONQUALIFIED STOCK OPTION means an Option to purchase shares of Common
Stock granted by the Committee pursuant to Section 6 of the Plan and
which is not intended to qualify under Section 422 of the Code.
2.19 OPTION means an Incentive Stock Option or a Nonqualified Stock Option.
2.20 PARTICIPATION means any director, officer or employee of the
Corporation or an Affiliate who is selected by the Committee to
receive an Award and any director who is granted an Award pursuant to
Section 5.04 of the Plan.
2.21 PLAN means the Amended and Restated 1994 Management Stock Incentive
Plan of the Corporation.
2.22 RESTRICTION PERIOD means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect with
respect to Restricted Stack under the Plan.
2.23 RESTRICTED STOCK means Shares which have been contingently awarded to
a Participant by the Committee subject to the restrictions referred to
in Section 7 of the Plan, so long as such restrictions remain in
effect.
2.24 RETIREMENT means retirement pursuant to the Corporation's retirement
policy, as amended from time to time.
2.25 SENIOR OFFICER means the Corporation's president, principal financial
officer, principal accounting officer (or if there is no such
accounting officer, the controller), any vice president in charge of a
principal business unit, division or function (such as sales,
administration or finance), any other officer who performs a
policy-making function, or any other person who performs similar
policy-making functions for the Corporation. Officers of the
Corporation's Affiliates shall be deemed Senior Officers of the
Corporation if they perform such policy-making functions for the
Corporation.
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2.26 SHARE or SHARES means a share or shares of the Corporation's Common
Stock.
2.27 Wherever used herein, unless indicated otherwise, words in the
masculine form shall be deemed to refer to females as well as males.
3. ADMINISTRATION
3.01 COMMITTEE. The Plan shall be administered by a Committee consisting of
two or more members, appointed by the Board, each of whom shall be a
Disinterested Person. In addition to meeting the definition of a
Disinterested Person within Section 2.12 of the Plan, Committee
members shall be subject to any additional restrictions necessary to
satisfy the requirements for disinterested administration of the Plan
as set forth in Rule 16b-3.
3.02 DETERMINATIONS. Within the limits of the provisions of the Plan, the
Committee shall have sole and plenary authority and discretion to
grant Awards and determine (i) Plan Participants; (ii) the form and
amount of such Awards; (iii) the number of Shares subject to types of
Awards generally, as well as to individual Awards granted under the
Plan; (iv) the terms, Award date, termination data and other
conditions upon which Awards shall lie granted under the Plan; (v) the
form and provisions of Agreements or other such instruments evidencing
such grants; (vi) limitations or restrictions applicable to any such
Award; (vii) whether to delegate to one or more officers of the
Corporation all or part of the Committee's authority and duties with
respect to Participants who are not subject to the reporting and other
provisions of Section 16 of the 1934 Act, as in effect from time to
time; (viii) interpretations of the Plan's provisions; and (ix)
regulations for the administration of the Plan including the right to
prescribe, amend and rescind such regulations. The determinations of
the Committee on all matters regarding the Plan shall be final and
conclusive unless otherwise determined by the Board of Directors, and
no member of the Committee shall be liable for any act conducted in
good faith with respect to the Plan.
3.03 QUORUM. A majority of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a
quorum is present, as well as acts which are approved in writing by a
majority of the Committee without a meeting, shall be considered as of
the Committee.
4. PARTICIPATION
Participants granted Awards pursuant to the Plan, including directors,
officers and employees of the Corporation or any Affiliate, shall be
determined by the Committee based upon its evaluation of each eligible
Participant's duties, overall performance and contribution to the success of
the Corporation or an Affiliate, and capacity for contributing to the
successful performance of the Corporation or its Affiliates. Members of the
Committee may not be granted Awards other than pursuant to Section 5.04. All
decisions regarding Awards granted to Plan Participants by the Committee
shall be conclusive.
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5. SHARE AWARDS UNDER THE PLAN
5.01 FORM. Awards granted pursuant to the Plan shall be in the form of
Incentive Stock Options, Nonqualified Stock Options or Restricted
Stack as herein defined in Section 2.
5.02 SHARES SUBJECT TO PLAN. The total number of Shares which may be
awarded by the Corporation in the forms included within Section 5.01
shall not exceed 600,000 Shares, subject to adjustments outlined in
Section 8.01. Those Shares with respect to which Awards may be granted
under the Plan may be either authorized but unissued Shares or Shares
heretofore or hereafter reacquired by the Corporation and held in its
treasury.
5.03 UNEXERCISED, TERMINATED AND FORFEITED SHARES. Shares from Options
which have expired unexercised or have been terminated for any reason
and Shares of Restricted Stock which are forfeited for any reason may
be reallocated to subsequent Options or Restricted Stock granted under
the Plan.
5.04 FORMULA AWARDS TO NON-EMPLOYEE DIRECTORS. Formula Awards to each
member of the Board who is not an Employee shall be made in accordance
with Appendix A attached hereto and incorporated by reference.
6. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be in such form and upon such terms
and conditions as the Committee shall determine from time to time, subject to
the following:
6.01 GENERAL COMMITTEE AUTHORITY AND DISCRETION. Except as expressly
limited by the provisions of the Plan and subject to the statutory
requirements of Incentive Stock Options as outlined in Section 6.06 of
the Plan, the Committee shall have absolute authority and discretion
to determine the terms and conditions of all Options including
Participants, number of Shares per Award, Exercise Price (which shall
not be less than the Fair Market Value per Share on the date of grant
of such Option), expiration date, restrictions, and the manner, timing
and sequencing of exercise. The terms and conditions of Options need
not be identical among Participants. As a condition of granting any
Option, the Committee may require that a Participant agree not to
exercise thereafter any one or more Options previously granted to such
Participant. The Committee may not grant Awards to any individual in
any calendar year with respect to more than 25% of the total Shares
subject to the Plan.
6.02 OPTION AGREEMENT OR OTHER AWARD INSTRUMENT. Each Option granted under
the Plan shall be evidenced by an Option Agreement or other
instrument, in a form as determined by the Committee in its sole
discretion, which has been executed by the Corporation and by the
Participant. Officers of the Corporation expressly designated and so
authorized by the Committee may execute and deliver Option Agreements
or other Award instruments in the name of the Corporation.
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6.03 FORMS OF PAYMENT. At the time that an Option granted under the Plan,
or any part thereof, as permitted according to terms established by
the Committee, is exercised, payment for the Shares issuable thereupon
shall be made in full in cash (including check, money order, cashier's
check, or certified check) or, if permitted by the Committee, by
delivering (i) Shares already owned by the Participant and having a
Fair Market Value equal to the applicable Exercise Price as determined
in a manner established by or acceptable to the Committee and in
conformance with applicable laws, or (ii) a combination of cash and
currently owned Shares.
6.04 SERVICE TO THE CORPORATION. Except as provided in Section 6.05 of the
Plan, every Option granted to a Participant shall be exercisable by
the Participant during his lifetime, and only in the event that such
Participant has maintained Continuous Service since the date of the
grant of such Option.
6.05 EXERCISE IN THE EVENT OF TERMINATION OF SERVICE.
(a) TERMINATION OTHER THAN FOR CAUSE OR DEATH. If a Participant to
whom an Option was granted shall cease to maintain Continuous Service
due to any reason other than death or termination of employment for
Cause as provided in Sections 6.05(b) and (c), such Participant may
exercise such Option to the extent that the Participant was entitled
to do so on the date of the termination, but only within three months
of cessation of Continuous Service and in no event after the
expiration date of the Option; provided that such right of exercise
after cessation of Continuous Service shall not be available to a
Participant if the Committee determines and provides in the Option
Agreement referenced in Section 6.02 that such right shall not be
available.
(b) TERMINATION DUE TO DEATH. In the event of the death of a
Participant while in Continuous Service or within the three month
period referred to in Section 6.05(a), the person or persons to whom
the Participant's rights under the Option pass by will or applicable
law, or, in the case of an Award other than an Incentive Stock Option,
pursuant to a qualified domestic relations order, as defined in the
Code or Title I of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") or the rules thereunder, may exercise such
Option to the extent that the Participant was entitled to do so on the
date of the Participant's death, and within a one year period
succeeding the date of the death of the Participant but in no event
after the expiration date of the Option. Following the death of any
Participant to whom an Option was granted under the Plan, irrespective
of whether the person entitled to exercise such Option desires to do
so, the Committee may, as an alternative means of settlement of such
Option, elect to pay to the person to whom such Option is transferred
by will or by the laws of descent and distribution, or, in the case of
an Option other than an Incentive Stock Option, pursuant to a
qualified domestic relations order, as defined in the Code or Title I
of ERISA or the rules thereunder, the amount by which the Fair Market
Value per Share on the date of exercise of such Option shall exceed
the Exercise Price of such Option, multiplied ay the number of
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Shares with respect to which such Option is properly exercised. Any
such settlement of an Option shall be considered an exercise of such
Option for all purposes of the Plan.
(c) TERMINATION FOR CAUSE. In the event that the Continuous Service of a
Participant is terminated for Cause, all rights under any Option shall
expire immediately upon giving the Participant notice of such
termination from service.
6.06 STATUTORY REQUIREMENTS OF INCENTIVE STOCK OPTIONS. In accordance with
Section 422 of the Code, any Options granted under the Plan which are
Incentive Stock Options shall be granted only to officers and other
employees of the Corporation or an Affiliate. Further, notwithstanding
any other Plan provision, (i) no Incentive Stock Option shall be
granted more than ten years after February 27, 1995, the date on which
the Plan was adopted by the Board of Directors; (ii) the Exercise
Price of an Incentive Stock Option shall not be less than Fair Market
Value on the date of grant and no Incentive Stock Option may be
awarded to any individual owning more than 10% of the total combined
voting power of all classes of stock of the Corporation or of any
Affiliate unless the Exercise Price is at least 110% of Fair Market
Value at the time of the grant and such Incentive Stock Option is not
exercisable after five years from the date on which it is awarded;
(iii) the aggregate Fair Market Value at the time of grant of the
Shares with respect to which Incentive Stock Options are exercisable
for the first time by a Participant in any calendar year shall not
exceed $100,000; and (iv) each Incentive Stock Option granted under
the Plan shall expire not more than 10 years from the date on which it
was granted.
7. TERMS AND CONDITIONS OF RESTRICTED STOCK
Restricted Stock shall be awarded under the Plan upon such terms and
conditions as the Committee shall have full authority and discretion to
determine from time to time, subject to provisions of the Plan and to the
following:
7.01 RESTRICTION PERIOD. At the time of an Award of Restricted Stock, the
Committee shall establish for each Participant a Restriction Period
during which or at the expiration of which, as the Committee shall
determine, the Shares awarded as Restricted Stock shall vest. Subject
to any such other terms and conditions as the Committee shall provide,
during the Restriction Period, Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered by the
Participant, except as hereinafter provided in this Section 7. Except
for such restrictions and provisions in this Section 7 of the Plan,
and except as determined by the Committee in its discretion and
provided in the Agreement referred to in Section 7.04, the Participant
as owner of such Shares shall have all of the rights of a stockholder
including but not limited to the right to receive all dividends paid
on such Shares and the right to vote such Shares. The Committee shall
have the authority, in its discretion, to accelerate the time at which
any or all of the restrictions shall lapse with respect to any
Restricted Stock prior to the expiration of the Restriction Period
with respect thereto, or to remove any or all of such
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restrictions, whenever it may determine that such action is
appropriate by reason of changes in applicable tax or other laws or
other changes in circumstances occurring after the commencement of
such Restriction Period.
7.02 TERMINATION BY DEATH, RETIREMENT OR DISABILITY. Except to the extent,
if any, provided by the Committee in the Agreement referred to in
Section 7.04, if a Participant ceases to maintain Continuous Service
because of death, Retirement or Disability, all shares of Restricted
Stock theretofore awarded to him shall become free of the restriction
imposed in Section 7.01 and the Corporation shall deliver to him,
within 60 days of such death, Retirement or Disability, one Share,
absent of the legend referred to in Section 7.05, for each such Share
of Restricted Stock deposited with the Corporation by the Participant
pursuant to Section 7.05.
7.03 TERMINATION BY OTHER THAN DEATH, RETIREMENT OR DISABILITY. If a
Participant ceases to maintain Continuous Service for any reason other
than death, Retirement or Disability, unless otherwise determined by
the Committee and provided in the Agreement referenced in Section
7.04, all Shares of Restricted Stock heretofore awarded le him which
are still subject to the restrictions imposed by Section 7.01 shall,
upon such termination, be forfeited by the Participant and returned to
the Corporation.
7.04 RESTRICTED STOCK AGREEMENT OR EQUIVALENT INSTRUMENT. Each Participant
awarded Restricted stock under the Plan shall enter into an Agreement
or other form of instrument, as determined by the Committee, agreeing
to the terms and conditions of the Award and other such matters as the
Committee shall in its sole discretion determine. Such terms and
conditions need not be identical among Participants.
7.05 REGISTRATION, DEPOSIT OF RESTRICTED STOCK AND LEGEND. Each certificate
issued in respect to Shares of Restricted Stock awarded under the Plan
shall be registered in the name of the Participant and deposited with
the Corporation by the Participant, together with a stock power
endorsed in blank, and shall bear the following, or a similar, legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions, including
forfeiture, contained in the D&N Financial Corporation Amended and
Restated 1994 Management Stock incentive Plan and an agreement entered
into between the registered owner and D&N Financial Corporation.
Copies of such Plan and agreement are on file in the offices of the
Secretary of the Corporation."
7.06 LAPSING OF RESTRICTIONS. When the restrictions imposed by and outlined
within this Section 7 of the Plan and the Agreement referred to in
Section 7.04 have lapsed or otherwise been satisfied with regard to
one or more Shares of Restricted Stock, the Corporation shall deliver
to the Participant (or his legal representative, beneficiary or heir)
one Share, absent of the legend referred to in Section 7.05, for each
such Share of Restricted Stock deposited with the Corporation by the
Participant pursuant to Section 7.05. At that time, the Agreement
referred to in
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Section 7.04 shall be terminated to the extent that it relates to
these same Shares on which the restrictions have lapsed or otherwise
been satisfied.
8. MISCELLANEOUS
8.01 ADJUSTMENT FOR CHANGES IN CAPITALIZATION. In the event that there is
any change in the Shares subsequent to the Plan's effective date by
reason of any recapitalization, stock split, reverse stock split,
stock dividend, reorganization, consolidation, combination or exchange
of shares, merger, or any other change in the corporate structure or
the Shares of the Corporation, the aggregate number and class of
shares available for Option and Restricted Stock grants, the Exercise
Price per Share of each such Option and the amount paid, if any, for
each Restricted Stock Share granted, and the number and class of
Shares subject to each outstanding Award may be adjusted by the
Committee, whose determination in such matters shall be conclusive and
binding. Any Shares of Restricted Stock received by a Participant as a
result of any of the foregoing shall be subject to the same
restrictions and the certificate(s) or other instruments representing
or evidencing such Shares or securities shall be legended and
deposited with the Corporation in the manner provided in Section 7
hereof.
8.02 EFFECT OF MERGER OR OTHER REORGANIZATION. In the event of a merger,
consolidation or combination in which the Corporation shall be the
continuing entity and which does not result in the outstanding shares
being converted into or exchanged for different securities, cash or
other property, or any combination thereof pursuant to a plan or
agreement the terms of which are binding upon all stockholders (except
to the extent of the rights of dissenting stockholders under
applicable law), Restricted Stock and Options shall apply to the
continuing entity to the same extent that they applied to the
Corporation immediately prior to the effective date of the merger,
consolidation or combination. In the event of a merger, consolidation
or combination in which the Corporation shall not be the continuing
entity, any Participant to whom an Option or Restricted Stock has been
granted under the Plan at least six months prior to such event shall
retain the right to receive upon exercise of such Option or the
lapsing of restrictions pursuant to provisions outlined within Section
7 of this Plan, as applicable, an amount equal to (i) in the case of
an Option, the excess of the Fair Market Value on the data of such
exercise of the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in
respect of a Share over the Exercise Price of such Option, multiplied
by the number of Shares with respect to which such Option has been
exercised, or (ii) in the case of a Share of Restricted Stock, such
cash or other property, or combination thereof, receivable upon such
merger, consolidation or combination in respect of a Share. Such
amount may be payable fully in cash, fully in one or more of the kind
or kinds of property payable in such merger, consolidation or
combination, or partly in cash and partly in one or more of such kind
or kinds of property, all in the discretion of the Committee.
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8.03 EFFECT OF CHANGE OF CONTROL. A "change of control" of the Corporation
shall be any of the following conditions: (i) any third person,
including a "group" as defined in Section 13(d)3 of the 1934 Act,
becomes the beneficial owner of shares of the Corporation with respect
to which 25% or more of the total number of votes for the election of
the Board of Directors of the Corporation may be cast, (ii) as a
result of or in connection with any cash tender offer, merger or other
business combination, sale of assets or contested election, or
combination of the foregoing, the persons who prior to such event were
directors of the Corporation cease to constitute a majority of the
Board of Directors of the Corporation, (iii) any third person,
including a "group" as defined above within this Section 8.03,
acquires between 10% and 25% of the outstanding shares of the
Corporation if the Board of Directors of the Corporation or the Office
of Thrift Supervision has made a determination that such acquisition
constitutes or will constitute an acquisition of control of the
Corporation, or (iv) the stockholders of the Corporation shall approve
an agreement providing either for a transaction in which the
Corporation will cease to be an independent, publicly-owned
corporation or for a sale or other disposition of all or substantially
all of the assets of the Corporation.
If following a change of control of the Corporation as defined in
Section 8.03, the Continuous Service of any Participant of the
Corporation or any Affiliate is voluntarily or involuntarily
terminated for any reason, with or without Cause and notwithstanding
Section 6.05(c) to the contrary, unless other provisions have been
made by the Committee and evidenced by the appropriate Option or
Restricted Stock Agreement, (i) any Restriction Period with respect to
Restricted Stock granted to such Participant shall lapse upon
termination of Continuous Service and all Shares awarded as Restricted
Stock shall become fully vested in the Participant, and (ii) all
outstanding Options not fully exercisable shall become exercisable in
full upon the happening of such termination and shall remain so
exercisable for a period of sixty days following such date, after
which they shall revert to being exercisable in accordance with their
terms; provided that no Option granted to a director or Senior Officer
of the Corporation shall be exercisable until six months after the
date on which it was granted.
8.04 NONTRANSFERABILITY AND NONASSIGNABILITY. No Restricted Stock or Option
granted under the Plan may be transferred, encumbered, assigned,
pledged or hypothecated except for transfer (i) in the event of the
death of a Participant as provided by will or the applicable laws of
descent and distribution; and (ii) in the case of Awards, other than
Incentive Stock Options, pursuant to a qualified domestic relations
order as defined in the Code or Title I of ERISA or the rules
thereunder. No Restricted Stock or Option awarded under the Plan shall
be subject to execution, attachment or similar process. Subject to the
terms and conditions under which it was granted, each Option granted
hereunder may be exercised only by the Participant to whom it is
issued or the person to whom it was transferred as provided in the
preceding sentence.
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8.05 COMPLIANCE WITH SECURITIES EXCHANGE ACT OF 1934. The Plan is intended
to fully comply with Rule 16b-3. Any provision of the Plan, regardless
of intent, which is inconsistent with said Rule shall, to the extent
of such inconsistency, be inoperative and shall not affect the
validity of the remaining Plan provisions.
8.06 EMPLOYEE RIGHTS. No director, officer or employee shall have a right
to be selected as a Participant nor, having been so selected, to be
necessarily selected again as a Participant and no director, officer,
employee or other person shall have any claim or right to be granted
an Award under the Plan or under any other incentive or similar plan
of the Corporation or any Affiliate. Neither the Plan nor any action
taken thereunder shall be construed as giving any employee any right
to be retained in the employ of the Corporation or any Affiliate, nor
affect any right which the Corporation has to terminate the employment
of any employee.
8.07 AWARDS NOT CONSIDERED IN BENEFIT DETERMINATIONS. No Award under this
Plan shall be taken into account in determining a Participant's
compensation for the purposes of any employee benefit, including but
not limited to pension or life insurance plans of the Corporation or
an Affiliate.
8.08 WITHHOLDING TAX. Upon the termination of the Restriction Period with
respect to any Shares of Restricted Stock (or at any such earlier
time, if any, that an election is made by the Participant under
Section 83(b) of the Code, or any successor provision of the Code
intended to include the value of such shares in taxable income), the
Corporation shall be entitled to withhold from the Participant's
compensation an amount sufficient to fulfill its withholding
requirements for Federal, state, local and social security taxes.
Alternatively, the Corporation may require the Participant or other
person receiving such Shares to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to
such Shares, or, in lieu thereof, to retain or sell without notice, a
sufficient number of Shares held by it to cover the amount required to
be withheld. The Corporation shall have the right to deduct from all
dividends paid with respect to Shares of Restricted Stock the amount
of any taxes which the Corporation is required to withhold with
respect to such dividend payments.
Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option pursuant to the Plan, the
Corporation shall have the right to require the Participant or such
other person to pay the Corporation the amount of any taxes which the
Corporation is required to withhold with respect to such Shares, or,
in lieu thereof, to retain, or sell without notice, a sufficient
number of such Shares to cover the amount required to be withheld, or,
in lieu of any of the foregoing, to withhold a sufficient sum from the
Participant's compensation payable by the Corporation to satisfy the
Corporation's tax withholding requirements.
The Corporation's method of satisfying its withholding obligations
shall be solely in the discretion of the Corporation, subject to
applicable Federal, state and local law.
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8.09 DELIVERY AND REGISTRATION OF STOCK. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so
requests, be conditioned upon the receipt of a representation as to
the investment intention of the Participant to whom such Shares are to
be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of the Securities
Act of 1933 or any other Federal, state or local securities
legislation or regulation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares
or other action eliminating the necessity of such representation under
such Securities Act or other securities legislation. The Corporation
shall not be required to deliver any Shares under the Plan prior to
(i) the admission of such Shares to listing on any stock exchange on
which Shares may then be listed, and (ii) the completion of such
registration or other qualification of such Shares under any state or
Federal law, rule or regulation as the Committee shall determine to be
necessary or advisable.
8.10 RULES OF CONSTRUCTION. Headings are given to the provisions and
sections of the Plan solely as a convenience to facilitate reference.
8.11 NO OBLIGATION TO EXERCISE. The granting of an Option shall impose no
obligation upon a Plan Participant to exercise such Option.
8.12 ELIMINATION OF FRACTIONAL SHARES. If, under any provision of the Plan
or formula used to calculate levels of Restricted Stock or Options to
be awarded, the number so computed is not a whole number, such number
of Shares shall be rounded down to the next whole number.
9. AMENDMENT OR TERMINATION
The Board of Directors may amend, suspend or terminate the Plan or any
portion thereof at any time, but (except as provided in Section 8.01) no
amendment shall be made without approval of the stockholders of the
Corporation which shall (i) materially increase the aggregate number of
Shares with respect to which Awards may be made under the Plan, (ii)
materially increase the benefits which accrue to Participants under the Plan,
or (iii) change the class of persons eligible to become Participants in the
Plan; provided, however, that no such amendment, suspension or termination
shall impair the rights of any Participant without his consent, regarding any
Award theretofore previously made pursuant to the Plan. In addition, to the
extent that this Plan provides for formula awards as contemplated by Rule
16b-3(c)(2) (ii), such provisions may not be amended more than once every six
months, other than to comport with changes in the Code, ERISA or the rules
thereunder.
10. DURATION OF THE PLAN
No shares of Restricted Stock or Options may be granted under this Plan
more than ten years after the earlier of the date that the Plan is adopted by
the Board or the date that the Plan is approved by stockholders as provided
in Section 11.
A-12
11. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective upon its adoption by the Board of
Directors of the Corporation provided that it is approved by vote of the
holders of a majority of the voting shares of the Corporation present either
in person or by proxy at a duly held stockholders' meeting within twelve
months of the date of such adoption by the Board.
A-13
APPENDIX A
D&N FINANCIAL CORPORATION
AMENDED AND RESTATED
1994 MANAGEMENT STOCK INCENTIVE PLAN
FORMULA AWARDS TO NON-EMPLOYEE DIRECTORS
Annual formula awards shall be made to each non-employee director of the
Corporation as follows:
5,000 shares of Corporation common stock ("Base Award") shall be granted
annually as nonqualified stock options if the Corporation achieves the Return
on Average Assets and Return on Average Equity performance targets set forth
in the matrix below for each fiscal year. The Base Award shall be increased
as set forth in the matrix below. Performance levels between specified
targets shall require proportionate calculation by the Committee to determine
the appropriate adjustment.
- ----------------------------------------------------------------------
Return on Average Assets
Fiscal 60 Basis
TARGET PERFORMANCE LEVEL: 1995 Points
Fiscal 80 Basis
1999 Points
Fiscal 90 Basis
1997-2004 Points
- ----------------------------------------------------------------------
Return on Average 100% 110% 120%
Equity
- ----------------------------------------------------------------------
Fiscal 1995 10% 100% 100% 110% 120%
---------------------------------------------
Fiscal 1996 12% 110% 110% 120% 135%
---------------------------------------------
Fiscal 1997-2004 13% 120% 120% 135% 150%
- ----------------------------------------------------------------------
All awards shall be exercisable, subject to vesting requirements set
forth below, for a period of ten years from the date of grant, which grant
date shall be 90 days following the close of each fiscal year, beginning with
fiscal year ending December 31, 1995. The exercise price per share shall be
the Fair Market Value of a share of the Corporation's common stock on the
date of grant. All awards shall vest in equal annual installments over three
years, vesting occurring on the date 91 days following the close of each
fiscal year, subject to the recipient maintaining continuous service through
the vesting data.
In addition to the foregoing, no options shall be granted with respect
to any fiscal year unless all of the following thresholds are met as of the
last day of such fiscal year:
1) The Corporation's ratio of non-performing assets to tangible
capital plus general valuation allowances is less than or equal to 50% (NPA +
(tangible capital + GVA) <= 50%); and
A-14
2) The Corporation's ratio of its allowance for loan losses to total
loans is greater than or equal to 1.0% (ALL + TL >= 1.0%);and
3) The Corporation's ratio of tangible capital to adjusted total
assets (as defined by OTS regulations) is greater than 5% (TC + ATA > 5%).
A-15
D&N FINANCIAL CORPORATION
AMENDED AND RESTATED 1994 MANAGEMENT STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
ISO NO. _____
This option is granted on _______________, ____ by D&N Financial
Corporation (the "Corporation") to _________________ (the "Optionee"), in
accordance with the following terms and conditions:
1. OPTION GRANT AND EXERCISE PERIOD. The Corporation hereby grants to the
Optionee an Option (the "Option") to purchase, pursuant to the D&N Financial
Corporation Amended and Restated 1994 Management Stock Incentive Plan, as the
same may be amended from time to time (the "Plan"), and upon the terms and
conditions therein and hereinafter set forth, an aggregate of _____________
shares (the "Option Shares") of the Common Stock, par value $.01 per share (the
"Common Stock"), of the Corporation at the price (the "Exercise Price") of
$__________ per share. A copy of the Plan, as currently in effect, is
incorporated herein by reference and is attached hereto.
Except as provided in Sections 8 and 9, this Option shall be exercisable
only during the period (the "Exercise Period") commencing on the dates set
forth in Section 2 below, and ending at 5:00 p.m., Hancock, Michigan time, on
the date ten years after the date of grant of this Option, such later time
and date being hereinafter referred to as the "Expiration Date," provided the
Optionee has maintained "Continuous Service" (as defined in the Plan) since
the date of grant. During the Exercise Period, this Option shall be
exercisable in whole at any time or in part from time to time subject to the
provisions of this Agreement, and further subject to the condition that the
aggregate Fair Market Value (as defined in the Plan and as determined as of
the date of the grant of this Option) of the Option Shares with respect to
which Incentive Stock Options (as defined in the Plan as in effect on the
date of the grant of this Option) are exercisable for the first time by the
Optionee in any calendar year shall not exceed One Hundred Thousand Dollars
($100,000.00). To the extent that this Option does not qualify as an
Incentive Stock Option for any reason, it shall become a Nonqualified Stock
Option under the Plan.
2. METHOD OF EXERCISE OF THIS OPTION. This Option may be exercised during
the Exercise Period, with respect to not more than the cumulative number of
Option Shares set forth below on or after the dates indicated, by giving written
notice to the Corporation specifying the number of Option Shares to be
purchased.
CUMULATIVE NUMBER OF OPTION
SHARES EXERCISABLE DATE
The notice must be in the form prescribed by the Committee referred to in
Section 3 of the Plan or its successor (the "Committee") and directed to the
address set forth in Section 12 below. The date of exercise is the date on
which such notice is received by the Corporation. Such notice
must be accompanied by payment in full of the Exercise Price for the Option
Shares to be purchased upon such exercise. Payment shall be made (i) in cash,
which may be in the form of a check, money order, cashier's check or certified
check, payable to the Corporation, or (ii) if the Committee shall have
previously approved such form of payment, by delivering shares of Common Stock
already owned by the Optionee having a "Fair Market Value" (as defined in the
Plan) equal to the applicable exercise price, or (iii) if the Committee shall
have previously approved such form of payment, a combination of cash and such
shares. Promptly after such payment, subject to Section 3 below, the Corporation
shall issue and deliver to the Optionee or other person exercising this Option a
certificate or certificates representing the shares of Common Stock so
purchased, registered in the name of the Optionee (or such other person), or,
upon request, in the name of the Optionee (or such other person) and in the name
of another jointly with right of survivorship.
3. DELIVERY AND REGISTRATION OF SHARES OF COMMON STOCK. The Corporation's
obligation to deliver shares of Common Stock hereunder shall, if the Committee
so requests, be conditioned upon the receipt of a representation as to the
investment intention of the Optionee or any other person to whom such shares are
to be delivered, in such form as the Committee shall determine to be necessary
or advisable to comply with the provisions of the Securities Act of 1933, as
amended, or any other federal, state or local securities law or regulation. In
requesting any such representation, it may be provided that such representation
requirement shall become inoperative upon a registration of such shares or other
action eliminating the necessity of such representation under such Securities
Act or other securities law or regulation. The Corporation shall not be required
to deliver any shares upon exercise of this Option prior to (i) the admission of
such shares to listing on any stock exchange or system on which the shares of
Common Stock may then be listed, and (ii) the completion of such registration or
other qualification of such shares under any state or federal law, rule or
regulation, as the Committee shall determine to be necessary or advisable.
4. NONTRANSFERABILITY OF THIS OPTION. This Option may not be assigned,
encumbered, transferred, pledged or hypothecated except, in the event of the
death of the Optionee, by will or the applicable laws of descent and
distribution, as described in the Plan, to the extent provided in Section 5
below. Except as provided herein, this Option is exercisable during the
Optionee's lifetime only by the Optionee. The provisions of this Option shall be
binding upon, inure to the benefit of and be enforceable by the parties hereto,
the successors and assigns of the Corporation and any person to whom this Option
is transferred by will or by the laws of descent and distribution.
5. TERMINATION OF SERVICE OR DEATH OF THE OPTIONEE. Except as provided in
this Section 5 and Section 9 below and notwithstanding any other provision of
this Option to the contrary, this Option shall not be exercisable unless the
Optionee, at the time he exercises this Option, has maintained "Continuous
Service" (as defined in the Plan) since the date of the grant of this Option.
If the Optionee shall cease to maintain Continuous Service for any
reason excluding death and termination of employment for Cause (as defined in
the Plan), the Optionee may, but only within the period of three months
immediately succeeding such cessation of Continuous Service and in no event
after the Expiration Date, exercise this Option to the extent the Optionee
ISO-2
was entitled to exercise this Option at the date of cessation. If the
Optionee is terminated for Cause (as defined in the Plan), all rights under
this Option shall expire immediately upon the giving to the Optionee of
notice of such termination except as provided in Section 9 below.
In the event of the death of the Optionee while in Continuous Service of
the Corporation or during the three month period referred to in the
immediately preceding paragraph, the person to whom the Option has been
transferred by will or by the laws of descent and distribution may, but only
to the extent the Optionee was entitled to exercise this Option on the date
of the Optionee's death, exercise this Option at any time within one year
following the death of the Optionee, but in no event after the Expiration
Date of this Option. Following the death of the Optionee, the Committee may,
as an alternative means of settlement of this Option, elect to pay to the
person to whom this Option is transferred by will or by the laws of descent
and distribution, the amount by which the Fair Market Value (as defined in
the Plan) per share of Common Stock on the date of exercise of this Option
shall exceed the Exercise Price per Option Share, multiplied by the number of
Option Shares with respect to which this Option is properly exercised. Any
such settlement of this Option shall be considered an exercise of this Option
for all purposes of this Option and of the Plan.
6. NOTICE OF SALE. The Optionee or any person to whom the Option or the
Option Shares shall have been transferred by will or by the laws of descent and
distribution promptly shall give notice to the Corporation in the event of the
sale or other disposition of Option Shares within the later of (i) two years
from the date of grant of this Option or (ii) one year from the date of exercise
of this Option. Such notice shall specify the number of Option Shares sold or
otherwise disposed of and be directed to the address set forth in Section 12
below.
7. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OF THE CORPORATION. In the
event of any change in the outstanding shares of Common Stock by reason of any
recapitalization, stock split, reverse stock split, stock dividend,
reorganization, consolidation, combination or exchange of shares, merger, or any
other change in the corporate structure of the Corporation or in the shares of
Common Stock, the number and class of shares covered by this Option and the
Exercise Price may be appropriately adjusted by the Committee, whose
determination shall be conclusive and binding.
8. EFFECT OF MERGER OR OTHER REORGANIZATION. In the event of any merger,
consolidation or combination of the Corporation with or into another corporation
(other than a merger, consolidation or combination in which the Corporation is
the continuing corporation and which does not result in the outstanding shares
of Common Stock being converted into or exchanged for different securities, cash
or other property, or any combination thereof), the Optionee shall, provided the
Option has been granted at least six months prior to such event, have the right
(subject to the provisions of the Plan and the limitations contained herein),
thereafter and during the Exercise Period, to receive upon exercise of this
Option an amount equal to the excess of the Fair Market Value on the date of
such exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a share
of Common Stock over the Exercise Price, multiplied by the number of Option
Shares with respect to which this Option shall have been exercised. Such amount
may be payable fully in cash, fully in one or more of the kind or kinds of
property
ISO-3
payable in such merger, consolidation or combination, or partly in cash and
partly in one or more of such kind or kinds of property, all in the discretion
of the Committee.
9. EFFECT OF CHANGE OF CONTROL. If following a change of control of the
Corporation (as defined in the Plan) the Continuous Service of the Optionee is
voluntarily or involuntarily terminated for any reason, with or without Cause
(as defined in the Plan) and notwithstanding Sections 2 and 5 herein to the
contrary, this Option shall become exercisable in full upon the happening of
such termination and shall remain so exercisable for a period of 60 days
following such date after which this Option shall revert to being exercisable in
accordance with the other provisions of this Option; PROVIDED that the
provisions of this Section 9 shall not be deemed to cause this Option to be
exercisable by a director or Senior Officer (as defined in the Plan) of the
Corporation within six months of the date of its grant or to the extent it has
previously been exercised or otherwise terminated.
10. STOCKHOLDER RIGHTS NOT GRANTED BY THIS OPTION. The Optionee is not
entitled by virtue hereof to any rights of a stockholder of the Corporation or
to notice of meetings of stockholders or to notice of any other proceedings of
the Corporation.
11. WITHHOLDING TAX. Where the Optionee or another person is entitled to
receive Option Shares pursuant to the exercise of this Option, the Corporation
shall have the right to require the Optionee or such other person to pay to the
Corporation the amount of any taxes which the Corporation or any of its
Affiliates is required to withhold with respect to such Option Shares, or in
lieu thereof, to retain, or sell without notice, a sufficient number of such
shares to cover the amount required to be withheld, or in lieu of any of the
foregoing, to withhold a sufficient sum from the Optionee's compensation payable
by the Corporation to satisfy the Corporation's tax withholding requirements.
The Corporation's method of satisfying its withholding obligations shall be
solely in the discretion of the Corporation, subject to applicable federal,
state and local law.
12. NOTICES. All notices hereunder to the Corporation shall be delivered or
mailed to it addressed to the Secretary of D&N Financial Corporation, 400 Quincy
Street, Hancock, Michigan 49930. Any notices hereunder to the Optionee shall be
delivered personally or mailed to the Optionee's address noted below. Such
addresses for the service of notices may be changed at any time provided written
notice of the change is furnished in advance to the Corporation or to the
Optionee, as the case may be.
13. PLAN AND PLAN INTERPRETATIONS AS CONTROLLING. This Option and the terms
and conditions herein set forth are subject in all respects to the terms and
conditions of the Plan, which are controlling. All determinations and
interpretations of the Committee shall be final and conclusive upon the Optionee
or his legal representatives with regard to any question arising hereunder or
under the Plan.
14. OPTIONEE SERVICE. Nothing in this Option shall limit the right of the
Corporation or any of its Affiliates to terminate the Optionee's service as a
director, officer or employee, or otherwise impose upon the Corporation or any
of its Affiliates any obligation to employ or accept the services of the
Optionee.
ISO-4
15. OPTIONEE ACCEPTANCE. The Optionee shall signify his acceptance of the
terms and conditions of this Option by signing in the space provided below and
returning a signed copy hereof to the Corporation at the address set forth in
Section 12 above. IN SIGNING THIS AGREEMENT, ANY OPTIONEE, WHO IS SUBJECT TO THE
REQUIREMENTS OF SECTION 16 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND THE RULES PROMULGATED PURSUANT THERETO, ACKNOWLEDGES THAT SHARES
ACQUIRED PURSUANT TO THE EXERCISE OF THIS OPTION MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY THE GRANTEE FOR AT LEAST SIX MONTHS FROM THE DATE OF THE GRANT OF
THIS OPTION WITHOUT CREATING AN OBLIGATION UNDER SECTION 16 OF THE SECURITIES
EXCHANGE ACT OF 1934 TO PAY TO THE CORPORATION THE PROFIT ON ANY SUCH
TRANSACTION.
ISO-5
IN WITNESS WHEREOF, the parties hereto have caused this INCENTIVE STOCK
OPTION AGREEMENT to be executed as of the date first above written.
D&N FINANCIAL CORPORATION
By:
-------------------------------
ACCEPTED:
-----------------------------
(Signature)
-----------------------------
(Street Address)
-----------------------------
(City, State and Zip Code)
ISO-6
D&N FINANCIAL CORPORATION
AMENDED AND RESTATED 1994 MANAGEMENT STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NQSO NO. ___
This option is granted on ________________________ by D&N Financial
Corporation (the "Corporation") to ____________________ (the "Optionee"), in
accordance with the following terms and conditions:
1. OPTION GRANT AND EXERCISE PERIOD. The Corporation hereby grants to the
Optionee an Option (the "Option") to purchase, pursuant to the D&N Financial
Corporation Amended and Restated 1994 Management Stock Incentive Plan, as the
same may be amended from time to time (the "Plan"), and upon the terms and
conditions therein and hereinafter set forth, an aggregate of __________ shares
(the "Option Shares") of the Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation at the price (the "Exercise Price") of $________ per
share. A copy of the Plan, as currently in effect, is incorporated herein by
reference and is attached hereto.
Except as provided in Sections 7 and 8 below, this Option shall be
exercisable only during the period (the "Exercise Period") commencing on the
dates set forth in Section 2 below, and ending at 5:00 p.m., Hancock,
Michigan time, on the date ten years after the date of grant of this Option,
such later time and date being hereinafter referred to as the "Expiration
Date," provided that the Optionee has maintained "Continuous Service" (as
defined in the Plan) since the date of grant.
2. METHOD OF EXERCISE OF THIS OPTION. This Option may be exercised at any
time, in whole or in part during the Exercise Period, with respect to not more
than the cumulative number of Option Shares set forth below, on or after the
dates indicated, by giving written notice to the Corporation specifying the
number of Option Shares to be purchased.
CUMULATIVE NUMBER OF
OPTION SHARES EXERCISABLE DATE
The notice must be in the form prescribed by the Committee referred to in
Section 3 of the Plan or its successor (the "Committee") and directed to the
address set forth in Section 11 below. The date of exercise is the date on
which such notice is received by the Corporation. Such notice must be
accompanied by payment in full for the Option Shares to be purchased upon
such exercise. Payment shall be made (i) in cash, which may be in the form
of a check, money order, cashier's check or certified check, payable to the
Corporation, or (ii) if the Committee shall have previously approved such
form of payment, by delivering shares of Common Stock already owned by the
Optionee having a "Fair Market Value" (as defined in the Plan) equal to the
applicable exercise price, or (iii) if the Committee shall have previously
approved such form of payment, a combination of cash and such shares.
Promptly after such payment, subject to
Section 3 below, the Corporation shall issue and deliver to the Optionee or
other person exercising this Option a certificate or certificates representing
the shares of Common Stock so purchased, registered in the name of the Optionee
(or such other person), or, upon request, in the name of the Optionee (or such
other person) and in the name of another jointly with right of survivorship.
3. DELIVERY AND REGISTRATION OF SHARES OF COMMON STOCK. The Corporation's
obligation to deliver shares of Common Stock hereunder shall, if the Committee
so requests, be conditioned upon the receipt of a representation as to the
investment intention of the Optionee or any other person to whom such shares are
to be delivered, in such form as the Committee shall determine to be necessary
or advisable to comply with the provisions of the Securities Act of 1933, as
amended, or any other federal, state or local securities law or regulation. In
requesting any such representation, it may be provided that such representation
requirement shall become inoperative upon a registration of such shares or other
action eliminating the necessity of such representation under such Securities
Act or other securities law or regulation. The Corporation shall not be required
to deliver any shares upon exercise of this Option prior to (i) the admission of
such shares to listing on any stock exchange or system on which the shares of
Common Stock may then be listed, and (ii) the completion of such registration or
other qualification of such shares under any state or federal law, rule or
regulation, as the Committee shall determine to be necessary or advisable.
4. NONTRANSFERABILITY OF THIS OPTION. This Option may not be assigned,
encumbered, transferred, pledged or hypothecated except, in the event of the
death of the Optionee, by will or the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order, as described
in the Plan, to the extent provided in Section 5 below. Except as provided
herein, this Option is exercisable during the Optionee's lifetime only by the
Optionee. The provisions of this Option shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto, the successors and assigns
of the Corporation and any person to whom this Option is transferred by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order, as described in the Plan.
5. TERMINATION OF SERVICE OR DEATH OF THE OPTIONEE. Except as provided in
this Section 5 and in Section 8 below and notwithstanding any other provision of
this Option to the contrary, this Option shall not be exercisable unless the
Optionee, at the time he exercises this Option, has maintained "Continuous
Service" (as defined in the Plan) since the date of the grant of this Option.
If the Optionee shall cease to maintain Continuous Service for any
reason excluding death and termination of employment for Cause (as defined in
the Plan), the Optionee may, but only within the period of three months
immediately succeeding such cessation of Continuous Service and in no event
after the Expiration Date, exercise this Option to the extent the Optionee
was entitled to exercise this Option at the date of cessation. If the
Optionee is terminated for Cause (as defined in the Plan), all rights under
this Option shall expire immediately upon the giving to the Optionee of
notice of such termination, except as provided in Section 8 below.
In the event of the death of the Optionee while in Continuous Service of
the Corporation, or during the three month period referred to in the
immediately preceding paragraph, the person
NQSO-2
or persons to whom the Option has been transferred by will or by the laws of
descent and distribution, or pursuant to a qualified domestic relations order,
as described in the Plan, may, but only to the extent the Optionee was entitled
to exercise this Option on the date of the Optionee's death, exercise this
Option at any time within one year following the death of the Optionee, but in
no event after the Expiration Date of this Option. Following the death of the
Optionee, the Committee may, as an alternative means of settlement of this
Option, elect to pay to the person to whom this Option is transferred by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order, as described in the Plan, the amount by which the Fair Market
Value (as defined in the Plan) per share of Common Stock on the date of exercise
of this Option shall exceed the Exercise Price per Option Share, multiplied by
the number of Option Shares with respect to which this Option is properly
exercised. Any such settlement of this Option shall be considered an exercise of
this Option for all purposes of this Option and of the Plan.
6. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OF THE CORPORATION. In the
event of any change in the outstanding shares of Common Stock by reason of any
recapitalization, stock split, reverse stock split, stock dividend,
reorganization, consolidation, combination or exchange of shares, merger, or any
other change in the corporate structure of the Corporation or in the shares of
Common Stock, the number and class of shares covered by this Option and the
Exercise Price may be appropriately adjusted by the Committee, whose
determination shall be conclusive and binding.
7. EFFECT OF MERGER OR OTHER REORGANIZATION. In the event of any merger,
consolidation or combination of the Corporation with or into another corporation
(other than a merger, consolidation or combination in which the Corporation is
the continuing corporation and which does not result in the outstanding shares
of Common Stock being converted into or exchanged for different securities, cash
or other property, or any combination thereof), the Optionee shall, provided the
Option has been granted at least six months prior to such event, have the right
(subject to the provisions of the Plan and the limitations contained herein),
thereafter and during the Exercise Period, to receive upon exercise of this
Option an amount equal to the excess of the Fair Market Value on the date of
such exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a share
of Common Stock over the Exercise Price, multiplied by the number of Option
Shares with respect to which this Option shall have been exercised. Such amount
may be payable fully in cash, fully in one or more of the kind or kinds of
property payable in such merger, consolidation or combination, or partly in cash
and partly in one or more of such kind or kinds of property, all in the
discretion of the Committee.
8. EFFECT OF CHANGE OF CONTROL. If following a change of control of the
Corporation (as defined in the Plan) the Continuous Service of the Optionee is
voluntarily or involuntarily terminated for any reason, with or without Cause
(as defined in the Plan) and notwithstanding Sections 2 and 5 herein to the
contrary, this Option shall become exercisable in full upon the happening of
such termination and shall remain so exercisable for a period of 60 days
following such date, after which this Option shall revert to being exercisable
in accordance with the other provisions of this Option; PROVIDED that the
provisions of this Section 8 shall not be deemed to cause this Option to be
exercisable to the extent it has previously been exercised or otherwise
NQSO-3
terminated or to cause this Option to be exercisable by a director or Senior
Officer (as defined in the Plan) of the Corporation within six months of the
date of its grant.
9. STOCKHOLDER RIGHTS NOT GRANTED BY THIS OPTION. The Optionee is not
entitled by virtue hereof to any rights of a stockholder of the Corporation or
to notice of meetings of stockholders or to notice of any other proceedings of
the Corporation.
10. WITHHOLDING TAX. Where the Optionee or another person is entitled to
receive Option Shares pursuant to the exercise of this Option, the Corporation
shall have the right to require the Optionee or such other person to pay to the
Corporation the amount of any taxes which the Corporation or any of its
Affiliates is required to withhold with respect to such Option Shares, or in
lieu thereof, to retain, or sell without notice, a sufficient number of shares
to cover the amount required to be withheld, or, in lieu of any of the
foregoing, to withhold a sufficient sum from the Optionee's compensation payable
by the Corporation to satisfy the Corporation's tax withholding requirements.
The Corporation's method of satisfying its withholding obligations shall be
solely in the discretion of the Corporation, subject to applicable federal,
state and local law.
11. NOTICES. All notices hereunder to the Corporation shall be delivered or
mailed to it addressed to the Secretary of D&N Financial Corporation, 400 Quincy
Street, Hancock, Michigan 49930. Any notices hereunder to the Optionee shall be
delivered personally or mailed to the Optionee's address noted below. Such
addresses for the service of notices may be changed at any time provided written
notice of the change is furnished in advance to the Corporation or the Optionee,
as the case may be.
12. PLAN AND PLAN INTERPRETATIONS AS CONTROLLING. This Option and the terms
and conditions herein set forth are subject in all respects to the terms and
conditions of the Plan, which are controlling. All determinations and
interpretations of the Committee shall be final and conclusive upon the Optionee
or his legal representatives with regard to any question arising hereunder or
under the Plan.
13. OPTIONEE SERVICE. Nothing in this Option shall limit the right of the
Corporation or any of its Affiliates to terminate the Optionee's service as a
director, officer or employee, or otherwise impose upon the Corporation or any
of its Affiliates any obligation to employ or accept the services of the
Optionee.
14. OPTIONEE ACCEPTANCE. The Optionee shall signify his acceptance of the
terms and conditions of this Option by signing in the space provided below and
returning a signed copy hereof to the Corporation at the address set forth in
Section 11 above. IN SIGNING THIS AGREEMENT, ANY OPTIONEE, WHO IS SUBJECT TO THE
REQUIREMENTS OF SECTION 16 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND THE RULES PROMULGATED THERETO, ACKNOWLEDGES THAT SHARES ACQUIRED
PURSUANT TO THE EXERCISE OF THIS OPTION MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
BY THE GRANTEE FOR AT LEAST SIX MONTHS FROM THE DATE OF THE GRANT OF THIS OPTION
WITHOUT CREATING AN OBLIGATION UNDER SECTION 16 OF THE SECURITIES EXCHANGE ACT
OF 1934 TO PAY TO THE CORPORATION THE PROFIT ON ANY SUCH TRANSACTION.
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IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed as of the date first above written.
D&N FINANCIAL CORPORATION
By:
--------------------------------
ACCEPTED:
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(Signature)
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(Street Address)
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(City, State and Zip Code)
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