SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. __)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
[ ] Confidential, for use of the Commission only (as permitted
by Rule 14a-6(e)(2))
FIRSTBANK CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the file fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
[FIRSTBANK LOGO] FIRSTBANK CORPORATION
311 WOODWORTH AVENUE
P.O. BOX 1029
ALMA, MICHIGAN 48801
The annual meeting of the shareholders of Firstbank Corporation will
be held at the Comfort Inn Conference Center at 3130 West Monroe (M-46),
Alma, Michigan 48801, on April 28, 1997, at 5 p.m. (Alma time) to consider
and vote upon:
1. Election of directors.
2. Approval of the amendment to the Corporation's articles of
incorporation to increase authorized capital stock.
3. Approval of the Stock Option and Restricted Stock Plan of 1997.
4. Any other business that may properly come before the meeting or
any adjournment of the meeting.
Shareholders of record at the close of business on March 3, 1997,
will be entitled to vote at the annual meeting and any adjournment of the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Mary D. Deci
Mary D. Deci, Vice President, Secretary
and Treasurer
Alma, Michigan
March 17, 1997
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IMPORTANT
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND IN PERSON, YOU ARE URGED TO DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. THIS WILL
ASSURE YOUR REPRESENTATION AND A QUORUM FOR THE TRANSACTION OF BUSINESS AT
THE MEETING. IF YOU DO ATTEND THE MEETING IN PERSON, THE PROXY WILL NOT BE
USED IF YOU CHOOSE TO VOTE IN PERSON.
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FIRSTBANK CORPORATION
311 Woodworth Avenue
P.O. Box 1029
Alma, Michigan 48801
Telephone: (517) 463-3131
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Firstbank Corporation
(the "Corporation") to be voted at the annual meeting of its shareholders
to be held at the Comfort Inn Conference Center at 3130 West Monroe (M-46),
Alma, Michigan 48801, on Monday, April 28, 1997, at 5 p.m., Alma time, and
at any adjournment of the meeting, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This proxy
statement and form of proxy are first being sent to shareholders on or
about March 17, 1997.
If a proxy in the accompanying form is properly executed, duly
returned to the Corporation, and not revoked, the shares represented by the
proxy will be voted at the annual meeting of the Corporation's shareholders
and at any adjournment of that meeting. Where a shareholder specifies a
choice, a proxy will be voted as specified. If no choice is specified, the
shares represented by the proxy will be voted for election of all nominees
of the Board of Directors, for approval of the amendment to the
Corporation's articles of incorporation to increase authorized capital
stock, and for approval of the Stock Option and Restricted Stock Plan of
1997. The Corporation's management does not know of any other matters
to be presented at the annual meeting. If other matters are presented, the
shares represented by proxy will be voted at the discretion of the persons
designated as proxies, who will take into consideration the recommendations
of the Corporation's management.
Any shareholder executing a proxy in the enclosed form has the
power to revoke it by notifying the Secretary of the Corporation in writing
at the address indicated above at any time before it is exercised or by
appearing at the meeting and voting in person.
Solicitation of proxies is being made by mail. Directors,
officers, and regular employees of the Corporation and its subsidiaries may
also solicit proxies in person or by telephone without additional
compensation. In addition, banks, brokerage firms, and other custodians,
nominees, and fiduciaries may solicit proxies from the beneficial owners of
shares they hold and may be reimbursed by the Corporation for reasonable
expenses incurred in sending proxy material to beneficial owners of the
Corporation's stock. The Corporation will pay all expenses of soliciting
proxies.
ELECTION OF DIRECTORS
The Board of Directors has nominated John A. McCormack and
David D. Roslund for reelection to the Board of Directors at the annual
meeting to serve 3-year terms that will expire in 2000.
The proposed nominees are willing to be elected and to serve.
In the event that any nominee is unable to serve or is otherwise unavailable
for election, which is not now contemplated, the incumbent Board of
Directors may or may not select a substitute nominee. If a substitute
nominee is selected, all proxies will be voted for the person so selected.
If a substitute nominee is not so selected, all proxies will be voted for
the election of the remaining nominee. Proxies will not be voted for a
greater number of persons than the number of nominees named.
A vote of shareholders holding a plurality of shares voting is
required to elect directors. For the purpose of counting votes on this
proposal, abstentions, broker non-votes, and other shares not voted will
not be counted as shares voted.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ELECTION OF ALL NOMINEES AS DIRECTORS
AMENDMENT OF THE ARTICLES OF INCORPORATION
The Board of Directors proposes to amend Article III of the
Corporation's articles of incorporation to increase the Corporation's
authorized capital stock from 2,500,000 shares of common stock and 300,000
shares of preferred stock to 10,000,000 shares of common stock and 300,000
shares of preferred stock. The purpose of the amendment is to provide
additional shares for future issuance.
The Board of Directors believes that it is advisable to have the
additional authorized shares available for possible future stock splits and
dividends, employee benefit plans, equity based acquisitions, and other
corporate purposes that might be proposed in the future. The corporation
has an established history of distributing authorized but unissued shares
to its shareholders in stock dividends and stock splits. Continuation of
this practice will require ample availability of authorized but unissued
shares. The board of directors will consider a stock split during 1997 if
the proposed increase in authorized capital is approved.
The Board of Directors has in the past had, and anticipates that
it will from time to time in the future have, discussions with smaller
banks which might be interested in being acquired as well as discussions
with larger institutions which have subsidiaries that the larger
institutions may wish to sell. Authorized but unissued shares of common
stock may be used for these purposes.
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On February 18, 1997, the Corporation signed a letter of intent
to acquire Lakeview Financial Corporation ("Lakeview"), the parent holding
company of Bank of Lakeview. The proposed transaction is structured as a
merger of Lakeview into the Corporation, with the shareholders of Lakeview
receiving the Corporation's common stock in exchange for their Lakeview
stock or, if they so elect, up to 35% of the transaction value in cash and
the remainder in the Corporation's common stock. The transaction is
subject to completion of a definitive agreement, regulatory approval,
approval of the Lakeview shareholders, and other conditions. Share
exchange ratios fluctuate under the terms of the arrangement within certain
ranges based on the market price of the Corporation's common stock. The
Corporation believes it has sufficient authorized but unissued shares to
satisfy the requirements for this transaction, without the increase of
authorized capital contemplated by this proposal.
All of the additional shares resulting from the increase in the
Corporation's authorized common stock would be of the same class, with the
same dividend, voting, and liquidation rights, as the shares of common
stock presently outstanding. As of March 3, 1997, _________ authorized
shares of common stock were issued and outstanding.
If the proposed amendment is adopted, the newly authorized shares
would be unreserved and available for issuance. No further shareholder
authorization would be required prior to the issuance of such shares by the
corporation. Shareholders have no preemptive rights to acquire shares
issued by the corporation under its existing articles of incorporation, and
shareholders would not acquire any such rights with respect to such
additional shares under the proposed amendment to the Corporation's
articles of incorporation. Under some circumstances issuance of additional
shares of common stock could dilute the voting rights, equity, and earnings
per share of existing shareholders.
The first paragraph of Article III, as amended, would read in its
entirety as follows:
The total authorized capital stock of the corporation is ten
million (10,000,000) shares of common stock, all of one class
with equal voting rights, and three hundred thousand (300,000)
shares of preferred stock.
The affirmative vote of holders of a majority of shares entitled
to vote at the annual meeting of shareholders is required to approve the
proposed amendment to the Corporation's articles of incorporation. For the
purpose of counting votes on this proposal, abstentions, broker non-votes,
and other shares not voted have the same effect as a vote against the
proposal.
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YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE AMENDMENT TO THE CORPORATION'S
ARTICLES OF INCORPORATION
APPROVAL OF STOCK OPTION AND RESTRICTED STOCK PLAN OF 1997
The Board of Directors firmly believes that the Corporation's
long-term interests are best advanced by aligning the interests of its key
leaders and employees with the interests of its shareholders. Therefore,
to attract and retain officers and other key employees of exceptional
abilities, and in recognition of the significant and extraordinary
contributions to the long-term performance and growth of the Corporation
and its subsidiary banks made by these individuals, the Board of Directors
has adopted, subject to shareholder approval, the Stock Option and
Restricted Stock Plan of 1997 (the "1997 Plan"). The 1997 Plan is intended
to supplement the Corporation's Stock Option and Restricted Stock Plan of
1993 (the "1993 Plan"). The 1993 Plan has limited authorized shares
remaining for future stock option grants. The Board of Directors believes
that the adoption and implementation of the 1997 Plan is in the best
interests of the Corporation and its shareholders and is now advisable to
make additional shares available for stock option grants and restricted
stock awards. The provisions of the 1997 Plan are similar to the
provisions of the 1993 Plan.
As with the 1993 Plan, the Board of Directors contemplates that
the 1997 Plan would primarily be used to grant stock options. However, the
1997 Plan like the 1993 Plan would also permit grants of restricted stock
and tax benefit rights if determined to be desirable to advance the
purposes of the 1997 Plan. Stock options, restricted stock and tax benefit
rights are referred to as "Incentive Awards" in this Proxy Statement. By
combining in a single plan these types of incentives commonly used in long-
term incentive compensation programs, it is intended that the 1997 Plan
would provide significant flexibility to the committee selected from the
Board of Directors to administer the 1997 Plan (the "Committee"). This
flexibility would allow the Committee to tailor specific long-term
incentives that would best promote the objectives of the 1997 Plan, and in
turn promote the interests of the Corporation's shareholders.
The following is a summary of the principal features of the 1997
Plan. The summary is qualified in its entirety by reference to the terms
of the 1997 Plan, the complete text of which is attached as Appendix A to
this proxy statement.
Persons eligible to receive Incentive Awards under the 1997 Plan
(with certain limitations discussed below) are corporate officers
(currently 6 persons), including those listed in the summary compensation
table presented in this proxy statement, and other full time employees
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(currently approximately 200 persons) of the Corporation and its subsidiary
banks. Directors who are not employees of the Corporation or its
subsidiary banks are not eligible to participate in the 1997 Plan. Other
individuals eligible to participate in the 1997 Plan may join the
Corporation in the future. A maximum of 100,000 shares of common stock
(subject to certain antidilution adjustments) will be available for
Incentive Awards under the 1997 Plan. Shares to be issued under the 1997
Plan are expected to be authorized but unissued shares. Because officers
and employees of the Corporation and its subsidiary banks may receive
awards under the 1997 Plan, they may be deemed to have an interest in the
1997 Plan. The 1997 Plan will not be qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and will not be
subject to the Employee Retirement Income Security Act of 1974.
The 1997 Plan will be administered by the Committee. The
Committee will be comprised of two or more directors who are "non-employee
directors" as defined in Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Board of Directors, in its
discretion, may also require that the members of the Committee be
"outside directors" as defined in the rules issued pursuant to Section
162(m) of the Code. The Committee will make determinations, subject to
the terms of the 1997 Plan, as to the persons to receive Incentive
Awards, the amount of Incentive Awards to be granted to each person,
the terms of each grant, and all other determinations necessary or
advisable for administration of the 1997 Plan. The Committee may
amend the terms of Incentive Awards granted under the 1997 Plan from
time to time in a manner consistent with the 1997 Plan; provided, that
no amendment may be effective relating to a particular Incentive Award
without the consent of the relevant participant, except to the extent
the amendment operates solely to the benefit of the participant.
Under the 1997 Plan, participants may be granted stock options.
A stock option is the right to purchase a specified number of shares of
common stock for a stated price at specified times. Certain stock options
that may be granted to employees under the 1997 Plan may qualify as
incentive stock options as defined in Section 422(b) of the Code
("Incentive Stock Options"). Other stock options will not be Incentive
Stock Options within the meaning of the Code. Stock options may be granted
at any time prior to the termination of the 1997 Plan according to its
terms or by action of the Committee.
The Committee will set forth the terms of individual grants of
stock options in stock option agreements, which will contain such terms and
conditions, consistent with the provisions of the 1997 Plan, as the
Committee determines to be appropriate. These restrictions may include
vesting requirements to encourage long-term ownership of shares. The
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Corporation will receive no consideration upon the award of options. The
option price per share will be determined by the Committee; provided, that
the option price for an Incentive Stock Option will be a price equal to or
higher than the "market value" of Firstbank common stock on the date of
grant. "Market value" means (a) the high bid price as reported on the NASD
Over-the-Counter Bulletin Board, (b) the last reported sales price if the
securities are listed for trading on The Nasdaq Stock Market or one or more
national securities exchanges, or (c) if neither (a) nor (b) is applicable,
the value as determined by any means deemed fair and reasonable by the
Committee. On February 14, 1997, the high bid price was $35 as reported on
the NASD Over-the-Counter Bulletin Board.
When exercising all or a portion of an option, a participant may
pay the exercise price with cash or, with the consent of the Committee,
shares of common stock. If shares of common stock are used to pay the
exercise price and the Committee consents, a participant may use the value
of shares received upon exercise for further exercises in a single
transaction, permitting a participant to fully exercise an option with a
relatively small initial cash or stock payment. The Committee may also
authorize payment of all or a portion of the option price in the form of a
promissory note or installments on such terms as the Committee may approve.
The Board of Directors may restrict or suspend the power of the Committee
to permit such loans and may require that adequate security be provided.
Although the term of each stock option will be determined by the
Committee, no Incentive Stock Option will be exercisable under the 1997
Plan after 10 years from the date it was granted. Options generally will
be exercisable for limited periods of time if an option holder is
terminated from employment with the Corporation or its subsidiary banks
without cause, dies or becomes disabled. If an option holder is terminated
for cause, the option holder will forfeit all rights to exercise any
outstanding options. Options granted to participants under the 1997 Plan
may not be transferred except by will or by the laws of descent and
distribution, unless the Committee otherwise consents or the terms of the
option agreement otherwise provide. No individual participant may be
granted, during any calendar year, options to purchase more than 10,000
shares (subject to adjustment) of common stock under the 1997 Plan. The
Committee may permit an option holder to exercise an option for an extended
period, which may not extend beyond the earlier of either three years from
the date of termination or the date on which the options expire by their
terms, if (i) the option holder retires after age 62 or upon any other age
determined by the Committee ("Normal Retirement"), (ii) the option holder
voluntarily terminates employment with the written consent of the Committee
after the option holder has attained 55 years of age and completed 10 years
of service ("Early Retirement"), or (iii) the option holder voluntarily
terminates employment and the Committee determines the termination to be in
the best interests of the Corporation ("Consensual Severance").
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Because the specific participants and the market value of common
stock on the grant date cannot presently be determined, the benefits or
amounts that will be received by participants under the 1997 Plan in the
future are not determinable. Similarly, the benefits or amounts that would
have been received by participants had the 1997 Plan been in effect during
the last completed fiscal year are not determinable.
Under current federal income tax laws, no income will be realized
when an option is granted pursuant to the 1997 Plan. A participant
exercising an Incentive Stock Option will not recognize income at the time
of exercise. The difference between the market value and the exercise
price will, however, be a tax preference item for the purpose of
calculating alternative minimum tax. Upon sale of the stock, so long as
the participant held the stock for at least one year after the exercise of
the option and at least two years after the grant of the option, the
participant's basis will equal the option price, and the participant will
pay tax on the difference between the sale price and the option price as
capital gain, in which case the Corporation will not be entitled to any
deduction for compensation income. If, prior to the expiration of either
of the above holding periods, the participant sells shares acquired under
an Incentive Stock Option, the tax deferral will be lost, and the
participant will recognize compensation income equal to the difference
between the option price and the fair market value of the shares sold at
the time of exercise, but not more than the maximum amount that will not
result in a loss on the disposition (generally the difference between the
option price and the price at which the shares are sold). The Corporation
will then receive a corresponding deduction for federal income tax
purposes. Additional gains, if any, will be recognized by the participant
as short- or long-term capital gain.
If a participant exercises stock options that are not Incentive
Stock Options, the participant will recognize compensation income in the
year of exercise equal to the difference between the stock option price and
the fair market value of the shares on the date of exercise. The
Corporation will receive a corresponding deduction for federal income tax
purposes. The participant's tax basis in the shares acquired will be
increased by the amount of compensation income recognized. Sale of the
stock after exercise will result in recognition of short- or long-term
capital gain (or loss).
In addition to the authority to grant stock options under the
1997 Plan, the 1997 Plan will allow the Committee to award restricted
stock. Restricted stock will be subject to such terms and conditions,
consistent with the provisions of the 1997 Plan, as the Committee from time
to time may determine. As with stock option grants, the Committee will set
forth the terms of individual awards of restricted stock in restricted
stock agreements. If a participant's employment or director or officer
status is terminated during the restricted period set by the Committee for
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any reason other than death or disability, or any additional reason as may
be permitted by the Committee, then any shares of restricted stock still
subject to restrictions will be forfeited. Unless the Committee provides
otherwise in a restricted stock agreement, if a participant's employment or
director or officer status is terminated during the restricted period by
reason of death or disability, the restrictions on the participant's shares
will terminate automatically as of the date of death or disability. The
Committee, in its discretion, may provide that all or part of the
restrictions on the restricted stock will lapse upon termination if the
termination is by reason of Consensual Severance, Normal Retirement or
Early Retirement.
Without Committee authorization, a recipient of restricted stock
may not sell, exchange, transfer, pledge, assign or otherwise dispose of
such stock other than to the Corporation or by will or the laws of descent
or distribution. In addition, the Committee may impose other restrictions
on shares of restricted stock. However, holders of restricted stock will
enjoy all other rights of shareholders with respect to restricted stock,
including the right to vote restricted shares at shareholders' meetings and
the right to receive all dividends paid with respect to restricted stock.
Any securities received by a holder of restricted stock pursuant to a stock
dividend, stock split, recapitalization or reorganization will be subject
to the same terms, conditions and restrictions that are applicable to the
restricted stock for which such shares are received.
Generally, a participant will not recognize income upon the award
of restricted stock. However, a participant will recognize compensation
income on the value of restricted stock at the time the restricted stock
vests (when the restrictions lapse). At the time the participant
recognizes this compensation income, the Corporation will be entitled to a
corresponding deduction for federal income tax purposes. If restricted
stock is forfeited by a participant, the participant will not recognize
income and the Corporation will not receive a deduction. Prior to the
lapse of the restrictions, dividends paid on restricted stock will be
reported as compensation income to the participant and the Corporation will
receive a corresponding deduction.
A participant may, within 30 days after the date of an award of
restricted stock, elect to report compensation income for the tax year in
which the award of restricted stock occurred. If the participant makes
such an election, the amount of compensation income will be the value of
the restricted stock at the time of the award. Any later appreciation in
the value of the restricted stock will be treated as capital gain and
realized only upon the sale of the restricted stock. Dividends received
after such an election will be taxable as dividends and not treated as
additional compensation income. If, however, restricted stock is forfeited
after the participant makes an election as described above, the participant
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will not be allowed any deduction for the amount earlier taken into income.
Upon the sale of restricted stock, a participant will realize capital gain
(or loss) in the amount of the difference between the sale price and the
value of the stock previously reported by the participant as compensation
income.
The Committee may provide that upon the occurrence of a
"change in control" of the Corporation (as defined in the 1997 Plan), all
restricted stock or other Incentive Awards immediately would become fully
vested, nonforfeitable or otherwise no longer subject to any restriction.
The Committee may provide in the restricted stock agreement that the number
of shares that will automatically vest will be limited in value to the
extent that any payments that are deemed "parachute payments" as defined in
Section 280G9(b)(2) of the Code would not be subject to the excise tax
imposed by Section 4999 of the Code.
The Committee may also grant tax benefit rights under the 1997
Plan. As with options and restricted stock, the Committee will set forth
the terms and conditions of tax benefit rights granted and the participants
to receive tax benefit rights in written agreements. A tax benefit right
entitles a participant to receive a cash payment from the Corporation or
its subsidiary banks to encourage the participant to exercise his or her
options. The amount of the payment may not exceed the amount calculated by
multiplying the ordinary income, if any, realized by the participant for
federal tax purposes as a result of the exercise of a non-Incentive Stock
Option, or as a result of the disqualifying disposition of shares acquired
under an Incentive Stock Option, by the maximum federal income tax rate
(including any surtax or similar charge or assessment) for corporations,
plus the applicable state and local tax imposed on the exercise of the
option or disqualifying disposition. Tax benefit rights may be granted
only with respect to a stock option issued and outstanding or to be issued
under the 1997 Plan or any prior plans. A participant may refuse the
issuance of a tax benefit right if the effect of the tax benefit right
would disqualify an Incentive Stock Option, change the date of the grant or
exercise price or impair the participant's existing stock options.
Whenever Incentive Awards are made under the 1997 Plan, the
Corporation may, if appropriate, withhold from any cash otherwise payable
to the participant or require the participant to remit to the Corporation
an amount sufficient to satisfy all applicable federal, state and local
withholding taxes. Withholding may be satisfied by withholding common
stock to be received upon exercise of an option or by delivery to the
Corporation of shares of previously owned common stock.
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The Board of Directors may terminate the 1997 Plan at any time
and may from time to time amend the 1997 Plan as it deems proper and in the
best interests of the Corporation, provided that no such amendment may
impair any outstanding Incentive Award without the consent of the
participant, except according to the terms of the Incentive Award. Subject
to shareholder approval, the 1997 Plan will take effect on April 28, 1997
and, unless earlier terminated by the Board of Directors, the 1997 Plan
will terminate on April 27, 2007. No award may be made under the 1997
Plan after that date.
The Corporation intends to register shares covered by the 1997
Plan under the Securities Act of 1933.
The affirmative vote of the holders of a majority of the shares
of common stock present in person or represented by proxy and voting on
this proposal is required to approve the 1997 Plan. For purposes of
counting votes on this proposal, abstentions, broker non-votes and other
shares not voted will not be counted as voted on this proposal, and the
number of shares of which a majority is required will be reduced by the
number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE STOCK OPTION AND RESTRICTED STOCK PLAN OF 1997
VOTING SECURITIES
At the close of business on March 3, 1997, the record date for
determination of the shareholders entitled to vote at the annual meeting,
the Corporation had issued and outstanding ____________ shares of its
common stock, the only class of voting securities presently outstanding.
Each share entitles its holder to one vote on each matter to be voted upon
at the meeting.
The following table shows certain information concerning the
number of shares of common stock held by the only shareholder who is known
to management of the Corporation to be the beneficial owner of more than 5
percent of the outstanding shares of common stock of the Corporation as of
December 31, 1996.
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AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP<F1>
---------------------------------------------
SOLE SHARED
VOTING AND VOTING OR TOTAL
NAME AND ADDRESS OF INVESTMENT INVESTMENT BENEFICIAL PERCENT
BENEFICIAL OWNER POWER POWER<F2> OWNERSHIP OF CLASS
-------------------------- ---------- ---------- ---------- --------
Firstbank Corporation
Employee Stock Ownership
Plan ("ESOP")
311 Woodworth
Avenue, Alma,
Michigan 48801<F3> 0 141,839 141,839 8.7 %
The following table shows certain information concerning the
shares of the Corporation beneficially owned by each of the Corporation's
directors and nominees for director, by the executive officers named in the
summary compensation table below, and by all directors and executive
officers as a group as of December 31, 1996.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP<F1>
---------------------------------------------
SOLE SHARED
VOTING AND VOTING OR TOTAL
NAME OF INVESTMENT INVESTMENT BENEFICIAL PERCENT
BENEFICIAL OWNER POWER POWER<F2> OWNERSHIP OF CLASS
------------------ ---------- ---------- ---------- --------
Mary D. Deci 2,858<F4><F5> 125 2,983<F4><F5> <F*>
William E. Goggin 3,943 1,821 5,764 <F*>
Edward B. Grant 0 1,058 1,058 <F*>
Charles W. Jennings 0 1,174 1,174 <F*>
John A. McCormack 22,161<F4><F5> 0 22,161<F4><F5> 1.36%
Phillip G. Peasley 4,421 0 4,421 <F*>
Dale A. Peters 4,743<F4><F5> 186 4,929<F4><F5> <F*>
David D. Roslund 3,473 93 3,566 <F*>
Thomas R. Sullivan 4,231<F4><F5> 0 4,231<F4><F5> <F*>
James E. Wheeler II 2,887<F4><F5> 4,556 7,443<F4><F5> <F*>
All directors and executive
officers as a group 52,404<F4><F5> 9,384 61,788<F4><F5> 3.80%
<FN>
<F*>Represents less than 1 percent of the outstanding shares.
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<F1> The numbers of shares stated are based on information furnished by
each person listed and include shares personally owned of record by
that person and shares which under applicable regulations are deemed
to be otherwise beneficially owned by that person. Under these
regulations, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise, has or shares voting power
or investment power with respect to the security. Voting power
includes the power to vote or to direct the voting of the security.
Investment power includes the power to dispose or to direct the
disposition of the security. A person will also be considered the
beneficial owner of a security if the person has a right to acquire
beneficial ownership of the security within 60 days.
<F2> Includes shares as to which the indicated person is legally entitled
to share voting or investment power by reason of joint ownership,
trust, or other contract or property right, and shares held by spouses
and children over whom the indicated person may have substantial
influence by reason of the relationship.
<F3> John A. McCormack, Dale A. Peters, and Thomas R. Sullivan, all
officers of the Corporation, and Nancy A. Stark, Human Resources
Officer for Bank of Alma, a wholly owned subsidiary of the
Corporation, are the members of the Pension Committee of the
Corporation. Bank of Alma is the trustee of the ESOP Trust, which
holds shares of the Corporation for the ESOP. The trustee has voting
and limited investment power over the shares held by the ESOP Trust
which have not been allocated to an individual account, if any, and
limited investment power over shares which have been allocated to an
individual account. The Pension Committee has the power to direct the
trustee as to the voting of the shares held by the ESOP Trust that
have not been allocated to an individual account, if any. Each of the
members of the Pension Committee disclaims beneficial ownership of
shares held by the ESOP (except shares allocated to the person's
individual account under the ESOP), and the ESOP shares are
not reported as beneficially owned by the members of the Pension
Committee as individuals unless the shares have been allocated to the
person's individual account under the ESOP.
<F4> Includes shares allocated to individual accounts under the ESOP.
<F5> Shares that may be acquired pursuant to stock options are included in
the table for stock options that are exercisable within 60 days. The
number of shares subject to such options for (a) Ms. Deci is 1,431
shares, (b) Mr. McCormack is 2,796 shares, (c) Mr. Peters is 1,864
shares, (d) Mr. Sullivan is 1,864 shares, (e) Mr. Wheeler is 1,864
shares, and (f) all directors and executive officers as a group is
10,939 shares. No other listed person owns options.
</FN>
-12-
BOARD OF DIRECTORS
The Articles of Incorporation of the Corporation provide that the
Board of Directors will be divided into three classes, as nearly equal in
number as possible, with the term of office of one class expiring each
year. The present Board of Directors consists of five persons who were
elected to the Board of Directors for terms of three years each by the
Corporation's shareholders and one person who was appointed by the Board of
Directors to fill a vacancy. The term of office of one class of directors
consisting of two directors expires in 1997.
Biographical information concerning the current directors and the
nominees who are nominated for election to the Board of Directors at the
annual meeting is presented below. Except as otherwise indicated, all
directors and nominees have had the same principal employment for over
five years.
NOMINEES FOR 3-YEAR TERMS EXPIRING IN 2000
JOHN A. MCCORMACK (age 60) has been President and Chief Executive
Officer and a director of the Corporation since 1986. He has also
been President and Chief Executive Officer and a director of Bank of
Alma since 1986. Previously, he served Bank of Alma in other
capacities. Mr. McCormack is a director of Firstbank and 1st Bank,
both wholly owned subsidiaries of the Corporation.
DAVID D. ROSLUND (age 56) was appointed to the Board of Directors
of the Corporation in 1995 and has been a director of Bank of Alma
since 1990. Mr. Roslund, a certified public accountant, is the
Administrator of Wilcox Health Care Center, a nursing home located in
Alma. He also is an investor in and manager of several local small
businesses.
DIRECTORS WITH TERMS EXPIRING IN 1999
EDWARD B. GRANT (age 47) has been a director of Firstbank since
1988, and of the Corporation since 1990. He has served as Chairman of
the Board of Firstbank since 1989. Mr. Grant is Director, Graduate
Business Studies, at Central Michigan University.
PHILLIP G. PEASLEY (age 63) has been a director of Bank of Alma
since 1973, and of the Corporation since 1985. He is the owner and
President of Peasley's Hardware & Furniture, Inc., a retail hardware
and furniture store.
-13-
DIRECTORS WITH TERMS EXPIRING IN 1998
WILLIAM E. GOGGIN (age 51) has been a director of Bank of Alma
since 1974, and of the Corporation since 1985. Mr. Goggin has served
as Chairman of the Board of the Corporation since 1986. He is an
attorney with the law firm of Goggin & Baker.
CHARLES W. JENNINGS (age 60) has been a director of 1st Bank
since 1987, and a director of the Corporation since 1989.
Mr. Jennings is an attorney with the law firm of Jennings & Ellias,
P.C.
The Board of Directors of the Corporation has a standing audit
committee. It is the duty of the audit committee to cause a suitable
examination of the Corporation's financial records and operations, and
those of its subsidiaries, to be made by the internal auditor through a
program of continuous internal audits; to recommend to the Board of
Directors the appointment of independent auditors to audit the consolidated
financial statements of the Corporation and its subsidiaries and make such
additional examinations as the committee deems advisable; to review reports
of examination of the Corporation and its subsidiaries received from
regulatory authorities; and to report to the Board of Directors at least
once each calendar year on the results of examinations made and offer such
conclusions and recommendations as the committee deems appropriate.
Messrs. Goggin, Grant, and Roslund served on this committee. During 1996,
the audit committee held four meetings.
The Board of Directors of the Corporation does not have standing
nominating or compensation committees. The entire Board of Directors
performs the functions of those committees. In making nominations for
election to the Board of Directors, the Board of Directors will consider
recommendations of shareholders. Shareholders who wish to recommend
nominees should submit their recommendations in writing, delivered or
mailed to the Secretary of the Corporation.
The Board of Directors of the Corporation held 15 regularly
scheduled and special meetings during 1996. All incumbent directors
attended at least 75 percent of all meetings of the Board of Directors and
any committees on which they served.
REPORT ON EXECUTIVE COMPENSATION
All of the executive officers of the Corporation are also
officers of one or more of the Corporation's subsidiary banks. They serve
as officers of the Corporation as an incident to their primary service as
an officer and employee of a subsidiary bank and, except for certain
directors' fees, receive no compensation directly from the Corporation.
Although there is a great deal of communication between the Board of
-14-
Directors of the Corporation and the Boards of Directors of the banks, the
Boards of Directors of the banks retain authority and responsibility for
setting compensation for their own officers, including those officers who
also serve as officers of the Corporation.
The entire Board of Directors of the Corporation serves as a
compensation committee, with Mr. McCormack excluded from decisions with
respect to his own compensation. The entire Board of Directors of the
Corporation, except Mr. McCormack, serves as a committee to administer the
1993 Plan. The Corporation's Board of Directors has responsibility for
establishing the formal employee benefit plans which are available to the
employees of all of the subsidiary banks. These plans currently include a
qualified employee stock ownership and 401(k) plan, a non-qualified
deferred compensation plan, the 1993 Plan and, subject to shareholder
approval, the 1997 Plan. The Board of Directors of the Corporation reviews
the compensation to be paid to the chief executive officers of the
subsidiary banks, each of whom is also an officer of the Corporation.
Recommendation and formal authorization of the compensation of the
subsidiary bank chief executive officers is, however, the role of the
Boards of Directors of the subsidiary banks.
All executive officers receive a salary and, if net income is
satisfactory, an annual cash bonus. It is the policy of the Corporation
and the banks to set salaries at levels that will be competitive with other
comparable financial institutions in order to enable the Corporation and
the banks to retain and, when needed, attract qualified executive officers.
Information on compensation levels of other institutions is obtained from
compensation surveys published by the Michigan Banker's Association, the
Bank Administration Institute and from other similar sources. In setting
salaries, the Corporation and the banks also seek to assure relative
fairness in the compensation of officers and to recognize the value of the
contribution that each makes to the Corporation's success. Annual cash
bonuses are based on a discretionary evaluation of the performance of the
Corporation and the bank served by the officer. Bonuses also take into
account recognition of specific personal achievements of the individual
officers.
During 1996, stock options were awarded under the 1993 Plan to
all full-time benefit eligible employees as of January 1, 1997. The number
of shares subject to each option was based on the position and a
discretionary assessment of the performance of each grantee. The options
awarded in 1996 vest over different periods depending on the employment
classification of the grantee. All options awarded to hourly employees
become fully vested six months after the grant date. Options awarded to
salaried employees vest over a period of nine years from the date of the
grant with 10% vesting six months after the grant date and an additional
10% vesting on each anniversary of the date of the grant. The 1993 Plan
-15-
also allows the Corporation to issue restricted stock to officers and
employees of the Corporation and its subsidiaries. However, no shares of
restricted stock were awarded in 1996.
The Corporation generally maintains a conservative level of
perquisites and personal benefits. The dollar value of perquisites and
personal benefits provided to executive officers does not exceed 10% of
each executive officer's respective annual salary and bonus.
Section 162(m) of the Internal Revenue Code provides that
publicly held corporations may not deduct compensation paid to certain
executive officers in excess of $1 million annually, with certain
exemptions. The Corporation's Board of Directors has examined its
executive compensation policies in light of Section 162(m) and the
regulations issued by the Internal Revenue Service to implement that
section. It is not expected that any portion of the Corporation's
deduction for employee remuneration will be disallowed in 1997 or in future
years by reason of actions expected to be taken in 1997.
The salary and bonus of John A. McCormack, President and Chief
Executive Officer of the Corporation and Bank of Alma, was recommended by
the Compensation Committee of Bank of Alma and approved by the Boards of
Directors of the Corporation and Bank of Alma. In recommending and
approving Mr. McCormack's salary, the committee and the boards considered a
survey of compensation paid to executive officers by Michigan financial
institutions of more or less comparable size. Mr. McCormack's salary,
bonus, and stock option awards were also based on a discretionary
evaluation of Mr. McCormack's personal performance and the operating
results of the Corporation and Bank of Alma. For this purpose, the
committee and the Boards of Directors focused on the earnings of the
Corporation and Bank of Alma in the year just completed, the quality and
productivity of the management team, reductions in administrative staffing,
and continuing improvements made in loan quality, loan and loan allowance
management, and loan documentation and procedure.
Respectfully submitted,
William E. Goggin
Edward B. Grant
Charles W. Jennings
John A. McCormack
Phillip G. Peasley
David D. Roslund
-16-
STOCK PERFORMANCE
The following graph compares the cumulative total shareholder
return on the common stock of the Corporation to the KBW 50 Index,
published by Keefe, Bruyette & Woods, Inc., and the Standard & Poor's 500
Stock Index assuming a $100 investment at the end of 1991. The Standard &
Poor's 500 Stock Index is a broad equity market index. The KBW 50 Index is
composed of 50 money center and regional bank holding companies.
Cumulative total return is measured by dividing (i) the sum of (A) the
cumulative amount of dividends for the measurement period, assuming
dividend reinvestment, and (B) the difference between the share price at
the end and the beginning of the measurement period; by (ii) the share
price at the beginning of the measurement period. The Standard & Poor's
500 Index and the KBW 50 Index assume dividend reinvestment.
[STOCK PERFORMANCE GRAPH]
The table below shows dollar values for cumulative total
shareholder return plotted in the graph above.
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
Firstbank $100.0 $161.7 $301.9 $318.0 $409.7 $541.4
KBW 50 $100.0 $127.4 $134.5 $127.6 $204.4 $289.1
S&P 500 $100.0 $107.6 $118.5 $120.0 $165.1 $203.1
-17-
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Executive officers of the Corporation are compensated by Bank of
Alma, Firstbank, or 1st Bank, in accordance with their employment with the
applicable banks. They do not receive any compensation directly from the
Corporation, except for directors' fees paid by the Corporation when such
executive officers serve as directors for other than their employer bank.
Presented below is the remuneration paid for the three years ended December
31, 1996, by Bank of Alma to its President and Senior Vice Presidents and
by Firstbank and 1st Bank to their Presidents, the only officers of the
Corporation whose annual salary and bonus exceeded $100,000 for the year
ended December 31, 1996.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------
SECURITIES ALL
NAME AND ANNUAL COMPENSATION UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY<F1> BONUS<F1> OPTIONS<F2> COMPENSATION<F3>
------------------ ---- ---------- --------- ------- ------------
John A. McCormack
President, Chief Executive 1996 $149,294 $44,177 1,575 $7,593
Officer and director of 1995 125,758 41,727 1,654 22,714
the Corporation and 1994 119,350 40,777 1,737 20,251
Bank of Alma
Thomas R. Sullivan
Executive Vice President 1996 100,521 15,000 1,313 5,489
of the Corporation and 1995 93,742 12,500 1,103 5,146
President, Chief Executive 1994 90,000 8,000 1,158 4,461
Officer and director of
Firstbank
James E. Wheeler II
Vice President of the 1996 81,583 24,200 1,050 3,952
Corporation and Senior 1995 78,285 22,100 1,103 3,997
Vice President and Chief 1994 75,500 21,800 1,158 3,921
Loan Officer of Bank
of Alma
Dale A. Peters
Vice President of the 1996 80,578 25,000 1,313 5,328
Corporation and President 1995 70,537 25,000 1,103 4,833
and Chief Executive 1994 68,000 11,000 1,158 4,104
Officer of 1st Bank
-18-
Mary D. Deci
Vice President and Chief 1996 76,592 23,600 1,050 4,899
Financial Officer of the 1995 72,601 21,600 992 5,146
Corporation and Senior 1994 62,000 17,100 868 3,985
Vice President and Chief
Financial Officer of
Bank of Alma
________________________________
<FN>
<F1> Includes directors' fees and compensation voluntarily deferred under
the ESOP and under the Firstbank Corporation Nonqualified Deferred
Compensation Plan.
<F2> The numbers of shares subject to stock options have been adjusted to
reflect the five percent stock dividends distributed on December 29,
1994, December 28, 1995, and December 13, 1996.
<F3> All other compensation for the year ended December 31, 1996, includes
(a) matching contributions under the ESOP and (b) insurance premiums
paid on life insurance for the benefit of the named executive
officers. The officers have not and will not receive any interest in
any cash surrender value of the life insurance obtained for the
benefit of the officers. The amounts included for each such category
are:
(A) (B)
------ ------
John A. McCormack $6,537 $1,056
Thomas R. Sullivan 4,337 1,152
James E. Wheeler II 3,011 941
Dale A. Peters 4,406 922
Mary D. Deci 4,027 872
</FN>
Stock options are believed to help align the interests of
employees with the interests of shareholders by promoting stock ownership
by employees and by rewarding them for appreciation in the price of the
Corporation's stock. Stock options which were granted or outstanding
during 1996 were granted under the 1993 Plan.
The following tables set forth information concerning stock
options granted to and exercised or retained by the named executive
officers of the Corporation during 1996.
-19-
OPTION GRANTS IN LAST FISCAL YEAR
% OF
TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM
OPTIONS IN FISCAL EXERCISE EXPIRATION ---------------------------
NAME GRANTED <F2> YEAR PRICE <F2> DATE 0% 5% 10%
---- ------------ ---------- --------- ---------- ------ ------- -------
John A. McCormack 1,575 5.7% $33.81 11/25/06 $0 $33,488 $84,867
Thomas R. Sullivan 1,313 4.7% 33.81 11/25/06 0 27,907 70,722
James E. Wheeler II 1,050 3.8% 33.81 11/25/06 0 22,326 56,578
Dale A. Peters 1,313 4.7% 33.81 11/25/06 0 27,907 70,722
Mary D. Deci 1,050 3.8% 33.81 11/25/06 0 22,326 56,578
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
NUMBER OF VALUE OF
SHARES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
NUMBER OF YEAR END YEAR END
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- --------------- -------- ------------- -------------
John A. McCormack 0 $0 2,796/3,992 $41,048/33,840
Thomas R. Sullivan 0 0 1,864/2,924 27,379/22,978
James E. Wheeler II 0 0 1,864/2,661 27,379/22,571
Dale A. Peters 0 0 1,864/2,924 27,379/22,978
Mary D. Deci 0 0 1,431/2,391 20,877/18,734
_________________________
<FN>
<F1> The per share exercise price of each option is equal to the market
value of the common stock on the date each option was granted. All
outstanding options were granted for a term of ten years. Options
terminate, subject to certain limited exercise provisions, in the
event of death, retirement, or other termination of employment. No
option is exercisable until six months after the date of grant.
Except for options granted in 1994 which became fully vested six
months after the date of grant, the right to exercise options vests
-20-
over nine years with 10% becoming vested six months from the grant
date and an additional 10% vesting on each anniversary of the date of
grant.
<F2> The numbers have been adjusted in accordance with the 1993 Plan to
reflect a five percent stock dividend distributed to all shareholders
on December 13, 1996.
</FN>
The Corporation pays the Chairman of its Board a retainer of
$3,000 per year and pays each of its directors who is not compensated as an
officer of the Corporation a fee of $500 for each regular Board of
Directors meeting attended and $700 for each full day and $500 for each
half day special Board of Directors meeting attended and $200 for each
conference call in which the director participates. In addition, directors
who serve on the Corporation's audit committee are paid $150 for each
committee meeting attended.
Each director or nominee of the Corporation is also a director of
Bank of Alma, Firstbank, or 1st Bank. Bank of Alma pays the Chairman of
its Board a retainer of $3,000 per year and pays each of its directors who
is not compensated as an officer of Bank of Alma a fee for each regular
Board of Directors meeting attended based on years served as a director.
For each regular meeting, directors that have served zero through five
years receive $300, six through ten years receive $400, and over ten years
receive $500. Each director attending a special full day Board of
Directors meeting receives $600, and for each half day meeting, $350. In
addition, directors of Bank of Alma who serve on committees are paid $200
for each executive committee meeting attended and $100 for each other
committee meeting attended.
Firstbank pays the Chairman of its Board a retainer of 100 shares
of Firstbank Corporation common stock per year and pays each of its
directors who is not compensated as an officer of Firstbank a retainer of
50 shares of Firstbank Corporation common stock plus a fee of $200 for each
regular Board of Directors meeting attended and $300 for each special Board
of Directors meeting attended. In addition, directors who serve on
committees are paid $100 for each committee meeting attended. Directors
have the option of receiving meeting fees in cash or Firstbank Corporation
common stock.
1st Bank pays each of its directors who is not compensated as an
officer of 1st Bank a fee of $250 for each regular Board of Directors
meeting attended and $400 for each special Board of Directors meeting
attended. In addition, directors who serve on committees are paid $100 for
each committee meeting attended. Directors have the option of receiving
fees in cash or Firstbank Corporation common stock.
-21-
Directors of the Corporation and each subsidiary bank may elect
to defer their director fees under the Firstbank Corporation Nonqualified
Deferred Compensation Plan. Deferrals are discretionary and each director
is permitted to select an investment option for the deferred fees under the
Deferred Compensation Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Exchange Act requires the Corporation's directors, officers,
and persons who own more than 10% of the Corporation's common stock to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC"). SEC regulations require such reporting
persons to furnish the Corporation with copies of all such reports they
file. Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no
filings were required for those persons, the Corporation believes that,
from January 1, 1996, through December 31, 1996, its directors, officers,
and greater than 10% shareholders complied with all applicable filing
requirements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The entire Board of Directors of the Corporation serves as a
compensation committee. As a director of the Corporation, Mr. McCormack
serves on the Board of Directors and participates in deliberations
concerning compensation of other executive officers. Mr. McCormack,
however, is excluded from decisions with respect to his own compensation.
The entire Board of Directors, except Mr. McCormack, serves as a committee
to administer the 1993 Plan.
Mr. Goggin is the owner of Goggin & Baker, a law firm which Bank
of Alma has retained in prior years and proposes to retain in the current
fiscal year. Fees paid by the Corporation and its subsidiaries represented
less than 5% of the gross revenues of the law firm during 1996.
Bank of Alma leases space to Goggin & Baker. Lease payments for
the space occupied by Goggin & Baker equal $561 per month. The Goggin &
Baker lease is for a term of 5 years ending March 30, 1999.
Charles W. Jennings is an attorney with, and President and 50
percent shareholder of, Jennings & Ellias, P.C., a law firm which has
performed services for 1st Bank in prior years and which 1st Bank may
continue to use for legal matters in the future. Fees paid by the
Corporation and its subsidiaries represented less than 5% of the gross
revenues of the law firm during 1996.
Directors and officers of the Corporation and their associates
were customers of, and had transactions with, the Corporation's subsidiary
-22-
banks in the ordinary course of business between January 1, 1996, and
December 31, 1996. All loans and commitments included in such transactions
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions
with other persons and did not involve more than the normal risk of
collectibility or present other unfavorable features. All loans to
directors, officers, and their associates were current as of December 31,
1996.
INDEPENDENT AUDITORS
The Board of Directors of the Corporation has appointed the firm
of Crowe, Chizek and Company LLP, certified public accountants, as
independent auditors of the Corporation for the 1997 fiscal year. Crowe,
Chizek and Company LLP also examined and reported on the Corporation's
financial statements as of, and for the year ended, December 31, 1996. A
representative of Crowe, Chizek and Company LLP is expected to be present
at the annual shareholders' meeting and have an opportunity to make a
statement if the representative desires to do so. The Crowe, Chizek and
Company LLP representative is also expected to be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual
meeting must be received by the Corporation for inclusion in its proxy
statement and form of proxy relating to that meeting by November 19, 1997.
Shareholder proposals should be made in accordance with Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended, and
should be addressed to Mary D. Deci, Secretary, Firstbank Corporation,
311 Woodworth Avenue, Alma, Michigan 48801.
-23-
APPENDIX A
STOCK OPTION AND RESTRICTED STOCK PLAN OF 1997
FIRSTBANK CORPORATION
STOCK OPTION AND RESTRICTED STOCK PLAN OF 1997
SECTION 1
ESTABLISHMENT OF PLAN; PURPOSE OF PLAN
1.1 ESTABLISHMENT OF PLAN. The Company hereby establishes the Stock
Option and Restricted Stock Plan of 1997 (the "Plan") for its corporate and
Subsidiary officers and other key employees. The Plan permits the grant or
award of Options, Restricted Stock and Tax Benefit Rights.
1.2 PURPOSE OF PLAN. The purpose of the Plan is to provide officers
and key employees of the Company and its Subsidiaries with an increased
incentive to make significant contributions to the long-term performance
and growth of the Company and its Subsidiaries, to join the interests of
officers and key employees with the interests of the Company's shareholders
through the opportunity for increased stock ownership, and to attract and
retain officers and key employees. The Plan is further intended to provide
flexibility to the Company in structuring long-term incentive compensation
to best promote the foregoing objectives.
SECTION 2
DEFINITIONS
The following words have the following meanings unless a different
meaning is plainly required by the context:
2.1 "Act" means the Securities Exchange Act of 1934, as amended.
2.2 "Board" means the Board of Directors of the Company.
2.3 Unless otherwise defined in the grant or agreement applicable to
an Incentive Award, "Change in Control" means:
(a) the sale, lease, exchange, or other transfer
of substantially all the assets of the Company (in one
transaction or in a series of related transactions) to,
or the merger or consolidation of the Company with, a
corporation that is not controlled by the Company; or
(b) a change in control of the Company of a nature
that would be required to be reported in a response to Item
6(e) of Schedule 14A of Regulation 14A issued under the
Act, provided that, without limitation, such change in
control shall be deemed to have occurred if (i) any "person"
(as such term is used in Section 13(d) and 14(d)(2) of the
Act) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting
power of the Company's then outstanding securities, or (ii)
during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board cease
for any reason to constitute at least a majority of the
Board (unless the election or nomination for election by the
Company's shareholders of each new director was approved by
a vote of at least two-thirds (2/3) of the directors then
still in office who were directors at the beginning of the
period).
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Committee" means a committee the Board shall designate to
administer the Plan. The Committee shall consist of at least two members
of the Board appointed by the Board, all of whom shall be "non-employee
directors" as defined in Rule 16b-3 under the Act as in effect from time
to time. The Board, in its discretion, may also require that members of
the Committee be "outside directors" as defined in the rules issued under
Section 162(m) of the Code.
2.6 "Common Stock" means the Common Stock of the Company.
2.7 "Company" means Firstbank Corporation, a Michigan corporation.
2.8 "Competition" means participation, directly or indirectly, in the
ownership, management, financing or control of any business that is the
same as or similar to the present or future businesses of the Company or
its parent or any Subsidiary. Such participation may be by way of
employment, consulting services, directorship or officership. Ownership of
less than five percent (5%) of the shares of any corporation whose shares
are traded publicly on any national or regional stock exchange or over the
counter shall not be deemed Competition.
2.9 "Consensual Severance" means the voluntary termination of all
employment by the Participant with the Company or any of its Subsidiaries
which the Committee determines to be in the best interests of the Company.
2.10 "Early Retirement" means the voluntary termination of all
employment by a Participant with the written consent of the Committee after
the Participant has attained 55 years of age and completed 10 years of
service with the Company or any of its Subsidiaries.
-2-
2.11 "Incentive Award" means the award or grant of an Option,
Restricted Stock or Tax Benefit Right to a Participant under the Plan.
2.12 "Market Value" of any security on any given date means: (a) the
high bid price as reported on the NASD Over-the-Counter Bulletin Board, or
if there is no such bid price for such security on such date, the high bid
price on the first day prior thereto on which such price was quoted; (b) if
the security is listed for trading on The Nasdaq Stock Market or one or
more national securities exchanges, the last reported sales price on the
date in question, or if such security shall not have been traded on such
principal exchange on such date, the last reported sales price on the first
day prior thereto on which such security was so traded; or (c) if neither
(a) nor (b) is applicable, the value as determined by any means deemed fair
and reasonable by the Committee, which determination shall be final and
binding on all parties.
2.13 "Normal Retirement" means the voluntary termination of all
employment by a Participant after the Participant has attained 62 years of
age, or such other age as shall be determined by the Committee in its sole
discretion or as otherwise may be set forth in the Incentive Award
agreement or other grant document with respect to a Participant and a
particular Incentive Award.
2.14 "Option" means the right to purchase Common Stock at a stated
price for a specified period of time.
2.15 "Participant" means the officers and other key employees of the
Company and its Subsidiaries who are granted an Incentive Award under
the Plan.
2.16 "Restricted Period" means the period of time during which
Restricted Stock awarded under the Plan is subject to restrictions. The
Restricted Period may differ among Participants and may have different
expiration dates with respect to shares of Common Stock covered by the same
Incentive Award.
2.17 "Restricted Stock" means Common Stock awarded to a Participant
under Section 6 of the Plan.
2.18 "Subsidiary" means any corporation or other entity of which fifty
percent (50%) or more of the outstanding voting stock or voting ownership
interest is directly or indirectly owned or controlled by the Company, or
by one or more Subsidiaries of the Company.
2.19 "Tax Benefit Right" means any right granted to a Participant
under Section 7 of the Plan.
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2.20 "Total Disability" means Total Disability as such term is defined
in the Firstbank Corporation Amended and Restated 401(k) and Employee Stock
Ownership Plan.
SECTION 3
ADMINISTRATION
3.1 POWER AND AUTHORITY. The Committee shall administer the Plan.
Except as limited in this Plan, the Committee shall have full power and
authority to interpret the provisions of the Plan and Incentive Awards
granted under the Plan, to supervise the administration of the Plan and
the Incentive Awards granted under the Plan and to make all other
determinations considered necessary or advisable under the Plan. All
determinations, interpretations and selections made by the Committee
regarding the Plan shall be final and conclusive. The Committee shall
hold its meetings at such times and places as it deems advisable.
Action may be taken by a written instrument signed by all of the
members of the Committee, and any action so taken shall be fully as
effective as if it had been taken at a meeting duly called and held.
The Committee may delegate recordkeeping, calculation, payment, and
other ministerial administrative functions to individuals designated by
the Committee, who may be employees of the Company or its Subsidiaries.
3.2 GRANTS OR AWARDS TO PARTICIPANTS. In accordance with and subject
to the provisions of the Plan, the Committee shall have the authority to
determine all provisions of Incentive Awards as the Committee may deem
necessary or desirable and as are consistent with the terms of the Plan,
including, without limitation, the authority to: (a) determine whether and
when Incentive Awards will be granted, the persons to be granted Incentive
Awards, the amount of Incentive Awards to be granted to each person and the
terms of the Incentive Awards to be granted; (b) determine and amend
vesting schedules, if any; (c) permit delivery or withholding of stock in
payment of the exercise price or to satisfy tax withholding obligations;
and (d) waive any restrictions or conditions applicable to any Incentive
Award. Incentive Awards shall be granted or awarded by the Committee, and
Incentive Awards may be amended by the Committee consistent with the Plan,
provided that no such amendment may become effective without the consent of
the Participant, except to the extent that the amendment operates solely to
the benefit of the Participant.
3.3 INDEMNIFICATION OF COMMITTEE MEMBERS. Neither any member or
former member of the Committee nor any individual to whom authority is or
has been delegated shall be personally responsible or liable for any act or
omission in connection with the performance of powers or duties or the
exercise of discretion or judgment in the administration and implementation
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of the Plan. Each person who is or shall have been a member of the
Committee shall be indemnified and held harmless by the Company from and
against any cost, liability or expense imposed or incurred in connection
with such person's or the Committee's taking or failing to take any action
under the Plan. Each such person shall be justified in relying on
information furnished in connection with the Plan's administration by any
appropriate person or persons.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in
Section 4.3 of the Plan, a maximum of 100,000 shares of Common Stock
shall be available for Incentive Awards under the Plan. Such shares may
be authorized but unissued shares.
4.2 LIMITATION UPON INCENTIVE AWARDS. No Participant shall be
granted, during any calendar year, Incentive Awards with respect to more
than 10% of the total number of shares of Common Stock available for
Incentive Awards under the Plan set forth in Section 4.1 of the Plan,
subject to adjustment as provided in Section 4.3 of the Plan.
4.3 ADJUSTMENTS. If the number of shares of Common Stock outstanding
changes by reason of a stock dividend, stock split, recapitalization,
merger, consolidation, combination, exchange of shares or any other change
in the corporate structure or shares of the Company, the aggregate number
and class of shares available for grants or awards under the Plan, together
with the Option prices, award limits and other appropriate terms of this
Plan, shall be appropriately adjusted. No fractional shares shall be
issued pursuant to the Plan, and any fractional shares resulting from
adjustments shall be eliminated from the respective Incentive Award, with
an appropriate cash adjustment for the value of any Incentive Awards
eliminated. If an Incentive Award is canceled, surrendered, modified,
expires or is terminated during the term of the Plan but prior to the
exercise or vesting of the Incentive Award in full, the shares subject to
but not purchased or retained by the Participant under such Incentive Award
shall be available for other Incentive Awards. If shares subject to and
otherwise deliverable upon the exercise of an Incentive Award are
surrendered to the Company in connection with the exercise or vesting of
an Incentive Award, the surrendered shares subject to the Incentive Award
shall be available for other Incentive Awards.
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SECTION 5
OPTIONS
5.1 GRANT. A Participant may be granted one or more Options under the
Plan. Options shall be subject to such terms and conditions, consistent
with the other provisions of the Plan, as shall be determined by the
Committee in its sole discretion. The Committee may vary, among
Participants and among Options granted to the same Participant, any and all
of the terms and conditions of the Options granted under the Plan. Subject
to the limitation imposed by Section 4.2 of the Plan, the Committee shall
have complete discretion in determining the number of Options granted to
each Participant. The Committee may designate whether or not an Option is
to be considered an incentive stock option as defined in Section 422(b) of
the Code.
5.2 OPTION AGREEMENTS. Each Option shall be evidenced by an Option
agreement containing such terms and conditions, consistent with the
provisions of the Plan, as the Committee from time to time determines. To
the extent not covered by the Option agreement, the terms and conditions of
this Section 5 shall govern.
5.3 OPTION PRICE. The per share Option price shall be determined by
the Committee. The per Share Option Price of any Option intended to qualify
as an incentive stock option under Section 422(b) of the Code shall be
equal to or greater than 100% of the Market Value on the date of grant.
The date of grant of an Option shall be the date the Option is authorized
by the Committee or a future date specified by the Committee as the date
for issuing the Option.
5.4 MEDIUM AND TIME OF PAYMENT. The exercise price for each share
purchased pursuant to an Option granted under the Plan shall be payable in
cash or, if the Committee consents, in shares of Common Stock (including
Common Stock to be received upon a simultaneous exercise). The time and
terms of payment may be amended before or after exercise of an Option (a)
by the Committee in its sole discretion, if the terms of such amendment are
more favorable to the Participant, or (b) in all other cases, by the
Committee with the consent of the Participant. The Committee may from time
to time authorize payment of all or a portion of the Option price in the
form of a promissory note or installments according to such terms as the
Committee may approve. The Board may restrict or suspend the power of the
Committee to permit such loans and may require that adequate security be
provided.
5.5 OPTIONS GRANTED TO TEN PERCENT SHAREHOLDERS. No Option granted
to any Participant who at the time of such grant owns, together with stock
attributed to such Participant under Section 424(d) of the Code, more than
ten percent (10%) of the total combined voting power of all classes of
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stock of the Company or any of its Subsidiaries may be designated as an
incentive stock option, unless such Option provides an exercise price equal
to at least one hundred ten percent (110%) of the Market Value of the
Common Stock, and the exercise of the Option after the expiration of five
years from the date of grant of the Option is prohibited by its terms.
5.6 LIMITS ON EXERCISABILITY. Options shall be exercisable for such
periods as may be fixed by the Committee. Options intended to qualify as
incentive stock options shall have terms not to exceed ten years from the
grant date. The Committee may in its discretion require a Participant to
continue service with the Company and its Subsidiaries for a certain length
of time prior to an Option becoming exercisable and may eliminate such
delayed vesting provisions. The Committee may also vary, among
Participants and among Options granted to the same Participant, any and all
of the terms and conditions of Options granted under the Plan.
5.7 TRANSFERABILITY.
(a) GENERAL. Unless the Committee otherwise consents or
unless the terms of the Option agreement provide otherwise, no
Option granted under the Plan may be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution. In addition,
all Options granted to a Participant during the Participant's
lifetime shall be exercisable during the Participant's lifetime
only by such Participant, his guardian, or legal representative.
(b) OTHER RESTRICTIONS. The Committee may impose such
restrictions on any shares of Common Stock acquired pursuant to
the exercise of an Option under the Plan as it deems advisable,
including, without limitation, restrictions intended to assure
compliance with applicable federal or state securities laws.
5.8 TERMINATION OF EMPLOYMENT.
(a) GENERAL. If a Participant ceases to be employed by the
Company or one of its Subsidiaries for any reason other than the
Participant's death, Total Disability, termination for cause, or
any additional provision as determined by the Committee, the
Participant may exercise an Option for a period of 90 days
after such termination of employment, but only to the extent the
Participant was entitled to exercise the Option on the date of
termination and would be entitled to exercise the Option if
employed at the date of exercise, unless the Committee otherwise
consents or the terms of the Option agreement provide otherwise.
For purposes of the Plan, the following shall not be deemed a
termination of employment: (i) a transfer of employment among
the Company and its Subsidiaries; (ii) a leave of absence, duly
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authorized in writing by the Company, for military service or for
any other purpose approved by the Company if the period of such
leave does not exceed 90 days; (iii) a leave of absence in excess
of 90 days, duly authorized in writing by the Company, provided
the employee's right to reemployment is guaranteed either by
statute or contract; or (iv) a termination of employment with
continued service as an officer or director. For purposes of the
Plan, termination of employment shall be considered to occur on
the date on which the employee is no longer obligated to perform
services for the Company or any of its Subsidiaries and the
employee's right to reemployment is not guaranteed either by
statute or contract, regardless of whether the employee continues
to receive compensation from the Company or any of its
Subsidiaries after such date.
(b) DEATH. If a Participant dies either while an employee
of the Company or one of its Subsidiaries, or dies after
termination of employment other than for cause and other than as
a result of voluntary termination but during the time when the
Participant could have exercised an Option under the Plan, the
Option issued to such Participant shall be exercisable by the
personal representative of such Participant or other successor to
the interest of the Participant for a period of one year after
the Participant's death, but only to the extent that the
Participant was entitled to exercise the Option on the date of
death or termination of employment, whichever first occurred, and
would be entitled to exercise the Option if employed at the date
of exercise, unless the Committee otherwise consents or the terms
of the Option agreement provide otherwise.
(c) TOTAL DISABILITY. If a Participant ceases to be an
employee of the Company or one of its Subsidiaries due to the
Participant's Total Disability, the Participant may exercise an
Option for a period of one year following such termination of
employment, but only to the extent the Participant was entitled
to exercise the Option on the date of such event, unless the
Committee otherwise consents or the terms of the Option agreement
provide otherwise.
(d) ADDITIONAL PROVISIONS IN OPTION AGREEMENTS. The
Committee may, in its sole discretion, provide by resolution or
by including provisions in any Option agreement entered into with
a Participant that the Participant may exercise any outstanding
options upon termination due to Early Retirement, Normal
Retirement or Consensual Severance for a period of time after
such termination as may be determined by the Committee, PROVIDED
that (i) such period may not extend beyond the earlier of three
(3) years after the date of termination or the date on which the
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Options expire by their terms, (ii) the Participant may exercise
the Option only to the extent the Participant was entitled to
exercise the Option on the date of termination, and (iii) the
Participant shall have no further right to exercise any Options
after termination due to Early Retirement, Normal Retirement or
Consensual Severance if the Committee determines the Participant
has entered into Competition with the Company.
(e) VOLUNTARY TERMINATION. Except as provided in Section
5.8(d), if a Participant voluntarily terminates employment with
the Company or one of its Subsidiaries, the Participant shall
have no further right to exercise any Option previously granted
him, unless the terms of the Option Agreement provide otherwise.
(f) TERMINATION FOR CAUSE. If a Participant is terminated
for cause, the Participant shall have no further right to
exercise any outstanding unexercised Option issued under the
Plan.
(g) SUSPENSION OF EXERCISABILITY. If the Participant
receives notice from the Company that the Participant may be
terminated for cause, the Participant shall have no right to
exercise any Options previously granted for a period of sixty
days from the receipt of such notice. If the Participant is
terminated for cause within such sixty-day period, the
Participant shall have no further right to exercise any Option
previously granted. If the Participant is not terminated for
cause within the sixty-day period, the provisions of the Option
agreement and the Plan shall continue to apply to the
exercisability of the Participant's Options.
SECTION 6
RESTRICTED STOCK
6.1 GRANT. A Participant may be granted Restricted Stock under the
Plan. Restricted Stock shall be subject to such terms and conditions,
consistent with the other provisions of the Plan, as shall be determined by
the Committee in its sole discretion. Restricted Stock shall be awarded on
the condition that the Participant remain in the employ of the Company or
one of its Subsidiaries during the Restricted Period. Such condition shall
have no effect on the right of the Company or any Subsidiary to terminate
the Participant's employment at any time. No payment is required from a
Participant for an award of Restricted Stock.
6.2 RESTRICTED STOCK AGREEMENTS. Each award of Restricted Stock
shall be evidenced by a Restricted Stock agreement containing such terms
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and conditions, consistent with the provisions of the Plan, as the
Committee from time to time determines.
6.3 TERMINATION OF EMPLOYMENT.
(a) GENERAL. If a Participant ceases to be employed by the
Company or one of its Subsidiaries for any reason other than the
Participant's death, Total Disability, or any other additional
provisions as determined by the Committee pursuant to Section
6.3(c), then any shares of Restricted Stock still subject to
restrictions on the date of such termination shall automatically
be forfeited and returned to the Company. For purposes of the
Plan, the following shall not be deemed a termination of
employment: (i) a transfer of employment among the Company and
its Subsidiaries; (ii) a leave of absence, duly authorized in
writing by the Company, for military service or for any other
purpose approved by the Company if the period of such leave does
not exceed 90 days; (iii) a leave of absence in excess of 90
days, duly authorized in writing by the Company, provided the
employee's right to reemployment is guaranteed either by statute
or contract; or (iv) a termination of employment with continued
service as an officer or director. For purposes of the Plan,
termination of employment shall be considered to occur on the
date on which the employee is no longer obligated to perform
services for the Company or any of its Subsidiaries and the
employee's right to reemployment is not guaranteed either by
statute or contract, regardless of whether the employee continues
to receive compensation from the Company or any of its
Subsidiaries after such date.
(b) DEATH OR TOTAL DISABILITY. Unless the terms of the
Restricted Stock agreement or grant provide otherwise, in the
event a Participant terminates employment with the Company or one
of its Subsidiaries because of death or Total Disability during
the Restricted Period, the restrictions applicable to the shares
of Restricted Stock shall automatically terminate and the
Restricted Stock shall vest as of the date of termination.
(c) ADDITIONAL PROVISIONS AS DETERMINED BY COMMITTEE. The
Committee may, in its sole discretion, provide provisions in any
Restricted Stock agreement permitting, or by resolution approve,
vesting of all or part of any Restricted Stock awarded to a
Participant upon termination due to Early Retirement, Normal
Retirement, Consensual Severance or a Change in Control.
6.4 RESTRICTIONS ON TRANSFERABILITY.
(a) GENERAL. Unless the Committee otherwise consents or
unless the terms of the Restricted Stock agreement provide
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otherwise, shares of Restricted Stock shall not be sold,
exchanged, transferred, pledged or otherwise disposed of by a
Participant during the Restricted Period other than to the
Company pursuant to subsection 6.3 or 6.4(b) or by will or the
laws of descent and distribution.
(b) SURRENDER TO THE COMPANY. If any sale, exchange,
transfer, pledge or other disposition, voluntary or involuntary,
of Restricted Stock that has not vested shall be made or
attempted during the Restricted Period, except as provided above
in subsections 6.3 and 6.4(a), the Participant's right to the
Restricted Stock shall immediately cease and terminate, and the
Participant shall promptly forfeit and surrender to the Company
all such Restricted Stock.
(c) OTHER RESTRICTIONS. The Committee may impose other
restrictions on any Restricted Stock as the Committee deems
advisable.
6.5 RIGHTS AS A SHAREHOLDER. During the Restricted Period, a
Participant shall have all rights of a shareholder with respect to his
Restricted Stock, including (a) the right to vote any shares at
shareholders' meetings; (b) the right to receive, without restriction, all
cash dividends paid with respect to such Restricted Stock; and (c) the
right to participate with respect to such Restricted Stock in any stock
dividend, stock split, recapitalization or other adjustment in the Common
Stock of the Company or any merger, consolidation or other reorganization
involving an increase or decrease or adjustment in the Common Stock of the
Company. Any new, additional or different shares or other security
received by the Participant pursuant to any such stock dividend, stock
split, recapitalization or reorganization shall be subject to the same
terms, conditions and restrictions as those relating to the Restricted
Stock for which such shares were received.
6.6 DEPOSIT OF CERTIFICATES; LEGENDING OF RESTRICTED STOCK.
(a) DEPOSIT OF CERTIFICATES. Any certificates evidencing
shares of Restricted Stock awarded pursuant to the Plan shall be
registered in the name of the relevant Participant and deposited,
together with a stock power endorsed in blank, with the Company.
In the discretion of the Committee, any such certificates may be
deposited in a bank designated by the Committee or delivered to
the Participant. Certificates for shares of Restricted Stock
that have vested shall be delivered to the Participant upon
request within a reasonable period of time. The Participant
shall sign all documents necessary or appropriate to facilitate
such delivery.
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(b) LEGEND. Any certificates evidencing shares of
Restricted Stock awarded pursuant to the Plan shall bear the
following legend:
This certificate is held subject to the terms and
conditions contained in a restricted stock agreement
that includes a prohibition against the sale or
transfer of the stock represented by this certificate
except in compliance with that agreement, and that
provides for forfeiture upon certain events. A copy of
that agreement is on file in the office of the
Secretary of Firstbank Corporation.
6.7 RESALE. The Participant shall agree not to resell or
redistribute such Restricted Stock after the Restricted Period except upon
such conditions as the Company may reasonably specify to ensure compliance
with federal and state securities laws.
SECTION 7
TAX BENEFIT RIGHTS
7.1 GRANT. A Participant may be granted Tax Benefit Rights under the
Plan to encourage a Participant to exercise Options and provide certain tax
benefits to the Company. A Tax Benefit Right entitles a Participant to
receive from the Company or a Subsidiary a cash payment not to exceed the
amount calculated by multiplying the ordinary income, if any, realized by
the Participant for federal tax purposes as a result of the exercise of a
non-qualified stock option, or the disqualifying disposition of shares
acquired under an incentive stock option, by the maximum federal income tax
rate (including any surtax or similar charge or assessment) for
corporations, plus any other applicable state and local tax against which
the Company is entitled to a deduction or credit by reason of exercise of
the Option or the disqualifying disposition.
7.2 RESTRICTIONS. A Tax Benefit Right may be granted only with
respect to an Option issued and outstanding or to be issued under the Plan
or any other Plan of the Company or its Subsidiaries that has been approved
by the shareholders as of the effective date of the Plan and may be granted
concurrently with or after the grant of the Option. Such rights with
respect to outstanding Options shall be issued only with the consent of the
Participant if the effect would be to disqualify an incentive stock option,
change the date of grant or the exercise price, or otherwise impair the
Participant's existing Options.
-12-
7.3 TERMS AND CONDITIONS. The Committee shall determine the terms
and conditions of any Tax Benefit Rights granted and the Participants to
whom such rights will be granted with respect to Options under the Plan or
any other plan of the Company and those terms and conditions shall be set
forth in written agreements. The Committee may amend, cancel, limit the
term of, or limit the amount payable under a Tax Benefit Right at any time
prior to the exercise of the related stock option, unless otherwise
provided under the terms of the Tax Benefit Right. The net amount of a Tax
Benefit Right, subject to withholding, may be used to pay a portion of the
Option price, unless otherwise provided by the Committee.
SECTION 8
CHANGE IN CONTROL
Without in any way limiting the Committee's discretion, the Committee
may include in any Incentive Award provisions for acceleration of any
vesting or other similar requirements or for the elimination of any
restrictions upon Incentive Awards upon a Change in Control of the Company.
The Committee may also include provisions for Participants to receive cash
in lieu of outstanding Options upon a Change in Control of the Company.
SECTION 9
GENERAL PROVISIONS
9.1 NO RIGHTS TO AWARDS. No Participant or other person shall have
any claim to be granted any Incentive Award, and there is no obligation of
uniformity of treatment of employees, Participants or holders or
beneficiaries of Incentive Awards. The terms and conditions of the
Incentive Awards of the same type and the determination of the Committee to
grant a waiver or modification of any Incentive Award and the terms and
conditions thereof need not be the same with respect to each Participant.
9.2 WITHHOLDING. The Company or a Subsidiary shall be entitled to
(a) withhold and deduct from future wages of a Participant (or from other
amounts that may be due and owing to a Participant from the Company or a
Subsidiary), or make other arrangements for the collection of, all amounts
deemed necessary to satisfy any and all federal, state and local
withholding and employment-related tax requirements attributable to an
Incentive Award, including, without limitation, the grant, exercise or
vesting of, or payment of dividends with respect to, an Incentive Award or
a disqualifying disposition of Common Stock received upon exercise of an
incentive stock option; or (b) require a Participant promptly to remit the
amount of such withholding to the Company before taking any action with
respect to an Incentive Award. Unless the Committee determines otherwise,
-13-
withholding may be satisfied by withholding Common Stock to be received
upon exercise or by delivery to the Company of previously owned Common
Stock.
9.3 COMPLIANCE WITH LAWS; LISTING AND REGISTRATION OF SHARES. All
Incentive Awards granted under the Plan (and all issuances of Common Stock
or other securities under the Plan) shall be subject to applicable laws,
rules and regulations, and to the requirement that if at any time the
Committee determines, in its sole discretion, that the listing,
registration or qualification of the shares covered thereby upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of, or in connection with, the granting of such Incentive Award
or the issue or purchase of shares thereunder, such Incentive Award may not
be exercised in whole or in part, or the restrictions on such Incentive
Award shall not lapse, unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
9.4 NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained
in the Plan shall prevent the Company or any Subsidiary from adopting or
continuing in effect other or additional compensation arrangements,
including the grant of options and other stock-based awards, and such
arrangements may be either generally applicable or applicable only in
specific cases.
9.5 NO RIGHT TO EMPLOYMENT. The grant of an Incentive Award shall
not be construed as giving a Participant the right to be retained in the
employ of the Company or any Subsidiary. The Company or any Subsidiary may
at any time dismiss a Participant from employment, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the
Plan or in any written agreement with a Participant.
9.6 GOVERNING LAW. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Michigan and applicable federal
law.
9.7 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been included.
-14-
SECTION 10
EFFECTIVE DATE AND DURATION OF THE PLAN
This Plan shall take effect April 28, 1997, subject to approval by the
shareholders at the 1997 Annual Meeting of Shareholders, or any adjournment
thereof or at a special meeting of shareholders. Unless earlier terminated
by the Board of Directors, no Incentive Award shall be granted under this
Plan after April 27, 2007.
SECTION 11
TERMINATION AND AMENDMENT
The Board may terminate the Plan at any time, or may from time to time
amend the Plan, provided that no such amendment may impair any outstanding
Incentive Award without the consent of the Participant, except according
to the terms of the Incentive Award. No termination, amendment or
modification of the Plan shall become effective with respect to any
Incentive Award previously granted under the Plan without the prior
written consent of the Participant holding such Incentive Award unless
such amendment or modification operates solely to the benefit of the
Participant.
-15-
PROXY FIRSTBANK CORPORATION
ANNUAL MEETING OF SHAREHOLDERS - APRIL 28, 1997
The undersigned shareholder acknowledges receipt of a Notice of
Annual Meeting and a Proxy Statement for the annual meeting referred to
above, and appoints JOHN A. McCORMACK and MARY D. DECI, or either of them,
each with full power of substitution, attorneys and proxies to represent
the shareholder, and to vote and act with respect to all shares that the
shareholder would be entitled to vote, at the annual meeting of
shareholders of Firstbank Corporation referred to above and at any
adjournment of that meeting, on all matters which come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF
THIS PROXY IS PROPERLY EXECUTED AND DELIVERED, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE OTHER SIDE OF THIS PROXY. IF
NO SPECIFICATION IS GIVEN, THE SHARES WILL BE VOTED FOR ELECTION OF ALL
NOMINEES NAMED ON THIS PROXY AS DIRECTORS AND FOR APPROVAL OF EACH PROPOSAL
IDENTIFIED IN THIS PROXY. THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTER WHICH MAY COME
BEFORE THE MEETING.
Signatures should be IDENTICAL to the
name(s) on your stock certificate (which
are on the address label of the envelope
in which this proxy material was
delivered). JOINT OWNERS SHOULD EACH
SIGN PERSONALLY. When signing on behalf
of a corporation, partnership, LLC,
estate, trust or other entity, or as
attorney or guardian, indicate title or
capacity of person signing and give the
full name of the entity or person on
whose behalf this proxy is signed.
Signature X_____________________________
Signature X_____________________________
Date _____________________________, 1997
1. Election of Directors
[ ] VOTE FOR ALL nominees [ ] WITHHOLD AUTHORITY to vote
listed below (except as for all nominees listed
marked to the contrary below
below)
YOUR BOARD OF DIRECTORS RECOMMENDS AUTHORIZATION TO VOTE FOR
ALL NOMINEES LISTED BELOW
JOHN A. McCORMACK DAVID D. ROSLUND
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in the space below.)
2. Proposal to approve an amendment to the Articles of Incorporation
to increase authorized capital stock
[ ] FOR [ ] AGAINST [ ] ABSTAIN
YOUR BOARD OF DIRECTORS RECOMMENDS AUTHORIZATION TO VOTE FOR THIS
PROPOSAL
3. Proposal to approve the stock Option and Restricted Stock Plan of
1997
[ ] FOR [ ] AGAINST [ ] ABSTAIN
YOUR BOARD OF DIRECTORS RECOMMENDS AUTHORIZATION TO VOTE FOR THIS
PROPOSAL
4. In their discretion, upon all other matters that may be presented
at the meeting.
PLEASE SIGN AND DATE THE OTHER SIDE. RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.