EXHIBIT 10.13
(FORM 10-K)
CITIZENS BANKING CORPORATION
STOCK COMPENSATION PLAN
EFFECTIVE JANUARY 18, 2002
I. GENERAL PROVISIONS
1.01 PURPOSE. The Plan, which was adopted by the Company's Board on the
Effective Date, is intended to attract and retain highly competent, effective
and loyal Employees and Non-Employee Directors so as to further the growth and
profitable operation of the Company and its Affiliates by encouraging Employees
and Non-Employee Directors of the Company and its Affiliates to acquire an
ownership interest in the Company through Options, Restricted Stock Awards,
Restricted Stock Units and Performance Awards, thus identifying their interests
with those of shareholders and encouraging them to make greater efforts on
behalf of the Company and its Affiliates to achieve the Company's long-term
business plans and objectives.
1.02 PARTICIPANTS. Participants in the Plan shall be such Employees
(including Employees who are directors) and Non-Employee Directors of the
Company and its Affiliates as the Committee may select from time to time. The
Committee may grant Options, Restricted Stock Awards, Restricted Stock Units and
Performance Awards to an individual upon the condition that the individual
become an Employee or Non-Employee Director of the Company or of an Affiliate,
provided that the Option, Restricted Stock Award, Restricted Stock Unit or
Performance Award shall be deemed to be granted only on the date that the
individual becomes an Employee or Non-Employee Director.
1.03 DEFINITIONS. As used in this Plan, the following terms have the
meaning described below:
(a) "AFFILIATE" OR "AFFILIATES" means a corporation or other
entity that is affiliated with the Company and includes any parent or subsidiary
of the Company, as defined in Code Sections 424(e) and (f), respectively.
(b) AGREEMENT" means the written agreement that sets forth the
terms of a Participant's Option, Restricted Stock Award, Restricted Stock Unit
or Performance Award.
(c) "BOARD" means the Board of Directors of the Company.
(d) "BUSINESS COMBINATION" means (1) any reorganization,
merger, share exchange or consolidation of the Company, or (2) any sale, lease,
exchange or other transfer of all or substantially all of the assets of the
Company.
(e) "CASHLESS EXERCISE PROCEDURE" means delivery to the
Company by a Participant exercising an Option of a properly executed exercise
notice, acceptable to the Company, together with irrevocable instructions to the
Participant's broker to deliver to the Company sufficient cash to pay the
exercise price and any applicable income and employment withholding taxes, in
accordance with a written agreement between the Company and the brokerage firm.
(f) "CAUSE" means (1) with respect to any Participant who is a
party to a written employment agreement with the Company or any Affiliate,
"Cause" as defined in such employment agreement, or (2) with respect to any
Participant who is not a party to a written employment agreement with the
Company or any Affiliate, personal dishonesty, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or receipt of a final cease-and-desist order. In
determining willfulness, no act or failure to act on a Participant's part shall
be considered "willful" unless done or omitted to be done by the Participant not
in good faith and without reasonable belief that the Participant's action or
omission was in the best interests of the Company.
(g) "CHANGE IN CONTROL" means the occurrence of any of the
following events:
(1) If any "person" (as such term is used in Sections
13(d) and 14(d) under the Exchange Act in effect on the date hereof), or group
of persons acting in concert, other than the Company or any Affiliate or any
employee benefit plan of the Company or an Affiliate becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of either the
Common Stock or the combined voting power of all classes of the Company's Voting
Stock. Notwithstanding the immediately preceding sentence, (A) the beneficial
ownership condition in this Section 1.03(g)(1) shall not be deemed satisfied if
the attainment of the applicable percentage of beneficial ownership is the
result of an acquisition of Common Stock or Voting Stock by the Company which,
by reducing the number of shares outstanding increases the proportionate number
of shares beneficially owned by any person; provided, however, that if a person
shall become the beneficial owner of 20% or more of the outstanding Common Stock
or Voting Stock then outstanding by reason of share purchases by the Company and
shall, after such share purchases become the beneficial owner of any additional
Common Stock or Voting Stock other than by a purchase from the Company, then the
beneficial ownership condition in this Section 1.03(g)(1) shall be deemed to
have been satisfied; (B) the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the Corporation, or (ii)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of Section 1.03(g)(3)(B).
(2) If the Incumbent Directors cease for any reason
to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election or
nomination for
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election by the Company's shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Directors (either by a
specific vote or by approval of the proxy statement of the Corporation in which
such person is named as a nominee for director, without written objection to
such nomination) shall be considered to be an Incumbent Director; provided
further, that any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies by
or on behalf of a person other than the Board shall not be considered an
Incumbent Director.
(3) If there shall be consummated a Business
Combination, other than (A) a merger or consolidation effected to implement a
reorganization of the Company's ownership wherein the Company shall become a
wholly-owned subsidiary of another corporation and the shareholders of the
Company shall become shareholders of such other corporation without any material
change in each shareholder's proportionate ownership of such other corporation
from that owned in the Company prior to such merger or consolidation; and (B) a
Business Combination following which: (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Common Stock and outstanding Voting Stock immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 65% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the Surviving
Corporation in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the outstanding Common Stock
and Voting Stock, as the case may be; (ii) no person or entity beneficially
owns, directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the Surviving Corporation or the combined voting power
of the then outstanding voting securities of the Surviving Corporation
(excluding any person or entity who beneficially owned 20% or more of the
outstanding Common Stock or Voting Stock prior to such Business Combination, the
Surviving Corporation and any employee benefit plan (or related trust) of the
Company or the Surviving Corporation); and (iii) at least a majority of the
members of the board of directors of the Surviving Corporation were Incumbent
Directors immediately prior to the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination.
(4) Approval by the shareholders of the Company of
any plan or proposal for the liquidation or dissolution of the Company.
(h) "CODE" means the Internal Revenue Code of 1986, as
amended.
(i) "COMMITTEE" means the Board acting as a whole, or a
committee of two or more "non-employee directors" (as defined in Rule 16b-3
under the Exchange Act) who also constitute "outside directors" (as defined
under Code Section 162(m) if applicable at the time) if designated by the Board
to administer the Plan. The fact that a Committee member shall fail to qualify
under Rule 16b-3 under the Exchange Act or
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Code Section 162(m) shall not invalidate any grant or award made by the
Committee, if the grant or award is otherwise validly granted under the Plan.
(j) "COMMON STOCK" means shares of the Company's authorized
and unissued common stock, or reacquired shares of such common stock.
(k) "COMPANY" means Citizens Banking Corporation and any
successor thereto.
(l) "DISABILITY" means disability as defined in Section 22(e)
of the Code.
(m) "EFFECTIVE DATE" means January 18, 2002, the date on which
the Board adopted the Plan.
(n) "EMPLOYEE" means an employee of the Company or Affiliate,
who has an "employment relationship" with the Company or an Affiliate, as
defined in Treasury Regulation 1.421-7(h); and the term "employment" means
employment with the Company, or an Affiliate of the Company.
(o) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended from time to time and any successor thereto.
(p) "FAIR MARKET VALUE" means, with respect to a share of
Common Stock on the Grant Date, the average of the high and low sale prices of
Common Stock on the Nasdaq Stock Market ("NSM") as reported in The Wall Street
Journal for the Grant Date. In the event that there were no Common Stock
transactions on such date, the Fair Market Value shall be determined as of the
immediately preceding date on which there were Common Stock transactions. Unless
otherwise specified in the Plan, "Fair Market Value" for purposes of determining
the value of Common Stock on the date of exercise means the average of the high
and low sale prices of such Common Stock on the NSM on the last date preceding
the exercise on which there were Common Stock transactions, as reported in The
Wall Street Journal. If the Common Stock is not listed for trading on the NSM on
the relevant date, (1) the average of the high and low sale prices on the
securities exchange (or, if there is more than one, the principal such exchange)
on which the Common Stock is traded as reported in The Wall Street Journal for
the relevant date; (2) if the shares are not listed for trading on any
securities exchange or the NSM on such date but bid and ask information is
reported by Nasdaq or another generally accepted reporting service, the average
of the high bid and low asked prices of the shares, as so reported by Nasdaq or,
if not reported by Nasdaq, another generally accepted reporting service, for the
relevant date; (3) if none of the foregoing is applicable, the fair market value
of a share as of the relevant date, as determined by the Committee.
(q) "GRANT DATE" means the date on which the Committee
authorizes an individual Option, Restricted Stock Award, Restricted Stock Unit
or Performance Award, or such later date as shall be designated by the
Committee.
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(r) "INCENTIVE STOCK OPTION" means an Option that is intended
to meet the requirements of Section 422 of the Code and is designated as such in
the Agreement evidencing the grant.
(s) "INCUMBENT DIRECTORS" means the members of the Board on
the Effective Date.
(t) "NON-EMPLOYEE DIRECTOR" means a director of the Company or
an Affiliate who is not an Employee.
(u) "NONQUALIFIED STOCK OPTION" means an Option that is not an
Incentive Stock Option.
(v) "OPTION" means either an Incentive Stock Option or a
Nonqualified Stock Option.
(w) "PARTICIPANT" means the individuals described in Section
1.02.
(x) "PERFORMANCE AWARD" means a performance award granted
pursuant to Article IV.
(y) "PLAN" means the Citizens Banking Corporation Stock
Compensation Plan, the terms of which are set forth herein, as amended from time
to time.
(z) "RESTRICTED PERIOD" means the period of time during which
Common Stock subject to a Restricted Stock Award or Restricted Stock Unit is
subject to transfer restrictions that make it nontransferable.
(aa) "RESTRICTED STOCK" means Common Stock that is subject to
a Restricted Period, pursuant to Article III.
(bb) "RESTRICTED STOCK AWARD" means an award of Common Stock
that is subject to a Restricted Period, granted pursuant to Article III.
(cc) "RESTRICTED STOCK UNIT" means a right granted pursuant to
Article III to receive Restricted Stock or an equivalent value in cash pursuant
to the terms of the Plan and the related Agreement.
(dd) "RETIREMENT" means a Participant's voluntary cessation of
employment or status as a Non-Employee Director following the Participant's 65th
birthday.
(ee) "SURVIVING CORPORATION" means the corporation resulting
from a Business Combination referred to in Section 1.03(g)(3)(B) of the Plan,
including, without
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limitation, the surviving corporation in a merger involving the Company and a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries.
(ff) "VOTING STOCK" means the securities ordinarily having the
right to vote in the election of directors to the Board.
1.04 ADMINISTRATION. (a) The Plan shall be administered by the
Committee, in accordance with Rule 16b-3 under the Exchange Act and Code Section
162(m), if applicable. The Committee, at any time and from time to time, subject
to Sections 2.02 and 7.07, may grant Options, Restricted Stock Awards,
Restricted Stock Units and Performance Awards to such Employees and Non-Employee
Directors and for such number of shares of Common Stock as it shall designate.
The Committee shall interpret the Plan, prescribe, amend, and rescind rules and
regulations relating to the Plan, and make all other determinations necessary or
advisable for its administration. The decision of the Committee on any question
concerning the interpretation of the Plan or its administration with respect to
any Option, Restricted Stock Award, Restricted Stock Unit or Performance Award
granted under the Plan shall be final and binding upon all Participants.
(b) The Committee may delegate to one or more officers or
managers of the Company or a committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Options, Restricted Stock Awards, Restricted Stock Units and
Performance Awards to, or to cancel, modify, waive rights with respect to,
alter, discontinue or terminate Options, Restricted Stock Awards, Restricted
Stock Units or Performance Awards held by Participants who are not officers or
directors of the Company for purposes of Section 16 of the Exchange Act.
1.05 STOCK. The total number of shares of Company Common Stock
available for grants and awards under this Plan shall be 7,000,000; provided,
however, that the number of shares subject to Restricted Stock Awards,
Restricted Stock Units and Performance Awards under this Plan shall not exceed
2,000,000. The maximum number of shares of Common Stock that may be subject to
Option grants under the Plan to any salaried employee during any two-year period
shall not exceed 500,000 shares. Shares subject to any portion of a terminated,
forfeited, cancelled or expired Option, Restricted Stock Award, Restricted Stock
Unit or Performance Award granted hereunder may again be subjected to grants and
awards under the Plan as of the date of such termination, forfeiture,
cancellation or expiration. All amounts in this Section 1.05 shall be adjusted,
as applicable, in accordance with Article VI.
II. STOCK OPTIONS
2.01 GRANT OF OPTIONS. The Committee may grant Options to Participants
and, to the extent Options are granted, shall determine the general terms and
conditions of exercise, including any applicable vesting or performance
requirements, which shall be
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set forth in a Participant's Agreement. The Committee may designate any Option
granted as either an Incentive Stock Option or a Nonqualified Stock Option, or
the Committee may designate a portion of an Option as an Incentive Stock Option
and the remainder as a Nonqualified Stock Option. No Option shall have an
exercise period that extends beyond 10 years from the Grant Date. Any
Participant may hold more than one Option, Restricted Stock Award, Restricted
Stock Unit or Performance Award under the Plan and any other plan of the Company
or Affiliate.
2.02 INCENTIVE STOCK OPTIONS. Any Option intended to constitute an
Incentive Stock Option shall comply with the requirements of this Section 2.02
and shall only be granted to an Employee. No Incentive Stock Option shall be
granted with an exercise price below its Fair Market Value on the Grant Date. An
Incentive Stock Option shall not be granted to any Participant who owns (within
the meaning of Code Section 424(d)) stock of the Company or any Affiliate
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or a Affiliate unless, at the Grant Date, the exercise
price for the Option is at least 110% of the Fair Market Value of the shares
subject to the Option and the Option, by its terms, is not exercisable more than
5 years after the Grant Date. The aggregate Fair Market Value of the underlying
Common Stock (determined at the Grant Date) as to which Incentive Stock Options
granted under the Plan (including a plan of an Affiliate) may first be exercised
by a Participant in any one calendar year shall not exceed $100,000. To the
extent that an Option intended to constitute an Incentive Stock Option shall
violate the foregoing $100,000 limitation (or any other limitation set forth in
Code Section 422), the portion of the Option that exceeds the $100,000
limitation (or fails any other Code Section 422 requirement) shall be deemed to
constitute a Nonqualified Stock Option.
2.03 OPTION PRICE. The Committee shall determine the per share exercise
price for each Option granted under the Plan, but no Option shall be granted
with an exercise price below 100% of the Fair Market Value of Common Stock on
the Grant Date.
2.04 PAYMENT FOR OPTION SHARES. The purchase price for shares of Common
Stock to be acquired upon exercise of an Option granted hereunder shall be paid
in full in cash or by personal check, bank draft or money order at the time of
exercise; provided, however, that in lieu of such form of payment, the Committee
may permit a Participant to pay such purchase price in whole or in part by
tendering shares of Common Stock that have been held at least six months, which
are freely owned and held by the Participant independent of any restrictions,
hypothecations or other encumbrances, duly endorsed for transfer (or with duly
executed stock powers attached), or in any combination of the above. If shares
of Common Stock are tendered in payment of all or part of the exercise price,
they shall be valued for such purpose at their Fair Market Value on the date of
exercise. At the discretion of the Committee, as set forth in a Participant's
Option Agreement, the purchase price may be paid by using the Cashless Exercise
Procedure if the relevant agreement between the Company and the Participant's
broker referred to in the definition of such term has been executed by the
Company and such broker.
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2.05 ACCELERATION. The Committee may, in its discretion, accelerate a
Participant's right to exercise an Option.
III. RESTRICTED STOCK AWARDS AND UNITS
3.01 TERMS OF RESTRICTED STOCK AWARDS AND RESTRICTED STOCK UNITS. The
Committee shall have the authority to grant Restricted Stock Awards and
Restricted Stock Units to such Participants and for such number of shares of
Common Stock as it shall designate. Such Awards and Units shall be evidenced by
an Agreement that shall specify the terms thereof, including the Restricted
Period, the number of shares of Common Stock subject to the Award or Unit, and
such other provisions, which may include, among other things, vesting and
performance goals, as the Committee shall determine.
3.02 TRANSFERABILITY. Except as provided in this Article III of the
Plan, the shares of Common Stock subject to a Restricted Stock Award or
Restricted Stock Unit may not be transferred, pledged, assigned, or otherwise
alienated or hypothecated until the termination of (a) the applicable Restricted
Period or for such period of time as shall be established by the Committee and
specified in the applicable Agreement, or (b) upon the earlier satisfaction of
other conditions as specified by the Committee and set forth in the applicable
Agreement. Prior to the end of the Restricted Period, all rights with respect to
the Common Stock subject to a Restricted Stock Award or Restricted Stock Unit
granted to a Participant shall be exercisable during the Participant's lifetime
only by the Participant or the Participant's legal representative.
3.03 OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any shares of Common Stock subject to a Restricted Stock Award
or Restricted Stock Unit as it may deem advisable including, without limitation,
restrictions under applicable federal or state securities laws, and shall legend
any certificates representing such shares to give appropriate notice of such
restrictions.
3.04 CERTIFICATE LEGEND. In addition to any legends placed on
certificates pursuant to Section 3.03, any certificate representing shares of
Common Stock subject to a Restricted Stock Award or Restricted Stock Unit shall
bear the following legend:
The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is
subject to certain restrictions on transfer set forth in the Citizens
Banking Corporation Stock Compensation Plan (the "Plan"), rules and
administrative guidelines adopted pursuant to such Plan and an
Agreement dated , . A copy of the Plan, such rules and such
Agreement may be obtained from the Secretary of the Company.
3.05 REMOVAL OF RESTRICTIONS. Except as otherwise provided under the
Plan, if the Restricted Period has elapsed or been waived by the Committee with
respect to all or
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a portion of the Restricted Shares represented by a certificate, the holder
thereof shall be entitled to have the legend required by Section 3.04 removed
from such stock certificate with respect to the shares as to which the
Restricted Period has elapsed. Any certificate evidencing the remaining shares
shall bear the legend required by Section 3.04. The Committee shall have the
discretion to waive the applicable Restricted Period with respect to all or any
part of the Common Stock subject to a Restricted Stock Award or Restricted Stock
Unit. The Company shall have the right to retain any certificate representing
shares of Common Stock subject to a Restricted Stock Award or Restricted Stock
Unit until such time as all conditions and/or restrictions applicable to such
shares of Common Stock have been satisfied.
3.06 VOTING AND DIVIDEND RIGHTS. During the Restricted Period,
Participants shall be considered record owners of any shares of Common Stock
subject to any Restricted Stock Award or Restricted Stock Unit held by them for
purposes of determining who is entitled to vote or receive dividends with
respect to such shares. If any dividends or distributions are paid in shares of
Common Stock during the Restricted Period, the dividend or other distribution
shares shall be subject to the same restrictions on transferability as the
shares of Common Stock with respect to which they were paid.
IV. PERFORMANCE AWARDS
4.01 PERFORMANCE AWARDS. The Committee is authorized to grant
Performance Awards to eligible Participants. Subject to the terms of the Plan, a
Performance Award granted under the Plan (a) may be denominated or payable in
cash or shares of Common Stock (including, without limitation, Restricted
Stock), and (b) shall confer on the holder thereof rights valued as determined
by the Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of such performance
goals during such performance period, as the Committee shall establish. Subject
to the terms of the Plan, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted, the amount of any payment or transfer to be made
pursuant to any Performance Award, and the other terms and conditions of any
Performance Award, including the effect upon such Award of termination of the
Participant's employment and/or directorship, shall be determined by the
Committee.
V. TERMINATION OF EMPLOYMENT AND SERVICES
5.01. OPTIONS.
(a) Unless otherwise provided in the applicable Agreement, if,
prior to the date that an Option first becomes exercisable, a Participant's
status as an Employee and Non-Employee Director is terminated for any reason,
the Participant's right to exercise the Option shall terminate and all rights
thereunder shall cease as of the close of business on the date of such
termination.
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(b) For any Nonqualified Stock Option unless otherwise
provided in the applicable Agreement and for any Incentive Stock Option, if, on
or after the date that the Option first becomes exercisable, a Participant's
status as an Employee and Non-Employee Director is terminated (1) for Cause, any
unexercised portion of the Option (whether then exercisable or not) shall, as of
the time of the Cause determination, immediately terminate, (2) due to death or
Disability, then the Option, to the extent that it is exercisable on the date of
termination, shall be exercisable only until the earlier of the one year
anniversary of such termination or the "expiration date" set forth in the
applicable Agreement, (3) for any other reason (except as provided in the next
sentence), then the Option, to the extent that it is exercisable on the date of
termination, shall be exercisable only until the earlier of the three month
anniversary of such termination or the "expiration date" set forth in the
applicable Agreement. For any Nonqualified Stock Option, unless otherwise
provided in the applicable Agreement, if, on or after the date that the Option
first becomes exercisable, a Participant's status as an Employee and
Non-Employee Director is terminated due to Retirement, or if a Participant is a
party to a Change in Control Agreement with the Company (as amended and restated
on November 28, 2000) and such Participant's status as an Employee and
Non-Employee Director is terminated involuntarily or constructively in
accordance with paragraph 3 thereof, then the Option, to the extent that it is
exercisable on the date of termination, shall be exercisable until the
"expiration date" set forth in the applicable Agreement. The Committee, at its
discretion, may designate in the applicable Agreement a different
post-termination period for exercise of a Nonqualified Stock Option and may
extend the exercise period of any Option, but in no event may the
post-termination exercise period exceed the tenth anniversary of the Grant Date;
it being understood that the extension of the exercise term for an Incentive
Stock Option may cause such Option to become a Nonqualified Stock Option.
(c) Shares subject to Options that are not exercised within
the time allotted for exercise shall expire and be forfeited by the Participant
as of the close of business on the date they are no longer exercisable.
5.02 RESTRICTED STOCK AWARDS AND RESTRICTED STOCK UNITS. Unless
otherwise provided in the applicable Agreement, if the status as an Employee and
Non-Employee Director of a Participant holding a Restricted Stock Award or
Restricted Stock Unit terminates for any reason other than Retirement, death or
Disability prior to the lapse of the Restricted Period, any shares of Common
Stock subject to a Restricted Stock Award or Restricted Stock Unit as to which
the Restricted Period has not yet lapsed or been waived shall be forfeited by
the Participant; provided, however, that the Committee, in its sole discretion,
may waive or change the remaining restrictions or add additional restrictions
with respect to any Restricted Stock Award or Restricted Stock Unit that would
otherwise be forfeited, as it deems appropriate. Unless otherwise provided in
the applicable Agreement, if the status as an Employee and Non-Employee Director
of a Participant holding a Restricted Stock Award or Restricted Stock Unit
terminates due to Retirement, death or Disability, any remaining Restricted
Period with respect to Restricted Stock Awards or Restricted Stock Units held by
such Participant shall lapse as of the date of such termination.
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5.03 PERFORMANCE AWARDS. Unless otherwise provided in the applicable
Agreement, if the status as an Employee and Non-Employee Director of a
Participant holding a Performance Award terminates for any reason other than
Retirement, death or Disability prior to satisfaction of the performance
requirements of such Award, such Award automatically shall be forfeited by the
Participant to the extent such requirements are not satisfied; provided,
however, that the Committee, in its sole discretion, may waive or change the
remaining requirements or add additional requirements with respect to any
Performance Award or portion thereof that would otherwise be forfeited, as it
deems appropriate. Unless otherwise provided in the applicable Agreement, if the
status as an Employee and Non-Employee Director of a Participant holding a
Performance Award terminates due to Retirement, death or Disability, the
performance requirements of such Award shall be deemed to have been fully
satisfied.
5.04 OTHER PROVISIONS. Neither the transfer of a Participant from one
corporation or division to another corporation or division among the Company and
any of its Affiliates nor a leave of absence under the Company's leave policy
shall be deemed to constitute a termination of status as a Participant for
purposes of the Plan, except that no new awards or grants may be made to a
Participant during a leave of absence.
VI. ADJUSTMENTS AND CHANGE IN CONTROL
6.01 ADJUSTMENTS.
(a) If the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Common Stock, other securities,
or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other corporate transaction or event affects the
Common Stock such that an adjustment is appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall, in such manner as it may
deem equitable, adjust any or all of (1) the number and type of shares of Common
Stock which thereafter may be made the subject of Options, Restricted Stock
Awards, Restricted Stock Units and Performance Awards, (2) the number and type
of shares of Common Stock subject to outstanding Options, Restricted Stock
Awards, Restricted Stock Units and Performance Awards, and (3) the exercise
price with respect to any Option; provided, however, in each case, that with
respect to Incentive Stock Options any such adjustment shall be made in
accordance with Section 422 of the Code or any successor provision thereto to
the extent that such Option is intended to remain an Incentive Stock Option.
(b) The foregoing adjustments shall be made by the Committee
or, if such adjustment is required by the Board, then by the Board at the
recommendation of the Committee. Any such adjustment shall provide for the
elimination of any fractional share
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that might otherwise become subject to an Option, Restricted Stock Award,
Restricted Stock Unit or Performance Award.
6.02 CHANGE IN CONTROL. Upon the occurrence of a Change in Control, or
if the Committee determines in its sole discretion that a Change in Control has
occurred, then (a) any Option granted hereunder immediately shall become
exercisable in full, regardless of any installment provision applicable to such
Option; (b) any remaining Restricted Period on any shares of Common Stock
subject to a Restricted Stock Award or Restricted Stock Unit granted hereunder
immediately shall lapse; and (c) the performance requirements for a Performance
Award granted hereunder shall be deemed to have been satisfied in full.
6.03 MERGER. If the Company is a party to any merger, consolidation,
reorganization, or sale of substantially all of its assets, each holder of
outstanding Option, Restricted Stock Award, Restricted Stock Unit or Performance
Award, to the extent that such Option, Award or Unit remains outstanding
thereafter, shall be entitled to receive, in lieu of the shares of Common Stock
to which such holder would otherwise be entitled, upon the exercise of such
Option or the lapse of the Restricted Period on shares of Common Stock subject
to a Restricted Stock Award or Restricted Stock Unit or the satisfaction of the
performance requirements for a Performance Award, the securities and/or property
which a shareholder owning the number of shares subject to the holder's Option,
Restricted Stock Award, Restricted Stock Unit or Performance Award would be
entitled to receive pursuant to such merger, consolidation, reorganization or
sale of assets.
VII. MISCELLANEOUS
7.01 PARTIAL EXERCISE/FRACTIONAL SHARES. The Committee may permit, and
shall establish procedures for, the partial exercise of Options granted under
the Plan. No fractional shares shall be issued in connection with the exercise
or payment of a grant or award under the Plan; instead, the Fair Market Value of
the fractional shares shall be paid in cash, or at the discretion of the
Committee, the number of shares shall be rounded down to the nearest whole
number of shares, and any fractional shares shall be disregarded.
7.02 RULE 16B-3 REQUIREMENTS. Notwithstanding any other provision of
the Plan, the Committee may impose such conditions on a Restricted Stock Award,
Restricted Stock Unit, Performance Award or the exercise of an Option
(including, without limitation, the right of the Committee to limit the time of
exercise to specified periods) as may be required to satisfy the requirements of
Rule 16b-3 of the Exchange Act (as such rule may be in effect at such time).
7.03 RIGHTS PRIOR TO ISSUANCE OF SHARES. No Participant shall have any
rights as a shareholder with respect to shares covered by an Option, Restricted
Stock Award, Restricted Stock Unit or Performance Award until the issuance of
such shares. No
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adjustment shall be made for dividends or other rights with respect to such
shares for which the record date is prior to the date the shares are issued.
7.04 NON-ASSIGNABILITY. No Option, Restricted Stock Award, Restricted
Stock Unit or Performance Award shall be transferable by a Participant except by
will or the laws of descent and distribution. During the lifetime of a
Participant, an Incentive Stock Option shall be exercised only by the
Participant. No transfer of an Option, Restricted Stock Award, Restricted Stock
Unit or Performance Award shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will or such evidence as the Company may deem necessary to establish the
validity of the transfer and the acceptance by the transferee of the terms and
conditions of the Option, Restricted Stock Grant Award, Restricted Stock Unit or
Performance Award.
7.05 SECURITIES LAWS.
(a) Anything to the contrary herein notwithstanding, the
Company's obligation to sell and deliver Common Stock pursuant to the exercise
of an Option, or deliver Common Stock pursuant to a Restricted Stock Award,
Restricted Stock Unit or Performance Award is subject to such compliance with
federal and state laws, rules and regulations applying to the authorization,
issuance or sale of securities as the Company deems necessary or advisable. The
Company shall not be required to sell or deliver Common Stock unless and until
it receives satisfactory assurance that the issuance or transfer of such shares
shall not violate any of the provisions of the Securities Act of 1933, the
Exchange Act, any other applicable federal laws, or the rules and regulations of
the Securities and Exchange Commission promulgated thereunder or those of any
stock exchange or stock market on which the Common Stock may be listed or
traded, the provisions of any state laws governing the sale of securities, or
that there has been compliance with the provisions of such acts, rules,
regulations and laws.
(b) The Committee may impose such restrictions on any shares
of Common Stock subject to or underlying an Option, Restricted Stock Award,
Restricted Stock Unit or Performance Award as it may deem advisable, including,
without limitation, restrictions (i) under applicable federal securities laws,
(ii) under the requirements of any stock exchange or other recognized trading
market upon which such shares of Common Stock are then listed or traded, or
(iii) under any blue sky or state securities laws applicable to such shares. No
shares shall be issued until counsel for the Company has determined that the
Company has complied with all requirements under appropriate securities laws.
7.06 WITHHOLDING AND TAXES. The Company shall have the right to
withhold from a Participant's compensation or require a Participant to remit
sufficient funds to satisfy applicable withholding for income and employment
taxes upon the exercise of an Option, the lapse of a Restriction Period or the
satisfaction of the performance requirements relating to a Performance Award. A
Participant may use the Cashless Exercise Procedure or may tender previously
acquired shares of Common Stock that have been held at least six months to
satisfy the withholding obligation in whole or in part,
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such shares being valued for such purpose at Fair Market Value; provided that
the Company shall not withhold from exercise more shares than are necessary to
satisfy the established requirements of federal, state and local tax withholding
obligations.
7.07 TERMINATION AND AMENDMENT.
(a) The Board may terminate the Plan, or the granting of
Options, Restricted Stock Awards, Restricted Stock Units or Performance Awards
under the Plan, at any time. No new grants or awards shall be made under the
Plan after the tenth anniversary of the Effective Date.
(b) The Board may amend or modify the Plan at any time and
from time to time.
(c) No amendment, modification or termination of the Plan
shall adversely affect any Option, Restricted Stock Award, Restricted Stock Unit
or Performance Award previously granted under the Plan in any material way
without the consent of the Participant holding the Option, Restricted Stock
Award, Restricted Stock Unit or Performance Award.
(d) An Agreement relating to an Option shall not be amended to
change the exercise price of the Option evidenced by such Agreement, other than
pursuant to Article VI.
7.08 EFFECT ON EMPLOYMENT OR SERVICES. Neither the adoption of the Plan
nor the granting of any Option, Restricted Stock Award, Restricted Stock Unit or
Performance Award pursuant to the Plan shall be deemed to create any right in
any individual to be retained or continued in the employment or services of the
Company or an Affiliate.
7.09 USE OF PROCEEDS. The proceeds received from the sale of Common
Stock pursuant to the Plan shall be used for general corporate purposes of the
Company.
7.10 APPROVAL OF PLAN. The Plan shall be subject to the approval of the
holders of at least a majority of the Common Stock of the Company present and
entitled to vote at a meeting of shareholders of the Company held within 12
months after adoption of the Plan by the Board. No Option, Restricted Stock
Award, Restricted Stock Unit or Performance Award granted under the Plan may be
exercised or paid out in whole or in part unless the Plan has been approved by
the shareholders as provided herein. If not approved by shareholders within 12
months after approval by the Board, the Plan and any Options, Restricted Stock
Awards, Restricted Stock Units or Performance Awards granted under the Plan
shall be rescinded.
7.11 GOVERNING LAW. The Plan and all actions taken under the Plan shall
be governed and construed in accordance with Michigan law.
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THIS PLAN is hereby executed as of January 18, 2002 in accordance with
the Board resolutions adopted on such date.
CITIZENS BANKING CORPORATION
By: /s/ Robert J. Vitito
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Its: Chairman, President, and
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Chief Executive Officer
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