1
EXHIBIT (10)K
AMENDED AND RESTATED
FIRST OF AMERICA BANK CORPORATION
STOCK COMPENSATION PLAN
1. Purpose; Effectiveness of the Plan.
(a) The purpose of this Plan is to advance the interests of the
Company and its stockholders by helping the Company attract and retain the
services of employees and officers, upon whose judgment, initiative and efforts
the Company is substantially dependent, and to provide those persons with
further incentives to advance the interests of the Company. The Plan is also
established with the objective of encouraging Stock ownership by such employees
and officers and aligning their interests with those of stockholders.
(b) This Plan will become effective on the date of its adoption by
the Board, provided the Plan is approved by the stockholders of the Company
(excluding holders of shares of Option Stock or Restricted Stock issued by the
Company under this Plan) within twelve months after that date. If the Plan is
not approved by the stockholders of the Company, any Options or shares of
Restricted Stock granted under this Plan will be rescinded and void. This Plan
will remain in effect until it is terminated by the Board under Section 11
hereof, except that no Incentive Stock Option will be granted after the tenth
anniversary of the date of this Plan's adoption by the Board.
2. Definitions. Unless the context otherwise requires, the following
defined terms (together with other capitalized terms defined elsewhere in this
Plan) will govern the construction of this Plan, and of any Stock Option
Agreements or Restricted Stock Agreements entered into pursuant to this Plan:
(a) "10% Stockholder" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set
forth in Section 424(d) of the Code at the time he or she is
granted an Option, Stock possessing more than ten percent (10%)
of the total combined voting power or value of all classes of
Stock of the Company and/or of its Subsidiaries.
(b) "1933 Act" means the federal Securities Act of 1933, as amended.
(c) "1934 Act" means the federal Securities Exchange Act of 1934, as
amended.
(d) "Board" means the Board of Directors of the Company.
(e) A "Change in Control" of the Company shall have occurred:
(i) on the fifth day preceding the scheduled expiration date of
a tender offer by, or exchange offer by any corporation,
person, other entity or group (other than the Company or
any of its wholly owned Subsidiaries), to acquire Voting
Stock of the Company if:
(1) after giving effect to such offer such corporation,
person, other entity or group would own 25% or more of
the Voting Stock of the Company;
(2) there shall have been filed documents with the
Securities and Exchange Commission in connection
therewith (or, if no such filing is required, public
evidence that the offer has already commenced); and
(3) such corporation, person, other entity or group has
secured all required regulatory approvals to own or
control 25% or more of
2
the Voting Stock of the Company;
(ii) if the shareholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into
another corporation in a transaction in which neither the
Company nor any of its wholly owned Subsidiaries will be
the surviving corporation, or to sell or otherwise dispose
of all or substantially all of the Company's assets to any
corporation, person, other entity or group (other than the
Company or any of its wholly owned Subsidiaries), and such
definitive agreement is consummated;
(iii) if any corporation, person, other entity or group (other
than the Company or any of its wholly owned Subsidiaries)
becomes the Beneficial Owner (as defined in the Company's
articles of incorporation) of Stock representing 25% or
more of the Voting Stock of the Company; or
(iv) if during any period of two consecutive years Continuing
Directors cease to comprise a majority of the Company's
Board of Directors.
(f) "Code" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer
to Sections of the Code as enacted at the time of this Plan's
adoption by the Board and as subsequently amended, or to any
substantially similar successor provisions of the Code resulting
from recodification, renumbering or otherwise).
(g) "Committee" means the Nominating and Compensation Committee of
the Board; except that where there is no Nominating and
Compensation Committee, the term "Committee" shall refer to any
committee of disinterested members of the Board designated by
the Board.
(h) "Company" means the First of America Bank Corporation, a
Michigan corporation and its successor or successors.
(i) "Company Performance Criteria" means such financial performance
criteria of the Company or its Subsidiaries as the Committee may
designate including Stock price, return on assets, return on
equity, return on capital, earnings per share, net income, net
operating income, revenue, expenses, net interest margin, burden
ratio, efficiency ratio and total shareholder return.
(j) "Continuing Director" means:
(i) any member of the Board of Directors of the Company at the
beginning of any period of two consecutive years; and
(ii) any person who subsequently becomes a member of the Board
of Directors of the Company; if
(iii) such person's nomination for election or election to the
Board of Directors of the Company is recommended or
approved by resolution of a majority of the Continuing
Directors; or
(iv) such person is included as a nominee in a proxy statement
of the Company distributed when a majority of the Board of
Directors of the Company consists of Continuing Directors.
(k) "Designated Performance Criteria" means any criteria, including
Company Performance Criteria, as the Committee may deem to be
appropriate.
(l) "Disability" has the same meaning as "permanent and
3
total disability," as defined in Section 22(e)(3) of the Code.
(m) "Disqualifying Disposition" means a disposition, as defined in
Section 424(c)(1) of the Code, of Option Stock acquired pursuant
to an ISO, which occurs either:
(i) within two years after the underlying Option is granted; or
(ii) within one year after the underlying Option is exercised.
Under Section 424(c)(1) of the Code, the term "disposition"
includes a sale, exchange, gift, or a transfer of legal title,
but does not include (A) a transfer from a decedent to an estate
or a transfer by bequest or inheritance, (B) an exchange to
which Section 354, 355, 356, or 1036 (or so much of Section 1031
as relates to Section 1036) applies, or (C) a mere pledge or
hypothecation.
(n) "Eligible Participants" means persons who, at a particular time,
are employees or officers of the Company or its Subsidiaries,
and are paid on a salary or commission basis. With respect to
ISOs only, this definition does not include persons who have
been on leave of absence for greater than 90 days, unless
re-employment is guaranteed by law or contract.
(o) "Fair Market Value" means, with respect to Option Stock and as
of the date in question, the market price per share of such
Stock determined by the Committee, consistent with the
requirements of Section 422 of the Code and to the extent
consistent therewith:
(i) if the Stock was traded on a national stock exchange as of
the date in question, then the Fair Market Value will be
equal to the average of the high and low prices reported by
the applicable composite transactions report for such date
or, if no trading occurred on the applicable exchange for
that date, for the latest trading date prior to such date.
(ii) if the Stock was traded on any other established market as
of the date in question, then the Fair Market Value will be
equal to the average of the high and low prices reported
for such date or, if no trading occurred on the applicable
exchange for that date, for the latest trading date prior
to such date; or
(iii) if neither of the foregoing provisions is applicable, then
the Fair Market Value will be determined by the Committee
on good faith on such basis as it deems appropriate.
(p) "ISO" or "Incentive Stock Option" means an Option, which is
subject to certain holding requirements and tax benefits, and
which qualifies as an "incentive stock option," as defined in
Section 422 of the Code.
(q) "NSO" means any Option granted under this Plan whether
designated by the Committee as a "non-qualified stock option," a
"non-statutory stock option" or otherwise, other than an Option
designated by the Committee as an ISO. The term "NSO" also
includes any Option designated by the Committee as an ISO but
which, for any reason, fails to qualify as an ISO pursuant to
Section 422 of the Code and the rules and regulations
thereunder.
(r) "Option" means a right granted pursuant to this Plan
4
entitling the Optionee to acquire shares of Stock issued by the
Company.
(s) "Option Agreement" means an agreement between the Company and an
Eligible Participant to evidence the terms and conditions of the
issuance of Options hereunder.
(t) "Option Price" with respect to any particular Option means the
exercise price at which the Optionee may acquire each share of
the Option Stock called for under such Option.
(u) "Option Stock" means Stock issued or issuable by the Company
pursuant to the valid exercise of an Option.
(v) "Optionee" means an Eligible Participant to whom an Option is
granted hereunder, and any transferee of such Option received
pursuant to a Transfer authorized under this Plan.
(w) "Plan" means this First of America Bank Corporation Stock
Compensation Plan.
(x) "Restricted Stock" means Stock issued or issuable by the Company
which is subject to the restrictions imposed in Section 7 of
this Plan.
(y) "Restricted Stock Agreement" means an agreement between the
Company and an Eligible Participant to evidence the terms and
conditions of the issuance of Restricted Stock hereunder.
(z) "Restricted Stockholder" means an Eligible Participant to whom
any Restricted Stock is issued hereunder, and any transferee of
such Stock received pursuant to a Transfer required by law.
(aa) "Retirement" means termination of employment with the Company or
a Subsidiary on or after the date on which the employee would be
able to commence receiving a monthly benefit from the Company
Employees' Retirement Plan.
(ab) "Stock" means shares of the Company's common stock.
(ac) "Subsidiary" has the same meaning as "Subsidiary Corporation" as
defined in Section 424(f) of the Code.
(ad) "Transfer," with respect to Option Stock or Restricted Stock,
includes, without limitation, a voluntary or involuntary sale,
assignment, transfer, conveyance, pledge, hypothecation,
encumbrance, disposal, loan, gift, attachment or levy of such
Stock, including without limitation an assignment for the
benefit of creditors of the Optionee or the Restricted
Stockholder, a transfer by operation of law, such as a transfer
by will or under the laws of descent and distribution, an
execution of judgment against the Option Stock or Restricted
Stock or the acquisition of record or beneficial ownership
thereof by a lender or creditor, a transfer pursuant to any
decree of divorce, dissolution or separate maintenance, any
property settlement, any separation agreement or any other
agreement with a spouse (except for estate planning purposes)
under which a part or all of the shares of Option Stock or
Restricted Stock are transferred or awarded to the spouse of the
Optionee or Restricted Stockholder or are required to be sold,
or a transfer resulting from the filing by the Optionee or
Restricted Stockholder of a petition for relief, or the filing
of an involuntary petition against such Optionee or Restricted
Stockholder, under the bankruptcy laws of the United States or
of any other nation.
5
(ae) "Voting Stock" shall mean those shares of the Company Stock
entitled to vote generally in the election of directors.
3. Eligibility. Options may be granted and Restricted Stock may be
issued under this Plan only to persons who are Eligible Participants as of the
time of such grant.
4. Administration.
(a) Administration by the Committee. The Committee will administer
this Plan.
(b) Authority and Discretion of Committee. The Committee will have
full and final authority in its discretion, at any time subject only to the
express terms, conditions and other provisions of the Company's articles of
incorporation, bylaws and this Plan, and the specific limitations on such
discretion set forth herein:
(i) to select and approve the persons to whom Options will be
granted under this Plan from among the Eligible
Participants, including the number of Options and the
amount of Option Stock available for purchase under such
Options so granted to each person;
(ii) to select and approve the persons to whom Restricted Stock
will be issued under this Plan from among the Eligible
Participants, including the number of issuances and shares
of Restricted Stock so issued to each such person;
(iii) to determine the period or periods of time during which
Options may be exercised or become exercisable, the
Designated Performance Criteria on which the Option Price
or exercisability may be dependent, the Option Price and
the duration of such Options, the date on which Options are
granted, and other matters to be determined by the
Committee in connection with specific Option grants and
Option Agreements as specified under this Plan;
(iv) to determine the period or periods of time during which the
Restricted Stock may vest, the Designated Performance
Criteria on which vesting may be dependent, the date on
which shares of Restricted Stock are awarded, and other
matters to be determined by the Committee in connection
with specific issuances of Restricted Stock and Restricted
Stock Agreements as provided in this Plan;
(v) to interpret this Plan, to prescribe, amend and rescind
rules and regulations relating to this Plan, and to make
all other determinations necessary or advisable for the
operation and administration of this Plan; and
(vi) to delegate all or a portion of its authority under
subsections 4.(b)(i), 4.(b)(ii), 4.(b)(iii) and 4.(b)(iv)
of this Plan to one or more directors of the Company who
are also officers of the Company, but only in connection
with Options or Restricted Stock granted to Eligible
Participants who are not subject to the reporting and
liability provisions of Section 16 of the 1934 Act, as
amended, and the rules and regulations thereunder, and
subject to such restrictions and limitations (such as the
aggregate number of shares of Option Stock and Restricted
Stock that may be granted) as the Committee may decide to
impose on such delegate directors.
(c) Designation of Options. Except as otherwise provided
6
herein, the Committee will designate any Option granted hereunder either as an
ISO or as an NSO. To the extent that the Fair Market Value of Stock,
determined at the time the Option is granted, with respect to which all ISOs
are exercisable for the first time by any individual during any calendar year
(pursuant to this Plan and all other plans of the Company and/or its
Subsidiaries) exceeds $100,000, such Option will be treated as an NSO.
(d) Option Agreements. Options will be deemed granted hereunder
only upon the execution and delivery of an Option Agreement by the Optionee and
a duly authorized officer of the Company. Options will not be deemed granted
hereunder merely upon the authorization of such grant by the Committee.
(e) Restricted Stock Agreements. Restricted Stock will be issued
hereunder only upon the execution and delivery of a Restricted Stock Agreement
by the Restricted Stockholder and a duly authorized officer of the Company.
Restricted Stock will not be deemed issued merely upon the authorization of
such issuance by the Committee.
5. Shares Reserved for Options and Restricted Stock. Subject to Sections
8 and 11 of this Plan, the aggregate number of shares of Option Stock and
Restricted Stock that may be issued and outstanding pursuant to the exercise of
Options and granting of Restricted Stock under this Plan (the "Option and
Restricted Stock Pool") will not exceed 3,000,000 shares. The total number of
shares of Option Stock and Restricted Stock that may be granted to an Eligible
Participant over the term of this Plan will not exceed 750,000 shares. Shares
of Option Stock withheld as payment of an Option Price as described in
subsection 6.(e) by the Company and shares of Restricted Stock that may be
forfeited, as described in subsection 7.(c) may be added back into the Option
and Restricted Stock Pool and reissued, provided, however, with respect to
persons subject to Section 16 of the 1934 Act, the total number of shares of
Option Stock and Restricted Stock that may be issued or reissued will be less
than 3,300,000 shares. Shares of Option Stock that would have been issuable
pursuant to Options, but that are no longer issuable because all or part of
those Options have terminated or expired may also be added back into the Option
and Restricted Stock Pool to be available for issuance.
6. Terms of Stock Option Agreements. Each Option granted pursuant to
this Plan will be evidenced by an Option Agreement between the Company and the
Eligible Participant to whom such Option is granted, in form and substance
satisfactory to the Committee in its sole discretion, consistent with this
Plan. Without limiting the foregoing, the following terms and conditions will
be considered a part of each Option Agreement (unless otherwise stated
therein):
(a) Covenants of Optionee. Nothing contained in this Plan, any
Option Agreement or in any other agreement executed in connection with the
granting of an Option under this Plan will confer upon any Optionee any right
with respect to the continuation of his or her status as an employee or officer
of the Company or its Subsidiaries.
(b) Option Vesting Periods. Except as otherwise provided herein,
each Option Agreement will specify the period or periods of time within which
each Option or portion thereof will first become exercisable (the "Option
Vesting Period"). Such Option Vesting Periods will be determined by the
Committee in its discretion, and may be accelerated or shortened by the
Committee in its discretion.
(c) Exercise of the Option.
(i) Mechanics and Notice. Options may be exercised to the
extent exercisable by giving written notice to the Company
specifying the number of Options to be exercised, the date
of the grant of the Option or Options to be exercised, the
exercise price, the desired effective date of the exercise,
the number of full shares of Option Stock to be retained by
the Optionee after exercise, and the method of payment.
Once written notice complying with the requirements of this
subsection is received, the Committee or its designee shall
promptly notify the Optionee of the amount of the Option
Price and
7
withholding taxes due, if either or both is applicable.
Payment of any amounts owing shall be due immediately upon
receipt of such notice.
(ii) Withholding Taxes. As a condition to the issuance of
shares of Option Stock upon exercise of an Option granted
under this Plan, the Optionee will pay to the Company in
cash, through cashless exercise as described in subsection
6.(e), or in such other form as the Committee may determine
in its discretion, the amount of the Company's tax
withholding liability, if any, associated with such
exercise. The Committee may prescribe a specific method of
payment of such withholding, in its discretion. For
purposes of this subsection 6.(c)(iii), "tax withholding
liability" will mean all federal and state income taxes,
social security tax, medicare tax and any other taxes
applicable to the income arising from the transaction
required by applicable law to be withheld by the Company.
(d) Payment of Option Price. Each Option Agreement will specify the
Option Price, with respect to the exercise of Option Stock granted thereunder,
which may be stated in terms of a fixed dollar amount, a percentage (not less
than 100%) of Fair Market Value at the time of the grant, a value based on a
market or peer group index or Designated Performance Criteria, or such other
method as determined by the Committee in its discretion. In no event will the
Option Price for an ISO or NSO granted hereunder be less than the Fair Market
Value (or, where an ISO Optionee is a 10% Stockholder, one hundred ten percent
(110%) of such Fair Market Value) of the Option Stock at the time such ISO or
NSO is granted. The Option Price will be payable to the Company in United
States dollars in cash or by check or, such other legal consideration as may be
approved by the Committee, in its discretion.
(e) Cashless Exercise. The Committee, in its discretion, may permit
an Optionee to pay all or a portion of the Option Price, and/or the tax
withholding liability set forth in subsection 6.(c)(ii) above, if applicable,
with respect to the exercise of an Option either by surrendering shares of
Stock already owned by such Optionee or by withholding shares of Option Stock,
provided that the Committee determines that the Fair Market Value of such
surrendered Stock or withheld Option Stock is equal to the corresponding
portion of such Option Price and/or tax withholding liability, as the case may
be, to be paid for therewith. To the extent that shares of Option Stock are
withheld as payment of all or a portion of the Option Price of an ISO, the
withholding of such shares will be treated as a Disqualifying Disposition, and
subject to Section 421(b) of the Code.
(f) Notice of Disqualifying Disposition. In the event of a
Disqualifying Disposition, the Optionee will promptly give written notice to
the Company of such disposition including information regarding the number of
shares involved, the exercise price of the underlying Option through which the
shares were acquired and the date of the Disqualifying Disposition.
(g) Termination of the Option. Except as otherwise provided herein,
each Option Agreement will specify the period of time, to be determined by the
Committee in its discretion, during which the Option granted therein will be
exercisable, not to exceed ten years from the date of grant in the case of an
ISO (the "Option Period"); provided that the Option Period will not exceed five
years from the date of grant in the case of an ISO granted to a 10%
Stockholder.
(i) ISOs. To the extent not previously exercised, each ISO
will terminate upon the expiration of the Option Period
specified in the Option Agreement; provided, however, that,
subject to the discretion of the Committee, each ISO will
terminate, if earlier: (a) immediately after the date that
the Optionee ceases to be an Eligible Participant for any
reason other than death, disability, or
8
Retirement; (b) five years after the date that the Optionee
ceases to be an Eligible Participant by reason of such
person's death or disability; provided, however, that the
ISO will convert to an NSO if exercised more than twelve
months after death or disability; or (c) five years after
the Optionee ceases to be an Eligible Participant by reason
of such person's Retirement; provided, however, that the
ISO will convert to an NSO if exercised more than three
months after Retirement.
(ii) NSOs. To the extent not previously exercised, each NSO
will terminate upon the expiration of the Option Period
specified in the Option Agreement; provided, however, that,
subject to the discretion of the Committee, each NSO will
terminate, if earlier: (a) immediately after the date that
the Optionee ceases to be an Eligible Participant for any
reason, other than death, disability, or Retirement; or (b)
five years after the date the Optionee ceases to be an
Eligible Participant by reason of such person's death,
disability or Retirement.
(iii) Limited Stock Appreciation Rights. Notwithstanding any
other provision of this Agreement, and except as provided
in subsection 6.(g)(iii)(2) below, each Option will be
cancelled on the effective date of a Change in Control of
the Company or a liquidation or dissolution of the Company,
and in lieu of further rights under the Options, Optionees
will receive from the Company in cash the difference
between the Fair Market Value and the Option Price,
multiplied by the number of shares to which each Option
relates.
(1) For purposes of subsection 6.(g)(iii) only, the Fair
Market Value shall be the average between the highest
and lowest quoted price per share for sales made and
reported on the New York Stock Exchange, or on a sales
or quotation system maintained by the National
Association of Securities Dealers, or such other
national stock exchange on which such Stock of the
Company may then be listed and which constitutes the
principal market for such Stock on the latest trading
date for which sales or quotations are reported prior
to such effective date or, if greater, the price or
value received by stockholders for a share of Stock
with respect to the largest number of shares the
ownership of which is transferred in conjunction with
such Change in Control, liquidation or dissolution of
the Company.
(2) The Committee shall receive an opinion, dated as of
the Change in Control, from the independent auditors
of the surviving company, that the limited stock
appreciation rights granted in subsection 6.(g)(iii)
shall be accounted for as a pooling of interests. If
the Committee does not receive the required opinion,
it may declare subsection 6.(g)(iii) to be nullified.
In such case, all Options shall become immediately and
fully exercisable upon the Change in Control.
(h) Transferability of Options. ISOs will be subject to Transfer by
the Optionee only by will or the laws of descent and distribution. NSOs will
be subject to Transfer by the Optionee only by will or the laws of descent and
distribution or, at the discretion of the Committee, by direct gift to a family
member, or gift to a family trust or family partnership. The terms "family
member," "family trust" and "family partnership" shall have meanings consistent
9
with Section 704 of the Code. Options will be exercisable only by the Optionee
during his or her lifetime, or, with respect to an NSO, by any of the
recipients of the Transfers specifically permitted by this subsection 6.(h).
(i) Compliance with Law. Notwithstanding any other provision of
this Plan, Options may be granted pursuant to this Plan, and Option Stock may
be issued pursuant to the exercise thereof by an Optionee, only after there has
been compliance with all applicable federal and state tax and securities laws.
The right to exercise an Option will be further subject to the requirement that
if at any time the Committee determines, in its discretion, that the listing,
registration or qualification of the shares of Option Stock called for by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory authority, is necessary or desirable as
a condition of or in connection with the granting of such Option or the
purchase of shares of Option Stock, the Option may not be exercised, in whole
or in part, unless and until such listing, registration, qualification, consent
or approval is effected or obtained free of any conditions not acceptable to
the Committee, in its discretion.
(j) Stock Certificates. Certificates representing the Option Stock
issued pursuant to the exercise of Options will bear all legends required by
law and necessary to effectuate this Plan's provisions. The Company may place
a "stop transfer" order against shares of the Option Stock until all
restrictions and conditions set forth in this Plan and in the legends referred
to in this subsection 6.(j) have been complied with.
(k) Other Provisions. The Option Agreement may contain such other
terms, provisions and conditions, including such special forfeiture conditions,
rights of repurchase, rights of first refusal and other restrictions on
Transfer of Option Stock issued upon exercise of any Options granted hereunder,
not inconsistent with this Plan, as may be determined by the Committee in its
sole discretion.
7. Terms of Restricted Stock Agreements. Each issuance of Restricted
Stock pursuant to this Plan will be evidenced by a Restricted Stock Agreement
between the Company and the Eligible Participant to whom such Restricted Stock
is to be issued, in form and substance satisfactory to the Committee in its
sole discretion, consistent with this Plan. Each Restricted Stock Agreement
(unless otherwise stated therein) will be deemed to include the following terms
and conditions:
(a) Covenants of Restricted Stockholder. Nothing contained in this
Plan, any Restricted Stock Agreement or in any other agreement executed in
connection with the issuance of Restricted Stock under this Plan will confer
upon any Restricted Stockholder any right with respect to the continuation of
his or her status as an employee or officer of the Company or its Subsidiaries.
(b) Restricted Stock Vesting Periods. Except as otherwise provided
herein, each Restricted Stock Agreement may specify the period or periods of
time within which shares of Restricted Stock will no longer be subject to the
restrictions imposed under this Plan or any Restricted Stock Agreement (the
"Restricted Stock Vesting Period"), as set forth in this subsection 7.(b). A
Restricted Stock Agreement may also specify Designated Performance Criteria
which must be satisfied within the Restricted Stock Vesting Period. Restricted
Stock Vesting Periods shall be determined by the Committee in its discretion
and may be accelerated or shortened by the Committee in its discretion, but
shall not, provided all applicable Designated Performance Criteria have been
satisfied, exceed ten years for full vesting. All shares of Restricted Stock
shall become immediately and fully vested upon a Change in Control of the
Company.
(c) Forfeiture of Restricted Stock. To the extent that the
applicable Restricted Stock Vesting Period has not elapsed or the Designated
Performance Criteria have not been satisfied, each share of Restricted Stock,
subject to the discretion of the Committee, shall be forfeited immediately as
of the date the Restricted Stockholder ceases to be an Eligible Participant for
any reason.
10
(d) Restrictions on Transfer of Restricted Stock.
(i) General Rule on Transfers of Restricted Stock. Restricted
Stock may be transferred only if required by law. All
Transfers of Restricted Stock not meeting the conditions
set forth in this subsection 7.(d) are expressly
prohibited.
(ii) Effect of Prohibited Transfer. Any prohibited Transfer of
Restricted Stock is void and of no effect. Should such a
Transfer purport to occur, the Company may refuse to carry
out the Transfer on its books, attempt to set aside the
Transfer, enforce any undertaking or right under this
subsection 7.(d), or exercise any other legal or equitable
remedy.
(iii) Escrow. The Committee may, in its discretion, require that
the Restricted Stockholder deliver the certificate(s) for the Restricted Stock
with a stock power executed in blank to the Secretary of the Company or his or
her designee to hold said certificate(s) and stock power(s) in escrow and to
take all such actions and to effectuate all such Transfers and/or releases as
are in accordance with the terms of this Plan. The certificate(s) may be held
in escrow so long as the shares of Restricted Stock are subject to any
restrictions under this Plan or under a Restricted Stock Agreement. Each
Restricted Stockholder acknowledges that the Secretary of the Company (or his
or her designee) is so appointed as the escrow holder with the foregoing
authorities as a material inducement to the issuance of shares of Restricted
Stock under this Plan, that the appointment is coupled with an interest, and
that it accordingly will be irrevocable. The escrow holder will not be liable
to any party to a Restricted Stock Agreement (or to any other party) for any
actions or omissions unless the escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine.
(e) Compliance with Law. Notwithstanding any other provision of
this Plan, Restricted Stock may be issued pursuant to this Plan only after
there has been compliance with all applicable federal and state tax and
securities laws.
(f) Stock Certificates. Certificates representing the Restricted
Stock issued pursuant to this Plan will bear all legends required by law and
necessary to effectuate this Plan's provisions. The Company may place a "stop
transfer" order against shares of the Restricted Stock until all restrictions
and conditions set forth in this Plan and in the legends referred to in this
subsection 7.(f) have been complied with.
(g) Market Standoff. To the extent requested by the Company and any
underwriter of securities of the Company in connection with a firm commitment
underwriting, no Restricted Stockholder of any shares of Restricted Stock will
sell or otherwise Transfer any such shares not included in such underwriting,
or not previously registered pursuant to a registration statement filed under
the 1933 Act, during the 120-day period following the effective date of the
registration statement filed with the Securities and Exchange Commission in
connection with such offering.
(h) Other Provisions. The Restricted Stock Agreement may contain
such other terms, provisions and conditions, including such special forfeiture
conditions, rights of repurchase, rights of first refusal and other
restrictions on Transfer of Restricted Stock issued hereunder, not inconsistent
with this Plan, as may be determined by the Committee in its sole discretion.
8. Adjustments Upon Changes in Stock. In the event of any change in the
outstanding Stock of the Company as a result of a stock split, reverse stock
split, stock dividend, recapitalization, combination or reclassification,
appropriate proportionate adjustments will be made:
(a) in the aggregate number of shares of Option Stock and
11
Restricted Stock in the Option and Restricted Stock Pool;
(b) in the Option Price and the number of shares of Option Stock that may
be purchased pursuant to an outstanding Option granted hereunder;
(c) in the exercise price of any rights of repurchase or of first refusal
under this Plan; and
(d) with respect to other rights and matters determined on a per share
basis under this Plan or any associated Option Agreement or Restricted Stock
Agreement.
Any such adjustments will be made only by the Committee, and when so made
will be effective, conclusive and binding for all purposes with respect to this
Plan and all Options and Restricted Stock then outstanding. No such
adjustments will be required by reason of the issuance or sale by the Company
for cash or other consideration of additional shares of its Stock or securities
convertible into or exchangeable for shares of its Stock.
9. Proceeds from Sale of Option Stock. Cash proceeds from the sale of
shares of Option Stock issued from time to time upon the exercise of Options
granted pursuant to this Plan will be added to the general funds of the Company
and as such will be used from time to time for general corporate purposes.
10. Modification, Extension and Renewal of Options. Subject to the terms
and conditions and within the limitations of this Plan, the Committee may
modify, extend or renew outstanding Options granted under this Plan, but in no
event may the Committee change the Option Price as stated in the Option
Agreement, if expressed as a fixed dollar amount, or the manner in which the
Option Price is to be calculated as stated in the Option Agreement, if
expressed as a percentage of Fair Market Value at the time of the grant, a
market or peer group index, Designated Performance Criteria or otherwise.
Notwithstanding the foregoing, no modification of any Option will, without the
consent of the holder of the Option, alter or impair any rights or obligations
under any Option previously granted under this Plan.
11. Amendment and Discontinuance. The Committee may amend, and the Board
may suspend or discontinue, this Plan at any time, provided that:
(a) No such action may, without the approval of the stockholders of
the Company, increase the maximum total number of shares of Option Stock and
Restricted Stock that may be granted to an individual over the term of this
Plan, change the definition of "Company Performance Criteria" as that term is
used in this Plan, materially increase (other than by reason of an adjustment
pursuant to Section 8 hereof) the aggregate number of shares of Option Stock
and Restricted Stock in the Option and Restricted Stock Pool that may be
granted pursuant to this Plan, materially increase the benefits accruing to
Plan participants or materially modify eligibility requirements for
participation in the Plan;
(b) No action of the Committee will cause ISOs granted under this
Plan not to comply with Section 422 of the Code unless the Committee
specifically declares such action to be made for that purpose;
(c) No action of the Committee shall alter or impair any Option or
Restricted Stock previously granted or awarded under this Plan without the
consent of such affected Optionee or Restricted Stockholder.
12. Plan Binding upon Successors. This Plan shall be binding upon and
inure to the benefit of the Company, its Subsidiaries, and their respective
successors and assigns, and Eligible Participants and their respective assigns,
personal representatives, heirs, legatees and beneficiaries.
13. Plan Compliance with Rule 16b-3. With respect to persons subject to
Section 16 of the 1934 Act, transactions under this Plan
12
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any provision of the Plan or
action by the Plan administrators fails to comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Plan
administrators.
14. Notices. Any notice to be given to the Company under the terms of an
Option Agreement or a Restricted Stock Agreement will be addressed to First of
America Bank Corporation, 211 S. Rose Street, Kalamazoo, Michigan 49007,
Attention: Senior Vice President of Human Resources, or at such other address
as the Company may designate in writing. Any notice to be given to an Optionee
or Restricted Stockholder will be addressed to the Optionee or Restricted
Stockholder at the address provided to the Company by the Optionee or
Restricted Stockholder. Any such notice will be deemed to be given when
deposited in the United States mail at a post office or branch post office
regularly maintained by the United States Postal Service, with postage fully
prepaid, enclosed in a properly sealed envelope, and addressed as required
under this Section 14.
15 Governing Law. This Plan will be governed by, and construed in
accordance with, the laws of the State of Michigan.
16 Copies of Plan. A copy of this Plan will be delivered to each
Optionee at or before the time he or she executes an Option Agreement, and to
each Restricted Stockholder of Restricted Stock at or before the time he or she
executes a Restricted Stock Agreement.
# # #
Date Plan Adopted by Board of Directors: February 21, 1996
Date Plan Approved by Stockholders: April 17, 1996
Date First Amendment to Plan Adopted by the Nominating and
Compensation Committee: November 20, 1996