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Exhibit 10.13
FIRSTMERIT CORPORATION
1997 OMNIBUS INCENTIVE PLAN (SG)
1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Company and its stockholders by providing a means for
attracting and retaining directors, advisory directors, officers and employees
of the Company and its Affiliates.
2. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Company as such terms are defined in Section 425(e) and (f),
respectively, of the Code.
"Award" -- means the grant by the Committee under this Plan of an
Incentive Stock Option, a Non-Qualified Stock Option, a Stock Appreciation
Right, Restricted Stock or a Performance Award, or any combination thereof, as
provided in the Plan.
"Award Agreement" -- means the agreement evidencing the grant of an
Award made under the Plan.
"Cause" -- means Termination of Service by reason of personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties or gross
negligence.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee referred to in Section 3 hereof.
"Company" -- means FirstMerit Corporation, an Ohio corporation, as
successor in interest to Signal Corp.
"Continuous Service" -- means the absence of any interruption or
termination of service as a director, advisory director, officer or employee of
the Company or an Affiliate, except that when used with respect to a person
granted an Incentive Stock Option means the absence of any interruption or
termination of service as an employee of the Company or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company or in the case of transfers
between payroll locations of the Company or between the Company, its parent, its
subsidiaries or its successor.
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"Early Retirement" -- means retirement from employment with or as a
director or advisory director of the Company prior to the Participant either (i)
having reached the age of 55 or (ii) having maintained Continuous Service for at
least three years.
"ERISA" -- means the Employee Retirement Income Security Act of
1974, as amended.
"FirstMerit Corporation" -- FirstMerit Corporation, an Ohio
corporation.
"Incentive Stock Option" -- means an option to purchase Shares
granted by the Committee which is intended to qualify as an Incentive Stock
Option under Section 422 of the Code. Unless otherwise set forth in the Award
Agreement, any Option which does not qualify as an Incentive Stock Option for
any reason shall be deemed a Non-Qualified Stock Option.
"Market Value" -- means the closing high bid with respect to a
Share on the date in question on the Nasdaq Stock Market, or any similar system
then in use, or, if the Shares are not then traded on the Nasdaq Stock Market or
any similar system, the closing sales price on such date (or, if there is no
reported sale on such date, on the last preceding date on which any reported
sale occurred) of a Share on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if on such date the Shares are not quoted on the
Composite Tape, on the New York Stock Exchange, or if the Shares are not listed
or admitted to trading on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 (the
"Exchange Act") on which the Shares are listed or admitted to trading, or, if
the Shares are not listed or admitted to trading on any such exchange, the fair
market value on such date of a Share as the Committee shall determine.
"Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee which does not qualify, for any reason, as an Incentive
Stock Option under Section 422 of the Code.
"Normal Retirement" -- means retirement from employment with or as
a director or advisory director of the Company after the Participant has (i)
reached the age of 65 and (ii) maintained Continuous Service for at least three
years.
"Option" -- means an Incentive Stock Option or a Non-Qualified
Stock Option.
"Participant" -- means any director, advisory director, officer or
employee of the Company or any Affiliate who is selected by the Committee to
receive an Award.
"Plan" -- means the FirstMerit Corporation 1997 Omnibus Incentive
Plan (SG).
"Restricted Stock" -- means Shares awarded to a Participant by the
Committee pursuant to Section 5(c) hereof.
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"Shares" -- means the shares of common stock of FirstMerit
Corporation.
"Ten Percent Holder" -- means any individual who owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company and any Affiliate.
3. ADMINISTRATION. The Plan shall be administered by a Committee
consisting of two or more members of the Board of Directors of FirstMerit
Corporation, each of whom (i) shall be an outside director as defined under
Section 162(m) of the Code and the regulations thereunder and (ii) shall be a
Non-Employee Director as defined under Rule 16(b) of the Securities Exchange Act
of 1934 or any similar or successor provision. The members of the Committee
shall be appointed by the Board of Directors of the Company. Except as limited
by the express provisions of the Plan or by resolutions adopted by the Board of
Directors of the Company, the Committee shall have sole and complete authority
and discretion to (i) select Participants and grant Awards; (ii) determine the
number of Shares to be subject to types of Awards generally, as well as to
individual Awards granted under the Plan; (iii) determine the terms and
conditions upon which Awards shall be granted under the Plan; (iv) prescribe the
form and terms of instruments evidencing such grants; and (v) establish from
time to time regulations for the administration of the Plan, interpret the Plan,
and make all determinations deemed necessary or advisable for the administration
of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. SHARES SUBJECT TO PLAN.
(a) Subject to adjustment by the operation of Section 7, the
maximum number of Shares with respect to which Awards may be made under the Plan
is 438,011 Shares. The Shares with respect to which Awards may be made under the
Plan may be either authorized and unissued shares or previously issued shares
reacquired and held as treasury shares. Shares which are subject to Related
Stock Appreciation Rights and Related Options shall be counted only once in
determining whether the maximum number of Shares with respect to which Awards
may be granted under the Plan has been exceeded. An Award shall not be
considered to have been made under the Plan with respect to any Option or Stock
Appreciation Right which terminates or with respect to Restricted Stock which is
forfeited, and new Awards may be granted under the Plan with respect to the
number of Shares as to which such termination or forfeiture has occurred.
(b) During any calendar year, no Participant may be granted Awards
under the Plan with respect to more than 50,000 Shares, subject to adjustment as
provided in Section 7.
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5. AWARDS.
(a) Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine, including the granting of Options in tandem with
other Awards under the Plan:
(i) Exercise Price. The exercise price per Share for an Option
shall be determined by the Committee; provided that, in the case of
an Incentive Stock Option, the exercise price thereof shall not be
less than 100% of the Market Value of a Share on the date of grant
of such Option; provided further that, in the case of an Incentive
Stock Option granted to a Ten Percent Holder, the exercise price
thereof shall not be less than 110% of the Market Value of a Share
on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by
the Committee, but shall be no greater than 15 years; provided
that, in the case of an Incentive Stock Option, the term of such
Option shall not exceed ten years; provided further that, in the
case of an Incentive Stock Option granted to a Ten Percent Holder,
the term of such option shall not exceed five years.
(iii) Time and Method of Exercise. Except as provided in
paragraph (a) of Section 6, no Option granted hereunder may be
exercised unless at the time the Participant exercises such Option,
such Participant has maintained Continuous Service since the date
of grant of such Option. To exercise an Option under the Plan, the
Participant to whom such Option was granted shall give written
notice to the Company in form satisfactory to the Committee (and,
if partial exercises have been permitted by the Committee, by
specifying the number of Shares with respect to which such
Participant elects to exercise such Option) together with full
payment of the exercise price, if any and to the extent notice is
received by the Company. Payment, if any is required, shall be made
either (i) in cash (including check, bank draft or money order) or
(ii) by delivering (A) Shares already owned by the Participant and
having a fair market value equal to the applicable exercise price,
such fair market value to be determined in such appropriate manner
as may be provided by the Committee or as may be required in order
to comply with or to conform to requirements of any applicable laws
or regulations, or (B) a combination of cash and such Shares.
(iv) Option Agreements. At the time of an Award of an Option,
the Participant shall enter into an Award Agreement with the
Company in a form specified by the Committee, agreeing to the terms
and conditions of the Award and such other matters as the Committee
shall in its sole discretion determine.
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(v) Limitations on Value of Exercisable Incentive
Stock Options. The aggregate Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the
first time by a Participant in any calendar year shall not exceed
$100,000.
(vi) Eligible Recipients of Incentive Stock Options. Incentive
Stock Options may be granted by the Committee only to officers or
employees of the Company or its Affiliates.
(b) Restricted Stock. The Committee is hereby authorized to
grant Awards of Restricted Stock to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock shall be subject
to such restrictions as the Committee may impose (including,
without limitation, any limitation on the right to vote a Share of
Restricted Stock or the right to receive any dividend or other
right or property with respect thereto), which restrictions may
lapse separately or in combination at such time or times, in such
installments or otherwise as the Committee may deem appropriate.
During the period of time in which the Shares awarded as Restricted
Stock are subject to the restrictions contemplated herein (a
"Restricted Period"), unless otherwise permitted by the Plan or by
the Committee as provided in the applicable Award Agreement, such
Shares may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant. Except for the restrictions which
may be imposed on Restricted Stock, a Participant to whom Shares of
Restricted Stock have been awarded shall have all the rights of a
stockholder, including but not limited to the right to receive all
dividends paid on such Shares and the right to vote such Shares.
(ii) Restricted Stock Agreements. At the time of an Award of
Shares of Restricted Stock, the Participant shall enter into an
Award Agreement with the Company in a form specified by the
Committee, agreeing to the terms and conditions of the Award and
such other matters as the Committee shall in its sole discretion
determine.
(iii) Stock Certificates. Any Restricted Stock granted under
the Plan shall be evidenced by issuance of a stock certificate or
certificates, which certificate or certificates shall be held by
the Company. Such certificate or certificates shall be registered
in the name of the Participant and shall bear the following (or
similar) legend:
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"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in the FirstMerit
Corporation 1997 Omnibus Incentive Plan (SG) and an Agreement
entered into between the registered owner and FirstMerit
Corporation (as successor in interest to Signal Corp.) Copies
of such Plan and Agreement are on file in the offices of the
Secretary of FirstMerit Corporation, III Cascade Plaza, Akron,
Ohio 44308.
(iv) Removal of Restrictions. Shares representing Restricted
Stock that are no longer subject to restrictions shall be delivered
to the holder thereof promptly after the applicable restrictions
lapse or are waived.
6. TERMINATION OF SERVICE.
(a) Options and Stock Appreciation Rights.
(i) If a Participant to whom an Option was granted shall cease
to maintain Continuous Service for any reason (including total and
partial disability and Early Retirement, but excluding Normal
Retirement, death and termination of employment by the Company or
any Affiliate for Cause), such Participant may, but only within the
period of three months, in the case of an Incentive Stock Option,
or one year, in the case of a Non-Qualified Stock Option,
immediately succeeding such cessation of Continuous Service and in
no event after the expiration date of such Option, exercise such
Option to the extent that such Participant was entitled to exercise
such Option at the date of such cessation of Continuous Service. If
the Continuous Service of a Participant to whom an Option was
granted by the Company is terminated for Cause, all rights under
any Option of such Participant shall expire immediately upon the
giving to the Participant of notice of such termination.
(ii) If a Participant to whom an Option was granted shall cease
to maintain Continuous Service due to Normal Retirement, such
Participant may, but only within the period of three months, in the
case of an Incentive Stock Option, or two years, in the case of a
Non-Qualified Stock Option, immediately succeeding such cessation
of Continuous Service and in no event after the expiration date of
such Option, exercise such Option to the extent that such
Participant was entitled to exercise such Option at the date of
such cessation of Continuous Service.
(iii) In the event of the death of a Participant while in the
Continuous Service of the Company or an Affiliate or within the
periods referred to in paragraphs (a)(i) and (a)(ii) of this
Section 6, the person to whom any Option held by the Participant at
the time of his or her death is transferred by will or the laws of
descent and distribution or in the case of an Award other than an
Incentive Stock Option,
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pursuant to a qualified domestic relations order, as defined in the
Code or Title I of ERISA or the rules thereunder, or as otherwise
permitted to be transferred under Section 10 of the Plan may, but
only within the period of two years immediately succeeding the date
of death of such Participant, and in no event after the expiration
date of such Option, exercise such Option to the extent that such
Participant was entitled to exercise such Option immediately prior
to his death. Following the death of any Participant to whom an
Option was granted under the Plan, the Committee may, as an
alternative means of settlement of such Option, elect to pay to the
person to whom such Option is transferred as permitted by Section
10 of this Plan, the amount by which the Market Value per Share on
the date of exercise of such Option shall exceed the exercise price
of such Option, multiplied by the number of Shares with respect to
which such Option is properly exercised. Any such settlement of an
Option shall be considered an exercise of such Option for all
purposes of the Plan.
(iv) Notwithstanding the provisions of subparagraphs (i)
through (iii) above, the Committee may, in its sole discretion,
establish different terms and conditions pertaining to the effect
of termination to the extent permitted by applicable federal and
state law.
(b) Restricted Stock. Except as otherwise provided in this Plan, if
a Participant ceases to maintain Continuous Services for any reason (other than
death, total or partial disability or Normal or Early Retirement) unless the
Committee, in its sole discretion, shall otherwise determine, all shares of
Restricted Stock theretofore awarded to such Participant and which at the time
of such termination of Continuous Service are subject to the restrictions
imposed by paragraph (c)(i) of Section 5 shall upon such termination of
Continuous Service be forfeited and returned to the Company. Unless the
Committee, in its sole discretion, shall otherwise determine, if a Participant
ceases to maintain Continuous Service by reason of death, total or partial
disability or Normal or Early Retirement, all shares of Restricted Stock
theretofore awarded to such Participant and which at the time of such
termination of Continuous Service are subject to the restrictions imposed by
paragraph (c)(i) of Section 5 shall upon such termination of Continuous Service
be free of restrictions and shall not be forfeited.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Company, the maximum aggregate number and
class of shares and exercise price of the Award, if any, as to which Awards may
be granted under the Plan and the number and class of shares and exercise price
of the Award, if any, with respect to which Awards have been granted under the
Plan shall be appropriately adjusted by the Committee, whose determination shall
be conclusive. Any Award which is adjusted as a result of this Section 7 shall
be subject to the same restrictions as the original Award.
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8. EFFECT OF MERGER ON OPTIONS. In the case of any merger,
consolidation or combination of the Company (other than a merger, consolidation
or combination in which the Company is the continuing corporation and which does
not result in the outstanding Shares being converted into or exchanged for
different securities, cash or other property, or any combination thereof), any
Participant to whom an Option has been granted shall have the right (subject to
the provisions of the Plan and any limitation applicable to such Option),
thereafter and during the term of each such Option, to receive, in lieu of
exercise of any such Option, an amount equal to the excess of the fair market
value on the date of such exercise of the securities, cash or other property, or
combination thereof, receivable upon such merger, consolidation or combination
in respect of a Share over the exercise price of such or Option, multiplied by
the number of Shares with respect to which such Option shall have been
exercised. Such amount may be payable fully in cash, fully in one or more of the
kind or kinds of property payable in such merger, consolidation or combination,
or partly in cash and partly in one or more of such kind or kinds of property,
all in the discretion of the Participant.
9. EFFECT OF CHANGE IN CONTROL. Each of the events specified in the
following clauses (i) through (iii) of this Section 9 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Company with respect to which 25% or more of the total
number of votes for the election of the Board of Directors of the Company may be
cast, (ii) as a result of, or in connection with, any cash tender offer, merger
or other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the Company
shall cease to constitute a majority of the Board of Directors of the Company,
or (iii) the stockholders of the Company shall approve an agreement providing
either for a transaction in which the Company will cease to be an independent
publicly-owned corporation or for a sale or other disposition of all or
substantially all the assets of the Company. Upon a change in control, unless
the Committee shall have otherwise provided in the applicable Award Agreement,
any restrictions or vesting period with respect to any outstanding Awards shall
lapse and all such Awards shall become fully vested in the Participant to whom
such Awards were awarded; provided, however, that no Award which has previously
been exercised or otherwise terminated shall become exercisable.
10. ASSIGNMENTS AND TRANSFERS. No Award granted under the Plan shall
be transferable otherwise than by will or the laws of descent and distribution,
except that an Award other than an Incentive Stock Option may be transferred
pursuant to a qualified domestic relations order or by gift to any member of the
Participant's immediate family or to a trust for the benefit of one or more of
such immediate family members. During the lifetime of an Award recipient, an
Award shall be exercisable only by the Award recipient unless it has been
transferred as permitted hereby, in which case it shall be exercisable only by
such transferee. For the purpose of this Section 10 a Participant's "immediate
family" shall mean the Participant's spouse, children and grandchildren.
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11. EMPLOYEE RIGHTS UNDER THE PLAN. No person shall have a right to be
selected as a Participant nor, having been so selected, to be selected again as
a Participant and no officer, employee or other person shall have any claim or
right to be granted an Award under the Plan or under any other incentive or
similar plan of the Company or any Affiliate. Neither the Plan nor any action
taken thereunder shall be construed as giving any employee any right to be
retained in the employ of or serve as a director or advisory director of the
Company or any Affiliate.
12. DELIVERY AND REGISTRATION OF STOCK. The Company's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other federal, state or local
securities legislation. It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under such Securities Act or
other securities legislation. The Company shall not be required to deliver any
Shares under the Plan prior to (i) the admission of such Shares to listing on
any stock exchange on which Shares may then be listed, and (ii) the completion
of such registration or other qualification of such Shares under any state or
federal law, rule or regulation, as the committee shall determine to be
necessary or advisable.
13. WITHHOLDING TAX. Upon the termination of the restricted period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Company shall have the right to require the Participant or other
person receiving such shares to pay the Company the amount of any taxes which
the Company is required to withhold with respect to such shares, or, in lieu
thereof, to retain or sell without notice, a sufficient number of shares held by
it to cover the amount required to be withheld. The Company shall have the right
to deduct from all dividends paid with respect to shares of Restricted Stock the
amount of any taxes which the Company is required to withhold with respect to
such dividend payments.
The Company shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Stock Appreciation Right under the Plan
any taxes required by law to be withheld with respect to such cash payments.
Where a Participant or other person is entitled to receive Shares pursuant to
the exercise of an Option or Stock Appreciation Right pursuant to the Plan, the
Company shall have the right to require the Participant or such other person to
pay the Company the amount of any taxes which the Company is required to
withhold with respect to such Shares, or, in lieu thereof, to retain, or sell
without notice, a number of such Shares sufficient to cover the amount required
to be withheld.
All withholding decisions pursuant to this Section 13 shall be at the
sole discretion of the Committee or the Company.
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14. AMENDMENT OR TERMINATION.
(a) Subject to paragraph (b) of this Section 14, the Board of
Directors of the Company may amend, alter, suspend, discontinue, or terminate
the Plan without the consent of shareholders or Participants, except that any
such action will be subject to the approval of the Company's shareholders if,
when and to the extent such shareholder approval is necessary or required for
purposes of any applicable federal or state law or regulation or the rules of
any stock exchange or automated quotation system on which the Shares may then be
listed or quoted, or if the Board of Directors of the Company, in its
discretion, determines to seek such shareholder approval.
(b) Except as otherwise provided herein, the Committee may waive
any conditions of or rights of the Company or modify or amend the terms of any
outstanding Award. The Committee may not, however, amend, alter, suspend,
discontinue or terminate any outstanding Award without the consent of the
Participant or holder thereof, except as otherwise herein provided.
15. EFFECTIVE DATE AND TERM OF PLAN. The plan shall become effective
upon its adoption by the Board of Directors of the Company, subject to the
approval of the Plan by the shareholders of the Company. It shall continue in
effect for a term of 15 years unless sooner terminated under Section 14 hereof.
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