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EXHIBIT 10.7
FIRSTMERIT CORPORATION
AMENDED AND RESTATED
1996 STOCK OPTION AND INCENTIVE PLAN (SF)
Effective October 21, 2000
1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, advisory directors, officers and employees
of the Corporation and its Affiliates.
2. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Corporation as such terms are defined in Section 425(e) and
(f), respectively, of the Code.
"Award" - means the grant of an Incentive Stock Option, a
Non-Qualified Stock Option, or Restricted Stock or other property or securities,
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.
"Corporation" -- means FirstMerit Corporation, an Ohio
corporation, as successor in interest to Security First Corp.
"FirstMerit"--means FirstMerit 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(b) 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 average of the high and low quoted
sales price on the date in question (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
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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 mean between the closing
high bid and low asked quotations with respect to a Share on such date on the
Nasdaq Stock Market, or any similar system then in use, or, if no such
quotations are available, 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(b) of the Code.
"Option" -- means an Incentive Stock Option or a Non-Qualified
Stock Option.
"Participant" -- means any director, advisory director,
officer or employee of the Corporation or any Affiliate who is selected by the
Committee to receive an Award.
"Plan" -- means the FirstMerit Corporation 1996 Stock Option
and Incentive Plan (SF).
"Restricted Stock" -- means Shares awarded to a Participant by
the Committee pursuant to Section 5(c) hereof.
"Shares" -- means the shares of common stock of FirstMerit.
"Termination of Service" -- means cessation of service, for
any reason, whether voluntary or involuntary, as a director, advisory director,
officer or employee of the Corporation or any of its Affiliates.
3. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board of Directors of FirstMerit, which shall consist of two or
more members of the Board of Directors of the 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 FirstMerit. Except as limited by the express provisions of
the Plan or by resolutions adopted by the Board of Directors of FirstMerit, 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
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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 6, the
maximum number of shares with respect to which Awards may be made under the Plan
is 243,242 shares plus (i) 67,673 shares authorized but unissued under prior
Corporation stock option plans; plus (ii) the number of shares repurchased by
the Corporation in the open market or otherwise with an aggregate price no
greater than the cash proceeds received by the Corporation from the exercise of
Shares under the Plan; plus (iii) any Shares surrendered to the Corporation in
payment of the exercise price of Options issued under the Plan. 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 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 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 6.
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,
however, that such exercise price shall not be less than 100%
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.
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(iii) Time and Method of Exercise. The Committee
shall determine the time or times at which an Option may be
exercised in whole or in part and the method or methods by
which, and the form or forms (including, without limitation,
cash, Shares, other Awards or any combination thereof, having
a market value on the exercise date equal to the relevant
exercise price) in which, payment of the exercise price with
respect thereto may be made or deemed to have been made.
(iv) Incentive Stock Options. Incentive Stock Options
may be granted by the Committee only to employees of the
Corporation or its Affiliates.
(v) Termination of Service. Unless otherwise
determined by the Committee and set forth in the Award
Agreement evidencing the grant of the Option, upon Termination
of Service of the Participant for any reason other than for
Cause, all Options then currently exercisable shall remain
exercisable for three years following such Termination of
Service. Upon Termination of Service for Cause, all Options
not previously exercised shall immediately be forfeited.
(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.
(ii) 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 Corporation. Such certificate or
certificates shall be registered in the name of the
Participant and shall bear an appropriate legend referring to
the restrictions applicable to such Restricted Stock.
(iii) Forfeiture; Delivery of Shares. Except as
otherwise determined by the Committee, upon Termination of
Service during the applicable restriction period, all Shares
of Restricted Stock at such time subject to restriction shall
be forfeited and reacquired by the Corporation; provided,
however, that the Committee may waive in whole or in part any
or all remaining restrictions with respect to Shares of
Restricted Stock. Shares representing Restricted Stock that is
no longer subject to restrictions
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shall be delivered to the holder thereof promptly after the
applicable restrictions lapse or are waived.
6. 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 Corporation, 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 6
shall be subject to the same restrictions as the original Award.
7. EFFECT OF MERGER ON OPTIONS. In the case of any merger,
consolidation or combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the continuing
corporation and which does not result in the outstanding Shares 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 exercising the 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 Committee.
8. EFFECT OF CHANGE IN CONTROL. The term "Change in Control" shall mean
the occurrence of any one of the following events:
(a) individuals who, on April 19, 2000, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to April 19, 2000 whose election or nomination for election was approved by a
vote of at least 2/3rds of the Incumbent Directors then on the Board (either by
a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without written objection to
such nomination) shall be an Incumbent Director; provided, however, that no
director of the Company initially as a result of an actual or threatened
election contest with respect to directors or any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than the
Board shall be deemed to be an Incumbent Director;
(b) any "person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities eligible to
vote for the election of the Board (the
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"Company Voting Securities"); provided, however, that the event described in
this paragraph (b) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions:
(i) by the Company or any Subsidiary,
(ii) by any employee benefit plan sponsored or
maintained by the Company or any Subsidiary,
(iii) by any underwriter temporarily holding
securities pursuant to an offering of such securities,
(iv) pursuant to a Non-Control Transaction (as
defined in paragraph (c)), or
(v) a transaction (other than one described in (c)
below) in which Company Voting Securities are acquired from
the Company, if a majority of the Incumbent Directors then on
the Board approve a resolution providing expressly that the
acquisition pursuant to this clause (v) does not constitute a
Change in Control under this paragraph (b);
(c) the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the Company or
any of its Subsidiaries that requires the approval of the Company's
shareholders, whether for such transaction or the issuance of securities in the
transaction (a "Business Combination"), unless immediately following such
Business Combination:
(i) more than 50% of the total voting power of (x)
the corporation resulting from such Business Combination (the
"Surviving Entity"), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect
directors ("Total Voting Power") of the Surviving Entity (the
"Parent Entity"), is represented by Company Voting Securities
that were outstanding immediately prior to such Business
Combination (or, if applicable, shares into which such Company
Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof
is in substantially the same proportion as the voting power of
such Company Voting Securities among the holders thereof
immediately prior to the Business Combination,
(ii) no person (other than any employee benefit plan
(or related trusts) sponsored or maintained by the Surviving
Entity or the Parent Entity), is or becomes the beneficial
owner, directly or indirectly, of 25% or more of the Total
Voting Power of the outstanding voting securities eligible to
elect directors of the Parent Entity (or, if there is no
Parent Entity, the Surviving Entity), and
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(iii) at least a majority of the members of the board
of directors of the Parent Entity (or, if there is no Parent
Entity, the Surviving Entity) following the consummation of
the Business Combination were Incumbent Directors at the time
of the Board's approval of the execution of the initial
agreement providing for such Business Combination (any
Business Combination which satisfies all of the criteria
specified in (i), (ii) and (iii) above shall be deemed to be a
"Non-Control Transaction"); or
(d) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change in Control of the Company shall
not be deemed to occur solely because any person acquires beneficial ownership
of more than 25% of the Company Voting Securities as a result of the acquisition
of Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person by more than one percent, a Change
in Control of the Company shall then occur.
Upon a change in control, unless the Committee shall have otherwise
provided in the Award Agreement, any restricted period with respect to
Restricted Stock awarded to such Participant shall lapse and all Shares awarded
as Restricted Stock shall become fully vested in the Participant to whom such
Shares were awarded. If a tender offer or exchange offer for Shares (other than
such an offer by the Corporation) is commenced, or if the event specified in
clause (iii) above shall occur, unless the Committee shall have otherwise
provided in the Award Agreement, all Options granted and not fully exercisable
shall become exercisable in full upon the happening of such event; provided,
however, that no Option which has previously been exercised or otherwise
terminated shall become exercisable.
9. ASSIGNMENTS AND TRANSFERS. No Award granted under the Plan shall be
transferable otherwise than by will, the laws of descent and distribution or
pursuant to a qualified domestic relations order, except an Award may be
transferred 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 if the
Committee so specifies in the Award Agreement. 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 9 a Participant's
"immediate family" shall mean the Participant's spouse, children and
grandchildren.
10. 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 Corporation or any Affiliate. Neither the Plan nor
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any action taken thereunder shall be construed as giving any employee any right
to be retained in the employ of the Corporation or any Affiliate.
11. DELIVERY AND REGISTRATION OF STOCK. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other federal, state or local
securities legislation. It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under such Securities Act or
other securities legislation. The Corporation shall not be required to deliver
any Shares under the Plan prior to (i) the admission of such Shares to listing
on any stock exchange on which Shares may then be listed, and (ii) the
completion of such registration or other qualification of such Shares under any
state or federal law, rule or regulation, as the committee shall determine to be
necessary or advisable.
12. 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 Corporation shall have the right to require the Participant or
other person receiving such shares to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such shares,
or, in lieu thereof, to retain or sell without notice, a sufficient number of
shares held by it to cover the amount required to be withheld. The Corporation
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments.
The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a 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 Right pursuant to the Plan, the Corporation shall have the right to require
the Participant or such other person to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
All withholding decisions pursuant to this Section 12 shall be at the
sole discretion of the Committee or the Corporation.
13. AMENDMENT OR TERMINATION.
(a) The Board of Directors of the Corporation 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 Corporation'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
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may then be listed or quoted, or if the Board of Directors of the Corporation,
in its discretion, determines to seek such shareholder approval.
(b) Except with respect to Awards granted pursuant to Section
5(e) of the Plan, the Committee may waive any conditions of or rights of the
Corporation 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.
14. EFFECTIVE DATE AND TERM OF PLAN. The Plan became effective upon its
adoption by the Board of Directors of the Corporation, and the approval of the
Plan by the shareholders of the Corporation. It shall continue in effect for a
term of fifteen years unless sooner terminated under Section 13 hereof.
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