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EXHIBIT 10.9
FIRSTMERIT CORPORATION
AMENDED AND RESTATED
1989 STOCK INCENTIVE PLAN (SB)
Effective October 21, 2000
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FIRSTMERIT CORPORATION
AMENDED AND RESTATED
1989 STOCK INCENTIVE PLAN (SB)
Effective October 21, 2000
TABLE OF CONTENTS
PAGE
1. Establishment, Purpose, and Effective Date of Plan.......................................................1
1.1 Establishment ..................................................................................1
1.2 Purpose ........................................................................................1
1.3 Effective Date .................................................................................1
2. Definitions .............................................................................................1
2.1 Definitions ....................................................................................1
2.2 Gender and Number ..............................................................................3
3. Eligibility and Participation ...........................................................................3
3.1 Eligibility and Participation ..................................................................3
3.2 Eligible Directors .............................................................................3
4. Administration ..........................................................................................3
5. Stock Subject to Plan ...................................................................................3
5.1 Number .........................................................................................3
5.2 Unused Stock ...................................................................................4
5.3 Adjustment in Capitalization ...................................................................4
6. Duration of Plan .......................................................................................4
7. Stock Options ...........................................................................................4
7.1 Grant of Options Other than Director Stock Options .............................................4
7.2 Grant of Director Stock Options ................................................................5
7.3 Option Agreement ...............................................................................5
7.4 Option Price ...................................................................................5
7.5 Duration of Options ............................................................................5
7.6 Exercise of Options ............................................................................6
7.7 Payment ........................................................................................6
7.8 Restrictions on Stock Transferability ..........................................................6
7.9 Termination of Employment for Specific Reasons .................................................6
7.10 Termination of Employment For Other Than Section 7.9 Reasons ...................................6
7.11 Termination of Eligible Director Shares ........................................................7
7.12 Nontransferability of Options ..................................................................7
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PAGE
8. Restricted Stock Awards .................................................................................7
8.1 Grant of Restricted Stock ......................................................................7
8.2 Transferability ................................................................................7
8.3 Other Restrictions .............................................................................7
8.4 Certificate Legend .............................................................................7
8.5 Removal of Restrictions ........................................................................8
8.6 Voting Rights ..................................................................................8
8.7 Dividends and Other Distributions ..............................................................8
8.8 Termination of Employment ......................................................................8
9. Beneficiary Designation .................................................................................8
10. Rights of Employees .....................................................................................8
10.1 Employment .....................................................................................8
10.2 Participation ..................................................................................8
11. Change in Control .......................................................................................9
11.1 In General .....................................................................................9
11.2 Limitation on Payments .........................................................................9
11.3 Definition .....................................................................................9
12. Amendment, Modification, and Termination of Plan .......................................................11
13. Tax Withholding ........................................................................................11
14. Indemnification ........................................................................................12
15. Requirements of Law ....................................................................................13
15.1 Requirements of Law ...........................................................................13
15.2 Governing Law .................................................................................13
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FIRSTMERIT CORPORATION
AMENDED AND RESTATED
1989 STOCK INCENTIVE PLAN (SB)
Effective October 21, 2000
1. ESTABLISHMENT, PURPOSE AND EFFECTIVE DATE OF PLAN
1.1 ESTABLISHMENT. FirstMerit Corporation, an Ohio corporation
("Corporation") established the "1989 Stock Incentive Plan (SB)" ("Plan") for
key employees of the Corporation and its subsidiaries and for directors of the
Corporation who are not employees of the Corporation or any of its subsidiaries.
The Plan permits the grant of "Director Stock Options" to such directors and the
grant of "Stock Options," and "Restricted Stock Awards," (all as defined below)
to such employees.
1.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Corporation by encouraging and providing for the acquisition of an equity
interest in the Corporation by directors of the Corporation and key employees of
the Corporation and its subsidiaries and by enabling the Corporation to attract
and retain the services of such directors and key employees upon whose judgment,
interest, and special effort the successful conduct of its operations is largely
dependent.
1.3 EFFECTIVE DATE. The Plan shall become effective as of the date of
its adoption by the Board of Directors of the Corporation, subject to
ratification by the shareholders of the Corporation within twelve months of the
adoption date.
2. DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have
their meanings set forth below:
"Award" means any Option, Stock Appreciation Right, Restricted
Stock Awards, Performance Share, or Performance Award.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of FirstMerit
Corporation's Board of Directors which shall consist of three or more directors
appointed by such Board. These directors shall be "disinterested persons" within
the meaning of Rule 16b-3 of the Securities Exchange Act of 1934.
"Corporation" means FirstMerit Corporation, a bank holding
company under the Bank Holding Company Act of 1956 headquartered in Akron, Ohio,
and its successors.
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"Disability" means disability as determined by the Committee.
"Director Stock Option" means an Option granted to an Eligible
Director. Each Director Stock Option shall be a nonqualified stock option the
grant of which is not intended to fall under the provisions of Section 422A of
the Code.
"Eligible Director" means any statutory director of the
Corporation who is not an employee of the Corporation or any of its
subsidiaries.
"Fair Market Value" means the closing price of the Stock as
reported on the principal United States securities exchange registered under the
Exchange Act on which such Stock is listed, or, if such Stock is not listed on
any such exchange, the highest closing bid quotation with respect to a share of
such Stock on the National Association of Securities Dealers, Inc. Automated
Quotations System or any substantially equivalent system then in use on a
particular date. In the event that there are no Stock transactions on such date,
the Fair Market Value shall be determined as of the immediately preceding date
on which there were Stock transactions.
"FirstMerit Corporation" means FirstMerit Corporation, an Ohio
corporation.
"Option" means the right to purchase Stock at a stated price
for a specified period of time. For purposes of the Plan an Option, other than a
Director Stock Option, may be either (i) an incentive stock option within the
meaning of Section 422A of the Code or (ii) a nonqualified stock option whose
grant is intended to fall under the provisions of Section 422A.
"Option Agreement" means an agreement entered into between the
Corporation and an employee or an Eligible Director in the form prescribed by
the Committee.
"Option Price" means the price at which each share of Stock
subject to an Option may be purchased, determined in accordance with Sections
8.1 and 8.4 herein.
"Participant" means any individual, other than an Eligible
Director, designated by the Committee to participate in the Plan pursuant to
Section 3.1 herein.
"Period of Restriction" means the period during which the
transfer of shares of Restricted Stock is restricted pursuant to Section 8 of
the Plan.
"Restricted Stock" means Stock granted to a Participant
pursuant to Section 8 of the Plan.
"Restricted Stock Agreement" means an agreement entered into
between the Corporation and the Employee in the form prescribed by the
Committee.
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"Retirement," "Normal Retirement," and "Early Retirement"
means termination of employment upon the normal retirement age set by the Board
of Directors.
"Stock" means the common stock of FirstMerit Corporation.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
words in the masculine gender when used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
3. ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY AND PARTICIPATION. Participants in the Plan shall be
selected by the Committee from among those employees of the Corporation and its
subsidiaries who are recommended for participation by the Chief Executive
Officer of the Corporation and who, in the opinion of the Committee, are in a
position to contribute materially to the Corporation's continued growth,
development, and long-term financial success. Persons serving on the Committee
shall not be eligible to be a Participant.
3.2 ELIGIBLE DIRECTORS. Eligible Directors are entitled to participate
in the Plan solely with respect to the grant of Director Stock Options and may
not receive any other Award under the Plan. The selection of Eligible Directors
is not subject to the discretion of the Committee. Persons serving on the
Committee who are Eligible Directors may receive grants of Director Stock
Options.
4. ADMINISTRATION
The Committee shall be responsible for the administration of the Plan.
The Committee, by majority action thereof, is authorized to interpret the Plan,
to prescribe, amend, and rescind rules and regulations relating to the Plan, to
provide for conditions and assurances deemed necessary or advisable to protect
the interests of the Corporation, and to make all other determinations necessary
or advisable for the administration of the Plan, but only to the extent not
contrary to the explicit provisions of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee pursuant to the
provisions of the Plan shall be final and binding and conclusive for all
purposes and upon all persons whomsoever.
5. STOCK SUBJECT TO PLAN
5.1 NUMBER. The total number of shares of Stock subject to issuance
under the Plan may not exceed ten percent (10%) of the total shares of capital
stock of the Company issued and outstanding at any time subject to adjustment
upon occurrence of any of the events indicated in Subsection 5.3. The shares to
be delivered under the Plan may consist, in whole or in part, of authorized but
unissued Stock or issued stock reacquired and held as treasury Stock not
reserved for any other purpose.
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5.2 UNUSED STOCK. In the event any shares of Stock that are subject to
an Option which, for any reason, expires or is terminated unexercised as to such
shares, or any shares of Stock subject to a Restricted Stock grant made under
the Plan are reacquired by the Corporation pursuant to the Plan, such shares
again shall become available for issuance under the Plan.
5.3 ADJUSTMENT IN CAPITALIZATION. In the event that subsequent to the
date of the Plan by the Board the shares of Stock should as a result of a stock
split, stock dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or other such change, be increased or decreased
or changed into or exchanged for a different number or kind of shares of Stock
or other securities of the Corporation or of another corporation, then (a) there
shall automatically be substituted for each share of Stock subject to an
unexercised Option (in whole or in part) granted under the Plan and each share
of Stock available for additional grants of Options under the Plan the number
and kind of shares of Stock or other securities into which each outstanding
share of Stock shall be changed or for which each such Share shall be exchanged,
(b) the Option Price shall be increased or decreased proportionately so that the
aggregate purchase price for the securities subject to the Option shall remain
the same as immediately prior to such event and (c) the Board shall make such
other adjustments to the securities subject to Options and the provisions of the
Plan and Option Agreements as may be appropriate and equitable. Any such
adjustment may provide for the elimination of fractional shares. In such event,
the Committee also shall have discretion to make appropriate adjustments in the
number and type of shares subject to Restricted and Performance Share grants
then outstanding under the Plan pursuant to the terms of such grants or
otherwise.
6. DURATION OF PLAN
The Plan shall remain in effect, subject to the Board's right to
earlier terminate the Plan pursuant to Section 16 hereof, until all Stock
subject to it shall have been purchased or acquired pursuant to the provisions
hereof. Notwithstanding the foregoing, no Option, Stock Appreciation Right,
Restricted Stock, Performance Share, or Performance Award may be granted under
the Plan on or after the tenth (10th) anniversary of the Plan's effective date.
7. STOCK OPTIONS
7.1 GRANT OF OPTIONS OTHER THAN DIRECTOR STOCK OPTIONS. Subject to the
provisions of Sections 5 and 6, Options other than Director Stock Options may be
granted to Participants at any time and from time to time as shall be determined
by the Committee. The Committee shall have complete discretion in determining
the number of Options granted to each Participant. The Committee also shall
determine whether an Option is to be an incentive stock option within the
meaning of Code Section 422A, or a nonqualified stock option whose grant is
intended not to fall within the provisions of Section 422A. However, in no event
shall the aggregate Fair Market Value (determined at the date of grant) of the
stock of which incentive stock options are first exercisable in a particular
calendar year exceed $100,000, computed in accordance with Section 422A(b)(7) of
the Code.
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An incentive stock option shall only be granted to a person who owns,
directly or indirectly, Stock possessing more than ten percent (10%) of the
total combined voting power of all classes of Stock of the Corporation, if the
price of any such Option is at least one hundred and ten percent (110%) of the
Fair Market Value of the Stock subject to the Option and the Option by its terms
is not exercisable more than five (5) years from the date it is granted.
Nothing in this Section 7 shall be deemed to prevent the grant of
nonqualified stock options in excess of the maximum established by Section 422A
of the Code.
7.2 GRANT OF DIRECTOR STOCK OPTIONS. [THIS PROVISION WAS TERMINATED
EFFECTIVE UPON THE MERGER OF SIGNAL CORPORATION WITH AN INTO FIRSTMERIT
CORPORATION.] Subject to the provisions of Sections 5 and 6, Director Stock
Options shall be granted to Eligible Directors as provided in this Section 7.2
and the Committee shall have no discretion with respect to any matters set forth
in this Section 7.2.
(a) VESTING. Each Director Stock Option shall become
exercisable on and after the first anniversary of the date of the grant.
(b) NUMBER OF SHARES. Commencing immediately after the
adjournment of the Corporation's annual meeting of shareholders ("Annual
Meeting") in 1991 and immediately after the adjournment of the Annual Meeting
each year thereafter, any Eligible Director who was an Eligible Director
immediately preceding such Annual Meeting and who has been elected as a director
at such Annual Meeting shall automatically be granted a Director Stock Option
for fifty (50) shares of Stock if, but only if, the return on common equity of
the Corporation as set forth in the Corporation's annual report to shareholders
for the immediately preceding fiscal year is equal to or greater than ten
percent (10%).
7.3 OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement that shall specify the type of Option granted, the Option Price, the
duration of the Option, the number of shares of Stock to which the Option
pertains, and such other provisions as the Committee shall determine.
7.4 OPTION PRICE. No Option granted pursuant to the Plan shall have an
Option Price that is less than the Fair Market Value of the Stock on the date
the Option is granted.
7.5 DURATION OF OPTIONS. Each Option, other than Director Stock Options
and Options granted to a person who owns, directly or indirectly, Stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of Stock of the Corporation, shall expire at such time as the Committee
shall determine at the time it is granted; provided, however, that no Option,
other than incentive stock options within the meaning of Section 422A of the
Code, shall be exercisable later than twenty (20) years and one day from the
date of its grant and no such incentive stock option shall be exercisable more
than ten (10) years and one day from the date of grant. No Director Stock Option
may be exercisable later than twenty (20) years and one day from the date of its
grant.
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7.6 EXERCISE OF OPTIONS. Options granted under the Plan other than
Director Stock Options shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance approve,
which need not be the same for all Participants.
7.7 PAYMENT. The Option Price upon exercise of any Option shall be
payable to the Corporation in full either (i) in cash or its equivalent, or (ii)
by tendering shares of previously acquired Stock having a Fair Market Value at
the time of exercise equal to the total Option Price, or (iii) by a combination
of (i) and (ii). The proceeds from such a payment shall be added to the general
funds of the Corporation and shall be used for general corporate purposes. As
soon as practicable after receipt of full payment (including the necessary tax
withholding), the Corporation shall deliver to the Participant or the Eligible
Director, as the case may be, Stock certificates in an appropriate amount based
upon the number of Options exercised, issued in the name of the Participant or
the Eligible Director, as the case may be.
7.8 RESTRICTIONS ON STOCK TRANSFERABILITY. The Committee shall impose
such restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities law, under the requirements of
any stock exchange upon which such shares of Stock are then listed under any
blue sky or state securities laws applicable to such shares.
7.9 TERMINATION OF EMPLOYMENT FOR SPECIFIC REASONS. In the event the
employment of a Participant is terminated for any reason, any outstanding Option
granted pursuant to the Plan and any rights thereunder shall be exercisable by
the Participant (or in the case of a deceased Participant by his legal
representative) only to the extent of the accrued right to exercise such Option
at the date of such termination; provided, however, if such termination is by
reason of death or disability or, with the prior consent of the Committee, by
reason of resignation or retirement, and if at the date of such termination the
Participant had completed twelve (12) full months of employment after the date
of the Option grant the Committee may, in its sole discretion, permit the
exercise of all or any portion of the Option not otherwise exercisable and may
provide that all or some portion of the Option shall not terminate upon or by
virtue of such employment termination. To the extent that such Option is
exercisable at termination or, as the result of Committee approval, becomes
exercisable at termination it must be exercises prior to the expiration of the
expiration date of the Option or within twelve (12) months and five (5) days
after such date of termination of employment, whichever period is shorter.
However, in the case of incentive stock options, the favorable tax treatment
prescribed under Section 422A of the Code shall not be available if such Option
is not exercised within the required statutory period as specified in Section
422A.
7.10 TERMINATION OF EMPLOYMENT FOR OTHER THAN SECTION 7.9 REASONS. If
the employment of the Participant shall terminate for any reason other than one
of those specified in Section 7.9 of the Plan, the rights under any then
outstanding Option granted pursuant to the Plan which, pursuant to the terms of
the Option Agreement between the Participant and the Corporation, is exercisable
as of the date of such termination, shall terminate upon the expiration date of
the Option or three (3) months after such date of termination of employment,
whichever first occurs. In its sole discretion, the Committee may extend the
three (3) months up to twelve (12) months and five (5) days, but in no event
beyond the expiration date of the Option.
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7.11 TERMINATION OF ELIGIBLE DIRECTOR SHARES. In the event that an
Eligible Director ceases to be an Eligible Director for any reason, the rights
under any then outstanding Director Stock Option granted pursuant to the Plan
which are exercisable as of the date he ceases to be an Eligible Director shall
terminate upon the date determined as provided in Section 8.5 above, or three
(3) months after such cessation date, whichever first occurs; provided, however,
that if he ceases to be an Eligible Director by reason of death, the three (3)
month period shall be extended to the sooner of twelve (12) months and five (5)
days or the expiration date of the Director Stock Option.
7.12 NONTRANSFERABILITY OF OPTIONS. No Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution.
All Options granted to a Participant or an Eligible Director under the Plan
shall be exercisable during his lifetime only by such Participant or Eligible
Director.
8. RESTRICTED STOCK AWARDS
8.1 GRANT OF RESTRICTED STOCK. Subject to the provisions of Sections 5
and 6, the Committee, at any time and from time to time, may award shares of
Restricted Stock under the Plan to such Participants and in such amounts as it
shall determine. Each Restricted Stock Award shall be evidenced by a Restricted
Stock Agreement that shall specify the Period or Periods of Restriction, the
number of Restricted Stock shares awarded, and such other provisions as the
Committee shall determine.
8.2 TRANSFERABILITY. Except as provided in this Section 8, the shares
of Restricted Stock awarded hereunder may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated for such period of time as
shall be determined by the Committee and shall be specified in the Restricted
Stock Agreement, or upon earlier satisfaction of other conditions as specified
by the Committee in its sole discretion and set forth in the Restricted Stock
Agreement.
8.3 OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any shares of Restricted Stock awarded pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable federal or state securities or tax laws, and may legend the
certificates representing Restricted Stock to give appropriate notice of such
restrictions.
8.4 CERTIFICATE LEGEND. In addition to any legends placed on
certificates pursuant to Section 8.3 hereof, each certificate representing
shares of Restricted Stock granted pursuant to the Plan shall bear a legend
which is comparable to the following:
"The sale or other transfer of this certificate or the shares
of stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain
restrictions on transfer and other terms and conditions set
forth in the FirstMerit Corporation1989 Stock Incentive Plan
(SB) and a Restricted Stock Agreement dated ____________,
____. A copy of the Plan and such Restricted Stock Agreement
may be obtained from the Secretary of FirstMerit Corporation,
III Cascade Plaza, Akron, Ohio 44308.
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8.5 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Section 8, shares of Restricted Stock covered by each Restricted Stock Award
made under the Plan shall become freely transferable by the Participant after
the last day of the Period of Restriction. Once the shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Section 8.4 removed from his Stock certificates.
8.6 VOTING RIGHTS. During the Period of Restriction, Participants
holding shares of Restricted Stock awarded hereunder may exercise full voting
rights with respect to those shares.
8.7 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants holding shares of Restricted Stock awarded hereunder
shall be entitled to receive all dividends and other distributions paid with
respect to those shares while they are so held. If any such dividends or
distributions are paid in shares of Stock, the shares shall be subject to the
same restrictions on transferability as the shares of Restricted Stock with
respect to which they were paid.
8.8 TERMINATION OF EMPLOYMENT. In the event that a Participant
terminates his employment with the Corporation for any reason, any shares of
Restricted Stock still subject to restrictions at the date of such termination
automatically shall be forfeited and returned to the Corporation; provided,
however, that the Committee, in its sole discretion, at the time of such
retirement may with respect to some or all of the shares still subject to
restrictions at the time of said termination waive the automatic forfeiture,
and/or reduce the restrictions, and/or modify restrictions applicable to such
shares.
9. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his death before he
receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during his lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to his
estate.
10. RIGHTS OF EMPLOYEES
10.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in
any way the right of the Corporation to terminate any Participant's employment
at any time, nor confer upon any Participant any right to continue in the employ
of the Corporation.
10.2 PARTICIPATION. No employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
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11. CHANGE IN CONTROL
11.1 IN GENERAL. In the event that (a) the Corporation is a party to a
merger or consolidation agreement, (b) the Corporation is a party to an
agreement to sell substantially all of its assets, or (c) there is change in
control of the Corporation as defined in Section 11.3 below, the Committee may,
in its sole discretion, provide that all outstanding Awards shall become one
hundred percent (100%) vested, that all outstanding Options shall become
immediately exercisable and that any Period of Restriction shall immediately
lapse.
11.2 LIMITATION ON PAYMENTS. If the receipt of any payment under this
Section by any Participant shall, in the opinion of independent tax counsel of
recognized standing selected by the Corporation, result in the payment by such
Participant of any excise tax provided for in Section 280G and Section 4999 of
the Code, then the amount of such payment shall be reduced to the extent
required, in the opinion of independent tax counsel, to prevent the imposition
of such excise tax.
11.3 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 "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,
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(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
(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
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(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.
12. AMENDMENT, MODIFICATION AND TERMINATION OF PLAN
The Board may at any time terminate and, from time to time, may amend
or modify the Plan, provided, however, that no such action of the Board, without
approval of the shareholders, may:
(a) Increase the total amount of Stock which may be issued
under the Plan, except as provided in Subsections 5.1 and 5.3 of the
Plan.
(b) Change the provisions of the Plan regarding the Option
Price except as permitted by Subsection 5.3.
(c) Materially increase the cost of the Plan or materially
increase the benefits to Participants.
(d) Extend the period during which Options, or Restricted
Stock, may be granted.
(e) Extend the maximum period after the date of grant during
which Options may be exercised.
No amendment, modification, or termination of the Plan shall in any
manner adversely affect any Options or, Restricted Stock, theretofore granted
under the Plan, without the consent of the Participant or the Eligible Director,
as the case may be.
13. TAX WITHHOLDING
(a) The Corporation shall have the right to withhold from any
payments made under the Plan or to collect as a condition of payment,
any taxes required by law to be withheld. At any time when a
Participant or an Eligible Director, as the case may be, is required to
pay to the Corporation an amount required to be withheld under
applicable income tax laws in connection with a distribution of common
stock or upon exercise of an Option, the Participant or an Eligible
Director, as the case may be, may satisfy this obligation
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in whole or in part by electing ("Election") to have the Corporation
withhold from the distribution shares of common stock having a value
equal to the amount required to be withheld. The value of the shares to
be withheld shall be based on the Fair Market Value of the common stock
on the date that the amount of tax to be withheld shall be determined
("Tax Date").
(b) Each Election must be made prior to the Tax Date. The
Committee may disapprove of any Election, may suspend or terminate the
right to make Elections, or may provide with respect to any grant that
the right to make elections shall not apply to such Grant. An Election
is irrevocable.
(c) If a Participant is an officer of the Corporation within
the meaning of Section 16 of the Securities Exchange Act of 1934 or if
the person making the Election is an Eligible Director, then an
Election is subject to the following additional restrictions:
(1) No Election shall be effective for a Tax Date which
occurs within six (6) months of the grant of the award, except
that this limitation shall not apply in the event Death or
Disability of the Participant or the eligible Director, as the
case may be, occurs prior to the expiration of the six-month
period.
(2) The Election must be made either six (6) months
prior to the Tax Date or must be made during a period
beginning on the third business day following the date of
release for publication of the Corporation's quarterly or
annual summary statements of sales and earnings and ending on
the twelfth business day following such date.
14. INDEMNIFICATION
Each person who is or shall have been a member of the Committee or of
the Board shall be indemnified and held harmless by the Corporation against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with the
Corporation's approval, or paid by him in satisfaction of any judgment in any
such action, suit, or proceeding against him, provided he shall give the
Corporation an opportunity, at its own expense, to handle and defend the same
before he under takes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Corporation's
Articles of Incorporation or Code of Regulations, as a matter of law, or
otherwise, or any power that the Corporation may have to indemnify them or hold
them harmless.
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15. REQUIREMENTS OF LAW
15.1 REQUIREMENTS OF LAW. The granting of Options, or Restricted Stock,
and the issuance of shares of Stock upon the exercise of an Option shall be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.
15.2 GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and be governed by the laws of the State of Ohio.
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