Exhibit 10
BANCINSURANCE CORPORATION 2002 STOCK INCENTIVE PLAN
1.00 PURPOSE
This Plan is intended to foster and promote the Company's long-term financial
success and to increase shareholder value by 111 providing Participants an
opportunity to acquire an ownership interest or to increase an ownership
interest in the Company and [2] enabling the Company to attract and retain the
services of outstanding individuals upon whose judgment, interest and dedication
the successful conduct of the Company's business is largely dependent.
2.00 DEFINITIONS
When used in this Plan, the following terms will have the meanings given to them
in this section unless another meaning is expressly provided elsewhere in this
Plan. When applying these definitions, the form of any term or word will include
any of its other forms.
ACT The Securities Exchange Act of 1934, as amended.
ANNUAL MEETING. The annual meeting of the Company's shareholders.
ANNUAL RETAINER. The annual retainer and committee fees paid to each Director
for service as a member of the Board and as a member of any Board committees.
AWARD. Any Incentive Stock Option, Nonqualified Stock Option, Restricted Stock,
Stock Appreciation Right, share of Stock issued under Section 7.02[l] and Stock
Unit. The aggregate number of shares of Stock with respect to which Options and
SARs may be issued to any Participant for any Plan Year may not be larger than
100,000 shares of Stock (adjusted as provided in Section 4.03), including
Options and SARs that are cancelled or deemed to have been cancelled under
Treas. Reg. Section 162-27(e)(2)(vi)(B) during the Plan Year issued.
AWARD AGREEMENT. The written agreement between the Company and each Participant
tat describes the terms and conditions of each Award.
BENEFICIARY. The individual a Participant designates to receive (or to exercise)
any Plan benefits (or rights) that are unpaid (or unexercised) when the
Participant dies. A Beneficiary may be designated only by following the
procedures described in Section 11.02; neither the Company nor the Committee is
required or permitted to infer a Beneficiary from any other source.
BOARD. The Company's board of directors.
CODE. The Internal Revenue Code of 1986, as in effect on the Effective Date or
as amended or superceded after the Effective Date, and any regulations and
applicable rulings issued under the Code.
COMMITTEE.
[1] In the case of Awards to Directors, the Board; or
[2] In the case of all other Awards, the Board's compensation
committee which also constitutes a "compensation committee" within the
meaning of Treas. Reg.Section 1.1 62-27(c)(4). The Committee will be
comprised of at least three individuals [a] each of whom must be [i] an
outside director, as defined in Treas. Reg.Section 1.1 62-27(e)(3)(i)
and [ii] a "non-employee director" within the meaning of Rule 1 6b-3
under the Act and [b] none of whom may receive remuneration in any
capacity other than as a director, except as permitted under Treas.
Reg.Section 1.1 62-27(e)(3)(ii).
COMPANY. Bancinsurance Corporation, a corporation organized under the laws of
Ohio, and any successor to it.
DIRECTOR. Each member of the Board or of the board of directors of any
Subsidiary who is not an Employee.
DIRECTOR OPTION. A Nonqualified Stock Option granted to a Director under Section
5.00.
DISABILITY. A disability as defined in Code Section 22(e)(3).
EFFECTIVE DATE. June 3, 2002.
EMPLOYEE. Any individual who is a common law employee of the Company or of any
Subsidiary. A worker who is classified as other than a common law employee but
who is subsequently reclassified as a common law employee of an Employer for any
reason and on any basis will be treated as a common law employee only from the
date of that determination and will not retroactively be reclassified as an
Employee for any purpose of this Plan.
EXERCISE PRICE. The price at which a Participant may exercise an Award.
FAIR MARKET VALUE. The value of one share of Stock on the relevant date,
determined as follows:
[1] If the shares are traded on an exchange (including the NASDAQ
National Market System), the reported "closing price" on the relevant
date, assuming it is a trading date; otherwise on the next trading day.
[2] If the shares are traded over-the-counter with no reported closing
price, the mean between the lowest bid and the highest asked prices on
that quotation system on the relevant date assuming it is a trading
day; otherwise on the next trading day; and
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[3] If neither [1] nor [2] applies, the fair market value as determined
by the Committee in good faith.
FREESTANDING SAR. An SAR that is not associated with an Option and is granted
under Section 7.00.
GRANT DATE. The date an Award is granted.
INCENTIVE STOCK OPTION. Any Option granted under Section 5.00 that meets the
conditions imposed under Code Section 422(B).
NONQUALIFIED STOCK OPTION. Any Option granted under Section 5.00 that is not an
Incentive Stock Option.
OPTION. The right granted under Section 5.00 to purchase a share of Stock at a
stated price for a specified period of time. An Option may be either [1] an
Incentive Stock Option or [2] a Nonqualified Stock Option.
PARTICIPANT. Any Employee or Director to whom the Committee grants an Award.
PLAN. Bancinsurance Corporation 2002 Stock Incentive Plan.
PLAN YEAR. The Company's fiscal year.
RESTRICTED STOCK. An Award granted under Section 6.00.
RESTRICTION PERIOD. The period over which the Committee will determine if
grantee has met conditions placed on Restricted Stock.
STOCK. Common shares issued by the Company.
STOCK APPRECIATION RIGHT (OR "SAR"). An Award granted under Section 7.00 that is
either a Tandem SAR or a Freestanding SAR.
STOCK UNIT. A right to receive payment of the Fair Market Value of a share of
Stock as provided in Section 7.02.
SUBSIDIARY. Any corporation, partnership or other form of unincorporated entity
of which the Company owns, directly or indirectly, 50 percent or more of the
total combined voting power of all classes of stock, if the entity is a
corporation, or of the capital or profits interest, if the entity is a
partnership or another form of unincorporated entity.
TANDEM SAR. An SAR that is associated with an Option and which expires when that
Option expires or is exercised, as described in Section 7.00.
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Termination of Service. As appropriate, [1] termination of the employee-employer
relationship between a Participant and the Company and all Subsidiaries for any
reason or [2] cessation of a Director's service on the Board (and the boards of
directors of all Subsidiaries) for any reason.
3.00 ADMINISTRATION
3.01 COMMITTEE DUTIES. The Committee is granted all powers appropriate and
necessary to administer the Plan. Consistent with the Plan's purpose, the
Committee may adopt, amend and rescind rules and regulations relating to the
Plan, to the extent appropriate to protect the Company's interests and has
complete discretion to make all other decisions necessary or advisable for the
administration and interpretation of the Plan. Any action by the Committee will
be final, binding and conclusive for all purposes and upon all Participants.
3.02 DELEGATION OF DUTIES. In its sole discretion, the Committee may delegate
to any individual or entity (including Employees) that it deems appropriate any
of its duties other than those described in Section 3.03[l].
3.03 PARTICIPATION.
[1] Consistent with the terms of the Plan, the Committee will:
[a] Decide which Employees and Directors may become Participants;
[b] Decide which Participants will be granted Awards;
[c] Identify the type of Awards to be granted to each Participant;
[c] Identify the terms and conditions imposed on any Awards
granted; [e] Identify the procedures through which an Award may be
exercised;
[d] Identify the circumstances under which the Company may cancel
an Award or reacquire any Award or shares of Stock acquired though
the Plan; and
[e] Impose any other terms and conditions the Committee believes
are appropriate and necessary to implement the purpose of this Plan.
[2] The Committee may establish different terms and conditions:
[a] For each type of Award;
[b] For Participants receiving the same type of Award; and
[c] For the same Participant for each Award the Participant
receives, whether or not those Awards are granted at different
times.
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[3] The Committee will prepare and deliver an Award Agreement to each
affected Participant with respect to each Award. The Award Agreement
will describe:
[a] The type of Award and when and how it may be exercised;
[b] The effect of exercising the Award;
[c] Any Exercise Price associated with the Award;
[d] Any conditions that must be met before the Award may be
exercised;
[e] Any objective restrictions placed on Restricted Stock and any
conditions that must be met before those restrictions will be
released (e.g., conditions related to Company-wide, divisional or
individual performance or growth in earnings per share, revenues or
profits) and the related Restriction Periods. Performance related
restrictions must be established before 25 percent of the related
Restriction Period has expired. In its sole discretion, the
Committee may adjust any performance related conditions with respect
to any Participant who is transferred during a Restriction Period to
a materially different position (or whose job duties change
otherwise) to ensure that those conditions are appropriate to his or
her new position;
[f] When and how the Award may be exercised; and
[g] Any other applicable terms and conditions affecting the Award.
3.04 CONDITIONS OF PARTICIPATION.
Each Participant receiving an Award agrees:
[1] To sign an Award Agreement; and
[2] To be bound by the terms of the Award Agreement and the Plan.
3.05 LIMITS ON EXERCISABILITY. Regardless of any other provision of this
Section 3.00 or the Plan, all unexercised Awards granted to a Participant will
be forfeited if that Participant, before his or her Termination of Service or
after Termination of Service but while any Award remains exercisable:
[1] Without the Committee's written consent, which may be withheld for any
reason or for no reason, serves (or agrees to serve) as an officer,
director or employee of any proprietorship, partnership or corporation or
becomes the owner of a business or a member of a partnership that competes
with any portion of the Company's (or a Subsidiary's) business or renders
any service (including business consulting) to entities that compete with
any portion of the Company's (or a Subsidiary's) business;
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[2] Refuses or fails to consult with, supply information to, or otherwise
cooperate with, the Company after having been requested to do so; or
[3] Deliberately engages in any action that the Committee concludes has
caused substantial harm to the interests of the Company or any Subsidiary.
4.00 STOCK SUBJECT TO PLAN
4.01 NUMBER OF SHARES.
[1] Subject to Section 4.03, the number of shares of Stock subject to
Awards under the Plan is 600,000.
[2] The shares of Stock to be delivered under the Plan may consist, in
whole or in part, of treasury Stock or authorized but unissued Stock not
reserved for any other purpose.
4.02 CANCELLED, TERMINATED OR FORFEITED AWARDS. Any Award (other than an Award
granted under Section 6.00) that, for any reason, is cancelled, terminated or
otherwise settled without the issuance of any Stock or cash may again be granted
under the Plan.
4.03 ADJUSTMENT IN CAPITALIZATION. If, after the Effective Date, there is a
Stock dividend or Stock split, recapitalization (including payment of an
extraordinary dividend), merger, consolidation, combination, spin-off,
distribution of assets to shareholders, exchange of shares or other similar
corporate change affecting Stock, the Committee will appropriately adjust the
number of Awards that may be issued to a Participant in any Plan Year, the
aggregate number of shares of Stock available for Awards under Section 4.01 or
subject to outstanding Awards (as well as any share-based limits imposed under
this Plan), the respective prices and/or limitations applicable to outstanding
Awards and any other affected factor, limit or term applying to Awards.
5.00 OPTIONS
5.01 GRANT OF OPTIONS. The Committee may grant Options to Participants at any
time during the term of this Plan. Options issued to Employees may be either [1]
Incentive Stock Options or [21 Nonqualified Stock Options. However, Options
issued to Directors may only be Nonqualified Stock Options.
5.02 OPTION PRICE. Each Option will bear an Exercise Price that is not less
than the Fair Market Value of a share of Stock on the Grant Date. However, each
Incentive Stock Option granted to a Participant who owns [as defined in Code
Section 424(d)] Stock possessing more than 10 percent of the total combined
voting power of all classes of Stock will bear an Exercise Price that is at
least 110 percent of the Fair Market Value of a share of Stock on the Grant
Date.
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5.03 EXERCISE OF OPTIONS. Options awarded to a Participant under Section 5.01
may be exercised at the times and subject to the restrictions and conditions
(including a vesting schedule) that the Committee specifies in the Award
Agreement. However:
[1] An Option may not be exercised for a fraction of a share, although
this limitation will not be applied to prevent a Participant from
acquiring the full number of shares of Stock for which Options are then
exercisable;
[2] The Committee may prohibit a Participant from exercising Options for
fewer than the minimum number of shares specified by the Committee in the
Award Agreement but only if this prohibition does not prevent a
Participant from acquiring the full number of shares of Stock for which
Options are then exercisable; and
[3] Subject to Section 5.04[4], unless the Committee specifies otherwise
in the Award Agreement, no Option may be exercised more than 10 years
after it is granted.
5.04 INCENTIVE STOCK OPTIONS. Notwithstanding anything in the Plan to the
contrary:
[1] No provision of this Plan relating to Incentive Stock Options will
be interpreted, amended or altered, nor will any discretion or authority
granted under the Plan be exercised, in a manner that is inconsistent with
Code Section 422 or, without the consent of any affected Participant, to
cause any Incentive Stock Option to fail to qualify for the federal income
tax treatment afforded under Code Section 421;
[2] The aggregate Fair Market Value of the Stock (determined as of the
Grant Date) with respect to which Incentive Stock Options are exercisable
for the first time by any Participant during any calendar year (under all
option plans of the Company and all Subsidiaries) will not exceed $100,000
[or the amount specified in Code Section 422(d)];
[3] No Incentive Stock Option may be granted to any individual who is
not an Employee; and
[4] No Incentive Stock Option may be exercised more than 10 years after
it is granted (five years if the Participant owns [as defined in Code
Section 424(d)] Stock possessing more than 10 percent of the total
combined voting power of all classes of Stock).
5.05 PAYMENT FOR OPTIONS. The Committee will develop procedures though which a
Participant may pay an Option's Exercise Price, including tendering shares of
Stock the Participant already has owned for at least six months, either by
actual delivery of the previously owned shares of Stock or by attestation,
valued at its Fair Market Value on the exercise date, as partial or full payment
of the Exercise Price.
5.06 RESTRICTIONS ON TRANSFERABILITY. The Committee may impose restrictions on
any shares of Stock acquired though an Option, including restrictions related to
applicable federal securities
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laws, the requirements of any national securities exchange or system on which
Stock are then listed or traded or any applicable blue sky or state securities
laws.
6.00 RESTRICTED STOCK
6.01 RESTRICTED STOCK GRANTS. The Committee may grant shares of Restricted
Stock to Participants at any time during the term of this Plan.
6.02 TRANSFERABILITY. Restricted Stock may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated until the end of the applicable
Restriction Period. In the Committee's sole discretion, all shares of Restricted
Stock will:
[1] Be held by the Company as escrow agent during the Restriction
Period, along with any cash dividends and other cash distributions made
with respect to escrowed Restricted Stock; or
[2] Be issued to the Participant in the form of certificates bearing a
legend describing the restrictions imposed on the shares.
6.03 FORFEITURES. Removal of Restrictions. Restricted Stock will be:
[1] Forfeited, if all restrictions have not been met at the end of the
Restriction Period, and again become available under the Plan; or
[2] Released from escrow and distributed (or any restrictions described
in the certificate removed) as soon as practicable after the last day of
the Restriction Period, if all restrictions have then been met.
6.04 RIGHTS ASSOCIATED WITH RESTRICTED STOCK. During the Restriction Period,
and unless the Award Agreement provides otherwise, each Participant to whom
Restricted Stock has been issued as described in Section 6.02[2]:
[1] May exercise full voting rights associated with his or her
Restricted Stock; and
[2] Subject to Section 6.02[1], will be entitled to receive all
dividends and other distributions paid with respect to his or her
Restricted Stock. If any dividends or other distributions are paid in
shares of Stock, those shares will be subject to the same restrictions on
transferability and forfeitability as the shares of Restricted Stock with
respect to which they were issued. Also, any dividend or other
distribution paid with respect to Restricted Stock will be subject to a
Restriction Period that is equal to the remaining Restriction Period
imposed on the shares of Restricted Stock with respect to which the
dividend or distribution is paid.
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7.00 STOCK APPRECIATION RIGHTS AND STOCK UNITS
7.01 STOCK APPRECIATION RIGHTS. The Committee may grant Freestanding SARs and
Tandem SARa (or a combination of each) to Participants at any time during the
term of this Plan.
[1] The Exercise Price specified in the Award Agreement will:
[a] In the case of a Freestanding SAR, never be less than 100
percent of the Fair Market Value of a share of Stock on the Grant
Date; and
[b] In the case of a Tandem SAR, never be less than the Exercise
Price of the related Option.
[2] Tandem SARs may be exercised with respect to all or part of the
shares of Stock subject to the related Option by surrendering the right to
exercise the equivalent portion of the related Option. However:
[a] A Tandem SAP. may be exercised only with respect to the shares
of Stock for which its related Option is then exercisable;
[b] A Tandem SAR will expire no later than the date the related
Option expires;
[c] The value of the payout with respect to a Tandem SAR related
to an Incentive Stock Option will not be more than 100 percent of
the difference between the Exercise Price of the related Option and
the Fair Market Value of the shares of Stock subject to the related
Option at the time the Tandem SAR is exercised; and
[d] A Tandem SAR related to an Incentive Stock Option may be
exercised only if the Fair Market Value of the shares of Stock
subject to the related Option is greater than the Option's Exercise
Price.
[3] Freestanding SARs will be exercisable subject to the terms specified
in the Award Agreement.
[4] A Participant exercising an SAR will receive an amount equal to:
[a] The difference between the Fair Market Value of a share of
Stock on the exercise date and the Exercise Price; multiplied by
[b] The number of shares of Stock with respect to which the SAR is
exercised. At the discretion of the Committee, this amount may be
paid in cash, shares of Stock or any combination of both.
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7.02 STOCK UNITS.
[1] Each Director may elect to receive all or a portion of his or her
Annual Retainer in Stock Units by returning to the Committee an Annual
Retainer Deferral Form specifying:
[a] The portion (stated in 25 percent increments) of the Annual
Retainer to be converted to Stock Units;
[b] The date Stock Units are to be settled;
[c] Whether Stock Units are to be settled in cash or shares of
Stock; and
[d] The period (which may not be longer than 10 years) over which
the value of Stock Units is to be distributed.
If a completed Annual Retainer Deferral Form is not received at least two
weeks before the first meeting of the Board of Directors during the fiscal
year for which the Annual Retainer is to be paid, the Director's Annual
Retainer will be paid consistent with in the Company's regular procedures
and policies for paying Annual Retainers. Each Director that has
effectively elected to receive Stock Units in lieu of all or a portion of
his or her Annual Retainer will receive a number of Stock Units (including
fractional Stock Units) equal to the portion of the Annual Retainer to be
received as Stock Units divided by the Fair Market Value on the date the
Annual Retainer would have been paid had that election not been made.
[2] All Stock Units will be settled in cash or shares of Stock as soon
as practicable after the later of:
[a] The date the Director ceases to be a member of the Board; or
[b] The date the Director specifies on an Annual Retainer Deferral
Form.
If Stock Units are to be settled in cash, the amount distributed will be
calculated by multiplying the number of Stock Units to be settled in cash
by the Fair Market Value as of the most recent trading date before the
settlement date. If a Director dies before all of his or her Stock Units
have been settled, the value of any unpaid Stock Units will be paid in a
lump sum in cash to his or her Beneficiary.
If Stock Units are to be settled in Stock, the number of shares to be
distributed will equal the number of Stock Units, adjusted, if
appropriate, under Section 4.03.
[3] Once filed, elections made on an Annual Retainer Deferral Form will
remain in effect until changed. Any change to an earlier election must be
made by completing and returning another completed Annual Retainer
Deferral Form to the Committee:
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[a] If the change relates to the portion of the Annual Retainer to
be deferred, no later than two weeks before the date the Annual
Retainer otherwise would be paid;
[b] If the change relates to the time Stock Units are to be
settled, no later than 12 months before the previously established
settlement date; or
[c] If the change relates to the form in which Stock Units are to
be settled, no later than 12 months before the settlement date.
8.00 TERMINATION OF SERVICE/BUY OUT
8.01 EXERCISE PERIOD. Except as provided in Section 8.02 and unless otherwise
specified in the Award Agreement (other than an Award Agreement or portion of an
Award Agreement relating to an Incentive Stock Option) , all Awards that are
outstanding (whether or not then exercisable) when a Participant Terminates
Service will expire on the earlier of [1] the date the Award expires under the
terms of the Award Agreement, [2] the date the Participant Terminates Service
for any reason other than death or Disability or [3] 12 months after the
Participant Terminates Service because of death or Disability.
8.02 BUY OUT OF AWARDS. At anytime, the Committee, in its sole discretion and
without the consent of the Participant, may cancel any or all outstanding Awards
held by that Participant by providing to that Participant written notice ("Buy
Out Notice") of its intention to exercise the rights reserved in this section.
If a Buy Out Notice is given, the Company also will pay to each affected
Participant the difference between [1] the Fair Market Value of each Award (or
portion of an Award) to be cancelled and [2] the Exercise Price associated with
each cancelled Award. However, unless otherwise specified in the Award
Agreement, no payment will be made with respect to any Awards that are not
exercisable when cancelled under this section. The Company will complete any buy
out made under this section as soon as administratively possible after the date
of the Buy Out Notice. At the Committee's option, payment of the buy out amount
may be made in cash, in whole shares of Stock or partly in cash and partly in
shares of Stock. The number of whole shares of Stock, if any, included in the
buy out amount will be determined by dividing the amount of the payment to be
made in shares of Stock by the Fair Market Value as of the date of the Buy Out
Notice.
9.00 MERGER, CONSOLIDATION OR SIMILAR EVENT
If [1] the Company enters into a plan or agreement that results in the merger or
consolidation of the Company or reclassification of Stock or the exchange of
Stock for the securities of another entity (other than a Subsidiary) that has
acquired the Company's assets or which is in control [as defined in Code
Section 368(c)] of an entity that has acquired the Company's assets and [2] the
terms of that plan or agreement are binding on all holders of Stock (except to
the extent that dissenting shareholders are entitled to relief under applicable
law), then [3] Awards will become fully exercisable, all restrictions will lapse
and each affected Participant will receive, upon payment of the Exercise Price,
if applicable, securities or cash, or both, equal to those the Participant would
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have been entitled to receive under the plan or agreement if the Participant had
already exercised the Award.
10.00 AMENDMENT, MODIFICATION AND TERMINATION OF PLAN
The Board or the Committee may terminate, suspend or amend the Plan at any time
without shareholder approval except to the extent that shareholder approval is
required to satisfy applicable requirements imposed by [1] Rule 16b-3 under the
Act, or any successor rule or regulation, [21 applicable requirements of the
Code or [3] any securities exchange, market or other quotation system on or
through which the Company's securities are listed or traded. Also, no Plan
amendment may [4] result in the loss of a Committee member's status as a
"non-employee director" as defined in Rule 16b-3 under the Act, or any successor
rule or regulation, with respect to any employee benefit plan of the Company,
[51 cause the Plan to fail to meet requirements imposed by Rule 1 6b-3 or [6]
without the consent of the affected Participant, adversely affect any Award
issued before the amendment, modification or termination. However, nothing in
this section will restrict the Committee's right to exercise the discretion
retained in Section 8.02.
11.00 MISCELLANEOUS
11.01 ASSIGNABILITY. Except as provided in this section, an Award may not be
transferred except by will or applicable laws of descent and distribution and,
during the Participant's lifetime, may be exercised only by the Participant or
the Participant's guardian or legal representative. However, with the
Committee's written consent (which may be withheld for any reason or for no
reason), a Participant or a specified group of Participants may transfer Awards
(other than Incentive Stock Options) to a revocable inter vivos trust, of which
the Participant is the settlor, or may transfer Awards (other than Incentive
Stock Options) to any member of the Participant's immediate family, any trust,
whether revocable or irrevocable, established solely for the benefit of the
Participant's immediate family, or any partnership or limited liability company
whose only partners or members are members of the Participant's immediate family
("Permissible Transferees"). Any Award transferred to a Permissible Transferee
will continue to be subject to all of the terms and conditions that applied to
the Award before the transfer and to any other rules prescribed by the
Committee. A Permissible Transferee may subsequently transfer an Award but only
to another Permissible Transferee and only after complying with the terms of
this section as if the Permissible Transferee was a Participant.
11.02 BENEFICIARY DESIGNATION. Each Participant may name a Beneficiary or
Beneficiaries (who may be named contingently or successively) to receive or to
exercise any vested Award that is unpaid or unexercised at the Participant's
death. Each designation made will revoke all earlier designations made by the
same Participant, must be made on a form prescribed by the Committee and will be
effective only when filed in writing with the Committee. If a Participant has
not made an effective Beneficiary designation, the deceased Participant's
Beneficiary will be his or her surviving spouse or, if there is no surviving
spouse, the deceased Participant's estate.
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[1] Interfering with or limiting the right of the Company or any
Subsidiary to terminate any Participant's employment at any time;
[2] Conferring on any Participant any right to continue as an Employee
or Director;
[3] Guaranteeing that any Employee will be selected to be a Participant;
or
[4] Guaranteeing that any Participant will receive any future Awards.
11.04 TAX WITHHOLDING. The Company will withhold from other amounts owed to a
Participant, or require the Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local withholding tax requirements on
any Award, exercise or cancellation of an Award or purchase of shares of Stock.
If these amounts are not to be withheld from other payments due to the
Participant, the Company will defer payment of cash or issuance of shares of
Stock until the earlier of
[1] Thirty days after the settlement date; or
[2] The date the Participant remits the required amount.
If the Participant has not remitted the required amount, the Company will
permanently withhold from the value of the Awards to be distributed the minimum
amount required to be withheld to comply with applicable federal, state and
local income, wage and employment taxes and distribute the balance to the
Participant.
In its discretion, the Committee may allow a Participant to elect, subject to
conditions the Committee establishes, to reimburse the Company for this
withholding obligation through one or more of the following methods:
[3] By having shares of Stock otherwise issuable under the Plan withheld
by the Company (but only to the extent of the minimum amount that must be
withheld to comply with applicable state, federal and local income,
employment and wage tax laws);
[4] By delivering, including by attestation, to the Company previously
acquired shares of Stock that the Participant has owned for at least six
months;
[5] By remitting cash to the Company; or
[6] By remitting a personal check immediately payable to the
Company.
11.05 INDEMNIFICATION. Each individual who is or was a member of the Committee
or of the Board will be indemnified and held harmless by the Company against and
from any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit or proceeding to which he or she may be made a party or in which he or she
may be involved by reason of any action taken or failure to take
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action under the Plan as a Committee member and against and from any and all
amounts paid, with the Company's approval, by him or her in settlement of any
matter related to or arising from the Plan as a Committee member; or paid by him
or her in satisfaction of any judgment in any action, suit or proceeding
relating to or arising from the Plan against him or her as a Committee member,
but only if he or she gives the Company an opportunity, at its own expense, to
handle and defend the matter before he or she undertakes to handle and defend it
in his or her own behalf. The right of indemnification described in this section
is not exclusive and is independent of any other rights of indemnification to
which the individual may be entitled under the Company's organizational
documents, by contract, as a matter of law, or otherwise.
11.06 NO LIMITATION ON COMPENSATION. Nothing in the Plan is to be construed to
limit the right of the Company to establish other plans or to pay compensation
to its employees or Directors in cash or property, in a manner not expressly
contemplated by the Plan.
11.07 REQUIREMENTS OF LAW. The grant of Awards and the issuance of shares of
Stock will be subject to all applicable laws, rules and regulations and to all
required approvals of any governmental agencies or national securities exchange,
market or other quotation system. Also, no shares of Stock will be issued under
the Plan unless the Company is satisfied that the issuance of those shares of
Stock will comply with applicable federal and state securities laws.
Certificates for shares of Stock delivered under the Plan may be subject to any
stock transfer orders and other restrictions that the Committee believes to be
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any stock exchange or other recognized market or
quotation system upon which the Stock is then listed or traded or any other
applicable federal or state securities law. The Committee may cause a legend or
legends to be placed on any certificates issued under the Plan to make
appropriate reference to restrictions within the scope of this section.
11.08 TERM OF PLAN. The Plan will be effective upon its adoption by the Board
and approval by the affirmative vote of the holders of a majority of the shares
of voting stock present in person or represented by proxy at the first Annual
Meeting occurring after the Board approves the Plan. Subject to Section 10.00,
the Plan will continue until the tenth anniversary of the date it is adopted by
the Board or approved by the Company's shareholders, whichever is earliest.
11.09 GOVERNING LAW. The Plan and all related agreements will be construed in
accordance with and governed by the laws (other than laws governing conflicts of
laws) of the United States and of the State of Ohio.
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