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Exhibit 10(i)
HUNTINGTON BANCSHARES INCORPORATED
INCENTIVE COMPENSATION PLAN
(as amended effective January 1, 1995)
PURPOSE
1.1 The purpose of this Incentive Compensation Plan ("Plan") is to
encourage, recognize, and reward exceptional levels of corporate, business
unit, and individual performance. The Plan's intent is to use award dollars as
a clear communication vehicle linking the interests of eligible officers with
the interests of Huntington Bancshares Incorporated ("Corporation") by
establishing a direct link between performance and incentive payments. The
Plan serves to reinforce a management style which closely ties officer rewards
to performance directly under his or her control and establishes the
Corporation's willingness to reward individual performance that has a direct
impact on incremental earnings.
ADMINISTRATION
2.1 The Plan will be administered by the Compensation and Stock
Option Committee ("Committee") of the Board of Directors of the Corporation
composed of two or more "outside directors" within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended, or any successor
statute of similar import ("Section 162(m)"). The Committee is authorized to
interpret and construe the Plan and to adopt such rules, regulations, and
procedures for the administration of the Plan as the Committee deems necessary
or advisable. The Committee's interpretations of the Plan, and all decisions
and determinations made by the Committee, shall be conclusive and binding on
all parties including the Corporation and any person claiming an award under
the Plan.
ELIGIBILITY
3.1 Not later than 90 days after the beginning of each calendar
year, the Committee will identify those officers, referred to herein as
"Covered Officers", whose compensation for that year is anticipated to be
affected by the Section 162(m) limitation on the deductibility of compensation
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and assign each such Covered Officer to a plan group for the purposes of
defining their award opportunities under the Plan. These Covered Officers,
and those other officers of the Corporation or an affiliated entity who are
designated annually by the Committee, will be eligible to participate in the
Plan.
AWARDS
4.1 Performance Criteria. Awards paid under the Plan may be based
upon corporate, business unit, and individual performance; however, awards
paid to Covered Officers under the Plan will be measured solely by the
Corporation's performance relative to return on average shareholders' equity
goals. Measures of performance for other officers will be determined based
upon average shareholders' equity goals and evaluations of the officer's
business unit and individual performance. Such evaluations will be made by the
officer's appropriate manager or senior officer. The maximum annual award
payable to any participant will not exceed $1 million.
4.2 Performance Goals. The Committee will establish annual
written performance goals reflecting corporate performance. Performance goals
based on return on average shareholders' equity of the Corporation and the
potential award, expressed as a percentage of base salary as of December 31 of
each plan year, that will be payable upon attainment of those performance goals
will be established in writing not later than 90 days after the commencement of
the year to which the goals relate. No award will be paid to a Covered
Officer under the Plan if return on average shareholders' equity of the
Corporation is less than 13% or any higher minimum goal established by the
Committee. The Committee may increase individual awards based upon
extraordinary circumstances; however, under no circumstance may the Committee
increase a Covered Officer's award above the amount determined based on the
attainment of the specified performance goals identified in accordance with the
first two sentences of this Section 4.2. In addition, notwithstanding the
attainment of specified performance goals, the Committee has the discretion to
reduce or eliminate an award that would otherwise be paid to any participant,
including any Covered Officer.
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4.3 Payment of Awards. Unless payment is deferred, awards will be
payable in cash annually as soon as practicable following the close of the year
and calculation of the amount of the awards; provided that awards will be paid
to Covered Officers only after the Committee has certified in writing in the
minutes of a committee meeting or otherwise that performance goals applicable
to Covered Officers have been satisfied. The Committee may defer payment of
an award for such period as the Committee may determine. No award will be paid
to an officer who is not employed by the Corporation or an affiliate on the day
the award is paid except in the case of death, disability, or retirement of the
officer or in the event that payment of the award is deferred by the Committee
or that a Change in Control of the Corporation has occurred. Awards are
subject to income and other payroll tax withholding.
CHANGE IN CONTROL
5.1 Interim Awards. In the event of a "Change in Control" of
the Corporation, as hereinafter defined, or at the direction of the Committee
in anticipation of a Change in Control, the following provisions shall apply:
(a) The Committee shall make interim incentive
compensation awards based upon the Corporation's quarterly
financial statements for the quarter ending immediately prior
to or coinciding with the Change in Control.
(b) In determining the amount of interim incentive
compensation awards, the Committee shall follow the procedures
for granting annual awards, except that the Committee shall
annualize each objective performance factor used in
calculating such awards, including return on average
shareholders' equity. The amount of the awards so calculated
shall be pro rated based upon the quarter as of
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which the interim awards are granted in accordance with the
following percentages: First Quarter - 25%; Second Quarter -
50%; Third Quarter - 75%; and Fourth Quarter - 100%
(c) Notwithstanding the foregoing, each interim award to
be made under this Section 5 to any officer who received an
award under this Plan for the Performance Year immediately
preceding the year in which the Change in Control occurs,
expressed as a percentage of base salary on a pro rated basis
in accordance with paragraph (b) above, shall be not less
than the award, expressed on the same basis, actually paid to
that officer under this Plan for the immediately preceding
Performance Year.
(d) The Committee shall grant an interim incentive
compensation award in accordance with this Section 5 to all
participants of the Plan who are employed by the Corporation
or an affiliated entity on the day immediately preceding the
day when the Change in Control becomes effective.
5.2 Change in Control Defined. For purposes of this section, a
"Change in Control" of the Corporation shall be deemed to have occurred if and
when, after the date hereof, (i) subject to the limitations set forth in this
paragraph, any "Person" (as that term is defined as of the date hereof in
Section 225.2(k) of Regulation Y ("Regulation Y") issued by the Board of
Governors of the Federal Reserve System), other than the Corporation or any
employee stock ownership, profit-sharing, salary adjustment or other employee
benefit plan of the Corporation or of any affiliate or any trustee or fiduciary
with respect thereto solely by reason of such capacity of such trustee or
fiduciary, acquires, directly or indirectly, or through or in concert with one
or more Persons, "Control" (as that term is defined as of the date hereof in
Section 225.2(e)(1) of Regulation Y) of the Corporation or control or the power
to vote 10% or more (but less than 25%) of the votes attributable
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to the voting securities of the Corporation if no other person will own a
greater percentage of the votes attributable to such voting securities
immediately after the acquisition transaction; (ii) the Corporation, or in one
or more transactions 50% or more of its assets or earning power, is acquired by
or combined with another Person and less than a majority of the outstanding
voting shares of the Person surviving such transaction (or the ultimate parent
of the surviving Person) after such acquisition or combination is owned,
immediately after such acquisition or combination, by the owners of the voting
shares of the Corporation outstanding immediately prior to such acquisition or
combination; or (iii) any Person, acting alone or through or in concert with
one or more Persons, shall elect, at one or more meetings of shareholders of
the Corporation, a majority of the members of the Board of Directors who were
not members of, or elected or recommended by, the previously existing Board of
Directors of the Corporation. In defining "Control," all voting securities of
the Corporation shall be considered to be a single class.
MISCELLANEOUS
6.1 Guidelines. From time to time the Committee will adopt
written guidelines for implementation and administration of the Plan.
6.2 No Rights to Awards. Except as provided in this Plan, no
officer or other person will have any claim or right to be paid an award under
the Plan. Neither the Plan nor any action taken hereunder will be construed as
giving any officer or employee any right to be retained in the employ of the
Corporation or any affiliate.
6.3 Funding. The Plan will be unfunded. The Corporation will not
be required to establish any special or separate fund or make any other
segregation of assets to assure the payment of any award under the Plan.
6.4 Expenses of Plan. The costs and expenses of administering the
Plan will be borne by the Corporation.
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EFFECTIVE DATE; AMENDMENT; TERMINATION
7.1 Effective Date. The Plan, as amended, will become effective
upon approval by a majority of the votes cast by shareholders of the
Corporation at the annual meeting on April 27, 1995, but will relate to
performance beginning January 1, 1995, and apply each calendar year thereafter.
No payments will be made under the Plan unless shareholder approval is
obtained.
7.2 Amendment; Termination. The Corporation may at any time
terminate, or from time to time, amend the Plan by action of the Board of
Directors or by action of the Committee without shareholder approval unless
such approval is required to satisfy the applicable provisions of Section
162(m).
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