1
PERFORMANCE-VESTED STOCK OPTION AGREEMENT
THIS AGREEMENT made and entered into this ____ day of _________ ____,
by and between FIRSTMERIT CORPORATION, (the "Company"), and (the "Optionee").
WITNESSETH, THAT:
WHEREAS, the Company on the 8th day of April, 1992, by action of its
shareholders, adopted and approved the 1992 Stock Option Program ("Plan"); and
WHEREAS, the purpose of said Plan is to enable selected and key
employees of the Company and its subsidiaries to acquire a proprietary interest
in the Company through such Plan, and to provide such employees with a more
direct stake in the future and welfare of the Company and its subsidiaries and
to encourage them to remain with the Company or its subsidiaries.
NOW THEREFORE, the Company and Optionee agree as follows:
1. Amount of Stock Subject to Option.
a. The Company hereby grants to Optionee the right to purchase
shares of authorized and unissued common stock of the Company, which stock is to
be issued by the Company upon the exercise of this option as hereinafter set
forth.
b. The Company also hereby grants to Optionee one Dividend
Unit with respect to each share of stock for which this option has been granted.
2. Purchase Price.
The purchase price per share shall be _______________________
($_____) (not less than 100% of the fair market value of the stock at the time
the option is granted).
3. Period of Option.
a. Shares granted as part of this option may not be purchased
until such time as they become exercisable. Once such shares become exercisable,
all or any part of such shares may be purchased at any time within ten (10)
years of the date hereof, except as otherwise provided in Section 8 of this
Agreement.
b. All such shares become exercisable upon the earlier
of
(i) ______ __,_____ (nine and one-half years
after the date hereof), or
2
(ii) The third business day following the day in
____ when the Company's fiscal year ____ summary statement of sales and earnings
results are made publicly available, IF, AND ONLY IF the cumulative earnings per
share (EPS) of the Company over fiscal years ____, ____, and ____, as disclosed
in the Company's summary statements of sales and earnings, and as certified by
the Committee, are at least $____, adjusted for any change in capitalization .
c. The terms of the Dividend Units granted herein shall be ten
(10) years from the date of grant hereof, provided that the Dividend Units will
accrue dividends only for the first three (3) years of that period. If the
shares granted as part of this option become exercisable as provided under
3b(ii) of this Agreement, then the Dividend Units granted herein shall be paid
out when such shares are purchased. If the shares granted as part of this option
become exercisable as provided under 3b(i) of this Agreement, then the Dividend
Units granted herein shall become null and void and shall not be paid out.
d. Unless the Committee determines otherwise, in the event of
a change in control of the Company (as defined in the Plan), all shares granted
as part of this option that have not yet become exercisable will immediately
become exercisable.
4. General Terms and Conditions.
This option is subject to the terms and conditions of the
Company's 1992 Stock Option Program, a copy of which is attached hereto and
incorporated by reference herein.
5. Exercise of Option.
In order to exercise this option or any part thereof, Optionee
shall give notice in writing to the Company of his or her intention to purchase
all or part of the shares subject to this option, and in said notice shall be
set forth the number of shares as to which he or she desires to exercise this
option. Optionee shall pay for said shares in full at the time of exercise in
cash, by check, bank draft or money order payable to the Company, or through the
delivery of shares of stock of the Company having an aggregate fair market value
as determined on the date of exercise equal to the option price. No shares shall
be issued until final payment for said shares has been made, and Optionee shall
have none of the rights of a shareholder until said shares are issued. Said
notice to exercise this option shall set forth that it is Optionee's present
intention to acquire said shares for investment, and not with a view to, or for
sale in connection with any distribution thereof, if in the opinion of counsel
for the Company it is necessary or desirable.
6. Payment and Valuation of Dividend Units.
a. The amount payable to Optionee in respect of each Dividend
Unit awarded herein shall be equal to the aggregate dividends actually paid on
one share of stock of the Company, to the extent Optionee held the Dividend Unit
on the record date established for payment of such dividends.
3
b. Except as otherwise provided herein, the amount payable to
Optionee in respect of a Dividend Unit shall be paid to Optionee only at the
exercise of this option with respect to the share of stock to which the Dividend
Unit is attached.
c. A Dividend Unit shall have no further force or effect upon
payment in respect thereof.
d. If a change of control of the Company (as defined in the
Plan) occurs prior to the date set forth in 3b(ii) of this Agreement, the
Company shall, on the date that the conditions specified in 3b(ii) of this
Agreement are satisfied, promptly pay to Optionee an amount equal to the
aggregate amount accrued on the Dividend Units granted hereby. If a change of
control of the Company occurs on or after the date that the conditions specified
in paragraph 3b(ii) are satisfied, the Company shall promptly pay to Optionee an
amount equal to the aggregate amount accrued on the Dividend Units accrued
hereby. If a change of control occurs and the conditions specified in 3b(ii)
have been satisfied, for so long as the Optionee holds any Dividend Unit and
dividends accrued thereon, the Company shall make payments to Optionee in
respect of any such Dividend Unit at the same time as payments of dividends on
the common stock of the Company are made. If the conditions specified in 3b(ii)
of this Agreement are never satisfied, a change in control of the Company shall
not cause the Company to pay to Optionee any amounts accrued on the Dividend
Units granted hereby.
7. Non-Transferability of Option.
This option is not assignable or transferable, except by will
or the laws of descent and distribution or a valid beneficiary designation made
in accordance with procedures as may be established by the Company. This option
shall be exercisable only by Optionee during his or her lifetime, or by
Optionee's estate, or by the person who acquired the right to exercise such
option by bequest or inheritance.
8. Termination of Employment and Death of Optionee.
a. If Optionee shall cease to be employed by the Company or
one of its subsidiaries for any reason other than death, disability (as defined
in the Plan), or retirement (as defined in the Plan), all rights to purchase
shares pursuant to this option which have not been exercised shall be
immediately canceled, except that if the termination is by the Company or any of
its subsidiaries for any reason other than misconduct or misfeasance, Optionee
shall have thirty (30) days thereafter within which to exercise this option, to
the extent that this option was otherwise exercisable immediately prior to such
termination, and further if such termination is attributable to a change of
control of the Company (as defined in the Plan), the option shall not be
canceled but shall continue as though Optionee remained in the employ of the
Company or any of its subsidiaries during the remaining term of the option.
b. (i) If the Optionee terminates employment with the Company
due to death, disability or retirement prior to the date specified in 3b(ii) of
this Agreement, this option
4
will be exercisable for a period equal to five (5) years after the date that the
conditions specified in 3b(ii) are satisfied.
(ii) If the Optionee terminates employment with
the Company due to death, disability or retirement on or after the date that the
conditions specified in 3b(ii) are satisfied, this option shall be exercisable
for a period equal to the lesser of five (5) years or the remaining option term.
(iii) If the Optionee terminates employment with
the Company due to death, disability or retirement and the conditions specified
in 3b(ii) are never satisfied, this option will be canceled and shall become
null and void.
c. If the conditions specified in 3b(ii) of this Agreement are
satisfied and the Optionee terminates employment with the Company, for any
reason, each Dividend Unit granted hereby shall remain outstanding until the
earlier of (a) the payment of such Dividend Unit in accordance with the terms of
this Agreement or (b) the termination, cancellation or expiration of the option.
If the conditions specified in 3b(ii) are never satisfied and the Optionee
terminates employment with the Company, for any reason, the Dividend Units
granted hereby shall become null and void and shall not be paid to the Optionee
upon exercise of this option or otherwise.
9. Changes in Capital.
If, prior to the expiration of this option, there shall be any
changes in the capitalization of the Company by reason of stock dividends, stock
splits, recapitalizations, combinations, exchanges of shares, spin-offs,
liquidations, reclassifications or other similar events, then the number of
shares available for purchase hereunder and the option price shall be adjusted
proportionally by the Board of Directors of the Company as in its sole
discretion shall deem equitable.
10. The Right to Terminate Employment.
This option shall not confer upon Optionee any right to
continue in the employ of Company or its subsidiaries or to interfere with or
restrict in any way with the rights of the Company or its subsidiaries to
discharge Optionee at any time, for any reason, with or without cause.
11. Listing, Registration, Qualification.
This option is subject to the requirement and condition that
if the Board of Directors shall determine that the listing, registration or
qualification upon any securities exchange under any state or federal law, or
the approval or consent of any governmental body is necessary or desirable as a
condition to the issuance or purchase of any shares subject to this option, then
this option may not be exercised in whole or in part unless or until such
listing, registration, qualification or approval has been obtained, free of any
conditions which are not acceptable to the Board of Directors of the Company,
and the sale and delivery of stock hereunder is also subject to the above
requirements and conditions.
5
12. Withholding.
The Company may require a payment from Optionee under the
exercise of this option to cover applicable withholding for income and
employment taxes. The Company reserves the right to offset such tax payment from
any funds which may be due Optionee by the Company.
IN WITNESS WHEREOF, the parties have hereto set their hands to
duplicates hereof, the _____ day of _________________, 19___.
Signed in the presence of: FIRSTMERIT CORPORATION
______________________________ By:
______________________________
Its: President and CEO
OPTIONEE
______________________________ By:
______________________________
Print Name: ________________________
6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRSTMERIT CORPORATION
By: /s/ GARY J. ELEK
---------------------------------------------
Gary J. Elek, Senior Vice President/Treasurer
Authorized to sign for the Corporation
By: /s/ GARY J. ELEK
---------------------------------------------
Gary J. Elek, Senior Vice President/Treasurer
Principal Financial Officer and
Principal Accounting Officer
DATE: May 10, 1996