FIRSTAR CORPORATION
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 11, 2000
Dear Firstar Corporation Shareholders:
The Annual Meeting of Shareholders of Firstar Corporation
("Corporation") will be held in the Presidential Ballroom of the Westin Hotel,
Fifth and Vine Streets, Cincinnati, Ohio, on Tuesday, April 11, 2000, at 11:00
a.m. eastern time. The purpose of the meeting is to consider and act on the
following:
1. To elect six Directors for three year terms ending in the year
2003.
2. To amend the Firstar Corporation Stock Incentive Plan to increase
the number of shares of common stock available for Plan purposes
by 30 million shares for a total of 45 million shares.
3. To transact any other business that may properly come before the
Annual Meeting, including any adjournment.
Shareholders who are of record at the close of business on February
17, 2000, are entitled to vote at the meeting.
Shareholders are cordially invited to attend the meeting. IF YOU
WISH TO ATTEND THE MEETING BUT YOUR SHARES ARE HELD IN THE NAME OF A BROKER,
TRUST, BANK OR OTHER NOMINEE, PLEASE BRING A PROXY OR LETTER FROM THE BROKER,
TRUSTEE, BANK OR NOMINEE WITH YOU TO CONFIRM YOUR BENEFICIAL OWNERSHIP OF THE
SHARES. Please vote your proxy by mail, by telephone or by internet
submission whether or not you plan to attend so that your shares may be
represented at the meeting. If you attend the meeting, you may revoke your
Proxy and vote in person if you choose.
By order of the Board of Directors,
Jennie P. Carlson
Executive Vice President,
General Counsel and Secretary
Milwaukee, Wisconsin
March 1, 2000
YOUR VOTE IS IMPORTANT. PLEASE VOTE THE ENCLOSED PROXY PROMPTLY WHETHER OR
NOT YOU INTEND TO ATTEND THE MEETING.
FIRSTAR CORPORATION
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is provided with the solicitation of proxies
for the Board of Directors of Firstar Corporation, (the "Corporation"), for
use at the Annual Meeting of Shareholders to be held on April 11, 2000. A
Notice of Annual Meeting is attached and a form of proxy is enclosed. These
proxy materials are first being mailed to shareholders of the Corporation on
or about March 1, 2000.
THE PROXY
The persons named as proxies were selected by the Board of
Directors of the Corporation.
If you are a registered Firstar Corporation shareholder, you may
vote your proxy in one of three ways:
1. By mail: sign, date and mail the enclosed proxy card in the
return envelope provided.
2. By telephone: follow the instructions on the enclosed proxy
card.
3. By internet: follow the instructions on the enclosed proxy
card.
Telephone or internet proxy instructions must be received by April
10 at 5:00 p.m. to be counted for the meeting.
All proxy voting procedures are designed to properly authenticate
shareholder identities and to accurately reflect and count proxies. You may
incur costs if you vote on the internet, including possible access charges
from internet providers and telephone companies, which will be your
responsibility.
Shareholders whose shares are held in the name of a bank, broker, or
other nominee may or may not be able to use telephone or internet voting. For
information, please refer to the voting materials you receive or contact your
broker, trustee, bank or nominee.
Any shareholder who gives a proxy may revoke or revise that proxy at
any time before the meeting by giving written notice to the Corporation's
Secretary, by executing and returning a later dated proxy, or by voting by
ballot at the meeting.
The Corporation pays the cost to solicit proxies. In addition to
soliciting proxies by mail, directors, officers and regular employees of the
Corporation may solicit proxies electronically or in person without additional
compensation. The Corporation may request banks, brokerage houses or other
custodians, nominees or fiduciaries to solicit proxies and will reimburse
those entities for reasonable expenses associated with such solicitation.
Under Wisconsin law, any shares not voted at the meeting with
respect to the proposal to amend the Stock Incentive Plan (whether as a result
of abstention, broker nonvote or otherwise) will have no impact on the vote.
OUTSTANDING VOTING SECURITIES AND PRINCIPAL HOLDERS
977,795,461 shares of the Corporation's Common Stock, par value
$0.01, (the "Common Stock") were outstanding on the close of business on
February 17, 2000, (the "Record Date"). Each of those shares is entitled to
one vote on each matter submitted at the meeting. Only shareholders of record
at the close of business on the Record Date are entitled to vote at the
meeting.
As of December 31, 1999, the following group was the beneficial
owner of more than five percent (5%) of Firstar's outstanding Common Stock:
Firstar, through subsidiaries which conduct various fiduciary
activities, beneficially owned 85,347,736 shares or 8.7 percent (8.7%).
Shares held in the Firstar Corporation Thrift and Sharing Plan and the
former Mercantile Bancorporation 401(k) Plan are included because Firstar
has the ability to amend the Plans; 34,940,236 shares, or 3.5 percent
(3.5%) of Firstar's Common Stock are held in those plans and are included
in this total.
Securities and Exchange Commission Rule 13d-3 defines "beneficial
ownership" as voting or investment decision power over shares. Beneficial
ownership does not necessarily mean that the holder enjoys any economic
benefit from those shares.
The following table lists information about the beneficial
ownership of the Corporation's Common Stock by each Director, the Chief
Executive Officer and the next four highest compensated executive officers of
the Corporation in all capacities to the Corporation and its subsidiaries
during the year ended December 31, 1999 individually, as reported to the
Corporation by those persons as of December 31, 1999.
<TABLE>
<S> <C> <C> <C>
SHARES SHARES HELD PURSUANT
BENEFICIALLY TO DEFERRED PERCENTAGE
NAME OWNED (1) COMPENSATION PLAN (4) OF OWNERSHIP
- --------------------------------------------------------------------------------
William L. Chenevich 367,627 --- .04%
John C. Dannemiller 97,275 (2) 38,993 .01%
Richard K. Davis 1,777,358 (2) (3) 24,278 .18%
David B. Garvin 1,586,237 --- .16%
Victoria Buyniski Gluckman 121,783 (2) 2,461 .01%
Jerry A. Grundhofer 6,016,195 (2) (3) 461,811 .66%
J. P. Hayden, Jr. 3,077,634 (2) (5) --- .31%
Joe F. Hladky 48,005 --- .00%
Roger L. Howe 545,970 (2) --- .06%
Thomas H. Jacobsen 3,983,666 (2) (3) --- .41%
Sheldon B. Lubar 894,823 344 .09%
Frank Lyon, Jr. 14,162,653 (2) --- 1.45%
Daniel F. McKeithan, Jr. 90,625 --- .01%
David M. Moffett 2,104,286 (2) (3) 50,124 .22%
David B. O'Maley 876,635 (2) (6) 4,170 .09%
O'dell M. Owens, M.D. 59,825 (2) 39,527 .01%
Thomas E. Petry 102,450 (2) 160,285 .03%
Craig D. Schnuck 31,032 (2) --- .00%
Patrick T. Stokes 26,079 (2) --- .00%
John J. Stollenwerk 46,909 5,092 .01%
Mark C. Wheeler, Jr. 240,000 --- .02%
William W. Wirtz 6,473,197 --- .66%
TOTAL 4.44%
</TABLE>
(1) Listed shares may include shares held in the name of a person's spouse,
minor children, other relatives and trusts and estates as to which
beneficial ownership is disclaimed.
(2) Includes shares which may be purchased upon exercise of presently
exercisable options or options exercisable in 60 days in the following
amounts: Mr. Dannemiller, 72,000 shares; Mr. Davis, 771,228 shares; Ms.
Buyniski Gluckman, 72,000 shares; Mr. Grundhofer, 3,939,651 shares; Mr.
Hayden, 40,500 shares; Mr. Howe, 72,000 shares; Mr. Jacobsen, 2,003,439
shares; Mr. Lyon, 7,319 shares; Mr. Moffett, 1,080,000 shares; Mr.
O'Maley, 72,000 shares; Dr. Owens, 13,500 shares; Mr. Petry, 72,000
shares; Mr. Schnuck, 7,319 shares and Mr. Stokes, 7,319 shares.
(3) Includes the following shares which are held for the individual's
account in the Corporation's Thrift Savings 401(k) Plan: Mr. Davis,
4,315 shares; Mr. Grundhofer, 14,999 shares; Mr. Jacobsen, 8,543 shares;
and Mr. Moffett, 9,472 shares.
(4) Listed shares are those held pursuant to the Firstar Corporation
Deferred Compensation Plan (the "Deferred Compensation Plan"); under the
terms of the trust in which they are held, such shares are subject to
creditors of the Corporation and may not be voted until released to the
individual participants.
(5) Includes shares which are owned by companies for which Mr. Hayden serves
as Chairman and Director in the following amounts: The Midland Company,
125,829 shares; American Family Home Insurance Company, 1,367,200
shares; American Modern Home Insurance Company, 576,000 shares; American
Western Home Insurance Company, 325,800 shares; and American Modern Life
Insurance Company of Ohio, 75,600 shares.
(6) Includes 720,000 shares which are owned by Ohio National Life Insurance
Company for which Mr. O'Maley serves as Chairman, President and Chief
Executive Officer.
ELECTION OF DIRECTORS
The Corporation's Articles of Incorporation provide that the number
of Directors constituting the Board of Directors shall be not less than nine
nor more than thirty-five as determined in accordance with the Bylaws from
time to time. The Board of Directors is divided into three classes: Class I
(terms expire in 2002), Class II (terms expire in 2000) and Class III (terms
expire in 2001). The Articles of Incorporation provide that nominees for each
Class of the Board of Directors are to be elected to serve for a term of three
years. The Board of Directors currently consists of eighteen members, with
each Class containing six directors.
At the 2000 Annual Meeting, the six Directors in Class II are to be
elected to hold office until the Annual Meeting in the year 2003 and until
their successors are duly elected and qualified. All of the nominees are
current Directors. The persons named in the Proxy intend to vote for the
election of these nominees. If any nominee becomes unable to serve, which is
not anticipated, the proxies will be voted for any substitute nominee that
Management recommends.
The following information concerns the nominees and continuing
Directors:
CLASS I DIRECTORS
(TERMS EXPIRE IN 2002)
J. P. HAYDEN, JR.: born 1929, Director since 1973. Mr. Hayden is
Chairman of the Executive Committee of the Board and a Director of The Midland
Company.
ROGER L. HOWE: born 1935, Director since 1985. Mr. Howe, prior to
his retirement September 1, 1997, was Chairman of the Board of U.S. Precision
Lens, Inc. Mr. Howe is also a Director of Cincinnati Bell, Inc., Cintas
Corporation, Eagle-Picher Industries, Inc. and Baldwin Piano and Organ
Company.
SHELDON B. LUBAR: born 1929, Director since 1986. Mr. Lubar is
Chairman of Lubar & Co., a Milwaukee, Wisconsin investment and management
firm. Mr. Lubar is also a Director of Massachusetts Mutual Life Insurance
Company, MGIC Investment Corporation, Jefferies Group, Inc., C2, Inc.,
Weatherford International Inc. and various private industrial companies.
DAVID B. O'MALEY: born 1946, Director since 1995. Mr. O'Maley is
Chairman, President and Chief Executive Officer of Ohio National Life
Insurance Company and serves several affiliates and subsidiaries similarly,
and has served in that capacity since 1994. From 1993 to 1994, he was
President and Chief Operating Officer and from 1992 to 1993, he was Executive
Vice President and Chief Marketing Officer of Ohio National Life Insurance
Company.
O'DELL M. OWENS, M.D.: born 1947, Director since 1991. Dr. Owens
is currently Medical Director of United Healthcare of Ohio, Inc.
WILLIAM W. WIRTZ: born 1929, Director since 1980. Mr. Wirtz is
President and a Director of Wirtz Corporation, Chicago, Illinois, a
diversified operations and investment company. Mr. Wirtz is also a Director
of Consolidated Enterprises, Inc., Forman Realty Corporation, American Mart
Corporation, 333 Building Corporation, Chicago Stadium Corporation, Chicago
Blackhawk Hockey Team, Inc., and Alberto Culver Company.
CLASS II DIRECTORS
(NOMINEES FOR TERMS TO EXPIRE IN 2003)
JERRY A. GRUNDHOFER: born 1944, Director since 1993. Mr.
Grundhofer is President and Chief Executive Officer of the Corporation and
Chairman, President, and Chief Executive Officer of Firstar Bank, N.A. and has
served Firstar in an executive capacity since 1993. Mr. Grundhofer is also a
Director of Ecolab, Inc. and The Midland Company.
JOE F. HLADKY: born 1940, Director since 1991. Mr. Hladky is
President and Chief Executive Officer of the Gazette Company, Cedar Rapids,
Iowa, an independent media company.
THOMAS H. JACOBSEN: born 1939, Director since 1989. Mr. Jacobsen
is Chairman of Firstar Corporation and former Chairman and Chief Executive
Officer of Mercantile Bancorporation Inc. Mr. Jacobsen is also a Director of
the Federal Reserve Bank of St. Louis.
FRANK LYON, JR.: born 1941, Director since 1995; private investor.
Mr. Lyon served as Chairman of Mercantile Bank of Arkansas and its predecessor
holding company, TCBankshares Inc. for more than five years prior to May 1995.
CRAIG D. SCHNUCK: born 1949, Director since 1991. Mr. Schnuck is
Chairman and Chief Executive Officer of Schnuck Markets, Inc., a retail
supermarket chain. Mr. Schnuck is also a Director of Schnuck Markets and
General American Life Insurance Company.
JOHN J. STOLLENWERK: born 1940, Director since 1998. Mr.
Stollenwerk is President of Allen-Edmonds Shoe Corporation and a Limited
Partner of RJP Partnership and Woodlore Partnership.
CLASS III DIRECTORS
(TERMS EXPIRE IN 2001)
JOHN C. DANNEMILLER: born 1938, Director since 1990. Mr.
Dannemiller is Chairman of Applied Industrial Technologies, formerly known as
Bearings, Inc. Mr. Dannemiller is also a Director of Lamson & Sessions Co.
DAVID B. GARVIN: born 1943, Director since 1998. Mr. Garvin
served as Chairman and Chief Executive Officer of Camping World Inc. from 1968
until 1989 and Chairman until 1998. Mr. Garvin is also a Director of the
Affinity Group, Inc., Gish, Sherwood, Inc. and is the owner and operator of
Ironwood Farms.
VICTORIA BUYNISKI GLUCKMAN: born 1951, Director since 1991. Ms.
Buyniski Gluckman is Founder, President and Chief Executive Officer of United
Medical Resources, Inc. and has served that company in an executive capacity
since 1983. Ms. Buyniski Gluckman is also a Director of The Health Alliance
and Ohio National Life Insurance Company.
DANIEL F. McKEITHAN, JR.: born 1935, Director since 1977. Mr.
McKeithan is President and Chief Executive Officer of Tamarack Petroleum
Company, Inc., a manager of oil and gas wells, and President of AIM and
Associates, an accounting firm. Mr. McKeithan is also a Director of Marcus
Corporation and WICOR, Inc. and a Trustee of Northwestern Mutual Life
Insurance Company.
THOMAS E. PETRY: born 1939, Director since 1987. Mr. Petry
retired in 1998 as Chairman and Chief Executive Officer of Eagle-Picher
Industries, Inc. Mr. Petry is also a Director of CINergy, Wm. Powell Co. and
Union Central Life Insurance Company.
PATRICK T. STOKES: born 1944, Director since 1992. Mr. Stokes is
President of Anheuser-Busch, Inc.
Dates listed for the nominees and continuing Directors include
service as Directors of Firstar Corporation or Mercantile Bancorporation Inc.
before the merger of the two on September 20, 1999.
PROPOSAL TO AMEND THE STOCK INCENTIVE PLAN
The Board of Directors of the Corporation approved the Compensation
Committee's recommendation to amend the Stock Incentive Plan, originally
adopted by Star Banc Corporation, predecessor to the Corporation, in 1996,
(the "Plan") at the Board's meeting on December 14, 1999. The purpose of the
amendment to the Plan is to increase the number of authorized shares of the
Corporation's Common Stock available for Plan purposes.
The Plan was originally adopted by Star Banc Corporation on April
8, 1997, when the Corporation's assets were approximately $10 billion. The
Corporation's assets currently exceed $70 billion. In 1997, 146 executives
participated in the Plan. In 2000, 1,700 executives are expected to
participate.
The Board approved an increase in the number of shares available
for Plan purposes to 45 million from the current 15 million. Substantially
all of the 15 million shares originally available under the Plan have been
granted as stock options or restricted shares. Additional available shares
will be used to provide material performance-based incentives for the
continued service of key employees and to attract qualified executives to
employment with the Corporation and its subsidiaries.
The complete text of the Plan is attached to this Proxy Statement as
an Exhibit. Please refer to it for the full Plan particulars.
The Board of Directors may terminate the Plan at any time, but
unexercised options will continue and any restricted shares shall continue
subject to the terms of the Plan.
The Plan contains no maximum limitation as to the number of
participants. Regular employees of the Corporation and its subsidiaries who
are key employees are eligible to participate in the Plan.
Neither the grant nor the exercise of an option under the Plan will
result under present accounting practices in any charge against the
Corporation's earnings. Any tax benefits accruing to the Corporation upon the
exercise by an employee of an option, or upon his subsequent disposition of
shares obtained by the option will be reflected in the Corporation's capital
accounts and will have no material impact on the earnings of the Corporation.
THE BOARD OF DIRECTORS INTENDS TO SUBMIT THE FOLLOWING RESOLUTION TO
SHAREHOLDERS FOR ACTION AT THE ANNUAL MEETING:
RESOLVED, THAT THE STOCK INCENTIVE PLAN BE, AND HEREBY IS,
AMENDED TO REFLECT AN INCREASE IN THE AGGREGATE NUMBER OF COMMON SHARES
OF THE CORPORATION WHICH MAY BE ISSUED UNDER THE PLAN TO NOT EXCEED 45
MILLION SHARES; SUBJECT TO ADJUSTMENT IN THE EVENT OF STOCK SPLITS,
STOCK DIVIDENDS, EXCHANGES OF SHARES OR THE LIKE OCCURRING AFTER THE
EFFECTIVE DATE OF THIS AMENDMENT TO THE PLAN.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of Firstar Corporation is composed
entirely of independent outside Directors and is responsible for setting
corporate compensation policy. The goal of the Corporation's compensation
program is to attract, motivate, reward and retain the management talent
required to achieve corporate objectives and increase shareholder value.
Base salaries of the Named Executives other than for Mr. Grundhofer
were determined by the Compensation Committee using senior management's
recommendations. Salaries were decided based on individual performance and
industry standards as determined through external compensation studies and
information from regional bank holding companies.
The Compensation Committee administers the Executive Bonus Plan, the
purpose of which is to reward the achievement of corporate financial
objectives established in advance by the Compensation Committee. The
performance measures for determining plan awards include fully diluted
earnings per share (EPS), return on average equity (ROE), return on average
assets (ROA), credit quality, and individual performance against established
objectives. The Plan provides awards, however, only if the Corporation's EPS
meets a specified threshold established by the Compensation Committee and
approved by the Board of Directors at the beginning of each plan year. The
opportunity for a bonus award for the Named Executives in 1999 ranged from 20%
to 200% of base salary depending on the individual's position and the amount
by which actual EPS exceeded the threshold set.
The Compensation Committee also administers the Corporation's Stock
Incentive Plan, the purpose of which is to encourage long-term growth in the
Corporation's shareholder value. Stock options and restricted stock may be
granted pursuant to the Plan, based on factors including corporate
performance, individual responsibilities and performance, grant guidelines
based on the Black-Scholes valuation method, and information from regional
bank holding companies and other competitive indices. 1999 options are
subject to a vesting schedule with full vesting four years from the date of
grant.
Mr. Grundhofer's compensation was determined by the Compensation
Committee and approved by the Board. His 1999 base salary of $850,000 as well
as his 1999 bonus opportunity and stock option grant were established under
the terms of his employment agreement with the Corporation, and are consistent
with industry standards as determined from the Hewitt Associates Compensation
Survey and other competitive indices. His bonus was based on the same
criteria as that described previously for the other Executive Officers. He
was granted options for 590,000 shares on December 14, 1999, exercisable
pursuant to a four-year vesting schedule at a grant price of $21.375.
COMPENSATION COMMITTEE OF
FIRSTAR CORPORATION BOARD OF DIRECTORS
J.P. Hayden, Jr. Frank Lyon, Jr. Thomas E. Petry, Chair
Roger L. Howe David B. O'Maley John J. Stollenwerk
The following tables list information on compensation received for
services by the Chief Executive Officer and the next four highest compensated
executive officers of the Corporation in all capacities to the Corporation
and its subsidiaries during the year ended December 31, 1999.
<TABLE>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- Annual Compensation --- ------- Long-Term Compensation ------
Name and Salary Bonus Other Stock Options Long-Term Compensation
Principal Position Year ($) (1) ($) (2) ($) Awards ($) (#) Incentive ($) ($)
- ------------------ ---- ------- ------- --- ---------- --- ------------- ---
Jerry A. Grundhofer 1999 850,000 1,700,000 590,000 428,104 (3)
President, Chief 1998 800,000 1,000,000 1,140,000 12,900
Executive Officer and 1997 750,000 937,500 540,000 12,262
Director of the Corporation
Richard K. Davis 1999 350,000 525,000 540,000 12,698 (4)
Vice Chairman 1998 325,000 331,500 270,000 10,891
of the Corporation 1997 300,000 306,000 225,000 10,085
David M. Moffett 1999 350,000 525,000 540,000 42,248 (5)
Vice Chairman 1998 325,000 331,500 270,000 10,892
and Chief Financial Officer 1997 300,000 306,000 225,000 10,087
of the Corporation
Mark C. Wheeler, Jr. (6) 1999 222,115 762,500 (7) 240,000 195,564 (8)
Vice Chairman
of the Corporation
William L. Chenevich (9) 1999 207,692 675,000 (10) 585,000 (11) 350,000 64,144 (12)
Vice Chairman
of the Corporation
</TABLE>
(1) Includes amounts deferred at the direction of the executive officer
pursuant to the Firstar Corporation Thrift Savings 401(k) Plan and, if
applicable, the Firstar Corporation Deferred Compensation Plan.
(2) Reflects bonus earned during the fiscal year. In some instances all or a
portion of the bonus was paid during the next fiscal year.
(3) Includes $10,000 Corporate contribution to the Firstar Corporation Thrift
Savings 401(k) Plan and $3,045 split dollar life insurance premium. Split
dollar insurance premiums are based on the cost of equivalent group term
insurance. Also includes $271,896 in excise tax gross-up; $117,502 in
moving expenses; $18,600 in car allowance; and $7,061 financial planning.
(4) Includes $10,000 Corporate contribution to the Firstar Corporation Thrift
Savings 401(k) Plan and $1,198 split dollar life insurance Premium. Split
dollar insurance premiums are based on the cost of equivalent group term
insurance. Also includes $1,500 financial Planning.
(5) Includes $10,000 Corporate contribution to the Firstar Corporation Thrift
Savings 401(k) Plan and $1,199 split dollar life insurance premium. Split
dollar insurance premiums are Split dollar insurance premiums are based on
the cost of equivalent group term insurance. Also includes $31,049 moving
expense, including a tax gross-up of $2,471.87.
(6) Employed 5/3/99; not included in proxy in 1998 or 1997.
(7) Includes 1999 performance incentive and special bonus as well as a
$205,000 one-time lump sum payment made upon employment.
(8) Moving expenses, which include a tax gross-up of $27,097.13.
(9) Employed 4/26/99; not included in proxy in 1998 or 1997.
(10) Includes 1999 performance incentive as well as $300,000 one-time lump
sum payment, $60,000 of which was received upon employment and $240,000 of
which was deferred.
(11) Value of restricted shares granted on 4/26/99 based on opening price of
Firstar stock.
(12) Moving expenses, which include a tax gross-up of $9,171.52.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<S> <C> <C> <C> <C> <C>
% of Total Options
Individual Grants Options Granted to Employees Exercise or Expiration Grant Date
Name Granted(#) in Fiscal Year Base Price ($) Date Present Value ($)
---- ---------- -------------- -------------- ---- -----------------
Jerry A. Grundhofer 590,000 3.4% $21.3750 12/14/09 $4,802,600
Richard K. Davis 345,000 2.0% $28.8958 01/12/09 $3,556,950
195,000 1.1% $21.3750 12/14/09 $1,587,300
David M. Moffett 345,000 2.0% $28.8958 01/12/09 $3,556,950
195,000 1.1% $21.3750 12/14/09 $1,587,300
Mark C. Wheeler, Jr. 240,000 1.4% $30.0000 05/03/09 $2,664,000
William L. Chenevich 240,000 1.4% $33.1875 04/26/09 $2,911,200
110,000 0.6% $21.3750 12/14/09 $895,400
</TABLE>
(1) Grant date option values calculated through use of the "Black-Sholes"
pricing model. Values are calculated assuming risk-free rates of return of
4.5% to 6.1%, dividend rate of 2%, volatility rate of 41%, quarterly
reinvestment of dividends, and an average term of five years. No
adjustments have been made for nontransferability or risk of forfeiture.
<TABLE>
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUE
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Number of Value of Unexercised in
Unexercised Options the Money Options
Shares Acquired 12/31/99 (#) 12/31/99 ($)
Name on Exercise (#) Value Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- ------------------ ------------------------- -------------------------
Jerry A. Grundhofer --- --- 3,939,651 / 1,595,000 $51,183,184 / 0
Richard K. Davis 206,568 $4,983,904 771,228 / 742,500 $6,840,392 / 0
David M. Moffett --- --- 1,080,000 / 742,500 $12,181,444 / 0
Mark C. Wheeler, Jr. --- --- 0 / 240,000 0 / 0
William L. Chenevich --- --- 0 / 350,000 0 / 0
</TABLE>
Stock Performance Chart. The following chart compares the yearly
percentage change in the cumulative total shareholder return on the
Corporation's Common Stock during the five years ended December 31, 1999 with
the cumulative total return on the Standard & Poor's Major Regional Banks'
Index and the Standard & Poor's Stock Index. The comparison assumes $100 was
invested on January 1, 1995, in the Corporation's Common Stock and in each of
the foregoing indices and assumes reinvestment of dividends.
[insert table graphic]
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
Firstar Corporation $100 $169.00 $267.40 $509.90 $838.30 $581.90
S&P Major Reg. Banks $100 $157.30 $210.20 $323.60 $357.60 $306.60
S&P 500 $100 $137.40 $166.30 $225.50 $289.90 $350.90
Defined Benefit Pension Plan. Compensation in the form of payments
from the Corporation's noncontributory, defined benefit pension plan is not
included in the compensation tables above. Substantially all employees are
eligible to receive benefits from this pension plan, which are based upon
average base salary during the five consecutive years in which compensation
was the highest and upon the employee's years of service, with a normal
retirement age of 65 and one year of plan participation. The 2000 total of
annual payments as a life annuity with 120 guaranteed payments (exclusive of
Social Security) from the pension plan may be individually estimated using the
following information.
<TABLE>
YEARS OF SERVICE
- -------------------------------------------------------------------------------------
Current
Annual
Earnings 10 15 20 25 30 35
- -------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
125,000 15,247 22,871 30,495 38,118 45,742 53,366
150,000 18,657 27,985 37,313 46,642 55,970 65,298
175,000 22,066* 33,099* 44,132* 55,166* 66,199* 77,232
200,000 25,476* 38,214* 50,951* 63,689* 76,427* 89,165
225,000 28,885* 43,328* 57,770* 72,213* 86,656* 101,098
250,000 32,295* 48,442* 64,589* 80,736* 96,884* 113,031
300,000 39,114* 58,670* 78,227* 97,784* 117,341* 136,897
400,000 52,751* 79,127* 105,503* 131,878* 158,254* 184,629
600,000 80,027* 120,041* 160,054* 200,068* 240,081* 280,095
800,000 107,303* 160,954* 214,606* 268,257* 321,908* 375,560
1,000,000 134,579* 201,868* 269,157* 336,446* 403,736* 471,025
1,400,000 189,130* 283,695* 378,260* 472,825* 567,390* 661,955
1,800,000 243,681* 365,522* 487,363* 609,203* 731,044* 852,885
2,200,000 298,233* 447,349* 596,465* 745,582* 894,698* 1,043,814
2,500,000 339,146* 508,719* 678,293* 847,866* 1,017,439* 1,187,012
2,800,000 380,060* 570,090* 760,120* 950,150* 1,140,180* 1,330,210
</TABLE>
The benefits [denoted with *] in the shaded area do not reflect the
$170,000 compensation limit or the $121,500 annual benefit limit which apply
under Federal law. The actual benefits payable from the qualified pension plan
will take into account these limits, and will be adjusted accordingly as the
limits are adjusted each year. These benefits were estimated using a five-year
average of compensation determined from the "Current Annual Earnings" shown
above.
For purposes of computing benefits under this plan, on December 31,
1999, Mr. Grundhofer had seven years of credited service; Mr. Davis, six
years; Mr. Moffett, six years; Mr. Wheeler, one year; and Mr. Chenevich, one
year.
Non-Qualified Retirement Plan. Compensation in the form of
payments from the Corporation's non-contributory, non-qualified retirement
plan, to the extent that it replaces income lost due to legislated limits on
benefits and compensation, is included in the above table. The plan provides
vested supplemental retirements to certain officers of the Corporation so that
participants receive a combined pension benefit under the qualified and non-
qualified plans at one of two levels. Participants eligible for the level of
augmented combined benefits under the qualified, non-qualified and certain
other prior employer plans based on a percentage of final average compensation
(base plus bonus) include Messrs. Davis, Grundhofer, Moffett, and certain
other executive officers. Eligibility for such augmented benefits is
determined by the Compensation Committee of the Board of Directors based on
individual performances and level of responsibility. The 1999 total of annual
payments as a life annuity with 120 guaranteed payments at the augmented level
(less benefits replaced due to the application of legislated limits) may be
individually estimated using the following table.
YEARS OF SERVICE
- ----------------------------------------------------------------------
CURRENT
ANNUAL
EARNINGS 10 15 20 25 30 35
- ----------------------------------------------------------------------
125,000 52,642 44,868 37,094 29,321 21,547 13,773
150,000 62,870 53,392 43,914 34,435 24,957 15,479
175,000 73,099 61,916 50,733 39,549 28,366 17,183
200,000 83,327 70,439 57,552 44,664 31,776 18,888
225,000 93,556 78,963 64,371 49,778 35,185 20,593
250,000 103,783 87,486 71,189 54,892 38,594 22,297
300,000 124,240 104,534 84,827 65,120 45,413 25,707
400,000 165,154 138,628 112,102 85,577 59,051 32,526
500,000 206,067 172,722 139,378 106,033 72,689 39,344
600,000 246,981 206,817 166,654 126,490 86,327 46,163
700,000 287,895 240,913 193,930 146,948 99,965 52,983
800,000 328,808 275,007 221,205 167,404 113,603 59,801
900,000 369,722 309,102 248,482 187,861 127,241 66,621
1,000,000 410,635 343,196 275,757 208,318 140,878 73,439
1,100,000 451,549 377,290 303,032 228,774 154,516 80,258
1,200,000 492,463 411,386 330,309 249,231 168,154 87,077
1,300,000 533,376 445,480 357,584 269,688 181,792 93,896
1,400,000 574,290 479,575 384,860 290,145 195,430 100,715
1,500,000 615,203 513,669 412,135 310,602 209,068 107,534
Employment Agreements. The Corporation has entered into employment
agreements with severance benefits with Messrs. Chenevich, Davis, Grundhofer,
Moffett and Wheeler. The agreements are designed to enhance the Corporation's
ability to attract and retain high caliber senior management at a time when
mergers and acquisitions are common in the financial services industry. In
general, the agreements provide for the payment of a lump sum benefit to the
officer, including a gross-up for federal excise tax purposes, if necessary,
pursuant to Section 280(G) of the Internal Revenue Code, plus the continuation
of certain medical and insurance benefits, in the event that the officer's
employment is terminated involuntarily by the Corporation, or voluntarily by
the officer for good reason. For Messrs. Chenevich, Davis, Moffett and
Wheeler, payment is provided only in the event such termination occurs during
a specified period following a Change of Control of the Corporation. Change
of Control is defined in the document and includes certain mergers, sales of
assets or tender offers.
Among other things, Mr. Grundhofer's agreement provides for
severance benefits of three times salary and bonus and accelerated vesting of
stock awards, in the event of a qualified termination during his Employment
Period (either before or following a Change of Control). In addition, Mr.
Grundhofer's agreement provides for the granting of past employer service
credit for vesting purposes under the Corporation's Non-Qualified Retirement
Plan upon three years of service. Mr. Grundhofer's rights in the
Corporation's Non-Qualified Retirement Plan are fully vested. Messrs.
Chenevich, Davis, Moffett and Wheeler have agreements which provide for lump
sum benefits of three times salary and bonus in the event of a qualified
termination following a Change of Control during the officer's protected
period. Messrs. Davis' and Moffett's rights in the Non-Qualified Retirement
Plan are fully vested.
Retention Agreements. The Corporation maintained retention
agreements with Messrs. Chenevich, Davis and Moffett. The agreements were
designed to allow the Corporation to maintain, reward, and encourage
continuity and excellence in senior management. The agreements generally
provide for a lump sum payment in the event that the executive remains in good
standing in his position with the Corporation for a specified period of time.
The agreements for Messrs. Davis and Moffett, established at the end of 1994,
provided for a payment of $350,000 to each if they were actively employed with
the Corporation on January 1, 2000, and each has received payment in
accordance with the agreements. The agreement for Mr. Chenevich provides for
a payment of $240,000 if he is actively employed with the Corporation on May
1, 2004.
COMPENSATION OF DIRECTORS
Directors of Firstar Corporation, except for those Directors who
became Directors as a result of the transaction with Mercantile on September
20, 1999 and for Mr. Grundhofer, received an annual retainer fee of $25,000
plus a fee of $1,500 for each Board meeting attended and a fee of $850 for
each Committee meeting attended. Committee Chairpersons received an annual
retainer fee of $4,000. Each Director of Firstar Corporation, except for
those Directors who became Directors as a result of the transaction with
Mercantile on September 20, 1999 and for Mr. Grundhofer, received options to
purchase 17,700 shares of Firstar Corporation stock, subject to a four-year
vesting schedule.
Directors of the former Mercantile Bancorporation Inc., other than
Mr. Jacobsen, received an annual retainer fee of $15,000 plus a meeting fee of
$1,000 for each Board meeting and Committee meeting attended. In addition,
the Chairpersons for the Committees received a retainer of $2,000. Each
Director of the former Mercantile Bancorporation Inc. received options to
purchase 2,091 shares of Mercantile (now Firstar) stock, subject to a six
month vesting schedule. The Mercantile stock options were converted to
Firstar stock options and became fully vested upon closing of the merger
between the Corporation and Mercantile Bancorporation Inc.
CORPORATE GOVERNANCE INFORMATION
The Board of Directors held eight meetings in 1999.
The Board of Directors has an Executive Committee, an Audit
Committee, a Compensation Committee, a Community Outreach and Fair Lending
Committee and a Governance Committee.
The Executive Committee of the Corporation held twelve meetings in
1999. The Committee has the authority to exercise all powers of the Board of
Directors between regularly scheduled Board meetings. The current members of
the Executive Committee are Messrs. Grundhofer, Hayden, Howe, Jacobsen, Lubar,
McKeithan, Petry and Stokes.
The Audit Committee of the Corporation held six meetings in 1999
and is responsible for the review of the work of PricewaterhouseCoopers LLP,
the Corporation's outside independent auditor for 1999. The Committee reviews
recommendations on various matters made by the outside auditors and action
taken by management and the Corporation's internal auditor to implement these
recommendations. The Committee also considers the scope of the audit to be
performed for the Corporation and its subsidiaries and the proposed fees for
this work. The Committee recommends action to the Board of Directors of the
Corporation in connection with all the above matters. The current members of
the Audit Committee are Ms. Buyniski Gluckman, and Messrs. Garvin, Hayden,
Hladky, Howe, Petry, McKeithan, Schnuck, Stollenwerk and Wirtz.
The Compensation Committee of the Corporation held seven meetings
in 1999 and sets policy for compensation, reviews the recommendations of the
Chief Executive Officer as to compensation of officers, establishes the
compensation of the Chief Executive Officer and approves eligibility for
benefits under the Corporation's non-qualified retirement plan. It also
administers the Corporation's Stock Incentive Plans. The current members of
the Compensation Committee are Messrs. Hayden, Howe, Lyon, O'Maley, Petry and
Stollenwerk.
The Community Outreach and Fair Lending Committee of the Corporation
held three meetings in 1999. The Committee is responsible for reviewing the
Corporation's activities with respect to community development and compliance
with the Community Reinvestment Act and fair lending regulations. The current
members of the Community Outreach and Fair Lending Committee are Ms. Buyniski
Gluckman and Messrs. Dannemiller, Hladky, Lyon, Owens, Schnuck and
Stollenwerk.
The Governance Committee of the Corporation held six meetings in
1999. The Committee administers the affairs of the Board of Directors,
evaluates current Directors, and nominates new Directors. The current members
of the Governance Committee are Messrs. Dannemiller, Hayden, Lubar, McKeithan
and Stokes. Shareholders who wish to suggest Director nominees should contact
the Committee by mail at the Corporate Headquarters.
All Directors except Messrs. Lyon, Schnuck and Stokes, who joined
the Board at the closing of the Mercantile transaction on September 20,
attended at least 75% of the aggregate of the number of regular and special
meetings of the Board of Directors held during 1999 and all committees of the
Board on which the Director served during the 1999 calendar year. This
percentage does not include meetings for Mercantile Bancorporation Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's Directors and named executive officers to file with
the Securities and Exchange Commission (SEC) and the New York Stock Exchange
(NYSE) reports of ownership and changes in ownership of Common Stock of the
Corporation. Officers and Directors are required by SEC regulation to furnish
the Corporation with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such reports furnished to
the Corporation or written representations that no other reports were
required, the Corporation believes that all filing requirements applicable to
its officers and Directors were properly filed during the 1999 year.
ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS
The Corporation's Articles of Incorporation provide that
shareholder nominations for election as directors or proposals of other
business may be made in compliance with certain advance notice, informational
and other applicable requirements. To be considered, a shareholder must give
timely notice in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be received by the Secretary of the Corporation at
the principal executive offices of the Corporation not later than the earlier
of (i) 45 days in advance of the first anniversary (the "Anniversary Date") of
the date set forth in the Corporation's proxy statement for the prior year's
Annual Meeting as the date on which the Corporation first mailed definitive
proxy materials for the prior year's Annual Meeting and (ii) the later of (x)
the date 70 days prior to the date of the Annual Meeting for which such
proposal is being made and (y) the date 10 business days after the first
public announcement of the date of the Annual Meeting for which such proposal
is being made. Such shareholder's notice shall be signed by the shareholder
of record who intends to introduce the other business, shall bear the date of
signature of such shareholder and shall set forth: (i) the name and address,
as they appear on the Corporation's books, of such shareholder and the
beneficial owner or owners, if any, on whose behalf the proposal is made; (ii)
the class and number of shares of the Corporation which are beneficially owned
by such shareholder and any such beneficial owner or owners; (iii) a
representation that such shareholder is a holder of record of shares of the
Corporation entitled to vote at such Annual Meeting and intends to appear in
person or by proxy at such Annual Meeting to introduce the business specified
in such shareholder's notice; and (iv) (A) a brief description of the business
desired to be brought before such Annual Meeting and, if such business
includes a proposal to amend these by-laws, the language; (B) such
shareholder's and any such beneficial owner's or owners' reasons for
conducting such business at such Annual Meeting; and (C) any material interest
in such business of such shareholder and any such beneficial owner or owners;
and (D) with respect to any nomination of a director, all information required
by the Articles of Incorporation to be set forth in a shareholder notice of
nomination of director.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Several of the Directors of the Corporation and the entities with
which they are associated were customers of and had various transactions with
the Corporation's subsidiary banks in the ordinary course of business during
1999. All loans, loan commitments and sales of notes included in these
transactions were made in the ordinary course of business, on substantially
the same terms, including interest rates and collateral, as those prevailing
at the time for comparable transactions with others and did not involve more
than the normal risk of collectability or present other unfavorable features.
While Mr. Jacobsen serves as Chairman of the Board of Firstar, he
will be entitled to receive a base salary and an annual bonus equal to the
base salary and annual bonus paid to Firstar's chief executive officer. Mr.
Jacobsen will receive a cash payment of $5 million in partial consideration of
his noncompete and confidentiality obligations under the new employment
agreement. Mr. Jacobsen was granted 300,000 shares of restricted Firstar
common stock on completion of the merger with Mercantile Bancorporation and
will be granted options to acquire 500,000 shares of Firstar common stock in
calendar year 2000. The restricted stock and the option awards will vest on
the fourth anniversary of the completion of the merger or, if earlier, on Mr.
Jacobsen's retirement after the 2001 annual shareholders' meeting. Beginning
at the 2001 annual shareholders' meeting, Mr. Jacobsen will be paid an annual
retirement benefit of $2.5 million, less any benefits payable under Firstar's
tax-qualified retirement plan. Should his spouse survive him, she will
receive annually 50% of the retirement benefit. The amounts paid under the
employment agreement are partially in consideration for Mr. Jacobsen's
noncompete and confidentiality obligations, and those portions of these
amounts have been reviewed by an independent appraiser.
The employment agreement provides that, on a termination of Mr.
Jacobsen's employment by Firstar, other than for cause or disability, or by
him for good reason, he will be entitled to a payment consisting of:
- -- a pro rata annual bonus through the date of termination, based on the
highest annual bonus earned in the three years prior to the termination
date, plus
- -- the product of (a) the number of months from the date of termination until
the 2001 annual shareholders' meeting, divided by 12 and (b) the sum of his
base salary and annual bonus (based on the highest annual bonus earned in
the three years prior to the termination date).
Also, if this type of termination of Mr. Jacobsen's employment occurs, the
restricted stock and option awards will vest immediately and Mr. Jacobsen and
his current spouse will be entitled to receive medical and dental benefits
coverage for the remainder of their lives.
If any amounts payable to Mr. Jacobsen under the employment
agreement or otherwise would be subject to the excise tax under section 4999
of the U.S. tax code, an additional payment will be made so that after the
payment of all income and excise taxes, Mr. Jacobsen will be in the same
after-tax position as if no excise tax under section 4999 had been imposed.
However, if these additional payments (excluding additional amounts payable
due to the excise tax) do not exceed 110% of the greatest amount that could be
paid to Mr. Jacobsen without requiring payment of the excise tax, no
additional payments will be made on account of the excise tax. Instead, the
payments otherwise due to Mr. Jacobsen will be reduced as necessary to prevent
the application of the excise tax.
INDEPENDENT AUDITORS
The Board of Directors appointed PricewaterhouseCoopers LLP as
independent auditors of the Corporation and its subsidiaries for the years
1999 and 2000.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at
the Annual Meeting. If any other matters arise before the meeting, the Board
of Directors intends for the holders of the proxies to vote in accordance with
the recommendations of Management.
By order of the Board of Directors,
Jennie P. Carlson
Executive Vice President,
General Counsel and Secretary
Milwaukee, Wisconsin
March 1, 2000
YOU MAY REQUEST A COPY OF THE FORM 10-K ANNUAL REPORT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (LESS EXHIBITS) BY CONTACTING DAVID
MOFFETT, VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER, BY TELEPHONE AT
414.765.4518, BY MAIL AT FIRSTAR CORPORATION, 777 EAST WISCONSIN AVENUE,
MILWAUKEE, WISCONSIN 53202, OR BY ELECTRONIC MAIL AT [email protected].
FIRSTAR CORPORATION
COMMON STOCK PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned appoints Jerry A. Grundhofer and Jennie P. Carlson or either
of them, with power of substitution to each, as attorney and proxy and
authorizes either of them to represent the undersigned at the Annual Meeting
of Shareholders of Firstar Corporation to be held in the Presidential Room
of the Westin Hotel, Fifth and Vine Streets, Cincinnati, Ohio on Tuesday,
April 11, 2000, at 11:00 a.m. eastern time, and at any applicable
adjournment and to vote, as designated below, all shares of Common Stock of
Firstar Corporation held as of record by the undersigned on February 17, 2000
and which the undersigned would be entitled to vote at such Annual Meeting,
revoking all former proxies.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned. If no direction is given and this proxy is properly returned,
this proxy will be voted FOR the Proposals. Please sign, date and return this
proxy form using the enclosed envelope.
IF YOU DO NOT VOTE BY TOUCH TONE PHONE OR INTERNET, PLEASE VOTE,
SIGN THIS PROXY ON THE REVERSE SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE.
(SEE REVERSE SIDE TO VOTE)
FIRSTAR NOW OFFERS THREE WAYS FOR YOU TO VOTE YOUR PROXY
AS A SHAREHOLDER YOU CAN NOW HELP YOUR COMPANY SAVE BOTH TIME AND EXPENSE
BY VOTING THIS PROXY OVER THE INTERNET OR BY TOUCH TONE PHONE.
OPTION 1: Call toll free 1-800-214-9752 using a touch tone phone 24 hours
VOTE BY a day, 7 days a week. You will be asked to enter the
TELEPHONE information listed below. Then, if you wish to vote as
recommended by the Board of Directors, simply press 1. That's
all there is to it...End of call. If you do not wish to vote
as the Board recommends, you need only respond to a few simple
prompts. THERE IS NO CHARGE FOR THIS CALL. (DO NOT RETURN
YOUR PROXY CARD IF YOU VOTE BY PHONE.)
YOUR CONTROL NUMBER IS:
OPTION 2: Access
VOTE ON THE https://www.css2.sungard.com/Firstar/InterLink?pbProxyVoting=1
INTERNET Follow the simple instructions. (DO NOT RETURN YOUR PROXY
CARD IF YOU VOTE ON THE INTERNET.)
YOUR PROXY NUMBER IS:
YOUR ISSUE NUMBER IS:
YOUR ACCOUNT NUMBER IS:
OPTION 3: If you do not wish to vote by touch tone phone or the Internet,
MAIL YOUR please complete and return the proxy card.
PROXY CARD
[graphic of telephone] [graphic of personal computer]
FIRSTAR CORPORATION 2000 ANNUAL MEETING OF SHAREHOLDERS
PROPOSAL I: Terms to 1-Jerry A. Grundhofer [ ] FOR all [ ] WITHHOLD
ELECTION OF Expire in 2-Joe F. Hladky nominees AUTHORITY
CLASS II DIRECTORS: 2003 3-Thomas H. Jacobsen listed to vote
(To elect the 4-Frank Lyon, Jr. to the for all
following directors 5-Craig D. Schnuck left nominees
to serve until the 6-John J. Stollenwerk (except as listed to
2003 Annual specified the left.
Meeting of below).
Shareholders of the
Corporation and
until their
successors are
elected and qualified)
(Instructions: To withhold authority to vote for any [arrow graphic] [ ]
indicated nominee, write the number(s) of the
nominee(s) in the box provided to the right.)
PROPOSAL II:
To amend the Firstar Corporation Stock [ ] FOR [ ] AGAINST [ ] ABSTAIN
Incentive Plan to increase the number of
shares of common stock available for Plan
purposes by 30 million shares for a total
of 45 million shares.
Check appropriate box Date _________ NO. OF SHARES
Indicate changes below:
Address Change? [ ] Name Change? [ ] [ ]
[ ]
[ ]
SIGNATURE(S) IN BOX
Please sign exactly as
your name appears on
your stock certificate,
then date and return
using the enclosed
envelope. When shares are
held jointly, each
shareholder must sign.
When signing as a
corporation, please sign
in full corporate name by
an authorized officer.
When signing as a partner-
ship, please sign in
partnership name by an
authorized person.
EXHIBIT
FIRSTAR CORPORATION
1998 EXECUTIVE STOCK INCENTIVE PLAN
(ADOPTED ORIGINALLY IN DECEMBER 1996
AND AS AMENDED THROUGH DECEMBER 1998)
1. Name and Purpose. This Plan was adopted originally by Star Banc
Corporation in December 1996 and, as adopted and amended through December
1998 by its successor, Firstar Corporation, shall be known as the Firstar
Corporation 1998 Stock Incentive Plan (the "Plan"). The purpose of the Plan
is to advance the interests of Firstar Corporation (the "Corporation") by
providing material incentive for the continued services of directors,
advisory directors and key employees and by attracting able individuals to
serve as directors and advisory directors of the Corporation and by
attracting able personnel to employment with the Corporation and its
Subsidiaries. The term "Subsidiary" as used herein means a subsidiary
corporation of the Corporation as the term is defined in Section 424(f) of
the Internal Revenue Code of 1986 as amended (the "Code").
2. 1986 and 1991 Stock Incentive Plans. The 1986 Stock Incentive
Plan (the 1986 Plan) and the 1991 Stock Incentive Plan (the 1991 Plan)
adopted by the Corporation's successor, Star Banc Corporation, are hereby
amended and restated in their entirety so that their terms and conditions
match exactly as the terms and conditions of this Plan, with the exception
that the number of shares authorized under each such Plan and the
termination date of each such Plan, shall remain unchanged. Grants of
remaining authorized shares under the 1986 Plan and the 1991 Plan, and
administration of awards made under those Plans, shall be governed by the
terms and conditions set forth therein. In the event of a conflict between
the terms and conditions of the 1986 and 1991 Plans, and those set forth
herein, this document shall govern.
3. Administration. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board of Directors of the
Corporation. The Committee shall consist of at least two members of the
Board of Directors, each of whom is a "Non-Employee Director" as defined in
Rule 16b-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (the "1934 Act"), as such Rule may be
amended from time to time or any successor rule thereto. To the extent that
it is desired that compensation resulting from the grant of a particular
Option be excluded from the deduction limitation of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), all directors
comprising the Committee granting such Option also shall be "outside
directors" within the meaning of Code Section 162(m). The Committee may
establish, subject to the provisions of the Plan, such rules and regulations
as it deems necessary for the proper administration of the Plan, and make
such determinations and take such action in connection therewith, or in
relation to the Plan as it deems necessary or advisable, consistent with the
Plan.
4. Eligibility. Directors of the Corporation and its Subsidiaries,
and advisory directors of the Regional Advisory Boards established by the
Corporation (collectively, "Directors"), and regular employees of the
Corporation and its Subsidiaries who are key employees, including officers,
whether or not Directors (collectively, "Eligible Employees") shall be
eligible to participate in the Plan.
5. Shares Subject to the Plan.
(a) The shares to be issued and delivered by the Corporation
under the Plan are the Corporation's common shares, $0.01 par value, which
may be either authorized but unissued shares or treasury shares.
(b) The aggregate number of common shares of the Corporation
which may be issued under the Plan (excluding those previously authorized
under the 1986 and 1991 Plans) shall not exceed seven million, five hundred
thousand (7,500,000) shares; subject, however, to the adjustment provided in
Paragraph 14 in the event of stock splits, stock dividends, exchanges of
shares or the like occurring after the effective date of this Plan. No
option may be granted under this Plan, no Restricted Shares may be allocated
under this Plan, and no Performance awards payable in common stock can be
paid under this Plan which could cause such maximum limit to be exceeded.
(c) The maximum number of shares with respect to which options
may be granted to any individual during any one year period is 600,000.
(d) Common shares covered by an option which is no longer
exercisable with respect to such shares shall again be available for
issuance in connection with other options granted under this Plan. Common
shares repurchased by the Corporation as provided in Paragraph 12, in
respect of which no benefits of ownership have been received, shall again be
available for issuance in connection with other allocations of Restricted
Shares under this Plan.
6. Grant of Options. The Committee may from time to time, in its
discretion and subject to the provisions of the Plan, grant options to any
or all Directors and Eligible Employees. With respect to Eligible Employees
who are not subject to the provisions of Section 16 of the 1934 Act or
Section 162(m) of the Code, options may be so granted by the Chief Executive
Officer of the Corporation as the designee of the Committee. Directors and
Employees to whom options have been granted are herein referred to as
"Optionees". Each option shall be embodied in an "Option Agreement" signed
by the Optionee and the Corporation providing that the option shall be
subject to the provisions of this Plan and containing such other provisions
as the Committee may prescribe not inconsistent with the Plan. Option grants
shall specify whether the grant is made in the Optionee's capacity as a
Director or as an Eligible Employee.
7. Terms and Conditions of Option. All options granted under the
Plan shall contain such terms and conditions as the Committee from time to
time determines, subject to the foregoing and following limitations and
requirements.
(a) Form of Option: Incentive Options and Non-Qualified
Options may be granted under this Plan. An "Incentive Option" shall mean an
option granted under this Plan which is designated to be an incentive stock
option under the provisions of Code Section 422; and any provisions
elsewhere in this Plan or in any such Incentive Option which would prevent
such options from being an incentive stock option may be deleted and/or
voided retroactively to the date of the granting of such option, by action
of the Committee. A "Non-Qualified Option" shall mean an option granted
under this Plan which is not an incentive stock option under the provisions
of Code Section 422, and which is exercisable even though there is
outstanding an Incentive Option which was granted before the granting of the
Non-Qualified Option to the same Options. Such Non-Qualified Option shall
not be affected by any actions taken retroactively as provided above with
respect to Incentive Options.
(b) Option Price: The option price per share of an Incentive
Option and of a Non-Qualified Option granted to a Director shall not be less
than 100% of the fair market value of the Corporation's common shares on the
date the option is granted, as determined by the Committee in a manner
consistent with the requirements of the Code for incentive stock options.
(c) Period Within Which Options May Be Exercised: The period
of each optionprior to the expiration of one year after the date of granting
the Incentive Option, and no option, whether an Incentive Option or a Non-
Qualified Option, may be exercised after the expiration of ten years from
the date the option is granted.
(d) Termination of Option by Reason of Termination of
Employment: Except as otherwise provided by the Committee, either by
Committee action or by provision in any option or other agreement to which
an Optionee is party, if an Optionee's employment with the Corporation and
its Subsidiaries terminates, all options granted under this Plan to such
Optionee which are not exercisable on the date of such termination of
employment shall terminate immediately. Any remaining options shall
terminate if not exercised before the expiration of the following periods,
or at such earlier time as may be applicable under Paragraph 7(c) above:
(i) if the option is a Non-Qualified Option, three (3)
months immediately following such termination of employment (unless the
termination is for cause, in which case the options shall terminate
immediately upon termination of employment), if such termination was not a
result of early or normal retirement ( as determined by the chief executive
officer of the Corporation), death or if the Optionee is disabled (as
defined in Code Section 422( c )( 6) --hereinafter "Disability") of the
Optionee; or
(ii) if the option is an Incentive Option, three (3)
months immediately following such termination of employment (unless the
termination is for cause, in which case the options shall terminate
immediately upon termination of employment), if such termination was not a
result of early or normal retirement ( as determined by the chief executive
officer of the Corporation), death or Disability of the Optionee; or
(iii) for all options, one (1) year immediately following
the date of early or normal retirement (as determined by the chief executive
officer of the Corporation), death or commencement of Disability, if the
Optionee was an employee of the Corporation and/or any Subsidiary at the
time of his death or the commencement of Disability or for Non-Qualified
Options at such later time as the Committee deems appropriate.
(e) Termination of Option by Reason of Termination of
Directorship: Upon termination of status as a Director, each Optionee shall
have one (1) year following the date of termination or such later time as
the Committee deems appropriate to exercise options granted and fully vested
under this Plan. Except as provided in Paragraphs 15 and 16 of this Plan, no
unvested option will vest after the date on which Director status
terminates.
(f) Non-transferability; Exceptions: Each option and all
rights thereunder shall be exercisable during the Optionee's lifetime only
by the Optionee and shall be non-assignable and non-transferable by the
Optionee, except that a Non-Qualified Option may be transferred pursuant to
a "domestic relations order" as defined in Section 414(p)(1)(B) of the Code.
In the event of the Optionee's death, such options and rights thereunder are
transferable by his will or by the laws of descent and distribution. In the
event the death of an Optionee occurs, the representative or representatives
of the Optionee's estate, or the person or persons who acquired (by bequest
or inheritance) the rights to exercise his stock options granted under this
Plan, may exercise any of the unexercised options in whole or in part prior
to the expiration of the applicable exercise period, as specified in
Paragraph 7( d) above.
(g) More than One Option Granted to an Optionee: More than one
option, and more than one form of option, may be granted to an Optionee
under this Plan; provided, however, that the aggregate fair market value
(determined as of the time the option is granted) of the shares for which
Incentive Options are exercisable for the first time by any Optionee during
any calendar year (under the Plan and all such plans of the Corporation and
any parent or subsidiary corporation) shall not exceed $100,000 or any other
limit established by the Code. A single option grant may include both an
Incentive Option and a Non-Qualified Option.
8. Method of Exercise of Options. An Optionee may exercise a stock
option by delivering an option exercise form to the Committee, and arranging
for the satisfaction of the exercise price and any tax withholding
obligation ( as provided in Paragraph 20). The exercise price and tax
withholding obligation may be satisfied ( i) by check; ( ii) by delivery of
common shares of the Corporation previously owned by the Optionee, valued at
fair market value when the option is exercised, subject to the limits
described below, or (iii) through a broker cashless exercise procedure.
Common shares of the Corporation may be delivered to satisfy the exercise
price only if the shares have been held by the Optionee for at least six
months before delivery, and have not been used for another option exercise
during this period. Shares held by an Optionee which formerly were
Restricted Shares may not be used for this purpose until six months have
elapsed after the restrictions under Paragraph 10 have terminated with
respect to such shares. Use of previously owned shares may be effected by
actual delivery of the stock certificates to the Corporation, or by
completing an affidavit available from the Committee affirming that the
Optionee owns the necessary shares and that any applicable holding period
has been satisfied. Upon receipt of the exercise price, the Corporation
shall deliver a certificate representing the common shares acquired upon
exercise to the Optionee or, in the case of a Non-Qualified Option, to such
other recipient as directed by the Optionee. An Optionee wishing to use the
cashless exercise procedure is required to elect to have a broker sell a
sufficient number of common shares of the Corporation to satisfy the option
exercise price. The Optionee may elect to have the broker sell additional
shares to satisfy the tax withholding amount, or sell up to the full number
of shares subject to the option exercise. Following the broker's delivery to
the Corporation of the proceeds necessary to satisfy the exercise price and
the tax withholding obligation, the Corporation will deliver to the broker
the number of shares previously sold by the broker at the Optionee's
direction, and will deliver any remaining amount of cash or shares to the
Optionee or, in the case of a Non-Qualified Option, to such other recipient
as directed by the Optionee.
9. Allocation and Purchase of Restricted Shares.
(a) The Committee may from time to time, in its discretion and
subject to the provisions of the Plan, allocate common shares to any or all
Directors and Eligible Employees. Common shares allocated under this
Paragraph 9 of the Plan are referred to herein as "Restricted Shares."
Directors and Employees to whom Restricted Shares have been allocated. are
herein referred to as "Participants." Each Participant to whom an allocation
of Restricted shares has been made shall have the right to purchase such
Restricted Shares as herein provided. Each allocation shall specify whether
the Participant has received such allocation in the Participant's capacity
as a Director or as an Eligible Employee.
(b) The Committee shall advise each Participant to whom an
allocation of Restricted Shares has been made in writing of the terms of the
offer, including the number of shares which such person shall be entitled to
purchase, the purchase price per share, and any other terms, conditions and
restrictions relating thereto. The Participant shall have ten (10) days from
the date of the offer to accept such offer. The Committee may, in the
exercise of its discretion, extend the term of any offer. Subject to the
express provisions of the Plan, the Committee shall have the power to make
such offer subject to any terms and conditions it may establish and the
offers made to different persons, or to the same person at different times,
may be subject to terms, conditions and restrictions which differ from each
other. Each allocation shall be embodied in a "Restricted Share Agreement"
signed by the Participant and the Corporation providing that the Restricted
Shares shall be subject to the provisions of this Plan and containing such
other provisions the Committee may prescribe not inconsistent with the Plan.
(c) The purchase price of the shares offered under this Plan
shall be any lawful consideration established by the Committee in its
discretion. If a Participant elects to purchase Restricted Shares, he shall
pay the purchase price in full, at the principal office of the Corporation,
prior to expiration of the offer. Upon payment of the purchase price,
certificates representing the shares shall be issued to the Participant,
which certificates shall bear an appropriate legend reflecting that such
shares are subject to the restrictions contained in this Plan.
10. Restrictions Applicable to Restricted Shares. By purchasing
the Restricted Shares allocated to a Participant under this Plan, the
Participant agrees and consents to the restrictions described in this Plan
for a period determined by the Committee at the time of such allocation,
said period referred to herein as the "Restricted Period." For the duration
of the Restricted Period (unless the restrictions earlier lapse or are
removed by the Committee ), Restricted Shares issued under this Plan shall
be held in escrow by Firstar Bank, N .A., and shall not be transferred,
delivered, assigned, sold, or disposed of in any manner, nor pledged or
otherwise hypothecated. On the last day of the Restricted Period, or upon
the earlier lapse or removal of restrictions, such Restricted Shares shall
cease to be subject to the restrictions under this Paragraph 10 of the Plan.
11. Termination of Directorship or Employment During Restricted
Period.
(a) Except as provided in Paragraphs 15 and 16 of this Plan,
if a Director ceases to serve as a Director, the restrictions of Paragraph
10 of this Plan shall automatically terminate as to that number of the
Restricted Shares owned by the Director which is equal to the total number
of such Restricted Shares multiplied by fraction, the numerator of which is
the number of full months which have elapsed from the date of allocation and
the denominator of which is the number of total months during the Restricted
Period. The Director ( or his or her estate, heirs, or legatees) shall be
required to resell the remaining Restricted Shares to the Corporation at a
price per share equal to the original purchase price paid by the Director
for such shares, unless the Committee shall, in its discretion, waive the
restrictions under Paragraph 10 as to any part or all of such remaining
Restricted Shares.
(b) If an Eligible Employee's employment with the Corporation
and its Subsidiaries terminates because of death, Disability, or retirement
after attaining normal retirement age under the provisions of any retirement
plan of the Corporation or any Subsidiary, the restrictions under Paragraph
10 of this Plan shall automatically terminate as to that number of the
Restricted Shares owned by such Participant which is equal to the total
number of such Restricted Shares multiplied by a fraction, the numerator of
which is the number of full months which have elapsed from the date of
allocation and the denominator of which is the total number of months during
the Restricted Period. The Participant (or his or her estate, heirs, or
legatees) shall be required to resell the remaining Restricted Shares to the
Corporation at a price per share equal to the original purchase price paid
by the Participant for such shares, unless the Committee shall, in its
discretion, waive the restrictions under Paragraph 10 as to any part or all
of such remaining Restricted Shares.
(c) If employment with the Corporation and its Subsidiaries
terminates during the Restricted Period other than by reason of death,
Disability, or retirement after attaining normal retirement age under the
provisions of any retirement plan of the Corporation or its Subsidiaries,
such Participant shall be required to resell all of the Restricted Shares to
the Corporation at a price per share equal to the original purchase price
paid by the Participant for such shares, unless the Committee shall, in its
discretion, waive the restrictions under Paragraph 8 as to any part or all
of the Restricted Shares.
12. Resale of Restricted Shares. In the event a Participant is
required to resell Restricted Shares to the Corporation as the result of the
termination of the Participant's directorship or employment as described in
Paragraph 11, the Corporation by written notice to the Participant shall
specify a date not less than five nor more than ten days from the date of
such notice to consummate the purchase and sale of such Restricted Shares at
the principal office of the Corporation. The Participant shall deliver to
the Corporation certificates representing such Restricted Shares, duly
endorsed and in proper form for transfer, and upon the receipt of such share
certificates, the Corporation shall deliver to the Participant a check in
the amount of the purchase price. If the Participant fails to deliver the
share certificates to the Corporation at the time specified in such notice,
the Corporation may deposit the purchase price with the Treasurer of the
Corporation, and thereafter the shares shall be deemed to have been
transferred to the Corporation and the Participant, despite his failure to
deliver the share certificates, shall have no further rights as a
stockholder of the Corporation. In such event, the Treasurer of the
Corporation shall continue to hold the purchase price for such shares and
shall make payment thereof, without interest, upon delivery of the share
certificates to the Corporation.
13. Performance Awards. The Committee may, from time to time, in
its discretion and subject to the provisions of the Plan, provide an
incentive opportunity ("Performance Awards") to any or all Directors and
Eligible Employees based on achievement by the Corporation for any calendar
year or other period chosen by the Committee. Each Performance Award shall
be embodied in a "Performance Award Agreement" signed by the Participant and
the Corporation providing that the Performance Award shall be subject to the
provisions of this Plan and containing such other provisions as the
Committee may prescribe not inconsistent with the Plan. The Committee will
determine, in its sole discretion, the performance targets and whether
Performance Awards should be payable in the form of the Corporation's common
shares or cash. If the Eligible Employee requests, prior to the date on
which payment of the Performance Award is to be made, that such payment not
be made until termination of employment by such Eligible Employee, then the
Committee shall consider and act upon such request promptly. If no request
is made by such Eligible Employee, the payment shall be made in the time
period chosen by the Committee.
14. Share Adjustments. In the event there is any change in the
Corporation's common shares resulting from stock splits, stock dividends,
combinations or exchange of shares, or other similar capital adjustments,
equitable proportionate adjustments shall be made by the Committee in ( a)
the number of shares available for option and issuance under this Plan, (b)
the number of shares subject to options granted under this Plan, and ( c)
the option price of optioned shares.
15. Merger, Consolidation, or Sale of Assets or Change of Control.
Except as otherwise provided in any Option Agreement, Restricted Share
Agreement, Performance Award Agreement or other agreement approved by the
Committee to which any Director or Eligible Employee is a party, in the
event the Corporation shall engage in a Change of Control, as defined in
this Paragraph 15, each option, Restricted Share and Performance Award held
by (a) a Director; and (b) if the employment of an Eligible Employee is
terminated by the Corporation immediately following such Change of Control,
for other than documented performance reasons as described in the
Corporation's written disciplinary policies, held by an Eligible Employee:
shall, without regard to any vesting schedule, restriction or performance
target, automatically become fully exercisable or payable, as the case may
be, immediately prior to such Change of Control in the case of a Director
and as of the date of such termination in the case of an Eligible Employee.
Options and restricted shares granted under this Plan shall continue as
provided in Paragraph 17.
For purposes of this Agreement, a Change of Control of the Corporation
shall mean:
(a) The acquisition by any individual, entity or group within
the meaning of Section 12(d)(3) or 13(d)(2) of the Securities Exchange Act
of 1934, as amended (the Exchange Act" a ("Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35%
or more of either (i) the then outstanding shares of common stock of the
Corporation (the "outstanding Corporation Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the
Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition
by any employee benefit plan ( or related trust) sponsored or maintained by
the Corporation or any corporation controlled by the company, or (iv) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i),(ii), and (iii) of subsection (c) of this Paragraph 15; or
(b) Individuals who, as of the date hereof, constitute the
Board ( the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Corporation's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of
the Corporation ( a "Business Combination"), in each case, unless, following
such Business Combination, (i), all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors,
as the case may be, of the Corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result
of such transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, (ii) no
Person ( excluding any employee benefit plan ( or related trust) of the
Corporation or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 35% or more of, respectively, the
then outstanding shares of common stock of the Corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least
a majority of the members of the board of directors of the Corporation
resulting from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of
the board, providing for such Business Combination; or
(d) Approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
16. Termination of Directorship With 10 Years of Service. Except
as otherwise provided in any Option Agreement, or other Agreement approved
by the Committee to which a Director is a party, in the event a Director
ceases to serve as a Director with the Corporation, after having served as a
Director for at least ten (10) years, each option and/or performance award
shall, without regard to any vesting schedule, restriction or performance
target, automatically and immediately become fully exercisable or payable,
as the case may be, and any remaining restrictions under Paragraph 10 shall
cease, immediately prior to such termination.
17. Amendment or Termination. The Board of Directors of the
Corporation may terminate this Plan at any time, and may amend the Plan at
any time or from time to time, without obtaining any approval of the
Corporation's stockholders, except that the Plan may not be amended (a) to
increase the aggregate number of shares issuable under the Plan for
incentive stock options (but not nonqualified stock options and excepting
proportionate adjustments made under Paragraph 14 to give effect to stock
splits, etc); (b) to change the option price of optioned stock (excepting
proportionate adjustments made under Paragraph 14); (c) to change the
requirement that the option price per share of common stock covered by an
incentive stock option (but not a nonqualified stock option) granted under
this plan not be less than 100% of the fair market value of the
Corporation's common stock on the date such option is granted; (d) to extend
the time within which options may be granted or the time without which a
granted option may be exercised; or (e) to change, without the consent of
the Optionee (or the Optionee's, or the Optionee's estate's, legal
representative), any option previously granted to him or her under the Plan.
If the Plan is terminated following a Change of Control as defined in
Paragraph 15 of this Agreement or for any other reason, any unexercised
option shall continue to be exercisable in accordance with its terms and the
terms of this Plan, consistently with Section 424(a) of the Internal Revenue
Code, which provides for a conversion of an existing option to an option to
acquire stock in the Business Combination at the ratio of fair market price
to option price immediately before the Change of Control and Restricted
Shares shall continue to be subject to the terms of this Plan (subject to
conversion to Restricted Shares of the Business Combination at the same
ratio of fair market price to option price immediately before the Change of
Control) for the duration of the Restricted Period.
18. Corporation Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Corporation. The Corporation shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or thing done or
left undone with respect to the price, time, quantity, or other conditions
and circumstances of the purchase of shares under the terms of the Plan, so
long as the Corporation acts in good faith.
19. Implied Consent of Optionees and Participants. Every Optionee,
by his or her acceptance of an option under this Plan, and every
Participant, by his or her acceptance of an allocation of Restricted Shares
under this Plan, and every Director and Eligible Employee, by his or her
acceptance of a Performance Award under this Plan, shall be deemed to have
consented to be bound, on his or her own behalf and on behalf of his or her
heirs, assigns, and legal representatives, by all of the terms and
conditions of this Plan.
20. No Effect on Director or Employment Status. The fact that a
Director or Eligible Employee has been granted an option, has been allocated
Restricted Shares or awarded a Performance Award under this Plan shall not
limit or otherwise qualify the right of the Corporation or any Subsidiary to
terminate such person's directorship or employment at any time.
21. Tax Withholding. The Corporation shall be entitled to deduct
from any payment to be made by it under this Plan, or to otherwise require,
prior to the issuance or delivery of any shares or the payment of any cash
to a Director or Eligible Employee, payment by the Director or Eligible
Employee of all applicable Federal, state, local or other taxes required by
law to be withheld. The Committee may permit, in accordance with any
applicable administrative rules established by it, a Director or Eligible
Employee to satisfy this withholding obligation by (i) directing the
withholding from any payment of common shares by the Corporation, or (ii)
delivering to the Corporation, common shares having a fair market value, on
the date of payment, equal to the amount of such taxes. Any fraction of a
share required to satisfy such tax obligation shall be disregarded and the
amount due shall be paid instead in cash by the Director or Eligible
Employee.
22. Compliance with Securities Laws. Options granted and shares
issued by the Corporation pursuant to this Plan shall be granted and issued
only in full compliance with all applicable securities laws, including laws,
rules and regulations of the Securities and Exchange Commission and
applicable state Blue Sky laws. With respect thereto, the Committee may
impose such conditions on transfer, restrictions and limitations as it may
deem necessary and appropriate to assure compliance with such applicable
securities laws.
23. Duration and Termination of the Plan. The Plan became effective
as of December 10, 1996, and was amended effective as of December 8, 1998.
No option shall be granted and no allocation of Restricted Shares shall be
made under the Plan subsequent to December 9, 2006.
