<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 26, 1998
================================================================================
REGISTRATION NO. 333-57439
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
ON FORM S-8
TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
FIRSTMERIT CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 34-1339938
(State of incorporation) (I.R.S. Employer Identification No.)
III CASCADE PLAZA, AKRON OHIO 44308 (330) 996-6300
(Address of Principal Executive Offices) (Zip Code)
SECURITY FIRST 1987 STOCK OPTION AND INCENTIVE PLAN;
SECURITY FIRST 1996 STOCK OPTION AND INCENTIVE PLAN AND
FIRST KENT FINANCIAL CORPORATION 1994 STOCK OPTION PLAN
(Full Title of the Plans)
TERRY E. PATTON, COPY TO:
SENIOR VICE PRESIDENT AND SECRETARY KEVIN C. O'NEIL
FIRSTMERIT CORPORATION BROUSE & MCDOWELL, L.P.A.
III CASCADE PLAZA, AKRON, OHIO 44308 500 FIRST NATIONAL TOWER
(330) 996-6300 AKRON, OHIO 44308
(Name, address, including zip code, and (330) 434-5207
telephone number, including area code,
of agent for service)
Calculation of Registration Fee
<TABLE>
<CAPTION>
======================== ====================== ====================== ====================== ======================
Title of securities to Amount to be Proposed maximum Proposed maximum Amount of
be registered registered offering price per aggregate offering registration fee
share price
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, 292,834 Shares (1) N/A N/A (2)
no par value
======================== ====================== ====================== ====================== ======================
</TABLE>
(1) This Post Effective Amendment No. 1 on Form S-8 to Form S-4 covers 292,834
shares of Common Stock originally registered on the Registration Statement on
Form S-4 to which this Amendment relates. These 292,834 shares of Common Stock
are issuable pursuant to options granted under (i) the Security First 1987 Stock
Option and Incentive Plan, (ii) the Security First 1996 Stock Option and
Incentive Plan and (iii) the First Kent Financial Corporation 1994 Stock Option
Plan (collectively, the "Plans"). See "Purpose of Amendment."
(2) The Registrant previously paid $74,820 upon the initial filing of this
Registration Statement to register 7,800,000 shares of Common Stock issuable to
the Stockholders of Security First Corp., including the 292,834 shares of Common
Stock which may be issued pursuant to the Plans.
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<PAGE> 2
PURPOSE OF AMENDMENT
The purpose of this Post Effective Amendment No. 1 is to
register on Form S-8 292,834 shares of common stock, no par value per share
(the "Common Stock"), of FirstMerit Corporation (the "Company") previously
registered on Form S-4 (Registration No. 333-57439) for issuance pursuant to
options granted under (i) the Security First 1987 Stock Option and Incentive
Plan, (ii) the Security First 1996 Stock Option and Incentive Plan or (iii)
the First Kent Financial Corporation 1994 Stock Option Plan (collectively, the
"Plans") of Security First Corp. ("Security First"), pursuant to the terms and
conditions of an Agreement of Affiliation and Plan of Merger dated as of April
4,1998, between the Registrant and Security First, which provided for the merger
of Security First with and into the Registrant. The merger was consummated on
October 23, 1998.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information required in Part I of the
Registration Statement will be provided to each participant in the Plans as
required by Rule 428(b)(1). Such documents are not being filed with the
Securities and Exchange Commission (the "Commission") in accordance with the
instructions to Form S-8, but constitute (along with the documents incorporated
by reference into the Registration Statement Amendment pursuant to Item 3 of
Part II hereof) a prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission under the Exchange
Act by the Company (File No. 0-10161) are hereby incorporated by reference into
this Registration Statement Amendment:
a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 filed with the Commission on February 24, 1998,
as amended by Form 10-K/A filed with the Commission on April 30,
1998;
b) The portions of the Company's Proxy Statement for the Annual
Meeting of Shareholders held April 8, 1998 that have been
incorporated by reference in the Company's Annual Report on Form
10-K for the year ended December 31, 1997;
c) The Company's Quarterly Reports on Form 10-Q for the period ended
March 31, 1998 filed with the Commission on May 14, 1998, and for
the period ended June 30, 1998 filed
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with the Commission on August 14, 1998, as amended by Form 10-Q/A
filed with the Commission on August 26, 1998;
d) The Company's Current Reports on Form 8-K filed with the Commission
on April 9, 1998, May 22, 1998, June 22, 1998, August 31, 1998 and
September 10, 1998; and
e) The description of the Company's Common Stock contained in (i) the
Company's Current Report on Form 8-K filed with the Commission on
September 10, 1998, and (ii) the description of the rights issued
pursuant to the FirstMerit Shareholders Rights Agreement, dated as
of October 23, 1993, by and between the Company and FirstMerit
Bank, N.A., as rights agent, as amended and restated May 20, 1998,
contained in Amendment No. 2 to the Company's Registration
Statement on Form 8-A with respect thereto filed with the
Commission on June 22, 1998; and any further amendment or report
filed for the purpose of updating the description.
All documents hereafter filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the shares of the Company's Common Stock to be
issued by the Company under the Plans have been passed upon for the Company by
its counsel, Brouse & McDowell, L.P.A. Philip A. Lloyd II, a director and
shareholder of the Company, is a shareholder of Brouse & McDowell, L.P.A. Kevin
C. O'Neil is a shareholder of Brouse & McDowell, L.P.A and the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Article Sixth of the Amended and Restated Articles of
Incorporation of the Company, the Company may indemnify any director or officer,
any former director or officer of the Company and any person who is or has
served at the request of the Company as a director, officer or trustee of
another corporation, partnership, joint venture, trust or other enterprise (and
his heirs, executors and administrators) against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him by reason of the fact that he is or was such director, officer
or trustee in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, to the
full extent permitted by applicable law, as the same may be in effect from time
to time. The indemnification provided for therein is not deemed to restrict the
right of the Company to (i) indemnify employees,
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agents and others as permitted by such law, (ii) purchase and maintain insurance
or provide similar protection on behalf of directors, officers or such other
persons against liabilities asserted against them or expenses incurred by them
arising out of their service to the Company, and (iii) enter into agreements
with such directors, officers, employees, agents or others indemnifying them
against any and all liabilities (or such lesser indemnification as may be
provided in such agreements) asserted against them or incurred by them arising
out of their service to the Company.
The rights provided in Article Sixth are in addition to any rights
provided by contract or as a matter of law. Ohio Revised Code Section 1701.13(E)
includes indemnification provisions similar to Article Sixth. Section 1701.13(E)
of the Ohio Revised Code provides that a corporation may indemnify or agree to
indemnify any person who was or is a party, or is threatened to be made a party,
to any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, other than an action by or in
the right of the corporation, by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign, nonprofit
or for profit, a limited liability company, or a partnership, joint venture,
trust, or other enterprise, against expenses, including attorney's fees,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, if he had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
Section 1701.13(E)(2) further specifies that a corporation may
indemnify or agree to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending, or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor, by reason of the fact that he is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the corporation
as a director, trustee, officer, employee, member, manager, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability
company, or a partnership, joint venture, trust, or other enterprise, against
expenses, including attorney's fees, actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification shall be made
in respect of (a) any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless, and only to the extent, that the court of
common pleas or the court in which such action or suit was brought determines,
upon application, that, despite the adjudication of liability, but in view of
all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses as the court of common pleas or such other court
shall deem proper, and (b) any action or suit in which the only liability
asserted against a director is pursuant to Section 1701.95 of the Ohio Revised
Code concerning unlawful loans, dividends and distribution of assets.
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In addition, Section 1701.13(E) requires a corporation to pay any
expenses, including attorney's fees, of a director in defending an action, suit,
or proceeding referred to above as they are incurred, in advance of the final
disposition of the action, suit, or proceeding, upon receipt of an undertaking
by or on behalf of the director in which he agrees to both (i) repay such amount
if it is proved by clear and convincing evidence that his action or failure to
act involved an act or omission undertaken with deliberate intent to cause
injury to the corporation or undertaken with reckless disregard for the best
interests of the corporation and (ii) reasonably cooperate with the corporation
concerning the action, suit, or proceeding. Section 1701.13(E) further
authorizes a corporation to enter into contracts regarding indemnification and
to purchase and maintain insurance on behalf of any director, trustee, officer,
employee or agent for any liability asserted against him or arising out of his
status as such. The Company presently has contracts with each of its directors
and key officers and maintains insurance for the benefit of persons entitled to
indemnification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.2 The Security First 1987 Stock Option and Incentive Plan
4.3 The Security First 1996 Stock Option and Incentive Plan
4.4 the First Kent Financial Corporation 1994 Stock Option Plan
4.5 Amended and Restated Articles of Incorporation of FirstMerit
Corporation (incorporated by reference from Exhibit 3(a) to the Form
8-K filed by the registrant on April 9, 1998)
4.6 Amended and Restated Code of Regulations of FirstMerit Corporation
(incorporated by reference from Exhibit 3(b) to the Form 10-K filed by
the registrant on April 9, 1998)
5.1 Opinion of Brouse & McDowell, L.P.A.
23.5 Consent of Brouse & McDowell, L.P.A. (included in Exhibit 5.1)
23.6 Consent of PricewaterhouseCoopers, L.L.P.
23.7 Consent of Deloitte & Touche, LLP
23.8 Consent of Deloitte & Touche, LLP
23.9 Consent of KPMG Peat Marwick LLP
23.10 Consent of Ernst & Young, LLP
24 Limited Power of Attorney
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24. Power of Attorney
ITEM 9. UNDERTAKINGS
(a) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(c) The Company undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act
of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(i) and (ii) above do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission
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by the Company pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8, and has duly caused this Post Effective
Amendment No. 1 to Registration Statement No. 333-57439 to be signed on its
behalf by the undersigned, there unto duly authorized, in the City of Akron,
State of Ohio, on October 26, 1998.
FirstMerit Corporation
By: /s/John R. Cochran
------------------------
John R. Cochran, Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post Effective Amendment No. 1 to Registration Statement No. 333-57439 has been
signed by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE
TITLE
<S> <C>
/s/John R. Cochran Chairman and Chief Executive Officer
- ----------------------------- (Principal Executive Officer) and
John R. Cochran Director
/s/Jack R. Gravo Executive Vice President, Finance and
- ----------------------------- Administration (Principal Financial
Jack R. Gravo Officer and Principal Accounting
Officer)
Karen S. Belden* Director
- -----------------------------
Karen S. Belden
R. Cary Blair* Director
- -----------------------------
R. Cary Blair
John C. Blickle* Director
- -----------------------------
John C. Blickle
Sid A. Bostic* Director
- -----------------------------
Sid A. Bostic
Philip A. Lloyd, II* Director
- -----------------------------
Philip A. Lloyd, II
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Richard Colella* Director
- -----------------------------
Richard Colella
Elizabeth A. Dalton* Director
- -----------------------------
Elizabeth A. Dalton
Terry L. Haines* Director
- -----------------------------
Terry L. Haines
Clifford J. Isroff* Director
- -----------------------------
Clifford J. Isroff
Robert G. Merzweiler* Director
- -----------------------------
Robert G. Merzweiler
Roger T. Read* Director
- -----------------------------
Roger T. Read
Justin T. Rogers, Jr.* Director
- -----------------------------
Justin T. Rogers, Jr.
Richard N. Seaman* Director
- -----------------------------
Richard N. Seaman
Jerry M. Wolf* Director
- -----------------------------
Jerry M. Wolf
</TABLE>
*The undersigned, by signing his name hereto, does sign and execute
this amendment to a registration statement on behalf of each of the indicated
officers and directors of FirstMerit Corporation pursuant to a Power of Attorney
executed by each such officer and director and filed with this registration
statement.
Dated: October 26, 1998 /s/ Kevin C. O'Neil
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Kevin C. O'Neil
Attorney-in-Fact
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 1 TO FORM S-4 ON FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------
FIRSTMERIT CORPORATION
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
---------------
EXHIBITS
---------------
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<PAGE> 11
EXHIBIT INDEX
4.2 The Security First 1987 Stock Option and Incentive Plan
4.3 The Security First 1996 Stock Option and Incentive Plan
4.4 The First Kent Financial Corporation 1994 Stock Option Plan
4.5 Amended and Restated Articles of Incorporation of FirstMerit
Corporation (incorporated by reference from Exhibit 3(a) to the Form
8-K filed by the registrant on April 9, 1998)
4.6 Amended and Restated Code of Regulations of FirstMerit Corporation
(incorporated by reference from Exhibit 3(b) to the Form 10-K filed by
the registrant on April 9, 1998)
5.1 Opinion of Brouse & McDowell, L.P.A.
23.5 Consent of Brouse & McDowell, L.P.A. (included in Exhibit 5.1)
23.6 Consent of PricewaterhouseCoopers, LLP
23.7 Consent of Deloitte & Touche, LLP
23.8 Consent of Deloitte & Touche, LLP
23.9 Consent of KPMG Peat Marwick LLP
23.10 Consent of Ernst & Young, LLP
24 Limited Power of Attorney
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<PAGE> 1
EXHIBIT 4.2
SECURITY FIRST CORP.
1987 STOCK OPTION AND INCENTIVE PLAN
1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Association and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Association
and its Affiliates. It is intended that designated Options granted pursuant to
the provisions of this Plan will qualify as Incentive Stock Options. Options
granted to persons who are not full-time employees will be Non-Qualified Stock
Options.
2. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Association as such terms are defined in Section 425(e) and
(f), respectively, of the Code.
"Association" - means Security Federal Savings and Loan Association
of Cleveland, a capital stock savings and loan association.
"Award" - means the grant by the Committee of an Incentive Stock
Option, a Non-Qualified Stock Option, a Stock Appreciation Right, a Limited
Stock Appreciation Right, or of Restricted Stock, or any combination thereof, as
provided in the Plan.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3 hereof.
"Continuous Service" shall mean the absence of any interruption or
termination of service as a director, officer or employee of the Association or
an Affiliate, except that when used with respect to persons granted an Incentive
Option means the absence of any interruption or termination of service as an
employee of the Association or an Affiliate. Service shall not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Association or in the case of transfers between payroll
locations of the Association or between the Association, its parent, its
subsidiaries or its successor.
"Disinterested Person" - means any person who, at the time
discretion under the Plan is exercised, is not eligible, and who has not at any
time within one year prior thereto been eligible, for selection as a Participant
in the Plan or as a person to whom stock may be allocated or to whom stock
options or stock ap-
<PAGE> 2
preciation rights may be granted pursuant to any other plan of the Association
or any of its affiliates (as that term is used in the Securities Exchange Act of
1934) entitling the participants therein to acquire stock, stock options or
stock appreciation rights of the Association or of any such affiliates;
provided, however, that no recipient of a stock option granted pursuant to
Section 21 hereof shall be deemed not to be a disinterested Person solely by
reason of such grant.
"Employee" - means any person, including an officer or director, who
is employed by the Association or any Affiliate.
"Exercise Price" - means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon exercise
of such Option and (ii) in the case of a Right, the price per Share (other than
the Market Value per Share on the date of exercise and the Offer Price per Share
as defined in Section 10 hereof) which, upon grant, the Committee determines
shall be utilized in calculating the aggregate value which a Participant shall
be entitled to receive pursuant to Sections 9, 10 or 13 hereof upon exercise of
such Right.
"Incentive Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422A of the Code.
"Limited Stock Appreciation Right" - means a stock appreciation
right with respect to Shares granted by the Committee pursuant to Sections 6 and
10 hereof.
"Market Value" - means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 or Section 21 hereof, which
option is not intended to qualify under Section 422A of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
<PAGE> 3
"Participant" - means any director, officer or employee of the
Association or any Affiliate who is selected by the Committee to receive an
Award.
"Plan" - means the 1987 Stock Option and Incentive Plan of the
Association.
"Related" - means (i) in the case of a Right, a Right which is
granted in connection with, and to the extent exercisable, in whole or in part,
in lieu of, an Option or another Right and (ii) in the case of an Option, an
Option with respect to which and to the extent a Right is exercisable, in whole
or in part, in lieu thereof has been granted.
"Restricted Period" - means the period of time selected by the
Committee for the purpose of determining when restrictions are in effect under
Section 11 hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently
awarded to a Participant by the Committee subject to the restrictions referred
to in Section 11 hereof, so long as such restrictions are in effect.
"Right" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.
"Shares" - means the shares of common stock of the Association.
"Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 9 hereof.
3. ADMINISTRATION. The Plan shall be administered by a Committee
consisting of three or more members, each of whom shall be a Disinterested
Person. The members of the Committee shall be appointed by the Board of
Directors of the Association. Except as limited by the express provisions of the
Plan, the Committee shall have sole and complete authority and discretion to
(i) select Participants and grant Awards; (ii) determine the number of Shares to
be subject to types of Awards generally, as well as to individual Awards granted
under the Plan; (iii) determine the terms and conditions upon which Awards shall
be granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan. The Committee
may maintain, and update from time to time as appropriate, a list designating
selected directors, officers and employees as Disinterested Persons. The purpose
of such list shall be to evidence the status of such individuals as
Disinterested Persons, and the Board of Directors may appoint to the Committee
any individual actually qualifying as a Disinterested Person, regardless of
whether identified as such on said list.
3
<PAGE> 4
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
4. PARTICIPATION. The Committee may select from time to time Participants
in the Plan from those directors, officers and employees (other than
Disinterested Persons), of the Association or its Affiliates who, in the opinion
of the Committee, have the capacity for contributing to the successful
performance of the Association or its Affiliates.
5. SHARES SUBJECT TO PLAN. Subject to adjustment by the operation of
Section 12 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 210,268. The Shares with respect to which Awards may
be made under the Plan may be either authorized and unissued shares or issued
shares heretofore or hereafter reacquired and held as treasury shares. Shares
which are subject to Related Rights and Related Options shall be counted only
once in determining whether the maximum number of Shares with respect to which
Awards may be granted under the Plan has been exceeded. An Award shall not be
considered to have been made under the Plan with respect to any Option or Right
which terminates or with respect to Restricted Stock which is forfeited, and new
Awards may be granted under the Plan with respect to the number of Shares as to
which such termination or forfeiture has occurred.
6. GENERAL TERMS AND CONDITIONS OF OPTIONS AND RIGHTS. The Committee
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Market Value per Share at the date of grant of such Option or Right, (ii) the
number of Shares subject to, and the expiration date of, any Option or Right,
which expiration date shall not exceed ten years from the date of grant,
(iii) the manner, time and rate (cumulative or otherwise) of exercise of such
Option or Right, and (iv) the restrictions, if any, to be placed upon such
Option or Right or upon Shares which may be issued upon exercise of such Option
or Right. The Committee may, as a condition of granting any Option or Right,
require that a Participant agree not to thereafter exercise one or more Options
or Rights previously granted to such Participant.
7. EXERCISE OF OPTIONS OR RIGHTS.
(a) An Option or Right granted under the Plan shall be exercisable
during the lifetime of the Participant to whom such Option or Right was granted
only by such Participant, and except as provided in paragraphs (c) and (d) of
this Section 7, no such Option or Right may be exercised unless at the time such
Participant exercises such Option or Right, such Participant has main-
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<PAGE> 5
tained Continuous Service since the date of grant of such Option or Right.
(b) To exercise an Option or Right under the Plan, the Participant to
whom such Option or Right was granted shall give written notice to the
Association in form satisfactory to the Committee (and, if partial exercises
have been permitted by the Committee, by specifying the number of Shares with
respect to which such Participant elects to exercise such Option or Right)
together with full payment of the Exercise Price, if any and to the extent
required. The date of exercise shall be the date on which such notice is
received by the Association. Payment, if any is required, shall be made either
(i) in cash (including check, bank draft or money order) or (ii) if permitted by
the Committee, by delivering (A) Shares already owned by the Participant and
having a fair market value equal to the applicable exercise price, such fair
market value to be determined in such appropriate manner as may be provided by
the Committee or as may be required in order to comply with or to conform to
requirements of any applicable laws or regulations, or (B) a combination of cash
and such Shares.
(c) If a Participant to whom an Option or Right was granted shall
cease to maintain Continuous Service for any reason (including total and partial
disability and normal and early retirement, but excluding death and termination
of employment by the Association or any Affiliate for cause), such Participant
may, but only within the period of three months immediately succeeding such
cessation of Continuous Service and in no event after the expiration date of
such Option or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the date of such
cessation, provided, however, that such right of exercise after cessation of
Continuous Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If the Continuous Service of a
Participant to whom an Option or Right was granted by the Association is
terminated for cause, all rights under any Option or Right of such Participant
shall expire immediately upon the giving to the Participant of notice of such
termination.
(d) In the event of the death of a Participant while in the Continuous
Service of the Association or an Affiliate or within the three month period
referred to in paragraph (c) of this Section 7, the person to whom any Option or
Right held by the Participant at the time of his death is transferred by will or
the laws of descent and distribution may, but only to the extent such
Participant was entitled to exercise such Option or Right immediately prior to
his death, exercise such Option or Right at any time within a period of one year
succeeding the date of death of such Participant, but in no event later than
ten years from the date of grant of such Option or Right. Following the death of
any Participant to whom an Option was granted under the Plan, irrespective of
whether any Related Right shall have theretofore been granted to the Participant
or whether the person entitled to
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<PAGE> 6
exercise such Related Right desires to do so, the Committee may, as an
alternative means of settlement of such Option, elect to pay to the person to
whom such Option is transferred by will or by the laws of descent and
distribution the amount by which the Market Value per Share on the date of
exercise of such Option shall exceed the Exercise Price of such Option,
multiplied by the number of Shares with respect to which such Option is properly
exercised. Any such settlement of an Option shall be considered an exercise of
such Option for all purposes of the Plan.
8. INCENTIVE STOCK OPTIONS. Incentive Stock Options may be granted only
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than
ten years from the date the Plan is adopted by the Board of Directors of the
Association and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock Option is granted other than by will or the laws of descent and
distribution and shall be exercisable during such Participant's lifetime only by
such Participant, (iv) no Incentive Stock Option shall be granted to any
individual who, at the time such Incentive Stock Option is granted, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Association or any Affiliate unless the Exercise Price
of such Incentive Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such Incentive Stock Option is not exercisable
after the expiration of five years from the date such Incentive Stock Option is
granted, and (v) the aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by a Participant in any
calendar year shall not exceed $100,000.
9. STOCK APPRECIATION RIGHTS. A Stock Appreciation Right shall, upon its
exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which
(i.e., the sum of the amount of cash and/or Market Value of such Shares on date
of exercise) shall equal (as nearly as possible, it being understood that the
Association shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares with
respect of which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall determine
whether and to what extent a Related Stock Appreciation Right shall be granted
with respect thereto; provided, however, and notwithstanding any other provision
of the
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<PAGE> 7
Plan, that if the Related Option is an Incentive Stock Option, the Related Stock
Appreciation Right shall satisfy all the restrictions and limitations of Section
8 hereof as if such Related Stock Appreciation Right were an Incentive Stock
Option and as if other rights which are Related to Incentive Stock Options were
Incentive Stock Options. In the case of a Related Option, such Related Option
shall cease to be exercisable to the extent of the Shares with respect to which
the Related Stock Appreciation Right was exercised. Upon the exercise or
termination of a Related Option, any Related Stock Appreciation Right shall
terminate to the extent of the Shares with respect to which the Related Option
was exercised or terminated.
10. LIMITED STOCK APPRECIATION RIGHTS. At the time of grant of an Option
or Stock Appreciation Right to any Participant, the Committee shall have full
and complete authority and discretion to also grant to such Participant a
Limited Stock Appreciation Right which is Related to such Option or Stock
Appreciation Right; provided, however and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive Stock Option, the Related
Limited Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Limited Stock Appreciation
Right were an Incentive Stock Option and as if all other Rights which are
Related to Incentive Stock Options were Incentive Stock Options. Notwithstanding
any other provision of the Plan, a Limited Stock Appreciation Right shall be
exercisable only during the period beginning on the first day following the date
of expiration of any "offer" (as such term is hereinafter defined) and ending on
the forty-fifth day following such date, provided, however, that no Limited
Stock Appreciation Right shall be exercisable by a director or officer of the
Association within six months of the date of its grant.
A Limited Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Limited Stock Appreciation Right was granted to receive
an amount of cash equal to the amount by which the "Offer Price per Share" (as
such term is hereinafter defined) or the Market Value on the date of such
exercise, as shall have been provided by the Committee in its discretion at the
time of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of Shares with respect to which
such Limited Stock Appreciation Right shall have been exercised. Upon the
exercise of a Limited Stock Appreciation Right, any Related Option and/or
Related Stock Appreciation Right shall cease to be exercisable to the extent of
the Shares with respect to which such Limited Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option or Related Stock
Appreciation Right, any Related Limited Stock Appreciation Right shall terminate
to the extent of the Shares with respect to which such Related Option or Related
Stock Appreciation Right was exercised or terminated.
For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one made by the
Association, provided that the corporation, person or
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<PAGE> 8
other entity making the offer acquires pursuant to such offer either (i) 25% of
the Shares outstanding immediately prior to the commencement of such offer or
(ii) a number of shares which, together with all other shares acquired in any
tender offer or exchange offer (other than one made by the Association) which
expired within sixty days of the expiration date of the offer in question,
equals 25% of the Shares outstanding immediately prior to the commencement of
the offer in question. The term "Offer Price per Share" as used in this
Section 10 shall mean the highest price per Share paid in any Offer which Offer
is in effect any time during the period beginning on the sixtieth day prior to
the date on which a Limited Stock Appreciation Right is exercised and ending on
the date on which such Limited Stock Appreciation Right is exercised. Any
securities or property which are part or all of the consideration paid for
Shares in the Offer shall be valued in determining the Offer Price per Share at
the higher of (A) the valuation placed on such securities or property by the
corporation, person or other entity making such Offer or (B) the valuation
placed on such securities or property by the Committee.
11. TERMS AND CONDITIONS OF RESTRICTED STOCK. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 11, to provide such
other terms and conditions (which need not be identical among Participants) in
respect of such Awards, and the vesting thereof, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 11.
(a) At the time of an award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period during which or at the
expiration of which, as the Committee shall determine and provide in the
agreement referred to in paragraph (d) of this Section 11, the shares awarded as
Restricted Stock shall vest, and subject to any such other terms and conditions
as the Committee shall provide shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered by the Participant,
except as hereinafter provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c), (d) and (e) of this Section 11 and
Section 12 hereof, the Participant as owner of such shares shall have all the
rights of a stockholder including but not limited to the right to receive all
dividends paid on such shares and the right to vote such shares. The Committee
shall have the authority, in its discretion, to accelerate the time at which any
or all of the restrictions shall lapse with respect to any shares of Restricted
Stock prior to the expiration of the Restricted Period with respect thereto, or
to remove any or all of such restrictions, whenever it may determine that such
action is appropriate by reason of changes in applicable tax or other laws or
other changes in circumstances occurring after the commencement of such
Restricted Period.
(b) Except as provided in Section 14 hereof, if a Participant
ceases to maintain Continuous Service for any reason
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<PAGE> 9
(other than death, total or partial disability or normal or early retirement)
unless the Committee shall otherwise determine and provide in the agreement
referred to in paragraph (d) of this Section 11, all shares of Restricted Stock
theretofore awarded to such Participant and which at the time of such
termination of Continuous Service are subject to the restrictions imposed by
paragraph (a) of this Section 11 shall upon such termination of Continuous
Service be forfeited and returned to the Association. Unless the Committee shall
have provided in the agreement referred to in paragraph (d) of this Section 11
for a ratable lapse of restrictions with respect to an award of shares of
Restricted Stock during the Restricted Period, if a Participant ceases to
maintain Continuous Service by reason of death, total or partial disability or
normal or early retirement, such portion of such shares of Restricted Stock
awarded to such Participant which at the time of such termination of Continuous
Service are subject to the restrictions imposed by paragraph (a) of this
Section 11 as shall be equal to the portion of the Restricted Period with
respect to such shares which shall have elapsed at the time of such termination
of Continuous Service shall be free of restrictions and shall not be forfeited.
(c) Each certificate in respect of shares of Restricted Stock
awarded under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Association and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and conditions
(including forfeiture) contained in the 1987 Stock Option and Incentive
Plan of Security Federal Savings and Loan Association of Cleveland and an
Agreement entered into between the registered owner and Security Federal
Savings and Loan Association of Cleveland. Copies of such Plan and
Agreement are on file in the offices of the Secretary of Security Federal
Savings and Loan Association of Cleveland, 1112 Euclid Avenue, Cleveland,
Ohio 44115."
(d) At the time of an award of shares of Restricted Stock, the
Participant shall enter into an Agreement with the Association in a form
specified by the Committee, agreeing to the terms and conditions of the award
and such other matters as the Committee shall in its sole discretion determine.
(e) At the time of an award of shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the Participant
of dividends declared or paid on such shares, or specified portion thereof, by
the Association shall be deferred until the earlier to occur of (i) the lapsing
of the restrictions imposed under paragraph (a) of this Section 11 or (ii) the
forfeiture of such shares under paragraph (b) of this Section 11, and shall be
held by the Association for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof)
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<PAGE> 10
interest on the amount of the account at the beginning of the year at a rate per
annum as the Committee, in its discretion, may determine. Payment of deferred
dividends, together with interest accrued thereon as aforesaid, shall be made
upon the earlier to occur of the events specified in (i) and (ii) of the
immediately preceding sentence.
(f) At the expiration of the restrictions imposed by paragraph (a)
of this Section 11, the Association shall redeliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 11 applies in the case
of a deceased Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to paragraph (c) of
this Section 11 and the Shares represented by such certificate(s) shall be free
of the restrictions referred to in paragraph (a) of this Section 11.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Association, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Association in the manner
provided in Section 11 hereof.
13. EFFECT OF MERGER ON OPTIONS OR RIGHTS. In the case of any merger,
consolidation or combination of the Association (other than a merger,
consolidation or combination in which the Association is the continuing
association and which does not result in the outstanding Shares being converted
into or exchanged for different securities, cash or other property, or any
combination thereof), any Participant to whom an Option or Right has been
granted under the Plan shall have the right (subject to the provisions of the
Plan and any limitation applicable to such Option or Right), thereafter and
during the term of each such Option or Right, to receive upon exercise of any
such Option or Right an amount equal to the excess of the fair market value on
the date of such exercise of the securities, cash or other property, or
combination thereof, receivable upon such merger, consolidation or combination
in respect of a Share over the Exercise Price of such Right or Option,
multiplied by the number of Shares with respect to which such Option or Right
shall have been exercised. Such amount may be payable fully in cash, fully in
one or more of the kind or kinds of property payable in such merger,
consolidation or combination, or partly in cash and partly in one or more of
such kind or kinds of property, all in the discretion of the Committee.
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<PAGE> 11
14. EFFECT OF CHANGE IN CONTROL. Each of the events specified in the
following clauses (i) through (iii) of this Section 14 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the
beneficial owner of shares of the Association with respect to which 25% or more
of the total number of votes for the election of the Board of Directors of the
Association may be cast, (ii) as a result of, or in connection with, any cash
tender offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Association shall cease to constitute a majority of the Board of Directors of
the Association or (iii) the shareholders of the Association shall approve an
agreement providing either for a transaction in which the Association will cease
to be an independent publicly owned association or for a sale or other
disposition of all or substantially all the assets of the Association; provided,
however, that the occurrence of any such events shall not be deemed a "change in
control" if, prior to such occurrence, a resolution specifically approving such
occurrence shall have been adopted by at least a majority of the Board of
Directors of the Association. If the Continuous Service of any Participant of
the Association or any Affiliate is involuntarily terminated for whatever
reason, at any time within eighteen months after a change in control, unless the
Committee shall have otherwise provided in the agreement referred to in
paragraph (d) of Section 11 hereof, any Restricted Period with respect to
Restricted Stock theretofore awarded to such Participant shall lapse upon such
termination and all Shares awarded as Restricted Stock shall become fully vested
in the Participant to whom such Shares were awarded. If a tender offer or
exchange offer for Shares (other than such an offer by the Association) is
commenced, or if the event specified in clause (iii) above shall occur, unless
the Committee shall have otherwise provided in the instrument evidencing the
grant of an Option or Stock Appreciation Right, all Options and Stock
Appreciation Rights theretofore granted and not fully exercisable shall become
exercisable in full upon the happening of such event and shall remain so
exercisable for a period of sixty days following such date after which they
shall revert to being exercisable in accordance with their terms; provided,
however, that no Option or Stock Appreciation Right shall be exercisable by a
director or officer of the Association within six months of the date of grant of
such Option or Stock Appreciation Right and no Option or Stock Appreciation
Right which has previously been exercised or otherwise terminated shall become
exercisable.
15. ASSIGNMENTS AND TRANSFERS. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution.
16. EMPLOYEE RIGHTS UNDER THE PLAN. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and
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no director, officer, employee or other person shall have any claim or right to
be granted an Award under the Plan or under any other incentive or similar plan
of the Association or any Affiliate. Neither the Plan nor any action taken
thereunder shall be construed as giving any employee any right to be retained in
the employ of the Association or any Affiliate.
17. DELIVERY AND REGISTRATION OF STOCK. The Association's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provision of the Securities Act of 1933 or any other Federal, state or local
securities legislation. It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under such Securities Act or
other securities legislation. The Association shall not be required to deliver
any Shares under the Plan prior to (i) the admission of such shares to listing
on any stock exchange on which Shares may then be listed, and (ii) the
completion of such registration or other qualification of such Shares under any
state or Federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
18. WITHHOLDING TAX. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Association shall have the right to require the Participant or
other person receiving such shares to pay the Association the amount of any
taxes which the Association is required to withhold with respect to such shares,
or, in lieu thereof, to retain or sell without notice, a sufficient number of
shares held by it to cover the amount required to be withheld. The Association
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Association is required to
withhold with respect to such dividend payments.
The Association shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes required
by law to be withheld with respect to such cash payments. Where a Participant or
other person is entitled to receive Shares pursuant to the exercise of an Option
or Right pursuant to the Plan, the Association shall have the right to require
the Participant or such other person to pay the Association
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<PAGE> 13
the amount of any taxes which the Association is required to withhold with
respect to such Shares, or, in lieu thereof, to retain, or sell without notice,
a number of such Shares sufficient to cover the amount required to be withheld.
19. AMENDMENT OR TERMINATION. The Board of Directors of the Association
may amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 12 hereof) no amendment shall be made without
approval of the stockholders of the Association which shall (i) materially
increase the aggregate number of Shares with respect to which Awards may be made
under the Plan, (ii) materially increase the aggregate number of Shares which
may be subject to Awards to Participants who are not Employees or (iii) change
the class of persons eligible to participate in the Plan; provided, however,
that no such amendment, suspension or termination shall impair the rights of any
Participant, without his consent, in any Award theretofore made pursuant to the
Plan.
20. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective upon
its adoption by the Board of Directors of the Association, subject to the
Association converting to a stock institution and approval of the Plan by vote
of the holders of a majority of the outstanding shares of the Association
entitled to vote on the adoption of the Plan. It shall continue in effect for a
term of ten years unless sooner terminated under Section 19 hereof.
21. INITIAL GRANT. By, and simultaneously with, the adoption of this
Plan, each member of the Board of Directors of the Association who is not a
full-time Employee is hereby granted a Non-Qualified Stock Option to purchase
shares of the Association's common stock equal to 6% of the total number of
shares subject to the Plan at an Exercise Price equal to the Market Value of the
Shares on the date of adoption of this Plan. Each such Option shall be evidenced
by a Non-Qualified Stock Option Agreement in the form approved by the Board of
Directors at the time of adoption of this Plan, and shall be subject in all
respects to the terms and conditions of this Plan, which are controlling.
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EXHIBIT 4.3
SECURITY FIRST CORP.
1996 STOCK OPTION AND INCENTIVE PLAN
1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, advisory directors, officers and employees
of the Corporation and its Affiliates.
2. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Corporation as such terms are defined in Section 425(e) and
(f), respectively, of the Code.
"Award" -- means the grant by the Committee of an Incentive Stock
Option, a Non-Qualified Stock Option, a Stock Appreciation Right, Restricted
Stock or other property or securities, or any combination thereof, as provided
in the Plan.
"Award Agreement" -- means the agreement evidencing the grant of an
Award made under the Plan.
"Cause" -- means Termination of Service by reason of personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties or gross
negligence.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee referred to in Section 3 hereof.
"Corporation" -- means Security First Corp., a Delaware corporation,
and any successor thereto.
"Incentive Stock Option" -- means an option to purchase Shares granted
by the Committee which is intended to qualify as an Incentive Stock Option under
Section 422(b) of the Code. Unless otherwise set forth in the Award Agreement
any Option which does not qualify as an Incentive Stock Option for any reason
shall be deemed a Non-Qualified Stock Option.
"Market Value" -- means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if on such date
the Shares are not quoted on the Composite Tape, on the New York Stock Exchange,
or if the Shares are not listed or admitted to trading on such Exchange, on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934 (the "Exchange Act") on which the Shares are listed or
admitted to trading, or, if the Shares
<PAGE> 2
are not listed or admitted to trading on any such exchange, the mean between the
closing high bid and low asked quotations with respect to a Share on such date
on the Nasdaq Stock Market, or any similar system then in use, or, if no such
quotations are available, the fair market value on such date of a Share as the
Committee shall determine.
"Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee which does not qualify, for any reason, as an Incentive
Stock Option under Section 422(b) of the Code.
"Option" -- means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" -- means any director, advisory director, officer or
employee of the Corporation or any Affiliate who is selected by the Committee to
receive an Award.
"Plan" -- means this 1996 Stock Option and Incentive Plan of the
Corporation.
"Related" -- means (i) in the case of a Right, a Right which is
granted in connection with, and to the extent exercisable, in whole or in part,
in lieu of, an Option or another Right and (ii) in the case of an Option, an
Option with respect to which and to the extent a Right is exercisable, in whole
or in part, in lieu thereof.
"Restricted Stock" -- means Shares awarded to a Participant by the
Committee pursuant to Section 5(c) hereof.
"Right" -- means a Stock Appreciation Right.
"Shares" -- means the shares of common stock of the Corporation.
"Stock Appreciation Right" -- means a stock appreciation right with
respect to Shares granted by the Committee pursuant to the Plan.
"Termination of Service" -- means cessation of service, for any
reason, whether voluntary or involuntary, as a director, advisory director,
officer or employee of the Corporation or any of its Affiliates.
3. ADMINISTRATION. The Plan shall be administered by a Committee
consisting of two or more members of the Board of Directors of the Corporation,
each of whom (i) shall be an outside director as defined under Section 162(m) of
the Code and the regulations thereunder and (ii) shall be a Non-Employee
Director as defined under Rule 16(b) of the Securities Exchange Act of 1934 or
any similar or successor provision. The members of the Committee shall be
appointed by the Board of Directors of the Corporation. Except as limited by the
express provisions of the Plan or by resolutions adopted by the Board of
Directors of the Corporation, the Committee shall have sole and complete
authority and discretion to (i) select Participants and grant Awards; (ii)
determine the number of Shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (iii) determine the terms
and conditions upon which
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Awards shall be granted under the Plan; (iv) prescribe the form and terms of
instruments evidencing such grants; and (v) establish from time to time
regulations for the administration of the Plan, interpret the Plan, and make all
determinations deemed necessary or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
4. SHARES SUBJECT TO PLAN.
(a) Subject to adjustment by the operation of Section 6, the maximum
number of shares with respect to which Awards may be made under the Plan is
243,242 shares plus (i) 67,673 shares authorized but unissued under prior
Corporation stock option plans; plus (ii) the number of shares repurchased by
the Corporation in the open market or otherwise with an aggregate price no
greater than the cash proceeds received by the Corporation from the exercise of
Shares under the Plan; plus (iii) any Shares surrendered to the Corporation in
payment of the exercise price of Options issued under the Plan. The Shares with
respect to which Awards may be made under the Plan may be either authorized and
unissued shares or previously issued shares reacquired and held as treasury
shares. Shares which are subject to Related Rights and Related Options shall be
counted only once in determining whether the maximum number of Shares with
respect to which Awards may be granted under the Plan has been exceeded. An
Award shall not be considered to have been made under the Plan with respect to
any Option or Right which terminates or with respect to Restricted Stock which
is forfeited, and new Awards may be granted under the Plan with respect to the
number of Shares as to which such termination or forfeiture has occurred.
(b) During any calendar year, no Participant may be granted Awards
under the Plan with respect to more than 50,000 Shares, subject to adjustment as
provided in Section 6.
5. AWARDS.
(a) Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine, including the granting of Options in tandem with
other Awards under the Plan:
(i) Exercise Price. The exercise price per Share for an Option
shall be determined by the Committee; provided, however, that such
exercise price shall not be less than 100% of the Market Value of a
Share on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by the
Committee, but shall be no greater than 15 years.
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<PAGE> 4
(iii) Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms
(including, without limitation, cash, Shares, other Awards or any
combination thereof, having a market value on the exercise date equal
to the relevant exercise price) in which, payment of the exercise
price with respect thereto may be made or deemed to have been made.
(iv) Incentive Stock Options. Incentive Stock Options may be
granted by the Committee only to employees of the Corporation or its
Affiliates.
(v) Termination of Service. Unless otherwise determined by the
Committee and set forth in the Award Agreement evidencing the grant of
the Option, upon Termination of Service of the Participant for any
reason other than for Cause, all Options then currently exercisable
shall remain exercisable for three years following such Termination of
Service. Upon Termination of Service for Cause, all Options not
previously exercised shall immediately be forfeited.
(b) Stock Appreciation Rights. A Stock Appreciation Right shall, upon
its exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which
(i.e., the sum of the amount of cash and/or Market Value of such Shares on date
of exercise) shall equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the exercise
price of such Stock Appreciation Right, multiplied by the number of Shares with
respect to which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. In the case of a Related Option, such Related Option shall cease
to be exercisable to the extent of the Shares with respect to which the Related
Stock Appreciation Right was exercised. Upon the exercise or termination of a
Related Option, any Related Stock Appreciation Right shall terminate to the
extent of the Shares with respect to which the Related Option was exercised or
terminated.
(c) Restricted Stock. The Committee is hereby authorized to grant
Awards of Restricted Stock to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock shall be subject to
such restrictions as the Committee may impose (including, without
limitation, any limitation on the right to vote a Share of Restricted
Stock or the right to receive any dividend or other right or property
with respect thereto), which restrictions may lapse separately or in
combination at such time or times, in such installments or otherwise
as the Committee may deem appropriate.
4
<PAGE> 5
(ii) Stock Certificates. Any Restricted Stock granted under the
Plan shall be evidenced by issuance of a stock certificate or
certificates, which certificate or certificates shall be held by the
Corporation. Such certificate or certificates shall be registered in
the name of the Participant and shall bear an appropriate legend
referring to the restrictions applicable to such Restricted Stock.
(iii) Forfeiture; Delivery of Shares. Except as otherwise
determined by the Committee, upon Termination of Service during the
applicable restriction period, all Shares of Restricted Stock at such
time subject to restriction shall be forfeited and reacquired by the
Corporation; provided, however, that the Committee may waive in whole
or in part any or all remaining restrictions with respect to Shares of
Restricted Stock. Shares representing Restricted Stock that is no
longer subject to restrictions shall be delivered to the holder
thereof promptly after the applicable restrictions lapse or are
waived.
(d) Performance Awards. The Committee is hereby authorized to grant
performance Awards to Participants subject to the terms of the Plan and any
applicable Award Agreement. A performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
performance Award granted and the amount of any payment or transfer to be made
pursuant to any performance Award shall be determined by the Committee.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any change
in the outstanding Shares subsequent to the effective date of the Plan by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares and exercise price of the Award, if any, as to which Awards
may be granted under the Plan and the number and class of shares and exercise
price of the Award, if any, with respect to which Awards have been granted under
the Plan shall be appropriately adjusted by the Committee, whose determination
shall be conclusive. Any Award which is adjusted as a result of this Section 6
shall be subject to the same restrictions as the original Award.
7. EFFECT OF MERGER ON OPTIONS OR RIGHTS. In the case of any merger,
consolidation or combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the continuing
corporation and which does not result in the outstanding Shares being converted
into or exchanged for different securities, cash or other property, or any
combination thereof), any Participant to whom an Option or Right has been
granted shall have the additional right (subject to the provisions of the Plan
and any limitation applicable to such Option or Right), thereafter and during
the term of each such Option or Right, to receive upon exercise
5
<PAGE> 6
of any such Option or Right an amount equal to the excess of the fair market
value on the date of such exercise of the securities, cash or other property, or
combination thereof, receivable upon such merger, consolidation or combination
in respect of a Share over the exercise price of such Right or Option,
multiplied by the number of Shares with respect to which such Option or Right
shall have been exercised. Such amount may be payable fully in cash, fully in
one or more of the kind or kinds of property payable in such merger,
consolidation or combination, or partly in cash and partly in one or more of
such kind or kinds of property, all in the discretion of the Committee.
8. EFFECT OF CHANGE IN CONTROL. Each of the events specified in the
following clauses (i) through (iii) of this Section 8 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in connection with, any cash
tender offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Corporation shall cease to constitute a majority of the Board of Directors of
the Corporation, or (iii) the stockholders of the Corporation shall approve an
agreement providing either for a transaction in which the Corporation will cease
to be an independent publicly-owned corporation or for a sale or other
disposition of all or substantially all the assets of the Corporation. Upon a
change in control, unless the Committee shall have otherwise provided in the
Award Agreement, any restricted period with respect to Restricted Stock awarded
to such Participant shall lapse and all Shares awarded as Restricted Stock shall
become fully vested in the Participant to whom such Shares were awarded. If a
tender offer or exchange offer for Shares (other than such an offer by the
Corporation) is commenced, or if the event specified in clause (iii) above shall
occur, unless the Committee shall have otherwise provided in the Award
Agreement, all Options and Stock Appreciation Rights granted and not fully
exercisable shall become exercisable in full upon the happening of such event;
provided, however, that no Option or Stock Appreciation Right which has
previously been exercised or otherwise terminated shall become exercisable.
9. ASSIGNMENTS AND TRANSFERS. No Award granted under the Plan shall be
transferable otherwise than by will, the laws of descent and distribution or
pursuant to a qualified domestic relations order, except an Award may be
transferred by gift to any member of the Participant's immediate family or to a
trust for the benefit of one or more of such immediate family members if the
Committee so specifies in the Award Agreement. During the lifetime of an Award
recipient, an Award shall be exercisable only by the Award recipient unless it
has been transferred as permitted hereby, in which case it shall be exercisable
only by such transferee. For the purpose of this Section 9 a Participant's
"immediate family" shall mean the Participant's spouse, children and
grandchildren.
10. EMPLOYEE RIGHTS UNDER THE PLAN. No person shall have a right to be
selected as a Participant nor, having been so selected, to be selected again as
a Participant and no officer, employee or other person shall have any claim or
right to be granted an Award under the Plan or under any other incentive or
similar plan of the Corporation or any Affiliate. Neither the Plan
6
<PAGE> 7
nor any action taken thereunder shall be construed as giving any employee any
right to be retained in the employ of the Corporation or any Affiliate.
11. DELIVERY AND REGISTRATION OF STOCK. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other federal, state or local
securities legislation. It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under such Securities Act or
other securities legislation. The Corporation shall not be required to deliver
any Shares under the Plan prior to (i) the admission of such Shares to listing
on any stock exchange on which Shares may then be listed, and (ii) the
completion of such registration or other qualification of such Shares under any
state or federal law, rule or regulation, as the committee shall determine to be
necessary or advisable.
12. WITHHOLDING TAX. Upon the termination of the restricted period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Corporation shall have the right to require the Participant or
other person receiving such shares to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such shares,
or, in lieu thereof, to retain or sell without notice, a sufficient number of
shares held by it to cover the amount required to be withheld. The Corporation
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments.
The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes required
by law to be withheld with respect to such cash payments. Where a Participant or
other person is entitled to receive Shares pursuant to the exercise of an Option
or Right pursuant to the Plan, the Corporation shall have the right to require
the Participant or such other person to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
All withholding decisions pursuant to this Section 12 shall be at the
sole discretion of the Committee or the Corporation.
13. AMENDMENT OR TERMINATION.
(a) The Board of Directors of the Corporation may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of shareholders
or Participants, except that any such action will be subject to the approval of
the Corporation's shareholders if, when and to the extent such shareholder
approval is necessary or required for purposes of any applicable
7
<PAGE> 8
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Shares may then be listed or quoted, or
if the Board of Directors of the Corporation, in its discretion, determines to
seek such shareholder approval.
(b) Except with respect to Awards granted pursuant to Section 5(e) of
the Plan, the Committee may waive any conditions of or rights of the Corporation
or modify or amend the terms of any outstanding Award. The Committee may not,
however, amend, alter, suspend, discontinue or terminate any outstanding Award
without the consent of the Participant or holder thereof, except as otherwise
herein provided.
14. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective upon
its adoption by the Board of Directors of the Corporation, and the approval of
the Plan by the shareholders of the Corporation. It shall continue in effect for
a term of fifteen years unless sooner terminated under Section 13 hereof.
8
<PAGE> 1
EXHIBIT 4.4
FIRST KENT FINANCIAL CORPORATION
1994 STOCK OPTION AND INCENTIVE PLAN
1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. It is intended that designated Options granted pursuant to
the provisions of this Plan to persons employed by the Corporation or its
Affiliates will qualify as Incentive Stock Options. Options granted to persons
who are not employees will be Non-Qualified Stock Options.
2. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
"Bank" - means First Federal Savings Bank of Kent, and any successor
entity.
"Award" - means the grant of an Incentive Stock Option, a
Non-Qualified Stock Option, a Stock Appreciation Right, a Limited Stock
Appreciation Right, or of Restricted Stock, or any combination thereof, as
provided in the Plan.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, advisory director, officer or employee of
the Corporation or an Affiliate, except that when used with respect to persons
granted an Incentive Option means the absence of any interruption or termination
of service as an employee of the Corporation or an Affiliate. Service shall not
be considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Corporation or in the case of transfers between
payroll locations of the Corporation or between the Corporation, its parent, its
subsidiaries or its successor. With respect to any advisory director, continuous
service shall mean availability to perform such functions as may be required of
the Bank's advisory directors.
"Corporation" - means First Kent Financial Corporation, a Delaware
corporation.
"Disinterested Person" - means any member of the Board of Directors of
the Corporation who within the prior year has not been, and is not being,
granted any awards related to the Shares under this Plan or any other plan of
the Corporation or any of its Affiliates except for awards which (i) are
calculated in accordance with a formula as contemplated in paragraph (c)(ii) of
Rule 16b-3 ("Rule 16b-3") under the Securities Exchange Act of 1934; (ii) result
from participation in an ongoing securities acquisition plan meeting the
conditions of paragraph (d)(2) of Rule 16b-3; or, (iii) arise from an election
by a director to receive all or part of his board fees in securities. No
recipient of a stock award granted pursuant to Section 21 hereof shall be deemed
not to be a Disinterested Person solely by reason of such grant.
"Employee" - means any person, including an officer or director, who
is employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of 1974,
as amended.
<PAGE> 2
"Exercise Price" - means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon exercise
of such Option and (ii) in the case of a Right, the price per Share (other than
the Market Value per Share on the date of exercise and the Offer Price per Share
as defined in Section 10 hereof) which, upon grant, the Committee determines
shall be utilized in calculating the aggregate value which a Participant shall
be entitled to receive pursuant to Sections 9, 10 or 13 hereof upon exercise of
such Right.
"Incentive Stock Option" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
"Limited Stock Appreciation Right" - means a stock appreciation right
with respect to Shares granted by the Committee pursuant to Sections 6 and 10
hereof.
"Market Value" - means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof, which option is not
intended to qualify under Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" - means any officer or employee of the Corporation or
any Affiliate who is selected by the Committee to receive an Award and any
director or advisory director of the Corporation who is granted an Award
pursuant to Section 21 hereof.
"Plan" - means the 1994 Stock Option and Incentive Plan of the
Corporation.
"Related" - means (i) in the case of a Right, a Right which is granted
in connection with, and to the extent exercisable, in whole or in part, in lieu
of, an Option or another Right and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof has been granted.
"Restricted Period" - means the period of time selected by the
Committee for the purpose of determining when restrictions are in effect under
Section 11 hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently awarded
to a Participant by the Committee subject to the restrictions referred to in
Section 11 hereof, so long as such restrictions are in effect.
"Right" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.
"Shares" - means the shares of common stock of the Corporation.
"Senior Officer" - means the Corporation's president, principal
financial officer, or principal accounting officer, any vice president of the
Corporation in charge of a principal business unit, division or
<PAGE> 3
function (such as sales, administration or finance), any other officer who
performs a policy-making function, or any other person who performs similar
policy-making functions for the Corporation. Officers of the Corporation's
Affiliates shall be deemed Senior Officers of the Corporation if they perform
such policy-making functions for the Corporation.
"Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 9 hereof.
"Ten Percent Beneficial Owner" - means the beneficial owner of more
than ten percent of any class of the Corporation's equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
3. ADMINISTRATION. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Disinterested Person
and each of whom shall be an "outside director," as set forth in Section 162(m)
of the Code and defined in the regulations promulgated thereunder. The members
of the Committee shall be appointed by the Board of Directors of the
Corporation. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion to (i) select
Participants and grant Awards; (ii) determine the number of Shares to be subject
to types of Awards generally, as well as to individual Awards granted under the
Plan; (iii) determine the terms and conditions upon which Awards shall be
granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan. The Committee
may maintain, and update from time to time as appropriate, a list designating
selected directors as Disinterested Persons. The purpose of such list shall be
to evidence the status of such individuals as Disinterested Persons, and the
Board of Directors may appoint to the Committee any individual actually
qualifying as a Disinterested Person, regardless of whether identified as such
on said list.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
4. PARTICIPATION IN COMMITTEE AWARDS. The Committee may select from time
to time Participants in the Plan from those directors, officers and employees
(other than Disinterested Persons), of the Corporation or its Affiliates who, in
the opinion of the Committee, have the capacity for contributing to the
successful performance of the Corporation or its Affiliates.
5. SHARES SUBJECT TO PLAN. Subject to adjustment by the operation of
Section 12 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 10% of the total Shares issued in the Bank's
conversion to the capital stock form. The Shares with respect to which Awards
may be made under the Plan may be either authorized and unissued shares or
issued shares heretofore or hereafter reacquired and held as treasury shares.
Shares which are subject to Related Rights and Related Options shall be counted
only once in determining whether the maximum number of Shares with respect to
which Awards may be granted under the Plan has been exceeded. An Award shall not
be considered to have been made under the Plan with respect to any Option or
Right which terminates or with respect to Restricted Stock which is forfeited,
and new Awards may be granted under the Plan with respect to the number of
Shares as to which such termination or forfeiture has occurred.
6. GENERAL TERMS AND CONDITIONS OF OPTIONS AND RIGHTS. The Committee
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Market Value per Share at the date of grant of such Option or Right, (ii) the
number of Shares subject to, and the expiration date of, any Option or Right,
which expiration date shall not exceed ten years from the date of grant,
(iii) the manner, time and rate (cumulative or otherwise) of exercise of
<PAGE> 4
such Option or Right, and (iv) the restrictions, if any, to be placed upon such
Option or Right or upon Shares which may be issued upon exercise of such Option
or Right. The Committee may, as a condition of granting any Option or Right,
require that a Participant agree not to thereafter exercise one or more Options
or Rights previously granted to such Participant. Notwithstanding the foregoing,
no individual shall be granted Awards in any calendar year with respect to more
than 25% of the total shares subject to the Plan.
7. EXERCISE OF OPTIONS OR RIGHTS.
(a) Except as provided herein, an Option or Right granted under the
Plan shall be exercisable during the lifetime of the Participant to whom such
Option or Right was granted only by such Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no such Option or Right may be
exercised unless at the time such Participant exercises such Option or Right,
such Participant has maintained Continuous Service since the date of grant of
such Option or Right. Cash settlements of Rights may be made only in accordance
with any applicable restrictions pursuant to Rule 16b-3(e) under the Securities
Exchange Act of 1934 or any similar or successor provision.
(b) To exercise an Option or Right under the Plan, the Participant to
whom such Option or Right was granted shall give written notice to the
Corporation in form satisfactory to the Committee (and, if partial exercises
have been permitted by the Committee, by specifying the number of Shares with
respect to which such Participant elects to exercise such Option or Right)
together with full payment of the Exercise Price, if any and to the extent
required. The date of exercise shall be the date on which such notice is
received by the Corporation. Payment, if any is required, shall be made either
(i) in cash (including check, bank draft or money order) or (ii) if permitted by
the Committee, by delivering (A) Shares already owned by the Participant and
having a fair market value equal to the applicable exercise price, such fair
market value to be determined in such appropriate manner as may be provided by
the Committee or as may be required in order to comply with or to conform to
requirements of any applicable laws or regulations, or (B) a combination of cash
and such Shares.
(c) If a Participant to whom an Option or Right was granted shall
cease to maintain Continuous Service for any reason (including total or partial
disability and normal or early retirement, but excluding death and termination
of employment by the Corporation or any Affiliate for cause), such Participant
may, but only within the period of three months immediately succeeding such
cessation of Continuous Service and in no event after the expiration date of
such Option or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the date of such
cessation, provided, however, that such right of exercise after cessation of
Continuous Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If the Continuous Service of a
Participant to whom an Option or Right was granted by the Corporation is
terminated for cause, all rights under any Option or Right of such Participant
shall expire immediately upon the giving to the Participant of notice of such
termination.
(d) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate or within the three month period
referred to in paragraph (c) of this Section 7, the person to whom any Option or
Right held by the Participant at the time of his death is transferred by will or
the laws of descent and distribution, or in the case of an Award other than an
Incentive Stock Option, pursuant to a qualified domestic relations order, as
defined in the Code or Title 1 of ERISA or the rules thereunder may, but only to
the extent such Participant was entitled to exercise such Option or Right
immediately prior to his death, exercise such Option or Right at any time within
a period of one year succeeding the date of death of such Participant, but in no
event later than ten years from the date of grant of such Option or Right.
Following the death of any Participant to whom an Option was granted under the
Plan, irrespective of whether any Related Right shall have theretofore been
granted to the Participant or whether the person entitled to exercise such
Related Right desires to do so, the Committee may, as an alternative means of
settlement of such Option, elect to pay to the person to whom such Option is
transferred by will or by the laws of descent and distribution, or in the case
of an Option other than an Incentive Stock Option, pursuant to a qualified
domestic relations order, as defined in the Code or Title I of ERISA or the
rules thereunder, the amount by which the Market Value per Share on the date of
exercise of such Option shall exceed the Exercise Price of such Option,
multiplied by the number of Shares with
<PAGE> 5
respect to which such Option is properly exercised. Any such settlement of an
Option shall be considered an exercise of such Option for all purposes of the
Plan.
8. INCENTIVE STOCK OPTIONS. Incentive Stock Options may be granted only
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock Option is granted other than by will or the laws of descent and
distribution, and shall be exercisable during such Participant's lifetime only
by such Participant, (iv) no Incentive Stock Option shall be granted to any
individual who, at the time such Incentive Stock Option is granted, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation or any Affiliate unless the Exercise Price
of such Incentive Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such Incentive Stock Option is not exercisable
after the expiration of five years from the date such Incentive Stock Option is
granted, and (v) the aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by a Participant in any
calendar year shall not exceed $100,000.
9. STOCK APPRECIATION RIGHTS. A Stock Appreciation Right shall, upon its
exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which
(i.e., the sum of the amount of cash and/or Market Value of such Shares on date
of exercise) shall equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares with
respect of which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall determine
whether and to what extent a Related Stock Appreciation Right shall be granted
with respect thereto; provided, however, and notwithstanding any other provision
of the Plan, that if the Related Option is an Incentive Stock Option, the
Related Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Stock Appreciation Right were
an Incentive Stock Option and as if other rights which are Related to Incentive
Stock Options were Incentive Stock Options. In the case of a Related Option,
such Related Option shall cease to be exercisable to the extent of the Shares
with respect to which the Related Stock Appreciation Right was exercised. Upon
the exercise or termination of a Related Option, any Related Stock Appreciation
Right shall terminate to the extent of the Shares with respect to which the
Related Option was exercised or terminated. Notwithstanding the foregoing, no
Stock Appreciation Right shall be exercisable by a director, Senior Officer or
Ten Percent Beneficial Owner of the Corporation within six months of the date of
its grant.
10. LIMITED STOCK APPRECIATION RIGHTS. At the time of grant of an Option
or Stock Appreciation Right to any Participant, the Committee shall have full
and complete authority and discretion to also grant to such Participant a
Limited Stock Appreciation Right which is Related to such Option or Stock
Appreciation Right; provided, however and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive Stock Option, the Related
Limited Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Limited Stock Appreciation
Right were an Incentive Stock Option and as if all other Rights which are
Related to Incentive Stock Options were Incentive Stock Options. Notwithstanding
any other provision of the Plan, a Limited Stock Appreciation Right shall be
exercisable only during the period be ginning on the first day following the
date of expiration of any "offer" (as such term is hereinafter defined) and
ending on the forty-fifth day following such date, provided, however, that no
Limited Stock Appreciation Right shall be exercisable by a director, Senior
Officer or Ten Percent Beneficial Owner within six months of the date of its
grant.
A Limited Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Limited
<PAGE> 6
Stock Appreciation Right was granted to receive an amount of cash equal to the
amount by which the "Offer Price per Share" (as such term is hereinafter
defined) or the Market Value on the date of such exercise, as shall have been
provided by the Committee in its discretion at the time of grant, shall exceed
the Exercise Price of such Limited Stock Appreciation Right, multiplied by the
number of Shares with respect to which such Limited Stock Appreciation Right
shall have been exercised. Upon the exercise of a Limited Stock Appreciation
Right, any Related Option and/or Related Stock Appreciation Right shall cease to
be exercisable to the extent of the Shares with respect to which such Limited
Stock Appreciation Right was exercised. Upon the exercise or termination of a
Related Option or Related Stock Appreciation Right, any Related Limited Stock
Appreciation Right shall terminate to the extent of the Shares with respect to
which such Related Option or Related Stock Appreciation Right was exercised or
terminated.
For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one made by the
Corporation, provided that the corporation, person or other entity making the
offer acquires pursuant to such offer either (i) 25% of the Shares outstanding
immediately prior to the commencement of such offer or (ii) a number of Shares
which, together with all other Shares acquired in any tender offer or exchange
offer (other than one made by the Corporation) which expired within sixty days
of the expiration date of the offer in question, equals 25% of the Shares
outstanding immediately prior to the commencement of the offer in question. The
term "Offer Price per Share" as used in this Section 10 shall mean the highest
price per Share paid in any Offer which Offer is in effect any time during the
period beginning on the sixtieth day prior to the date on which a Limited Stock
Appreciation Right is exercised and ending on the date on which such Limited
Stock Appreciation Right is exercised. Any securities or property which are part
or all of the consideration paid for Shares in the Offer shall be valued in
determining the Offer Price per Share at the higher of (A) the valuation placed
on such securities or property by the corporation, person or other entity making
such Offer or (B) the valuation placed on such securities or property by the
Committee.
11. TERMS AND CONDITIONS OF RESTRICTED STOCK. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 11, to provide such
other terms and conditions (which need not be identical among Participants) in
respect of such Awards, and the vesting thereof, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 11.
(a) At the time of an award of Restricted Stock, the Committee shall
establish for each Participant a Restricted Period of not less than six months
during which or at the expiration of which, as the Committee shall determine and
provide in the agreement referred to in paragraph (d) of this Section 11, the
Shares awarded as Restricted Stock shall vest. Subject to any such other terms
and conditions as the Committee shall provide, shares of Restricted Stock may
not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, except as hereinafter provided, during the Restricted Period.
Except for such restrictions, and subject to paragraphs (c), (d) and (e) of this
Section 11 and Section 12 hereof, the Participant as owner of such shares shall
have all the rights of a stockholder, including but not limited to the right to
receive all dividends paid on such shares and the right to vote such shares. The
Committee shall have the authority, in its discretion, to accelerate the time at
which any or all of the restrictions shall lapse with respect to any shares of
Restricted Stock prior to the expiration of the Restricted Period with respect
thereto, or to remove any or all of such restrictions, whenever it may determine
that such action is appropriate by reason of changes in applicable tax or other
laws or other changes in circumstances occurring after the commencement of such
Restricted Period.
(b) Except as provided in Section 14 hereof, if a Participant ceases
to maintain Continuous Service for any reason (other than death or total or
partial disability) unless the Committee shall otherwise determine, all shares
of Restricted Stock theretofore awarded to such Participant and which at the
time of such termination of Continuous Service are subject to the restrictions
imposed by paragraph (a) of this Section 11 shall upon such termination of
Continuous Service be forfeited and returned to the Corporation. Unless the
Committee shall have provided in the agreement referred to in paragraph (d) of
this Section 11 for a ratable lapse of restrictions with respect to an award of
shares of Restricted Stock during the Restricted Period, if a Participant ceases
to maintain Continuous Service by reason of death or total or partial
disability, such portion of such shares of Restricted Stock awarded to such
Participant which at the time of such termination of Continuous Service are
<PAGE> 7
subject to the restrictions imposed by paragraph (a) of this Section 11 as shall
be equal to the portion of the Restricted Period with respect to such shares
which shall have elapsed at the time of such termination of Continuous Service
shall be free of restrictions and shall not be forfeited.
(c) Each certificate in respect of shares of Restricted Stock awarded
under the Plan shall be registered in the name of the Participant and deposited
by the Participant, together with a stock power endorsed in blank, with the
Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the 1994 Stock Option and Incentive Plan of
First Kent Financial Corporation and an Agreement entered into between
the registered owner and First Kent Financial Corporation. Copies of such
Plan and Agreement are on file in the offices of the Secretary of First
Kent Financial Corporation, 157 North Water Street, Kent, Ohio 44240.
(d) At the time of an award of shares of Restricted Stock, the
Participant shall enter into an Agreement with the Corporation in a form
specified by the Committee, agreeing to the terms and conditions of the award
and such other matters as the Committee shall in its sole discretion determine.
(e) At the time of an award of shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the Participant
of dividends declared or paid on such shares, or specified portion thereof, by
the Corporation shall be deferred until the earlier to occur of (i) the lapsing
of the restrictions imposed under paragraph (a) of this Section 11 or (ii) the
forfeiture of such shares under paragraph (b) of this Section 11, and shall be
held by the Corporation for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon as
aforesaid, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the immediately preceding sentence.
(f) At the expiration or lapse of the restrictions imposed by
paragraph (a) of this Section 11, the Corporation shall redeliver to the
Participant (or where the relevant provision of paragraph (b) of this Section 11
applies in the case of a deceased Participant, to his legal representative,
beneficiary or heir) the certificate(s) and stock power deposited with it
pursuant to paragraph (c) of this Section 11 and the Shares represented by such
certificate(s) shall be free of the restrictions referred to in paragraph (a) of
this Section 11.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Corporation in the manner
provided in Section 11 hereof.
13. EFFECT OF MERGER. In the event of any merger, consolidation or
combination of the Corporation (other than a merger, consolidation or
combination in which the Corporation is the continuing entity and which does not
result in the outstanding Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof) pursuant to a
plan or agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their holdings), any
Participant to whom an Option or Right has been granted at least 6 months prior
to such event shall have the right (subject to the provisions of the Plan and
any limitation applicable to such Option or Right), thereafter and during the
term of each such Option or Right, to receive upon exercise of any such Option
or Right
<PAGE> 8
an amount equal to the excess of the fair market value on the date of such
exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a Share
over the Exercise Price of such Right or Option, multiplied by the number of
Shares with respect to which such Option or Right shall have been exercised.
Such amount may be payable fully in cash, fully in one or more of the kind or
kinds of property payable in such merger, consolidation or combination, or
partly in cash and partly in one or more of such kind or kinds of property, all
in the discretion of the Committee. Unless the Committee shall have provided
otherwise in the agreement referred to in paragraph (d) of Section 11 hereof, in
the event of any such merger, consolidation or combination any Restricted Period
shall lapse with respect to Shares of Restricted Stock awarded at least six
months prior to such event, all such Shares shall be fully vested in the
Participants to whom such Shares were awarded, and the holders of such Shares
shall be eligible to receive in respect thereof the full amount receivable per
Share in such merger, consolidation or combination.
14. EFFECT OF CHANGE IN CONTROL. Each of the events specified in the
following clauses (i) through (iii) of this Section 14 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in connection with, any cash
tender offer, exchange offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing, the persons who
were directors of the Corporation shall cease to constitute a majority of the
Board of Directors of the Corporation or (iii) the stockholders of the
Corporation shall approve an agreement providing either for a transaction in
which the Corporation will cease to be an independent publicly owned entity or
for a sale or other disposition of all or substantially all the assets of the
Corporation; provided, however, that the occurrence of any such events shall not
be deemed a "change in control" if, prior to such occurrence, a resolution
specifically approving such occurrence shall have been adopted by at least a
majority of the Board of Directors of the Corporation. If the Continuous Service
of any Participant of the Corporation or any Affiliate is involuntarily
terminated for whatever reason, at any time within eighteen months after a
change in control, unless the Committee shall have otherwise provided in the
agreement referred to in paragraph (d) of Section 11 hereof, any Restricted
Period with respect to Restricted Stock theretofore awarded to such Participant
shall lapse upon such termination and all Shares awarded as Restricted Stock
shall become fully vested in the Participant to whom such Shares were awarded.
If a tender offer or exchange offer for Shares (other than such an offer by the
Corporation) is commenced, or if the event specified in clause (iii) above shall
occur, unless the Committee shall have otherwise provided in the instrument
evidencing the grant of an Option or Stock Appreciation Right, all Options and
Stock Appreciation Rights theretofore granted and not fully exercisable shall
become exercisable in full upon the happening of such event and shall remain so
exercisable for a period of sixty days following such date, after which they
shall revert to being exercisable in accordance with their terms; provided,
however, that no Option or Stock Appreciation Right shall be exercisable by a
director, Senior Officer or Ten Percent Beneficial Owner of the Corporation
within six months of the date of grant of such Option or Stock Appreciation
Right and no Option or Stock Appreciation Right which has previously been
exercised or otherwise terminated shall become exercisable.
15. ASSIGNMENTS AND TRANSFERS. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or in the case of
Awards other than Incentive Stock Options pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the rules
thereunder.
16. EMPLOYEE RIGHTS UNDER THE PLAN. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no director, officer, employee or
other person shall have any claim or right to be granted an Award under the Plan
or under any other incentive or similar plan of the Corporation or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any employee any right to be retained in the employ of the Corporation
or any Affiliate.
17. DELIVERY AND REGISTRATION OF STOCK. The Corporation's obligation to
deliver Shares with respect
<PAGE> 9
to an Award shall, if the Committee so requests, be conditioned upon the receipt
of a representation as to the investment intention of the Participant to whom
such Shares are to be delivered, in such form as the Committee shall determine
to be necessary or advisable to comply with the provisions of the Securities Act
of 1933 or any other Federal, state or local securities legislation or
regulation. It may be provided that any representation requirement shall become
inoperative upon a registration of the Shares or other action eliminating the
necessity of such representation under such Securities Act or other securities
legislation. The Corporation shall not be required to deliver any Shares under
the Plan prior to (i) the admission of such shares to listing on any stock
exchange on which Shares may then be listed, and (ii) the completion of such
registration or other qualification of such Shares under any state or Federal
law, rule or regulation, as the Committee shall determine to be necessary or
advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
18. WITHHOLDING TAX. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Corporation shall retain a sufficient number of shares held by it
to cover the amount required to be withheld. The Corporation shall have the
right to deduct from all dividends paid with respect to shares of Restricted
Stock the amount of any taxes which the Corporation is required to withhold with
respect to such dividend payments.
The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes required
by law to be withheld with respect to such cash payments. Where a Participant or
other person is entitled to receive Shares pursuant to the exercise of an Option
or Right pursuant to the Plan, the Corporation shall have the right to require
the Participant or such other person to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such Shares.
19. AMENDMENT OR TERMINATION. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 12 hereof) no amendment shall be made without
approval of the stockholders of the Corporation which shall (i) materially
increase the aggregate number of Shares with respect to which Awards may be
made under the Plan, (ii) materially increase the aggregate number of Shares
which may be subject to Awards to Participants who are not Employees or
(iii) change the class of persons eligible to participate in the Plan; provided,
however, that no such amendment, suspension or termination shall impair the
rights of any Participant, without his consent, in any Award theretofore made
pursuant to the Plan.
20. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective upon
its approval by the stockholders of the Corporation. It shall continue in effect
for a term of ten years unless sooner terminated under Section 19 hereof.
21. INITIAL GRANT. By, and simultaneously with, the approval of the Plan
by the stockholders of the Corporation, each member of the Board of Directors of
the Corporation at the time of the Bank's conversion to stock form who is not an
Employee, is hereby granted a ten year, Non-Qualified Stock Option to purchase a
number of shares equal to .50% of the shares issued in the conversion at an
Exercise Price per share equal to the Market Value on the date of the grant. All
options shall vest ratably over a five year period, beginning one year from the
date of stockholder approval. In addition, each non-employee director of the
Corporation elected after the completion of the Bank's conversion to stock form
is hereby granted as of the date he or she is elected and qualified ("election
date") a ten year Non-Qualified Stock Option to Purchase a number of shares
equal to .50% of the shares issued in the conversion at the applicable Market
Value on the election date. Each such Option shall be evidenced by a
Non-Qualified Stock Option Agreement in a form approved by the Board of
Directors and shall be subject in all respects to the terms and conditions of
this Plan, which are controlling. All options granted pursuant to this Section
21 shall be rounded down to the nearest whole share to the extent necessary to
ensure that no options to purchase stock representing fractional shares are
granted.
<PAGE> 10
Notwithstanding anything else in this Plan to the contrary, to the extent
that the Plan provides for formula awards, as defined in Rule 16b-3(c)(2)(ii)
under the Securities Exchange Act of 1934, such provisions may not be amended
more than once every six months, other than to comport with changes in the Code,
ERISA or the rules thereunder.
<PAGE> 1
EXHIBIT 5.1
[Brouse & McDowell, L.P.A. Letterhead]
October 26, 1998
FirstMerit Corporation
III Cascade Plaza, 7th Floor
Akron, Ohio 44308
Re: Registration on Form S-8 of 292,834 Shares of
Common Stock of FirstMerit Corporation
Gentlemen:
We are acting as counsel to FirstMerit Corporation (the "Company") in
connection with the issuance and sale by the Company of up to 292,834 shares of
its Common Stock (the "Shares") upon the exercise or conversion of certain stock
options. The Shares will be issued and sold to certain employees of the Company
pursuant to the Security First 1987 Stock Option and Incentive Plan; the
Security First 1996 Stock Option and Incentive Plan and the First Kent
Financial Corporation 1994 Stock Option Plan (collectively, the "Plans").
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion, and based thereon we are of the
opinion that the Shares which may be issued and sold pursuant to the Plans,
upon the exercise or conversion of stock options, have been duly authorized and,
when issued and sold in accordance with the terms of the Plans, will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to
Amendment No.1 on Form S-8 to the Registration Statement on Form S-4 being filed
by the Company with the Securities and Exchange Commission to effect
registration of the Shares under the Securities Act of 1933.
Very truly yours,
Brouse & McDowell, L.P.A.
/s/ Brouse & McDowell, L.P.A.
<PAGE> 1
Exhibit 23.6
Consent of PricewaterhouseCoopers L.L.P.
We consent to incorporation by reference in the Registration Statement (Form
S-8), of our report dated January 15, 1998, relating to the consolidated balance
sheets of FirstMerit Corporation and subsidiaries as of December 31, 1997 and
1996, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the years in the three year period ended December 31,
1997, which report appears in the 1997 Annual Report on Form 10-K of FirstMerit
Corporation, as amended by Form 10-K/A filed on April 30, 1998. We also consent
to the reference to our firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
Akron, Ohio
October 26, 1998
<PAGE> 1
Exhibit 23.7
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post Effective Amendment
No.1 to Registration Statement No. 333-57439 of FirstMerit Corporation on Form
S-8 of our report dated January 26, 1996, related to Signal Corp (formerly known
as FirstFederal Financial Services Corp) for the year ended December 31, 1995
appearing in Form 8-K dated August 31, 1998 of FirstMerit Corporation and to the
reference to us under the heading "Experts" in the prospectus, which is part of
this Registration Statement.
/s/ Deloitte & Touche LLP
Columbus, Ohio
October 22, 1998
<PAGE> 1
Exhibit 23.8
Independent Auditors' Consent
We consent to the use in this Registration Statement on Form S-8 of FirstMerit
Corporation (post effective Amendment No. 1 to Registration Statement No.
333-57439 on Form S-4) of our report dated April 22, 1998, appearing in Appendix
C to Part 1 (Prospectus and Proxy Statement) of Registration Statement No.
333-57439 on Form S-4 of FirstMerit Corporation filed on June 22, 1998, which is
being amended by this Registration Statement, and to the reference to us under
the heading "Experts" in such Prospectus and Proxy Statement.
/s/ Deloitte & Touche LLP
October 23, 1998
Cleveland, Ohio
<PAGE> 1
Exhibit 23.9
Consent of Independent Auditors'
To the Board of Directors of Signal Corp:
We consent to the incorporation by reference in the registration statement on
Form S-8 of FirstMerit Corporation of our report dated February 6, 1998, except
as to note 1 (Stock Dividend), which is as of April 22, 1998, and note 15, which
is as of June 29, 1998, with respect to the consolidated balance sheets of
Signal Corp and subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the years then ended, which report appears in the Form 8-K of
FirstMerit Corporation dated August 31, 1998.
Our report refers to the adoption of the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities," in 1997.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
October 22, 1998
<PAGE> 1
Exhibit 23.10
Consent of Independent Auditors
We consent to the incorporation by reference in this Registration Statement
(Post Effective Amendment No. 1 on Form S-8) of FirstMerit Corporation for the
registration of up to 292,834 shares of its common stock of our report dated
February 6, 1998, with respect to the consolidated statements of financial
position of First Shenango Bancorp, Inc. and subsidiaries as of December 31,
1997 and 1996, and the related consolidated statements of income, changes in
shareholder's equity, and cash flows for each of the years in the three year
period ended December 31, 1997 included in FirstMerit Corporation's Form 8-K
dated August 31, 1998 filed with the Securities and Exchange Commission.
Pittsburgh, Pennsylvania /s/ Ernst & Young LLP
October 22, 1998
<PAGE> 1
FIRSTMERIT CORPORATION Exhibit 24
LIMITED POWER OF ATTORNEY
REGISTRATION STATEMENTS ON FORM S-8
The undersigned directors and officers of FirstMerit Corporation (the
"Company") hereby constitute and appoint Terry E. Patton, and/or Kevin C.
O'Neil, and each of them, with full power of substitution and resubstitution, as
attorneys or attorney of the undersigned, to execute and file under the
Securities Act of 1933 (i) a Post Effective Amendment on Form S-8 to the
Registration Statement on Form S-4 filed by the Company on June 22, 1998, to
register certain shares of the Company's Common Stock that may be issued by the
Company pursuant to certain stock option plans of Security First Corp. (the
"Plans"); (ii) a Post Effective Amendment to Registration Statements on Form S-8
of Security First Corp. filed on May 2, 1996 and June 30, 1993 in order to
de-register shares of Security First Corp.'s Common Stock currently subject to
the Plans; (iii) a Post Effective Amendment to the Registration Statement on
Form S-4 filed by the Company on June 22, 1998, to de-register shares of
Security First Common Stock exchanged for the Company's Common Stock, and (iv)
any and all amendments and exhibits to any of the foregoing and any and all
applications or other documents to be filed with the Securities and Exchange
Commission, National Association of Securities Dealers and any state securities
agencies pertaining to such Registration Statements, with full power and
authority to do and perform any and all acts and things whatsoever necessary,
appropriate or desirable to be done in the premises, or in the name, place and
stead of the said directors and officers, hereby ratifying and approving the
acts of said attorneys and any of them and any such substitute.
Effective the 15th day of October, 1998, unless otherwise indicated
below.
<TABLE>
<CAPTION>
<S> <C>
/s/ John R. Cochran /s/ Jack R. Gravo
- ------------------------------------------- ----------------------------------------------------------
John R. Cochran Jack R. Gravo
Chairman and Chief Executive Officer Executive Vice President, Finance and Administration
(Chief Financial Officer and Chief Accounting Officer)
/s/ Karen S. Belden /s/ R. Cary Blair
- ------------------------------------------- ----------------------------------------------------------
Karen S. Belden, Director R. Cary Blair, Director
/s/ John C. Blickle /s/ Sid A. Bostic
- ------------------------------------------- ----------------------------------------------------------
John C. Blickle, Director Sid A. Bostic, Director
/s/ Richard Colella
- ------------------------------------------- ----------------------------------------------------------
Robert W. Briggs, Director Richard Colella, Director
/s/ Elizabeth A. Dalton /s/ Terry L. Haines
- ------------------------------------------- ----------------------------------------------------------
Elizabeth A. Dalton, Director Terry L. Haines, Director
/s/ Clifford J. Isroff /s/ Philip A. Lloyd, II
- ------------------------------------------- ----------------------------------------------------------
Clifford J. Isroff, Director Philip A. Lloyd, II, Director
/s/ Robert G. Merzweiler
- ------------------------------------------- ----------------------------------------------------------
Robert G. Merzweiler, Director Stephen E. Myers, Director
/s/ Roger T. Read /s/ Justin T. Rogers
- ------------------------------------------- ----------------------------------------------------------
Roger T. Read, Director Justin T. Rogers, Director
/s/ Richard N. Seaman /s/ Jerry M. Wolf
- ------------------------------------------- ----------------------------------------------------------
Richard N. Seaman, Director Jerry M. Wolf, Director
</TABLE>
