SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST MICHIGAN BANK CORPORATION
(Name of registrant as specified in its charter)
FIRST MICHIGAN BANK CORPORATION
(Name of person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
______________________________________________________________________
(2) Aggregate number of securities to which transaction applies: ________
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
______________________________________________________________________
(5) Total fee paid:
______________________________________________________________________
[ ] Fee paid previsouly with preliminary materials:____________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid: _____________________________________________
(2) Form, schedule or registration statement no.: _______________________
(3) Filing party: _______________________________________________________
(4) Date filed: _________________________________________________________ <PAGE>
[This Page Intentionally Left Blank.]<PAGE>
[ FMB LOGOTYPE ]
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
and PROXY STATEMENT
March 13, 1997
Dear Shareholder,
You are cordially invited to attend First Michigan Bank Corporation's Annual
Meeting of Shareholders on Tuesday, April 15, 1997, at 10:00 a.m. The meeting
will take place in the Ambassador Ballroom of the Amway Grand Plaza Hotel,
Grand Rapids, Michigan, and will be preceded by a continental breakfast at
9:00 a.m. Parking vouchers for the garage directly across Pearl Street from
the hotel will be available at the meeting.
A copy of First Michigan Bank Corporation's 1996 Annual Report is enclosed
for your review. We are pleased to report that the Corporation had another
outstanding year with record earnings and strong asset growth. This
performance, as well as our plans for the future, will be highlighted at the
Annual Meeting.
Every shareholder's vote is important. Therefore, please sign and return the
accompanying proxy in the return envelope provided. If you attend the meeting
and wish to vote your shares in person, you may do so even though you have
submitted a proxy. If your shares are held in the name of a brokerage or
bank, you may need to obtain a legal proxy from that institution to vote your
shares in person.
Also enclosed this year is a brief shareholder survey. Please take a moment
to complete it. This information will help FMB expand its shareholder base
and better serve all shareholders.
Thank you for your continued interest and investment in our Corporation, and
we look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ David M. Ondersma
- ---------------------
David M. Ondersma
Chairman
and Chief Executive Officer
<PAGE>
[ FMB LOGOTYPE ]
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of First Michigan Bank Corporation
will be held in the Ambassador Ballroom at the Amway Grand Plaza Hotel, Pearl
at Monroe, Grand Rapids, Michigan, on Tuesday, April 15, 1997, at 10:00 a.m.
(local time), for the following purposes:
(1) To elect five persons to the Board of Directors, four for
three-year terms and one for a two-year term.
(2) To consider and act on a proposal to approve the First Michigan
Bank Corporation Stock Compensation Plan.
(3) To consider and act on a proposal to approve the First Michigan
Bank Corporation 1997 Directors' Stock Option Plan.
(4) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 3, 1997, will be
entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Stephen A. Stream
- ---------------------
Stephen A. Stream
Secretary
Holland, Michigan
March 13, 1997
<PAGE>
[ FMB LOGOTYPE ]
March 13, 1997
One Financial Plaza * 10717 Adams
Holland, Michigan 49423
(Telephone 616/355-9200)
PROXY STATEMENT
SOLICITATION OF PROXIES
This Proxy Statement is furnished to the shareholders of First Michigan
Bank Corporation (the "Company") in connection with the solicitation by the
Board of Directors of proxies to be used at the Annual Meeting of
Shareholders, and any adjournments thereof, to be held on Tuesday, April 15,
1997, at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders.
Execution and return of the proxy in the form enclosed will not in any
way affect a shareholder's right to attend the meeting and vote in person. A
shareholder giving a proxy may revoke it at any time before it is exercised
by giving notice to the Chairman of the Board of the Company in writing or in
open meeting, by submitting to the Chairman of the Board a duly executed
proxy bearing a later date, or by attending the meeting and voting in person.
Proxies executed and returned in the form enclosed, unless previously
revoked, will be voted at the meeting as set forth herein and in the proxies.
The costs of soliciting proxies will be borne by the Company. The
solicitation of proxies will be made primarily by mail. The Company has
engaged Corporate Investor Communications, Inc., specialists in proxy
solicitation, to solicit proxies on its behalf from brokers, bank nominees,
and other institutional holders of its stock at an anticipated cost of $6,000
plus certain out-of-pocket expenses. Proxies may also be solicited by
directors, officers, and other employees of the Company and its subsidiaries
personally, and by telephone, facsimile, or other means. No additional
compensation will be paid to directors, officers, or employees for any such
solicitation nor will any such solicitation result in more than a minimal
cost to the Company.
ELECTION OF DIRECTORS
The Articles of Incorporation provide for the division of the Board of
Directors into three classes of nearly equal size with staggered three-year
terms of office. Five persons have been nominated for election to the Board,
four to serve three-year terms expiring at the 2000 Annual Meeting of
Shareholders, and one for a two-year term expiring at the 1999 Annual Meeting
of Shareholders. The Board has nominated the following four persons to serve
three-year terms: Doyle A. Hayes, Donald W. Maine, Jack H. Miller and David
M. Ondersma. All four are incumbent directors previously elected by the
Company's shareholders. The Board has also nominated Ronald J. Bieke to serve
a two-year term. Mr. Bieke was appointed to the Board in 1996 to fill a
vacancy on the Board. The latter portions of this Proxy Statement contain
more information about the nominees.
Unless otherwise directed by a shareholder's proxy, the persons named
as proxy voters in the accompanying proxy will vote for the nominees named
above. In the event any of such nominees shall become unavailable, which is
not anticipated, the Board of Directors in its discretion may designate
substitute nominees, in which event the enclosed proxy will be voted for such
substituted nominees. Proxies cannot be voted for a greater number of persons
than the number of nominees named.
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A plurality of the votes cast at the meeting is required to elect the
nominees as directors of the Company. As such, the five who receive the
largest number of votes cast at the meeting will be elected as directors.
Shares not voted at the meeting, whether by abstention, broker nonvote, or
otherwise, will not be treated as votes cast at the meeting.
The Board of Directors recommends a vote FOR the election of all the
persons nominated by the Board.
Following are summaries of the background, business experience, and
descriptions of the primary occupations of the nominees:
[PHOTOGRAPH] [PHOTOGRAPH] [PHOTOGRAPH]
Ronald J. Bieke Doyle A. Hayes Donald W. Maine
[PHOTOGRAPH] [PHOTOGRAPH]
Jack H. Miller David M. Ondersma
Ronald J. Bieke, 64, is President of Arcadia BIDCO Corporation, a
venture capital company. He is Chairman of the Board of FMB-Arcadia Bank. He
is Vice Chairman of the Board of Mercantile Bank of Southwest Florida. He is
also on the Board of Directors of GHS Corporation, a manufacturer of guitar
strings and air compressors; Detroit Mortgage and Realty Company; IDS
Corporation, a biochemical company; Arcadia Services, Inc., a health services
company; and Hilltop Nurseries.
Doyle A. Hayes, 46, is President and CEO of Pyper Products, Inc., an
automotive products supplier in Battle Creek. He is also on the Board of
Directors of Metropolitan Hospital in Grand Rapids and the Economic Club of
Grand Rapids. He serves on the Governor's Workforce Development Board as well
as the Seidman Advisory Board. He is also a trustee of the Grand Valley State
University Foundation and is an advisor to the Mackinac Center for Public
Policy.
Donald W. Maine, 54, is President and CEO of the Davenport
College/Detroit College of Business/Great Lakes College System. He serves as
Chairperson of the Metropolitan Hospital Board. He is a member of the Opera
Grand Rapids Board, the Grand Rapids Economic Club Board, the Grand Rapids
Area Chamber of Commerce Foundation Board, the Grand Action Executive
Committee, the Celebration on the Grand Board, and the Association of
Independent Colleges and Universities of Michigan Board of Directors.
Jack H. Miller, 64, is President and CEO of Howard Miller Company. He
is also Chairman of the Board and CEO of Hekman Furniture Company, a
subsidiary of Howard Miller Company. He is a trustee of Aquinas College, the
Davenport College Foundation, the Grand Valley State University Foundation,
Pine Rest Christian Mental Health Services, and Resthaven Patrons, Inc. Mr.
Miller is also a director of the Michigan Chamber of Commerce and Center for
Health Affairs.
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David M. Ondersma, 55, is Chairman and CEO of First Michigan Bank
Corporation. He serves as a member of the Advisory Board of "The Community
Banker" magazine, published by Irwin Professional Publishing. He is also a
member of the Board of Directors of the Grand Rapids Symphony and serves as
Secretary/ Treasurer of the Board of Directors of the Metropolitan Hospital
in Grand Rapids.
PROPOSAL TO APPROVE THE FIRST MICHIGAN BANK CORPORATION
STOCK COMPENSATION PLAN
On December 12, 1996, the Board of Directors adopted the First Michigan
Bank Corporation Stock Compensation Plan (the "Plan"), subject to approval by
the Company's shareholders. The following summary of the Plan is subject to
the specific provisions contained in the complete text of the Plan set forth
in Appendix A to this Proxy Statement.
Purpose. The purpose of the Plan is to promote the long-term success of
the Company for the benefit of its shareholders through stock-based
compensation, by aligning the personal interests of the Company's key
employees with those of its shareholders. The Plan is designed to allow key
employees of the Company and certain of its subsidiaries to participate in
the Company's future, as well as to enable the Company to attract, retain,
and reward such employees.
Administration. The Plan will be administered by the Nominating and
Salary Committee of the Board of Directors (the "Committee"). The Committee
is composed of at least four directors, each of whom is not an employee of
the Company. Each member of the Committee is required to be a "nonemployee
director" within the meaning of Rule 16b-3 of the General Rules and
Regulations under the Securities and Exchange Act of 1934, as amended, and no
member of the Committee is eligible to participate in the Plan. Subject to
the Company's Articles of Incorporation, Bylaws and the provisions of the
Plan, the Committee has the authority to select key employees to whom Awards
may be awarded; the type of Awards (or combination thereof) to be granted;
the number of shares of Common Stock to be covered by each Award; and the
terms and conditions of any Award, such as conditions of forfeiture, transfer
restrictions and vesting requirements.
The Plan provides for the granting of a variety of stock-based Awards,
described in more detail below, such as Stock Options, including Incentive
Stock Options, as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), Restricted Stock, Performance Shares, and
Other Stock-Based Awards. The term of the Plan is ten (10) years; no Awards
may be granted under the Plan after January 1, 2007.
Types of Awards. The following types of Awards may be granted under the
Plan:
An "Option" is a contractual right to purchase a number of shares at a
price determined at the date the Option is granted. Options include Incentive
Stock Options, as defined in Section 422 of the Code, as well as Nonqualified
Stock Options. The exercise price included in both Incentive Stock Options
and Nonqualified Stock Options must equal at least 100% of the fair market
value of the stock at the date of grant.
"Restricted Stock" are shares of Common Stock granted to an employee
for no or nominal consideration. Title to the shares passes to the employee
at the time of the grant; however, the ability to sell or otherwise dispose
of the shares is subject to restrictions and conditions determined by the
Committee.
"Performance Shares" are an Award of the right to receive stock or cash
of an equivalent value at the end of the specified performance period upon
the attainment of specified performance goals.
An "Other Stock-Based Award" is any other Award that may be granted
under the Plan that is valued in whole or in part by reference to or is
payable in or otherwise based on Common Stock.
Shares Subject to Plan. One million five hundred thousand (1,500,000)
shares of Common Stock, $1.00 par value, are proposed to be set aside for use
under the Plan. The shares to be offered under the Plan will be authorized
and unissued shares, including shares reacquired by the Company which have
that status. The closing sale price of the Company's Common Stock as quoted
on the NASDAQ National Market System
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on March 3, 1997, was $30.00. The number of shares that may be issued under
the Plan and the number of shares subject to Options are subject to
adjustments in the event of a merger, reorganization, consolidation,
recapitalization, stock dividend, stock splits, or other change in corporate
structure affecting the Common Stock. Subject to certain restrictions,
unexercised Options, lapsed shares of Restricted Stock, and shares
surrendered in payment for exercising Options may be reissued under the Plan.
Termination or Amendment of the Plan. The Board may at any time amend,
discontinue, or terminate this Plan or any part thereof; however, unless
otherwise required by law, after shareholder approval, the rights of a
participant may not be impaired without the consent of such participant. In
addition, without the approval of the Company's shareholders, no amendment
may be made which would increase the aggregate number of shares of Common
Stock that may be issued under the Plan, change the definition of employees
eligible to receive Awards under the Plan, extend the maximum option period
under the Plan, decrease the Option price of any Option to less than 100% of
the fair market value on the date of grant, otherwise materially increase the
benefits to participants in the Plan, or cause the Plan not to comply with
certain applicable securities and tax law requirements.
Eligibility. Key employees of the Company and its designated
subsidiaries are eligible to be granted Awards under the Plan. Eligibility is
determined by the Committee. Awards granted under the Plan will be void and
of no effect if the Plan is not approved by shareholders at the Company's
1997 annual meeting. It is not possible to predict the number or identity of
future participants or, except as set forth in the Plan, to describe the
restrictions that may be included in Award agreements.
Participation and Assignability. Neither the Plan nor any Award
agreement granted under the Plan entitles any participant or other employee
to any right to continued employment by the Company or any subsidiary.
Generally, no Award, Option, or other benefit payable under the Plan may,
except as otherwise specifically provided by law, be subject in any manner to
assignment, transfer, or encumbrance. However, Nonqualified Stock Options may
be transferred without consideration to (i) an immediate family member of the
optionee, (ii) a trust for the benefit of the immediate family members of the
optionee, or (iii) a partnership or limited liability company whose only
partners or members are immediate family members of the optionee, if the
option holder satisfies such conditions as may be required by the Committee
Federal Tax Consequences. The following summarizes the consequences of
the grant and acquisition of Awards under the Plan for federal income tax
purposes, based on management's understanding of existing federal income tax
laws. This summary is necessarily general in nature and does not purport to
be complete. Also, state and local income tax consequences are not discussed,
and may vary from locality to locality.
Options. Plan participants will not recognize taxable income at the
time an Option is granted under the Plan unless the Option has a readily
ascertainable market value at the time of grant. Management understands that
Options to be granted under the Plan will not have a readily ascertainable
market value; therefore, income will not be recognized by participants before
the time of exercise of an Option. For Nonqualified Stock Options, the
difference between the fair market value of the shares at the time an Option
is exercised and the Option price generally will be treated as ordinary
income to the optionee, in which case the Company will be entitled to a
deduction equal to the amount of the optionee's ordinary income. With respect
to Incentive Stock Options, participants will not realize income for federal
income tax purposes as a result of the exercise of such Options. In addition,
if Common Stock acquired as a result of the exercise of an Incentive Stock
Option is disposed of more than two years after the date the Option is
granted and more than one year after the date the Option was exercised, the
entire gain, if any, realized upon disposition of such Common Stock will be
treated for federal income tax purposes as capital gain. Under these
circumstances, no deduction will be allowable to the Company in connection
with either the grant or exercise of an Incentive Stock Option. Exceptions to
the general rules apply in the case of a "disqualifying disposition." If a
participant disposes of shares of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option before the expiration of one year after
the date of exercise or two years after the date of grant, the sale of such
stock will be treated as a "disqualifying disposition." As a result, such a
participant would recognize ordinary income and the Company would be entitled
to a deduction in the year in which such disposition occurred.
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The amount of the deduction and the ordinary income recognized upon a
disqualifying disposition would generally be equal to the lesser of: (a) the
sale price of the shares sold minus the Option price, or (b) the fair market
value of the shares at the time of exercise minus the Option price. If the
disposition is to a related party (such as a spouse, brother, sister, lineal
descendant, or certain trusts for business entities in which the seller holds
a direct or indirect interest), the ordinary income recognized generally is
equal to the excess of the fair market value of the shares at the time of
exercise over the exercise price. Any additional gain recognized upon
disposition, in excess of the ordinary income, will be taxable as capital
gain. In addition, the exercise of Incentive Stock Options may result
in an alternative minimum tax liability.
Restricted Stock. Recipients of shares of Restricted Stock that are not
"transferable" and are subject to "substantial risk of forfeiture" at the
time of grant will not be subject to federal income taxes until the lapse or
release of the restrictions or sale of the shares, unless the recipient files
a specific election under the Code to be taxed at the time of grant. The
recipient's income and the Company's deduction will be equal to the excess of
the then fair market value (or sale price) of the shares less any purchase
price.
Performance Shares. Participants are not taxed upon the grant of
Performance Shares. Upon receipt of the underlying shares or cash, a
participant will be taxed at ordinary income tax rates (subject to
withholding) on the amount of cash received and/or the current fair market
value of stock received, and the Company will be entitled to a corresponding
deduction. The participant's basis in any Performance Shares received will be
equal to the amount of ordinary income on which he or she was taxed and, upon
subsequent disposition, any gain or loss will be capital gain or loss.
Required Vote for Approval. The affirmative vote of a majority of the
Company's Common Stock voted at the Annual Meeting, in person or by proxy, is
required to approve the Plan. While broker nonvotes will not be treated as
votes cast on the approval of this Plan, shares voted as abstentions will be
counted as votes cast. Since a majority of the votes cast is required for
approval, the sum of any negative votes and abstentions will necessitate
offsetting affirmative votes to assure approval. Unless otherwise directed by
marking the accompanying proxy, the proxy holders named therein will vote for
the approval of the Plan. The Board of Directors recommends a vote FOR the
approval of the proposed Plan.
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PROPOSAL TO APPROVE THE FIRST MICHIGAN BANK CORPORATION
1997 DIRECTORS' STOCK OPTION PLAN
On December 12, 1996, the Board of Directors adopted the First Michigan
Bank Corporation 1997 Directors' Stock Option Plan (the "Plan"), subject to
approval by the Company's shareholders. The following summary of the Plan is
subject to the specific provisions contained in the complete text of the Plan
set forth in Appendix B to this Proxy Statement.
Purpose. The Plan is intended to encourage stock ownership by
nonemployee directors of the Company and to provide those individuals with
additional incentive to manage the Company effectively and to contribute to
its success. The Plan is also intended to provide a form of compensation that
will attract and retain highly qualified individuals as nonemployee members
of the Board of Directors of the Company.
Annual Grant of Options to Acquire Common Stock. The Plan provides that
all persons who are directors of the Company, but are neither contractual nor
common law employees of the Company, will be granted an option, as of the
first business day following each annual meeting of the Company's
shareholders, providing for the purchase of 1,000 shares of the Company's
Common Stock. If the Plan is approved by the Company's shareholders at the
1997 Annual Meeting, the initial grant under this Plan will occur on April
16, 1997, the first business day following the 1997 Annual Meeting. Directors
who are appointed to the Company's Board of Directors between annual meetings
of the Company's shareholders will be granted, at the time of their
appointment, one option to purchase 1,000 shares of the Company's Common
Stock.
There are currently 10 persons who are eligible to participate in the
Plan. Based on the current number of nonemployee directors, options providing
for the purchase of an aggregate of 10,000 shares of Common Stock would be
granted to such persons under the Plan each year.
The term of each option granted under the Plan is 10 years from the
date of grant subject to earlier termination at the end of three years
following the director's termination of services as a director. The option
price for each option must equal 100% of the fair market value of the
Company's Common Stock on the date the option is granted. In general, no
option may be exercisable in whole or in part prior to the first anniversary
of the date of grant of the option. The Plan does not obligate the Company,
its Board of Directors or its shareholders to retain an optionee as a
director of the Company.
Administration. The Plan is administered by the Corporate Executive
Committee of the Company. This Committee currently consists of the most
senior executive officers of the Company (the "Committee"). The Committee's
authority is limited to interpreting the provisions of the Plan and
supervising its administration, including the power to adopt procedures and
regulations for administrative purposes.
Shares Subject to Plan. A total of 150,000 shares of the Company's
Common Stock are reserved for issuance under the Plan. The closing sale price
of the Company's Common Stock as quoted on the NASDAQ National Market System
on March 3, 1997, was $30.00. The shares of Common Stock that may be
delivered under the Plan pursuant to the exercise of options will consist of
authorized and unissued shares, which may include shares reacquired by the
Company. The Plan provides for an equitable adjustment in the number, kind,
or price of shares of Common Stock covered by options in the event the
outstanding shares of Common Stock are increased, decreased or changed into
or exchanged for a different number or kind of shares of the Company through
stock dividends or similar changes.
Termination or Amendment of the Plan. The Board of Directors of the
Company may amend or terminate the Plan with respect to shares not subject to
option at the time of amendment or termination. The Plan may not be amended
without shareholder approval if the amendment would increase the maximum
number of shares that may be issued under the Plan, extend the term of the
options, decrease the price at which options may be granted, remove the
administration of the Plan from the Committee, change the class of persons
eligible to receive options, or permit the granting of options under the Plan
after April 15, 2007. Unless earlier terminated by the Board of Directors,
the Plan will expire on April 15, 2007.
Transferability of Options and Common Stock. Generally, options granted
under the terms of the Plan may be transferred only by will or according to
the laws of descent and distribution. However, options may be transferred
without consideration to (i) an immediate family member of the optionee, (ii)
a trust for the
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benefit of the immediate family members of an optionee, or (iii) a
partnership or limited liability company whose only partners or members are
immediate family members of an optionee ("Permitted Transferee") if the
optionee satisfies such conditions to the transfer as may be required by the
Administrators. Options may be exercised only by an optionee or a Permitted
Transferee during the optionee's lifetime. Before issuing any shares upon the
exercise of an option, the Company may require the optionee or Permitted
Transferee to represent in writing that the shares are being acquired for
investment and not for resale. The Company may also delay issuance of the
shares until all appropriate registrations or qualifications under federal
and state securities laws have been completed.
Federal Tax Consequences. The following summarizes the consequences of
the grant and exercise of options under the Plan for federal income tax
purposes, based on management's understanding of existing federal income tax
laws. This summary is necessarily general in nature and does not purport to
be complete. Also, state and local income tax consequences are not discussed,
and may vary from locality to locality.
Optionees will not recognize taxable income at the time an option is
granted under the Plan unless the option has a readily ascertainable market
value at the time of grant. Management understands that options to be granted
under the Plan will not have a readily ascertainable market value; therefore,
income will not be recognized by participants before the time of exercise of
an option. Because options will not qualify as incentive stock options under
the Code, the difference between the fair market value of the shares at the
time an option is exercised and the option exercise price generally will be
treated as ordinary income to the optionee. The Company is entitled to a
corresponding deduction equal to the amount of an optionee's ordinary income.
Tax consequences to the holder of the shares will arise again at the
time the shares of Common Stock are sold. In general, if the shares have been
held for more than one year, the gain or loss will be treated as long-term
capital gain or loss. Otherwise, the gain or loss will be treated as
short-term capital gain or loss. The amount of any gain or loss will be
calculated under the general principles for determining gain and loss, and
will equal the difference between the amount realized in the sale and the tax
basis of the shares of Common Stock. The tax basis will generally equal the
cost of the shares (the option exercise price paid) plus any income
recognized upon exercise of the option.
Required Vote for Approval. The affirmative vote of a majority of the
Company's Common Stock voted at the Annual Meeting, in person or by proxy, is
required to approve the Plan. While broker nonvotes will not be treated as
votes cast on the approval of this Plan, shares voted as abstentions will be
counted as votes cast. Since a majority of the votes cast is required for
approval, the sum of any negative votes and abstentions will necessitate
offsetting affirmative votes to assure approval. Unless otherwise directed by
marking the accompanying proxy, the proxy holders named therein will vote for
the approval of the Plan. The Board of Directors recommends a vote FOR the
approval of the proposed Plan.
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VOTING SECURITIES AND BENEFICIAL OWNERSHIP OF MANAGEMENT
At March 3, 1997, the Company had outstanding 26,379,852 shares of
Common Stock, par value $1.00 per share. Shareholders are entitled to one
vote for each full share of Common Stock registered in their names at the
close of business on March 3, 1997, the record date fixed by the Board of
Directors. Votes cast at the meeting and submitted by proxy are counted by
the inspectors of the meeting, who are appointed by the Company.
As of March 3, 1997, no person was known by management to be the
beneficial owner of more than 5% of the outstanding Common Stock of the
Company, except as follows:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Approximate
Beneficial Owner Beneficial Ownership Percent of Class
- ------------------- -------------------- ----------------
<S> <C> <C>
FMB-Trust((1)) 2,283,045(1) 8.65%
<FN>
(1) FMB-Trust ("Trust"), a subsidiary of the Company, holds these shares in a
fiduciary capacity under 154 trust agreements. Trust has sole or shared
voting and investment powers as to these shares. Trust has no actual
pecuniary interest in any of the shares held by it. All of the shares are
held of record by nominees of Trust. All of such shares held of record by
the nominees for these trusts are included for informational purposes in
the amount shown as beneficially owned by Trust, although Trust may not
be deemed to be beneficial owner of all of such shares under the
applicable tests, and the inclusion of such shares for informational
purposes is not to be construed as an admission that Trust is the
beneficial owner of such shares. Trust instructs its respective nominees
to vote these shares in accordance with instructions from trust creators
or beneficiaries when shared voting and investment powers are applicable;
otherwise, if Trust has sole voting power with respect to the shares in
question, the nominees may vote these shares in accordance with the
recommendation of the management of Trust. However, in those cases in
which Trust holds sole voting power, its normal practice is to seek
voting instructions from trust grantors or beneficiaries and to follow
such instructions to the extent received.
</TABLE>
The information in the following table sets forth the beneficial
ownership of the Company's Common Stock by each of the executive officers
listed in the Summary Compensation Table included in the latter portion of
this Proxy Statement and by all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of Approximate
Persons Beneficial Ownership(1) Percent of Class(2)
------- ----------------------- -------------------
<S> <C> <C>
David M. Ondersma ................................... 290,105(3) 1.08%
Stephen A. Stream ................................... 124,924 0.46%
Larry D. Fredricks .................................. 72,910 0.27%
Merle J. Prins ...................................... 136,623 0.51%
All executive officers and directors as a group
(consisting of 14 persons) .......................... 1,065,803(4) 3.96%
<FN>
(1) Includes shares with respect to which certain executive officers have the
right to acquire beneficial ownership under stock options exercisable in 60
days as follows: Mr. Ondersma -- 238,644; Mr. Stream -- 103,582; Mr.
Fredricks -- 57,510; Mr. Prins -- 129,782.
(2) Calculated on the basis of the amount of shares outstanding plus the
529,518 shares acquirable within 60 days upon exercise of stock options.
(3) Includes 2,958 shares owned by Mr. Ondersma's children to which Mr.
Ondersma disclaims beneficial ownership.
(4) Included for informational purposes are 34,593 shares to which officers
and directors disclaim beneficial ownership, and 529,518 shares with
respect to which those persons have the right to acquire beneficial
ownership under stock options exercisable in 60 days.
</TABLE>
8
<PAGE>
INFORMATION ABOUT DIRECTORS AND DIRECTOR NOMINEES
The information in the following table relating to principal occupation
or employment and beneficial ownership of shares has been furnished to the
Company by the respective directors and director nominees:
<TABLE>
<CAPTION>
Year First Amount and Nature of Approx.
Became Beneficial Ownership Percent
Name Age Principal Occupation a Director as of 3/03/97(1) of Class
- ---- --- -------------------- ---------- -------------------- --------
Nominees for Election as Directors for Terms
Expiring in 2000:
<S> <C> <C> <C> <C> <C>
Doyle A. Hayes ....... 46 President and Chief Executive Officer
of Pyper Products, Inc. (automotive
products supplier) .................... 1994 2,885 0.01%
Donald W. Maine ...... 54 President and Chief Executive Officer
of Davenport College of Business ...... 1985 5,773(2) 0.02%
Jack H. Miller ....... 64 President and Chief Executive Officer
of Howard Miller Company (clock and
furniture manufacturer) ............... 1982 215,556 0.80%
David M. Ondersma .... 55 Chairman of the Board and Chief
Executive Officer of First Michigan
Bank Corporation ...................... 1985 290,105(2)(3) 1.08%
<CAPTION>
Nominee for Election as Director for Term
Expiring in 1999:
<S> <C> <C> <C> <C> <C>
Ronald J. Bieke ...... 64 President of Arcadia BIDCO (venture
capital company) ...................... 1996 43,499 0.16%
<CAPTION>
Directors Whose Terms Expire in 1998:
<S> <C> <C> <C> <C> <C>
James H. Bloem ....... 46 Executive Vice President of Perrigo
Company (over-the-counter store-
brand pharmaceutical, personal care and
nutritional products manufacturer) .... 1994 4,575 0.02%
Meriam B. Leeke ...... 59 Chief Executive Officer of Old Channel
Trail Enterprises (golf course and real
estate company) ....................... 1992 21,087 0.08%
John W. Spoelhof ..... 57 Chairman of the Board of Prince
Corporation (automotive products and
machine tool manufacturer) ............ 1987 109,596(2) 0.41%
Stephen A. Stream .... 54 President, Chief Operating Officer and
Secretary of First Michigan Bank
Corporation ........................... 1995 124,924(3) 0.46%
<CAPTION>
Directors Whose Terms Expire in 1999:
<S> <C> <C> <C> <C> <C>
Roger A. Andersen .... 63 President of Peninsular Investment
Company (real estate investment
company) .............................. 1979 23,770 0.09%
David M. Cassard ..... 43 President of The Waters Corporation
(real estate investment and management
company) .............................. 1993 3,703 0.01%
Robert J. Kapenga .... 54 President of Steketee-VanHuis, Inc.
(graphics arts manufacturing company) . 1994 10,797 0.04%
<FN>
(1) Unless otherwise indicated by note (2), each director or nominee has sole
voting and investment power and owns the shares directly or shares voting
and investment power with his or her spouse under joint ownership.
(2) The persons named above disclaim beneficial interest in the following
shares of Common Stock that are included in the foregoing schedule for
informational purposes: Mr. Maine -- 4,508; Mr. Ondersma -- 2,958; and
Mr. Spoelhof -- 27,127. The foregoing shares are owned directly or
indirectly by members of the person's family, by a company in which the
person serves as an officer, or by a foundation of which the person
serves as a director.
(3) Includes shares with respect to which each director or nominee has the
right to acquire beneficial ownership under stock options exercisable
within 60 days as follows: Mr. Ondersma -- 238,644, and Mr. Stream --
103,582. These shares have been added to shares outstanding in
calculating each director's or nominee's individual approximate
percentage of beneficial ownership.
</TABLE>
9
For the last five years, the nominees and directors of the Company have
either been engaged in the positions reported above or in other executive
positions with their respective organizations shown above, except Mr. Hayes,
who was employed by Diesel Technologies, Inc. in various executive positions
for the period prior to his current occupation, and Mr. Bloem, who was
employed as vice president and chief financial officer by Herman Miller, Inc.
for the period prior to his current occupation. There are no family
relationships between or among any of the directors, nominees or executive
officers of the Company.
During 1996, the Board of Directors held seven regular meetings.
Various committees of the Board held meetings as needed. Each director
attended at least 75% of the total number of meetings of the Board of
Directors and meetings of committees on which they served.
The Audit Committee, comprised of Ms. Leeke and Messrs. Andersen,
Bieke, Bloem and Spoelhof met on four occasions during 1996. Its primary
duties and responsibilities include: (1) annually recommending to the Board
of Directors the independent public accounting firm to be appointed auditors
of the Company and its subsidiaries; (2) a review of the scope of and fees
for the audit and a review of all reports received from the independent
public accountants; and (3) coordination of the internal auditing department
and a review of the scope of its annual program and the results of its audit
findings.
During 1996, the Nominating and Salary Committee, comprised of Messrs.
Cassard, Hayes, Kapenga, Maine and Miller met six times. Its primary duties
and responsibilities include: (1) the coordination of salary and benefit
administration throughout the Company; (2) the making of recommendations to
the Board of Directors regarding salaries and benefits for corporate officers
and subsidiary bank presidents; (3) reviewing qualifications of and making
recommendations for membership on the Board of Directors of the Company and
on the boards of its subsidiaries; and (4) the administration of the
Company's stock option plans. This Committee will consider for Board
nomination qualified persons recommended by shareholders provided that any
recommendations are submitted in writing, on or before the 60th day preceding
the anniversary date of the previous annual meeting, including a description
of the proposed nominee, his or her consent to serve as a director, and other
biographical data of the nominee, to Stephen A. Stream, Corporate Secretary,
First Michigan Bank Corporation, One Financial Plaza, Holland, Michigan
49423.
Directors who are not employees of the Company were compensated at the
rate of $14,000 per year, plus $900 per regular Board meeting, special Board
meeting and committee meeting attended. In addition, the chair of each Board
committee received an additional $700 per committee meeting attended.
Directors were reimbursed for out-of-pocket expenses incurred in attending
meetings.
During 1995, the Company's Deferred Compensation, Deferred Stock and
Current Stock Purchase Plan for Nonemployee Directors ("the Plan") was
approved by the shareholders to provide an opportunity for directors of the
Company and its subsidiaries to defer payment of all or a part of their
respective director fees ("Plan Fees") or to receive shares of FMBC stock in
lieu of cash payment of Plan Fees. Each director, who participates in the
plan, must elect to have his or her Plan Fees credited quarterly to either
(a) a Current Stock Purchase Account, (b) a Deferred Cash Investment Account,
or (c) a Deferred Stock Account. Plan Fees credited to a Current Stock
Purchase Account are converted into shares of FMBC Common Stock at market
value on the credit date and distributed to the director in lieu of cash
payment of Plan Fees. Plan Fees credited to a Deferred Cash Investment
Account are deferred for tax purposes and are credited quarterly with an
appreciation factor that may not exceed the prime rate of interest charged by
FMB-First Michigan Bank. Plan Fees credited to a Deferred Stock Account are
also deferred for tax purposes. At the credit date, the Plan Fees are
converted into "FMBC stock units" determined by dividing the amount of the
Plan Fees credited for the quarter by the fair market value of a share of
FMBC Common Stock on the credit date. From the credit date forward, the value
of the FMBC stock units in the director's account is tied directly to the
fair market value of FMBC Common Stock, including the impact of paid
dividends. Upon termination of a director's service with the Company, the
amount credited to his or her Deferred Cash Investment Account or Deferred
Stock Account is paid out in a lump sum, or if termination occurs because of
retirement, the distribution may be spread over 5 to 10 years.
10
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Committee Report on Executive Compensation
Decisions on the compensation of the Company's executive officers are
made by the Board's Nominating and Salary Committee (the "Committee"),
composed of nonemployee directors. To ensure this Committee's independence,
the Board of Directors has made annual changes in the nonemployee directors
who serve on the Committee. This Report, prepared by the Committee, addresses
the Company's compensation policies and programs for the year ended December
31, 1996, the details of which are reflected in the tables set forth on the
following pages of this Proxy Statement.
Compensation Policies and Programs
The Company's established policies and programs of compensation are
tailored to reward employees for the achievement of annual and long-term
corporate goals, as well as individual and collective accomplishments. The
various means of compensation, which apply to other employees of the Company
as well, are intended to encourage management to increase the value of the
Company as an asset of its shareholders, to reward and challenge individuals,
working individually and as a team, to achieve superior operating results,
and to attract and retain well-qualified personnel.
The Company's compensation program is comprised of several elements:
cash compensation (including salary and incentive bonus), stock options, and
defined benefit and defined contribution retirement plans. Reflective of the
Company's goal of tying compensation to corporate performance, the incentive
bonus plan permits executive officers, who are employees of the Company
("Company executives"), to earn up to 70% of their salary if outstanding
results are achieved. The bonus may be earned by Company executives if the
Company's return on equity (ROE) and growth exceeds the annual targets
established by the Board of Directors. Executive officers who are employees
of a subsidiary may also earn up to 70% of their salary under this plan. The
maximum percentage of base salary that may be earned under this plan is
reduced for nonexecutive officers. Once the ROE and asset growth targets are
achieved, executive officers, as well as other employees, earn a percentage
of their base salary, up to the established maximum.
Company Performance and Executive Compensation
The salaries of the Company's Chief Executive Officer and other Company
executives are established based on a performance appraisal system. Each
Company executive's performance, other than that of the Chief Executive
Officer, is evaluated by his or her superior and reviewed by the Committee.
This review considers the employee's overall performance relative to the
achievement of corporate objectives, as well as the satisfaction of a number
of specific performance criteria. This same appraisal system is applied to
the Company's Chief Executive Officer by the Committee.
The Company achieved a number of financial performance goals for the
year ended December 31, 1996. The Company attained record earnings during the
year and exceeded objectives pertaining to the Company's return on equity and
asset growth. In light of these achievements and other corporate
accomplishments, each of the Company's executive officers earned payouts of
53.3% under the incentive bonus plan. The Chief Executive Officer received
the same relative bonus under the incentive program as the other Company
executives for performance during 1996.
The Committee also authorized, during 1996, the grant of stock options
to the Company's executives and other management personnel under the
Company's 1987 Stock Option Plan ("the Plan"). The Plan, approved by
shareholders in 1987, provides for the grant of options to purchase shares of
the Company's Common Stock over a ten-year period. The options become
exercisable one year after the date of grant, and the exercise price equals
the market price of the stock on the date of grant. The Plan was established
to provide additional incentive to management to contribute to the
success of the Company and to attract and retain well-qualified key
employees. The Committee believes that the Plan, by encouraging and promoting
stock ownership, inures to the benefit of the Company's shareholders by
aligning their interests with the
11
<PAGE>
enhancement of shareholder value. Options are granted to management
personnel, including the Company executives and the Chief Executive Officer,
based on their relative annual salary and their position with the Company and
its subsidiaries.
Submitted by the Nominating and Salary Committee:
David M. Cassard Robert J. Kapenga Jack H. Miller
Doyle A. Hayes Donald W. Maine
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the
Company's Chief Executive Officer and the three other executive officers
(referred to collectively as the "Named Executives") for each of the three
years ended December 31, 1996.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------ All Other
Name & Options Compen-
Principal Position Year Salary(1) Bonus(1) (# Shares) sation (2)
------------------ ---- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
David M. Ondersma ................................ 1996 $400,000 $213,200 26,123 $10,129
Chairman of the Board 1995 374,300 210,357 27,268 8,948
and Chief Executive Officer 1994 340,000 170,000 30,558 8,111
Stephen A. Stream ................................ 1996 $273,000 $145,509 17,850 $ 7,818
President, Chief Operating 1995 254,150 142,832 18,557 6,531
Officer and Secretary 1994 209,615 104,808 18,828 5,943
Larry D. Fredricks ............................... 1996 $243,100 $129,572 11,830 $14,262
Executive Vice President and 1995 219,050 123,106 12,347 9,239
Chief Financial Officer 1994 199,654 99,827 13,681 8,184
Merle J. Prins ................................... 1996 $234,000 $124,722 11,830 $ 6,402
Executive 1995 219,050 123,106 12,347 7,378
Vice President 1994 199,654 99,827 13,681 6,201
<CAPTION>
(1) Includes amounts deferred by employees under the Company's Cash Option
Plan, pursuant to Section 401(k) of the Internal Revenue Code.
(2) The amounts disclosed in this column include: (a) amounts contributed by
the Company to the Company's Cash Option Plan, pursuant to which
substantially all salaried employees of the Company participate, (the
Company made matching contributions equal to 50% of each Named
Executive's salary reduction contribution for 1996 and the last six
months of 1995, and 35% for prior periods); and (b) dollar value of
premiums paid by the Company for term life insurance on behalf of the
Named Executives as follows:
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C> <C>
Mr. Ondersma ........................................ (a) $4,750 $3,785 $3,234
(b) 5,379 5,163 4,877
Mr. Stream .......................................... (a) 4,750 3,570 3,234
(b) 3,068 2,961 2,709
Mr. Fredricks ....................................... (a) 4,750 3,791 3,234
(b) 9,512 5,448 4,950
Mr. Prins ........................................... (a) 4,750 3,894 3,064
(b) 1,652 3,484 3,137
</TABLE>
12
<PAGE>
OPTION GRANTS IN 1996
The following table provides information on options granted to the
Named Executives during the year ended December 31, 1996.
<TABLE>
<CAPTION>
Individual Grants
- ----------------------------------------------------------------------------------------------------------
Number of Percentage of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration Grant Date
Name Granted (1) 1996 (per share)(2) Date Present Value(3)
---- ----------- ------------- -------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
David M. Ondersma ........ 26,123 16.11% $20.00 01/19/06 $130,876
Stephen A. Stream ........ 17,850 11.01% 20.00 01/19/06 89,429
Larry D. Fredricks ....... 11,830 7.30% 20.00 01/19/06 59,268
Merle J. Prins ........... 11,830 7.30% 20.00 01/19/06 59,268
<FN>
(1) Indicates number of shares that may be purchased pursuant to options
granted under the Company's 1987 Stock Option Plan on January 18, 1996.
Options may not be exercised in full or in part prior to the expiration
of one year from the date of grant. Each option contains a limited stock
appreciation right which becomes exercisable: (1) if any person acquires
25% or more of the Company's outstanding Common Stock; (2) prior to a
merger in which the Company will not survive; or (3) upon the sale of
substantially all of the Company's assets. The limited stock appreciation
right entitles the holder to surrender all or part of his or her options
in exchange for cash, Company shares or both cash and shares, in an
amount equal to the excess of the prevailing per share market value of
the Company's Common Stock over the option price.
(2) The exercise price equals the prevailing market price of the Company's
Common Stock on the date of grant. The exercise price may be paid in
cash, or if at least 500 shares are being acquired, by the delivery of
previously owned shares, or a combination thereof.
(3) The values reflect standard application of the Black-Scholes option
pricing model employing these assumptions: (a) expected stock price
volatility of 0.220; (b) risk-free rate of return of 5.50%; (c) cash
dividend yield of 3.0%; and (d) expected time to exercise of 7.5 years.
The actual value, if any, of the options granted is dependent upon the
market value of the Company's stock subsequent to the date the options
become exercisable.
</TABLE>
AGGREGATED STOCK OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUES
The following table provides information on the exercise of stock
options during 1996 by the Named Executives and the value of unexercised
options at December 31, 1996.
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
12/31/96 12/31/96(2)
-------------------- ------------
Shares Acquired
Name on Exercise Value Realized(1) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- ----------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
David M. Ondersma ........ 7,124 $119,962 212,521/ 26,123 $4,276,790/$248,169
Stephen A. Stream ........ 2,800 40,180 85,732/ 17,850 1,576,838/ 169,575
Larry D. Fredricks ....... -0- -0- 45,680/ 11,830 762,945/ 112,385
Merle J. Prins ........... 1,680 26,952 117,952/ 11,830 2,430,368/ 112,385
<FN>
(1) Aggregate market value of shares acquired at time of exercise, less the
aggregate exercise price paid by the employee to the Company.
(2) Values are based on the difference between the closing bid price of the
Company's Common Stock on December 31, 1996 ($29.50) and the exercise
prices of the options.
</TABLE>
13
<PAGE>
PENSION PLAN
The following table illustrates the maximum annual benefits currently
payable upon normal retirement at age 65 to persons in specified compensation
and years of service classifications under the Company's defined benefit plan
and the Company's Pension Benefit Restoration Plan ("PBRP"). Under the
Company's defined benefit plan, the projected benefits are computed on a
straight line annuity basis, and such benefit is in addition to any amounts
which may be received under the Social Security Act. Benefits in excess of
$120,000, as limited by Section 415 of the Internal Revenue Code ("IRC"), are
payable under the PBRP. The PBRP provides participants with an additional
retirement benefit determined by applying the benefit formula set forth in
the Company's defined benefit plan to their average annual compensation
(including salary and generally only 50% of bonus payments) without regard to
the IRC limit, minus the amount of the benefit they will receive under the
Company's defined benefit plan. Benefits under the PBRP are reduced
proportionately for each year of completed service with the Company that is
less than 30, as determined at the time of the participant's retirement or
termination of employment. Benefits are payable under the PBRP upon an
employee's retirement on or after age 55, although at a reduced level for
each month that the actual retirement date precedes the participant's 65th
birthday, or disability, provided the employee has at least five years of
credited service with the Company. The Company's obligations under the PBRP
are a general liability of the Company. Any assets that the Company may
designate as assets of the PBRP will still be subject to the claims of the
Company's creditors.
<TABLE>
<CAPTION>
Final
Average
Annual Years of Benefit Service (2)
Compensation ------------------------------------------------------
(1)
---
10 15 20 25 30 or More
-------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
$100,000 .......................................... $ 20,259 $ 30,389 $ 40,518 $ 50,648 $ 60,777
$150,000 .......................................... 31,009 46,514 62,018 77,523 93,027
$200,000 .......................................... 41,759 62,639 83,518 104,398 125,277
$250,000 .......................................... 52,509 78,764 105,018 131,273 157,527
$300,000 .......................................... 63,259 94,889 126,518 158,148 189,777
$350,000 .......................................... 74,009 111,014 148,018 185,023 222,027
$400,000 .......................................... 84,759 127,139 169,518 211,898 254,277
$450,000 .......................................... 95,509 143,264 191,018 238,773 286,527
$500,000 .......................................... 106,259 159,389 212,518 265,648 318,777
$550,000 .......................................... 117,009 175,514 234,018 292,523 351,027
$600,000 .......................................... 127,759 191,639 255,518 319,398 383,277
<FN>
(1) The final average annual compensation is determined under the defined
benefit plan by the average of the five highest consecutive years of
annual compensation (including salary and bonus payments as referenced in
the Summary Compensation Table) during the last ten years of employment,
subject to a maximum of $150,000 for all years. Under the PBRP, average
annual compensation includes salary and generally only 50% of bonus
payments (as referenced in the Summary Compensation Table) and is subject
to a maximum of $600,000 for all years.
(2) The Named Executives have credited years of service under the defined
benefit plan and PBRP as follows: David M. Ondersma -- 24, Stephen A.
Stream -- 15, and Merle J. Prins -- 29.
</TABLE>
The Company has entered into a separate retirement agreement with Mr.
Fredricks. Mr. Fredricks is covered and has five credited years of service
under the Company's defined benefit plan and the PBRP. In addition to the
benefits under those plans, this agreement provides for a $50,000 annual
retirement benefit for the life of Mr. Fredricks beginning at age 65 or a
$45,000 annual retirement benefit beginning at age 62. The Company funds this
obligation on a level basis over the employee's projected employment period
with contributions made to an irrevocable trust that is subject to the claims
of the Company's creditors.
The Company has entered into individual Management Continuity
Agreements with Messrs. Ondersma, Stream, Fredricks, and Prins. These
agreements provide severance benefits if the executive's employment is
terminated within 36 months after a change in control or within 12 months
before a change in control if the Company terminates his employment in
contemplation of a change in control and to avoid the agreement. For
14
the purposes of these agreements, a "change in control" is any occurrence
reportable as such in a proxy statement under applicable rules of the
Securities and Exchange Commission, and would include, without limitation,
the acquisition of beneficial ownership of 25% of the Company's voting
securities by any person or an extraordinary change in the composition of the
board of directors. Severance benefits will not be payable if the Company
terminates the employment for cause, if employment terminates due to the
executive's death or disability, or if the executive resigns without good
reason. An executive may resign with "good reason" after a change in control
and retain benefits if the Company reduces the executive's salary or bonus,
assigns duties inconsistent with the executive's prior position, or shifts
the executive's job location more than 40 miles. The agreements are for
self-renewing terms of 3 years unless the Company takes action to terminate
further extensions. Each agreement is automatically extended for a 3-year
term from the date of a change in control. These agreements provide a
severance benefit of a lump-sum payment equal to 3 years' salary and bonus
and continuation of benefits coverage for 3 years and provide for additional
payment to make an executive whole, on an after-tax basis, for any excise
taxes imposed by Section 4999 of the IRC.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Company's Common Stock with
that of the cumulative total return of the NASDAQ Bank Stocks Index, the
NASDAQ Stock Market Index and the Standard & Poor's 500 Stock Index for the
five year period ended December 31, 1996. The following information is based
on an investment of $100, on January 1, 1992, in the Company's Common Stock,
the NASDAQ Bank Stocks Index, the NASDAQ Stock Market Index and the Standard
& Poor's 500 Stock Index, all with dividends reinvested:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN FISCAL YEAR ENDING DECEMBER 31
[ GRAPH ]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
First Michigan Bank Corporation 100 145 183 225 288 441
NASDAQ Bank Stock Index 100 146 166 165 246 326
NASDAQ Stock Market Index 100 116 134 131 185 227
S&P 500 Index 100 108 118 120 165 203
</TABLE>
15
<PAGE>
OTHER TRANSACTIONS
During 1996, subsidiary banks of the Company entered into, and had
outstanding, credit relationships and other transactions with directors and
executive officers of the Company and their associates in the ordinary course
of business. The loans and extensions of credit included in such
transactions: (1) were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with others; (2) did not involve more than the normal risk of
collectibility or present other unfavorable features; and (3) were repaid as
scheduled or, to the extent still outstanding, remain current in their
respective repayment schedules.
One of the Company's subsidiary banks leases office space from The
Waters Corporation, of which Mr. Cassard, a member of the Board of Directors
of the Company, is president. Payments for rent, utilities and miscellaneous
services totaled $451,968 during 1996. The Board of Directors of this bank
believes that the terms of these leases are at least as favorable to the bank
as could have been obtained from unrelated parties.
The Company and its subsidiaries contract for certain printing services
from Steketee-VanHuis, Inc. and its 79%-owned subsidiary, The Printery, Inc.
Mr. Kapenga, a member of the Board of Directors of the Company, is president
of both companies. Payments for printing services during 1996 totaled
$96,255. The Company believes that rates charged for these printing services
are competitive with other printing firms in the market.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
In November 1996, Mr. Andersen sold 68 shares of FMBC stock at $27.125
per share from his Keogh account and failed to report the transaction on a
Form 4 Report for the month of November. The transaction was reported
subsequently on the year-end Form 5 Report.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements of the Company for the year ended December 31,
1996, have been audited by BDO Seidman, LLP, independent public accountants.
A representative of BDO Seidman, LLP will be at the Annual Meeting of
Shareholders and will have an opportunity to make a statement and will be
available to answer appropriate questions. BDO Seidman, LLP has been
reappointed by the Board of Directors as the independent public accountants
of the Company and its subsidiaries for the year ending December 31, 1997.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be considered by the Company for inclusion
in the 1998 Annual Meeting of Shareholders proxy material must be received by
the Company no later than November 8, 1997.
16
<PAGE>
OTHER BUSINESS
The Board of Directors is not aware of any matter to be presented for
action at the meeting, other than the matters set forth herein. If any other
business should come before the meeting, the proxy will be voted in respect
thereof in accordance with the best judgment of the persons authorized
therein, and discretionary authority to do so is included in the proxy.
The Annual Report of the Company for 1996 is included with this Proxy
Statement. Copies of the report will also be available for all shareholders
attending the Annual Meeting.
Shareholders are urged to sign and return the enclosed proxy in the
enclosed envelope. A prompt response will be helpful and appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Stephen A. Stream
- ---------------------
Stephen A. Stream
Secretary
March 13, 1997
17
<PAGE>
APPENDIX A
FIRST MICHIGAN BANK CORPORATION
STOCK COMPENSATION PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1 -- ESTABLISHMENT AND PURPOSE OF THE PLAN ............ A-1
1.1 Establishment of the Plan ........................... A-1
1.2 Purpose of the Plan ................................. A-1
1.3 Term of Plan ........................................ A-1
ARTICLE 2 -- DEFINITIONS....................................... A-1
ARTICLE 3 -- ADMINISTRATION ................................... A-3
3.1 The Committee ....................................... A-3
3.2 Committee Authority ................................. A-3
ARTICLE 4 -- COMMON STOCK SUBJECT TO THE PLAN.................. A-3
ARTICLE 5 -- ELIGIBILITY....................................... A-4
ARTICLE 6 -- STOCK OPTIONS .................................... A-4
6.1 Options ............................................. A-4
6.2 Grants .............................................. A-4
6.3 Incentive Stock Options ............................. A-4
6.4 Terms of Options .................................... A-4
ARTICLE 7 -- RESTRICTED STOCK ................................. A-6
7.1 Awards of Restricted Stock .......................... A-6
7.2 Awards and Certificates ............................. A-6
7.3 Restrictions and Conditions ......................... A-7
ARTICLE 8 -- PERFORMANCE SHARES................................ A-7
8.1 Award of Performance Shares ......................... A-7
8.2 Terms and Conditions ................................ A-7
ARTICLE 9 -- OTHER STOCK-BASED AWARDS ......................... A-8
9.1 Other Awards ........................................ A-8
9.2 Terms and Conditions ................................ A-8
ARTICLE 10 -- TERMINATION OR AMENDMENT OF THE PLAN ............ A-8
ARTICLE 11 -- UNFUNDED PLAN ................................... A-9
ARTICLE 12 -- ADJUSTMENT PROVISIONS............................ A-9
12.1 Antidilution ........................................ A-9
12.2 Change in Control ................................... A-9
12.3 Adjustments by Committee ............................ A-10
ARTICLE 13 -- GENERAL PROVISIONS............................... A-10
13.1 Legend .............................................. A-10
13.2 No Right to Employment .............................. A-10
13.3 Withholding of Taxes ................................ A-10
13.4 No Assignment of Benefits ........................... A-10
13.5 Governing Law ....................................... A-11
13.6 Application of Funds ................................ A-11
13.7 Rights as a Shareholder ............................. A-11
ARTICLE 14 -- SHAREHOLDER APPROVAL............................... A-11
</TABLE>
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<PAGE>
FIRST MICHIGAN BANK CORPORATION
STOCK COMPENSATION PLAN
ARTICLE 1
ESTABLISHMENT AND PURPOSE OF THE PLAN
1.1 Establishment of the Plan. First Michigan Bank Corporation, a
Michigan corporation (the "Company"), hereby establishes a stock compensation
plan to be known as the "First Michigan Bank Corporation Stock Compensation
Plan" (the "Plan"), as set forth in this document. The Plan permits the
granting of stock options, restricted stock, and other stock-based awards to
key employees of the Company and its subsidiaries.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
long-term success of the Company for the benefit of the Company's
shareholders, through stock-based compensation, by aligning the personal
interests of the Company's key employees with those of its shareholders. The
Plan is also designed to allow key employees to participate in the Company's
future, as well as to enable the Company to attract, retain and reward such
employees. Compensation related to Awards under the Plan is generally
intended to qualify as "performance-based compensation" under Section 162(m)
of the Internal Revenue Code of 1986, as amended ("Code").
1.3 Term of Plan. No Awards shall be granted pursuant to the Plan on or
after the tenth anniversary of the Effective Date ("Termination Date"),
provided that Awards granted prior to the Termination Date may extend beyond
that date.
ARTICLE 2
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings
set forth below:
2.1 Award means any award under this Plan of any Options, Restricted
Stock, Performance Shares or Other Stock-Based Award.
2.2 Award Agreement means an agreement evidencing the grant of an Award
under this Plan. Awards under the Plan shall be evidenced by Award Agreements
that set forth the details, conditions and limitations for each Award, as
established by the Committee and shall be subject to the terms and conditions
of the Plan.
2.3 Award Date means the date that an Award is made, as specified in an
Award Agreement.
2.4 Board means the Board of Directors of the Company.
2.5 Change in Control is defined in Article 12.
2.6 Code means the Internal Revenue Code of 1986, as amended.
2.7 Committee means the Committee, as specified in Article 3, appointed
by the Board to administer the Plan, no members of which shall be eligible to
receive an Award pursuant to the Plan.
2.8 Common Stock means the Common Stock, $1.00 par value per share, of
the Company.
2.9 Disability means permanent and total disability as determined under
the rules and guidelines established by the Committee for purposes of the
Plan.
2.10 Effective Date means January 1, 1997.
2.11 Employee means a salaried employee (including officers and
directors who are also employees) of the Company or Subsidiary.
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2.12 Fair Market Value means the closing sale price per share of the
Common Stock on the relevant valuation date on the National Association of
Securities Dealers Automated Quotation System or any successor system then in
use ("NASDAQ"). If no sale of shares of Common Stock is reflected on the
NASDAQ on a date, "Fair Market Value" shall be determined on the next
preceding day on which there was a sale of shares of Common Stock reflected
on NASDAQ.
2.13 Incentive Stock Option or ISO means an option to purchase shares
of Common Stock granted under Article 6, which is designated as an Incentive
Stock Option and is intended to meet the requirements of Section 422
of the Code.
2.14 Non-Employee Director has the meaning set forth in Rule
16b-3(b)(3)(i) or any successor definition adopted by the Securities and
Exchange Commission.
2.15 Nonqualified Stock Option or NQSO means an option to purchase
shares of Common Stock, granted under Article 6, which is not an Incentive
Stock Option.
2.16 Option means an Incentive Stock Option or a Nonqualified Stock
Option.
2.17 Option Price means the price at which a share of Common Stock may
be purchased by a Participant pursuant to an Option, as determined by the
Committee.
2.18 Other Stock-Based Award means an Award under Article 9 of this
Plan that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock.
2.19 Participant means an Employee of the Company or a Subsidiary who
holds an outstanding Award granted under the Plan.
2.20 Permitted Transferee means (i) a spouse, a child, or a grandchild
of a Participant (each an "Immediate Family Member"), (ii) a trust for the
exclusive benefit of a Participant and/or one or more Immediate Family
Members, or (iii) a partnership or limited liability company whose only
partners or members are the Participant and/or one or more Immediate Family
Members.
2.21 Performance Shares means an Award granted under Article 8 of this
Plan evidencing the right to receive Common Stock or cash of an equivalent
value at the end of a specified performance period and upon achievement of
specified performance goals or objectives.
2.22 Retirement (including Normal, Early and Disability Retirement)
means the termination of a Participant's employment with the Company or a
Subsidiary with eligibility for normal, early or disability retirement
benefits under the terms of the Company's pension plan, as amended and in
effect at the time of such termination of employment.
2.23 Restricted Stock means an Award granted to a Participant under
Article 7 of this Plan.
2.24 Rule 16b-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (the "Act"), as
amended from time to time or any successor rule.
2.25 Subsidiary means any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which the
Company owns at least fifty percent (50%) of the combined equity thereof.
2.26 Termination Date means December 31, 2006.
2.27 Termination of Employment means the termination of a Participant's
employment with the Company or a Subsidiary. A Participant employed by a
Subsidiary shall also be deemed to incur a Termination of Employment if the
Subsidiary ceases to be a Subsidiary and the Participant does not immediately
thereafter become an Employee of the Company or another Subsidiary.
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<PAGE>
ARTICLE 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Nominating and
Salary Committee designated by the Board consisting of not less than three
(3) directors who shall be appointed from time to time by the Board, each of
whom shall qualify as a Non-Employee Director.
3.2 Committee Authority. Subject to the Company's Articles of
Incorporation, Bylaws and the provisions of this Plan, the Committee shall
have full authority to grant Awards to key Employees of the Company or a
Subsidiary. Awards may be granted singly, in combination, or in tandem. The
authority of the Committee shall include the following:
(a) To select the key Employees of the Company or a Subsidiary to
whom Awards may be granted under the Plan;
(b) To determine whether and to what extent Options, Restricted
Stock, Performance Shares and Other Stock-Based Awards, or any
combination thereof are to be granted under the Plan;
(c) To determine the number of shares of Common Stock to be covered
by each Award;
(d) To determine the terms and conditions of any Award Agreement,
including, but not limited to, the Option Price, any vesting
restriction or limitation, any vesting schedule or acceleration
thereof, or any forfeiture restrictions or waiver thereof, regarding
any Award and the shares Common Stock relating thereto, based on such
factors as the Committee shall determine in its sole discretion;
(e) To determine whether, to what extent and under what
circumstances grants of Awards are to operate on a tandem basis and/or
in conjunction with or apart from other cash compensation arrangement
made by Company other than under the terms of this Plan;
(f) To determine under what circumstances an Award may be settled
in cash, Common Stock, or a combination thereof; and
(g) To determine to what extent and under what circumstances
shares of Common Stock and other amounts payable with respect to an
Award shall be deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable, to interpret the terms and
provisions of the Plan and any Award issued under the Plan (including any
Award Agreement) and to otherwise supervise the administration of the Plan.
However, the Committee shall take no action which will impair any Award
previously granted under the Plan or cause the Plan or the Award not to meet
the requirements of Rule 16b-3. A majority of the Committee shall constitute
a quorum, and the acts of a majority of a quorum at any meeting, or acts
reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee. The interpretation and
construction by the Committee of any provisions of the Plan or any Award
granted under the Plan shall be final and binding upon the Company, the Board
and Participants, including their respective heirs, executors and assigns. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or an Award granted
hereunder.
ARTICLE 4
COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 12.1, the maximum
aggregate number of shares of Common Stock which may be issued under this
Plan shall not exceed 1,500,000 shares, which may be either authorized and
unissued Common Stock or issued Common Stock reacquired by the Company ("Plan
Shares"). Determinations as to the number of Plan Shares that remain
available for issuance under the Plan shall be made in accordance with such
rules and procedures as the Committee shall determine from time to time,
which shall be consistent with the requirements of Rule 16b-3 and such
interpretations thereof. If an
A-3
<PAGE>
Award expires unexercised or is forfeited, cancelled, terminated or settled
in cash in lieu of Common Stock, the shares of Common Stock that were
theretofore subject (or potentially subject) to such Award may again be made
subject to an Award Agreement; provided, however, that any such shares
subject to a forfeited or cancelled Award shall not again be made subject to
an Award Agreement to any Participant who received, directly or indirectly,
any of the benefits of ownership of the securities underlying such Award,
excluding the right to vote such shares.
ARTICLE 5
ELIGIBILITY
The persons who shall be eligible to receive Awards under the Plan
shall be such key Employees as the Committee shall select from time to time.
In making such selections, the Committee shall consider such factors as the
Committee in its discretion shall deem relevant. Participants may hold more
than one Award, but only on the terms and subject to the restrictions set
forth in the Plan and their respective Award Agreements.
ARTICLE 6
STOCK OPTIONS
6.1 Options. Options may be granted alone or in addition to other
Awards granted under this Plan. Each Option granted under this Plan
shall be either an Incentive Stock Option ("ISO") or a Nonqualified Stock
Option ("NQSO").
6.2 Grants. The Committee shall have the authority to grant to any
Participant one or more Incentive Stock Options, Nonqualified Stock Options,
or both types of Options. To the extent that any Option does not qualify as
an Incentive Stock Option (whether because of its provisions or the time or
manner of its exercise or otherwise), such Option or the portion thereof
which does not qualify shall constitute a separate Nonqualified Stock Option.
6.3 Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options
shall be interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to disqualify the
Plan under Section 422 of the Code, or, without the consent of the
Participants affected, to disqualify any Incentive Stock Option under such
Section 422. An Incentive Stock Option shall not be granted to an individual
who, on the date of grant, owns stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company.
The aggregate Fair Market Value, determined on the Award Date of the shares
of Common Stock with respect to which one or more Incentive Stock Options (or
other incentive stock options within the meaning of Section 422 of the Code,
under all other option plans of the Company) granted on or after January 1,
1987, that are exercisable for the first time by a Participant during any
calendar year shall not exceed the $100,000 limitation imposed by Section
422(d) of the Code.
6.4 Terms of Options. Options granted under the Plan shall be evidenced
by Award Agreements in such form as the Committee shall, from time to time
approve, which Agreement shall comply with and be subject to the following
terms and conditions:
(a) Option Price. The Option Price per share of Common Stock
purchasable under an Option shall be determined by the Committee at the
time of grant but shall be not less than one hundred percent (100%) of
the Fair Market Value of the Common Stock at the Award Date.
(b) Option Term. The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than ten (10) years
after the date the Option is granted.
(c) Exercisability. Except as provided in Section 12.2, no Option
shall be exercisable either in whole or in part prior to the first
anniversary of the Award Date. Thereafter, an Option shall be
exercisable at such time or times and subject to such terms and
conditions as shall be determined by
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<PAGE>
the Committee and set forth in the Award Agreement. If the Committee
provides that any Option is exercisable only in installments, the
Committee may at any time waive such installment exercise provisions,
in whole or in part, based on such factors as the Committee may
determine.
(d) Method of Exercise. Subject to whatever installment exercise
and waiting period provisions apply under subsection (c) above, Options
may be exercised in whole or in part at any time during the term of the
Option, by giving written notice of exercise to the Company specifying
the number of shares to be purchased. Such notice shall be accompanied
by payment in full of the purchase price in such form as the Committee
may accept. Notwithstanding the foregoing, an Option shall not be
exercisable with respect to less than 100 shares of Common Stock unless
the remaining shares covered by an Option are fewer than 100 shares. If
and to the extent determined by the Committee in its sole discretion at
or after grant, payment in full or in part may also be made in the form
of Common Stock owned for at least six months by the Participant (and
for which the Participant has good title free and clear of any liens
and encumbrances) or Restricted Stock, or by reduction in the number of
shares issuable upon such exercise based, in each case, on the Fair
Market Value of the Common Stock on the last trading date preceding
payment as determined by the Committee (without regard to any
forfeiture restrictions applicable to Restricted Stock). No shares of
stock shall be issued until payment has been made. A Participant shall
generally have the rights to dividends or other rights of a shareholder
with respect to shares subject to the Option when the optionee has
given written notice of exercise, has paid for such shares as provided
herein, and, if requested, has given the representation described in
Section 13.1 of the Plan. Notwithstanding the foregoing, if payment in
full or in part has been made in the form of Restricted Stock, an
equivalent number of shares of Common Stock issued on exercise of the
Option shall be subject to the same restrictions and conditions, and
during the remainder of the Restriction Period [as defined in Section
7.3(a)], applicable to the shares of Restricted Stock surrendered
therefor.
(e) Nontransferability of Options. No Option may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution,
provided, however, a Nonqualified Stock Option may be transferred,
without consideration, to a Permitted Transferee if the Participant
satisfies such conditions to the transfer as may be required by the
Committee. A Permitted Transferee shall succeed to all rights and
benefits (except any right to further transfer of the Option) and be
subject to all obligations and limitations applicable to the original
Participant. However, such rights and benefits (except any right to
further transfer of the Option), and obligations and limitations shall
be determined as if the original Participant continued to hold the
Option, whereby provisions of this Plan dealing with termination of
employment, retirement, disability or death of a Participant will
continue to refer to the original Participant regardless of whether a
Nonqualified Stock Option has been transferred to a Permitted
Transferee. The Company shall have no obligation to notify a Permitted
Transferee of the termination of employment, retirement, disability, or
death of a Participant. Further, all Options shall be exercisable,
during the Participant's lifetime, only by such Participant, or, in the
case of a Nonqualified Stock Option, by a Participant or a Permitted
Transferee, as the case may be. The designation of a person entitled to
exercise an Option after a person's death will not be deemed a
transfer.
(f) Termination of Employment for Reasons other than Retirement,
Disability, or Death. Upon Termination of Employment for any reason
other than Retirement or on account of Disability or death, each Option
held by the Participant shall, to the extent rights to purchase shares
under such Option have accrued at the date of such Termination of
Employment and shall not have been fully exercised, be exercisable, in
whole or in part, at any time within a period of three (3) months
following Termination of Employment, subject, however, to prior
expiration of the term of such Options and any other limitations on the
exercise of such Options in effect at the date of exercise.
(g) Termination of Employment for Retirement or Disability. Upon
Termination of Employment by reason of Retirement or Disability, each
Option held by such Participant shall, to the extent rights to purchase
shares under the Option have accrued at the date of such Retirement or
Disability and shall not have been fully exercised, remain exercisable
in whole or in part, for a period of three (3) years following such
Termination of Employment, subject, however, to prior expiration
according to its terms
A-5
and other limitations imposed by the Plan. If the Participant dies after such
Retirement or Disability, the Participant's Options shall be exercisable in
accordance with Section 6.4(h) below.
(h) Termination of Employment for Death. Upon Termination of Employment
due to death, each Option held by such Participant shall, to the extent
rights to purchase shares under the Options have accrued at the date of death
and shall not have been fully exercised, be exercisable, in whole or in part,
by the personal representative of the Participant's estate or by any person
or persons who shall have acquired the Option directly from the Participant
by bequest or inheritance only under the following circumstances and during
the following periods: (i) if the Participant dies while employed by the
Company or a Subsidiary, at any time within three (3) years after his death,
or (ii) if the Participant dies during the extended exercise period following
Termination of Employment specified in Section 6.4(g), at any time within the
longer of such extended period or one (1) year after death, subject, however,
in any case, to the prior expiration of the term of the Option and any other
limitation on the exercise of such Option in effect at the date of exercise.
(i) Termination of Options. Any Option that is not exercised within
whichever of the exercise periods specified in Sections 6.4(f), (g) or (h) is
applicable shall terminate upon expiration of such exercise period.
(j) Purchase and Settlement Provisions. The Committee may at any time
offer to purchase an Option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the
Participant at the time that such offer is made.
ARTICLE 7
RESTRICTED STOCK
7.1 Awards of Restricted Stock. Shares of Restricted Stock may be
issued either alone or in addition to other Awards granted under the Plan.
The Committee shall determine the eligible persons to whom, and the time or
times at which, grants of Restricted Stock will be made, the number of
shares to be awarded, the price (if any) to be paid by the Participant, the
time or times within which such Awards may be subject to forfeiture, the
vesting schedule and rights to acceleration thereof, and all other terms and
conditions of the Awards. The Committee may condition the grant of Restricted
Stock upon the achievement of specific business objectives, measurements of
individual or business unit or Company performances, or such other factors as
the Committee may determine. The provisions of Restricted Stock awards need
not be the same with respect to each Participant, and such Awards to
individual Participants need not be the same in subsequent years.
7.2 Awards and Certificates. A prospective Participant selected to
receive a Restricted Stock shall not have any rights with respect to such
Award, unless and until such Participant has executed an Award Agreement
evidencing the Award and has delivered a fully executed copy thereof to the
Company, and has otherwise complied with the applicable terms and conditions
of such Award. Further, such Award shall be subject to the following
conditions:
(a) Acceptance. Awards of Restricted Stock must be accepted
within a period of 20 days (or such shorter period as the Committee may
specify at grant) after the Award Date, by executing an Award Agreement
and by paying whatever price (if any) the Committee has designated for
such shares of Restricted Stock.
(b) Legend. Each Participant receiving a Restricted Stock Award
shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the name of
such Participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the First Michigan Bank Corporation Stock Compensation
Plan and related Award Agreement entered into between the registered
owner and the Company, dated _____. Copies of such Plan and Agreement
are on file in the offices of the Company, One Financial Plaza.
Holland, Michigan 49323."
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<PAGE>
(c) Custody. The Committee may require that the stock
certificates evidencing such shares be held in custody by the Company
until the restrictions thereon shall have lapsed, and that, as a
condition of any award of Restricted Stock, the Participant shall have
delivered a duly signed stock power, endorsed in blank, relating to the
Common Stock covered by such Award.
7.3 Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Plan shall be subject to the following restrictions and
conditions:
(a) Restriction Period. Subject to the provisions of this Plan
and the Award Agreement, during a period set by the Committee (the
"Restriction Period"), the Participant shall not be permitted to sell,
transfer, pledge, or assign shares of Restricted Stock awarded under
this Plan. Subject to these limits, the Committee, in its sole
discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or
in part, based on service, performance and/or such other factors or
criteria as the Committee may determine.
(b) Rights as Shareholder. Except as provided in this subsection
(b) and subsection (a) above, the Participant shall have, with respect
to the shares of Restricted Stock, all of the rights of a holder of
shares of Common Stock of the Company including the right to receive
any dividends. The Committee, in its sole discretion, as determined at
the time of Award, may permit or require the payment of dividends to be
deferred. If any dividends or other distributions are paid in shares of
Common Stock, such shares shall be subject to the same restrictions on
transferability and forfeitability as the shares of Restricted Stock
with respect to which they were paid.
(c) Termination of Employment. Subject to the applicable
provisions of the Award Agreement and this Article 7, upon Termination
of Employment for any reason during the Restriction Period, all
Restricted Shares still subject to restriction will vest or be
forfeited in accordance with the terms and conditions established by
the Committee as specified in the Award Agreement.
(d) Lapse of Restrictions. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock, the
certificates for such shares shall be delivered to the Participant.
ARTICLE 8
PERFORMANCE SHARES
8.1 Award of Performance Shares. Performance Shares may be awarded
either alone or in addition to other Awards granted under this Plan. The
Committee shall determine the eligible persons to whom and the time or times
at which Performance Shares shall be awarded, the number of Performance
Shares to be awarded to any person, the duration of the period (the
"Performance Period") during which, and the conditions under which, receipt
of the Performance Shares will be deferred, and the other terms and
conditions of the Award in addition to those set forth in Section 8.2, as
specified in the Award Agreement. The Committee may condition the grant of
Performance Shares upon the achievement of specific business objectives,
measurements of individual or business unit or Company performance, or such
other factors or criteria as the Committee shall determine. The provisions of
the award of Performance Shares need not be the same with respect to each
Participant, and such Awards to individual Participants need not be the same
in subsequent years.
8.2 Terms and Conditions. Performance Shares awarded pursuant to this
Article 8 shall be subject to the following terms and conditions:
(a) Nontransferability. Subject to the provisions of this Plan
and the related Award Agreement, Performance Shares may not be sold,
assigned, transferred, pledged or otherwise encumbered during the
Performance Period. At the expiration of the Performance Period, share
certificates or cash of an equivalent value (as the Committee may
determine in its sole discretion) shall be delivered to the
Participant, or his legal representative, in a number equal to the
shares covered by the Award Agreement.
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<PAGE>
(b) Dividends. Unless otherwise determined by the Committee at
the time of Award, amounts equal to any cash dividends declared during
the Performance Period with respect to the number of shares of Common
Stock covered by a Performance Share Award will not be paid to the
Participant.
(c) Termination of Employment. Subject to the provisions of the
Award Agreement and this Article 8, upon Termination of Employment for
any reason during the Performance Period for a given Award, the
Performance Shares in question will vest or be forfeited in accordance
with the terms and conditions established by the Committee at or after
grant.
(d) Accelerated Vesting. Based on service, performance and/or
such other factors or criteria as the Committee may determine and set
forth in the Award Agreement, the Committee may, at or after grant,
accelerate the vesting of all or any part of any award of Performance
Shares and/or waive the deferral limitations for all or any part of
such Award.
ARTICLE 9
OTHER STOCK-BASED AWARDS
9.1 Other Awards. Other Awards of Common Stock and other Awards that
are valued in whole or in part by reference to, or are payable in or
otherwise based on, Common Stock ("Other Stock-Based Awards"), may be granted
either alone or in addition to or in tandem with Options, Restricted Stock or
Performance Shares. Subject to the provisions of this Plan, the Committee
shall have authority to determine the persons to whom and the time or times
at which such Awards shall be made, the number of shares of Common Stock to
be awarded pursuant to such awards, and all other conditions of the Awards.
The Committee may also provide for the grant of Common Stock under such
Awards upon the completion of a specified performance period. The provisions
of Other Stock-Based Awards need not be the same with respect to each
Participant and such Awards to individual Participants need not be the same
in subsequent years.
9.2 Terms and Conditions. Other Stock-Based Awards made pursuant to
this Article 9 shall be set forth in an Award Agreement and shall be subject
to the following terms and conditions:
(a) Nontransferability. Subject to the provisions of this Plan
and the Award Agreement, shares of Common Stock subject to Awards made
under this Article 9 may not be sold, assigned, transferred, pledged,
or otherwise encumbered prior to the date on which the shares are
issued, or, if later, the date on which any applicable restriction,
performance or deferral period lapses.
(b) Dividends. Unless otherwise determined by the Committee at
the time of Award, subject to the provisions of this Plan and the Award
Agreement, the recipient of an Award under this Article 9 shall be
entitled to receive, currently or on a deferred stock basis, dividends
or other distributions with respect to the number of shares of Common
Stock covered by the Award.
(c) Vesting. Any Award under this Article 9 and any Common Stock
covered by any such Award shall vest or be forfeited to the extent so
provided in the Award Agreement, as determined by the Committee, in its
sole discretion.
(d) Waiver of Limitation. In the event of the Participant's
Retirement, Disability or death, or in cases of special circumstances,
the Committee may, in its sole discretion, waive in whole or in part
any or all of the limitations imposed hereunder (if any) with respect
to any or all of an Award under this Article 9.
(e) Price. Common Stock issued or sold under this Article 9 may
be issued or sold for no cash consideration or such consideration as
the Committee shall determine and specify in the Award Agreement.
ARTICLE 10
TERMINATION OR AMENDMENT OF THE PLAN
The Board may at any time amend, discontinue or terminate this Plan or
any part thereof (including any amendment deemed necessary to ensure that the
Company may comply with any applicable regulatory requirement); provided,
however, that, unless otherwise required by law, the rights of a Participant
with respect to Awards granted prior to such amendment, discontinuance or
termination, may not be impaired
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without the consent of such Participant and, provided further, without the
approval of the Company's share holders, no amendment may be made which would
(i) increase the aggregate number of shares of Common Stock that may be
issued under this Plan (except by operation of Section 12.1); (ii) change the
definition of Employees eligible to receive Awards under this Plan; (iii)
decrease the option price of any Option to less than one hundred percent
(100%) of the Fair Market Value on the date of grant for an Option; (iv)
extend the maximum option period under Section 6.4(b) of the Plan; or (v)
cause the Plan not to comply with either Rule 16b-3, or any successor rule
under the Act, or Section 162(m) of the Code. The Committee may amend the
terms of any Award theretofore granted, prospectively or retroactively, but,
subject to Section 12.2, no such amendment or other action by the Committee
shall impair the rights of any Participant without the Participant's consent.
Awards may not be granted under the Plan after the Termination Date, but
Awards granted prior to such date shall remain in effect or become
exercisable pursuant to their respective terms and the terms of this Plan.
ARTICLE 11
UNFUNDED PLAN
This Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payment not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of
the Company.
ARTICLE 12
ADJUSTMENT PROVISIONS
12.1 Antidilution. Subject to the provisions of this Article 12, if the
outstanding shares of Common Stock are increased, decreased, or exchanged for
a different number or kind of shares or other securities, or if additional
shares or new or different shares or other securities are distributed with
respect to such shares of Common Stock or other securities, through merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to such shares
of Common Stock or other securities, an appropriate and proportionate
adjustment may be made in (i) the maximum number and kind of shares provided
in Article 4 of the Plan, (ii) the number and kind of shares or other
securities subject to the then outstanding Awards, and (iii) the price for
each share or other unit of any other securities subject to the then
outstanding Awards.
12.2 Change in Control. Notwithstanding Section 12.1, upon the
occurrence of a Change in Control, all Awards then outstanding under the Plan
will be fully vested and exercisable and all restrictions will immediately
cease, unless, in the case of a transaction described in clause (iii)
or (iv) in the following definition of Change in Control, provisions are made
in connection with such transaction for the continuance of the Plan and the
assumption of or the substitution for such Awards of new Awards covering the
stock of a successor employer corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices.
As used in this Plan, "Change in Control" shall mean a change in control of
the Company of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Act;
provided that, for purposes of this Plan, a Change in Control shall be deemed
to have occurred if: (i) any Person (other than the Company) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company which represent 20% or more of the
combined voting power of the Company's then outstanding securities; (ii)
during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election, or the
nomination for election, by the Company's stockholders, of each new director
is approved by a vote of at least two-thirds (2/3) of the directors then
still in office who were directors at the beginning of the period but
excluding any individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such term is
used in Rule 14a-11 of Regulation 14A promulgated under the Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; (iii) there
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is consummated any con solidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of Common Stock are converted into cash, securities or other property,
other than a merger of the Company in which the holders of Common Stock
immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger; (iv)
there is consummated any consolidation or merger of the Company in which the
Company is the continuing or surviving corporation in which the holders of
Common Stock immediately prior to the merger do not own at least fifty
percent (50%), or such greater percentage as shall be set in any agreement
with any Participant, or more of the stock of the surviving corporation
immediately after the merger; (v) there is consummated any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company; or
(vi) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company.
12.3 Adjustments by Committee. Any adjustments pursuant to this Article
12 will be made by the Committee, whose determination as to what adjustments
will be made and the extent thereof will be final, binding, and conclusive.
No fractional interest will be issued under the Plan on account of any such
adjustments. Only cash payments will be made in lieu of fractional shares.
ARTICLE 13
GENERAL PROVISIONS
13.1 Legend. The Committee may require each person purchasing shares
pursuant to an Award under the Plan to represent to and agree with the
Company in writing that the Participant is acquiring the shares without a
view to distribution thereof. In addition to any legend required by this
Plan, the certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause
a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
13.2 No Right to Employment. Neither this Plan nor the grant of any
Award hereunder shall give any Participant or other Employee any right with
respect to continuance of employment by the Company or any Subsidiary, nor
shall there be a limitation in any way on the right of the Company or any
Subsidiary by which an Employee is employed to terminate his or her
employment at any time.
13.3 Withholding of Taxes. The Company shall have the right to deduct
from any payment to be made pursuant to this Plan, or to otherwise require,
prior to the issuance or delivery of any shares of Common Stock or the
payment of any cash hereunder, payment by the Participant of, any Federal,
state or local taxes required by law to be withheld. Unless otherwise
prohibited by the Committee, each Participant may satisfy any such
withholding tax obligation by any of the following means or by a combination
of such means: (a) tendering a cash payment; (b) authorizing the
Company to withhold from the shares otherwise issuable to the Participant a
number of shares having a Fair Market Value as of the "Tax Date", less than
or equal to the amount of the withholding tax obligation; or (c) delivering
to the Company unencumbered shares owned by the Participant having a Fair
Market Value, as of the Tax Date, less than or equal to the amount of the
withholding tax obligation. The "Tax Date" shall be the date that the amount
of tax to be withheld is determined.
13.4 No Assignment of Benefits. No Option, Award or other benefit
payable under this Plan shall, except as otherwise specifically transfer,
provided by law, be subject in any manner to anticipation, alienation,
attachment, sale, transfer, assignment, pledge, encumbrance or charge, and
any attempt to anticipate, alienate, attach, sell, transfer, assign, pledge,
encumber or charge, any such benefits shall be void, and any such benefit
shall not in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person who shall be entitled to such
benefit, nor shall it be subject to attachment or legal process for or
against such person.
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13.5 Governing Law. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws and in the courts
of the state of Michigan.
13.6 Application of Funds. The proceeds received by the Company from
the sale of shares of Common Stock pursuant to Awards granted under this Plan
will be used for general corporate purposes.
13.7 Rights as a Shareholder. Except as otherwise provided in an Award
Agreement, a Participant shall have no rights as a shareholder of the Company
until he or she becomes the holder of record of Common Stock.
ARTICLE 14
SHAREHOLDER APPROVAL
The Plan shall be effective on the Effective Date and shall be
submitted for approval by the shareholders of the Company at the Annual
Meeting of Shareholders in 1997. If the shareholders do not approve the Plan,
it, and any action taken under the Plan, shall be void and of no effect.
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APPENDIX B
FIRST MICHIGAN BANK CORPORATION
1997 DIRECTORS' STOCK OPTION PLAN
Section 1. Establishment and Purpose.
First Michigan Bank Corporation hereby establishes a stock option plan
to be named the First Michigan Bank Corporation 1997 Directors' Stock Option
Plan, for certain directors of the Company. The purpose of the Plan is: (i)
to provide a non-cash method of compensating directors that will directly
promote the interests of the shareholders because the rewards made available
to the directors would be directly related to the price of stock; and (ii) to
aid the Company and its subsidiaries in competing with other enterprises for
the services of new directors needed to help ensure the Company's continued
progress.
Section 2. Definitions.
(a) Act means the Securities Exchange Act of 1934, as amended from time
to time.
(b) Administrator means the Corporate Executive Committee of the Company.
(c) Authority means the 150,000 shares of Stock authorized for issuance
pursuant to the Plan.
(d) Board of Directors means the Board of Directors of the Company.
(e) Company means First Michigan Bank Corporation, a corporation
organized and existing under the laws of the State of Michigan.
(f) Eligible Director means a director of the Company who is not
otherwise an officer or employee of the Company or of any subsidiary thereof.
(g) Effective Date means the date this Plan is approved by the Company's
shareholders.
(h) Fair Market Value of a share of Stock means the closing sale price
on the National Association of Securities Dealers Automated Quotation System,
or any successor system then in use, on the relevant valuation date or, if
there were no sales on the valuation date, on the next preceding date on
which selling prices were recorded.
(i) Grant Date means, with respect to each Option, the day that an
Eligible Director is granted the Option.
(j) Option means an option granted under this Plan to acquire Stock.
(k) Optionee means the person to whom an Option is granted.
(l) Option Agreement means an Agreement issued to each Eligible
Director with respect to each Option.
(m) Option Date means the first business day after an annual meeting of
Shareholders with respect to each Option.
<PAGE>
(n) Permitted Transferee means either (i) the spouse, a child, or a
grandchild of an Optionee (each an "Immediate Family Member"), (ii) a trust
for the exclusive benefit of an Optionee and/or one or more Immediate Family
Members, or (iii) a partnership or limited liability company whose only
partners or members are an Optionee and/or one or more Immediate Family
Members.
(o) Plan means the First Michigan Bank Corporation 1997 Directors' Stock
Option Plan.
(p) Post-Death Representative(s) means the executor(s) or
administrator(s) of the Optionee's estate or the person or persons to whom
the Optionee's rights under his or her Option pass by Optionee's will or the
laws of descent and distribution.
(q) Rule 16b-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Act, as amended from time to time or any
successor rule.
(r) Shares means shares of Stock.
(s) Stock means authorized and unissued shares of common stock, $1.00
par value, of the Company and includes Shares which may be reacquired by the
Company.
Section 3. Administration.
The Plan shall be administered on behalf of the Company by the
Administrator. The Administrator may adopt, amend, and rescind from time to
time such administrative rules, and may take from time to time such actions,
with or without notice to affected Optionees or Permitted Transferees, as the
case may be, as the Administrator may deem appropriate to implement or
interpret the provisions of this Plan or to exercise any authority,
discretion, or power explicitly or implicitly granted to the Administrator
under this Plan, provided that no such rules or actions may be inconsistent
with the provisions of this Plan or Rule 16b-3, or any successor rule, under
the Act (in the case of Optionees affected thereby). The Administrator may
make rules or take action pursuant to this Section by any appropriate means.
Section 4. Shares Reserved Under the Plan.
The following provisions shall govern the number of Shares issuable
under the Plan:
(a) The maximum number of Shares which may be issued in connection with
Options granted hereunder is 150,000. At any time during the existence of the
Plan, there shall be reserved for issuance upon the exercise of Options
granted under the Plan an amount of Stock (subject to adjustment as provided
in Section 10 hereof) equal to 150,000 Shares less the total number of Shares
issued pursuant to all such exercises which shall have been made prior to
such time.
(b) When an Option is granted, the total number of Shares issuable upon
complete exercise thereof shall be charged against the maximum number of
Shares of the Authority. When the Option is exercised, no additional charge
shall be made against the Authority. If an exercise price is paid in Shares
owned by the Optionee or the Permitted Transferee, as the case may be, such
Shares shall not be added to the Authority.
(c) If an Option terminates in whole in part, by expiration or for any
other reason except exercise of such Option, the Shares previously charged to
the Authority upon grant of the Option shall be restored to the Authority,
and shall again be available for issuance under the Authority, for as long as
such Authority continues, as if such Shares had never been subject to an
Option.
Section 5. Granting of Options.
Each person who is an Eligible Director on the Option Date in 1997, and
each person who is an Eligible Director in each subsequent year on the Option
Date, shall receive an Option to acquire 1,000 Shares at the Fair Market
Value on such date. If an Eligible Director is first appointed to the Board
of Directors after the Option Date in 1997, and such appointment is effective
as of a date other than the date of an annual meeting of Shareholders or an
Option Date, the Eligible Director shall, as of the date of appointment as a
director, receive one Option to acquire 1,000 Shares at the Fair Market Value
on that date.
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<PAGE>
Section 6. Terms of Options.
Notwithstanding any other provisions of the Plan, each Option shall be
evidenced by an Option Agreement, which shall include the substance of the
following terms and conditions:
(a) The option price for each Share covered by an Option shall be an
amount equal to one hundred percent (100%) of the Fair Market Value of a
Share on the Grant Date of such Option.
(b) The Option by its terms shall not be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution; provided,
however, an Option may be transferred, without consideration, to a Permitted
Transferee if the Optionee satisfies such conditions to the transfer as may
be required by the Administrator. A Permitted Transferee shall succeed to all
rights and benefits (except any right to further transfer of the Option) and
be subject to all obligations and limitations applicable to the original
Optionee. However, such rights and benefits (except any right to further
transfer of the Option), and obligations and limitations shall be determined
as if the original Optionee continued to hold the Option, whereby
provisions of this Plan dealing with termination of service or death of an
Optionee will continue to refer to the original Optionee regardless of
whether an Option has been transferred to a Permitted Transferee. The Company
shall have no obligation to notify a Permitted Transferee of the termination
of service or death of an Optionee. The designation of a beneficiary does not
constitute a transfer. The Option shall be exercisable, during the Optionee's
lifetime, only by the Optionee or a Permitted Transferee, as the case may be.
(c) Options shall become fully exercisable on the first anniversary of
the Grant Date. No Option shall be exercisable after the expiration of ten
years from the Grant Date. Notwithstanding the foregoing, if the Optionee
dies before service as a director terminates, the Option shall be exercisable
as to all Shares, to the extent not previously exercised.
(d) The Option shall not be exercisable after the earlier of (i) the
last day of the thirty-sixth month after the month in which the Optionee's
service as a director terminates for any reason or (ii) the expiration of ten
years from the Grant Date.
Section 7. No Right to Remain a Director.
The grant of an Option shall not create any right in any person to
remain as a director of the Company.
Section 8. Exercise of Option.
(a) An Option shall be exercisable only (1) upon payment to the Company
on the exercise date of cash in the full amount of the option price of the
Shares with respect to which the Option is exercised, (2) upon delivery to
the Company on the exercise date of certificates representing unencumbered
Shares, owned by the Optionee or the Permitted Transferee, as the case may
be, having a Fair Market Value, on the last trading date preceding such
exercise and delivery, equal to the full amount of the purchase price of the
Shares with respect to which the Option is exercised, or (3) a combination of
(1) and (2), except that (i) any portion of the exercise price representing a
fraction of a Share shall in any event be paid in cash, and (ii) no Shares of
Stock which have been held for less than six months may be delivered in
payment of the exercise price of an Option. If and to the extent determined
by the Administrator, in its sole discretion, at or after the Grant Date,
payment in full or in part may also be made by reduction in the number of
Shares issuable upon exercise of the Option based on the Fair Market Value of
the Stock on the last trading date preceding the exercise.
(b) An Optionee or Permitted Transferee, as the case may be, shall have
none of the rights of a shareholder with respect to Shares subject to the
Option until Shares are issued to the Optionee or Permitted Transferee upon
the exercise of an Option.
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<PAGE>
Section 9. General Provisions.
The Company shall not be required to issue or deliver any certificate
for Shares to an Optionee or Permitted Transferee, as the case may be, upon
the exercise of an Option prior to:
(a) If requested by the Company, the filing with the Company by the
Optionee, the Permitted Transferee or the Optionee's Post-Death
Representative, as the case may be, of a representation in writing that at
the time of such exercise it is their then present intention to acquire the
Shares being purchased for investment and not for resale, and/or the
completion of any registration or other qualification of such Shares under
any state or federal laws or rulings or regulations of any governmental
regulatory body, which the Company shall determine to be necessary or
advisable; and
(b) The obtaining of any other consent, approval, or permit from any
state or federal governmental agency which the Administrator shall, in the
Administrator's absolute discretion upon the advice of counsel, determine to
be necessary or advisable.
Section 10. Adjustment Provisions.
In the event any stock dividend is declared upon the Stock or in the
event outstanding Shares of Stock shall be changed into or exchanged for a
different number, class or kind of Shares of Stock or other securities of the
Company or another corporation, whether by reason of a split or combination
of shares, recapitalization, reclassification, reorganization, merger,
consolidation, or otherwise, the maximum number of Shares of Stock which may
be charged against the Authority shall be appropriately and proportionately
adjusted and in any such event a corresponding adjustment shall be made
changing the number, class or kind of Shares of Stock or other securities
which are deliverable upon the exercise of any Option theretofore granted
without change in the total price applicable to the unexercised portion of
such Option, but with a corresponding adjustment in the price for each Share
or other securities covered by the unexercised portion of such Option. In the
event the Company is merged, consolidated, or reorganized with another
corporation, appropriate provision shall be made for the continuance of
outstanding Options with respect to shares of the succeeding parent
corporation following a merger, or with respect to shares of the consolidated
or reorganized corporation in the case of a consolidation or reorganization,
and to prevent their dilution or enlargement compared to the total shares
issuable therein in respect of the Stock. Adjustments under this Section 10
shall be made in an equitable manner by the Administrator, whose
determination shall be conclusive and binding on all concerned.
Section 11. Duration, Amendment, and Termination.
The Board of Directors may at any time terminate the Plan or make such
amendments thereof as it shall deem advisable and in the best interests of
the Company, without further action on the part of the Shareholders of the
Company; provided, however, that no such termination or amendment shall,
without the consent of the Optionee or Permitted Transferee, as the case may
be, adversely affect or impair the rights of such Optionee or Permitted
Transferee, as the case may be, and provided further, that, unless the
Shareholders of the Company shall have first approved thereof, no amendment
of this Plan shall be made whereby: (a) the total number of Shares which may
be granted under the Plan to all individuals shall be increased, except by
operation of the adjustment provisions of Section 10 hereof; (b) the term of
the Options shall be extended; (c) the minimum option price shall be
decreased; or (d) the class of eligible persons to whom Options may be
granted shall be changed. The period during which Options may be granted
under the Authority shall terminate on the tenth anniversary of the Effective
Date, unless the Plan earlier shall have been terminated as provided above.
Section 12. Date of Granting Options.
All Options granted under the Plan shall be in writing and shall be
granted as of a Grant Date.
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<PAGE>
Section 13. Shareholder Approval.
The Plan is to be submitted for approval by the Shareholders of the
Company at the 1997 annual meeting and shall be effective only upon receiving
such approval.
Section 14. Miscellaneous.
(a) Subject to the provisions of applicable federal law, the Plan shall
be administered, construed and enforced according to the internal laws of the
State of Michigan, excluding its conflict of law rules, and applicable
federal law and in courts situated in the State of Michigan.
(b) Transactions under this Plan are intended to comply with applicable
conditions for exemption under Rule 16b-3. To the extent any provision of
this Plan or action by the Administrator fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by
the Administrator.
(c) The invalidity of any particular provision herein shall not
invalidate all or any part of the remainder of the Plan, but such remainder
shall be and remain valid in all respects as fully as the law will permit.
B-5<PAGE>
PROXY FIRST MICHIGAN BANK CORPORATION
One Financial Plaza * Holland, Michigan 49423
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 15, 1997
The undersigned hereby appoints Roger A. Andersen and Robert J. Kapenga,
and each of them, Proxies, with power of substitution, to vote the shares of
capital stock of First Michigan Bank Corporation which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company, to be
held in the Ambassador Ballroom of the Amway Grand Plaza, Pearl at Monroe,
Grand Rapids, Michigan, on Tuesday, April 15, 1997 at 10:00 a.m. local time.
1. Election of five persons to the Board of Directors,
four persons for terms expiring in 2002,
and one person for a term expiring in 1999:
[ ] FOR all nominees listed below (except
as marked to the contrary below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
Doyle A. Hayes, Donald W. Maine, Jack H. Miller and David M. Ondersma each
for three-year terms expiring in 2000
Ronald J. Bieke for a two-year term expiring in 1999
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- ----------------------------------------------------------------------------
2. Proposal to consider and approve the First Michigan Bank Corporation Stock
Compensation Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to consider and approve the First Michigan Bank Corporation 1997
Directors' Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(Continued and to be signed on other side)
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR the nominees named in Item 1 and FOR the proposals in Items
2 and 3 on the reverse side.
________________________________ ______________________________
Signature Signature (if jointly held)
Date: _______________________
NOTE: Joint owners should each sign. When signing as executor, corporate
officer, trustee, guardian, etc., please indicate capacity.
