Registration No. 33-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST OF AMERICA BANK CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
MICHIGAN 38-1971791
(State of Incorporation) (IRS Employer Identification No.)
211 South Rose Street
Kalamazoo, Michigan 49007
(Address of Principal Executive Offices)
FIRST OF AMERICA BANK CORPORATION
DIRECTOR STOCK COMPENSATION PLAN
(Full Title of the Plan)
Richard V. Washburn Copy to:
Senior Vice President David E. Riggs, Esq.
First of America Bank Corporation Howard & Howard
211 South Rose Street Attorneys, P.C.
Kalamazoo, Michigan 49007 Suite 400
(616) 376-9000 107 West Michigan Ave.
(Name, Address and Telephone Number Kalamazoo, Michigan
of Agent for Service) 49007
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Registration
Registered Registered per Share Offering Price Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 100,000 $ 59.75 (3) $ 5,975,000 (3) $ 1,811 (3)
$10 par value (1) shares (2)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Also includes an equal number of Rights to purchase
shares of Registrant's Series A Junior Participating<PAGE>
Preferred Stock, which Rights are not (a) separable from
the shares of Common Stock or (b) presently exercisable.
2 Plus (in accordance with Rule 416) an indeterminate
number of additional shares as may be issuable in the
event of an adjustment as a result of an increase in the
number of issued shares of Common Stock of the Registrant
resulting from a subdivision of such shares, the payment
of stock dividends or certain other capital adjustments
as provided in the above-referenced Director Stock
Compensation Plan.
3 Estimated in accordance with Rules 457(h) and (c) solely
for the purpose of calculating the amount of the
registration fee, based on the $59.75 average of
the high and low prices reported for the Registrant's
Common Stock on the New York Stock Exchange on April 14,
1997.<PAGE>
Part II. Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
The following documents filed with the Securities and
Exchange Commission (the "Commission") by the Registrant (File
No. 1-10534) pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), are incorporated in this
Registration Statement by reference:
(1) the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996;
(2) the Registrant's Current Reports on Form 8-K dated
January 15, 1997 and January 30, 1997;
(3) the information contained in the Registrant's
definitive Proxy Statement dated March 13, 1996 relating to
its 1997 annual meeting of shareholders under the headings
"Certain Federal Income Tax Consequences" within the section
titled "(3) Approval of Director Stock Compensation Plan"; and
(4) the description of the Registrant's Common Stock,
$10.00 par value, and Series A Junior Participating Preferred
Stock Purchase Rights which are contained in the Registrant's
Registration Statements on Form 8-A dated April 30, 1990 and
July 18, 1990, respectively filed under the Exchange Act,
including any amendments or reports filed for the purpose of
updating such descriptions.
All documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all
securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and
to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Sections 561 through 571 of the Michigan Business
Corporation Act (the "Act"), Article X of the Registrant's
Restated Articles of Incorporation ("Articles") and Article V
of the Registrant's Bylaws relate to indemnification of the
Registrant's directors and officers, among others, in a<PAGE>
variety of circumstances against liabilities arising in
connection with the performance of their duties. The
Registrant's Articles and Bylaws generally permit
indemnification to the same extent provided by the Act.
The Act provides for indemnification of directors and
officers acting in good faith and in a manner they reasonably
believe to be in or not opposed to the best interest of the
Registrant (and, if a criminal proceeding, who have no
reasonable cause to believe their conduct to be unlawful)
against (i) expenses (including attorney's fees) and amounts
paid in settlement actually and reasonably incurred in
connection with any threatened, pending, or completed action,
suit or proceeding (other than an action by, or in the right
of the Registrant) arising out of a position with the
Registrant (or with some other entity at the Registrant's
request) and (ii) expenses (including attorney's fees) and
amounts paid in settlement actually and reasonably incurred in
connection with threatened, pending, or completed actions or
suits by or in the right of the Registrant, unless the
director or officer is found liable to the Registrant and an
appropriate court does not determine that he or she is
nevertheless fairly and reasonably entitled to indemnity. The
Act requires indemnification for expenses to the extent that a
director or officer is successful in defending against any
such action, suit or proceeding, and otherwise requires in
general that the indemnification provided for in (i) and (ii)
above be made only on a determination by a majority vote of a
quorum of the Board of Directors who were not parties to or
threatened to be made parties to the action, suit, or
proceeding, by a majority vote of a committee of not less than
two disinterested directors, by independent legal counsel, by
all independent directors not parties to or threatened to be
made parties to the action, suit or proceeding, or by the
shareholders, that the applicable standards of conduct were
met. In certain circumstances, the Act further permits
advances to cover such expenses before a final determination
that indemnification is permissible, upon receipt of an
undertaking, which need not be secured, by or on behalf of the
directors or officers to repay such amounts unless it shall
ultimately be determined that they are entitled to
indemnification.
Indemnification under the Act is not exclusive of other
rights to indemnification to which a person may be entitled
under the Articles, the Bylaws or a contractual agreement.
The Act permits the Registrant to purchase insurance on
behalf of its directors and officers against liabilities
arising out of their positions with the Registrant, whether or
not such liabilities would be within the foregoing
indemnification provisions. Pursuant to this authority, the
Registrant maintains such insurance on behalf of its directors
and officers. <PAGE>
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following Exhibits are filed or incorporated by
reference as part of this Registration Statement:
4. (a) Restated Articles of Incorporation of First of
America Bank Corporation (incorporated by reference
to Exhibit (3) to the Registrant's Quarterly Report
Form 10-Q (File No. 1-10534) for the quarter ended
September 30, 1992).
(b) Bylaws of First of America Bank Corporation
(incorporated by reference to Exhibit (3) to the
Registrant's Quarterly Report on Form 10-Q (File No.
1-10534) for the quarter ended March 31, 1996).
(c) Rights Agreement between First of America Bank
Corporation and First of America Bank - Michigan,
N.A., as Rights Agent, dated as of July 18, 1990
(incorporated herein by reference to Exhibit (4) to
Registrant's Current Report on Form 8-K (File No. 0-
6469) dated July 18, 1990).
5. Opinion and Consent of Howard & Howard Attorneys, P.C.
15. Not applicable.
23. (a) Consent of KPMG Peat Marwick LLP.
(b) Consent of Howard & Howard Attorneys, P.C.
(incorporated by reference to Exhibit 5 to this
Registration Statement).
24. Not applicable.
99. First of America Bank Corporation Director Stock
Compensation Plan, as amended, February 19, 1997.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or
sales are being made, a post-effective
amendment to this Registration Statement:
(i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933; <PAGE>
(ii) to reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(iii) to include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by
those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration
Statement.
(2) that, for the purpose of determining any
liability under the Securities Act of 1933,
each such post-effective amendment shall be
deemed to be a new registration statement
relating to the securities offered therein, and
the offering of such securities at that time
shall be deemed to be the initial bona fide
offering thereof;
(3) to remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the
Securities Act of 1933 (the "Securities Act"), each
filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference
in this Registration Statement shall be deemed to be
a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof. <PAGE>
(h) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to
directors, directors and controlling persons of the
Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in
the opinion of the Commission, such indemnification
is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against
such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a
director, officer, or controlling person of the
Registrant in the successful defense of any action,
suit or proceeding) is asserted by director, officer
or controlling person in connection with the
securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Kalamazoo, State of Michigan, on
April 16, 1997.
FIRST OF AMERICA BANK CORPORATION
By: /s/ RICHARD V. WASHBURN
Richard V. Washburn
Senior Vice President and Secretary
POWER OF ATTORNEY
The undersigned officers and directors of First of
America Bank Corporation, a Michigan corporation, do hereby
constitute and appoint Richard F. Chormann, Thomas W. Lambert,
and Richard V. Washburn, and each of them, the lawful
attorneys and agents or attorney and agent, with power and
authority to do any and all acts and things and to execute any
and all instruments which said attorneys and agents, and any
one of them, determine may be necessary or advisable or
required to enable said corporation to comply with the
Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange
Commission in connection with this Registration Statement.
Without limiting the generality of the foregoing power and
authority, the powers granted include the power and authority
to sign the names of the undersigned officers and directors in
the capacities indicated below to this Registration Statement,
to any and all amendments, both pre-effective and post-
effective, and supplements to this Registration Statement and
to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or
supplements thereto, and each of the undersigned hereby
ratifies and confirms all that said attorneys and agents or
any of them shall do or cause to be done by virtue hereof.
This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed
this Power of Attorney as of the 16th day of April, 1997.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities indicated on the 16th day
of April, 1997.<PAGE>
/S/ RICHARD F. CHORMANN Director, Chairman and
Richard F. Chormann Chief Executive Officer
(Principal Executive Officer)
/S/ THOMAS W. LAMBERT Executive Vice President and
Thomas W. Lambert Chief Financial Officer
(Principal Financial Officer
and Principal Accounting
Officer)
/S/ JON E. BARFIELD Director
Jon E. Barfield
/S/ JOHN W. BROWN Director
John W. Brown
/S/ JOSEPH J. FITZSIMMONS Director
Joseph J. Fitzsimmons
/S/ JOEL N. GOLDBERG Director
Joel N. Goldberg
/S/ CLIFFORD L. GREENWALT Director
Clifford L. Greenwalt
/S/ ROBERT L. HETZLER Director
Robert L. Hetzler
/S/ DOROTHY A. JOHNSON Director
Dorothy A. Johnson
/S/ MARTHA MAYHOOD MERTZ Director
Martha Mayhood Mertz
/S/ DANIEL R. SMITH Director
Daniel R. Smith
/S/ LEY S. SMITH Director
Ley S. Smith
/S/ JAMES S. WARE Director
James S. Ware
<PAGE>
EXHIBIT INDEX
Number
5 Opinion of Howard & Howard Attorneys, P.C., including
Consent
23(a) Consent of KPMG Peat Marwick LLP
99 First of America Bank Corporation Director Stock
Compensation Plan, as amended February 19, 1997<PAGE>
HOWARD & HOWARD ATTORNEYS, P.C.
April 16, 1997
First of America Bank Corporation
211 South Rose Street
Kalamazoo, Michigan 49007
Attention: Richard V. Washburn
Greetings:
We have acted as counsel to First of America Bank
Corporation (the "Company") in connection with the preparation
and filing of a registration statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933,
registering an additional 100,000 shares of the Company's
Common Stock, par value $10 per share, issuable as awards of
common stock or restricted stock or upon exercise of stock
options granted to directors or other persons serving in
advisory positions for the Company or a subsidiary of the
Company pursuant to the First of America Bank Corporation
Director Stock Compensation Plan (the "Plan"), which Plan was
adopted by resolution of the Board of Directors of the Company
(the "Board") on February 21, 1996, amended by the Board on
February 19, 1997 and approved by shareholders on April 16,
1997.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such corporate
records, certifies, and other documents and conducted
interviews with officers as we considered necessary or
appropriate for the purpose of this opinion.
It is our opinion that the Common Stock of the Company,
when issued as provided in the Plan, will be legally issued,
fully paid, and non-assessable.
We hereby consent to the filing of this opinion as
Exhibit 5 to the Registration Statement.
This opinion is rendered pursuant to Item 8 of Form S-8
and Item 601 of Regulation S-K and may be relied upon only by
the Company and the Securities and Exchange Commission and may
not be used, quoted or referred to and/or filed with any other
person without our prior written permission.
Very truly yours,
HOWARD & HOWARD ATTORNEYS, P.C.
/s/ MELANIE MAYO WEST
Melanie Mayo West<PAGE>
Exhibit 23(a)
The Board of Directors
First of America Bank Corporation:
We consent to the incorporation by reference in the
Registration Statement on Form S-8 of First of America Bank
Corporation, of our report dated January 14, 1997 on the
consolidated financial statements of First of America Bank
Corporation, as of December 31, 1996 and 1995 and for each of
the years in the three year period ended December 31, 1996,
which report is included in the 1996 Annual Report on Form 10-
K of First of America Bank Corporation.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Chicago, Illinois
April 16, 1997<PAGE>
EXHIBIT 99
FIRST OF AMERICA BANK CORPORATION
DIRECTOR STOCK COMPENSATION PLAN
SECTION I - PLAN
1.1 Plan. First of America Bank Corporation, a Michigan
corporation, established the Director Deferred
Compensation Plan effective April 1, 1996 for the purpose
of providing a means for Directors of the Company and
Participating Companies to accumulate savings through
deferral of the payment of their Director's Fees, and to
defer the taxation of such fees. The amended and
restated Plan, renamed the First of America Bank
Corporation Director Stock Compensation Plan, will become
effective on the date of its adoption by the Board,
provided that the Plan is approved by shareholders of the
Company (excluding holders of shares of Stock, Restricted
Stock or Stock Options issued by the Company under this
Plan) within twelve months after that date. If the Plan
is not approved by the shareholders of the Company, any
Stock, Restricted Stock or Stock Options granted under
this Plan will be rescinded and void. Deferrals made
previously under the Director Deferred Compensation Plan,
as well as Phantom Stock credits made under this Plan,
will, however, continue to be valid in such event. This
Plan will remain in effect until it is terminated by the
Board under Section 13.3 hereof.
1.2 Purpose. In addition to the original intent of the
Director Deferred Compensation Plan, the amended and
restated Plan has the purpose of advancing the interests
of the Company and its shareholders by helping the
Company attract and retain the services of highly
qualified Directors, upon whose judgment, initiative and
efforts the Company is substantially dependent. The Plan
also has the objective of paying a portion of Director's
Fees in Equity Compensation to encourage Stock ownership
by such Directors and to further align their interests
with those of other shareholders.
SECTION II - DEFINITIONS
2.1 The following words and phrases have the respective
meanings stated below unless a different meaning is
plainly required by the context:
(a) "1934 Act" means the Securities Exchange Act of
1934, as amended.
(b) "Beneficiary" means any person who is entitled to
receive Phantom Stock Account distributions, Stock
Options or Restricted Stock under this Plan after<PAGE>
the death of a Director pursuant to Section 11.1.
(c) "Board" or "Board of Directors" means the Board of
Directors of the Company, or any other entity
authorized to act on its behalf.
(d) A "Change in Control" of the Company shall have
occurred:
(i) on the fifth day preceding the scheduled
expiration date of a tender offer by, or
exchange offer by any corporation, person,
other entity or group (other than the Company
or any of its wholly owned subsidiaries), to
acquire Voting Stock of the Company if:
a. after giving effect to such offer such
corporation, person, other entity or group
would own twenty-five percent (25%) or
more of the Voting Stock of the Company;
b. there shall have been filed documents with
the Securities and Exchange Commission
("SEC") in connection therewith (or, if no
such filing is required, public evidence
that the offer has already commenced); and
c. such corporation, person, other entity or
group has secured all required regulatory
approvals to own or control twenty-five
percent (25%) or more of the Voting Stock
of the Company;
(ii) if the shareholders of the Company approve a
definitive agreement to merge or consolidate
the Company with or into another corporation in
a transaction in which neither the Company nor
any of its wholly owned subsidiaries will be
the surviving corporation, or to sell or
otherwise dispose of all or substantially all
of the Company's assets to any corporation,
person, other entity or group (other than the
Company or any of its wholly owned
subsidiaries), and such definitive agreement is
consummated;
(iii) if any corporation, person, other entity or
group (other than the Company or any of its
wholly owned subsidiaries) becomes the
Beneficial Owner (as defined in the Company's
Articles of Incorporation) of stock
representing twenty-five percent (25%) or more
of the Voting Stock of the Company; or<PAGE>
(iv) if during any period of two (2) consecutive
years Continuing Directors cease to comprise a
majority of the Company's Board of Directors.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Committee" means the Nominating and Compensation
Committee of the Company's Board of Directors.
(g) "Company" means First of America Bank Corporation, a
Michigan corporation and its successor or
successors.
(h) "Continuing Director" means:
(i) any member of the Board of Directors of the
Company at the beginning of any period of two
(2) consecutive years; and
(ii) any person who subsequently becomes a member of
the Board of Directors of the Company; if
a. such person's nomination for election or
election to the Board of Directors of the
Company is recommended or approved by
resolution of a majority of the Continuing
Directors; or
b. such person is included as a nominee in a
proxy statement of the Company distributed
when a majority of the Board of Directors
of the Company consists of Continuing
Directors.
(i) "Deferring Director" means a Director or former
Director for whom a Phantom Stock Account has been
established under the Plan.
(j) "Designated Committee" means the Company's Unified
Audit Committee, the Company's Unified Trust
Committee and any other committee advisory board
designated by the Committee to be subject to the
provisions of this Plan.
(k) "Designated Equity Compensation" means the
percentage or amount of Director's Fees established
by the Committee, which will be payable in a form of
Equity Compensation.
(l) "Director" means a member of the Board of Directors
or a member of the board of directors of a
Participating Company, who is entitled to receive
Director's Fees. Solely for purposes of this Plan,<PAGE>
the term "Director" shall also include any person
serving on a Designated Committee.
(m) "Director's Fees" means the board and committee
meeting fees and the board and committee retainer
fees, including fees to serve as a chairperson of a
board or committee or any other fees, payable to
Directors for their service as Directors, as
established by the Company or a Participating
Company.
(n) "Disability" has the same meaning as "permanent and
total disability," as defined in Section 22(e)(3) of
the Code.
(o) "Entry Date" means the first day of each Plan Year
or the first day of service as a Director.
(p) "Equity Compensation" means compensation in the form
of Stock, Restricted Stock, Phantom Stock, or Stock
Options.
(q) "Fair Market Value" means as of the date in
question, the market price per share of Stock
determined by the Committee and to the extent
consistent therewith:
(i) if the Stock was traded on a national stock
exchange as of the date in question, then the
Fair Market Value will be equal to the average
of the high and low prices reported by the
applicable composite transactions report for
such date or, if no trading occurred on the
applicable exchange for that date, for the
latest trading date prior to such date;
(ii) if the Stock was traded on any other
established market as of the date in question,
then the Fair Market Value will be equal to the
average of the high and low prices reported for
such date or, if no trading occurred on the
applicable exchange for that date, for the
latest trading date prior to such date; or
(iii) if neither of the foregoing provisions is
applicable, then the Fair Market Value will be
determined by the Committee on good faith on
such basis as it deems appropriate.
(r) "Optional Equity Compensation" means the percentage
or amount of Director's Fees other than the
Designated Equity Compensation.
(s) "Option Price" with respect to any particular Stock<PAGE>
Option means the exercise price at which the
Optionee may acquire a share of Option Stock called
for under such Stock Option.
(t) "Option Stock" means Stock issued or issuable by the
Company pursuant to the valid exercise of a Stock
Option.
(u) "Optionee" means a Director to whom a Stock Option
is granted hereunder, and any transferee of such
Stock Option received pursuant to a transfer
authorized under this Plan.
(v) "Participating Company" means any wholly owned
subsidiary of the Company, any wholly owned
subsidiary of such a subsidiary, or any other
company designated by the Company.
(w) "Pension Plan" means the First of America Bank
Corporation Employees' Retirement Plan.
(x) "Phantom Stock" means a share equivalent whose value
is based upon the value of one share of Stock.
(y) "Phantom Stock Account" means any bookkeeping
account established for maintaining Phantom Stock
credits under this Plan.
(z) "Plan" means the First of America Bank Corporation
Director Stock Compensation Plan, formerly known as
the First of America Bank Corporation Director
Deferred Compensation Plan, as herein set forth.
(aa) "Plan Year" means the period commencing each year on
the day of that year's Annual Meeting of
Shareholders of the Company and ending the following
year on the day prior to that year's Annual Meeting
of Shareholders.
(ab) "Restricted Stock" means Stock issued by the Company
which is subject to the restrictions imposed in
Section 4.5 of this Plan.
(ac) "Restricted Stock Agreement" means an agreement
between the Company and a Director to evidence the
terms and conditions of the issuance of Restricted
Stock hereunder.
(ad) "Restricted Stockholder" means a Director to whom
any Restricted Stock is issued hereunder, and any
transferee of such Stock received pursuant to a
Transfer required by law.
(ae) "Retirement" means Separation from Service, as a<PAGE>
Director on a board or Designated Committee after
attaining age 60.
(af) "Separation from Service" means the cessation of
service as a Director for any reason. If a Director
serves on more than one board or Designated
Committee of the Company or Participating Companies,
a Separation from Service shall not be deemed to
have occurred until the cessation of service as a
Director on all such boards or Designated
Committees.
(ag) "Stock" means the Company's common stock.
(ah) "Stock Option" means a right granted pursuant to
this Plan entitling the Optionee to acquire one
share of Stock issued by the Company.
(ai) "Stock Option Agreement" means an agreement between
the Company and a Director to evidence the terms and
conditions of the issuance of Stock Options
hereunder.
(aj) "Transfer," with respect to Option Stock or
Restricted Stock, includes, without limitation, a
voluntary or involuntary sale, assignment, transfer,
conveyance, pledge, hypothecation, encumbrance,
disposal, loan, gift, attachment or levy of such
Stock, including without limitation an assignment
for the benefit of creditors of the Optionee or the
Restricted Stockholder, a transfer by operation of
law, such as a transfer by will or under the laws of
descent and distribution, an execution of judgment
against the Option Stock or Restricted Stock or the
acquisition of record or beneficial ownership
thereof by a lender or creditor, a transfer pursuant
to any decree of divorce, dissolution or separate
maintenance, any property settlement, any separation
agreement or any other agreement with a spouse
(except for estate planning purposes) under which a
part or all of the shares of Option Stock or
Restricted Stock are transferred or awarded to the
spouse of the Optionee or Restricted Stockholder or
are required to be sold, or a transfer resulting
from the filing by the Optionee or Restricted
Stockholder of a petition for relief, or the filing
of an involuntary petition against such Optionee or
Restricted Stockholder, under the bankruptcy laws of
the United States or of any other nation.
(ak) "Valuation Date" means June 30th, September 30th,
December 31st, March 31st of each Plan Year and such
other dates as are designated by the Board or
Committee to value the Phantom Stock Accounts of<PAGE>
Deferring Directors under this Plan.
(al) "Voting Stock" means those shares of the Company
entitled to vote generally in the election of
directors.
SECTION III - PLAN FEATURES
3.1 Designated Equity Compensation. At least 45 days prior
to the commencement of each Plan Year, the Committee may
establish the Designated Equity Compensation for all
Director's Fees and the forms of Equity Compensation
which may be elected by Directors for payment of such
Designated Equity Compensation. In no event shall the
Designated Equity Compensation for the Board be less than
50% of Board retainer fees. The Designated Equity
Compensation determinations and forms of available Equity
Compensation approved by the Committee for previous years
remain in effect unless changed in accordance with this
Section 3.1. Pursuant to Section 4.1, Directors will
elect the desired form or forms of available Equity
Compensation payable. If the Board does not establish
Designated Equity Compensation for a type of Director's
Fees, the Designated Equity Compensation for such fees
will be zero, except in the case of Board retainer fees
where the Designated Equity Compensation will be 50% of
such fees.
3.2 Optional Equity Compensation. With respect to the
Optional Equity Compensation, unless the Committee
determines otherwise at least 45 days prior to the
commencement of each Plan Year, Directors may elect to
receive Stock, Phantom Stock or Stock Options instead of
cash, pursuant to Section 5.2. The limitations on the
forms of available Optional Equity Compensation approved
by the Committee for previous years remain in effect
unless changed in accordance with Section 3.2.
3.3 Shares Reserved Under the Plan. Subject to Sections 13.2
and 13.4 of this Plan, the aggregate number of shares of
Stock, including Option Stock and Restricted Stock, that
may be issued and outstanding pursuant to the granting of
Stock, the exercise of Stock Options and the granting of
Restricted Stock under this Plan (the "Stock Pool") will
not exceed 100,000 shares. Also subject to Sections 13.2
and 13.4, the aggregate number of shares of Stock,
including Option Stock and Restricted Stock that may be
issued under this Plan to any individual will not exceed
10,000 shares. Shares of Restricted Stock that are
forfeited, as described in subsection 6.1(c) and shares
of Option Stock withheld as payment of an Option Price
and/or tax withholding liability as described in
subsection 7.1(d) may be added back into the Stock Pool
and reissued. Shares of Option Stock that would have<PAGE>
been issuable pursuant to Stock Options, but that are no
longer issuable because all or part of those Stock
Options have terminated or expired may also be added back
into the Stock Pool to be available for issuance. The
Company may purchase shares on the open market or issue
authorized shares but unissued shares to satisfy its
obligations under the Plan.
SECTION IV - DESIGNATED EQUITY COMPENSATION
4.1 Timing of Designated Elections. If an election is
required for an upcoming Plan Year, at least 30 days
prior to the first day of such Plan Year, a Director
shall make a written election as to the form or forms of
available Equity Compensation desired for payment and/or
deferral of the Designated Equity Compensation (the
"Designated Election"). If a Director is elected or
appointed after the first payment of Director's Fees in a
Plan Year, the Director's Designated Election must be
made prior to the effective date of such election or
appointment.
4.2 Method of Designated Election. Except as the Committee
may otherwise provide, Directors may choose more than one
form of available Equity Compensation for payment and/or
deferral of the Designated Equity Compensation. As long
as a Director's Designated Election is consistent with
the available forms of Equity Compensation, unless the
Director notifies the Committee of a change, the
Director's Designated Election shall remain in effect
until Separation from Service. If a Director's
Designated Election is not consistent with the available
forms of Equity Compensation, the Director must make a
new Designated Election in accordance with Section 4.1.
If a Director fails to make a necessary Designated
Election with respect to all or a portion of the
Director's Designated Equity Compensation, payment of
such amount will be made in Stock pursuant to Section
4.4, unless Stock is not an available form of Designated
Equity Compensation in the Plan Year, in which case the
Committee shall determine the form of payment. If a
Director serves on more than one board or Designated
Committee of the Company or Participating Companies, a
separate election shall be required for the Director's
Fees for each such board or Designated Committee.
4.3 Change in Designated Election. Any change in a
Director's Designated Election will not take effect until
a subsequent Entry Date. All changes must be made in
accordance with Section 4.1. In the event of a change in
the Director's Fees, the amount of Stock, Restricted
Stock, Phantom Stock or Stock Options to be received will
be adjusted proportionately as soon as practicable with
respect to such changed Director's Fees, without action<PAGE>
by the Director.
4.4 Stock. If a Director receives or elects to receive Stock
in payment of the Designated Equity Compensation, the
Company shall determine the number of shares of Stock
with a Fair Market Value equal to the Designated Equity
Compensation of the Director's Fees as of the date on
which any Director's Fees become payable. For a
participant in the First of America Shareholders
Investment Plan, whole and fractional shares will be
added to the Director's account under that plan as soon
as practicable after such date. For any other Director,
shares in an amount rounded to the nearest whole share
will be delivered to the Director or an account
designated by the Director.
4.5 Restricted Stock. If a Director receives or elects to
receive Restricted Stock in payment of the Designated
Equity Compensation, as of any date on which Director's
Fees become payable to that Director, the Company shall
issue to the Director and hold in escrow pursuant to
subsection 6.1(d)(iii) a number of shares of Restricted
Stock equal to the number of shares of Stock, rounded to
the nearest whole share, which would be issuable to the
Director under Section 4.4.
4.6 Phantom Stock. If a Director receives or elects to
receive Phantom Stock for deferral of the Designated
Equity Compensation, the Director's Phantom Stock Account
shall be credited with a number of whole and fractional
units of Phantom Stock equal to the number of whole and
fractional shares of Stock which would be issuable under
Section 4.4, as of any date on which Director's Fees
become payable to that Director. In addition, as actual
dividends are paid on Stock, Phantom Stock Accounts will
be credited with a number of whole and fractional units
of Phantom Stock as if the same dividends were paid on
Phantom Stock and immediately reinvested in Phantom
Stock. Dividend credits will be made based on the number
of units of Phantom Stock credited to a Phantom Stock
Account as of the dividend record date for Stock.
4.7 Stock Options. If a Director receives or elects to
receive Stock Options in payment of the Designated Equity
Compensation, as of any date on which Director's Fees
become payable to that Director, the Director shall
receive a number of Stock Options based on the following
formula:
[Number of whole and fractional shares of Stock
which would be issuable under Section 4.4]
multiplied by [Multiplier]
The "Multiplier" referred to above shall be<PAGE>
established by the Committee annually 45 days prior to
the beginning of each Plan Year, but may be changed as
frequently as the Committee deems appropriate. The value
of the Multiplier shall be determined based on a
reasonable option valuation method such that the value of
the Stock Options granted reasonably approximates the
equivalent value of the Director's Fees payable in Stock
Options, but shall in no event exceed ten (10).
SECTION V - OPTIONAL EQUITY COMPENSATION
5.1 Participation. Unless a Director has made an election in
accordance with Section 5.2 to receive all or any portion
of Optional Equity Compensation in Stock, Phantom Stock
and/or Stock Options (the "Optional Election"), on any
date on which Director's Fees become payable to a
Director, he or she will be paid in cash an amount equal
to the Optional Equity Compensation. Any Optional
Election becomes effective as of the first Entry Date
coincident with or following the Director's appointment
or election as a Director. If the Director declines to
make an Optional Election at the initial Entry Date, the
Director may make an Optional Election effective upon any
subsequent Entry Date.
5.2 Timing of Optional Elections. At least 30 days prior to
the first day of a Plan Year, unless the Committee
determines otherwise pursuant to Section 3.2, a Director
may make an Optional Election by giving written notice
authorizing payment of Optional Equity Compensation in
Stock, Stock Options and/or deferral of Optional Equity
Compensation through receipt of Phantom Stock. If a
Director is elected or appointed after the first payment
of Director's Fees in a Plan Year, the Director's
Optional Election must be made prior to the effective
date of such election or appointment.
5.3 Method of Optional Election. Except as the Committee may
otherwise provide, Directors may choose more than one
form of Equity Compensation for payment and/or deferral
of the Optional Equity Compensation. Unless the Director
notifies the Committee of a change, the Director's Option
Elections shall remain in effect until Separation from
Service. If a Director serves on more than one board or
Designated Committee of the Company or Participating
Companies, a separate Optional Election shall be required
for the Director's Fees for each such board or Designated
Committee.
5.4 Change in Optional Election. Any change in a Director's
Optional Election will not take effect until a subsequent
Entry Date. All changes must be made in accordance with
Section 5.3. In the event of a change in the Director's
Fees, the amount of Stock, Stock Options or Phantom Stock<PAGE>
to be received will be adjusted proportionately as soon
as practicable with respect to such changed Director's
Fees, without action by the Director.
5.5 Stock. If a Director elects to receive Stock in payment
of the Optional Equity Compensation of certain Director's
Fees, the Company shall determine the number of shares of
Stock with a Fair Market Value equal to the Optional
Equity Compensation of such Director's Fees as of the
date on which any Director's Fees become payable. For a
participant in the First of America Shareholders
Investment Plan, whole and fractional shares will be
added to the Director's account under that plan as soon
as practicable after such date. For any other Director,
shares in an amount rounded to the nearest whole share
will be delivered to the Director or an account
designated by the Director.
5.6 Phantom Stock. If a Director elects to receive Phantom
Stock for deferral of the Optional Equity Compensation,
the Director's Phantom Stock Account shall be credited
with a number of whole and fractional shares of Phantom
Stock equal to the number of whole and fractional units
of Stock which would be issuable under Section 5.5, as of
any date on which Director's Fees become payable to that
Director. In addition, as actual dividends are paid on
Stock, Phantom Stock Accounts will be credited with a
number of whole and fractional units of Phantom Stock as
if the same dividends were paid on Phantom Stock and
immediately reinvested in Phantom Stock. Dividend
credits will be made based on the number of units of
Phantom Stock credited to a Phantom Stock Account as of
the dividend record date for Stock.
5.7 Stock Options. If a Director elects to receive Stock
Options in payment of the Optional Equity Compensation,
as of any date on which Director's Fees become payable to
that Director, the Director shall receive a number of
Stock Options based on the following formula:
[Number of whole and fractional shares of Stock
which would be issuable under Section 5.5]
multiplied by [Multiplier]
The "Multiplier" referred to above shall be
established by the Committee annually 45 days prior to
the beginning of each Plan Year, but may be changed as
frequently as the Committee deems appropriate. The value
of the Multiplier shall be determined based on a
reasonable option valuation method such that the value of
the Stock Options granted reasonably approximates the
value of the Director's Fees payable in Stock Options,
but shall in no event exceed ten (10).<PAGE>
SECTION VI - RESTRICTED STOCK
6.1 Terms of Restricted Stock Agreements. All issuances of
Restricted Stock made in a single Plan Year pursuant to
this Plan will be evidenced by one Restricted Stock
Agreement between the Company and the Director to whom
such Restricted Stock is issued, in form and substance
satisfactory to the Committee in its sole discretion,
consistent with this Plan. The terms of a Restricted
Stock Agreement shall apply equally to all issuances of
Restricted Stock made in the Plan Year to which the
Restricted Stock Agreement relates except that Restricted
Stock Vesting Periods will differ based on timing of each
issuance. Without limiting the foregoing, the following
terms and conditions will be considered part of each
Restricted Stock Agreement (unless otherwise stated
therein):
(a) Covenants of Restricted Stockholder. Nothing
contained in this Plan, any Restricted Stock
Agreement or in any other agreement executed in
connection with the issuance of Restricted Stock
under this Plan will confer upon any Restricted
Stockholder any right with respect to the
continuation of the Director's status as a Director
of the Company or a Participating Company or member
of a Designated Committee.
(b) Restricted Stock Vesting Periods. Except as
otherwise provided herein, the period or periods of
time during which shares of Restricted Stock will be
subject to the restrictions imposed under this Plan
or any other restrictions (the "Restricted Stock
Vesting Period") shall be specified in the
Restricted Stock Agreement. Restricted Stock
Vesting Periods shall be determined by the Committee
in its discretion, but shall not exceed ten years
for full vesting. All shares of Restricted Stock
shall become immediately and fully vested upon a
Change in Control of the Company.
(c) Forfeiture of Restricted Stock. To the extent that
the applicable Restricted Stock Vesting Period has
not elapsed, each share of Restricted Stock, subject
to the discretion of the Committee, shall be
forfeited immediately as of the date the Restricted
Stockholder ceases to be a Director for any reason.
(d) Restrictions on Transfer of Restricted Stock
(i) General Rule on Transfers of Restricted Stock.
Restricted Stock may be transferred only if
required by law. All Transfers of Restricted
Stock not meeting the conditions set forth in<PAGE>
this subsection are expressly prohibited.
(ii) Effect of Prohibited Transfer. Any prohibited
Transfer of Restricted Stock is void and of no
effect. Should such a Transfer purport to
occur, the Company may refuse to carry out the
Transfer on its books, attempt to set aside the
Transfer, enforce any undertaking or right
under this subsection 6.1(d), or exercise any
other legal or equitable remedy.
(iii) Escrow. All shares of Restricted Stock issued
pursuant to this Plan will be held in escrow by
the Company so long as the shares of Restricted
Stock are subject to any restrictions under
this Plan or under a Restricted Stock
Agreement. Each Restricted Stockholder
acknowledges that the Secretary of the Company
(or the Director's designee) is appointed as
the escrow holder with the authority to take
all such actions and to effectuate all such
Transfers and/or releases as are in accordance
with the terms of this Plan as a material
inducement to the issuance of shares of
Restricted Stock under this Plan, that the
appointment is coupled with an interest, and
that it accordingly will be irrevocable. The
escrow holder will not be liable to any party
to a Restricted Stock Agreement (or to any
other party) for any actions or omissions
unless the escrow holder is grossly negligent
relative thereto. The escrow holder may rely
upon any letter, notice or other document
executed by any signature purported to be
genuine.
(e) Compliance with Law. Notwithstanding any other
provision of this Plan, Restricted Stock may be
issued pursuant to this Plan only after there has
been compliance with all applicable federal and
state tax and securities laws.
(f) Stock Certificates. Certificates representing the
Restricted Stock issued pursuant to this Plan will
bear all legends required by law and necessary to
effectuate this Plan's provisions. The Company may
place a "stop transfer" order against shares of the
Restricted Stock until all restrictions and
conditions set forth in this Plan and in the legends
referred to in this subsection 6.1(f) have been
complied with.
(g) Market Standoff. To the extent requested by the
Company and any underwriter of securities of the<PAGE>
Company in connection with a firm commitment
underwriting, no Restricted Stockholder of any
shares of Restricted Stock will sell or otherwise
Transfer any such shares not included in such
underwriting, or not previously registered pursuant
to a registration statement filed under the 1933
Act, during the 120-day period following the
effective date of the registration statement filed
with the Securities and Exchange Commission in
connection with such offering.
(h) Other Provisions. The Restricted Stock Agreement
may contain such other terms, provisions and
conditions, including such special forfeiture
conditions, rights of repurchase, rights of first
refusal and other restrictions on Transfer of
Restricted Stock issued hereunder, not inconsistent
with this Plan, as may be determined by the
Committee in its sole discretion.
SECTION VII - STOCK OPTIONS
7.1 Terms of Stock Option Agreements. All Stock Options
granted in a single Plan Year pursuant to this Plan will
be evidenced by one Stock Option Agreement between the
Company and the Director to whom such Stock Option is
granted, in form and substance satisfactory to the
Committee in its sole discretion, consistent with this
Plan. The terms of a Stock Option Agreement shall apply
equally to all grants of Stock Options made in the Plan
Year to which the Stock Option Agreement relates, except
that Option Prices will differ based on the timing of
each grant. Without limiting the foregoing, the
following terms and conditions will be considered a part
of each Stock Option Agreement (unless otherwise stated
therein):
(a) Covenants of Optionee. Nothing contained in this
Plan, any Stock Option Agreement or in any other
agreement executed in connection with the granting
of a Stock Option under this Plan will confer upon
any Optionee any right with respect to the
continuation of the Director's status as a Director
of the Company or a Participating Company or member
of a Designated Committee.
(b) Stock Option Vesting. Except as otherwise provided
herein, the Committee in its discretion may specify
a period of time within which each Stock Option will
vest and first become exercisable. All Stock
Options granted without specific vesting provisions,
or as Optional Equity Compensation, shall be fully
and immediately vested and exercisable as of the
date of their grant.<PAGE>
(c) Exercise of the Stock Option
(i) Mechanics and Notice. Stock Options may be
exercised to the extent exercisable by giving
written notice to the Company specifying the
number of Stock Options to be exercised, the
date of the grant of the Stock Option or Stock
Options to be exercised, the Option Price, the
desired effective date of the exercise, the
number of full shares of Option Stock to be
retained by the Optionee after exercise, and
the method of payment. Once written notice
complying with the requirements of this
subsection is received, the Committee or its
designee shall promptly notify the Optionee of
the amount of the Option Price and withholding
taxes due. Payment of any amounts owing shall
be due immediately upon receipt of such notice.
(ii) Withholding Taxes. As a condition to the
issuance of shares of Option Stock upon
exercise of a Stock Option granted under this
Plan, the Optionee will pay to the Company in
cash, through share netting as described in
subsection 6.1(d), or in such other form as the
Committee may determine in its discretion, the
amount of the Company's tax withholding
liability, if any, associated with such
exercise. The Committee may prescribe a
specific method of payment of such withholding,
in its discretion. For purposes of this
subsection 6.1(c)(ii), "tax withholding
liability" will mean all federal and state
income taxes, social security tax, medicare tax
and any other taxes applicable to the income
arising from the transaction required by
applicable law to be withheld by the Company.
(iii) Payment of Option Price. Each Stock Option
Agreement will specify the Option Price, with
respect to the exercise of Stock Options
granted thereunder, which may be stated in
terms of a fixed dollar amount, a percentage
(not less than 100%) of Fair Market Value at
the time of the grant, or such other method as
determined by the Committee in its discretion.
In no event will the Option Price for a Stock
Option granted hereunder be less than the Fair
Market Value of the Option Stock at the time
such Stock Option is granted. The Option Price
will be payable to the Company in United States
dollars in cash or by check or, such other
legal consideration as may be approved by the
Committee, in its discretion.<PAGE>
(d) Share Netting. The Optionee may pay all or a
portion of the Option Price and/or the tax
withholding liability, if applicable, with respect
to the exercise of a Stock Option by withholding
shares of Option Stock ("share netting"), provided
that the Committee determines that the Fair Market
Value of such netted Option Stock is equal to the
corresponding portion of such Option Price and/or
tax withholding liability, as the case may be, to be
paid for therewith.
(e) Termination of the Stock Option. Except as
otherwise provided herein, each Stock Option
Agreement will specify the period of time, not to
exceed ten years, to be determined by the Committee
in its discretion, during which the Stock Option
granted therein will be exercisable (the "Option
Period"). To the extent not previously exercised,
each Stock Option will terminate upon the expiration
of the Option Period specified in the Stock Option
Agreement; provided, however, that, subject to the
discretion of the Committee, each Stock Option will
terminate, if earlier: (a) six months after the
date of the Optionee's Separation from Service for
any reason, other than death, Disability, or
Retirement; or (b) five years after the date of the
Optionee's Separation from Service by reason of such
person's death, Disability or Retirement.
(i) Limited Stock Appreciation Rights.
Notwithstanding any other provision of this
Agreement, and except as provided in
subsection 6.1(e)(i)b, below, each Stock Option
will be cancelled on the effective date of a
Change in Control of the Company or a
liquidation or dissolution of the Company, and
in lieu of further rights under the Stock
Options, Optionees will receive from the
Company in cash the difference between the Fair
Market Value and the Option Price, multiplied
by the number of shares to which each Stock
Option relates.
a. For purposes of subsection 6.1(e)(i) only,
the Fair Market Value shall be the average
between the highest and lowest quoted
price per share for sales made and
reported on the New York Stock Exchange,
or on a sales or quotation system
maintained by the National Association of
Securities Dealers, or such other national
stock exchange on which such Stock of the
Company may then be listed and which
constitutes the principal market for such<PAGE>
Stock on the latest trading date for which
sales or quotations are reported prior to
such effective date or, if greater, the
price or value received by shareholders
for a share of Stock with respect to the
largest number of shares the ownership of
which is transferred in conjunction with
such Change in Control, liquidation or
dissolution of the Company.
b. The Board shall receive an opinion, dated
as of the Change in Control, from the
independent auditors of the surviving
company, that the limited stock
appreciation rights granted in
subsection 6.1(e)(i) do not prevent the
Change in Control from being accounted for
as a pooling of interests. If the Board
does not receive the required opinion, it
may declare subsection 6.1(e)(i) to be
nullified. In such case, all previously
vested Stock Options shall continue to be
fully exercisable, and all unvested Stock
Options shall become immediately and fully
exercisable, upon the Change in Control
pursuant to the terms of this Plan.
(f) Modification of Stock Options. Subject to the terms
and conditions and within the limitations of this
Plan, the Committee may modify outstanding Stock
Options granted under this Plan, but in no event may
the Committee change the Option Price as stated in
the Stock Option Agreement, if expressed as a fixed
dollar amount, or the manner in which the Option
Price is to be calculated as stated in the Stock
Option Agreement, if expressed as a percentage of
Fair Market Value at the time of the grant, a market
or peer group index or otherwise. Notwithstanding
the foregoing, no modification of any Stock Option
will, without the consent of the holder of the Stock
Option, alter or impair any rights or obligations
under any Stock Option previously granted under this
Plan.
(g) Transferability of Stock Options. Stock Options
will be subject to Transfer by the Optionee only by
will or the laws of descent and distribution or, at
the discretion of the Committee, by direct gift to a
family member, or gift to a family trust or family
partnership. The terms "family member," "family
trust" and "family partnership" shall have meanings
consistent with Section 704 of the Code. Stock
Options will be exercisable only by the Optionee
during the Director's lifetime, or, by any of the<PAGE>
recipients of the Transfers specifically permitted
by this subsection 6.1(g).
(h) Compliance with Law. Notwithstanding any other
provision of this Plan, Stock Options may be granted
pursuant to this Plan, and Option Stock may be
issued pursuant to the exercise thereof by an
Optionee, only after there has been compliance with
all applicable federal and state tax and securities
laws. The right to exercise a Stock Option will be
further subject to the requirement that if at any
time the Committee or legal counsel of the Company
determines, in its discretion, that the listing,
registration or qualification of the shares of
Option Stock called for by any securities exchange
or under any state or federal law, or the consent or
approval of any governmental regulatory authority,
is necessary or desirable as a condition of or in
connection with the granting of such Stock Option or
the purchase of shares of Option Stock, the Stock
Option may not be exercised, in whole or in part,
unless and until such listing, registration,
qualification, consent or approval is effected or
obtained free of any conditions not acceptable to
the Committee, in its discretion.
(i) Stock Certificates. Certificates representing the
Option Stock issued pursuant to the exercise of
Stock Options will bear all legends required by law
and necessary to effectuate this Plan's provisions.
The Company may place a "stop transfer" order
against shares of the Option Stock until all
restrictions and conditions set forth in this Plan
and in the legends referred to in this
subsection 6.1(i) have been complied with.
(j) Other Provisions. The Stock Option Agreement may
contain such other terms, provisions and conditions,
including such special forfeiture conditions, rights
of repurchase, rights of first refusal and other
restrictions on Transfer of Option Stock issued upon
exercise of any Stock Options granted hereunder, not
inconsistent with this Plan, as may be determined by
the Committee in its sole discretion.
SECTION VIII - PHANTOM STOCK (DEFERRED COMPENSATION)
8.1 Phantom Stock Deferrals. Pursuant to Section 4.6, each
Director may defer all or a part of the Designated Equity
Compensation of one or more types of Director's Fees by
electing to receive Phantom Stock instead of such fees,
if Phantom Stock is an available form of Equity
Compensation for the Plan Year. Pursuant to Section 5.6,
each Director may defer all or a part of the Optional<PAGE>
Equity Compensation of one or more types of Director's
Fees by electing to receive Phantom Stock instead of cash
payment of such fees.
8.2 Effect of Deferral. To the extent the Company is
required to withhold taxes or any other amounts from
Phantom Stock Account credits or any other deferrals
pursuant to any federal, state or local law, the
Committee may provide for such withholding in any manner
it deems appropriate.
8.3 Pre-Existing Director Deferred Compensation Plans or
Agreements. For all Phantom Stock Accounts established
prior to February 19, 1997, the effective date of this
amended and restated Plan, in order to facilitate record
keeping which will be compatible with the operation of
the Plan as amended and restated, all such Phantom Stock
Accounts will be valued in terms of units of Phantom
Stock. With Committee approval, a Deferring Director may
elect to consolidate any other accumulated deferrals or
Phantom Stock he or she may have under any other director
deferred compensation plan sponsored by a Participating
Company with the Director's Phantom Stock Accounts in
this Plan. Such transferred amounts will be governed by
the provisions of this Plan for all purposes. No cash
payments, after-tax deferral accounts or qualified plan
rollovers or transfers will be accepted under this Plan.
8.4 Non-Alienation. No Phantom Stock Account under this Plan
shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, pledge,
encumber or charge the same shall be void. No Phantom
Stock Account under this Plan shall in any manner be
liable for or subject to the debts, contracts,
liabilities or torts of the person entitled to such
Account except such claims as may be made by the Company
or any Participating Company.
8.5 Unsecured Creditors. All amounts held in Phantom Stock
Accounts under this Plan will be unsecured liabilities of
the Company. Nothing contained herein, and no action
taken pursuant to the provisions of this Plan shall
create or be construed to create a trust of any kind, or
a fiduciary relationship between the Company,
Participating Companies, Directors or any other person.
To the extent that a Director or any other person
acquires a right to receive payments under the terms of
this Plan, such rights shall be no greater than the
rights of an unsecured general creditor of the Company or
Participating Companies. All payments made under the
terms of this Plan shall be made from the general funds
of the Company, or Participating Companies, and no
segregation of assets shall be made for the payment of<PAGE>
any Phantom Stock Account distributions under the terms
of this Plan to any Deferring Director or beneficiary
thereof. Notwithstanding the foregoing, the Company may
establish an irrevocable Rabbi Trust to provide funding
of Phantom Stock Accounts payable under the Plan. At all
times, the assets of such trust shall remain subject to
the claims of the Company's creditors and Deferring
Directors' claims to such assets shall be no greater than
those of an unsecured, general creditor of the Company.
8.6 Tax Treatment of Phantom Stock. Any Phantom Stock or
other compensation deferred under this Plan shall not be
deemed compensation and shall not be included in a
Director's taxable income nor deductible by the Company
under federal or state law until actually received by the
Deferring Director. In order to ensure that Phantom
Stock or other deferred compensation payable under this
Plan is not deemed received until it is distributed
according to Section X, the Committee may require
Deferring Directors to make Designated Elections and
Optional Elections earlier than 30 days prior to the
beginning of a Plan Year. Any other rights, powers,
privileges or duties in connection with the establishment
and administration of Phantom Stock Accounts under this
Plan shall not be effective if and to the extent that the
same, if effective, would result in the compensation
deferred under this Plan being subject to taxation before
actual receipt by the Deferring Director. All provisions
of this Plan relating to the Phantom Stock Accounts shall
be subordinate to this requirement and any
interpretations or constructions to be given to this Plan
shall be made in such a manner as to carry out this
intention.
SECTION IX - MAINTENANCE AND VALUATION
OF PHANTOM STOCK ACCOUNTS
9.1 Maintenance of Separate Phantom Stock Accounts. For each
Deferring Director, the Company shall establish a
separate Phantom Stock Account according to generally
accepted accounting principles, which shall reflect all
deferrals and Phantom Stock accumulations under this Plan
and adjustments to the value of Deferring Director's
Phantom Stock Accounts in accordance with Section 9.2.
Each Deferring Director will be furnished a statement of
the Director's Phantom Stock Accounts not less often than
annually and following the complete distribution of such
Phantom Stock Accounts to the Deferring Director.
9.2 Valuation of Phantom Stock Accounts. Phantom Stock
Accounts will be credited, as described in Sections 4.6
and 5.6, with units of Phantom Stock and dividend credits
on such Phantom Stock. No specific assets will be
invested under this Plan nor will shares be held on<PAGE>
behalf of a Deferring Director. The value of each of a
Deferring Director's Phantom Stock Accounts will be
determined as if assets were invested in shares of
Company Stock.
The Committee shall have the authority to establish
such consistent and nondiscriminatory accounting
procedures as it deems appropriate to credit Phantom
Stock and dividends and transfers from other director
deferred compensation plans to a Deferring Director's
Phantom Stock Accounts, and to specify the date as of
which the value of Company Stock shall be determined for
purposes of valuing a Deferring Director's Phantom Stock
Accounts. Phantom Stock Accounts shall be valued as of
each Valuation Date.
Upon a partial or total distribution of the
Deferring Director's Phantom Stock Accounts, the
Committee shall determine the value of the Deferring
Director's Phantom Stock Accounts by adding (i) the value
of such Phantom Stock Accounts as of the Valuation Date
preceding the date of distribution, and (ii) any
additional Phantom Stock or dividend credits to the
Phantom Stock Account since the Valuation Date preceding
the date of distribution.
SECTION X - DISTRIBUTION OF PHANTOM STOCK ACCOUNT BALANCES
10.1 Forms of Distribution. All distributions of Phantom
Stock Account balances will be paid in cash, Stock, or
some combination of both, in accordance with an election
made by the Deferring Director prior to receiving a
distribution. If no election is made, distributions will
be made in cash. In the event that fractional shares of
Stock become payable to a Deferring Director, in lieu of
payment in fractional shares, the Deferring Director will
receive the value of such shares in cash.
10.2 Distribution Upon Separation from Service.
(a) General Rule. In the event of a Deferring
Director's Separation from Service, the Deferring
Director shall receive a single distribution of
Phantom Stock Account balances as of the date of
Separation from Service as soon as practicable
following the Director's Separation from Service,
unless the Deferring Director has previously elected
an alternative method of distribution under
Section 10.2(b).
(b) Timing of Alternative Distribution Method Election.
An election of an alternative method of distribution
of Phantom Stock Account balances described in
Sections 10.2(c) or 10.2(d) must be made by the<PAGE>
Deferring Director on a form supplied by the Company
and delivered to the Committee no later than the
earlier of:
(i) three months prior to the Director's Separation
from Service; or
(ii) the last day of the calendar year preceding the
calendar year in which the Director's
Separation from Service occurs.
(c) Single Deferred Distribution. A Deferring Director
may elect to receive a single deferred distribution
of the Director's Phantom Stock Account balances on
the 5th or 10th anniversary of the Deferring
Director's Separation from Service. The
distribution will be made by the Company as soon as
practicable following the anniversary date elected
by the Deferring Director. If a Deferring Director
makes an election under this Section 10.2(c), and
dies prior to receiving all amounts payable under
the Plan, the remaining amounts payable shall be
distributed to the Deferring Director's Beneficiary
in accordance with the Deferring Director's
election.
(d) 5 or 10 Year Installments. A Deferring Director may
elect to receive a deferred distribution of Phantom
Stock Account balances in 5 or 10 annual
installments commencing as soon as practicable
following the first anniversary of the Deferring
Director's Separation from Service. The amount of
each annual distribution shall equal the total value
of the Deferring Director's Phantom Stock Account in
the Plan as of the Valuation Date immediately
preceding the distribution divided by the number of
payments remaining to be made to the Deferring
Director. If a Deferring Director makes an election
under this Section 10.2(d), and dies prior to
receiving all amounts payable under the Plan, the
remaining amounts payable shall be distributed to
the Deferring Director's Beneficiary in accordance
with the Deferring Director's election.
10.3 Cessation of Deferring Director. A Deferring Director
shall continue to participate in the Plan until such time
as the full value of the Director's Phantom Stock
Accounts has been distributed.
10.4 Effect of a Change in Control on Phantom Stock Accounts.
Subject to prior approval by the Committee of an
alternative course of action, including immediate
distribution of all Phantom Stock Account balances, in
the event of a Change in Control of the Company, the<PAGE>
Committee shall make appropriate arrangements with and
obtain such binding commitments from the Company's
successor as are necessary to provide for the
distribution of all Phantom Stock Accounts in accordance
with the terms of this Plan.
SECTION XI - BENEFICIARIES
11.1 Beneficiary Designation. A Director may designate, by
written notice delivered to the Committee or its designee
prior to the Director's death, a Beneficiary or
Beneficiaries to receive, in the event of the Director's
death, all or part of the amount of the Director's
Phantom Stock Accounts, any of the Director's Stock
Options granted pursuant to the Plan or any of the
Director's unvested shares of Restricted Stock granted
pursuant to the Plan. A designation of Beneficiary may
be replaced by a new designation or may be revoked by the
Director at any time by written notice delivered prior to
the Director's death.
11.2 Absence of Beneficiary or Uncertain Beneficiary. If no
beneficiary designation is in effect at the time of a
Director's death, or if no designated beneficiary
survives the Director, or such designation conflicts with
law, payment of the amount, if any, payable under the
Plan upon the Director's death shall be made to the
Director's estate.
If the Committee is in doubt as to the right of any
person to receive such amount, the Committee may retain
such amount without liability for any interest thereon,
until the rights to such amount are determined or the
Committee may pay such amount into any court of
appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Company, the
Participating Companies, the Plan and the Board. Every
person receiving or claiming payment under this Plan
shall be presumed to be mentally competent and of full
legal age until the date on which the Committee receives
a written notice, that such person is incompetent or a
minor for whom a guardian or other person legally vested
with the care of the Director's person or estate has been
appointed. However, if the Committee shall find that any
person to whom an amount is payable is unable to care for
the Director's affairs because of incompetency or the
person is a minor, any payment due (unless a prior claim
shall have been made by a duly appointed legal
representative) may be paid to the spouse, child, parent,
brother, or sister of such person, or to any person or
institution deemed by the Committee to have incurred
expense for such person otherwise entitled to payment.
To the extent permitted by law, any such payment so made
shall be a complete discharge of liability under this<PAGE>
Plan.
In the event a guardian of the estate of any person
receiving or claiming payment under this Plan shall be
appointed by a court of competent jurisdiction, payments
may be made to such guardian provided that proper proof
of appointment and continuing qualification is furnished
to the Company. To the extent permitted by law, any such
payment so made shall be a complete discharge of any
liability under the Plan.
SECTION XII - ADMINISTRATION
12.1 Administration of Plan. This Plan will be administered
by the Committee, which may delegate such powers or
duties to employees of the Company or a Participating
Company, as it deems appropriate, provided that such
delegation is consistent with maintaining an exemption
from the short-swing profit liability provisions of
Section 16 of the 1934 Act.
12.2 Power of Plan Administrator. Except as otherwise
expressly provided in this Plan, the Committee shall have
full power and authority, within the limits provided by
this Plan:
(a) to interpret this Plan, resolve ambiguities that
arise under the Plan and make equitable adjustment
for any mistakes or errors made in the
administration of this Plan;
(b) to determine all questions arising in the
administration of this Plan, including the power to
determine the rights of Directors and their
Beneficiaries;
(c) to adopt such rules and regulations as it may deem
reasonably necessary for the proper and efficient
administration of this Plan consistent with its
purposes;
(d) to enforce this Plan in accordance with its terms
and any rules and regulations adopted by the
Committee;
(e) to determine the period or periods of time during
which Stock Options may be exercised or become
exercisable, the Option Price and the duration of
such Stock Options, and other matters to be
determined by the Committee in connection with
specific Stock Option grants and Stock Option
Agreements as specified under this Plan;
(f) to determine the period or periods of time during<PAGE>
which the Restricted Stock may vest, and other
matters to be determined by the Committee in
connection with specific issuances of Restricted
Stock and Restricted Stock Agreements as provided in
this Plan; and
(g) to do all other acts which in its judgment are
necessary or desirable for the proper and effective
administration of this Plan.
SECTION XIII - MISCELLANEOUS
13.1 Expenses. Expenses of administering the Plan, will be
borne by the Company and Participating Companies.
13.2 Amendments. The Board may amend the Plan at any time in
its sole discretion, provided that:
(a) Any such amendment will be effective at such date as
the Board may determine;
(b) No amendment shall reduce the value of a Deferring
Director's Phantom Stock Accounts as of the date the
Board adopts the amendment, but an amendment may
change the manner in which Plan distributions or
earnings or losses on Phantom Stock Accounts are
determined;
(c) No such action may, without the approval of the
shareholders of the Company, materially increase
(other than by reason of an adjustment pursuant to
Section 13.4 hereof) the aggregate number of shares
of Stock, Option Stock and Restricted Stock in the
Stock Pool that may be granted pursuant to this
Plan; and
(d) No action of the Board or Committee shall alter or
impair any Stock Option or Restricted Stock
previously granted or awarded under this Plan
without the consent of such affected Optionee or
Restricted Stockholder.
13.3 Plan Termination. The Board may terminate this Plan at
any time; however, no termination shall alter or impair
any Stock Option or Restricted Stock previously granted
or awarded under this Plan without the consent of such
affected Optionee or Restricted Shareholder, nor shall
any termination reduce the value of the Deferring
Director's Phantom Stock Accounts as of the date the
Board terminates the Plan.
13.4 Adjustments Upon Changes in Stock. In the event of any
change in the outstanding Stock of the Company as a
result of a stock split, reverse stock split, stock<PAGE>
dividend, recapitalization, combination or
reclassification, appropriate proportionate adjustments
will be made:
(a) in the aggregate number of shares of Stock, Option
Stock and Restricted Stock in the Stock Pool;
(b) in the Option Price and the number of shares of
Option Stock that may be purchased pursuant to an
outstanding Stock Option granted hereunder; and
(c) in the number of units of Phantom Stock held in
Phantom Stock Accounts maintained under this Plan;
and
(d) with respect to other rights and matters determined
on a per share basis under this Plan or any
associated Stock Option Agreement or Restricted
Stock Agreement.
(e) Any such adjustments will be made only by the
Committee, and when so made will be effective,
conclusive and binding for all purposes with respect
to this Plan and all Stock Options, Restricted Stock
and Phantom Stock then outstanding. No such
adjustments will be required by reason of the
issuance or sale by the Company for cash or other
consideration of additional shares of its Stock or
securities convertible into or exchangeable for
shares of its Stock.
13.5 Notices. Notices, reports and statements to be given,
made or delivered to a Director will be deemed duly
given, made or delivered, when addressed to the Director,
and delivered by first class mail, to such Director's
last known residence or business address. All notices
required to be given by a Director will be given on a
form provided for the purpose and will be deemed received
when delivered to the Committee, care of the Company's
Senior Vice President of Human Resources at 211 S. Rose,
Kalamazoo, MI, 49007.
13.6 Applicable Law. This Plan shall be governed by the law
of the State of Michigan, to the extent not preempted by
federal law.
13.7 Plan Binding upon Successors. This Plan shall be binding
upon and inure to the benefit of the Company, the
Participating Companies, Directors and their respective
successors, assigns, personal representatives, heirs,
legatees and beneficiaries.
Approved by the Board of Directors on February 21, 1996.<PAGE>
Amended and restated by the Board of Directors on February 19,
1997.
Approved by shareholders on April 16, 1997.<PAGE>
