<PAGE>
As filed with the Securities and Exchange Commission on October 6, 1997
Registration No. 333-24707
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_________________________________
POST-EFFECTIVE AMENDMENT NO. ONE
ON FORM S-8
TO FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________________
FIRSTFEDERAL FINANCIAL SERVICES CORP
(Exact name of registrant as specified in its charter)
Ohio 34-1622711
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
135 East Liberty Street, Wooster, Ohio 44691
(Address of principal executive offices) (Zip Code)
SUMMIT BANCORP
1989 STOCK INCENTIVE PLAN
(Full title of the plan)
Jeffrey M. Werthan, P.C.
Craig M. Scheer, Esq.
Silver, Freedman & Taff, L.L.P.
(a limited liability partnership including professional
corporations)
7th Floor - East Tower
1100 New York Avenue NW
Washington, DC 20005
(Name and address of agent for service)
(202) 414-6100
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered(1) per share offering price registration fee
- - ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$1.00 per share 54,114 shares $N/A(2) $N/A(2) $N/A(2)
(1) Pursuant to Rule 416 under the Securities Act of 1933, as
amended, this Registration Statement covers, in addition to the number of
shares set forth above, an indeterminate number of shares which, by reason of
certain events specified in the Plan, may become subject to the Plan.
(2) The Registrant paid $2,185 with the original filing on April 7, 1997 to
register 605,000 shares, including the 54,114 shares which may be issued
pursuant to the Summit Bancorp 1989 Stock Incentive Plan.
/TABLE
<PAGE>
<PAGE>
PURPOSE OF AMENDMENT
The purpose of this post-effective amendment is to register on Form S-8
shares of common stock, par value $1.00 per share (the "Common Stock"), of
FirstFederal Financial Services Corp (the "Company") previously registered on
Form S-4 (No. 333-24707) for issuance pursuant to options granted under the
1989 Stock Incentive Plan (the "Plan") of Summit Bancorp ("Summit"), pursuant
to the terms and conditions of the Agreement of Affiliation and Plan of Merger,
dated December 30, 1996, by and among the Company and Summit. The merger was
consummated on July 8, 1997.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part
I of Form S-8 will be sent or given to participants in the Plan as specified by
Rule 428(b)(1) promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act").
Such document(s) are not being filed with the Commission,
but constitute (along with the documents incorporated by reference into the
Registration Statement pursuant to Item 3 of Part II hereof) a prospectus that
meets the requirements of Section 10(a) of the Securities Act.<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Certain Documents by Reference.
------------------------------------------------
The following documents previously or concurrently filed by
FirstFederal Financial Services Corp (the "Company") with the Commission are
hereby incorporated by reference in this Registration Statement and the
Prospectus to which this Registration Statement relates (the "Prospectus"),
which Prospectus has been or will be delivered to the participants in the plan
covered by this Registration Statement:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (File No. 0-17894);
(b) all other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since the end of the fiscal year covered by the Annual
Report referred to in (a) above;
(c) the description of the Common Stock contained in the Company's Current
Report on Form 8-K filed with the Commission pursuant to SEC Release No.
34-90721 (together with the following portions of the Company's Registration
Statement on Form S-4 filed with the Commission on February 23, 1989 (File No.
33-27243), and of all Post-Effective Amendments to such Registration Statement:
"Market Prices and Dividends" and "The Holding Company Merger and
Reorganization -- Comparison of Stockholder Rights").
All documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act after the
date hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed incorporated
by reference into this Registration Statement and the Prospectus and to be a
part hereof and thereof from the date of the filing of such documents. Any
statement contained in the documents incorporated, or deemed to be
incorporated, by reference herein or in the Prospectus shall be deemed to be
modified or superseded for purposes of this Registration Statement and the
Prospectus to the extent that a statement contained herein or therein or in any
other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein or therein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement and the Prospectus.
The Company shall furnish without charge to each person to
whom the Prospectus is delivered, on the written or oral request of such
person, a copy of any or all of the documents incorporated by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference to the information that is incorporated). Requests
should be directed to L. Dwight Douce, Executive Vice President and
Secretary, 135 East Liberty Street, Wooster, Ohio 44691, telephone number (330)
264-8001.
<PAGE>
All information appearing in this Registration Statement and
the Prospectus is qualified in its entirety by the detailed
information, including financial statements, appearing in the documents
incorporated herein or therein by reference.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Ohio's Revised Code Section 1791.13(E) empowers the Company
to indemnify, subject to the standards therein prescribed, any person in
connection with any action, suit or proceeding brought or threatened by reason
of the fact that such person is or was a director, officer, employee or agent
of the Company or is or was serving as such or in a similar capacity with
respect to another corporation or other entity at the request of the Company.
Article Fifth of the Company's Articles of Incorporation
requires the Company, to the full extent permitted by law, to indemnify a
director or former director of the Company and grants the Board of Directors of
the Company to the full extent permitted by law, the discretion to indemnify
any officer or employee or former officer or employee, against reasonable
expenses incurred in connection with the defense of any pending or threatened
action, suit or proceeding, whether civil or criminal, to which he or she is or
may be made a party by reason of being or having been a director, officer or
employee of the Company. As authorized by Article Fifth, the Company has
purchased a director and officer liability insurance policy.
Item 7. Exemption from Registration Claimed.
Not Applicable.
<PAGE>
Item 8. Exhibits.
<TABLE>
<CAPTION>
Regulation
S-K
Exhibit
Number Document
<S> <C>
4.1 Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3(i) to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996
(File No. 0-17894))
4.2 Code of Regulations of the Company
(incorporated by reference to Exhibit 4.2
to the Company's Registration Statement
No. 33-50664)
4.3 Specimen common stock certificate
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement No. 33-27243)
4.4 Specimen stock certificate of 7% Cumulative
Convertible Preferred Stock, Series A
(incorporated by reference to Exhibit 4.4 to
the Company's Registration Statement No.
33-50664)
4.5 Specimen stock certificate of 6 1/2% Cumulative
Convertible Preferred Stock, Series B
(incorporated by reference to Exhibit 4.4 to the
Company's Registration Statement No. 33-79196)
5 Opinion of Critchfield, Critchfield & Johnston,
Ltd.*
23.1 Consent of Critchfield, Critchfield & Johnston,
Ltd.(included in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Deloitte & Touche LLP
24 Power of Attorney (contained in signature page)
99 Summit Bancorp
1989 Stock Incentive Plan
_________
*Previously filed.
</TABLE>
<PAGE>
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;
(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, represents a fundamental
change in the information set forth in the registration statement;
notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of a prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
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.
(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, each
filing of the Registrant's annual report pursuant to Section 13(a) of or
Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the 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 such 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 Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds
to believe that it meets all the requirements for filing on Form
S-8 and the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Wooster, State of
Ohio, on October 6, 1997.
FIRSTFEDERAL FINANCIAL SERVICES CORP
By:/s/ Gary G. Clark
------------------------------------
Gary G. Clark, Chairman, President
and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and
appoints Gary G. Clark and James J. Little, his true and lawful
attorneys-in-fact and agents, with full power of
substitution and re-substitution, for him or her and in his or
her name, place and stead, in any and all capacities, to
sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same,
with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every
act and thing requisite and necessary to be done, as fully to all
intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all said
attorneys-in-fact and agents or their substitutes or substitute
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below
by the following persons in the capacities and on the date
indicated.
/s/ Gary G. Clark /s/ L. Dwight Douce
- - ------------------------------- ----------------------------
Gary G. Clark, Chairman, President L. Dwight Douce, Executive Vice
and Chief Executive Officer and President, Secretary and Director
Director (Principal Executive
Officer)
Date: October 6, 1997 Date: October 6, 1997
/s/ James J. Little /s/ Gust B. Geralis
- - ------------------------------- -----------------------------
James J. Little, Executive Gust B. Geralis, Director
Vice President and Chief
Financial Officer (Principal
Financial and Accounting
Officer)
Date: October 6, 1997 Date: October 6, 1997
/s/ R. Victor Dix /s/ Ronald A. James, Jr.
- - ------------------------------- ----------------------------
R. Victor Dix, Director Ronald A. James, Jr., Director
Date: October 6, 1997 Date: October 6, 1997
/s/ Richard E. Herald /s/ Steven N. Stein
- - ------------------------------- -----------------------------
Richard E. Herald, Director Steven N. Stein, Director
Date: October 6, 1997 Date: October 6, 1997
/s/ Daniel H. Plumly
- - ----------------------------
Daniel H. Plumly, Director
Date: October 6, 1997
<PAGE>
The Board of Directors
FirstFederal Financial Services Corp and Subsidiaries:
We consent to the use of our report incorporated herein by reference.
Our report refers to the adoption of the provisions of the Financial Accounting
Standard Board's Statements of Financial Accounting Standards Nos. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of, and No. 122, Accounting for Mortgage Servicing Rights, in 1996.
KPMG PEAT MARWICK LLP
Cleveland, Ohio
October 3, 1997
<PAGE>
INDEPENDENT AUDITORS' CONSENT
FirstFederal Financial Services Corp
We consent to the incorporation by reference in this Post-Effective Amendment
No. One to Registration Statement No. 333-24707 of FirstFederal Financial
Services Corp on Form S-8 to Form S-4 of our report dated January 26, 1996,
appearing in the Annual Report on Form 10-K of FirstFederal Financial Services
Corp for the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
Columbus, Ohio
October 2, 1997
<PAGE>
SUMMIT BANCORP
1989 STOCK INCENTIVE PLAN
<PAGE>
<PAGE>
Summit Bancorp
1989 Stock Incentive Plan
TABLE OF CONTENTS
Page
1. Establishment, Purpose, and Effective Date of Plan........ 1
1.1 Establishment........................................ 1
1.2 Purpose.............................................. 1
1.3 Effective Date....................................... 1
2. Definitions............................................... 1
2.1 Definitions.......................................... 1
2.2 Gender and Number.................................... 3
3. Eligibility and Participation............................. 3
3.1 Eligibility and Participation........................ 3
3.2 Eligible Directors................................... 4
4. Administration............................................ 4
5. Stock Subject to Plan..................................... 4
5.1 Number............................................... 4
5.2 Unused Stock......................................... 4
5.3 Adjustment in Capitalization......................... 4
6. Stock Appreciation Rights Subject to Plan................. 5
6.1 Unexercised Rights................................... 5
6.2 Adjustment in Capitalization......................... 5
7. Duration of Plan.......................................... 5
8. Stock Options............................................. 5
8.1 Grant of Options Other than Director Stock Options... 5
8.2 Grant of Director Stock Options...................... 6
8.3 Option Agreement..................................... 6
8.4 Option Price......................................... 6
8.5 Duration of Options.................................. 6
8.6 Exercise of Options.................................. 7
8.7 Payment.............................................. 7
8.8 Restrictions on Stock Transferability................ 7
8.9 Termination of Employment for Specific Reasons....... 7
8.10 Termination of Employment For Other Than
Section 8.9 Reasons.................................. 7
i
<PAGE>
TABLE OF CONTENTS (continued)
8.11 Termination of Eligible Director Shares.............. 8
8.12 Nontransferability of Options........................ 8
9. Stock Appreciation Rights................................. 8
9.1 Grant of Stock Appreciation Rights................... 8
9.2 Exercise of SARs in Lieu of Options.................. 8
9.3 Exercise of SARs in Addition to Options.............. 8
9.4 Exercise of SARs Upon Lapse of Options............... 9
9.5 Exercise of SARs Independent of Options.............. 9
9.6 Payment of SAR Amount................................ 9
9.7 Form and Timing of Payment........................... 9
9.8 Limit on Appreciation................................ 9
9.9 Rule 16b-3 Requirements.............................. 9
9.10 Term of SAR.......................................... 9
9.11 Termination of Employment............................ 9
9.12 Nontransferability of SARs........................... 9
10. Restricted Stock Awards...................................10
10.1 Grant of Restricted Stock............................10
10.2 Transferability......................................10
10.3 Other Restrictions...................................10
10.4 Certificate Legend...................................10
10.5 Removal of Restrictions..............................10
10.6 Voting Rights........................................10
10.7 Dividends and Other Distributions....................11
10.8 Termination of Employment............................11
11. Performance Shares........................................11
11.1 Grant of Performance Shares..........................11
11.2 Performance Period...................................11
11.3 Performance Measurement..............................11
11.4 Payment of Awards....................................11
11.5 Termination of Employment Due to Retirement..........12
11.6 Termination of Employment Due to Death or
Disability...........................................12
11.7 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement............................12
11.8 Nontransferability of Performance Shares.............12
ii
<PAGE>
TABLE OF CONTENTS (continued)
12. Performance Awards........................................13
12.1 Grant of Performance Awards..........................13
12.2 Performance Period...................................13
12.3 Performance Measurement..............................13
12.4 Payment of Awards....................................13
12.5 Termination of Employment Due to Retirement..........13
12.6 Termination of Employment Due to Death or
Disability...........................................14
12.7 Termination of Employment for Reasons Other Than
Death, Disability, or Retirement.....................14
12.8 Nontransferability of Performance Awards.............14
13. Beneficiary Designation...................................14
14. Rights of Employees.......................................15
14.1 Employment...........................................15
14.2 Participation........................................15
15. Change in Control.........................................15
15.1 In General...........................................15
15.2 Limitation on Payments...............................15
15.3 Definition.....................................................15
16. Amendment, Modification, and Termination of Plan......... 16
17. Tax Withholding...........................................16
18. Indemnification...........................................17
19. Requirements of Law.......................................17
19.1 Requirements of Law..................................17
19.2 Governing Law........................................18
iii<PAGE>
<PAGE>
SUMMIT BANCORP
1989 STOCK INCENTIVE PLAN
1. Establishment, Purpose and Effective Date of Plan
1.1 Establishment. Summit Bancorp, an Ohio corporation
("Corporation") hereby establishes the "1989 Stock Incentive Plan" ("Plan") for
key employees of the Corporation and its subsidiaries and for directors of the
Corporation who are not employees of the Corporation or any of its
subsidiaries. The Plan permits the grant of "Director Stock Options" to such
directors and the grant of "Stock Options," "Stock Appreciation Rights,"
"Restricted Stock Awards," "Performance Shares," and "Performance Awards" (all
as defined below) to such employees.
1.2 Purpose. The purpose of the Plan is to advance the interests of
the Corporation by encouraging and providing for the acquisition of an equity
interest in the Corporation by directors of the Corporation and key employees
of the Corporation and its subsidiaries and by enabling the Corporation to
attract and retain the services of such directors and key employees upon whose
judgment, interest, and special effort the successful conduct of its operations
is largely dependent.
1.3 Effective Date. The Plan shall become effective as
of the date of its adoption by the Board of Directors of the Corporation,
subject to ratification by the shareholders of the Corporation within twelve
months of the adoption date.
2. Definitions
2.1 Definitions. Whenever used herein, the following terms shall have
their meanings set forth below:
"Award" means any Option, Stock Appreciation Right, Restricted
Stock Awards, Performance Share, or Performance Award.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Committee of the Corporation's Board of
Directors which shall consist of three or more directors appointed by the
Board. These directors shall be "disinterested persons" within the
meaning of Rule 16b-3 of the Securities Exchange Act of 1934.
1
<PAGE>
"Corporation" means Summit Bancorp, a bank holding company under
the Bank Holding Company Act of 1956 headquartered in Akron, Ohio.
"Disability" means disability as determined by the Committee.
"Director Stock Option" means an Option granted to an Eligible
Director. Each Director Stock Option shall be a nonqualified stock option
the grant of which is not intended to fall under the provisions of Section
422A of the Code.
"Eligible Director" means any statutory director of the
Corporation who is not an employee of the Corporation or any of its
subsidiaries.
"Fair Market Value" means the closing price of the Stock as
reported on the principal United States securities exchange registered
under the Exchange Act on which such Stock is listed, or, if such Stock is
not listed on any such exchange, the highest closing bid quotation with
respect to a share of such Stock on the National Association of Securities
Dealers, Inc. Automated Quotations System or any substantially equivalent
system then in use on a particular date. In the event that there are no
Stock transactions on such date, the Fair Market Value shall be determined
as of the immediately preceding date on which there were Stock
transactions.
"Option" means the right to purchase Stock at a stated price for
a specified period of time. For purposes of the Plan an Option, other
than a Director Stock Option, may be either (i) an incentive stock option
within the meaning of Section 422A of the Code or (ii) a nonqualified
stock option whose grant is intended to fall under the provisions of
Section 422A.
"Option Agreement" means an agreement entered into between the
Corporation and an employee or an Eligible Director in the form prescribed
by the Committee .
"Option Price" means the price at which each share of Stock
subject to an Option may be purchased, determined in accordance with
Sections 8.1 and 8.4 herein.
"Participant" means any individual, other than an Eligible
Director, designated by the Committee to participate in the Plan pursuant
to Section 3.1 herein.
"Period of Restriction" means the period during which the
transfer of shares of Restricted Stock and/or Performance Shares is
restricted pursuant to Section 10 and/or Section 11 of the Plan.
"Performance Awards" means awards of cash granted to a
Participant pursuant to Section 12 of the Plan.
2
<PAGE>
"Performance Objective" shall mean the performance measure(s)
and the achievement goals of the Corporation or one or more of its
subsidiaries set by the Committee.
"Performance Period" shall mean two or more successive fiscal
years of the Corporation with respect to which a Performance Share or
Performance Award may be earned pursuant to this Plan. Performance
Periods shall begin with the first day of the fiscal year in which a
Performance Share or Performance Award is granted. The length of a
Performance Period shall be at the discretion of the Committee. For each
Performance Share and Performance Award, no more than one Performance
Period shall begin in any one fiscal year of the Corporation.
"Performance Shares" means Stock granted to a Participant
pursuant to Section 11 of the Plan. Each Performance Share shall be the
equivalent of one share of Stock.
"Restricted Stock" means Stock granted to a Participant pursuant
to Section 10 of the Plan.
"Restricted Stock Agreement" means an agreement entered into
between the Corporation and the Employee in the form prescribed by the
Committee.
"Retirement," "Normal Retirement," and "Early Retirement" means
termination of employment upon the normal retirement age set by the Board
of Directors.
"Stock" means the common stock of the Corporation, without par
value.
"Stock Appreciation Right" and "SAR" means the right to receive
a cash payment from the Corporation equal to the excess of the Fair Market
Value of a share of Stock at the date of exercise over a specified price
fixed by the Committee which shall not be less than one hundred percent
(100%) of the Fair Market Value of the Stock on the date of grant. In the
case of a Stock Appreciation Right which is granted in conjunction with an
Option, the specified price shall be the Option exercise price.
2.2 Gender and Number. Except when otherwise indicated by the
context, words in the masculine gender when used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.
3. Eligibility and Participation
3.1 Eligibility and Participation. Participants in the Plan shall be
selected by the Committee from among those employees of the Corporation and its
subsidiaries who are recommended for participation by the Chief Executive
Officer of the Corporation and who, in the opinion of the Committee, are in a
position to contribute materially to the Corporation's continued
3
<PAGE>
growth, development, and long-term financial success. Persons serving on the
Committee shall not be eligible to be a Participant.
3.2 Eligible Directors. Eligible Directors are entitled to
participate in the Plan solely with respect to the grant of Director Stock
Options and may not receive any other Award under the Plan. The selection of
Eligible Directors is not subject to the discretion of the Committee. Persons
serving on the Committee who are Eligible Directors may receive grants of
Director Stock Options.
4. Administration
The Committee shall be responsible for the administration of the Plan.
The Committee, by majority action thereof, is authorized to interpret the Plan,
to prescribe, amend, and rescind rules and regulations relating to the Plan, to
provide for conditions and assurances deemed necessary or advisable to protect
the interests of the Corporation, and to make all other determinations
necessary or advisable for the administration of the Plan, but only to the
extent not contrary to the explicit provisions of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee pursuant to
the provisions of the Plan shall be final and binding and conclusive for all
purposes and upon all persons whomsoever.
5. Stock Subject to Plan
5.1 Number. The total number of shares of Stock subject to issuance
under the Plan may not exceed ten percent (10%) of the total shares of capital
stock of the Company issued and outstanding at any time subject to adjustment
upon occurrence of any of the events indicated in Subsection 6.3. The shares
to be delivered under the Plan may consist, in whole or in part, of authorized
but unissued Stock or issued stock reacquired and held as treasury Stock not
reserved for any other purpose.
5.2 Unused Stock. In the event any shares of Stock that are subject
to an Option which, for any reason, expires or is terminated unexercised as to
such shares, or any shares of Stock subject to a Restricted Stock or
Performance Share grant made under the Plan are reacquired by the Corporation
pursuant to the Plan, such shares again shall become available for issuance
under the Plan except as provided in Section 9.4
5.3 Adjustment in Capitalization. In the event that subsequent to the
date of the Plan by the Board the shares of Stock should as a result of a stock
split, stock dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or other such change, be increased or decreased
or changed into or exchanged for a different number or kind of shares of Stock
or other securities of the Corporation or of another corporation, then (a)
there shall automatically be substituted for each share of Stock subject to an
unexercised Option (in whole or in part) granted under the Plan and each share
of Stock available for additional grants of Options under the Plan
4
<PAGE>
the number and kind of shares of Stock or other securities into which each
outstanding share of Stock shall be changed or for which each such Share shall
be exchanged, (b) the Option Price shall be increased or decreased
proportionately so that the aggregate purchase price for the securities subject
to the Option shall remain the same as immediately prior to such event and (c)
the Board shall make such other adjustments to the securities subject to
Options and the provisions of the Plan and Option Agreements as may be
appropriate and equitable. Any such adjustment may provide for the elimination
of fractional shares. In such event, the Committee also shall have discretion
to make appropriate adjustments in the number and type of shares subject to
Restricted and Performance Share grants then outstanding under the Plan
pursuant to the terms of such grants or otherwise.
6. Stock Appreciation Rights Subject to Plan
6.1 Unexercised Rights. In the event any Stock Appreciation Rights
expire unexercised, such Stock Appreciation Rights again shall become available
for issuance under the Plan.
6.2 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock that occurs after ratification of the Plan by the
shareholders of the Corporation by reason of a Stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change, the Committee shall make appropriate
adjustments in the number of outstanding Stock Appreciation Rights and the
related granted values.
7. Duration of Plan
The Plan shall remain in effect, subject to the Board's right to earlier
terminate the Plan pursuant to Section 16 hereof, until all Stock subject to it
shall have been purchased or acquired pursuant to the provisions hereof.
Notwithstanding the foregoing, no Option, Stock Appreciation Right, Restricted
Stock, Performance Share, or Performance Award may be granted under the Plan on
or after the tenth (10th) anniversary of the Plan's effective date.
8. Stock Options
8.1 Grant of Options Other than Director Stock Options. Subject to
the provisions of Sections 5 and 7, Options other than Director Stock Options
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete discretion in
determining the number of Options granted to each Participant. The Committee
also shall determine whether an Option is to be an incentive stock option
within the meaning of Code Section 422A, or a nonqualified stock option whose
grant is intended not to fall within the provisions of Section 422A. However,
in no event shall the aggregate Fair Market Value (determined at the date of
grant) of the stock of which incentive stock options are first exercisable in a
particular calendar year exceed $100,000, computed in accordance with Section
422A(b)(7) of the Code.
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An incentive stock option shall only be granted to a person who owns,
directly or indirectly, Stock possessing more than ten percent (10%) of the
total combined voting power of all classes of Stock of the Corporation, if the
price of any such Option is at least one hundred and ten percent (110%) of the
Fair Market Value of the Stock subject to the Option and the Option by its
terms is not exercisable more than five (5) years from the date it is granted.
Nothing in this Section 8 shall be deemed to prevent the grant of
nonqualified stock options in excess of the maximum established by Section 422A
of the Code.
8.2 Grant of Director Stock Options. Subject to the provisions of
Sections 5 and 7, Director Stock Options shall be granted to Eligible Directors
as provided in this Section 8.2 and the Committee shall have no discretion with
respect to any matters set forth in this Section 8.2.
Vesting. Each Director Stock Option shall become exercisable on
and after the first anniversary of the date of the grant.
Number of Shares. Commencing immediately after the adjournment of
the Corporation's annual meeting of shareholders ("Annual Meeting") in 1991 and
immediately after the adjournment of the Annual Meeting each year thereafter,
any Eligible Director who was an Eligible Director immediately preceding such
Annual Meeting and who has been elected as a director at such Annual Meeting
shall automatically be granted a Director Stock Option for fifty (50) shares of
Stock if, but only if, the return on common equity of the Corporation as set
forth in the Corporation's annual report to shareholders for the immediately
preceding fiscal year is equal to or greater than ten percent (10%).
8.3 Option Agreement. Each Option shall be evidenced by
an Option Agreement that shall specify the type of Option granted, the Option
Price, the duration of the Option, the number of shares of Stock to which the
Option pertains, and such other provisions as the Committee shall determine.
8.4 Option Price. No Option granted pursuant to the Plan shall have
an Option Price that is less than the Fair Market Value of the Stock on the
date the Option is granted.
8.5 Duration of Options. Each Option, other than Director Stock
Options and Options granted to a person who owns, directly or indirectly, Stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of Stock of the Corporation, shall expire at such time as the
Committee shall determine at the time it is granted; provided, however, that no
Option, other than incentive stock options within the meaning of Section 422A
of the Code, shall be exercisable later than twenty (20) years and one day from
the date of its grant and no such incentive stock option shall be exercisable
more than ten (10) years and one day from the date of grant. No Director Stock
Option may be exercisable later than twenty (20) years and one day from the
date of its grant.
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8.6 Exercise of Options. Options granted under the Plan other than
Director Stock Options shall be exercisable at such times and be subject to
such restrictions and conditions as the Committee shall in each instance
approve, which need not be the same for all Participants.
8.7 Payment. The Option Price upon exercise of any Option shall be
payable to the Corporation in full either (i) in cash or its equivalent, or
(ii) by tendering shares of previously acquired Stock having a Fair Market
Value at the time of exercise equal to the total Option Price, or (iii) by a
combination of (i) and (ii). The proceeds from such a payment shall be added
to the general funds of the Corporation and shall be used for general corporate
purposes. As soon as practicable after receipt of full payment (including the
necessary tax withholding), the Corporation shall deliver to the Participant or
the Eligible Director, as the case may be, Stock certificates in an appropriate
amount based upon the number of Options exercised, issued in the name of the
Participant or the Eligible Director, as the case may be.
8.8 Restrictions on Stock Transferability. The Committee shall impose
such restrictions on any shares of Stock acquired pursuant to the exercise of
an Option under the Plan as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities law, under the
requirements of any stock exchange upon which such shares of Stock are then
listed under any blue sky or state securities laws applicable to such shares.
8.9 Termination of Employment for Specific Reasons. In the event the
employment of a Participant is terminated for any reason, any outstanding
Option granted pursuant to the Plan and any rights thereunder shall be
exercisable by the Participant (or in the case of a deceased Participant by his
legal representative) only to the extent of the accrued right to exercise such
Option at the date of such termination; provided, however, if such termination
is by reason of death or disability or, with the prior consent of the
Committee, by reason of resignation or retirement, and if at the date of such
termination the Participant had completed twelve (12) full months of employment
after the date of the Option grant the Committee may, in its sole discretion,
permit the exercise of all or any portion of the Option not otherwise
exercisable and may provide that all or some portion of the Option shall not
terminate upon or by virtue of such employment termination. To the extent that
such Option is exercisable at termination or, as the result of Committee
approval, becomes exercisable at termination it must be exercises prior to the
expiration of the expiration date of the Option or within twelve (12) months
and five (5) days after such date of termination of employment, whichever
period is shorter. However, in the case of incentive stock options, the
favorable tax treatment prescribed under Section 422A of the Code shall not be
available if such Option is not exercised within the required statutory period
as specified in Section 422A.
8.10 Termination of Employment For Other Than Section 8.9 Reasons. If
the employment of the Participant shall terminate for any reason other than one
of those specified in Section 8.9 of the Plan, the rights under any then
outstanding Option granted pursuant to the Plan which, pursuant to the terms of
the Option Agreement between the Participant and the Corporation, is
exercisable as of the date of such termination, shall terminate upon the
expiration
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date of the Option or three (3) months after such date of termination of
employment, whichever first occurs. In its sole discretion, the Committee may
extend the three (3) months up to twelve (12) months and five (5) days, but in
no event beyond the expiration date of the Option.
8.11 Termination of Eligible Director Shares. In the event that an
Eligible Director ceases to be an Eligible Director for any reason, the rights
under any then outstanding Director Stock Option granted pursuant to the Plan
which are exercisable as of the date he ceases to be an Eligible Director shall
terminate upon the date determined as provided in Section 8.5 above, or three
(3) months after such cessation date, whichever first occurs; provided,
however, that if he ceases to be an Eligible Director by reason of death, the
three (3) month period shall be extended to the sooner of twelve (12) months
and five (5) days or the expiration date of the Director Stock Option.
8.12 Nontransferability of Options. No Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and
distribution. All Options granted to a Participant or an Eligible Director
under the Plan shall be exercisable during his lifetime only by such
Participant or Eligible Director.
9. Stock Appreciation Rights
9.1 Grant of Stock Appreciation Rights. Subject to the provisions of
Sections 6 and 7, Stock Appreciation Rights may be granted to Participants at
any time and from time to time as shall be determined by the Committee. A SAR
may be granted, in the discretion of the Committee, in any of the following
forms:
(a) In lieu of Options,
(b) In addition to Options,
(c) Upon lapse of Options, or
(d) Independent of Options.
9.2 Exercise of SARs in Lieu of Options. SARs granted in lieu of
Options may be exercised for all or part of the shares of Stock subject to the
related Option upon the surrender of the right to exercise an equivalent number
of Options. The SAR may be exercised only with respect to the shares of Stock
for which its related Option is then exercisable. SARs granted in lieu of
Options will lapse in the event and to the extent that the related Option is
exercised.
9.3 Exercise of SARs in Addition to Options . SARs granted in
addition to Options shall be deemed to be exercised upon the exercise of the
related Options.
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9.4 Exercise of SARs Upon Lapse of Options. SARs granted upon lapse
of Options shall be deemed to have been exercised upon the lapse of the related
Options as to the number of shares of Stock subject to the Options.
9.5 Exercise of SARs Independent of Options. SARs granted independent
of Options may be exercised upon whatever terms and conditions the Committee,
in its sole discretion, imposes upon the SARs.
9.6 Payment of SAR Amount. Upon exercise of the SAR, the holder shall
be entitled to receive payment of an amount (subject to Section 9.8 below)
determined by multiplying:
(a) The difference between the Fair Market Value of a share of
Stock at the date of exercise over the price fixed by the Committee at the date
of grant, by
(b) The number of shares with respect to which the SAR is
exercised.
9.7 Form and Timing of Payment. At the discretion of the Committee,
payment for SARs may be made in cash or stock, or in a combination thereof. If
payment is made in Stock, the value of such Stock shall be the Fair Market
Value determined as of the date of exercise.
9.8 Limit on Appreciation. At the time of grant, the Committee may
establish, in its sole discretion, a maximum amount per share which will be
payable upon exercise of an SAR.
9.9 Rule 16b-3 Requirements. Notwithstanding any other provision of
the Plan, the Committee may impose such conditions on exercise of a SAR
(including, without limitation, the right of the Committee to limit the time of
exercise to specified periods) as may be required to satisfy the requirements
of Rule 16b-3 (or any successor rule), under the Securities Exchange Act of
1934.
9.10 Term of SAR. The term of SAR granted under the Plan shall not
exceed ten (10) years and one (1) day.
9.11 Termination of Employment. In the event the employment of a
Participant is terminated by reason of Death, Disability, Retirement, or any
other reason, any SARs outstanding shall terminate in the same manner as
specified for Options under Sections 8.9 and 8.10 herein.
9.12 Nontransferability of SARs. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further,
all SARs granted to a Participant under the Plan shall be exercisable during
his lifetime only by such Participant.
10. Restricted Stock Awards
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10.1 Grant of Restricted Stock. Subject to the provisions of Sections
5 and 7, the Committee, at any time and from time to time, may award shares of
Restricted Stock under the Plan to such Participants and in such amounts as it
shall determine. Each Restricted Stock Award shall be evidenced by a
Restricted Stock Agreement that shall specify the Period or Periods of
Restriction, the number of Restricted Stock shares awarded, and such other
provisions as the Committee shall determine.
10.2 Transferability. Except as provided in this Section 10, the
shares of Restricted Stock awarded hereunder may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated for such period of
time as shall be determined by the Committee and shall be specified in the
Restricted Stock Agreement, or upon earlier satisfaction of other conditions as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Agreement.
10.3 Other Restrictions. The Committee shall impose such other
restrictions on any shares of Restricted Stock awarded pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable federal or state securities or tax laws, and may legend the
certificates representing Restricted Stock to give appropriate notice of such
restrictions.
10.4 Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 10.3 hereof, each certificate representing
shares of Restricted Stock granted pursuant to the Plan shall bear a legend
which is comparable to the following:
"The sale or other transfer of this certificate or the shares of
stock represented by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer and other
terms and conditions set forth in the Summit Bancorp 1989 Stock Incentive Plan
and a Restricted Stock Agreement dated ____________, 19_. A copy of the Plan
and such Restricted Stock Agreement may be obtained from the Secretary of
Summit Bancorp, 2680 W. Market Street, Akron, Ohio 44313.
10.5 Removal of Restrictions. Except as otherwise provided in this
Section 10, shares of Restricted Stock covered by each Restricted Stock Award
made under the Plan shall become freely transferable by the Participant after
the last day of the Period of Restriction. Once the shares are released from
the restrictions, the Participant shall be entitled to have the legend required
by Section 10.4 removed from his Stock certificates.
10.6 Voting Rights. During the Period of Restriction, Participants
holding shares of Restricted Stock awarded hereunder may exercise full voting
rights with respect to those shares.
10.7 Dividends and Other Distributions. During the Period of
Restriction, Participants holding shares of Restricted Stock awarded hereunder
shall be entitled to receive all dividends and other distributions paid with
respect to those shares while they are so held. If any such dividends
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or distributions are paid in shares of Stock, the shares shall be subject to
the same restrictions on transferability as the shares of Restricted Stock with
respect to which they were paid.
10.8 Termination of Employment. In the event that a Participant
terminates his employment with the Corporation for any reason, any shares of
Restricted Stock still subject to restrictions at the date of such termination
automatically shall be forfeited and returned to the Corporation; provided,
however, that the Committee, in its sole discretion, at the time of such
retirement may with respect to some or all of the shares still subject to
restrictions at the time of said termination waive the automatic forfeiture,
and/or reduce the restrictions, and/or modify restrictions applicable to such
shares.
11. Performance Shares
11.1 Grant of Performance Shares. Subject to the provisions of
Sections 5 and 7, the Committee, at any time and from time to time, may grant
Performance Shares to such Participants and in such amounts as it shall
determine. Each grant of Performance Shares shall be in writing.
11.2 Performance Period. The period over which Performance Shares may
be earned shall begin on the first day of the fiscal year in which a grant
occurs. The length of the Performance Period for each grant shall be
determined by the Committee, in its sole discretion, but shall not be less than
two (2) years.
11.3 Performance Measurement. At the beginning of each Performance
Period, Performance Objectives shall be established by the Chief Executive
Officer of the Corporation subject to Committee approval. The degree of
attainment of such Performance Objectives shall determine the number of the
Performance Shares payable at the end of the Performance Period, in accordance
with a schedule established by the Chief Executive Officer and approved by the
Committee at the beginning of the Performance Period.
The Committee may adjust the Performance Objectives during the Performance
Period if it is determined that changes in business conditions have materially
and unduly influenced the Corporation's ability to meet the Performance
Objectives.
11.4 Payment of Awards. All payments pursuant to Performance Share
grants shall be made as soon as practicable following the end of the applicable
Performance Period based upon the degree of attainment of the Performance
Objectives. Payments shall be made in Stock. The Committee shall review all
calculations of actual Performance Objective accomplishments and shall make any
adjustments in the computations to recognize material extraordinary or
nonrecurring items if, in the judgment of the Committee, the effect of such
adjustments is equitable and in conformity with the purposes of the Plan.
11.5 Termination of Employment Due to Retirement. In the event that a
Participant terminates his employment with the Corporation because of Normal
Retirement during the
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Performance Period, the Participant shall be entitled to a prorated award of
Performance Shares as of the most recently completed full fiscal year of the
Performance Period. Payments of Performance Shares determined in this manner
shall be multiplied by a fraction, the numerator of which is the number of full
months which have elapsed since the commencement of the Performance Period, and
the denominator of which is the number of full months in the particular
Performance Period. Payment of Performance Shares in this case shall be made as
soon as practicable following the end of the fiscal year of termination.
In the event that a Participant terminates his employment with the
Corporation because of Early Retirement, any Performance Shares outstanding at
the date of such Early Retirement automatically shall be forfeited; provided,
however, that the Committee may, in its sole discretion, determine a prorated
value for the Participant's then outstanding Performance Shares as it deems
appropriate. Payment of Performance Shares in this case shall be made as soon
as practicable following the end of the fiscal year of termination.
11.6 Termination of Employment Due to Death or Disability. In the
event a Participant terminates his employment with the Corporation because of
Death or Disability during the Performance Period, the Participant shall be
entitled to a prorated award of Performance Shares as of the most recently
completed full fiscal year of the Performance Period. Payments of Performance
Shares determined in this manner shall be multiplied by a fraction, the
numerator of which is the number of full months which have elapsed since the
commencement of the Performance Period, and the denominator of which is the
number of full months in the particular Performance Period. Payment of
Performance Shares in this case shall be made as soon as practicable following
the end of the fiscal year of termination.
11.7 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement. In the event that a Participant terminates his
employment with the Corporation for any reason other than those set forth in
Sections 11.5 and 11.6 hereof during the Performance Period; then any
Performance Shares still outstanding at the date of such termination
automatically shall be forfeited; provided, however, that, in the event of an
involuntary termination of the employment of a Participant by the Corporation
the Committee may, in its sole discretion, waive the automatic forfeiture of
any or all such Performance Shares as it deems appropriate, and pay a prorated
award.
11.8 Nontransferability of Performance Shares. No Performance Shares
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Performance
Period. All rights with respect to Performance Shares granted to a Participant
under the Plan shall be exercisable during his lifetime only by such
Participant.
12. Performance Awards
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12.1 Grant of Performance Awards. Subject to the provisions of
Sections 5 and 7, the Committee, at any time and from time to time, may grant
Performance Awards under the Plan to such Participants and in such amounts as
it shall determine. Each grant of Performance Awards shall be in writing.
12.2 Performance Period. The period over which Performance Awards may
be earned shall begin on the first day of the fiscal year in which a grant
occurs. The length of the Performance Period for each grant shall be
determined by the Committee in its sole discretion but shall not be less than
two (2) years.
12.3 Performance Measurement. At the beginning of each Performance
Period, Performance Objectives shall be established by the Chief Executive
Officer of the Corporation subject to Committee approval. The degree of
attainment of such Performance Objectives shall determine the value of the
Performance Awards at the end of the Performance Period, in accordance with a
schedule established by the Chief Executive Officer and approved by the
Committee at the beginning of the Performance Period.
The Committee may adjust the Performance Objectives during the Performance
Period if it is determined that changes in business conditions have materially
and unduly influenced the Corporation's ability to meet the Performance
Objectives.
12.4 Payment of Awards. All payments pursuant to Performance Award
grants shall be made as soon as practicable following the end of the applicable
Performance Period based upon the degree of attainment of the Performance
Objectives. Payments shall be made in cash. The Committee shall review all
calculations of actual Performance Objective accomplishments and shall make any
adjustments in the computations to recognize material extraordinary or
nonrecurring items if, in the judgment of the Committee, the effect of such
adjustments is equitable and in conformity with the purposes of the Plan.
12.5 Termination of Employment Due to Retirement. In the event that a
Participant terminates his employment with the Corporation because of Normal
Retirement during the Performance Period, the Participant shall be entitled to
a prorated award of Performance Awards as of the most recently completed full
fiscal year of the Performance Period. Payment of Performance Awards
determined in this manner shall be multiplied by a fraction, the numerator of
which is the number of full months which have elapsed since the commencement of
the Performance Period, and the denominator of which is the number of full
months in the particular Performance Period. Payment of Performance Awards in
this case shall be made as soon as practicable following the end of the fiscal
year of termination.
In the event that a Participant terminates his employment with the
Corporation because of Early Retirement, the Committee may, in its sole
discretion, determine a prorated value for the Participant's then outstanding
Performance Awards as it deems appropriate. Payment of
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Performance Awards in this case shall be made as soon as practicable following
the end of the fiscal year of termination.
12.6 Termination of Employment Due to Death or Disability. In the
event a Participant terminates his employment with the Corporation because of
Death or Disability during the Performance Period, the Participant shall be
entitled to a prorated award of Performance Awards as of the most recently
completed full fiscal year of the Performance Period. Payments of Performance
Awards determined in this manner shall be multiplied by a fraction, the
numerator of which is the number of full months which have elapsed since the
commencement of the Performance Period, and the denominator of which is the
number of full months in the particular Performance Period. Payment of
Performance Awards in this case shall be made as soon as practicable following
the end of the fiscal year of termination.
12.7 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement. In the event that a Participant terminates his
employment with the Corporation for any reason other than those set forth in
Sections 12.5 and 12.6 hereof during the Performance Period, then any
Performance Awards still outstanding at the date of such termination
automatically shall be forfeited; provided, however, that in the event of an
involuntary termination of the employment of a Participant by the Corporation
the Committee may, in its sole discretion, waive the automatic forfeiture of
any or all such Performance Awards as it deems appropriate and pay a prorated
award.
12.8 Nontransferability of Performance Awards. No Performance Awards
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Performance
Period. All rights With respect to Performance Awards granted to a Participant
under the Plan shall be exercisable during his lifetime only by such
Participant.
13. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his death before he
receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during his lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to his estate.
14. Rights of Employees
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14.1 Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Corporation to terminate any Participant's employment
at any time, nor confer upon any Participant any right to continue in the
employ of the Corporation.
14.2 Participation. No employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a
Participant.
15. Change in Control
15.1 In General. In the event that (a) the Corporation is a party to a
merger or consolidation agreement, (b) the Corporation is a party to an
agreement to sell substantially all of its assets, or (c) there is change in
control of the Corporation as defined in Section 15.3 below, the Committee may,
in its sole discretion, provide that all outstanding Awards shall become one
hundred percent (100%) vested, that all outstanding Options and SARs shall
become immediately exercisable and that any Period of Restriction shall
immediately lapse. Performance Share and Performance Award values shall be
computed as if the most recently completed full fiscal year was the end of the
Performance Period, except that no Performance Share or Performance Award
payable under this Section, except as limited by Section 15.2 hereof, may be
less than would have been paid had the Corporation achieved one hundred percent
(100%) of its Performance Objectives.
15.2 Limitation on Payments. If the receipt of any payment under this
Section by any Participant shall, in the opinion of independent tax counsel of
recognized standing selected by the Corporation, result in the payment by such
Participant of any excise tax provided for in Section 280G and Section 4999 of
the Code, then the amount of such payment shall be reduced to the extent
required, in the opinion of independent tax counsel, to prevent the imposition
of such excise tax.
15.3 Definitions. For purposes of the Plan, a "change in control"
shall mean any of the following events:
(a) The acquisition of "beneficial ownership," as defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), of twenty percent (20%) or more of the total voting capital Stock of the
Corporation then issued and outstanding, by any person, or "group" as defined
in Section 13(d)(3) of the Exchange Act, or
(b) Individuals who were members of the Board of the Corporation
immediately prior to a meeting of the shareholders of the Corporation involving
a contest for the election of directors do not constitute a majority of the
Board immediately following such election, unless the election of such new
directors was recommended to the shareholders by management of the Corporation.
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The Board has final authority to determine the exact date on which a
change in control has been deemed to have occurred under (a) and (b) above.
16. Amendment, Modification and Termination of Plan
The Board may at any time terminate and, from time to time, may amend or
modify the Plan, provided, however, that no such action of the Board, without
approval of the shareholders, may:
(a) Increase the total amount of Stock which may be issued under the
Plan, except as provided in Subsections 5.1 and 5.3 of the Plan.
(b) Change the provisions of the Plan regarding the Option Price
except as permitted by Subsection 5.3.
(c) Materially increase the cost of the Plan or materially increase
the benefits to Participants.
(d) Extend the period during which Options, Stock Appreciation Rights,
Restricted Stock, Performance Shares, or Performance Awards may be granted.
(e) Extend the maximum period after the date of grant during which
Options may be exercised.
No amendment, modification, or termination of the Plan shall in any manner
adversely affect any Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares, or Performance Awards theretofore granted under the Plan,
without the consent of the Participant or the Eligible Director, as the case
may be.
17. Tax Withholding
(a) The Corporation shall have the right to withhold from any payments
made under the Plan or to collect as a condition of payment, any taxes required
by law to be withheld. At any time when a Participant or an Eligible Director,
as the case may be, is required to pay to the Corporation an amount required to
be withheld under applicable income tax laws in connection with a distribution
of common stock or upon exercise of an Option or SAR, the Participant or an
Eligible Director, as the case may be, may satisfy this obligation in whole or
in part by electing ("Election") to have the Corporation withhold from the
distribution shares of common stock having a value equal to the amount required
to be withheld. The value of the shares to be withheld shall be based on the
Fair Market Value of the common stock on the date that the amount of tax to be
withheld shall be determined ("Tax Date").
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(b) Each Election must be made prior to the Tax Date. The Committee
may disapprove of any Election, may suspend or terminate the right to make
Elections, or may provide with respect to any grant that the right to make
elections shall not apply to such Grant. An Election is irrevocable.
(c) If a Participant is an officer of the Corporation within the
meaning of Section 16 of the Securities Exchange Act of 1934 or if the person
making the Election is an Eligible Director, then an Election is subject to the
following additional restrictions:
(1) No Election shall be effective for a Tax Date which occurs
within six (6) months of the grant of the award, except that this limitation
shall not apply in the event Death or Disability of the Participant or the
eligible Director, as the case may be, occurs prior to the expiration of the
six-month period.
(2) The Election must be made either six (6) months prior to the
Tax Date or must be made during a period beginning on the third business day
following the date of release for publication of the Corporation's quarterly or
annual summary statements of sales and earnings and ending on the twelfth
business day following such date.
18. Indemnification
Each person who is or shall have been a member of the Committee or of the
Board shall be indemnified and held harmless by the Corporation against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with
the Corporation's approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him, provided he shall give the
Corporation an opportunity, at its own expense, to handle and defend the same
before he under takes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Corporation's
Articles of Incorporation or Code of Regulations, as a matter of law, or
otherwise, or any power that the Corporation may have to indemnify them or hold
them harmless.
19. Requirements of Law
19.1 Requirements of Law. The granting of Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, or Performance Awards, and the
issuance of shares of Stock upon the exercise of an Option shall be subject to
all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
17
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19.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and be governed by the laws of the State of Ohio.
