<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 16, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SUMMIT BANCORP
(Exact Name of Registrant as Specified in its Charter)
OHIO 34-1599501
(State of Incorporation) (I.R.S. Employer Identification Number)
2680 WEST MARKET STREET, AKRON, OHIO 44333
(Address of Principal Executive Offices) (Zip Code)
SUMMIT BANCORP
1989 STOCK INCENTIVE PLAN
(Full Title of each Plan)
DAVID C. VERNON, PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUMMIT BANCORP, 2680 WEST MARKET STREET, AKRON, OHIO 44333
(330) 864-8080
(Name, Address and Telephone Number of Agent for Service)
COPY TO:
Stanley E. Everett, Esq., Brouse & McDowell
500 First National Tower, Akron, Ohio 44308-1471 (330) 535-5711
CALCULATION OF REGISTRATION FEE
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- ------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (1) FEE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 25,000 shares $36.00 $900,000 $310.34
- ------------------------------------------------------------------------------------------------------------------------
<FN>
1 Estimated solely for the purpose of calculating the registration fee,
pursuant to Rules 457(c) and (h) under the Securities Act of 1933, on
the basis of the average of the bid and asked prices for shares of the
Company's Common Stock as of August 12, 1996 with respect to shares for
which options have not yet been granted and the average exercise price
with respect to shares for which options have been granted.
</TABLE>
<PAGE> 2
PART II
ITEM 3 INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Summit Bancorp ("Company") with the
Securities and Exchange Commission ("Commission") under the Securities
Exchange Act of 1934 ("Exchange Act") are herein incorporated by
reference: (1) Annual Report on Form 10-K for its fiscal year ended
December 31, 1995; and (2) Quarterly Reports on Form 10-Q for its fiscal
quarters ended March 31 and June 30, 1996.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, 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 part hereof from the date of
filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES
The description of the Company's Common Stock contained in Amendment No.
2 to the Company's Registration Statement No. 33-29708 on Form S-1 filed with
the Commission on January 22, 1990 pursuant to the Securities Act of 1933 is
incorporated herein by reference.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Code of Regulations ("Regulations")
provide, to the extent provided by law, that the Company shall indemnify
any director or officer and any former director or officer of the
Company and any such director or officer who is or has served at the
request of the Company as a director, officer or trustee of another
corporation, partnership, joint venture, trust or other enterprise (and
his heirs, executors and administrators) against expenses, including
attorney's fees, judgments, fines and amounts paid in settlement,
actually and reasonably incurred by him by reason of the fact that he is
or was such director, officer or trustee in connection with any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative to the full extent
permitted by applicable law. The indemnification provided in the
Regulations does not restrict the right of the Company (i) to indemnify
employees, agents and others to the extent not prohibited by law, (ii)
to purchase and maintain insurance or furnish similar protection on
behalf of or for any person who is or was a director, officer, employee
or agent of the Company, or any person who is or was serving at the
request of the Company as a director, officer, trustee, employee or
agent of another corporation, joint venture, partnership, trust or other
enterprise against any liability asserted against him or incurred by him
in any such capacity or arising out of his status as such, and (iii) to
enter into agreements with persons of the class identified in clause
(ii) above indemnifying them against any and all liabilities (or such
lesser indemnification as may be provided in such agreements) asserted
against or incurred by them in such capacities.
Section 1701.13(E) of the Ohio Revised Code authorizes the
indemnification as stated above. In addition, with respect to directors,
Section 1701.13(E) provides that, under certain circumstances, unless a
corporation's articles or regulations explicitly provide otherwise, a
corporation must advance expenses to directors. The Company's
Regulations do not provide otherwise. Such advances need be repaid only
if it is proved in court that the director acted or failed to act with
deliberate intent to cause injury to the corporation or with reckless
disregard for the best interests of the corporation.
The indemnification available is at all times subject to federal and
state public policy limitations which may prevent or limit
indemnification and does not affect a director's potential liability
under the federal securities laws.
Section 1701.13(E) also authorizes the Company to purchase and maintain
insurance covering any director, trustee, officer, employee or agent for
any liability asserted against him in, or arising out of, his status as
such. The Company maintains such insurance for the benefit of such
persons, including coverage for liabilities under the Securities Act of
1933, as amended (the "Securities Act").
II-1
<PAGE> 3
The Company also has entered into indemnification agreements with its
directors and executive officers ("Indemnitees"), which create a
contractual right of Indemnitees to indemnification from the Company.
The form of indemnification agreement allows Indemnitees to select
indemnification rights to the extent of the highest and most
advantageous to the Indemnitee, as determined by the Indemnitee, of one
or any combination of the following:
(a) the benefits provided by the Regulations in effect on the
date of the respective indemnification agreement;
(b) the benefits provided by the Regulations, the Company's Second
Amended and Restated Articles of Incorporation ("Articles"), or their
equivalent in effect at the time expenses are incurred by the
Indemnitee;
(c) the benefits allowable under Ohio law in effect at the date of
the respective indemnification agreement;
(d) the benefits allowable under the law of the jurisdiction
under which the Company exists at the time expenses are incurred by the
Indemnitee;
(e) the benefits available under any liability insurance obtained by
the Company; and
(f) such other benefits as are or may be otherwise available to
Indemnitee.
An Indemnitee has the right to be reimbursed for expenses as incurred if
he files with the Company an undertaking to repay any amount which it is
ultimately determined he must repay. Such reimbursement for expenses of
directors is mandatory under Section 1701.13(E), but discretionary as to
officers and other persons.
Payments by the Company under the indemnification agreements will be
made from insurance or from general assets to the extent insurance is
unavailable. The agreements allow the Company to purchase and maintain
liability insurance for so long as it is available on a basis acceptable
to the Company.
No indemnification is required under the agreements with respect to (i)
any proceeding initiated by an Indemnitee without the consent or
authorization of the Board of Directors of the Company, provided that
this exclusion does not apply with respect to any claims brought by an
indemnitee to enforce rights under the Indemnitee's agreement or in any
proceeding initiated by another person or entity whether or not such
claims were brought by an Indemnitee against a person or entity who was
otherwise a party to such proceeding, (ii) those actions, fines or
penalties specifically excluded from indemnification coverage under
applicable Ohio law, such as any claim as to which it is finally proved
in court that the indemnitee acted with willful misfeasance, or willful
disregard of his duties, except to the extent that the court shall
determine that, in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to indemnity; or (iii) any
payment required under Section 16(b) of the Securities Exchange Act of
1934, as amended.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable
ITEM 8. EXHIBITS
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NUMBER DESCRIPTION
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5 Opinion of Brouse & McDowell regarding legality of securities being offered
23(a) Consent of Crowe, Chizek and Company LLP
</TABLE>
II-2
<PAGE> 4
23(b) Consent of Brouse & McDowell (included in Exhibit 5)
24 Powers of Attorney
99 Summit Bancorp 1989 Stock Incentive Plan
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,
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 (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
Securities Exchange Act of 1934 that are incorporated by reference
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) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(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 of the
registrant 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.
II-3
<PAGE> 5
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 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 Akron, State of Ohio, on August 15, 1996.
SUMMIT BANCORP
By: /s/ David C. Vernon
--------------------------------------
David C. Vernon
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf in the
capacities indicated on the 15th day of August, 1996:
SIGNATURE TITLE
--------- -----
/s/ David C. Vernon President, Chief Executive Officer
- -------------------------- and Chairman of the Board
David C. Vernon (Principal Executive Officer)
* Vice President and
- -------------------------- Chief Financial Officer
Jon W. Park (Principal Financial Officer)
* Comptroller
- -------------------------- (Principal Accounting Officer)
Charles P. Murphy
Directors: Robert G. Andrews, Charles E. Conner*, W. Gary Diehl*, Nicholas
T. George, Philip P. Lutz, Jr.*, Donald J. McDaniel*, John J.
Olszeski*, Eva H. Poinar*, Jerry F. Whitmer*
*By: /s/ David C. Vernon
------------------------------
David C. Vernon
Attorney-In-Fact**
Dated: August 15, 1996
** Pursuant to authority granted by powers of attorney, copies of which are
filed herewith.
S-1
<PAGE> 6
INDEX OF EXHIBITS
5 Opinion of Brouse & McDowell regarding legality of securities being
offered
23(a) Consent of Crowe, Chizek and Company LLP
23(b) Consent of Brouse & McDowell (included in Exhibit 5)
24 Power of Attorney
99 Summit Bancorp 1989 Stock Incentive Plan
<PAGE> 1
EXHIBIT 5
August 16, 1996
Summit Bancorp
2680 West Market Street
Akron, Ohio 44333
Re: Registration on Form S-8 of 25,000 Shares
of the Common Stock of Summit Bancorp
Gentlemen:
We are acting as counsel to Summit Bancorp (the "Company") in connection
with the issuance and sale by the Company of up to 25,000 shares of its common
stock. The shares being registered will be issued upon the exercise of options
granted to employees of the Company pursuant to its 1989 Stock Incentive Plan
(the "Plan").
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion, and based thereon we are of the
opinion that the shares of common stock, without par value, of the Company which
may be issued and sold pursuant to the Plan and any authorized forms of
agreement thereunder (the "Agreements") are duly authorized and, when issued and
sold in accordance with the terms of the Plan and the Agreements (provided that
the consideration received by the Company is at least equal to the par value of
the shares), will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission to effect registration of the Shares under
the Securities Act of 1933 of the shares to be issued and sold pursuant to the
Plan.
Very truly yours,
Brouse & McDowell
/s/ Brouse & McDowell
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Summit Bancorp:
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Summit Bancorp, of our report dated February 2, 1996 on the 1995
consolidated financial statements of Summit Bancorp, which report is included in
and incorporated by reference in the Annual Report on Form 10-KSB of Summit
Bancorp, for the year ended December 31, 1995.
Crowe, Chizek and Company LLP
Columbus, Ohio /s/ Crowe, Chizek and Company LLP
August 15, 1996
<PAGE> 1
EXHIBIT 5
August 16, 1996
Summit Bancorp
2680 West Market Street
Akron, Ohio 44333
Re: Registration on Form S-8 of 25,000 Shares
of the Common Stock of Summit Bancorp
Gentlemen:
We are acting as counsel to Summit Bancorp (the "Company") in connection
with the issuance and sale by the Company of up to 25,000 shares of its common
stock. The shares being registered will be issued upon the exercise of options
granted to employees of the Company pursuant to its 1989 Stock Incentive Plan
(the "Plan").
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion, and based thereon we are of the
opinion that the shares of common stock, without par value, of the Company which
may be issued and sold pursuant to the Plan and any authorized forms of
agreement thereunder (the "Agreements") are duly authorized and, when issued and
sold in accordance with the terms of the Plan and the Agreements (provided that
the consideration received by the Company is at least equal to the par value of
the shares), will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission to effect registration of the Shares under
the Securities Act of 1933 of the shares to be issued and sold pursuant to the
Plan.
Very truly yours,
Brouse & McDowell
/s/ Brouse & McDowell
<PAGE> 1
EXHIBIT 24
DIRECTORS AND OFFICERS OF
SUMMIT BANCORP
POWER OF ATTORNEY
The undersigned officers and directors of Summit Bancorp (the "Company") hereby
constitute and appoint Stanley E. Everett, J. Bret Treier and David C. Vernon,
and each of them, with full power of substitution and resubstitution, as
attorneys or attorney of the undersigned, to execute and file under the
Securities Act of 1933 a Registration Statement on Form S-8 relating to the
registration of 25,000 shares of the Company's common stock, and any and all
amendments and exhibits thereto, including pre- and post-effective amendments,
and any and all applications or other documents to be filed with the Securities
and Exchange Commission pertaining to such registration, with full power and
authority to do and perform any and all acts and things whatsoever necessary,
appropriate or desirable to be done in the premises, or in the name, place and
stead of the said directors and officers, hereby ratifying and approving the
acts of said attorneys and any of them and any such substitute.
Executed in the capacities indicated on the 15th day of August, 1996:
/s/ David C. Vernon President, Chief Executive Officer
- -------------------------- and Chairman of the Board
David C. Vernon (Principal Executive Officer)
/s/ Jon W. Park Vice President and
- -------------------------- Chief Financial Officer
Jon W. Park (Principal Financial Officer)
/s/ Charles P. Murphy Comptroller
- -------------------------- (Principal Accounting Officer)
Charles P. Murphy
Director
- --------------------------
Robert G. Andrews
/s/ Charles E. Conner Director
- --------------------------
Charles E. Conner
/s/ W. Gary Diehl Director
- --------------------------
W. Gary Diehl
Director
- --------------------------
Nicholas T. George
/s/ Philip P. Lutz, Jr. Director
- --------------------------
Philip P. Lutz, Jr.
/s/ Donald J. McDaniel Director
- --------------------------
Donald J. McDaniel
/s/ John J. Olszeski Director
- --------------------------
John J. Olszeski
/s/ Eva H. Poinar Director
- --------------------------
Eva H. Poinar
/s/ Jerry F. Whitmer Director
- --------------------------
Jerry F. Whitmer
<PAGE> 2
SUMMIT BANCORP
POWER OF ATTORNEY
Summit Bancorp (the "Company") hereby constitutes and appoints Stanley E.
Everett, J. Bret Treier and David C. Vernon and each of them, with full
power of substitution and resubstitution, as attorneys or attorney of the
undersigned, to execute and file under the Securities Act of 1933 a
Registration Statement on Form S-8 relating to the registration of 25,000
shares of the Company's common stock, and any and all amendments and
exhibits thereto, including pre- and post-effective amendments, and any and
all applications or other documents to be filed with the Securities and
Exchange Commission pertaining to such registration, with full power and
authority to do and perform any and all acts and things whatsoever
necessary, appropriate or desirable to be done in the premises, or in the
name, place and stead of the said directors and officers, hereby ratifying
and approving the acts of said attorneys and any of them and any such
substitute.
Executed at Akron, Ohio, this 15th day of August, 1996.
Summit Bancorp
By: /s/ Deborah L. Jacob
------------------------------------------------
Deborah L. Jacob
Senior Vice President
Attest: /s/ Jon W. Park
--------------------------------------------
Jon W. Park
Vice President and Chief Financial Officer
<PAGE> 1
EXHIBIT 99
SUMMIT BANCORP
1989 STOCK INCENTIVE PLAN
<PAGE> 2
SUMMIT BANCORP
1989 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
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PAGE
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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 .....................................................................................3
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 ....................................................................................6
8.7 Payment ................................................................................................6
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
</TABLE>
i
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TABLE OF CONTENTS (CONTINUED)
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8.11 Termination of Eligible Director Shares .........................................................7
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 .................................................................8
9.5 Exercise of SARs Independent of Options ................................................................8
9.6 Payment of SAR Amount ..................................................................................8
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 ........................................................................................9
10.1 Grant of Restricted Stock ..............................................................................9
10.2 Transferability ........................................................................................9
10.3 Other Restrictions .....................................................................................9
10.4 Certificate Legend ....................................................................................10
10.5 Removal of Restrictions ...............................................................................10
10.6 Voting Rights .........................................................................................10
10.7 Dividends and Other Distributions .....................................................................10
10.8 Termination of Employment .............................................................................10
11. Performance Shares ............................................................................................10
11.1 Grant of Performance Shares ...........................................................................10
11.2 Performance Period ....................................................................................11
11.3 Performance Measurement ...............................................................................11
11.4 Payment of Awards .....................................................................................11
11.5 Termination of Employment Due to Retirement ...........................................................11
11.6 Termination of Employment Due to Death or Disability ..................................................11
11.7 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement ...........................................................................12
11.8 Nontransferability of Performance Shares ..............................................................12
</TABLE>
ii
<PAGE> 4
TABLE OF CONTENTS (CONTINUED)
<TABLE>
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PAGE
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12. Performance Awards .............................................................................................12
12.1 Grant of Performance Awards ............................................................................12
12.2 Performance Period .....................................................................................12
12.3 Performance Measurement ................................................................................12
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 ...................................................13
12.7 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement ..........................................................................13
12.8 Nontransferability of Performance Awards ...............................................................14
13. Beneficiary Designation ........................................................................................14
14. Rights of Employees ............................................................................................14
14.1 Employment .............................................................................................14
14.2 Participation ..........................................................................................14
15. Change in Control ..............................................................................................14
15.1 In General .............................................................................................14
15.2 Limitation on Payments .................................................................................15
15.3 Definition .............................................................................................15
16. Amendment, Modification, and Termination of Plan ...............................................................15
17. Tax Withholding ................................................................................................16
18. Indemnification ................................................................................................16
19. Requirements of Law ............................................................................................17
19.1 Requirements of Law ....................................................................................17
19.2 Governing Law ..........................................................................................17
</TABLE>
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<PAGE> 5
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> 6
"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.
"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.
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"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 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.
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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 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
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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.
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.
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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.
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
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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 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.
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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.
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
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(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
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,
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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 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.
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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 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
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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.
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
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.
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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 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
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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
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.
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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.
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
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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").
(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
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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.
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.
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