<PAGE> 1
Registration No. 000-22201
Filed May 23, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
EMERALD FINANCIAL CORP.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its Articles of Incorporation)
Ohio 34-1842953
------------------------------ ------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
14092 Pearl Road, Strongsville, Ohio 44136
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(Address of Principal Executive Offices)
Emerald Financial Corp. 1994 Long-Term Incentive Plan
-------------------------------------------------------------------------
(Full Title of Plan)
John F. Ziegler
Executive Vice President &
Chief Financial Officer
Emerald Financial Corp.
14092 Pearl Road, Strongsville, Ohio 44136
(216) 238-7311
- --------------
(Name, address and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------
Title of Amount Proposed maxi- Proposed maxi- Amount of
Securities to be to be mum offering mum aggregate Registration
Registered (1) Registered Price per share(2) offering price(2) Fee(3)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Stock, No par 100,000 $ 14.25 $1,425,000.00 $ 431.82
value
===========================================================================================================================
<FN>
Notes:
1. Includes the exercise of options under the Emerald Financial Corp. 1994
Long-Term Incentive Plan and the resale of such shares by non-affiliated
persons to the public.
2. Estimated solely for the purpose of calculating the registration fee, which
has been calculated pursuant to Rule 457(h). The proposed Maximum Offering
Price Per Share is the average of the high and low prices of the common
stock, without par value, of Emerald Financial Corp. on the NASDAQ National
Market on May 19, 1997.
3. Computed in accordance with Rule 457(h) under the Act.
- -----------------
This Registration Statement shall become effective automatically upon the date
of filing in accordance with Section 8(a) of the Securities Act of 1933, as
amended, and 17 C.F.R. Section 230.462.
</TABLE>
Page 1 of 7 pages
Index to Exhibits is located on page 7
<PAGE> 2
Emerald Financial Corp.
S-8 Registration
PART I.
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents constituting Part I of this Registration Statement will
be given to participants in the Strongsville Savings Bank 1994 Long-Term
Incentive Plan (the "Plan") as specified of Rule 428(b)(1) under the Securities
Act of 1933, as amended (the "Securities Act"). In accordance with the rules and
regulations of the Securities and Exchange Commission (the "SEC") and the
instructions to Form S-8, such documents are not being filed with the SEC either
as part of this Registration Statement or as a prospectus pursuant to Rule 424.
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Emerald Financial Corp. (Company or Registrant) incorporates by
reference into this registration statement the following documents:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed with the SEC under SEC File No.
000-22201.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, filed with the SEC under SEC File No.
000-22201.
(c) The description of the Registrant's Common Stock, without par
value, contained in the Company's Registration Statement on
Form 8-A dated March 6, 1997.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (Exchange
Act), prior to the filing of a post-effective amendment which indicates that all
securities offered herein have been sold, or which deregisters all securities
then remaining unsold, shall be deemed incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
A legal opinion has been rendered by Grady & Associates to the effect
that when issued in accordance with the Plan, Registrant's common shares will be
duly issued and outstanding and fully paid and non-assessable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Section 1701.13(E) of the Ohio Revised Code, the Company
will indemnify any director or officer and any former director or officer of the
Company, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement, actually and reasonably incurred by him or her by
reason of the fact that he or she is or was such a director or officer, 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.
Article IV, Section A of the Code of Regulations of the Company
provides that the Company shall indemnify any person who is or was a director or
officer of the company or who is serving at the request of the Company as a
director or officer against expenses (including attorney's fees, judgments,
fines and
2
<PAGE> 3
Emerald Financial Corp.
S-8 Registration
amounts paid in settlement) actually and reasonably incurred by him or her by
reason of the fact that he or she was such director or officer in connection
with any threatened, pending or contemplated action, suit or proceeding, whether
civil, criminal, administrative or investigative to the full extent and
according to the procedures and requirements in the Oho Revised Code as the same
may be in effect from time to time.
The Company has purchased insurance policies indemnifying its officers
and directors and the officers and directors of its subsidiary against claims
and liabilities (with stated exceptions) to which they may become subject by
reason of their positions with the Company as officers and directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8 (numbering corresponds to Exhibit Table
in Item 601 of Regulation S-K).
NO. EXHIBIT
(5) Opinion of Grady & Associates regarding legality
(23.1) Consent of Deloitte & Touche LLP
(23.2) Consent of Grady & Associates (appears in their opinion filed
as Exhibit 5)
(24) Power of Attorney for any subsequent amendments (contained in
the signature page to this Registration Statement).
(99.1) Emerald Financial Corp. 1994 Long-Term Incentive Plan
(99.2) Form of Emerald Financial Corp 1994 Long-Term Incentive
Agreement
3
<PAGE> 4
Emerald Financial Corp.
S-8 Registration
ITEM 9 UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers and
sales are being made, a post-effective amendment to this
registration statement to include any material information
with respect to the plan of distribution not previously
disclosed in this registration statement or any material
change to such information in this registration statement;
(2) That, for the purpose of determining any liability
under the Act, 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; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered that remain unsold at the termination of the
offering.
(4) The Company hereby undertakes that, for purposes
of determining any liability under the Act, each filing of its
annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act that is incorporated by reference in this
registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers and
controlling persons of the Company, the Company has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person
of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
4
<PAGE> 5
Emerald Financial Corp.
S-8 Registration
SIGNATURES
THE REGISTRANT. 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 Strongsville, State of Ohio, on the 21st day of May
1997.
EMERALD FINANCIAL CORP.
BY: \S\ THOMAS P. PERCIAK
--------------------------
Thomas P. Perciak
President and Chief Executive Officer
BY: \S\ JOHN F. ZIEGLER.
----------------------
John F. Ziegler
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW BY ALL MEN BY THESE PRESENT that each person whose signature
appears below constitutes and appoints Thomas P. Perciak and John F. Ziegler and
each of them (with full power in each acting alone), as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his 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 other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in or about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
5
<PAGE> 6
Emerald Financial Corp.
S-8 Registration
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
- ------------------------------------ ----------------------------------- -----------------------------------
SIGNATURE TITLE DATE
- ------------------------------------ ----------------------------------- -----------------------------------
<S> <C> <C>
\S\ THOMAS P. PERCIAK President, Chief Executive
- ----------------------- Officer and Director May 21, 1997
Thomas P. Perciak
\S\ JOHN F. ZIEGLER Executive Vice President, Chief
- --------------------- Financial Officer and Director May 21, 1997
John F. Ziegler
\S\ MIKE KALINICH Chairman of the Board of Directors May 21, 1997
- ------------------
Mike Kalinich
\S\ JOAN M. DZURILLA Director May 21, 1997
- ---------------------
Joan M. Dzurilla
\S\ WILLIAM A. FRAUNFELDER, JR. Director May 21, 1997
- -------------------------------
William A. Fraunfelder, Jr.
\S\ GLENN W. GOIST
- -------------------
Glenn W. Goist Director May 21, 1997
\S\ GEORGE P. BOHNERT, JR. Director May 21, 1997
- --------------------------
George P. Bohnert, Jr.
\S\ JOHN J. PLUCINSKY
- ----------------------
John J. Plucinsky Director May 21, 1997
\S\ KENNETH J. PIECHOWSKI
- --------------------------
Kenneth J. Piechowski Director May 21, 1997
- ------------------------------------ ----------------------------------- -----------------------------------
</TABLE>
6
<PAGE> 7
Emerald Financial Corp.
S-8 Registration
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8
Exhibit Number Description
- --------------- -----------
5 Opinion of Grady & Associates regarding legality
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Grady & Associates (appears in their opinion filed
as Exhibit 5)
24 Power of Attorney for any subsequent amendments (contained in
the signature page to this Registration Statement).
99.1 Emerald Financial Corp. 1994 Long-Term Incentive Plan
99.2 Form of Emerald Financial Corp 1994 Long-Term Incentive
Agreement
7
<PAGE> 1
Exhibit 5
May 21, 1997
Board of Directors
Emerald Financial Corp.
14092 Pearl Road
Strongsville, OH 44136
RE: Form S-8 Registration Statement
Gentlemen and Ladies:
We are rendering this opinion in connection with the Form S-8
Registration Statement (the "Registration Statement") filed by Emerald Financial
Corp. (the "Company") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on or about the date hereof. The
Registration Statement relates to 100,000 shares of the Company's Common Stock,
no par value, (the "Shares") offered pursuant to the provisions of the Company's
1994 Long-Term Incentive Plan (the "Plan").
We have acted as your counsel in connection with the preparation of the
Registration Statement and are familiar with the proceedings taken by the
Company in connection with authorization, issuance and sale of the Shares. We
have examined such corporate documents, records, certificates, and papers, and
have made an examination of such legal matters, and have taken such other steps
as deemed relevant and necessary as a basis for the opinion hereinafter set
forth.
To the extent that this opinion is based upon factual information, we
have relied upon certain representations and certifications made by the
executive management of the Company, and we have no reason to believe that
reliance thereon is unwarranted.
For the purposes of this opinion, we have assumed the genuineness of
all signatures on all documents submitted to us, assumed the authenticity of all
documents submitted as originals to us and the conformity to the original
documents of all copies of documents submitted to us.
Based upon the foregoing, we are of the opinion that when issued in
accordance with the terms of the Plan and the options or other awards granted
thereunder, the Shares will be duly authorized, validly issued, fully paid and
nonassessable. No other opinion should be inferred as to any other matters not
specifically covered herein. The opinion expressed herein is expressed solely
<PAGE> 2
Emerald Financial Corp.
May 23, 1997
Page 2
to the addressee hereof, who may rely thereon, and this opinion shall not be
deemed to be extended to any other person.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement covering the Shares.
Sincerely yours,
Grady & Associates
Exhibit 5, Page 2
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
Emerald Financial Corp.
We consent to the incorporation by reference in this Registration Statement of
Emerald Financial Corp. on Form S-8 of our report dated January 25, 1997 (which
expresses an unqualified opinion and contains an explanatory paragraph
describing the adoption of a new accounting pronouncement in 1995) on the
consolidated financial statements of The Strongsville Savings Bank incorporated
by reference in the Annual Report on Form 10-K of Emerald Financial Corp. for
the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
Cleveland, Ohio
May 21, 1997
<PAGE> 1
EXHIBIT 99.1
EMERALD FINANCIAL CORP.
1994 LONG-TERM INCENTIVE PLAN
<PAGE> 2
SECTION CONTENTS PAGE
------- -------- ----
1. Purpose; Definitions 1
2. Administration 3
3. Stock Subject to the Plan 5
4. Eligibility 6
5. Stock Options 6
6. Restricted Stock 10
7. Long-Term Performance Awards 12
8. Change-in-Control Provisions 14
9. Amendments and Termination 16
10. Unfunded Status of Plan 16
11. General Provisions 17
12. Indemnification 18
13. Effective Date of Plan 18
14. Term of Plan 18
15. Holding Company 18
16. Initial Grant 19
i
<PAGE> 3
SECTION 1. PURPOSE; DEFINITIONS.
The name of this plan is Emerald Financial Corp. 1994 Long-Term
Incentive Plan (the "Plan"). The purpose of the Plan is to enable persons who
contribute to the success of Emerald Financial Corp. (the "Company") to
participate in the Company's future by offering them long-term performance-based
incentives. The Plan also provides a means through which the Company can attract
and retain key individuals of particular merit.
For the purposes of the Plan, the following terms shall be defined as
set forth below:
a. "AFFILIATE" means any entity that owns, directly or indirectly, more
than fifty percent (50%) of the combined voting power of the Company's
outstanding shares of stock.
b. "BOARD" means the Board of Directors of the Company.
c. "CAUSE" means a felony conviction of a Participant or the failure of a
Participant to contest prosecution for a felony, or a Participant's willful
misconduct or dishonesty, any of which is directly or materially harmful to the
business or reputation of the Company, an Affiliate or a Subsidiary.
d. "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
e. "COMMITTEE" means the Committee referred to in Section 2 of the Plan.
If at any time no Committee shall be in office, then the functions of the
Committee specified in the Plan shall be exercised by members of the Board who
qualify as Disinterested Persons.
f. "COMPANY" means Emerald Financial Corp., a savings association
organized under the laws of the State of Ohio, or any successor organization.
g. "DISABILITY" means a condition which renders an employee unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which can be expected to last for a continuous period of not less than
twelve (12) months. The determination of an employee's disability under this
Plan shall be determined by a physician chosen by the Committee.
Exhibit 99.1 Page 1
<PAGE> 4
h. "DISINTERESTED PERSON" means any member of the Board who within the
prior year has not been, and is not being, granted any awards related to the
Stock under this Plan or any other plan of the Company or any of its Affiliates
except for awards which (i) are calculated in accordance with a formula as
contemplated in paragraph (c)(ii) of Rule 16b-3 ("Rule 16b-3") under the
Securities Exchange Act of 1934; (ii) result from participation in an ongoing
securities acquisition plan meeting the conditions of paragraph (d)(2) of Rule
16b-3; or, (iii) arise from an election by a director to receive all or part of
his board fees in securities. No recipient of a stock award granted pursuant to
Section 16 hereof shall be deemed not to be a Disinterested Person solely by
reason of such grant.
i. "EARLY RETIREMENT" means separation from service with the Company or
a Subsidiary, with consent of the Committee at the time of separation, pursuant
to the early retirement provisions of the qualified pension plan maintained by
the Company or a Subsidiary.
j. "FAIR MARKET VALUE" means, as of any given date (or, if there is no
reported sale on such date, on the last proceeding date on which any reported
sale occurred), the mean between the closing high bid and low asked quotations
with respect to the Stock on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of
the Stock as the Committee shall determine.
k. "INCENTIVE STOCK OPTION" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
l. "INSIDER PARTICIPANT" shall have the meaning set forth in clause (vii)
of Section 2.
m. "LONG-TERM PERFORMANCE AWARD" or "LONG-TERM AWARD" means an award
made pursuant to Section 7 below that is payable in cash and/or Stock (including
Restricted Stock) in accordance with the terms of the grant, based on Company,
business unit and/or individual performance over a period of at least two (2)
years.
n. "NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
Exhibit 99.1 Page 2
<PAGE> 5
o. "NORMAL RETIREMENT" means separation from service with the Company
and any Subsidiary or Affiliate pursuant to the normal retirement provisions of
the pension plan of the Company or a Subsidiary.
p. "PARTICIPANT" means an individual to whom a Stock Option or award is
granted pursuant to the Plan.
q. "PLAN" means this 1994 Long-Term Incentive Plan of Emerald Financial
Corp., as hereinafter amended from time to time.
r. "RESTRICTED STOCK" means an award of shares of Stock that is subject
to restrictions pursuant to Section 6.
s. "RETIREMENT" means Normal Retirement or Early Retirement.
t. "STOCK" means the capital stock, without par value, of the Company.
u. "Stock Option" or "Option" means any option to purchase shares of
Stock.
v. "SUBSIDIARY" means any corporation, other than the employer
corporation, in an unbroken chain of corporations beginning with the employer
corporation if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one or more of the other
corporations in such chain.
In addition, the terms "CHANGE IN CONTROL", "POTENTIAL CHANGE IN
CONTROL" and "CHANGE-IN-CONTROL PRICE" shall have meanings set forth,
respectively, in Sections 8(b), (c) and (d) below.
SECTION 2. ADMINISTRATION
The Plan shall be administered by a Committee of not less than three
persons, who shall be appointed by the Board of Directors of the Company and who
shall serve at the pleasure of the Board. To the extent necessary to ensure that
the Plan complies with Rule 16b-3 or any successor rule of the Securities and
Exchange Commission (the "SEC") insofar as Insider Participants (as hereinafter
defined) are concerned, the members of the Committee shall be Disinterested
Persons. To the extent the Board performs the duties of the Committee, only the
directors who are Disinterested Persons shall perform such duties.
Exhibit 99.1 Page 3
<PAGE> 6
The Committee shall have plenary authority to grant to eligible
employees, pursuant to the terms of the Plan: (i) Stock Options, (ii) Restricted
Stock, and/or (iii) Long-Term Performance Awards.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of the Company or
any Subsidiary to whom Stock Options, Restricted Stock, and Long-Term
Performance Awards may from time to time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Restricted Stock, and Long-Term Performance Awards,
or any combination thereof, are to be granted hereunder;
(iii) to determine the number of shares to be covered by each such
award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder, including, but not limited
to, the share price and any restriction or limitation, or any vesting
acceleration or forfeiture waiver regarding any Stock Option or other award
and/or the shares of Stock relating thereto, based on such factors as the
Committee shall determine in its sole discretion;
(v) to determine whether and under what circumstances a Stock Option
may be settled in cash or stock, including Restricted Stock under Section 5(k);
(vi) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an award under this Plan shall
be deferred either automatically or at the election of the Participant; and
(vii) to establish in respect of Participants who are or become subject
to the provisions of the Exchange Act, as defined in Section 8(b)(i) hereof, by
reason of being directors, executive officers or owners of more than ten percent
(10%) of any class of equity security of the Company ("Insider Participants")
such additional or different terms and conditions than those applicable to
Participants generally, or to make changes thereto or amendments thereof that
apply only to such Participants, as the Committee may determine are necessary to
ensure that the Plan and grants or awards made or to be made hereunder satisfy
the provisions of Rule 16b-3 under the Exchange Act in respect of Insider
Participants. Likewise, the Committee shall have authority to make changes or
amendments to the Plan and grants and awards made or to be made hereunder, with
or without shareholder approval, that are limited to Participants other than
Insider Participants if such changes or amendments would adversely affect the
qualification of the Plan or such grants and awards under Rule 16b-3 in respect
of Insider Participants or require shareholder approval in order to maintain
Exhibit 99.1 Page 4
<PAGE> 7
such qualification. The Committee may provide that terms and conditions made
applicable only to Insider Participants expire automatically as to any Insider
Participant who ceases, by reason of retirement or otherwise, to be an Insider
Participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable; to interpret the terms and provisions of the
Plan and any Stock Option or award issued under the Plan (and any agreements
relating thereto); except insofar as Insider Participants are concerned, to
delegate its authority under this Plan to one or more individuals; and otherwise
to supervise the administration of the Plan.
Decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company, any Subsidiary
and Participants.
With respect to Insider Participants, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successor(s) under the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails, in respect of such Participants, to so comply, it
shall be deemed null and void to that extent, as permitted by law and as deemed
advisable by the Committee.
SECTION 3. STOCK SUBJECT TO THE PLAN
The total number of shares of Stock reserved and available for
distribution under the Plan shall be One Hundred Twenty-Five Thousand (125,000)
shares, subject to any adjustment as set forth in the last paragraph of this
Section 3. Such shares may consist, in whole or in part, of authorized but
unissued shares or treasury shares.
Subject to Section 5(d) below, when payment for shares of Stock
purchased pursuant to the exercise of a Non-Qualified Stock Option is made in
full or in part by means of a Stock-for-Stock swap, then a number of shares of
Stock equal to the difference between the number of shares obtained upon such
exercise and the number of shares representing the optionee's gain as a result
of such exercise shall remain available for distribution in connection with
future awards under the Plan.
Subject to Section 6(b)(iv) below, if any shares of Stock cease to be
subject to a Stock Option, or if any such shares of Stock that are subject to
any Restricted Stock award or Long-Term Performance Award granted hereunder are
forfeited or any such award otherwise terminates without a payment being made to
the Participant in the form of Stock, such shares shall again be available for
distribution in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend or split, distribution of assets to
shareholders or other change in corporate structure affecting the
Exhibit 99.1 Page 5
<PAGE> 8
Stock, a substitution or adjustment shall be made in the aggregate number of
shares reserved for issuance under the Plan, the number and option price of
shares subject to outstanding Options granted under the Plan or both, as may be
determined to be appropriate by the Committee in its sole discretion; PROVIDED,
HOWEVER, that the number of shares subject to any award shall always be a whole
number.
SECTION 4. ELIGIBILITY
Directors, officers and employees of the Company or a Subsidiary (but
excluding any member of the Committee to the extent necessary to maintain the
Committee member's status as a Disinterested Person) who, in the Committee's
judgment, are responsible for or contribute to the management, growth and/or
profitability of the business of the Company and/or its Subsidiaries and
Affiliates are eligible to be granted awards under the Plan. The maximum number
of shares of Stock with respect to which a Stock Option or Stock Options may be
granted to any employee in any one taxable year of the Company shall not exceed
100,000 shares.
SECTION 5. STOCK OPTIONS
Stock Options may be granted alone, in addition to or in tandem with
other awards granted under the Plan. Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options. To
the extent that any Stock Option does not qualify as an Incentive Stock Option,
it shall constitute a separate Non-Qualified Stock Option. The Committee may
provide that Incentive Stock Options may be converted to Non-Qualified Stock
Options following grant.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the optionee(s) affected, to disqualify any Incentive
Stock Option under such Section 422.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) OPTION PRICE. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant
but shall be not less than 100% of the
Exhibit 99.1 Page 6
<PAGE> 9
Fair Market Value of the Stock at the time of grant; PROVIDED, HOWEVER, that
any Incentive Stock Option granted to any optionee who, at the time the option
is granted, owns more than 10% of the voting power of all classes of stock of
the Company or of a parent corporation or subsidiary corporation (as determined
under Code Sections 422 and 424 and the regulations thereunder), shall have an
exercise price no less than 110% of Fair Market Value per share on date of the
grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
(10) years after the date the Option is granted and no Non-Qualified Stock
Option shall be exercisable more than ten (10) years and one day after the date
the Option is granted; PROVIDED, HOWEVER, that any Option granted to any
optionee who, at the time the Option is granted, owns more than 10% of the
voting power of all classes of Stock of the Company or of a parent corporation
or subsidiary corporation (as determined under Code Sections 422 and 424 and
the regulations thereunder), may not have a term of more than five (5) years.
No Option may be exercised by any person after expiration of the term of the
option.
(c) EXERCISABILITY. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at or after grant; PROVIDED, HOWEVER, that, except as set forth in
Section 5(g) and Section 8, unless otherwise determined by the Committee at or
after grant, no Stock Option shall be exercisable prior to the first
anniversary date of the granting of the Option. If the Committee in its
discretion provides that any Stock Option is exercisable only in installments,
the Committee may waive such installment exercise provisions at any time at or
after grant in whole or in part, based on such factors as the Committee shall
determine in its sole discretion.
(d) METHOD OF EXERCISE. Subject to whatever installment exercise
provisions apply under Section 5(c), Stock Options may be exercised in whole or
in part at any time and from time to time during the option term, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check, or such other instrument as
the Committee may accept. As determined by the Committee in its sole discretion
at or after grant, payment in full or in part may also be made in the form of
unrestricted Stock already owned by the optionee or, in the case of the exercise
of a Non-Qualified Stock Option, Restricted Stock subject to an award hereunder
(based, in each case, on the Fair Market Value of the Stock on the date the
option is exercised, as determined by the Committee); PROVIDED, HOWEVER, that in
the case of an Incentive Stock Option, the right to make a payment in the form
of already owned shares may be authorized only at the time the option is
granted.
If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock, such
Restricted Stock (or any replacement shares relating thereto) shall remain (or
be) restricted, as the case may be, in accordance with the original terms of
the Restricted Stock award in question, and any additional Stock received upon
the
Exhibit 99.1 Page 7
<PAGE> 10
exercise shall be subject to the same forfeiture restrictions, unless otherwise
determined by the Committee in its sole discretion at or after grant.
If payment of the Option exercise price of an Option is made in
whole or in part in the form of unrestricted Stock already owned by the
Participant, the Company may require that the Stock shall have been owned by
the Participant for a period of time that would not result in a charge to the
Company's earnings as a result of the exercise; PROVIDED, HOWEVER, that in no
event may the Stock tendered be held for less than six(6) months by the
Participant. Such provision may be used by the Company to prevent a pyramid
exercise.
No shares of Stock shall be issued until full payment therefor
has been made. An optionee shall generally have the rights to dividends or other
rights of a shareholder with respect to shares subject to the Option when the
optionee has given written notice of exercise,has paid in full for such shares,
and, if requested, has given the representation described in Section 11(a).
(e) REPLACEMENT OPTIONS. If an Option granted pursuant to the Plan is
exercised by an optionee, then at the discretion of the Committee, the
Participant may receive a replacement Option pursuant to this part of the Plan
to purchase a number of shares determined by the Committee, with an exercise
price equal to the then current Fair Market Value, and with a term extending to
the expiration date of the original Option.
(f) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee other than by will or the laws of descent and
distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee; PROVIDED, HOWEVER, that Non-Qualified Stock
Options may be transferred by Participants other than Insider Participants to
family members, and thereafter exercised by them, without regard to this
Section 5(f).
(g) TERMINATION BY REASON OF DEATH. Subject to Section 5(k), if an
optionee's service with the Company and any Subsidiary or Affiliate terminates
by reason of death, any Incentive Stock Option held by such optionee may
thereafter be exercised, to the extent then exercisable or on such accelerated
basis as the Committee may determine at or after grant, by the legal
representative of the estate or by the legatee of the optionee under the will
of the optionee, for a period of one (1) year (or such shorter period as the
Committee may specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter. Non-Qualified Stock Options held by such optionee may be exercised
following the optionee's death, to the extent then exercisable or on such
accelerated basis as the Committee may determine at or after grant, by the
legal representative of the estate, legatee of the optionee under the will of
the optionee or by a family member transferee of the optionee for a period of
one (1) year (or such shorter period as the Committee may specify at grant)
from the date of such death.
(h) TERMINATION BY REASON OF DISABILITY. Subject to Section 5(k), if
an optionee's service with the Company and any Subsidiary or Affiliate
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was
Exhibit 99.1 Page 8
<PAGE> 11
exercisable at the time of termination, or on such accelerated basis as the
Committee may determine at or after grant, for a period of three (3) years (or
such shorter period as the Committee may specify at grant) from the date of
such termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is the shorter; PROVIDED, HOWEVER, that, if
the optionee dies within such three-year period (or such shorter period as the
Committee shall specify at grant) any unexercised Stock Option granted to such
optionee shall thereafter be exercisable as provided in Section 5(g) above. In
the event of termination of service by reason of Disability, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.
(i) TERMINATION BY REASON OF RETIREMENT. Subject to Section 5(k), if
an optionee's service with the Company or a Subsidiary terminates by reason of
Retirement, any Stock Option granted to such optionee may thereafter be
exercised to the extent it was exercisable at the time of such Retirement or on
such accelerated basis as the Committee may determine at or after grant, for a
period of three (3) years (or such shorter period as the Committee may specify
at grant) from the date of such termination of service or the expiration of the
stated term of such Stock Option, whichever period is the shorter; PROVIDED,
HOWEVER, that, if the optionee dies within such three-year period, any
unexercised Stock Option granted to such optionee shall thereafter be
exercisable as provided in Section 5(g) above. In the event of termination of
service by reason of Retirement, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, such Stock Option thereafter will be treated as a
Non-Qualified Stock Option.
(j) OTHER TERMINATION. A Stock Option shall terminate upon an
optionee's separation from service with the Company or a Subsidiary for any
reason other than death, Disability or Retirement, unless otherwise determined
by the Committee at or after grant of such Stock Option. Notwithstanding the
preceding sentence, an optionee who is involuntarily separated from service
with the Company or a Subsidiary without Cause may exercise any Stock Option in
effect at the time of such separation during the period which ends on the
earlier of the date which is three (3) months after the date of such
termination or the date on which the option term of such Stock Option ends.
(k) INCENTIVE STOCK OPTION LIMITATION. To the extent required for
"incentive stock option" status under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Stock with
respect to which Incentive Stock Options are exercisable for the first time by
an optionee during any calendar year under the Plan and all other plans of the
optionee's employer corporation and its parent corporation and subsidiary
corporations (as determined under Code Sections 422 and 424 and the regulations
thereunder) shall not exceed One Hundred Thousand Dollars ($100,000).
To the extent (if any) permitted under Section 422 of the
Code, if (i) a participant's service with the Company or a Subsidiary is
terminated by reason of death, Disability or
Exhibit 99.1 Page 9
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Retirement and (ii) the portion of any Incentive Stock Option that is otherwise
exercisable during the post-termination period specified under Section 5(g),
(h) or (i) (applied without regard to this Section 5(k)), is greater than the
portion of such Incentive Stock Option that is exercisable as an "incentive
stock option" during such post-termination period under Code Section 422, such
post-termination period shall automatically be extended (but not beyond the
original option term) to the extent necessary to permit the optionee to
exercise such Incentive Stock Option. The Committee may provide at grant for a
similar extension of the post-termination exercise period in the event of a
Change in Control.
(l) CASH-OUT OF OPTION/DEFERRAL OF PAYMENTS: SETTLEMENT OF SPREAD
VALUE IN RESTRICTED STOCK. On receipt of written notice to exercise, the
Committee in its sole discretion may elect to cash out all or part of the
portion of the Option or Options to be exercised by paying the optionee an
amount, in cash or shares of Stock, equal to the excess of the Fair Market
Value of the Stock over the option price (the "Spread Value") on the effective
date of such cash-out.
The Committee may permit a Participant to elect deferral of any
payment to which he is entitled under the Plan under such rules and regulations
as the Committee may establish, including rules and regulations relative to
crediting of interest on deferred amounts denominated in cash and dividend
equivalents on deferred amounts denominated in Stock.
In addition, if the option agreement so provides at grant or is
amended after grant and prior to exercise to so provide (with the optionee's
consent), the Committee may require that all or part of the shares of Stock to
be issued with respect to the Spread Value of an exercised Option take the form
of Restricted Stock, which shall be valued on the date of exercise on the basis
of the Fair Market Value of such Restricted Stock determined without regard to
the forfeiture restrictions involved.
SECTION 6. RESTRICTED STOCK
(a) ADMINISTRATION. Shares of Restricted Stock may be issued either
alone or in addition to other awards granted under the Plan. The Committee shall
determine the persons to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the price (if
any) to be paid by the recipient of Restricted Stock (subject to Section 6(b)),
the time or times within which such awards may be subject to forfeiture, and all
other conditions of the awards.
The Committee may condition the grant of Restricted Stock upon
the attainment of specified performance goals or such other factors as the
Committee in its sole discretion may determine.
The provisions of Restricted Stock awards need not be the same
with respect to each recipient.
Exhibit 99.1 Page 10
<PAGE> 13
(b) AWARDS AND CERTIFICATES. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award, unless and
until such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Company, and has otherwise
complied with the applicable terms and conditions of such award.
(i) The purchase price for shares of Restricted Stock shall be
equal to or less than their par value and may be zero (0).
(ii) Awards of Restricted Stock must be accepted within a period
of sixty (60) days (or such shorter period as the Committee may specify at
grant) after the award date, by executing a Restricted Stock Award Agreement
and paying the specified price (if any) for such Restricted Stock.
(iii) Each Participant receiving a Restricted Stock award shall
be issued a stock certificate in respect of such shares of Restricted Stock.
Such certificate shall be registered in the name of such Participant, and shall
bear an appropriate legend referring to the terms,conditions, and restrictions
applicable to such award, substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of Emerald Financial Corp. 1994 Long-Term Incentive Plan and an
Agreement entered into between the registered owner and Emerald Financial
Corp.. Copies of such Plan and Agreement are on file in the offices of Emerald
Financial Corp., 14092 Pearl Road, Strongsville, Ohio 44136."
(iv) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any Restricted Stock
award, the Participant shall have delivered a stock power, endorsed in blank,
relating to the Stock covered by such award.
(c) RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock
awarded pursuant to this Section 6 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the date of
such award (the "Restriction Period"), the Participant shall not be permitted
to sell, transfer, pledge, assign or otherwise encumber shares of Restricted
Stock awarded under the Plan. Within these limits, the Committee in its sole
discretion may provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions in whole or in part, based on
service, performance and/or such other factors or criteria as the Committee in
its sole discretion may determine.
(ii) Except as provided in this paragraph (ii) and Section
6(c)(i), the Participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a shareholder of the Company, including the right
to vote the shares and the right to receive any dividends. The
Exhibit 99.1 Page 11
<PAGE> 14
Committee in its sole discretion as determined at the time of award, may permit
or require the payment of cash dividends to be deferred, reinvested in
additional Restricted Stock (subject to the restrictions in Section 11(f)) or
otherwise reinvested.
(iii) Subject to the applicable provisions of the award
agreement and this Section 6, upon termination of a Participant's service with
the Company or a Subsidiary for any reason during the Restriction Period, all
shares still subject to restriction shall be forfeited by the Participant.
(iv) In the event of hardship or other special circumstances of
a Participant whose service with the Company or a Subsidiary is involuntarily
terminated (other than for Cause), the Committee in its sole discretion may
waive in whole or in part any or all remaining restrictions with respect to
such Participant's shares of Restricted Stock, based on such factors as the
Committee may deem appropriate.
(v) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction Period, the
certificates for such shares shall be delivered to the Participant within a
reasonable period of time after the expiration of such Restriction Period.
SECTION 7. LONG-TERM PERFORMANCE AWARDS
(a) AWARDS AND ADMINISTRATION. Long-Term Performance Awards may be
awarded either alone or in addition to other awards granted under the Plan. The
Committee shall determine: (i) the nature, length and starting date of the
performance period (the "Performance Period") for each Long-Term Performance
Award (which shall be at least two (2) years (subject to Section 8)); (ii) the
performance objectives to be used in valuing Long-Term Performance Awards; and
(iii) the extent to which such Long-Term Performance Awards have been earned.
Performance objectives may vary from Participant to Participant and between
groups of Participants and shall be based upon such Company, business unit
and/or individual performance factors and criteria as the Committee may deem
appropriate. Performance Periods may overlap and Participants may participate
simultaneously with respect to Long-Term Performance Awards that are subject to
different Performance Periods and/or different performance factors and criteria.
At the beginning of each Performance Period,the Committee
shall determine for each Long-Term Performance Award subject to such Performance
Period the range of dollar values or number of shares of Stock to be awarded to
the Participant at the end of the Performance Period if and to the extent that
the relevant measure(s) of performance for such Long-Term Performance Award is
(are) met. Such dollar values or number of shares of Stock may be fixed or may
vary in accordance with such performance and/or other criteria as may be
specified by the Committee in its sole discretion.
Exhibit 99.1 Page 12
<PAGE> 15
(b) ADJUSTMENT OF AWARDS. In the event of special or unusual events or
circumstances affecting the application of one or more performance objectives to
a Long-Term Performance Award, the Committee may revise the performance
objectives and/or underlying factors and criteria applicable to the Long-Term
Performance Awards affected, to the extent deemed appropriate by the Committee
in its sole discretion to avoid unintended windfalls or hardship.
(c) TERMINATION OF EMPLOYMENT. Subject to Section 8 and unless
otherwise provided in the applicable award agreement(s), if a Participant
terminates service with the Company or a Subsidiary during a Performance Period
because of death, Disability or Retirement, such Participant shall be entitled
to a payment with respect to each outstanding Long-Term Performance Award at the
end of the applicable Performance Period:
(i) based, to the extent relevant under the terms of the award,
upon the Participant's performance for the portion of such Performance Period
ending on the date of termination and the performance of the applicable
business unit(s) for the entire Performance Period, and
(ii) prorated, where deemed appropriate by the Committee, for
the portion of the Performance Period during which the Participant rendered
service to the Company or a Subsidiary,
all as determined by the Committee in its sole discretion;
PROVIDED, HOWEVER, that the Committee may provide for an earlier payment in
settlement of such award in such amount and under such terms and conditions as
the Committee deems appropriate.
Subject to Section 8, if a Participant terminates service with
the Company during a Performance Period for any reason other than death,
Disability or Retirement, then such Participant shall not be entitled to any
payment with respect to the Long-Term Performance Awards subject to such
Performance Period, unless the Committee shall otherwise determine in its sole
discretion.
Payment shall be made in the form of cash or whole shares of
Stock, including Restricted Stock, either in a lump sum payment or in annual
installments commencing as soon as practicable after the end of the relevant
Performance Period, all as the Committee shall determine at or after grant. If
and to the extent a Long-Term Performance Award is payable in Stock and the
full amount of such value is not paid in Stock, then the shares of Stock
representing the portion of the value of the Long-Term Performance Award not
paid in Stock shall again become available for award under the Plan.
Exhibit 99.1 Page 13
<PAGE> 16
SECTION 8. CHANGE-IN-CONTROL PROVISIONS
(a) IMPACT OF EVENT. In the event of:
(1) a "Change in Control" as defined in Section 8(b), unless
otherwise determined by the Committee or the Board at or after grant, but prior
to the occurrence of such Change in Control, or
(2) a "Potential Change in Control" as defined in Section
8(c), but only if and to the extent so determined by the Committee or the Board
at or after grant (subject to any right of approval expressly reserved by the
Committee or the Board at the time of such determination),
the following acceleration and valuation provisions shall apply:
(i) The restrictions and deferral limitations applicable to
any Restricted Stock awards under the Plan shall lapse and such awards shall be
deemed fully vested.
(ii) The value of all outstanding Stock Options and
Restricted Stock awards, unless otherwise determined by the Committee at or
after grant, shall be cashed out on the basis of the "Change-in-Control Price"
as defined in Section 8(d) as of the date such Change in Control or such
Potential Change in Control is determined to have occurred, or such other date
as the Committee may determine prior to the Change in Control.
(iii) Any outstanding Long-Term Performance Awards shall be
vested and paid out based on the prorated target results for the Performance
Periods in question, unless the Committee provides otherwise at or after grant
and prior to the Change in Control event.
(b) DEFINITION OF "CHANGE IN CONTROL". For purposes of
Section 8(a), a "Change in Control" means the happening of any of the
following:
(i) When any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), other
than the Company or an Affiliate or any Company employee benefit plan
(including any trustee of such plan acting as trustee) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly of securities of the Company representing twenty percent (20%)
or more of the combined voting power of the Company's then outstanding
securities (other than a person who holds twenty percent (20%) or more of the
combined voting power of the Company's outstanding securities at the time this
Plan is first approved by shareholders at the Company's 1994 Annual Meeting of
Shareholders);
(ii) The occurrence of any transactions or event relating to
the Company required to be described pursuant to the requirements of Item 6(e)
of Schedule 14A of the SEC
Exhibit 99.1 Page 14
<PAGE> 17
under the Exchange Act (as in effect on the effective date of this Plan),
whether or not the Company is then subject to such reporting requirement;
(iii) When, during any period of two (2) consecutive years
during the existence of the Plan, the individuals who, at the beginning of
such period, constitute the Board, cease for any reason other than death to
constitute at least a two-thirds (2/3) majority thereof; provided, however,
that a director who was not a director at the beginning of such period shall
be deemed to have satisfied the two-year requirement if such director was
elected by, or on the recommendation of, at least two-thirds (2/3) of the
directors who were directors at the beginning of such period (either actually
or by prior operation of this Section 8(b)(iii);
(iv) The occurrence of a transaction requiring shareholder
approval for the acquisition of the Company by an entity other than the
Company through purchase of assets, by merger, or otherwise; or
(v) The occurrence of any transaction or event that results
in a change of control of the Company or a Subsidiary within the meaning of 12
U.S.C. Section 1817, Change in Bank Control Act, or 12 C.F.R. Part 574 of the
Rules and Regulations of the Office of Thrift Supervision promulgated
thereunder, as in effect on the effective date of this Plan.
(c) DEFINITION OF POTENTIAL CHANGE IN CONTROL. For purposes of
Section 8(a), a "Potential Change in Control" means the occurrence of any one
of the following:
(i) The entering into an agreement by the Company, the
consummation of which would result in a Change in Control of the Company as
defined in Section 8(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group other than the Company, an
Affiliate or any Company employee benefit plan (including any trustee of such
plan acting as such trustee) of securities of the Company representing five
percent (5%) or more of the combined voting power of the Company's outstanding
securities, and the adoption of a resolution by the Board to the effect that a
Potential Change in Control of the Company has occurred for the purposes of
this Plan.
(d) CHANGE-IN-CONTROL PRICE. For purposes of this Section 8,
"Change-in-Control Price" means the average of the high and low quoted sales
price per share paid in any transaction reported on a stock exchange or if the
shares are not listed or admitted to trading on any such exchange, the mean
between the closing high bid and low asked quotations with respect to a share of
Stock on such date on the National Association of Securities Dealers, Inc.
Automated Quotations System, or if no such quotations are available, the fair
market value on such date as the Committee shall determine; provided, however,
that, in the case of Incentive Stock Options, such price shall be based only on
transactions reported for the date on which the Committee decides to cash out
such options.
Exhibit 99.1 Page 15
<PAGE> 18
SECTION 9. AMENDMENTS AND TERMINATION
The Board may amend, alter, or discontinue the Plan at any time and
from time to time, but no amendment, alteration, or discontinuation shall be
made which would impair the rights of an optionee or Participant under a Stock
Option, Restricted Stock, or Long-Term Performance Award theretofore granted,
without the optionee's or Participant's consent, except as expressly allowed
pursuant to the terms of this Plan. Except to the extent allowed under clause
(vii) of Section 2, no amendment, alteration or discontinuation shall be made
which, without the approval of the Company's shareholders, would:
(a) except as expressly provided in this Plan, increase the
total number of shares reserved for the purpose of this Plan;
(b) decrease the option price of any Stock Option to less than
one hundred percent (100%) of the Fair Market Value on the date of grant;
(c) change the employees or class of employees eligible to participate
in the Plan; or
(d) extend the maximum option period under Section 5(b) of the Plan.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent, except as expressly allowed pursuant to the terms of this
Plan. The Committee may substitute new Stock Options for previously granted
Stock Options, including previously granted Stock Options having higher option
prices.
Subject to the above provisions, the Board may amend the Plan to take
into account changes in applicable tax laws and accounting rules, as well as
other developments; PROVIDED, HOWEVER, that shareholder approval of any
amendment shall be obtained (and such amendment shall be conditioned on such
approval) to the extent necessary to maintain the status of the Plan as a plan
satisfying the requirements of SEC Rule 16b-3.
SECTION 10. UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant or optionee by the Company, nothing contained herein shall give any
such Participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder; PROVIDED, HOWEVER, that, unless the Committee otherwise determines
with the consent of the affected individual, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of the Plan.
Exhibit 99.1 Page 16
<PAGE> 19
SECTION 11. GENERAL PROVISIONS
(a) The Committee may require each individual purchasing shares
pursuant to a Stock Option under the Plan to represent to and agree with the
Company in writing that the person is acquiring the shares without a view to
distribution thereof. The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock or other securities
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the SEC, any national securities
association or any stock exchange upon which the Stock is then listed or
authorized for quotation, and any applicable Federal or state securities law,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements subject to shareholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of the
Company any right to continued employment with the Company or a Subsidiary, nor
shall it interfere in any way with the right of the Company or a Subsidiary to
terminate the employment or change the compensation of any of its employees at
any time.
(d) No later than the date as of which an amount received pursuant to
this Plan first becomes includible in the gross income of an individual for
Federal income tax purposes with respect to any award under the Plan, the
individual shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations may be settled
with Stock, including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the individual.
(e) At the time of grant, the Committee may provide in connection with
any grant made under this Plan that the shares of Stock received as a result of
such grant shall be subject to a right of first refusal, pursuant to which the
individual shall be required to offer to the Company any shares that the
individual wishes to sell, at the then Fair Market Value of the Stock, subject
to such other terms and conditions as the Committee specify at the time of
grant.
(f) The reinvestment of dividends in additional Restricted Stock at
the time of any dividend payment shall only be permissible if sufficient shares
of Stock are available under Section 3 for such reinvestment (taking into
account then outstanding Stock Options).
Exhibit 99.1 Page 17
<PAGE> 20
(g) The Committee shall establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any amounts
payable in the event of the Participant's death are to be paid.
(h) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Ohio.
(i) The Committee may allow dividend equivalent payments or credit
rights with respect to any award or grant under this Plan denominated in Stock
or Stock equivalents.
SECTION 12. INDEMNIFICATION
The Company shall indemnify and hold harmless the members of the Board
and the members of the Committee duly appointed in accordance with Section 2,
above, from and against any and all liabilities, costs, and expenses incurred by
such persons as a result of any act, or omission to act, in connection with the
performance of such persons' duties, responsibilities and obligations under this
Plan, other than such liabilities, costs and expenses as may result from the
negligence, gross negligence, bad faith, willful conduct or criminal acts of
such persons.
SECTION 13. EFFECTIVE DATE OF PLAN
The Plan shall be effective on the date this Plan is adopted by the
Board at a meeting duly held in accordance with Ohio law, or by unanimous
written consent as provided under such law; PROVIDED, HOWEVER, that
notwithstanding any provision of the Plan to the contrary, the grant (and
exercise) of an Option or award pursuant to the Plan shall be contingent upon
the approval of the Plan by an affirmative vote of the holders of Stock having a
majority of the voting power of all Stock represented and entitled to vote at a
meeting duly held in accordance with Ohio law within twelve (12) months after
the Plan is adopted by the Board.
SECTION 14. TERM OF PLAN
No Stock Option, Restricted Stock, or Long-Term Performance Award shall
be granted pursuant to the Plan on or after the tenth (10th) anniversary of the
earlier of the date this Plan is adopted by the Board or the date this Plan is
approved by shareholders, but awards or options granted prior to such tenth
(10th) anniversary may extend beyond that date.
SECTION 15. HOLDING COMPANY
Anything in this Plan to the contrary notwithstanding, in the event
that the Company enters into a transaction whereby it becomes the wholly owned
subsidiary of another corporation (the
Exhibit 99.1 Page 18
<PAGE> 21
"Holding Company"), all of whose shares are owned by persons who were the
owners (of record or beneficially) of the shares of the Company's Stock
immediately prior to such transaction (apart from shareholders of the Company
who exercise any right of dissent in respect of such transaction) (a "Holding
Company Transaction"), the terms of this Plan and any outstanding grants or
awards shall not be affected by such Holding Company Transaction; PROVIDED,
HOWEVER, that the term "Stock" as used herein shall, from and after the date of
such Holding Company Transaction, be deemed to refer to the common stock of the
Holding Company, the term "Company" shall be deemed to refer to the Holding
Company and the Holding Company's common stock shall be substituted for Company
Stock for all purposes under this Plan.
SECTION 16. INITIAL GRANT
By, and simultaneously with, the adoption of this Plan, Directors Elton
L. Bedford, George P. Bohnert, Jr., William A. Fraunfelder, Jr., Glenn W. Goist,
Mike Kalinich and John J. Plucinsky are each hereby granted a ten(10) year,
Non-Qualified Stock Option and Director Joan M. Dzurilla is hereby granted a
five(5) year, Non-Qualified Stock Option to purchase 2,000 shares of Stock, all
at an exercise price per share equal to the Fair Market Value of the Stock at
the date this Plan is approved by the Board. Each such Option shall be evidenced
by a Non-Qualified Stock Option Agreement in a form approved by the Board of
Directors and shall be subject in all respects to the terms and conditions of
this Plan, which are controlling. Notwithstanding anything else in this Plan to
the contrary, to the extent that the Plan provides for formula awards, as
defined in Rule 16b-3(c)(2)(ii) under the Exchange Act, such provisions may not
be amended more than once every six(6) months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974 or the
rules thereunder.
Exhibit 99.1 Page 19
<PAGE> 1
EXHIBIT 99.2
OPTION AGREEMENT
This OPTION AGREEMENT is entered into by and between_____________________ (the
"Optionee") and Emerald Financial Corp. (the Company") as of the date written
below.
RECITALS
--------
1. Pursuant to Emerald Financial Corp. 1994 Long-Term Incentive Plan (the
"Plan"), the Committee (as defined in the Plan) has granted to the Optionee a
Stock Option (as defined in the Plan) subject to the terms and conditions set
forth in the Plan, this Agreement, and the grant attached to this Agreement as
Exhibit A. A copy of the Plan, as currently in effect, is incorporated herein
by reference and is attached hereto.
2. The Optionee desires to accept the Grant and the Company desires to provide
any benefits that become payable pursuant to the Grant in accordance with the
terms of the Plan, this Agreement and the Grant.
NOW, THEREFORE, the Company and the Optionee agree to terms set forth below:
1. Any benefit provided to the Optionee (or any other person) pursuant
to the grant of the Stock Option to such Optionee shall be determined in
accordance with the terms of the Plan and the Grant, which are incorporated
into this Agreement by reference, except to the extent otherwise specifically
provided in this Agreement or any amendment to this Agreement.
2. The exercise of the Stock Option pursuant to the Grant is
conditioned upon the acceptance by the Optionee of the terms of the Plan, this
Agreement and the Grant, as evidenced by his execution of this Agreement in the
space provided below, and the return of an executed original of this Agreement
to the Secretary of the Company no later than February 9, 1994.
3. The Optionee and the Company may amend this Agreement in writing to
the extent permitted under the terms of the Plan.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
this_________ day of , 199_.
EMERALD FINANCIAL CORP.
BY:____________________________
William A. Fraunfelder, Jr.
____________________________
OPTIONEE
Exhibit 99.2 Page 1
<PAGE> 2
EXHIBIT A
STOCK OPTION GRANT
Pursuant to the terms of Emerald Financial Corp. 1994 Long-Term Incentive Plan
(the "Plan"), the Committee hereby grants an option to purchase from the
Company the number of shares of Stock at the purchase price per share as set
forth below:
1. STOCK OPTION
Name of Optionee: ________________
Number of Shares covered by Option ________________
Option Price per Share ________________
Date of Grant ________________
Type of Option ________________
Incentive/Non-Qualified
Exercise Schedule:
Exercise Period
---------------
Number of Shares Commencement Expiration
Subject to Option Date Date
----------------- ---- ----
______,000 ______ ___, 199__ ___/___/___
Notwithstanding any other provision of this Grant, the option granted
hereunder shall be contingent upon the approval of the Plan by an affirmative
vote of the holders of stock having a majority of the voting power of all stock
represented at a meeting duly held in accordance with Ohio law.
2. DURATION OF STOCK OPTION
Except as otherwise set forth in Section 1, above, or in the Plan, the
option granted hereunder shall be exercisable while the Optionee remains in the
service of the Company, or any Subsidiary or Affiliate within a nine(9) year
period commencing on the first anniversary of the date the option is granted.
The duration and exercisability of the option granted hereunder upon separation
of service from the Company or any Subsidiary or Affiliate shall be governed by
the terms of the Plan.
Exhibit 99.2 Page 2
<PAGE> 3
3. EXERCISABILITY AND DISTRIBUTION
The Optionee shall exercise the option granted hereunder, in whole or
in part, by submitting a written statement to the Committee at the address of
the Company at the time of such exercise, setting forth the number of shares of
stock of the Company which the Optionee is purchasing. The date of exercise is
the date on which such written statement is received by the Company. Such
written statement shall be accompanied by a certified check in the amount of
the purchase price. The Committee shall determine within a reasonable period of
time of receipt of such written notice and certified check and in accordance
with the terms of the Plan, whether such exercise shall be satisfied by means
of a distribution of shares of stock and a cash payment equal to the spread
value or only by means of shares of stock. The Committee shall notify the
Optionee in writing of its decision with respect to satisfying the exercise of
the option granted hereunder, and shall take all action necessary to distribute
to the Optionee in a timely manner the cash payment and/or shares of stock.
4. CONDITION TO EXERCISABILITY
The exercise of the option granted hereunder is conditioned upon the
acceptance by the Optionee of the terms of the Plan, a Stock Option Agreement
and this grant, as evidenced by his execution and the return of the Stock
Option Agreement to the Secretary of the Company no later than ____________
____, 199___.
5. GENERAL
Unless specifically defined in this Grant, all terms initially
capitalized shall have the meaning assigned to them in the Plan.
IN WITNESS WHEREOF, the members of the Committee hereby execute this Stock
Option Grant on this ____th day of_________ , 199__.
___________________________
George P. Bohnert, Jr.
___________________________
William A. Fraunfelder, Jr.
____________________________
Glenn W. Goist
Exhibit 99.2 Page 3
