<PAGE> 1
Registration No.333-_____
Filed April 30, 1998
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 .
------------------------------------------------------------------------
(Address of Principal Executive Offices)
Emerald Financial Corp. 1998 Stock Option and Incentive Plan .
------------------------------------------------------------------------
(Full Title of Plan)
John F. Ziegler
Executive Vice President &
Chief Financial Officer
Emerald Financial Corp.
14092 Pearl Road, Strongsville, Ohio 44136
(440) 238-7311
- --------------
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Title of Amount Proposed maxi- Proposed maxi- Amount of
Securities to be to be mum offering mum aggregate Registration
Registered Registered (1) Price per share(2) offering price(2) Fee(2)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Stock, No par 250,000 $ 29.25 $7,312,500.00 $2,157.19
value
===========================================================================================================
</TABLE>
Notes:
1. Consistent with Rule 416 under the Securities Act of 1933, this registration
Statement also includes an indeterminate number of shares of Common Stock that
may be issued under the anti-dilution provision of the plan.
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 April 24,
1998.
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 Emerald Financial Corp. 1998 Stock Option and
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, 1997, filed with the SEC under SEC File No. 000-22201.
(b) 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 reregisters 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 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.
2
<PAGE> 3
Emerald Financial Corp.
S-8 Registration
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)(a) Consent of KPMG Peat Marwick LLP
(23.1)(b) 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. 1998 Stock Option and
Incentive Plan
(99.2) Form of Emerald Financial Corp. 1998 Stock Option and
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
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) 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 together, represent a
fundamental change in the information set
forth in the registration statement.
Notwithstanding the foregoing, any increase
or decrease in volume of securities offered
(if the total dollar value of securities
offered would not exceed that which was
registered) and any deviation from the low
or high end of the estimated maximum
offering range may be reflected in the form
of prospectus filed with the Securities and
Exchange Commission pursuant to rule 424(b)
if, in the aggregate, the changes in volume
and price represent no more than a 20
percent change in maximum aggregate offering
price set forth in the "Calculation of
Registration Fee" table in the effective
registration statement; and
(iii) Include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the registrant pursuant to Section 13 or 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 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,
4
<PAGE> 5
Emerald Financial Corp.
S-8 Registration
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.
5
<PAGE> 6
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 27th day of April
1998.
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.
6
<PAGE> 7
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 April 27, 1998
Thomas P. Perciak
\S\ JOHN F. ZIEGLER Executive Vice President, Chief
- --------------------------- Financial Officer and Director April 27, 1998
John F. Ziegler
\S\ MIKE KALINICH Chairman of the Board of
- --------------------------- Directors April 27, 1998
Mike Kalinich
\S\ JOAN M. DZURILLA
- ---------------------------
Joan M. Dzurilla Director April 27, 1998
\S\ WILLIAM A. FRAUNFELDER, Jr.
- ---------------------------
William A. Fraunfelder, Jr. Director April 27, 1998
\S\ GLENN W. GOIST
- ---------------------------
Glenn W. Goist Director April 27, 1998
\S\ GEORGE P. BOHNERT, JR. Director April 27, 1998
- ---------------------------
George P. Bohnert, Jr.
\S\ JOHN J. PLUCINSKY
- ---------------------------
John J. Plucinsky Director April 27, 1998
\S\ KENNETH J. PIECHOWSKI
- ---------------------------
Kenneth J. Piechowski Director April 27, 1998
- ------------------------------------ ----------------------------------- -----------------------------------
</TABLE>
7
<PAGE> 8
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(a) Consent of KPMG Peat Marwick LLP
23.1(b) Consent of Deloitte & Touche LLP
23.2 Consent of Grady & Associates LLP (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 The Emerald Financial Corp. 1998 Stock Option and
Incentive Plan
99.2 Form of The Emerald Financial Corp. 1998 Stock Option
and Incentive Agreement
8
<PAGE> 1
Emerald Financial Corp.
S-8 Registration
EXHIBIT NO. 5
OPINION OF GRADY & ASSOCIATES
REGARDING LEGALITY
9
<PAGE> 2
Emerald Financial Corp.
S-8 Registration
GRADY & ASSOCIATES
ATTORNEYS & COUNSELORS AT LAW
20800 CENTER RIDGE ROAD, SUITE 116
ROCKY RIVER, OHIO 44116-4306
--------------------
Francis X. Grady (440) 356-7255
Joseph A. Drain Fax (440) 356-7254
April 27, 1998
Board of Directors
Emerald Financial Corp.
14092 Pearl Road
Strongsville, OH 44136
RE: FORM S-3 REGISTRATION STATEMENT
Ladies and Gentlemen:
We are rendering this opinion in connection with the Form S-3
Registration Statement (the "Registration Statement") filed by Emerald Financial
Corp. (the "Company") with the Securities and Exchange Commission under the
Securities Exchange Act of 1933. The registration Statement relates to the
offering of 250,000 shares (the "Shares") of the Company's Common Stock, without
par value, pursuant to the provisions of the Company's 1998 Stock Option and
Incentive Plan (the "Plan").
We 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, 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. For the purposes of
this opinion, we have assumed the genuineness of all signatures on all documents
submitted to us and 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. 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.
Based upon the foregoing, we are of the opinion that the Shares have
been duly authorized and, when issued, sold and paid for in accordance with the
terms of the Plan and the options or other awards granted thereunder, will be
legally issued, fully paid and nonassessable shares of Common Stock of the
Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement covering the Shares.
Sincerely yours,
/s/ Grady and Associates
10
<PAGE> 1
Emerald Financial Corp.
S-8 Registration
EXHIBIT NO. 23.1 (a)
CONSENT OF EXPERTS
KPMG PEAT MARWICK LLP
11
<PAGE> 2
Emerald Financial Corp.
S-8 Registration
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, OH 44114-3495
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
The Board of Directors
Emerald Financial Corp.
We consent to the use of our report incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
April 27, 1998
12
<PAGE> 1
Emerald Financial Corp.
S-8 Registration
EXHIBIT NO. 23.1 (b)
CONSENT OF EXPERTS
DELOITTE & TOUCHE LLP
13
<PAGE> 2
Emerald Financial Corp.
S-8 Registration
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 includes an explanatory
paragraph relating to a change in accounting for mortgage servicing rights),
incorporated by reference in the Annual Report on Form 10-K of Emerald Financial
Corp. for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
April 27, 1998
14
<PAGE> 1
Emerald Financial Corp.
S-8 Registration
EXHIBIT NO. 99.1
THE EMERALD FINANCIAL CORP.
1998 STOCK OPTION AND INCENTIVE PLAN
15
<PAGE> 2
EMERALD FINANCIAL CORP. APPENDIX A
1998 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its shareholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. It is intended that designated Options granted pursuant to
the provisions of this Plan to persons employed by the Corporation or its
Affiliates will qualify as Incentive Stock Options. Options granted to persons
who are not employees will be Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
"Award" - means the grant of an Incentive Stock Option, a Non-Qualified
Stock Option, a Stock Appreciation Right, Restricted Stock or other property or
securities, or any combination thereof, as provided in the Plan.
"Award Agreement" - means the agreement evidencing the grant of an
Award made under the Plan.
"Bank" - means The Strongsville Savings Bank, and any successor entity.
"Cause" or "cause" - means, in connection with termination or cessation
of service as a director, officer or employee of the Corporation or an
Affiliate, personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties or gross negligence.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, officer or employee of the Corporation or
an Affiliate, except that when used with respect to persons granted an Incentive
Option "Continuous Service" means the absence of any interruption or termination
of service as an employee of the Corporation or an Affiliate. Service shall not
be considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Corporation or in the case of transfers between
payroll locations of the Corporation or between the Corporation, its parent, its
subsidiaries or its successor.
"Corporation" - means Emerald Financial Corp., an Ohio corporation, or
any successor thereto as provided in Section 19 herein.
"Employee" - means any person, including an officer or director, who is
employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Exercise Price" - means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon exercise
of such Option and (ii) in the case of a Right, the price per Share which, upon
grant, the Committee determines shall be used to calculate the aggregate value a
Participant shall be entitled to receive pursuant to Sections 9 or 12 hereof
upon exercise of such Right.
"Incentive Stock Option" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code. Unless otherwise set forth in the Award
Agreement, any Option that does not qualify as an Incentive Stock Option for any
reason shall be deemed a Non-Qualified Stock Option.
<PAGE> 3
"Market Value" - means the average of the high and low quoted sales
prices on the date in question (or, if there is no reported sale on such date,
on the last preceding date on which any reported sale occurred) of a Share on
the Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, 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 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 a
Share as the Board of Directors shall determine.
"Non-Employee Director" - means a director who (a) is an outside
director, as defined in Section 162(m) of the Code, and (b) is a Non-Employee
Director, as defined in Rule 16b-3(b)(3) of the Securities and Exchange
Commission or any successor rule thereto.
"Non-Qualified Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof which does not qualify,
for any reason, as an Incentive Stock Option under Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" - means any director, officer or employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award.
"Plan" - means the 1998 Stock Option and Incentive Plan of the
Corporation.
"Related" - means (i) in the case of a Right, a Right which is granted
in connection with, and to the extent exercisable, in whole or in part, in lieu
of, an Option or another Right and (ii) in the case of an Option, an Option
which is granted in connection with, and to the extent exercisable, in whole or
in part, in lieu of, a Right or another Option.
"Restricted Stock" - means Shares awarded to a Participant by the
Committee pursuant to Section 10(a) hereof.
"Right" - means a Stock Appreciation Right.
"Shares" - means the shares of Common Stock of the Corporation, without
par value.
"Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to the Plan.
3. Administration. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Non-Employee
Director. The members of the Committee shall be appointed from time to time by
the Board of Directors of the Corporation and shall serve at the discretion of
the Board of Directors. Except as limited by the express provisions of the Plan
or by resolutions adopted by the Board of Directors of the Corporation, the
Committee shall have sole and complete authority and discretion to (i) select
Participants and grant Awards; (ii) determine the number of Shares to be subject
to types of Awards generally, as well as to individual Awards granted under the
Plan; (iii) determine the terms and conditions upon which Awards shall be
granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan.
Without in any way limiting the authority of the Committee under the
terms of the Plan, the Committee may provide in any Award Agreement that the
recipient of the Award shall maintain in confidence the amount and terms of his
or her award, except as disclosure thereof may be required under applicable law.
An Award shall be subject to
<PAGE> 4
forfeiture at the Committee's discretion for violation of the confidentiality
provisions of an Award Agreement, except insofar as such Award relates to
Options or Rights that have been exercised or Shares that have become vested by
lapse of any applicable restrictions.
A majority of the Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. Eligibility. The Committee may select from time to time Participants
in the Plan from those directors, officers and employees of the Corporation or
its Affiliates who, in the opinion of the Committee, are responsible for or
contribute to the management, growth and profitability of the Corporation and
its Affiliates. Subject to adjustment as set forth in Section 11, the maximum
number of Shares subject to an Award granted to any individual Participant in
any calendar year shall be Fifty Thousand (50,000) Shares.
5. Shares Subject to Plan. Subject to adjustment by the operation of
Section 11 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 250,000, plus any Shares surrendered to the
Corporation in payment of the exercise price of Options or Rights issued under
the Plan. The Shares with respect to which Awards may be made under the Plan may
be authorized and unissued shares or issued shares heretofore or hereafter
reacquired and held as treasury shares. Shares that are subject to Related
Rights and Related Options shall be counted only once in determining whether the
maximum number of Shares with respect to which Awards may be granted under the
Plan has been exceeded. An Award shall not be considered to have been made under
the Plan with respect to any Option or Right that terminates. New Awards may be
granted under the Plan with respect to the number of Shares as to which such
termination has occurred.
6. General Terms and Conditions of Options and Rights. The Committee
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Market Value per Share at the date of grant of such Option or Right, (ii) the
number of Shares subject to, and the expiration date of, any Option or Right,
which expiration date shall not exceed ten years from the date of grant, (iii)
the manner, time and rate (cumulative or otherwise) of exercise of such Option
or Right, and (iv) the restrictions, if any, to be placed upon such Option or
Right or upon Shares which may be issued upon exercise of such Option or Right.
Notwithstanding the foregoing, subject to adjustment by the operation of Section
11 hereof, no individual shall be granted Awards with respect to more than
125,000 of the total shares subject to the Plan. No Awards shall vest and become
exercisable earlier than one year from the date the Plan is approved by
shareholders of the Corporation.
Furthermore, at the time of any Award, the Participant shall enter into
an agreement with the Corporation in a form specified by the Committee, agreeing
to the terms and conditions of the Award and such other matters as the
Committee, in its sole discretion, shall determine (the "Option Agreement").
7. Exercise of Options or Rights.
(a) Except as provided herein, an Option or Right granted under the
Plan shall be exercisable during the lifetime of the Participant to whom such
Option or Right was granted only by such Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no such Option or Right may be
exercised unless at the time such Participant exercises such Option or Right,
such Participant has maintained Continuous Service since the date of grant of
such Option or Right.
(b) To exercise an Option or Right under the Plan, the Participant to
whom such Option or Right was granted shall give written notice to the
Corporation in form satisfactory to the Committee (and, if partial exercises
have been permitted by the Committee, by specifying the number of Shares with
respect to which such Participant elects to exercise such Option or Right)
together with full payment of the Exercise Price, if any and to the extent
required. The date of exercise shall be the date on which such notice is
received by the Corporation. Payment, if any is required, shall be made either
(i) in cash (including check, bank draft or money order) or (ii) by delivering
(A)
<PAGE> 5
Shares already owned by the Participant and having a fair market value equal to
the applicable exercise price, such fair market value to be determined in such
appropriate manner as may be provided by the Committee or as may be required in
order to comply with or to conform to requirements of any applicable laws or
regulations, or (B) a combination of cash and such Shares.
(c) If a Participant to whom an Option or Right was granted shall cease
to maintain Continuous Service for any reason (excluding death or disability and
termination of employment by the Corporation or any Affiliate for cause), such
Participant may, but only within the period of three months immediately
succeeding such cessation of Continuous Service and in no event after the
expiration date of such Option or Right, exercise such Option or Right to the
extent that such Participant was entitled to exercise such Option or Right at
the date of such cessation; provided, however, that such right of exercise after
cessation of Continuous Service shall not be available to a Participant if the
Committee otherwise determines and so provides in the applicable instrument or
instruments evidencing the grant of such Option or Right. If a Participant to
whom an Option or Right was granted shall cease to maintain Continuous Service
by reason of death or disability then, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an Option or Stock
Appreciation Right, all Options and Rights granted and not fully exercisable
shall become exercisable in full upon the happening of such event and shall
remain so exercisable (i) in the event of death for the period described in
paragraph (d) of this Section 7 and (ii) in the event of disability for a period
of three months following such date. If the Continuous Service of a Participant
to whom an Option or Right was granted by the Corporation is terminated for
cause, all rights under any Option or Right of such Participant shall expire
immediately upon the giving to the Participant of notice of such termination.
(d) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate or within the three month period
referred to in paragraph (c) of this Section 7, the person to whom any Option or
Right held by the Participant at the time of his death is transferred by will or
the laws of descent and distribution, or in the case of an Award other than an
Incentive Stock Option, pursuant to a qualified domestic relations order, as
defined in the Code or Title 1 of ERISA or the rules thereunder may, but only to
the extent such Participant was entitled to exercise such Option or Right as set
forth in paragraph (c) of this Section 7, exercise such Option or Right at any
time within a period of one year succeeding the date of death of such
Participant, but in no event later than ten years from the date of grant of such
Option or Right. Following the death of any Participant to whom an Option was
granted under the Plan, irrespective of whether any Related Right shall have
been granted to the Participant or whether the person entitled to exercise such
Related Right desires to do so, the Committee may, as an alternative means of
settlement of such Option, elect to pay to the person to whom such Option is
transferred by will or by the laws of descent and distribution, or in the case
of an Option other than an Incentive Stock Option, pursuant to a qualified
domestic relations order, as defined in the Code or Title I of ERISA or the
rules thereunder, the amount by which the Market Value per Share on the date of
exercise of such Option shall exceed the Exercise Price of such Option,
multiplied by the number of Shares with respect to which such Option is properly
exercised. Any such settlement of an Option shall be considered an exercise of
such Option for all purposes of the Plan.
8. Incentive Stock Options. Incentive Stock Options may be granted only
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock Option is granted other than by will or the laws of descent and
distribution, and shall be exercisable during such Participant's lifetime only
by such Participant, (iv) no Incentive Stock Option shall be granted to any
individual who, at the time such Incentive Stock Option is granted, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation or any Affiliate unless the Exercise Price
of such Incentive Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such Incentive Stock Option is not exercisable
after the expiration of five years from the date such Incentive Stock Option is
granted, and (v) the aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by a Participant in any
calendar year shall not exceed $100,000.
<PAGE> 6
9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon
its exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which (i.e.,
the sum of the amount of cash and/or Market Value of such Shares on date of
exercise) shall equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares with
respect of which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall determine
whether and to what extent a Related Stock Appreciation Right shall be granted
with respect thereto; provided, however, and notwithstanding any other provision
of the Plan, that if the Related Option is an Incentive Stock Option, the
Related Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Stock Appreciation Right were
an Incentive Stock Option and as if other rights which are Related to Incentive
Stock Options were Incentive Stock Options. In the case of a Related Option,
such Related Option shall cease to be exercisable to the extent of the Shares
with respect to which the Related Stock Appreciation Right was exercised. Upon
the exercise or termination of a Related Option, any Related Stock Appreciation
Right shall terminate to the extent of the Shares with respect to which the
Related Option was exercised or terminated.
10. Restricted Stock and Performance Awards.
(a) Restricted Stock. The Committee is hereby authorized to grant
Awards of Restricted Stock to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock shall be subject to such
restrictions as the Committee may impose (including, without limitation, any
limitation on the right to vote a Share of Restricted Stock or the right to
receive any dividend or other right or property with respect thereto), which
restrictions may lapse separately or in combination at such time or times, in
such installments or otherwise as the Committee may deem appropriate.
(ii) Stock Certificates. Any Restricted Stock granted under the Plan
shall be evidenced by issuance of a stock certificate or certificates, which
certificate or certificates shall be held by the Corporation. Such certificate
or certificates shall be registered in the name of the Participant and shall
bear an appropriate legend referring to the restrictions applicable to such
Restricted Stock.
(iii) Forfeiture; Delivery of Shares. Except as otherwise determined by
the Committee, upon termination of service during the applicable restriction
period, all Shares of Restricted Stock at such time subject to restriction shall
be forfeited to the Corporation; provided, however, that the Committee may waive
in whole or in part any or all remaining restrictions with respect to Shares of
Restricted Stock. Shares representing Restricted Stock that is no longer subject
to restrictions shall be delivered to the holder thereof promptly after the
applicable restrictions lapse or are waived.
(b) Performance Awards. The Committee is hereby authorized to grant
performance Awards to Participants subject to the terms of the Plan and any
applicable Award Agreement. A performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
performance Award granted and the amount of any payment or transfer to be made
pursuant to any performance Award shall be determined by the Committee.
11. Adjustments Upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted
<PAGE> 7
under the Plan and the number, class and exercise price of shares with respect
to which Awards have been granted under the Plan shall be appropriately adjusted
by the Committee, whose determination shall be conclusive. Creation of a class
of Serial Preferred Stock or issuance of such shares hereafter shall not be
deemed to constitute a change requiring adjustment under this Section.
12. Effect of Merger and Change in Control.
(a) Merger. In the event of any merger, consolidation or combination of
the Corporation (other than a merger, consolidation or combination in which the
Corporation is the continuing entity and which does not result in the
outstanding Shares being converted into or exchanged for different securities,
cash or other property, or any combination thereof) pursuant to a plan or
agreement the terms of which are binding upon all shareholders of the
Corporation (except to the extent that dissenting shareholders may be entitled,
under statutory provisions or provisions contained in the articles of
incorporation, to receive the appraised or fair value of their holdings), any
Participant to whom an Option or Right has been granted shall have the right
(subject to the provisions of the Plan and any limitation or vesting period
applicable to such Option or Right), thereafter and during the term of each such
Option or Right, to receive upon exercise of any such Option or Right an amount
equal to the excess of the fair market value on the date of such exercise of the
securities, cash or other property, or combination thereof, receivable upon such
merger, consolidation or combination in respect of a Share over the Exercise
Price of such Right or Option, multiplied by the number of Shares with respect
to which such Option or Right shall have been exercised. Such amount may be
payable fully in cash, fully in one or more of the kind or kinds of property
payable in such merger, consolidation or combination, or partly in cash and
partly in one or more of such kind or kinds of property, all in the discretion
of the Committee.
(b) Change in Control. Each of the events specified in the following
clauses (i) through (iii) of this Section 12(b) shall be deemed a "change in
control": (i) any third person, including a "group," as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board of Directors of the
Corporation may be cast (other than any person or group owning 25% or more of
the Common Stock as of the date of adoption of the Plan, and other than any
person who, together with members of his immediate family, owns 25% or more of
the Common Stock as of the date of adoption of the Plan), (ii) as a result of,
or in connection with, any cash tender offer, merger or other business
combination, sale of assets or contested election, or combination of the
foregoing, the persons who were directors of the Corporation shall cease to
constitute a majority of the Board of Directors of the Corporation, or (iii) the
shareholders of the Corporation shall approve an agreement providing either for
a transaction in which the Corporation will cease to be an independent, publicly
owned corporation or for a sale or other disposition of all or substantially all
the assets of the Corporation. Upon a change in control, unless the Committee
shall have otherwise provided in the Award Agreement, any restricted period with
respect to Restricted Stock awarded to such Participant shall lapse and all
Shares awarded as Restricted Stock shall become fully vested in the Participant
to whom such Shares were awarded. If a tender offer or exchange offer for Shares
(other than such an offer by the Corporation) is commenced, or if the event
specified in clause (iii) above shall occur, unless the Committee shall have
otherwise provided in the Award Agreement, all Options and Stock Appreciation
Rights granted and not fully exercisable shall become exercisable in full upon
the happening of such event; provided, however, that no Option or Stock
Appreciation Right that has previously been exercised or otherwise terminated
shall become exercisable.
13. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or in the case of
Awards other than Incentive Stock Options pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the rules
thereunder.
14. Employee Rights Under the Plan. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no director, officer, employee or
other person shall have any claim or right to be granted an Award under the Plan
or under any other incentive or similar plan of the Corporation or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any employee any right to be retained in the employ of the Corporation
or any Affiliate.
<PAGE> 8
15. Delivery and Registration of Stock. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other Federal, state or local
securities legislation or regulation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation under the Securities Act
of 1933 or other applicable securities law. The Corporation shall not be
required to deliver any Shares under the Plan prior to (i) the admission of such
shares to listing on any stock exchange on which Shares may then be listed, and
(ii) the completion of such registration or other qualification of such Shares
under any state or Federal law, rule or regulation, as the Committee shall
determine to be necessary or advisable.
16. Withholding Tax. Upon the termination of the restricted period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Corporation shall have the right to require the Participant or
other person receiving such shares to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such shares,
or, in lieu thereof, to retain or sell without notice, a sufficient number of
shares held by it to cover the amount required to be withheld. The Corporation
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments.
The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes required
by law to be withheld with respect to such cash payments. Where a Participant or
other person is entitled to receive Shares pursuant to the exercise of an Option
or Right pursuant to the Plan, the Corporation shall have the right to require
the Participant or such other person to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
All withholding decisions pursuant to this Section 16 shall be at the
sole discretion of the Committee or the Corporation.
17. Amendment or Termination. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 11 hereof) no amendment shall be made without
approval of the shareholders of the Corporation which shall (i) increase the
aggregate number of Shares with respect to which Awards may be made under the
Plan (except pursuant to Section 11), (ii) materially increase the benefits
accruing to Participants, (iii) materially change the requirements as to
eligibility for participation in the Plan or (iv) change the class of persons
eligible to participate in the Plan; provided, that no such amendment,
suspension or termination shall impair the rights of any Participant, without
his consent, in any Award made pursuant to the Plan.
18. Effective Date and Term of Plan. The Plan shall become effective
upon its adoption by shareholders of the Corporation. It shall continue in
effect for a term of ten years unless sooner terminated under Section 17 hereof.
19. Successors. All obligations of the Corporation under the Plan, with
respect to Awards granted hereunder, shall be binding on any successor to the
Corporation, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation or otherwise, of all or
substantially all of the business and/or assets of the Corporation.
<PAGE> 1
Emerald Financial Corp.
S-8 Registration
EXHIBIT NO. 99.2
FORM OF THE EMERALD FINANCIAL CORP.
1998 STOCK OPTION AND INCENTIVE AGREEMENT
16
<PAGE> 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 the Emerald Financial Corp. 1998 Stock Option and Incentive Plan
(the "Plan"), the Committee (as defined in the Plan) has granted to the Optionee
an 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 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 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 ____________________, ____.
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 ____________ , ____.
EMERALD FINANCIAL CORP.
BY:
----------------------------------
OPTION COMMITTEE MEMBER
----------------------------------
OPTIONEE
Page 1
<PAGE> 3
EXHIBIT A
STOCK OPTION GRANT
Pursuant to the terms of the Emerald Financial Corp. 1998 Stock Option and
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
------------
Number of Incentive Stock Options
------------
Number of Non-Qualified Stock Options
------------
EXERCISE PERIOD
---------------
Number of Shares Commencement Expiration
Subject to Option Date Date
----------------- ---- ----
------------ ----------- ------------
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 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 Affiliate shall be governed by the terms of the
Plan.
Page 2
<PAGE> 4
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 accompanied
by payment in full for any Shares being purchased. Payment shall be made in
cash, by check , by wire, in Shares held for more than six (6) months or by a
combination of any. If all or any part of the payment is in the form of Shares,
the Shares shall be valued based on their Market Value on the date of exercise.
The Committee shall determine within a reasonable period of time of receipt of
such written notice and payment 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, an Option Agreement and
this grant, as evidenced by this execution and the return of the Option
Agreement to the Secretary of the Company no later than _______________ ___,
____.
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 _______________ ___, ____.
-------------------------------
George P. Bohnert, Jr.
-------------------------------
William A. Fraunfelder, Jr.
-------------------------------
Glenn W. Goist
Page 3
