þ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 2008 |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE
ACT OF 1934 For the transition period from to |
Wisconsin | 39-1098068 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. employer
identification no.) |
|
1200 Hansen Road | 54304 | |
Green Bay, Wisconsin
|
(Zip code) | |
(Address of principal executive offices)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common stock, par value $0.01 per share
|
The Nasdaq Stock Market LLC |
Large accelerated filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
Document
Proxy Statement for Annual Meeting of Shareholders on April 22, 2009 |
Part of Form 10-K Into Which
Portions of Documents are Incorporated Part III |
2
| operating, legal, and regulatory risks; |
| economic, political, and competitive forces affecting Associated Banc-Corps banking, securities, asset management, insurance, and credit services businesses; |
| integration risks related to acquisitions; |
| impact on net interest income from changes in monetary policy and general economic conditions; |
| the risk that Associated Banc-Corps analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful; and |
| other factors discussed under Item 1A, Risk Factors and elsewhere herein. |
ITEM 1. | BUSINESS |
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| Capital Purchase Program (CPP). Pursuant to this program, the UST, on behalf of the US government, will purchase preferred stock, along with warrants to purchase common stock, from certain financial institutions, including bank holding companies, savings and loan holding companies and banks or savings associations not controlled by a holding company. The investment will have a dividend rate of 5% per year, until the fifth anniversary of the USTs investment and a dividend of 9% thereafter. |
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| Temporary Liquidity Guarantee Program. This program contained both (i) a debt guarantee component, whereby the FDIC will guarantee until June 30, 2012, the senior unsecured debt issued by eligible financial institutions between October 14, 2008 and June 30, 2009; and (ii) an account transaction guarantee component, whereby the FDIC will insure 100% of non-interest bearing deposit transaction accounts held at eligible financial institutions, such as payment processing accounts, payroll accounts and working capital accounts through December 31, 2009. The deadline for participation or opting out of this program was December 5, 2008. We elected not to opt out of the program. | |
| Temporary increase in deposit insurance coverage. Pursuant to the EESA, the FDIC temporarily raised the basic limit on federal deposit insurance coverage from $100,000 to $250,000 per depositor. The EESA provides that the basic deposit insurance limit will return to $100,000 after December 31, 2009. |
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ITEM 1A. | RISK FACTORS |
| Actual or anticipated variations in quarterly results of operations. | |
| Recommendations by securities analysts. | |
| Operating results and stock price performance of other companies that investors deem comparable to us. | |
| News reports relating to trends, concerns, and other issues in the financial services industry. | |
| Perceptions in the marketplace regarding us and/or our competitors. | |
| New technology used or services offered by competitors. | |
| Significant acquisitions or business combinations, strategic partnerships, joint ventures, or capital commitments by or involving us or our competitors. | |
| Failure to integrate acquisitions or realize anticipated benefits from acquisitions. | |
| Changes in government regulations. | |
| Geopolitical conditions such as acts or threats of terrorism or military conflicts. |
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| The ability to develop, maintain, and build upon long-term customer relationships based on top quality service, high ethical standards, and safe, sound assets. | |
| The ability to expand our market position. | |
| The scope, relevance, and pricing of products and services offered to meet customer needs and demands. | |
| The rate at which we introduce new products and services relative to our competitors. | |
| Customer satisfaction with our level of service. | |
| Industry and general economic trends. |
13
| Difficulty in estimating the value of the target company. | |
| Payment of a premium over book and market values that may dilute our tangible book value and earnings per share in the short and long term. | |
| Potential exposure to unknown or contingent liabilities of the target company. | |
| Exposure to potential asset quality issues of the target company. | |
| There may be volatility in reported income as goodwill impairment losses could occur irregularly and in varying amounts. | |
| Difficulty and expense of integrating the operations and personnel of the target company. | |
| Inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits. | |
| Potential disruption to our business. | |
| Potential diversion of our managements time and attention. | |
| The possible loss of key employees and customers of the target company. | |
| Potential changes in banking or tax laws or regulations that may affect the target company. |
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ITEM 1B. | UNRESOLVED STAFF COMMENTS |
20
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
ITEM 5. | MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
21
Total Number of
|
Maximum Number of
|
|||||||||||||||
Shares Purchased as
|
Shares that May Yet
|
|||||||||||||||
Total Number of
|
Average Price
|
Part of Publicly
|
Be Purchased Under
|
|||||||||||||
Period
|
Shares Purchased | Paid per Share | Announced Plans | the Plan | ||||||||||||
October 1 October 31, 2008
|
| $ | | | | |||||||||||
November 1 November 30, 2008
|
| | | | ||||||||||||
December 1 December 31, 2008
|
212 | 18.90 | | | ||||||||||||
Total
|
212 | $ | 18.90 | | | |||||||||||
Market Price Range
|
||||||||||||||||||||
Closing Sales Prices | ||||||||||||||||||||
Dividends Paid | Book Value | High | Low | Close | ||||||||||||||||
2008
|
||||||||||||||||||||
4th Quarter
|
$ | 0.32 | $ | 18.54 | $ | 24.21 | $ | 15.72 | $ | 20.93 | ||||||||||
3rd Quarter
|
0.32 | 18.52 | 25.92 | 14.85 | 19.95 | |||||||||||||||
2nd Quarter
|
0.32 | 18.46 | 29.23 | 19.29 | 19.29 | |||||||||||||||
1st Quarter
|
0.31 | 18.71 | 28.86 | 22.60 | 26.63 | |||||||||||||||
2007
|
||||||||||||||||||||
4th Quarter
|
$ | 0.31 | $ | 18.32 | $ | 30.49 | $ | 25.23 | $ | 27.09 | ||||||||||
3rd Quarter
|
0.31 | 18.04 | 33.05 | 26.86 | 29.63 | |||||||||||||||
2nd Quarter
|
0.31 | 17.56 | 33.49 | 32.14 | 32.70 | |||||||||||||||
1st Quarter
|
0.29 | 17.54 | 35.43 | 33.16 | 33.60 | |||||||||||||||
22
Source:Bloomberg | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||||||||||
Associated Banc-Corp
|
100.0 | 119.9 | 121.3 | 134.2 | 108.9 | 89.2 | ||||||||||||||||||||||||
S&P 500
|
100.0 | 110.7 | 116.1 | 134.2 | 141.6 | 89.8 | ||||||||||||||||||||||||
Nasdaq Bank Index
|
100.0 | 113.4 | 111.2 | 126.4 | 101.6 | 80.0 | ||||||||||||||||||||||||
23
ITEM 6.
SELECTED
FINANCIAL DATA
%
5-Year
Change
Compound
2007 to
Growth
Years Ended December 31,
2008
2008
2007
2006
2005
2004
Rate(5)
$
1,126,709
(11.7
)%
$
1,275,712
$
1,279,379
$
1,094,025
$
767,122
9.1
%
430,561
(31.9
)
631,899
609,830
421,770
214,495
14.7
696,148
8.1
643,813
669,549
672,255
552,627
6.4
202,058
485.5
34,509
19,056
13,019
14,668
34.0
494,090
(18.9
)
609,304
650,493
659,236
537,959
1.3
285,650
(17.2
)
344,781
295,501
291,086
210,247
5.7
557,460
4.2
534,891
496,215
480,463
377,869
9.2
222,280
(47.0
)
419,194
449,779
469,859
370,337
(7.1
)
53,828
(59.7
)
133,442
133,134
149,698
112,051
(10.4
)
168,452
(41.0
)
285,752
316,645
320,161
258,286
(5.9
)%
3,250
N/M
N/M
$
165,202
(42.2
)%
$
285,752
$
316,645
$
320,161
$
258,286
(6.3
)
$
27,711
1.7
%
$
27,259
$
26,233
$
25,509
$
25,528
2.2
%
$
1.30
(42.0
)%
$
2.24
$
2.40
$
2.45
$
2.28
(8.9
)%
1.29
(42.2
)
2.23
2.38
2.43
2.25
(8.8
)
1.27
4.1
1.22
1.14
1.06
0.98
7.4
127,501
0.1
127,408
132,006
130,554
113,532
2.9
127,891
(0.4
)
128,428
133,132
131,931
115,025
2.7
$
16,283,908
4.9
%
$
15,516,252
$
14,881,526
$
15,206,464
$
13,881,887
9.6
%
265,378
32.3
200,570
203,481
203,404
189,762
8.4
5,349,417
51.0
3,543,019
3,436,621
4,711,605
4,815,344
7.2
24,192,067
12.0
21,592,083
20,861,384
22,100,082
20,520,136
9.7
15,154,796
8.5
13,973,913
14,316,071
13,573,089
12,786,239
9.1
1,861,647
(0.2
)
1,864,771
2,071,142
3,348,476
2,604,540
(1.8
)
2,876,503
23.5
2,329,705
2,245,493
2,324,978
2,017,419
16.4
18.54
1.2
18.32
17.44
17.15
15.56
8.6
$
16,080,565
6.3
%
$
15,132,634
$
15,370,090
$
14,347,707
$
11,174,856
8.6
%
3,707,549
6.5
3,480,831
3,825,245
4,794,708
3,983,452
2.3
22,037,963
6.8
20,638,005
21,162,099
20,921,575
16,365,762
8.0
13,812,072
0.5
13,741,803
13,623,703
12,462,981
10,144,528
8.2
2,423,332
7.5
2,253,878
2,279,376
2,101,389
1,499,606
13.2
6.95
%
(573
)
12.68
%
13.89
%
15.24
%
17.22
%
0.76
(62
)
1.38
1.50
1.53
1.58
52.41
(151
)
53.92
50.31
48.99
48.04
3.65
5
3.60
3.62
3.64
3.80
11.00
8
10.92
10.77
10.04
9.16
97.69
4,323
54.46
47.50
43.27
42.84
(1)
Share and per share data adjusted
retroactively for stock splits and stock dividends.
(2)
Change in basis points.
(3)
Efficiency ratio is noninterest
expense divided by the sum of taxable equivalent net interest
income plus noninterest income, excluding investment securities
gains, net and asset sale gains, net.
(4)
Ratio is based upon basic earnings
per common share.
(5)
Base year used in
5-year
compound growth rate is 2003 consolidated financial data.
24
Table of Contents
70
105
126
133
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
25
Table of Contents
26
Table of Contents
27
Table of Contents
28
Table of Contents
29
Table of Contents
In November 2008, the Corporation sold $525 million of
Senior Preferred Stock, bearing a 5% dividend for the first
5 years and 9% thereafter, and approximately 4 million
related common stock warrants to the UST under the CPP. As a
result, stockholders equity at December 31, 2008,
included $508 million attributable to the Senior Preferred
Stock net of the preferred stock discount, and net income
available to common equity was reduced by $3 million due to
the Senior Preferred Stock dividend and discount accretion that
began in the fourth quarter of 2008. These funds also increased
the Corporations equity and capital ratios and supported
the Corporations investment in $1.7 billion of agency
guaranteed mortgage-related investment securities during the
fourth quarter of 2008.
Taxable equivalent net interest income was $723.9 million
for 2008, $52.8 million or 7.9% higher than 2007. Taxable
equivalent interest income decreased $148.5 million, while
interest expense decreased by $201.3 million. The increase
in taxable equivalent net interest income was attributable to
both favorable volume/mix variances (increasing taxable
equivalent net interest income by $35.3 million) and
favorable rate variances (increasing taxable equivalent net
interest income by $17.5 million).
The net interest margin for 2008 was 3.65%, 5 bp higher
than 3.60% in 2007. The improvement in net interest margin was
attributable to a 28 bp increase in interest rate spread
(the net of a 145 bp decrease in the cost of
interest-bearing liabilities and a 117 bp decrease in the
yield on earning assets), offset by 23 bp lower
contribution from net free funds (primarily attributable to
lower rates on interest-bearing liabilities reducing the value
of noninterest-bearing deposits and other net free funds).
At December 31, 2008, total loans were $16.3 billion,
up 4.9% over year-end 2007, led by consumer-based loan growth,
while commercial loan growth was tempered by the credit
environment. Total deposits at December 31, 2008, were
$15.2 billion, up 8.5% from year-end 2007, primarily
attributable to higher network transaction deposits and brokered
CDs.
The time period starting in the second half of 2007 and
continuing throughout 2008, was marked with general economic and
industry declines with a pervasive impact on consumer
confidence, business and personal financial performance, and
commercial and residential real estate markets, resulting in an
increase in nonperforming loans and charge offs. Nonperforming
loans were $341 million at December 31, 2008, compared
to $163 million a year earlier, impacted by several larger
individual commercial credit relationships. Net charge offs were
$137.3 million in 2008 (or 0.85% of average loans) compared
to $40.4 million in 2007 (or 0.27% of average loans),
primarily due to larger specific commercial charge offs. The
provision for
30
Table of Contents
loan losses was $202.1 million and $34.5 million,
respectively, for 2008 and 2007. At year-end 2008, the allowance
for loan losses represented 1.63% of total loans (covering 78%
of nonperforming loans), compared to 1.29% (covering 123% of
nonperforming loans) at year-end 2007. For additional discussion
regarding charge offs and nonperforming loans see sections,
Allowance for Loan Losses and Nonperforming
Loans, Potential Problem Loans, and Other Real Estate
Owned.
Noninterest income was $285.7 million for 2008,
$59.1 million or 17.2% lower than 2007. Core fee-based
revenues (including trust service fees, service charges on
deposit accounts, card-based and other nondeposit fees, and
retail commissions) totaled $267.9 million for 2008, up
$15.0 million or 5.9% over $252.9 million for 2007, in
part due to a combination of increased volumes and improved
pricing. Net mortgage banking income was $14.7 million for
2008, compared to $22.8 million in 2007, a decrease of
$8.1 million from 2007, with 2007 including gains of
$8.6 million on bulk servicing sales and a
$1.4 million valuation recovery, while 2008 included a
$7.8 million favorable improvement in the gain on sales of
mortgage loans to the secondary market and related fees and a
$6.8 million addition to the valuation reserve. Asset and
investment securities losses combined were $54.2 million
for 2008 (primarily attributable to
other-than-temporary
write-downs on investment securities), compared to combined
asset and investment securities gains of $23.8 million for
2007 (predominantly from deposit premiums and fixed asset gains
related to the 2007 branch deposit sales).
Noninterest expense was $557.5 million for 2008, up
$22.6 million or 4.2% over 2007, impacted in part by
generally rising costs. Personnel expense rose $6.1 million
or 2.0%, while all remaining noninterest expense categories on a
combined basis increased $16.5 million or 7.1% over 2007.
The efficiency ratio (as defined under
section,Overview) was 52.41% for 2008 and 53.92% for
2007.
Income tax expense for 2008 was $53.8 million, compared to
$133.4 million for 2007. The effective tax rate for 2008
was 24.2%, versus 31.8% for 2007. The decline in the effective
tax rate was primarily due to the decrease in income before
taxes, as the level of permanent difference items (such as
tax-exempt interest and dividends) while relatively consistent
between years, had a proportionately greater impact on the
effective tax rate based on lower pre-tax income. Additionally,
the first quarter 2008 resolution of certain tax matters and
changes in estimated exposure of uncertain tax positions,
partially offset by the increase in valuation allowance related
to certain tax assets, resulted in the net reduction of
previously recorded tax liabilities and income tax expense of
approximately $4.4 million in the first quarter of 2008.
31
Table of Contents
32
Table of Contents
33
Table of Contents
(1)
The yield on tax-exempt loans and
securities is computed on a taxable equivalent basis using a tax
rate of 35% for all periods presented and is net of the effects
of certain disallowed interest deductions.
(2)
Nonaccrual loans and loans held for
sale have been included in the average balances.
(3)
Interest income includes net loan
fees.
34
Table of Contents
2008 Compared to 2007
2007 Compared to 2006
Increase (Decrease) Due to
Increase (Decrease) Due to
Volume
Rate
Net
Volume
Rate
Net
($ in Thousands)
$
41,172
$
(171,805
)
$
(130,633
)
$
21,379
$
1,928
$
23,307
(5,568
)
(6,482
)
(12,050
)
(26,427
)
6,796
(19,631
)
33,863
(49,896
)
(16,033
)
(3,210
)
5,298
2,088
69,467
(228,183
)
(158,716
)
(8,258
)
14,022
5,764
11,494
(823
)
10,671
(16,941
)
7,922
(9,019
)
586
(848
)
(262
)
1,600
(858
)
742
735
(979
)
(244
)
(171
)
43
(128
)
12,815
(2,650
)
10,165
(15,512
)
7,107
(8,405
)
$
82,282
$
(230,833
)
$
(148,551
)
$
(23,770
)
$
21,129
$
(2,641
)
$
(108
)
$
(365
)
$
(473
)
$
(405
)
$
1,075
$
670
(1,681
)
(18,843
)
(20,524
)
(2,793
)
3,483
690
15,949
(75,816
)
(59,867
)
15,754
3,664
19,418
(16,396
)
(32,572
)
(48,968
)
(1,952
)
21,354
19,402
(2,236
)
(127,596
)
(129,832
)
10,604
29,576
40,180
871
(11,086
)
(10,215
)
(1,824
)
1,044
(780
)
(1,365
)
(138,682
)
(140,047
)
8,780
30,620
39,400
31,573
(71,063
)
(39,490
)
(16,553
)
1,289
(15,264
)
27,500
(36,050
)
(8,550
)
20,358
(261
)
20,097
(10,728
)
(2,523
)
(13,251
)
(31,603
)
9,439
(22,164
)
48,345
(109,636
)
(61,291
)
(27,798
)
10,467
(17,331
)
$
46,980
$
(248,318
)
$
(201,338
)
$
(19,018
)
$
41,087
$
22,069
$
35,302
$
17,485
$
52,787
$
(4,752
)
$
(19,958
)
$
(24,710
)
(1)
The change in interest due to both
rate and volume has been allocated in proportion to the
relationship to the dollar amounts of the change in each.
(2)
The yield on tax-exempt loans and
securities is computed on a fully taxable equivalent basis using
a tax rate of 35% for all periods presented and is net of the
effects of certain disallowed interest deductions.
35
Table of Contents
2008 Average
2007 Average
2006 Average
% of
% of
% of
Earning
Yield /
Earning
Yield /
Earning
Yield /
Balance
Assets
Rate
Balance
Assets
Rate
Balance
Assets
Rate
($ in Thousands)
$
16,080,565
81.1
%
5.95
%
$
15,132,634
81.2
%
7.37
%
$
15,370,090
79.9
%
7.22
%
3,759,141
18.9
%
5.26
%
3,512,136
18.8
%
5.35
%
3,859,759
20.1
%
5.08
%
$
19,839,706
100.0
%
5.82
%
$
18,644,770
100.0
%
6.99
%
$
19,229,849
100.0
%
6.79
%
$
17,019,832
85.8
%
2.53
%
$
15,886,710
85.2
%
3.98
%
$
16,434,947
85.5
%
3.71
%
2,819,874
14.2
%
2,758,060
14.8
%
2,794,902
14.5
%
$
19,839,706
100.0
%
2.17
%
$
18,644,770
100.0
%
3.39
%
$
19,229,849
100.0
%
3.17
%
3.29
%
3.01
%
3.08
%
0.36
%
0.59
%
0.54
%
3.65
%
3.60
%
3.62
%
5.08
%
8.05
%
7.96
%
1.75
%
4.95
%
4.97
%
333
bp
310
bp
299
bp
*
Source: Bloomberg
36
Table of Contents
37
Table of Contents
% Change From
Years Ended December 31,
Prior Year
2008
2007
2006
2008
2007
($ in Thousands)
$
38,420
$
42,629
$
37,484
(9.9
)%
13.7
%
118,368
101,042
91,593
17.1
10.3
48,540
47,558
42,661
2.1
11.5
62,588
61,645
61,256
1.5
0.6
267,916
252,874
232,994
5.9
8.5
37,566
39,467
32,888
(4.8
)
20.0
22,882
16,717
18,087
36.9
(7.6
)
14,684
22,750
14,801
(35.5
)
53.7
19,804
17,419
16,155
13.7
7.8
37,455
27,957
26,525
34.0
5.4
339,859
321,000
290,475
5.9
%
10.5
%
(1,668
)
15,607
304
N/M
N/M
(52,541
)
8,174
4,722
N/M
N/M
$
285,650
$
344,781
$
295,501
(17.2
)%
16.7
%
38
Table of Contents
39
Table of Contents
40
Table of Contents
% Change From
Years Ended December 31,
Prior Year
2008
2007
2006
2008
2007
($ in Thousands)
$
309,478
$
303,428
$
283,431
2.0
%
7.1
%
50,461
46,659
43,825
8.1
6.5
19,123
17,908
17,466
6.8
2.5
30,451
31,690
31,451
(3.9
)
0.8
21,400
19,785
16,857
8.2
17.4
7,674
6,824
7,082
12.5
(3.6
)
6,269
7,116
8,903
(11.9
)
(20.1
)
6,153
6,786
7,157
(9.3
)
(5.2
)
7,702
7,689
7,377
0.2
4.2
14,566
11,841
12,723
23.0
(6.9
)
13,685
7,508
3,784
82.3
98.4
70,498
67,657
56,159
4.2
20.5
$
557,460
$
534,891
$
496,215
4.2
%
7.8
%
55.5
%
56.7
%
57.1
%
41
Table of Contents
As of December 31,
2008
2007
2006
2005
2004
% of
% of
% of
% of
% of
Amount
Total
Amount
Total
Amount
Total
Amount
Total
Amount
Total
($ in Thousands)
$
4,388,691
27
%
$
4,281,091
28
%
$
3,677,573
24
%
$
3,417,343
22
%
$
2,803,333
20
%
3,566,551
22
3,635,365
23
3,789,480
25
4,064,327
27
3,933,131
28
2,260,888
13
2,260,766
14
2,047,124
14
1,783,267
12
1,459,629
11
122,113
1
108,794
1
81,814
1
61,315
50,718
10,338,243
63
10,286,016
66
9,595,991
64
9,326,252
61
8,246,811
59
2,883,317
18
2,269,122
15
2,164,758
15
2,025,055
13
1,866,485
13
827,303
5
841,136
5
915,747
6
1,003,938
7
1,054,011
8
3,710,620
23
3,110,258
20
3,080,505
21
3,028,993
20
2,920,496
21
2,235,045
14
2,119,978
14
2,205,030
15
2,851,219
19
2,714,580
20
$
16,283,908
100
%
$
15,516,252
100
%
$
14,881,526
100
%
$
15,206,464
100
%
$
13,881,887
100
%
42
Table of Contents
43
Table of Contents
Maturity(1)
Within 1 Year(2)
1-5 Years
After 5 Years
Total
($ in Thousands)
$
3,514,213
$
704,874
$
169,604
$
4,388,691
1,882,413
341,315
37,160
2,260,888
$
5,396,626
$
1,046,189
$
206,764
$
6,649,579
$
1,019,137
$
769,271
$
186,312
$
1,974,720
4,377,489
276,918
20,452
4,674,859
$
5,396,626
$
1,046,189
$
206,764
$
6,649,579
81
%
16
%
3
%
100
%
(1)
Based upon scheduled principal
repayments.
(2)
Demand loans, past due loans, and
overdrafts are reported in the Within 1 Year
category.
44
Table of Contents
45
Table of Contents
46
Table of Contents
Years Ended December 31,
2008
2007
2006
2005
2004
($ in Thousands)
$
200,570
$
203,481
$
203,404
$
189,762
$
177,622
2,991
13,283
14,750
202,058
34,509
19,056
13,019
14,668
45,207
21,574
9,562
9,461
4,640
12,932
4,427
1,918
4,667
7,677
55,782
2,559
1,287
612
16
599
150
140
259
245
114,520
28,710
12,907
14,999
12,578
20,011
9,732
8,251
3,469
2,571
7,546
6,501
7,005
7,052
6,129
27,557
16,233
15,256
10,521
8,700
3,749
2,306
2,344
2,223
924
145,826
47,249
30,507
27,743
22,202
6,000
3,595
5,489
3,957
1,873
391
804
3,148
8,317
1,498
73
252
37
29
26
23
3
6,493
4,677
8,660
12,311
3,374
384
386
370
259
107
1,386
1,530
1,559
1,807
1,140
1,770
1,916
1,929
2,066
1,247
313
245
939
706
303
8,576
6,838
11,528
15,083
4,924
137,250
40,411
18,979
12,660
17,278
$
265,378
$
200,570
$
203,481
$
203,404
$
189,762
1.63
%
1.29
%
1.37
%
1.34
%
1.37
%
1.9
5.0
10.7
16.1
11.0
(A
)
(A
)
(A
)
(A
)
(A
)
$
39,207
90
$
17,979
46
$
4,073
12
$
5,504
18
$
2,767
12
12,541
35
3,623
10
(1,230
)
(3
)
(3,650
)
(10
)
6,179
18
55,709
238
2,307
11
1,287
6
575
4
16
570
47
124
14
117
16
259
48
242
52
108,027
104
24,033
25
4,247
4
2,688
3
9,204
13
19,627
74
9,346
43
7,881
37
3,210
17
2,464
18
6,160
74
4,971
57
5,446
57
5,245
50
4,989
67
25,787
74
14,317
47
13,327
43
8,455
29
7,453
36
3,436
16
2,061
9
1,405
5
1,517
5
621
3
$
137,250
85
$
40,411
27
$
18,979
12
$
12,660
9
$
17,278
15
79
%
60
%
22
%
21
%
53
%
19
%
35
%
70
%
67
%
43
%
2
%
5
%
8
%
12
%
4
%
47
Table of Contents
As of December 31,
% of
% of
% of
% of
% of
Loan
Loan
Loan
Loan
Loan
Type to
Type to
Type to
Type to
Type to
Total
Total
Total
Total
Total
2008
Loans
2007
Loans
2006
Loans
2005
Loans
2004
Loans
($ in Thousands)
$
103,198
27
%
$
67,941
28
%
$
88,112
24
%
$
85,125
22
%
$
79,882
20
%
65,991
13
24,084
14
17,267
14
13,643
12
12,263
11
58,202
22
71,172
23
65,949
25
67,914
27
62,200
28
777
1
732
1
708
1
590
502
228,168
63
163,929
66
172,036
64
167,272
61
154,847
59
20,175
18
20,045
15
10,452
15
11,047
13
10,453
13
6,585
5
5,353
5
10,584
6
12,169
7
11,247
8
26,760
23
25,398
20
21,036
21
23,216
20
21,700
21
10,450
14
11,243
14
10,409
15
12,916
19
13,215
20
$
265,378
100
%
$
200,570
100
%
$
203,481
100
%
$
203,404
100
%
$
189,762
100
%
39
%
34
%
43
%
42
%
42
%
25
12
9
7
6
22
35
33
33
33
86
81
85
82
81
8
10
5
6
6
2
3
5
6
6
10
13
10
12
12
4
6
5
6
7
100
%
100
%
100
%
100
%
100
%
48
Table of Contents
49
Table of Contents
50
Table of Contents
51
Table of Contents
December 31,
2008
2007
2006
2005
2004
($ in Thousands)
$
257,322
$
105,780
$
108,129
$
68,304
$
85,955
45,146
33,737
19,290
15,912
16,088
24,389
13,011
9,315
11,097
10,718
326,857
152,528
136,734
95,313
112,761
3,039
1,631
148
659
10
13,801
7,079
4,094
3,122
1,494
13,811
10,118
5,725
3,270
2,153
26
32
37
340,668
162,646
142,485
98,615
114,951
48,710
26,489
14,417
11,336
3,915
$
389,378
$
189,135
$
156,902
$
109,951
$
118,866
2.09
%
1.05
%
0.96
%
0.65
%
0.83
%
2.38
%
1.22
%
1.05
%
0.72
%
0.86
%
1.61
%
0.88
%
0.75
%
0.50
%
0.58
%
78
%
123
%
143
%
206
%
165
%
1.63
%
1.29
%
1.37
%
1.34
%
1.37
%
$
104,664
$
32,610
$
40,369
$
27,882
$
40,545
62,423
35,049
37,190
24,654
38,412
90,048
39,837
32,079
15,805
7,245
187
1,323
148
143
449
257,322
108,819
109,786
68,484
86,651
31,035
16,209
10,044
9,072
8,102
7,155
3,881
3,365
5,147
4,110
38,190
20,090
13,409
14,219
12,212
45,156
33,737
19,290
15,912
16,088
340,668
162,646
142,485
98,615
114,951
28,724
8,465
2,390
2,508
1,223
15,178
10,308
6,382
4,175
2,563
4,808
7,716
5,645
4,653
129
48,710
26,489
14,417
11,336
3,915
$
389,378
$
189,135
$
156,902
$
109,951
$
118,866
52
Table of Contents
Years Ended December 31,
2008
2007
2006
($ in Thousands)
$
32,499
$
13,704
$
13,683
(13,589
)
(5,520
)
(6,369
)
$
18,910
$
8,184
$
7,314
53
Table of Contents
At December 31,
2008
% of Total
2007
% of Total
2006
% of Total
($ in Thousands)
$
4,985
<1
%
$
4,923
<1
%
$
28,258
1
%
75,816
2
75,272
2
79,148
2
913,216
17
964,616
27
910,290
27
4,032,784
76
2,224,198
63
2,137,556
62
264,275
5
259,393
8
283,185
8
$
5,291,076
100
%
$
3,528,402
100
%
$
3,438,437
100
%
$
4,966
<1
%
$
4,936
<1
%
$
28,261
1
%
77,010
2
75,676
2
78,706
2
925,603
17
980,989
28
926,511
27
4,077,431
76
2,222,103
63
2,107,460
61
264,407
5
259,315
7
295,683
9
$
5,349,417
100
%
$
3,543,019
100
%
$
3,436,621
100
%
$
58,341
$
14,617
$
(1,816
)
54
Table of Contents
55
Table of Contents
Investment Securities Available for Sale - Maturity
Distribution and Weighted Average Yield
Mortgage-related
After one but
After five but
and equity
Total
Total
Within one year
within five years
within ten years
After ten years
securities
Amortized Cost
Fair Value
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
($ in Thousands)
$
4,985
2.53
%
$
$
$
$
$
4,985
2.53
%
$
4,966
27,704
3.34
48,112
4.58
%
75,816
4.13
77,010
118,297
7.22
313,223
6.65
371,648
6.27
%
110,048
6.00
%
913,216
6.49
925,603
41,882
1.04
1,750
4.43
200
4.00
5,920
6.61
49,752
1.83
49,395
4,032,784
5.14
%
4,032,784
5.14
4,077,431
214,523
1.69
214,523
1.69
215,012
$
192,868
5.20
%
$
363,085
6.36
%
$
371,848
6.27
%
$
115,968
6.03
%
$
4,247,307
4.97
%
$
5,291,076
5.19
%
$
5,349,417
$
194,901
$
372,588
$
376,930
$
112,555
$
4,292,443
$
5,349,417
(1)
Expected maturities will differ
from contractual maturities, as borrowers may have the right to
call or repay obligations with or without call or prepayment
penalties.
(2)
Yields on tax-exempt securities are
computed on a taxable equivalent basis using a tax rate of 35%
and have not been adjusted for certain disallowed interest
deductions.
56
Table of Contents
2008
2007
2006
Amount
% of Total
Amount
% of Total
Amount
% of Total
($ in Thousands)
$
2,446,613
18
%
$
2,376,009
17
%
$
2,349,948
17
%
1,752,991
13
1,844,274
13
1,997,355
15
890,811
6
913,143
7
1,012,966
8
4,231,678
30
3,752,199
27
3,324,362
24
532,805
4
515,705
4
550,925
4
3,957,174
29
4,340,473
32
4,388,147
32
$
13,812,072
100
%
$
13,741,803
100
%
$
13,623,703
100
%
December 31, 2008
Total Certificates of
Certificates
Other
Deposits and Other
of Deposit
Time Deposits
Time Deposits
($ in Thousands)
$
519,822
$
200,745
$
720,567
192,299
129,542
321,841
236,663
67,417
304,080
248,079
2,750
250,829
$
1,196,863
$
400,454
$
1,597,317
57
Table of Contents
December 31,
2008
2007
2006
($ in Thousands)
$
1,590,738
$
1,936,430
$
1,313,786
2,330,426
1,847,789
2,185,067
2,658,608
2,281,308
3,176,814
1.02
%
4.25
%
5.01
%
2.20
%
4.91
%
4.85
%
58
Table of Contents
Moodys
S&P
P1
A2
A1
A-
P1
A2
A2
BBB+
A3
BBB
59
Table of Contents
60
Table of Contents
61
Table of Contents
December 31, 2008
Interest Sensitivity Period
Total Within
0-90 Days
91-180 Days
181-365 Days
1 Year
Over 1 Year
Total
($ in Thousands)
$
87,084
$
$
$
87,084
$
$
87,084
833,137
579,041
687,178
2,099,356
3,250,061
5,349,417
9,327,946
722,971
1,399,255
11,450,172
4,833,736
16,283,908
37,390
37,390
37,390
$
10,285,557
$
1,302,012
$
2,086,433
$
13,674,002
$
8,083,797
$
21,757,799
$
3,716,110
$
1,807,147
$
2,759,422
$
8,282,679
$
6,082,581
$
14,365,260
4,837,294
280,076
315,492
5,432,862
922,257
6,355,119
(400,000
)
200,000
(200,000
)
200,000
$
8,153,404
$
2,287,223
$
3,074,914
$
13,515,541
$
7,204,838
$
20,720,379
$
2,132,153
$
(985,211
)
$
(988,481
)
$
158,461
$
878,959
$
1,037,420
$
2,132,153
$
1,146,942
$
158,461
9.8
%
5.3
%
0.7
%
(1)
The interest rate sensitivity
assumptions for demand deposits, savings accounts, money market
accounts, and interest-bearing demand deposit accounts are based
on current and historical experiences regarding portfolio
retention and interest rate repricing behavior. Based on these
experiences, a portion of these balances are considered to be
long-term and fairly stable and are, therefore, included in the
Over 1 Year category.
(2)
For analysis purposes, Brokered CDs
of $790 million have been included with other
interest-bearing liabilities and excluded from deposits.
62
Table of Contents
63
Table of Contents
Note
One Year
One to
Three to
Over
At December 31, 2008:
Reference
or Less
Three Years
Five Years
Five Years
Total
($ in Thousands)
7
$
3,664,484
$
705,355
$
360,763
$
46,493
$
4,777,095
8
3,703,936
3,703,936
9
707,519
909,612
162
244,354
1,861,647
6
11,764
19,270
13,324
14,751
59,109
14
3,831,627
1,037,257
465,260
59,141
5,393,285
$
11,919,330
$
2,671,494
$
839,509
$
364,739
$
15,795,072
64
Table of Contents
65
Table of Contents
At December 31,
2008
2007
2006
(In Thousands, except per share data)
$
2,876,503
$
2,329,705
$
2,245,493
2,117,680
1,566,872
1,546,037
2,446,597
1,888,346
1,955,035
2,674,059
3,444,764
4,490,695
$
18.54
$
18.32
$
17.44
1.27
1.22
1.14
20.93
27.09
34.88
14.85
25.23
30.27
29.23
35.43
35.13
11.89
%
10.79
%
10.76
%
9.75
7.83
7.82
11.91
9.06
9.42
13.76
10.92
11.92
127,762
127,160
128,747
127,501
127,408
132,006
127,891
128,428
133,132
3,920
8,025
$
$
34.15
$
32.83
3,855
3,855
1,375
(1)
Does not include shares repurchased
for minimum tax withholding settlements on equity compensation.
66
Table of Contents
67
Table of Contents
68
Table of Contents
2008 Quarter Ended
December 31
September 30
June 30
March 31
(In Thousands, except per share data)
$
278,869
$
271,376
$
279,594
$
296,870
87,087
104,859
106,862
131,753
191,782
166,517
172,732
165,117
65,044
55,011
59,001
23,002
(35,298
)
(13,585
)
(718
)
(2,940
)
19,062
50,252
64,535
88,431
13,609
37,769
47,359
66,465
$
0.11
$
0.30
$
0.37
$
0.52
$
0.11
$
0.30
$
0.37
$
0.52
127,717
127,553
127,433
127,298
127,944
127,711
127,964
127,825
69
Table of Contents
2007 Quarter Ended
December 31
September 30
June 30
March 31
(In Thousands, except per share data)
$
318,967
$
324,608
$
317,673
$
314,464
154,748
161,535
160,198
155,418
164,219
163,073
157,475
159,046
15,501
8,733
5,193
5,082
(815
)
1,879
6,075
1,035
94,289
105,251
111,126
108,528
64,791
71,741
75,825
73,395
$
0.51
$
0.57
$
0.59
$
0.57
$
0.51
$
0.56
$
0.59
$
0.57
127,095
126,958
127,606
127,988
127,835
127,847
128,750
129,299
Table of Contents
71
Table of Contents
72
Table of Contents
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
73
Table of Contents
ITEM 8.
Financial
Statements and Supplementary Data
CONSOLIDATED BALANCE SHEETS
74
Table of Contents
CONSOLIDATED STATEMENTS OF INCOME
75
Table of Contents
Accumulated
Other
Preferred Equity
Common Stock
Retained
Comprehensive
Deferred
Treasury
Shares
Amount
Shares
Amount
Surplus
Earnings
Income (Loss)
Compensation
Stock
Total
(In Thousands, except per share data)
$
135,697
$
1,357
$
1,301,004
$
1,029,247
$
(3,938
)
$
(2,081
)
$
(611
)
$
2,324,978
316,645
316,645
2,549
2,549
319,194
(15,064
)
(15,064
)
(151,235
)
(151,235
)
790
8
15,268
(4,945
)
19,538
29,869
(6,061
)
(61
)
(201,913
)
(68,316
)
(270,290
)
2,345
(54
)
2,081
(561
)
3,811
4,230
4,230
$
130,426
$
1,304
$
1,120,934
$
1,189,658
$
(16,453
)
$
$
(49,950
)
$
2,245,493
285,752
285,752
13,955
13,955
299,707
(155,809
)
(155,809
)
1,338
14
46,486
46,500
1,092
(14,465
)
35,045
21,672
(4,011
)
(40
)
(133,820
)
(133,860
)
4,189
4,189
1,813
1,813
$
127,753
$
1,278
$
1,040,694
$
1,305,136
$
(2,498
)
$
$
(14,905
)
$
2,329,705
(2,515
)
(2,515
)
$
127,753
$
1,278
$
1,040,694
$
1,302,621
$
(2,498
)
$
$
(14,905
)
$
2,327,190
168,452
168,452
2,553
2,553
171,005
525
507,675
507,675
17,325
17,325
333
(333
)
363
3
5,981
(11,535
)
14,905
9,354
(162,347
)
(162,347
)
(2,917
)
(2,917
)
6,988
6,988
2,230
2,230
525
$
508,008
128,116
$
1,281
$
1,073,218
$
1,293,941
$
55
$
$
$
2,876,503
76
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
77
Table of Contents
NOTE 1
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
78
Table of Contents
79
Table of Contents
80
Table of Contents
81
Table of Contents
82
Table of Contents
83
Table of Contents
84
Table of Contents
NOTE 2
BUSINESS
COMBINATIONS:
85
Table of Contents
NOTE 3
INVESTMENT
SECURITIES:
2008
Gross
Gross
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
($ in Thousands)
$
4,985
$
10
$
(29
)
$
4,966
75,816
1,195
(1
)
77,010
913,216
16,581
(4,194
)
925,603
4,032,784
54,128
(9,481
)
4,077,431
264,275
639
(507
)
264,407
$
5,291,076
$
72,553
$
(14,212
)
$
5,349,417
2007
Gross
Gross
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
($ in Thousands)
$
4,923
$
17
$
(4
)
$
4,936
75,272
416
(12
)
75,676
964,616
16,722
(349
)
980,989
2,224,198
9,060
(11,155
)
2,222,103
259,393
1,993
(2,071
)
259,315
$
3,528,402
$
28,208
$
(13,591
)
$
3,543,019
2008
Amortized
Fair
Cost
Value
($ in Thousands)
$
192,868
$
194,901
363,085
372,588
371,848
376,930
115,968
112,555
1,043,769
1,056,974
4,032,784
4,077,431
214,523
215,012
$
5,291,076
$
5,349,417
86
Table of Contents
2008
2007
2006
($ in Thousands)
$
5
$
9,081
$
22,569
(52,546
)
(907
)
(17,847
)
$
(52,541
)
$
8,174
$
4,722
3,550
66,239
754,091
Less than 12 months
12 months or more
Total
Unrealized Losses
Fair Value
Unrealized Losses
Fair Value
Unrealized Losses
Fair Value
($ in Thousands)
$
(29
)
$
3,960
$
$
$
(29
)
$
3,960
(1
)
52
(1
)
52
(3,645
)
128,571
(549
)
21,752
(4,194
)
150,323
(2,240
)
268,626
(7,241
)
140,021
(9,481
)
408,647
(445
)
3,798
(62
)
206
(507
)
4,004
$
(6,359
)
$
404,955
$
(7,853
)
$
162,031
$
(14,212
)
$
566,986
87
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88
Table of Contents
Less than 12 months
12 months or more
Total
Unrealized Losses
Fair Value
Unrealized Losses
Fair Value
Unrealized Losses
Fair Value
($ in Thousands)
$
(4
)
$
3,944
$
$
$
(4
)
$
3,944
(1
)
15,161
(11
)
6,893
(12
)
22,054
(125
)
22,957
(224
)
42,547
(349
)
65,504
(82
)
61,962
(11,073
)
1,193,144
(11,155
)
1,255,106
(2,039
)
13,686
(32
)
6,296
(2,071
)
19,982
$
(2,251
)
$
117,710
$
(11,340
)
$
1,248,880
$
(13,591
)
$
1,366,590
NOTE 4
LOANS:
2008
2007
($ in Thousands)
$
4,388,691
$
4,281,091
3,566,551
3,635,365
2,260,888
2,260,766
122,113
108,794
10,338,243
10,286,016
2,883,317
2,269,122
827,303
841,136
3,710,620
3,110,258
2,235,045
2,119,978
$
16,283,908
$
15,516,252
2008
2007
2006
($ in Thousands)
$
200,570
$
203,481
$
203,404
2,991
202,058
34,509
19,056
(145,826
)
(47,249
)
(30,507
)
8,576
6,838
11,528
(137,250
)
(40,411
)
(18,979
)
$
265,378
$
200,570
$
203,481
89
Table of Contents
2008
2007
($ in Thousands)
$
326,857
$
152,528
13,811
10,118
$
340,668
$
162,646
2008
2007
($ in Thousands)
$
120,830
$
64,880
152,324
47,758
$
273,154
$
112,638
$
51,511
$
32,823
2008
2007
2006
($ in Thousands)
$
204,054
$
126,355
$
95,299
$
12,093
$
4,432
$
5,692
2008
($ in Thousands)
$
33,192
45,909
(21,056
)
(176
)
$
57,869
NOTE 5
GOODWILL
AND INTANGIBLE ASSETS:
90
Table of Contents
2008
2007
2006
($ in Thousands)
$
929,168
$
871,629
$
877,680
57,539
(6,051
)
$
929,168
$
929,168
$
871,629
2008
2007
2006
($ in Thousands)
$
47,748
$
47,748
$
43,363
(25,165
)
(20,580
)
(15,698
)
$
22,583
$
27,168
$
27,665
$
$
4,385
$
4,585
4,882
5,190
$
20,433
$
22,370
$
26,348
(8,419
)
(8,505
)
(11,399
)
$
12,014
$
13,865
$
14,949
$
$
1,150
$
167
1,684
2,234
3,713
(1)
Other intangibles of
$1.8 million were fully amortized during 2007 and have been
removed from both the gross carrying amount and the accumulated
amortization for 2008. Other intangibles of $5.1 million
were fully amortized during 2006 and have been removed from both
the gross carrying amount and the accumulated amortization for
2007.
91
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2008
2007
2006
($ in Thousands)
$
54,819
$
71,694
$
76,236
17,263
19,553
15,866
(18,269
)
(16,057
)
(18,067
)
(20,400
)
(92
)
(8
)
$
56,025
$
54,819
$
71,694
(3,632
)
(5,074
)
(7,395
)
(6,825
)
1,350
2,313
92
8
(10,457
)
(3,632
)
(5,074
)
$
45,568
$
51,187
$
66,620
$
52,882
$
62,815
$
76,734
$
6,606,000
$
6,403,000
$
8,330,000
0.69
%
0.80
%
0.80
%
$
22,882
$
16,717
$
18,087
(1)
Included in the December 31,
2007, additions to mortgage servicing rights was
$2.4 million from First National Bank at acquisition.
(2)
In 2007, the Corporation sold
approximately $2.7 billion of its mortgage portfolio
serviced for others with a carrying value of $18.3 million
at an $8.6 million gain, which is included in mortgage
banking, net in the consolidated statements of income.
92
Table of Contents
(3)
Included in the December 31,
2007, portfolio of residential mortgage loans serviced for
others was $0.3 billion from First National Bank at
acquisition.
(4)
Includes the amortization of
mortgage servicing rights and additions/recoveries to the
valuation allowance of mortgage servicing rights, and is a
component of mortgage banking, net in the consolidated
statements of income.
Core Deposit Intangibles
Other Intangibles
Mortgage Servicing Rights
($ in Thousands)
$
4,100
$
1,400
$
14,300
3,700
1,200
11,800
3,700
1,000
9,500
3,200
1,000
7,100
3,100
900
5,100
NOTE 6
PREMISES
AND EQUIPMENT:
2008
2007
Estimated
Accumulated
Net Book
Net Book
Useful Lives
Cost
Depreciation
Value
Value
($ in Thousands)
$
44,554
$
$
44,554
$
45,519
3 20 years
4,777
2,333
2,444
2,074
5 40 years
197,449
96,983
100,466
104,711
3 5 years
34,735
27,298
7,437
8,750
3 20 years
123,074
94,285
28,789
27,585
5 30 years
26,048
18,796
7,252
8,807
$
430,637
$
239,695
$
190,942
$
197,446
93
Table of Contents
($ in Thousands)
$
11,764
10,650
8,620
7,463
5,861
14,751
$
59,109
NOTE 7
DEPOSITS:
2008
2007
($ in Thousands)
$
2,814,079
$
2,661,078
841,129
853,618
1,796,405
1,947,551
4,926,088
3,923,063
789,536
409,637
3,987,559
4,178,966
$
15,154,796
$
13,973,913
($ in Thousands)
$
3,664,484
607,627
97,728
303,774
56,989
46,493
$
4,777,095
94
Table of Contents
NOTE 8
SHORT-TERM
BORROWINGS:
2008
2007
($ in Thousands)
$
1,590,738
$
1,936,430
500,000
1,600,000
200,000
13,198
1,055,357
35,000
$
3,703,936
$
3,226,787
NOTE 9
LONG-TERM
FUNDING:
2008
2007
($ in Thousands)
$
1,118,140
$
1,096,685
250,000
300,000
100,000
225,058
199,462
216,291
216,465
2,158
2,159
$
1,861,647
$
1,864,771
95
Table of Contents
($ in Thousands)
$
707,519
710,000
199,612
83
79
244,354
$
1,861,647
NOTE 10
STOCKHOLDERS
EQUITY:
96
Table of Contents
97
Table of Contents
2008
2007
2006
($ in Thousands)
$
168,452
$
285,752
$
316,645
(8,817
)
24,607
8,790
52,541
(8,174
)
(4,722
)
(16,559
)
(5,591
)
(1,519
)
27,165
10,842
2,549
(29,593
)
6,267
(396
)
472
442
231
844
11,556
(2,863
)
(17,334
)
4,294
(16,679
)
(1,606
)
4,343
(366
)
5,058
791
(7,278
)
(1,181
)
2,553
13,955
2,549
$
171,005
$
299,707
$
319,194
NOTE 11
STOCK-BASED
COMPENSATION:
98
Table of Contents
2008
2007
2006
5.12
%
3.45
%
3.23
%
2.77
%
4.80
%
4.44
%
21.32
%
19.28
%
23.98
%
6yrs
6 yrs
6 yrs
$
2.74
$
5.99
$
6.97
99
Table of Contents
Weighted Average
Aggregate
Weighted Average
Remaining
Intrinsic
Stock Options
Shares
Exercise Price
Contractual Term
Value (000s)
7,859,686
$
25.40
77,000
32.28
(1,316,932
)
22.58
(153,272
)
31.43
6,466,482
$
25.91
5.95
$
57,985
6,081,776
$
25.67
5.85
$
56,005
6,466,482
$
25.91
1,091,645
33.72
(974,440
)
23.05
(264,274
)
32.48
6,319,413
$
27.43
5.78
$
(2,136
)
5,289,288
$
26.22
5.14
$
4,603
6,319,413
$
27.43
1,256,790
24.35
(576,685
)
18.20
(417,816
)
30.55
6,581,702
$
27.45
5.87
$
(42,922
)
4,770,537
$
27.44
4.77
$
(31,076
)
Options
Weighted Average
Remaining
Options
Weighted Average
Outstanding
Exercise Price
Life (Years)
Exercisable
Exercise Price
26,003
$
12.53
1.49
26,003
$
12.53
308,822
17.25
2.77
241,822
16.82
2,768,858
22.70
5.28
1,650,324
21.40
772,161
29.04
5.30
737,681
29.08
2,705,858
33.17
7.04
2,114,707
32.99
6,581,702
$
27.45
5.87
4,770,537
$
27.44
100
Table of Contents
Weighted Average
Shares
Grant Date Fair Value
1,003,891
$
6.00
77,000
6.97
(668,362
)
5.87
(27,823
)
6.26
384,706
$
6.40
384,706
$
6.40
1,091,645
5.99
(333,376
)
6.31
(112,850
)
6.07
1,030,125
$
6.03
1,030,125
$
6.03
1,256,790
2.74
(337,557
)
6.06
(138,193
)
4.66
1,811,165
$
3.85
101
Table of Contents
Weighted Average
Restricted Stock
Shares
Grant Date Fair Value
72,500
$
28.70
92,300
33.50
(15,000
)
23.25
(21,900
)
32.78
127,900
$
32.11
127,900
$
32.11
118,250
33.70
(45,716
)
31.64
(35,594
)
33.19
164,840
$
33.14
164,840
$
33.14
265,900
24.43
(69,074
)
32.47
(7,339
)
32.21
354,327
$
26.75
NOTE 12
RETIREMENT
PLANS:
102
Table of Contents
Pension
Postretirement
Pension
Postretirement
Plan
Plan
Plan
Plan
2008
2008
2007
2007
($ in Thousands)
$
135,931
$
$
124,551
$
(27,660
)
10,567
10,000
378
10,000
354
(9,160
)
(378
)
(9,187
)
(354
)
$
109,111
$
$
135,931
$
$
108,006
$
5,188
$
107,425
$
5,747
9,362
9,888
6,174
271
5,698
294
396
147
(9,327
)
(520
)
(6,214
)
(499
)
(9,160
)
(378
)
(9,187
)
(354
)
$
105,202
$
4,561
$
108,006
$
5,188
$
3,909
$
(4,561
)
$
27,925
$
(5,188
)
$
4,557
$
$
27,925
$
(560
)
(590
)
(648
)
(4,001
)
(4,598
)
$
3,909
$
(4,561
)
$
27,925
$
(5,188
)
Pension
Postretirement
Pension
Postretirement
Plan
Plan
Plan
Plan
2008
2008
2007
2007
($ in Thousands)
$
400
$
813
$
446
$
1,050
27,294
(403
)
9,382
(108
)
$
27,694
$
410
$
9,828
$
942
103
Table of Contents
Pension Plan
Postretirement Plan
Pension Plan
Postretirement Plan
2008
2008
2007
2007
($ in Thousands)
$
(30,112
)
$
519
$
5,769
$
498
(396
)
77
395
47
395
258
(27
)
844
11,911
(355
)
(2,506
)
(357
)
$
(17,866
)
$
532
$
3,758
$
536
Pension Plan
Postretirement Plan
Pension Plan
Postretirement Plan
Pension Plan
Postretirement Plan
2008
2008
2007
2007
2006
2006
($ in Thousands)
$
9,362
$
$
9,888
$
$
9,546
$
6,174
271
5,698
294
5,335
311
(11,768
)
(11,269
)
(9,551
)
(88
)
77
395
47
395
47
395
258
(27
)
844
1,035
$
4,103
$
639
$
5,208
$
689
$
6,324
$
706
267
102
$
4,370
$
639
$
5,208
$
689
$
6,426
$
706
104
Table of Contents
Pension Plan
Postretirement Plan
Pension Plan
Postretirement Plan
2008
2008
2007
2007
6.10
%
6.10
%
6.00
%
6.00
%
5.00
N/A
5.00
N/A
6.00
%
6.00
%
5.50
%
5.50
%
5.00
N/A
5.00
N/A
8.25
N/A
8.75
N/A
Asset Category
2008
2007
52
%
61
%
47
37
1
2
100
%
100
%
Pension Plan
Postretirement Plan
($ in Thousands)
$
16,548
$
560
7,721
610
8,375
587
9,454
565
9,720
500
52,501
1,463
Table of Contents
2008
2007
100 bp Increase
100 bp Decrease
100 bp Increase
100 bp Decrease
($ in Thousands)
$
23
$
(21
)
$
22
$
(20
)
$
377
$
(348
)
$
363
$
(339
)
NOTE 13
INCOME
TAXES:
Years Ended December 31,
2008
2007
2006
($ in Thousands)
$
97,707
$
120,623
$
109,909
(2,327
)
3,353
3,589
95,380
123,976
113,498
(44,986
)
7,048
16,412
3,434
2,418
3,224
(41,552
)
9,466
19,636
$
53,828
$
133,442
$
133,134
106
Table of Contents
2008
2007
($ in Thousands)
$
108,028
$
81,498
5,424
3,002
20,637
19,160
23,072
2,222
37,249
29,337
9,457
3,293
203,867
138,512
(25,182
)
(12,082
)
178,685
126,430
13,903
13,903
22,621
20,862
25,932
23,661
6,498
9,679
18,105
16,492
16,569
10,717
4,046
5,091
9,313
5,879
116,987
106,284
61,698
20,146
(15,926
)
(4,395
)
18,736
7,180
2,810
2,785
$
64,508
$
22,931
107
Table of Contents
2008
2007
($ in Thousands)
$
12,082
$
7,689
13,100
4,393
$
25,182
$
12,082
2008
2007
2006
35.0
%
35.0
%
35.0
%
(7.3
)
(3.9
)
(3.0
)
0.3
0.9
1.0
(3.1
)
(1.4
)
(1.2
)
(0.7
)
1.2
(2.2
)
24.2
%
31.8
%
29.6
%
108
Table of Contents
2008
2007
($ in Millions)
$
38
$
29
9
10
(8
)
(1
)
(1
)
$
38
$
38
NOTE 14
COMMITMENTS,
OFF-BALANCE SHEET ARRANGEMENTS, AND CONTINGENT
LIABILITIES:
109
Table of Contents
2008
2007
($ in Thousands)
$
4,885,011
$
6,603,204
21,121
30,495
563,784
628,760
(1)
These off-balance sheet financial
instruments are exercisable at the market rate prevailing at the
date the underlying transaction will be completed and, thus, are
deemed to have no current fair value, or the fair value is based
on fees currently charged to enter into similar agreements and
is not material at December 31, 2008 or 2007.
(2)
Commitments to originate
residential mortgage loans held for sale are considered
derivative instruments and are disclosed in Note 15.
(3)
The Corporation has established a
liability of $3.7 million at both December 31, 2008
and 2007, as an estimate of the fair value of these financial
instruments.
110
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111
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NOTE 15
DERIVATIVE
AND HEDGING ACTIVITIES:
112
Table of Contents
Notional
Fair Value
Weighted Average
December 31, 2008
Amount
Gain / (Loss)
Receive Rate
Pay Rate
Maturity
($ in Thousands)
$
400,000
$
(14,623
)
0.76
%
3.78
%
22 months
1,787,262
(1,404
)
3.02
%
3.02
%
55 months
92,724
15 months
53,593
(94
)
42 months
(1)
Cash flow hedge accounting is
applied on $400 million notional, of which,
$200 million hedges the interest rate risk in the cash
flows of a long-term, variable-rate FHLB advance and
$200 million hedges the interest rate risk in the cash
flows of certain, short-term, variable-rate borrowings as an
asset / liability management strategy.
(2)
Hedge accounting is not applied on
$1.9 billion notional of interest rate swaps, caps, and
collars entered into with our customers whose value changes are
offset by mirror swaps, caps, and collars entered into with
third parties.
Notional
Fair Value
Weighted Average
December 31, 2007
Amount
Gain / (Loss)
Receive Rate
Pay Rate
Maturity
($ in Thousands)
$
175,000
$
(50
)
7.63
%
6.01
%
298 months
200,000
(1,972
)
4.74
%
4.42
%
18 months
758,376
4.92
%
4.92
%
62 months
42,314
15 months
56,503
54 months
(3)
Fair value hedge accounting is
applied on $175 million notional, which hedges a long-term,
fixed-rate subordinated debenture.
(4)
Cash flow hedge accounting is
applied on $200 million notional, which hedges the interest
rate risk in the cash flows of a long-term, variable-rate FHLB
advance.
(5)
Hedge accounting is not applied on
$857 million notional of interest rate swaps, caps, and
collars entered into with our customers whose value changes are
offset by mirror swaps, caps, and collars entered into with
third parties.
113
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114
Table of Contents
NOTE 16
PARENT
COMPANY ONLY FINANCIAL INFORMATION:
115
Table of Contents
116
Table of Contents
NOTE 17
FAIR
VALUE MEASUREMENTS:
117
Table of Contents
118
Table of Contents
119
Table of Contents
Fair Value Measurements Using
December 31, 2008
Level 1
Level 2
Level 3
($ in Thousands)
$
5,349,417
$
319,689
$
5,029,728
$
79,706
75,576
4,130
$
91,697
$
$
91,697
$
120
Table of Contents
Assets and Liabilities Measured at Fair Value
Using Significant Unobservable Inputs (Level 3)
Derivatives
($ in Thousands)
$
(1,067
)
5,197
$
4,130
Fair Value Measurements Using
December 31, 2008
Level 1
Level 2
Level 3
($ in Thousands)
$
87,084
$
$
87,084
$
133,627
133,627
45,568
45,568
(1)
Represents collateral-dependent
impaired loans, net, which are included in loans.
121
Table of Contents
2008
2007
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
($ in Thousands)
$
533,338
$
533,338
$
553,031
$
553,031
12,649
12,649
11,671
11,671
24,741
24,741
22,447
22,447
98,335
98,335
109,088
109,088
75,576
75,576
16,116
16,116
5,349,417
5,349,417
3,543,019
3,543,019
87,084
87,161
94,441
94,441
16,018,530
15,527,838
15,315,682
15,435,448
510,663
510,663
491,294
491,294
15,154,796
15,154,796
13,973,913
13,995,258
31,947
31,947
39,382
39,382
3,703,936
3,703,936
3,226,787
3,226,787
1,861,647
1,981,566
1,864,771
1,881,852
91,697
91,697
18,138
18,138
3,672
3,672
3,692
3,692
6,630
6,630
590
590
(2,500
)
(2,500
)
477
477
(1)
At December 31, 2008 and 2007,
the notional amount of non-trading interest rate swap agreements
was $400 million and $375 million, respectively. See
Note 15 for information on the fair value of derivative
financial instruments.
(2)
The commitment on standby letters
of credit was $0.6 billion at both December 31, 2008
and 2007. See Note 14 for additional information on the
standby letters of credit and for information on the fair value
of lending-related commitments.
122
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NOTE 18
REGULATORY
MATTERS:
123
Table of Contents
To Be Well Capitalized
For Capital Adequacy
Under Prompt Corrective
Actual
Purposes
Action Provisions:(2)
($ In Thousands)
Amount
Ratio(1)
Amount
Ratio(1)
Amount
Ratio(1)
$
2,446,597
13.76
%
$
1,422,715
³
8.00
%
2,117,680
11.91
711,358
³
4.00
%
2,117,680
9.75
869,139
³
4.00
%
$
1,794,979
10.32
$
1,391,227
³
8.00
%
$
1,739,033
³
10.00
%
1,576,864
9.07
695,613
³
4.00
%
1,043,420
³
6.00
%
1,576,864
7.31
862,936
³
4.00
%
1,078,670
³
5.00
%
$
1,888,346
10.92
%
$
1,383,408
³
8.00
%
1,566,872
9.06
691,704
³
4.00
%
1,566,872
7.83
800,474
³
4.00
%
$
1,706,518
10.04
$
1,359,997
³
8.00
%
$
1,699,997
³
10.00
%
1,513,235
8.90
679,999
³
4.00
%
1,019,998
³
6.00
%
1,513,235
7.63
793,289
³
4.00
%
991,612
³
5.00
%
(1)
(2)
124
Table of Contents
NOTE 19
EARNINGS
PER COMMON SHARE:
For the Years Ended December 31,
2008
2007
2006
(In thousands, except per share data)
$
168,452
$
285,752
$
316,645
(3,250
)
$
165,202
$
285,752
$
316,645
127,501
127,408
132,006
390
1,020
1,126
127,891
128,428
133,132
$
1.30
$
2.24
$
2.40
$
1.29
$
2.23
$
2.38
NOTE 20
SEGMENT
REPORTING:
125
Table of Contents
Wealth
Consolidated
Banking
Management
Other
Total
($ in Thousands)
$
695,370
$
778
$
$
696,148
202,058
202,058
200,515
105,043
(3,851
)
301,707
49,799
1,468
51,267
455,355
70,746
(3,851
)
522,250
40,385
13,443
53,828
$
148,288
$
20,164
$
$
168,452
88
%
12
%
%
100
%
$
24,133,439
$
115,690
$
(57,062
)
$
24,192,067
100
%
%
%
100
%
$
895,885
$
105,821
$
(3,851
)
$
997,855
90
%
10
%
%
100
%
$
643,306
$
507
$
$
643,813
34,509
34,509
259,259
107,473
(3,884
)
362,848
48,314
1,695
50,009
435,255
71,578
(3,884
)
502,949
119,559
13,883
133,442
$
264,928
$
20,824
$
$
285,752
93
%
7
%
%
100
%
$
21,527,456
$
110,105
$
(45,478
)
$
21,592,083
100
%
%
%
100
%
$
902,565
$
107,980
$
(3,884
)
$
1,006,661
90
%
10
%
%
100
%
$
669,047
$
502
$
$
669,549
19,056
19,056
217,160
101,904
(3,163
)
315,901
51,562
1,906
53,468
397,003
69,307
(3,163
)
463,147
120,657
12,477
133,134
$
297,929
$
18,716
$
$
316,645
94
%
6
%
%
100
%
$
20,797,528
$
94,931
$
(31,075
)
$
20,861,384
100
%
%
%
100
%
$
886,207
$
102,406
$
(3,163
)
$
985,450
90
%
10
%
%
100
%
*
Total revenues for this segment
disclosure are defined to be the sum of net interest income plus
noninterest income, net of mortgage servicing rights
amortization.
Table of Contents
127
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
128
Table of Contents
129
Table of Contents
ITEM 9B.
OTHER
INFORMATION
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE
COMPENSATION
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
(c)
Number of
Securities
(a)
Remaining Available
Number of
for Future Issuance
Securities to be
(b)
Under Equity
Issued Upon
Weighted-Average
Compensation Plans
Exercise of
Exercise Price of
(excluding
Outstanding
Outstanding
securities
Options, Warrants
Options, Warrants
reflected in column
and Rights
and Rights
(a))
by security holders
6,300,794
$
27.71
3,521,583
approved by security holders
280,908
21.76
2,780,864
6,581,702
$
27.45
6,302,447
130
Table of Contents
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
ITEM 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
(a)
1 and 2
Financial Statements and Financial Statement Schedules
131
Table of Contents
(a)
3
Exhibits Required by Item 601 of
Regulation S-K
Description
Amended and Restated Articles of Incorporation
Exhibit(3) to Report on Form
10-Q
filed
on May 8, 2006
Articles of Amendment to the Amended and Restated Articles of
Incorporation (TARP Capital Purchase Program Fixed Rate
Cumulative Perpetual Preferred Stock, Series A)
Exhibit (3.1) to Report on
Form 8-K
filed on November 21, 2008
Amended and Restated Bylaws
Exhibit (3.1) to Report on
Form 8-K
filed on April 24, 2008
Instruments Defining the Rights of Security Holders, Including
Indentures
The Parent Company, by signing this report, agrees to furnish
the SEC, upon its request, a copy of any instrument that defines
the rights of holders of long-term debt of the Corporation and
its consolidated and unconsolidated subsidiaries for which
consolidated or unconsolidated financial statements are required
to be filed and that authorizes a total amount of securities not
in excess of 10% of the total assets of the Corporation on a
consolidated basis
Warrant for Purchase of Common Stock, issue date November 21,
2008 (TARP Capital Purchase Program)
Exhibit (4.1) to Report on
Form 8-K
filed on November 21, 2008
Associated Banc-Corp 1987 Long-Term Incentive Stock Plan,
Amended and Restated Effective January 1, 2008
Filed herewith
Associated Banc-Corp 1999 Long-Term Incentive Stock Plan,
Amended and Restated Effective January 1, 2008
Filed herewith
Associated Banc-Corp 2003 Long-Term Incentive Stock Plan,
Amended and Restated Effective January 1, 2008
Filed herewith
Form of Incentive Stock Option Agreement Pursuant to Associated
Banc-Corp 2003 Long-Term Incentive Stock Plan, Amended and
Restated Effective January 1, 2008
Filed herewith
Form of Non Qualified Stock Option Agreement Pursuant to
Associated Banc-Corp 2003 Long-Term Incentive Stock Plan,
Amended and Restated Effective January 1, 2008
Filed herewith
Form of Restricted Stock AgreementPerformance Based
Restricted Shares Pursuant to Associated Banc-Corp 2003
Long-Term Incentive Stock Plan, Amended and Restated Effective
January 1, 2008
Filed herewith
Form of Restricted Stock AgreementService Based Restricted
Shares Pursuant to Associated Banc-Corp 2003 Long-Term Incentive
Stock Plan, Amended and Restated Effective January 1, 2008
Filed herewith
132
Table of Contents
Description
Associated Banc-Corp Deferred Compensation Plan
Filed herewith
Associated Banc-Corp Directors Deferred Compensation Plan,
Restated Effective January 1, 2008
Filed herewith
Associated Banc-Corp Cash Incentive Compensation Plan, Amended
and Restated Effective January 1, 2008
Filed herewith
Associated Banc-Corp Supplemental Executive Retirement Plan,
Restated Effective January 1, 2008
Filed herewith
Change of Control Plan of the Corporation, Restated Effective
January 1, 2008
Filed herewith
Letter Agreement, dated November 21, 2008, between Associated
Banc-Corp and the United States Department of the Treasury,
which includes the Securities Purchase Agreement attached
thereto, with respect to the issuance and sale of the Fixed Rate
Cumulative Perpetual Preferred Stock, Series A and Warrant to
purchase Common Stock (TARP Capital Purchase Program)
Exhibit (10.1) to Report on
Form 8-K
filed on November 21, 2008
Form of Senior Executive Officer Compensation Waiver (TARP
Capital Purchase Program)
Exhibit (10.2) to Report on
Form 8-K
filed on November 21, 2008
Form of TARP Capital Purchase Program Compliance, Amendment and
Consent Agreement (including Clawback Policy)
Exhibit (10.3) to Report on
Form 8-K
filed on November 21, 2008
Statement Re Computation of Per Share Earnings
See Note 19 in Part II Item 8
Subsidiaries of Associated Banc-Corp
Filed herewith
Consent of Independent Registered Public Accounting Firm
Filed herewith
Power of Attorney
Filed herewith
Certification Under Section 302 of Sarbanes-Oxley by Paul S.
Beideman, Chief Executive Officer
Filed herewith
Certification Under Section 302 of Sarbanes-Oxley by Joseph B.
Selner, Chief Financial Officer
Filed herewith
Certification by the CEO and CFO Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of
Sarbanes-Oxley.
Filed herewith
*
Management contracts and
arrangements.
Table of Contents
ASSOCIATED BANC-CORP
Chairman and Chief Executive Officer
Chairman and Chief Executive Officer and Director
Director
Chief Financial Officer
Principal Financial Officer and
Principal Accounting Officer
Director
President, Chief Operating Officer and Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Attorney-in-Fact
134
Page | ||||
SECTION I
|
Purpose of the Plan | 1 | ||
SECTION II
|
Administration | 1 | ||
SECTION III
|
Awards | 2 | ||
SECTION IV
|
Miscellaneous Provisions | 11 | ||
SECTION V
|
Amendment and Termination; Adjustments Upon Changes in Stock | 16 | ||
SECTION VI
|
Shares of Stock Available | 16 | ||
SECTION VII
|
Effective Date and Term of the Plan | 17 | ||
SECTION VIII
|
Disclaimer | 17 |
i
(a) | The Committee . The Plan shall be administered by the Compensation and Benefits Committee of the Companys Board of Directors (the Committee) composed of not less than three Directors. In the event that any member of the Committee is to be granted Options under the Plan, then said grant shall be made by the Board of Directors of the Company. The Board of Directors actions in such instances shall be governed by each of the provisions of the Plan to the extent applicable to the Committee. Options under the Plan can be granted to officers and directors of the Company only after the Plan has been ratified by the shareholders of the Company. |
(b) | Authority and Discretion of Committee . Subject to the express provisions of the Plan and provided that all actions taken shall be consistent with the purposes of the Plan, the Committee shall have full and complete authority and the sole discretion to: (i) determine those key employees of the Company and its affiliated units who shall be among the Participants; (ii) select the Participants to whom awards are to be granted under this Plan; (iii) determine the size and the form of the award or awards to be granted to any Participant; (iv) determine the time or times such awards shall be granted; (v) establish the terms and conditions upon which such awards may be exercised and/or transferred; (vi) alter any restrictions or vesting schedules; and (vii) adopt such rules and regulations, establish, define and/or interpret any other terms and conditions, and make all other determinations (which may be on a case-by-case basis) deemed necessary or desirable for the administration of the Plan. |
1
(c) | Option Grants . Options granted under the Plan may, in the discretion of the Committee, be either Incentive Stock Options (ISOs) as defined in Section 422 of the Internal Revenue Code of 1986, as amended, (the Code) or nonqualified stock options (collectively, Options). Each stock option agreement shall specifically state, for each Option granted thereunder, whether the Option is an ISO or a nonqualified stock option. In no event, however, shall both an ISO and a nonqualified stock option be granted together under the Plan in such a manner that the exercise of one Option affects the right to exercise the other. The provisions of this Plan and of each ISO granted hereunder shall be interpreted in a manner consistent with Section 422 of the Code and with all valid regulations issued thereunder. However, to the extent that any ISO granted hereunder does not comply with the provisions of Section 422, such ISO shall be treated as a nonqualified stock option for all purposes under the Code. ISOs may be granted only to employees of the Company and its affiliated units. No ISO shall be granted under the Plan subsequent to April 22, 2008. Except as provided in section III(f)(2), all provisions of this Plan apply to both ISOs and nonqualified options. |
(a) | Nonqualified Stock Options . Nonqualified stock options are rights to purchase shares of the Common Stock of the Company, $.01 par value, (Common Stock) at a price equal to the Fair Market Value of such Common Stock on the date of grant for a predetermined period of time. |
(i) | The Committee may grant nonqualified stock options either alone or in conjunction with Stock Appreciation Rights as described in paragraph (c) below. It shall determine the number of shares of Common Stock to be covered by each such nonqualified stock option. Nonqualified stock options granted hereunder shall be evidenced by option agreements containing such terms and conditions as the Committee shall establish from time to time consistent with the Plan. | ||
(ii) | No nonqualified stock option shall be exercisable until it is vested and, thereafter, shall be immediately exercisable. A nonqualified stock option shall vest in accordance with terms |
2
set forth by the Committee at the date of grant in the option agreement. |
(iii) | In the event of termination of a Participants employment with the Company or its affiliated units for any reason, except as otherwise provided below, any non-vested portion of any nonqualified stock option granted to such Participant shall terminate immediately. | ||
(iv) | Except as described below or as otherwise determined by the Committee in its sole discretion, in the event of a Participants voluntary or involuntary termination of employment with the Company or its affiliated units, the vested portion of any nonqualified stock option granted to such Participant, but not yet exercised, shall terminate on the date of termination of employment. | ||
(v) | If a Participants employment with the Company or its affiliated unit terminates by reason of the Participants death, Permanent Disability or Retirement, any outstanding nonqualified stock option then held by such Participant shall remain exercisable, but only to the extent such nonqualified stock option was exercisable on the date of such Participants termination of employment, until the earlier of (a) one year following the date of termination and (b) the expiration of the term of such Option. If on the date of such termination of employment, any such nonqualified stock option shall not be fully exercisable, the Committee shall have the discretion to cause such Option to continue to become exercisable on the date or dates specified therein as if such termination of employment had not occurred. The Committee may exercise the discretion granted to it by the preceding sentence at the time a nonqualified stock option is granted or at any time thereafter while such a nonqualified stock option remains outstanding. | ||
(vi) | The Committee will determine the conditions of nonqualified stock option exercise, but in no event may any portion of a vested nonqualified stock option be exercisable earlier than one year (except pursuant to a Change in Control) or later than ten years from the date of the grant. | ||
(vii) | All nonqualified stock options shall vest immediately upon a Change in Control, as defined in section IV(1) hereof. |
3
(viii) | The purchase price of shares purchased pursuant to any nonqualified stock option shall be equal to the Fair Market Value of such shares on the date of nonqualified stock option grant, as determined by the Committee, and shall be paid in full upon exercise, either (a) in cash; (b) by delivery of shares of Common Stock held for a period of at least six months (valued at their Fair Market Value on the date of nonqualified stock option exercise, as defined in section IV); or (c) a combination of cash and Common Stock. | ||
(ix) | The Committee may at any time offer to buy out a nonqualified stock option previously granted, based on such terms and conditions as the Committee shall establish and communicate to the Participant at the time that such offer is made. |
(b) | ISO . ISOs are rights to purchase shares of the Common Stock at a price equal to the Fair Market Value of such Common Stock on the date of grant for a predetermined period of time. Only Participants who are key employees (not directors who are not also employees) of the Company or an affiliated unit shall be eligible to receive an ISO grant. However, in the case of an ISO granted to a Participant who at the time of the grant owns (directly or indirectly, and including the Shares purchasable under such ISO) stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, the Option price shall be at least 110% of such Fair Market Value at the time the ISO is granted; provided further, that the Option price shall in no event be less than the par value of the Shares subject to such Option and the ISO must be exercised within 5 years of the date of grant. |
(i) | The Committee shall determine the number of shares of Common Stock to be covered by each such ISO. ISOs granted hereunder shall be evidenced by option agreements containing such terms and conditions as the Committee shall establish from time to time consistent with the Plan. | ||
(ii) | No ISO shall be exercisable until it is vested and, thereafter, shall be immediately exercisable. An ISO shall vest in accordance with terms set forth by the Committee at the date of grant in the option agreement. |
4
(iii) | In the event of termination of a Participants employment with the Company or its affiliated units for any reason, except as otherwise provided below or as otherwise determined by the Committee in its sole discretion, any non-vested portion of any ISO granted to such Participant shall terminate immediately. | ||
(iv) | Except as described below or as otherwise determined by the Committee in its sole discretion, in the event of a Participants voluntary or involuntary termination of employment with the Company or its affiliated units, the vested portion of any ISO granted to such Participant, but not yet exercised, shall terminate on the date of termination of employment. | ||
(v) | If a Participants employment with the Company or its affiliated unit terminates by reason of the Participants death, Permanent Disability or Retirement, any outstanding ISO then held by such Participant shall remain exercisable, but only to the extent such option was exercisable on the date of such Participants termination of employment, until the earlier of (a) one year following the date of termination and (b) the expiration of the term of such ISO. If on the date of such termination of employment, any such ISO shall not be fully exercisable, the Committee shall have the discretion to cause such ISO to continue to become exercisable on the date or dates specified therein as if such termination of employment had not occurred. The Committee may exercise the discretion granted to it by the preceding sentence at the time an ISO is granted or at any time thereafter while such an ISO remains outstanding. | ||
(vi) | The Committee will determine the conditions of Option exercise, but in no event may any portion of a vested ISO be exercisable earlier than one year (except pursuant to a Change in Control) or later than ten years from the date of the grant. | ||
(vii) | All ISOs shall vest immediately upon a Change in Control, as defined in section IV(1) hereof. | ||
(viii) | The purchase price of shares purchased pursuant to any ISO shall be equal to the Fair Market Value of such shares on the date of grant, as determined by the Committee, and shall be paid in full upon exercise, either (a) in cash; (b) by delivery |
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of shares of Common Stock held for a period of at least six months (valued at their Fair Market Value on the date of ISO exercise, as defined in section IV); or (c) a combination of cash and Common Stock. |
(ix) | The Committee may at any time offer to buy out an ISO previously granted, based on such terms and conditions as the Committee shall establish and communicate to the Participant at the time that such offer is made. |
(c) | Stock Appreciation Rights . Stock Appreciation Rights are rights to receive cash and/or Common Stock in lieu of the purchase of shares under a related Option. The Committee may grant Stock Appreciation Rights to any optionee either at the time of the grant of the Option or subsequently, by amendment to such grant. All Stock Appreciation Rights shall be evidenced by option agreements containing such terms and conditions as the Committee shall establish from time to time consistent with the Plan and shall be granted subject to the following terms and conditions and such other terms and conditions as the Committee may establish: |
(i) | Each Stock Appreciation Right shall be exercisable at the same time as the related Option is exercisable. | ||
(ii) | Each Stock Appreciation Right shall entitle the holder thereof to surrender to the Company a portion of or all of the unexercised, but exercisable, related Option. With respect to each share of Common Stock as to which an optionees Option is surrendered upon exercise of any Stock Appreciation Right, the optionee shall be entitled to receive, in cash or in shares of Common Stock, the economic value of such Stock Appreciation Right. Such economic value shall be equal to the excess of the Fair Market Value (determined on the date of exercise of such Stock Appreciation Right) of one share of Common Stock over the option price per share specified in the related Option. The Optionee shall not be required to pay the Option exercise price upon surrender of the Option upon exercise of the related Stock Appreciation Right. | ||
(iii) | Each surrender of a portion of or all of an Option upon the exercise of a Stock Appreciation Right shall cause a |
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share-for-share reduction in the number of shares of Common Stock covered by the related Option. |
(iv) | Stock Appreciation Rights, when exercised, may be paid for by the Company in cash or Common Stock. The Committee shall have the sole and absolute discretion to determine the relative amounts of cash or Common Stock which may be paid or issued upon exercise of Stock Appreciation Rights. |
(d) | Restricted Stock Awards . Restricted Stock Awards are stock grants, the payment of which will depend upon the Participants continued employment with the Company and may depend upon the achievement of certain financial performance objectives. |
(i) | The Committee may grant Restricted Stock either alone or in conjunction with Performance Shares as described in paragraph (e) below. It shall determine the number of shares of Restricted Stock to be covered by each such grant. | ||
(ii) | Restricted Stock is Common Stock acquired by a Participant subject to the restrictions described in the following subsections. | ||
(iii) | Restricted Stock may not be sold, transferred or otherwise disposed of, pledged, or otherwise encumbered during a period set by the Committee, commencing with the date of such award. In the event of the termination of employment of a recipient of Restricted Stock for any reason except death, Retirement or Permanent Disability, the recipient shall transfer or cause to be transferred to the Company title to the Restricted Stock owned by such recipient within 30 days following such termination. | ||
(iv) | Restriction terms and conditions will be set by the Committee at the time of award. These conditions may include the requirement that certain financial performance objectives of a Participant or the Company are achieved. | ||
(v) | Upon the occurrence of the earlier of the death or Permanent Disability of the recipient of Restricted Stock, the restrictions against sale, transfer, and other disposition and against pledge or other encumbrance of such Restricted Stock, which have not otherwise lapsed, shall immediately lapse. |
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(vi) | Upon the occurrence of Retirement, the restrictions against sale, transfer or other disposition and against pledge or other encumbrance, as to a portion of the Restricted Stock (Portion A), as to which restrictions have not otherwise lapsed shall immediately lapse. The retiree shall transfer or cause to be transferred to the Company title to the balance of the Restricted Stock ( i.e. , the portion of Restricted Stock as to which restrictions have not otherwise lapsed and which is not included in Portion A) within 30 days following such Retirement. | ||
For purposes of this subsection, Portion A will be determined separately for each block of Restricted Stock for which restrictions are due to lapse on a different date. For each such block, Portion A will be determined by multiplying the number of shares in such block by a fraction, the numerator of which is the number of months from the date of grant of that block of Restricted Stock to the date of retirees Retirement and the denominator of which is the number of months from the date of grant of that block of Restricted Stock to the date that restrictions on such block are due to lapse, as determined by the Committee. In the event that the total Portion A calculated for all such fraction shall be rounded up to the nearest whole number. | |||
By way of illustration, if a Participant was granted 100 shares of Restricted Stock on January 1, 1994, with the restrictions on such stock due to lapse on January 1, 1999, and 200 shares of Restricted Stock on January 1, 1995, with the restrictions on such stock due to lapse on January 1, 2000, and if the Participant retired on January 1, 1996, Portion A would be determined separately for the Restricted Stock granted on January 1, 1994, and for the Restricted Stock granted on January 1, 1995. With respect to the Restricted Stock granted on January 1, 1994, Portion A would equal 40 shares [determined by multiplying 100 (the number of shares in such block) by 24/60 (the number of months from the date of grant to the date of Retirement divided by the number of months from the date of grant to the date of lapse)]. Thus the total amount of stock included in Portion A for the Participant would be 60 shares (40 plus 20). |
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(vii) | All restrictions shall lapse immediately upon a Change in Control, as defined in section IV(1) hereof. | ||
(viii) | Certificates issued in respect of Restricted Stock granted under the Plan shall be registered in the name of the recipient but shall bear the following legend: | ||
The transferability of this certificate and the shares of stock represented hereby is restricted and the shares are subject to the further terms and conditions contained in the Associated Banc-Corp 1987 Long-Term Incentive Stock Plan of Associated Banc-Corp (the Company). A copy of said Plan is on file in the office of the Secretary of the Company at the Companys offices in Green Bay, Wisconsin. | |||
Prior to January 1, 2008, the legend provided: | |||
The transferability of this certificate and the shares of stock represented hereby is restricted and the shares are subject to the further terms and conditions contained in the Amended and Restated Long-Term Incentive Stock Plan of Associated Banc-Corp (the Company). A copy of said Plan is on file in the office of the Secretary of the Company at the Companys offices in Green Bay, Wisconsin. | |||
(ix) | In order to enforce the restrictions, terms and conditions on Restricted Stock, each recipient thereof shall, immediately upon receipt of a certificate or certificates representing such stock, deposit such certificates, together with stock powers and such other instructions of transfer as the Committee may require, appropriately endorsed in blank, with the Company as Escrow Agent under an escrow agreement in such form as shall be determined by the Committee. |
(e) | Performance Shares . Each Restricted Stock Award may be accompanied by a Performance Share Award. |
(i) | On the date the restrictions lapse on an accompanying Restricted Stock Award, each Performance Share awarded will result in payment to the recipient of the Performance Share Award, in Common Stock or in cash, of an amount equal to the Fair Market Value of one share of Company Common Stock on such date multiplied by sum of the highest Federal and state of residence of Participant marginal income |
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tax rates in effect in the year in which restrictions lapse. A marginal income tax rate is the rate of tax applicable to the last dollar of income earned by the taxpayer. The Committee shall have the sole and absolute discretion to determine the relative amounts of cash or Common Stock which may be paid or issued in satisfaction of a Performance Share Award. |
(ii) | The number of Performance Shares shall be determined by the Committee and will be granted on the same date as is the Restricted Stock Award. |
(f) | Limitations on Grants . |
(i) | The following limitations will apply to grants of Options or Stock Appreciation Rights under the Plan: |
[a] | No Participant will be granted Options or Stock Appreciation Rights under the Plan to receive more than 100,000 shares of Common Stock in any fiscal year, provided that the Company may make an additional one-time grant of up to 20,000 shares to newly hired employees; and | ||
[b] | No Participant will be granted Options or Stock Appreciation Rights under the Plan to purchase more than 1,000,000 shares over the term of the Plan, provided that, if the number of shares available for issuance under the Plan is increased, the maximum number of Options or Stock Appreciation Rights that any Participant may be granted also automatically will increase by a proportionate amount equal of shares for each additional fiscal year in which shares are allocated for issuance under the Plan. |
Except as to forfeited shares, the payment of cash dividends and dividend equivalents in conjunction with outstanding awards shall not be counted against the shares available for issuance. | |||
The foregoing limitations are intended to satisfy the requirements applicable to Options and Stock Appreciation Rights so as to qualify such awards as performance-based compensation within the meaning of section 162 (m) of the Code. In the event that the Committee determines that such |
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limitations are not required to qualify Options or Stock Appreciation Rights as performance-based compensation, the Committee may modify or eliminate such limitations. |
(ii) | The following limitations will apply to grants of ISOs under the Plan: |
[a] | The aggregate Fair Market Value (determined at the time the ISOs are granted) of the Shares with respect to which the ISOs are exercisable for the first time by an employee during any calendar year shall not exceed $100,000. This limitation shall be applied by taking ISOs into account in the order they were granted. | ||
[b] | Shares acquired upon the exercise of an ISO shall not be disposed of (a) within two (2) years following the date the ISO was granted; nor (b) within one (1) year following the date shares of Common Stock are transferred to the employee. |
(a) | Rights of Recipients of Awards . A holder of Options, Stock Appreciation Rights and Performance Shares granted under the Plan shall have no rights as a shareholder of the Company by virtue thereof unless and until certificates for shares are issued. The holder of a Restricted Stock Award will be entitled to receive any dividends on such shares in the same amount and at the same time as declared on shares of Common Stock of the Company and shall be entitled to vote such shares as a shareholder of record. | ||
(b) | Assignment . Options, Stock Appreciation Rights and Performance Shares or any rights or interests of a Participant therein, shall be assignable or transferable by such Participant at the discretion of the Committee or by will or the laws of descent and distribution. | ||
(c) | Further Agreements . All Options, Stock Appreciation Rights, Restricted Stock Awards and Performance Shares granted under this Plan shall be evidenced by agreements or other written documents from the Company, in such form and containing such terms and conditions (not inconsistent with this Plan) as the Committee may require. Such agreement may set forth certain restrictive covenants applicable to the Participant and penalties for the breach thereof, as determined by the Committee in its sole discretion. |
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(d) | Replacement Options . Upon cancellation of an outstanding Option, replacement Options may be issued in an amount and with such terms as the Committee may determine. | ||
(e) | Deferral of Exercise . |
(i) | Securities Law Restrictions . Although the Company intends to use its best efforts so that the shares purchasable upon the exercise of Options will be registered under, or exempt from the registration requirements of the federal Securities Act of 1933, as amended (the Securities Act) and any applicable state securities law at the time Options become exercisable, if the exercise of an Option or any part of it would otherwise result in the violation by the Company of any provision of the Securities Act or of any state securities law, the Company may require that such exercise be deferred until the Company has taken appropriate action to avoid any such violation. | ||
(ii) | Legal and Other Requirements . No shares of Common Stock shall be issued or transferred upon exercise of any award under the Plan unless and until all legal requirements applicable to the issuance or transfer of such shares and such other requirements as are consistent with the Plan have been complied with to the satisfaction of the Committee. The Committee may require that prior to the issuance or transfer of Common Stock hereunder, the recipient thereof shall enter into a written agreement to comply with any restrictions on subsequent disposition that the Committee or the Company deem necessary or advisable under any applicable law, regulation or official interpretation thereof. Certificates of stock issued hereunder may bear a legend to reflect such restrictions. |
(f) | Withholding of Taxes . Pursuant to applicable Federal, state, local, or foreign tax laws, the Company may be required to collect income or other taxes upon the grant of certain awards, the exercise of an Option or Stock Appreciation Right, or the lapse of restrictions on a Restricted Stock Award or Performance Share. The Company may deduct from payments made under the Plan, or require, as a condition to such award or to the exercise of an Option or Stock Appreciation Right, that the recipient pay the Company, at such time as the Committee or the Company determine, the amount of any taxes which the Committee or the Company determine, in their |
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discretion are required to be withheld. Unless otherwise determined by the Company, the Participants withholding reimbursement obligation may be settled by the Participants transfer of vested Common Stock to the Company. The maximum number of shares that the Participant may use toward satisfying the withholding reimbursement shall not exceed the minimum funding required for the withholding. Where the Participants withholding reimbursement obligation arises by reason of the Participants election under section 83(b) of the Code with respect to the Award, the Participant may not remit unvested shares in satisfaction of the Participants withholding reimbursement obligation. |
(g) | Right to Awards . No employee of the Company or its affiliated unit or other person shall have any claim or right to be a Participant in this Plan or to be granted an award hereunder. Neither the adoption of this Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ of the Company or any affiliated unit nor shall the grant of any award hereunder constitute a request or consent to postpone the retirement date of a Participant. Nothing contained hereunder shall be construed as giving any Participant or any other person any equity or interest of any kind in any assets of the Company or creating a trust of any kind or a fiduciary relationship of any kind between the Company and any such person. As to any claim for any unpaid amounts under the Plan, any Participant or any other person having a claim for payments shall be an unsecured creditor. | ||
(h) | Fair Market Value . The Fair Market Value of the Common Stock of the Company shall be determined by the Committee and shall be the closing price as reported on the NASDAQ National Market System as reported in the Wall Street Journal, for the Companys Common Stock for the trading day of the date of the grant or exercise, whichever is appropriate. If no trade occurs on the NASDAQ National Market System on such date, the Fair Market Value of the Common Stock of the Company shall be determined by the Committee in good faith. | ||
(i) | Permanent Disability . Permanent Disability shall mean a finding by the Committee that a Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits of |
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not less than 3 months under the Associated Banc-Corp Long-Term Disability Plan. |
(j) | Retirement . Retirement shall mean any date on which an employee retires under the terms and conditions of the Companys 401(k) and Employee Stock Ownership Plan provided, however, that the employee has attained age 55 as of such date. | ||
(k) | Indemnity . Neither the Board of Directors nor the Company, nor any members of either, nor any employees of the Company or its affiliated units, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with their responsibilities with respect to the Plan, and the Company hereby agrees to indemnify the members of the Board of Directors, the members of the Committee, and the employees of the Company and its affiliated units with respect to any claim, loss, damage, or expense (including counsel fees) arising from any such act, omission, interpretation, construction or determination with respect to the Plan or any action taken pursuant to it to the full extent permitted by law and the Articles of Incorporation of the Company. | ||
(l) | Change in Control . Change in Control shall mean a change in control of the Company which shall be deemed to have occurred only if: |
(i) | 25% or more of the outstanding voting securities of the Company changes beneficial ownership as a result of a tender offer; | ||
(ii) | The Company is merged or consolidated with another corporation, and as a result of such merger or consolidation, less than 75% of the outstanding voting securities of the surviving or resulting corporation is owned in the aggregate by the shareholders of the Company who owned such securities immediately prior to such merger or consolidation, other than affiliates (within the meaning of the Exchange Act) of any party to such merger or consolidation; | ||
(iii) | The Company sells at least 85% of its assets to any entity which is not a member of the control group of corporations, within the meaning of Internal Revenue Code section 1563, of which the Company is a member; or |
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(iv) | A person, within the meaning of sections 3(a)(9) or 13(d)(3) of the Exchange Act, acquires 25% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record). |
For purposes hereof, ownership of voting securities shall take into account and shall include ownership as determined by applying the provisions of Rule 13d-3(d)(1)(i) (relating to options) of the Exchange Act. | |||
(m) | Transfers and Leaves . A change in employment or service from the Company to an affiliated unit of the Company, or vice versa, shall not constitute termination of employment or service for purposes of the Plan. Furthermore, the Committee (or Board of Directors in case of a member of the Committee) may determine that for purposes of the Plan, a Participant who is on leave of absence will still be considered as in the continuous employment or service of the Company. | ||
(n) | No Fiduciary Relationship or Responsibility . The Plan is not subject to ERISA. Under ERISA and related federal laws, the Company is not a fiduciary with respect to the Plan, and has no fiduciary obligation with respect to any Participant, beneficiary or other person claiming a right hereunder. Further, nothing herein contained, and no action or inaction arising pursuant hereto shall give rise under state or federal law to a trust of any kind or create any fiduciary relationship of any kind or degree for the benefit of Participants, any beneficiary, or any other person. | ||
(o) | Severability of Provisions . If any provision of this Plan is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions, and this Plan shall be construed and enforced as if such provision had not been included. | ||
(p) | Governing Law . This Plan shall be governed, administered, construed and enforced according to the laws of the United States and the State of Wisconsin law to the extent not preempted by the laws of the United States. | ||
(q) | Waiver . A waiver by a party of any of the terms and conditions of this agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any |
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subsequent breach thereof, or of any other term or condition of this agreement. |
(r) | Entire Agreement . This Plan constitutes the entire agreement between the parties respecting the subject matter hereof, and there are no representations, warranties, agreements, or commitments of the Company hereto except as set forth herein. This Plan may be amended only by an instrument in writing. |
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ARTICLE I
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Establishment and Purpose | 1 | ||||
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ARTICLE II
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Definitions | 1 | ||||
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ARTICLE III
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Eligibility and Participation | 3 | ||||
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ARTICLE IV
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Administration | 3 | ||||
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ARTICLE V
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Stock Subject to the Plan | 4 | ||||
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ARTICLE VI
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Duration of the Plan | 5 | ||||
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ARTICLE VII
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Terms of Stock Options | 5 | ||||
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ARTICLE VIII
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Written Notice, Issuance of Stock Certificates, Stockholder Privilege | 6 | ||||
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ARTICLE IX
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Termination of Employment or Services | 7 | ||||
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ARTICLE X
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Rights of Optionees | 8 | ||||
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ARTICLE XI
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Amendment, Modification and Termination of the Plan | 8 | ||||
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ARTICLE XII
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Acquisition, Merger and Liquidation | 8 | ||||
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ARTICLE XIII
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Securities Registration | 10 | ||||
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ARTICLE XIV
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Tax Withholding | 10 | ||||
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ARTICLE XV
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Indemnification | 10 | ||||
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ARTICLE XVI
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Requirements of Law | 11 |
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(a) | Board means the Board of Directors of the Company. | ||
(b) | Code means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. | ||
(c) | Commission means the Securities and Exchange Commission or any successor agency. | ||
(d) | Committee means the Compensation and Benefits Committee of the Board. | ||
(e) | Company means Associated Banc-Corp, a Wisconsin corporation. | ||
(f) | Date of Exercise means the date the Company receives notice, by an Optionee, of the exercise of an Option pursuant to section 8.1 of this Plan. Such notice shall indicate the number of shares of Stock the Optionee intends to purchase upon exercise of an Option. |
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(g) | Employee means any person, including an officer or director of the Company, who is employed by the Company. | ||
(h) | Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. | ||
(i) | Fair Market Value means the fair market value of Stock upon which an Option is granted under this Plan, as determined by the Board. If the Stock is traded on an over-the-counter securities market or national securities exchange, Fair Market Value shall mean an amount equal to the average of the highest and lowest reported sales prices of the Stock reported on such over-the-counter market or such national securities exchange on the applicable date or, if no sales of Stock have been reported for that date, on the next preceding date for which sales where reported. | ||
(j) | IRS means the Internal Revenue Service, or any successor agency. | ||
(k) | Option means the right, granted under this Plan, to purchase Stock of the Company at the Option price for a specified period of time. | ||
(l) | Optionee means an Employee holding an Option under the Plan. | ||
(m) | Permanent Disability means a finding by the Committee that the Optionee is fully and permanently unable to be gainfully employed because of a physical or mental disability. | ||
(n) | Qualified Director means a director who is both (a) a Non-Employee Director as defined in Rule 16b-3(b)(3)(i), as promulgated by the Commission under the Exchange Act, or any successor definition adopted by the Commission, and (b) an Outside Director as defined by section 162(m) of the Code and the regulations promulgated thereunder, or any successor definition adopted by the IRS. | ||
(o) | Retirement means any date on which an Optionee retires under the Companys Profit Sharing & Retirement Savings Plan provided, however, that the Optionee has attained age 55 as of such date. |
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(p) | Rule 16b-3 means Rule 16b-3, as promulgated by the Commission under Section 16(b) of the Exchange Act, as amended from time to time. | ||
(q) | Stock means the Common Stock of the Company. |
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SECTION I
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Purpose and Adoption | 1 | ||||
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SECTION II
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Administration | 1 | ||||
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SECTION III
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Awards | 3 | ||||
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SECTION IV
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Miscellaneous Provisions | 17 | ||||
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SECTION V
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Amendment and Termination; Adjustments Upon Changes in Stock | 22 | ||||
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SECTION VI
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Shares of Stock Available | 22 | ||||
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SECTION VII
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Effective Date and Term of the Plan | 23 | ||||
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SECTION VIII
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Disclaimer | 23 |
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I. | Stock Option |
A. | Number of Shares Optioned-Option Price. The Company grants to Optionee the right and option to purchase, on the terms and conditions hereof, all or any part of an aggregate of shares of the presently authorized common stock of the Company, $0.01 par value, at the purchase price of $ per share, the Fair Market Value at the above date. | ||
B. | Incentive Stock Options-Amount Allowable. Although there is no limitation on the total number of option shares that can be granted as an ISO, only the first $100,000 which is exercisable for the first time during any calendar year can qualify as an ISO. The formula for calculating the maximum number of shares that can be treated as ISOs each year is as follows: |
Any incentive stock options granted which exceed the $100,000 limit will be treated as non-qualified options . | |||
C. | Option Governed by Terms of Agreement and Plan . This option shall be exercisable only in accordance with the terms of this agreement, which hereby incorporates by reference and makes a part hereof the Plan. In the event of any conflict between any provisions of this agreement and the provisions of the Plan, the provisions of the Plan shall control. Terms defined in the Plan, where used herein, shall have the meanings as so defined. Optionee hereby acknowledges receipt of a copy of the Plan. | ||
D. | Vesting of Options . This option shall vest, in accordance with the following percentages, only upon Optionees completion of the number of years of continuous employment with the Company and its affiliated units as set forth below: |
Number of Completed Years of | Maximum Percentage of | |||
Continuous Employment or Service | Shares Becoming Exercisable | |||
After the Date of Grant or Option | Under the Option | |||
Less than 1 year
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0 | % | ||
At least 1 year
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34 | % | ||
At least 2 years
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67 | % | ||
At least 3 years
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100 | % |
1. | Except as described below, in the event of termination of Optionees employment with the Company or its affiliated units for any reason, the non-vested portion of any option granted to Optionee shall terminate immediately. | ||
2. | Except as described below, in the event of Optionees voluntary or involuntary termination of employment with the Company or its affiliated units, the vested portion of an option granted to such Optionee, but not yet exercised, shall terminate on the date of termination of employment. | ||
3. | In the event of Optionees termination of employment with the Company or its affiliated units due to Optionees death, Permanent Disability or Retirement, any outstanding option then held by such Optionee shall remain exercisable, but only to the extent such option was exercisable on the date of such Optionees termination of employment, until the earlier of (a) one year following the date of termination and (b) the expiration of the term of such option. If on the date of such termination of employment, any such option shall not be fully exercisable, the Administrative Committee of the Board (the Committee) shall have the discretion to cause such option to continue to become exercisable on the date or dates specified therein as if such termination of employment had not occurred. The Committee may exercise the discretion granted to it by the preceding sentence at the time an option is granted or at any time thereafter while such an option remains outstanding. | ||
4. | Notwithstanding any other provisions of this agreement, if Optionees employment or service is terminated by reason of a breach of Optionees employment agreement with the Company or any of its affiliated units, as determined by the Committee, or by reason of Optionees commission of a felony or a misdemeanor against the Company or any of its affiliated units (whether or not prosecuted), the option granted under this agreement shall be deemed terminated and not exercisable by Optionee. |
E. | Term of Option . All rights to exercise this option shall expire ten years from the date this option is granted. | ||
F. | Deferral of Exercise. |
G. | Conditions of Exercise of Option During Employment . Except as provided above in Paragraph D, this option may not be exercised unless Optionee is, at the date of exercise, in the employ or service of the Company or an affiliated unit and shall have been continuously employed since the date hereof. | ||
H. | Limitations on Disposition of Shares and Non-transferability . The option granted hereunder shall be assignable or transferable by the Optionee at the discretion of the Administrative Committee of |
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the Board or by will or the laws of descent and distribution. The option granted herein and the rights and privileges pertaining thereto shall not be subject to execution of judgment, attachment or similar process. | |||
I. | Method of Exercising Option . This option shall be exercised, as to all or part of the shares covered hereby, by Optionee delivering to the Company at its principal business office on any business day a written stock option exercise notice specifying the number of shares the Optionee desires to purchase and specifying a business day for the payment of the purchase price against delivery of the shares being purchased (the date of delivery of such notice is referred to herein as the Date of Purchase). | ||
J. | Manner of Payment . The purchase price shall be paid in full upon exercise, in cash or by delivery of shares of common stock of the Company (valued at the Fair Market Value determined by the Committee as of the date of purchase of the option or in a combination of cash and common stock) within 5 business days of the date of exercise. Failure to pay within this time frame could result in the cancellation of the transaction. | ||
K. | Method of Valuation . Fair Market Value of the Common Stock of the company shall be determined by the Committee and shall be the closing price as reported on NASDAQ National Market System as reported in the Wall Street Journal, for the Companys Common Stock for a specific trading day, usually the date of the grant or exercise. | ||
L. | Withholding of Taxes . Pursuant to applicable federal, state, local or foreign laws, the Company may be required to collect income or other taxes upon the exercise of an option. The Company may deduct from payments made under the Plan or require as a condition to the exercise of an option, that Optionee pay the Company, at such time as the Committee or the Company may determine, the amount of any taxes that the Committee or the Company determines, in their discretion, is required to be withheld. The Company, its subsidiaries and affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Optionee. The Optionees obligation to reimburse the Company for withholding obligations may be settled with Stock that is the subject of this option or other Stock owned by the Optionee. The maximum amount of Stock that the Optionee may use toward satisfying tax withholding requirements shall not exceed the minimum funding required for the withholding. | ||
M. | Rights as Shareholder . Optionee shall not be deemed the holder of any shares covered by this option and shall have no rights as a stockholder of the Company by virtue of the option granted hereunder unless and until such shares are fully aid and certificates for shares are issued to him after exercise of his option granted hereunder. | ||
N. | No Employment or Retention Agreement Intended . This agreement does not confer upon Optionee any right to continuation of employment or retention in service in any capacity by the Company or an affiliated unit and does not constitute an employment or retention agreement of any kind. | ||
O. | Changes in Stock. If there shall be any change in the stock subject to any option through merger, consolidation, reorganization, recapitalization, stock dividend, stock split or other change in the corporate structure, appropriate adjustments may be made by the board of directors of the Company in the aggregate number and kind of shares subject to the Plan and the number and kind of shares and the price per share subject to outstanding options. | ||
P. | Repurchase . The Committee may at any time offer to buy out an option previously granted, based on such terms and conditions as the Committee shall establish and communicate to the Optionee at the time that such offer is made. | ||
Q. | Confidential Information . The parties acknowledge that Company has created and maintains at great expense strategic plans, sales data and sales strategy, methods, products, procedures, processes, techniques, financial information, customer and supplier lists, personal customer data, pricing policies, personnel data and other similar confidential and proprietary information, and has received from its customers certain confidential and proprietary information (collectively, the Confidential Information). The parties further acknowledge that Company has taken and will continue to take actions to protect this Confidential Information. Accordingly, Optionee agrees that during the term of Optionees employment with Company, and until the sooner of (i) such time as the Confidential Information becomes generally available to the public through no fault of |
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Optionee or other person under a duty of confidentiality to Company, (ii) such time as the Confidential Information no longer provides a benefit to Company, or (iii) two years after the termination of Optionees employment with Company, Optionee will not, in any capacity, use or disclose, or cause to be used or disclosed, in any geographic territory in which Company or any of Companys customers do business, any Confidential Information Optionee acquired while employed by Company. The requirements of confidentiality and the limitations on use and disclosure described in this Agreement shall not apply to Confidential Information that Optionee can demonstrate by clear and convincing evidence, at the time of disclosure by Company to Optionee, was known to Optionee as evidenced by Optionees contemporaneous written records. The parties agree that nothing in this Agreement shall be construed to limit or negate the law of torts or trade secrets where it provides Company with broader protection than that provided herein. | |||
R. | Return of Company Property . The parties acknowledge that any material (in computerized or written form) that Optionee obtained in the course of performing Optionees employment duties are the sole and exclusive property of Company. Optionee agrees to immediately return any and all records, files, computerized data, documents, confidential or proprietary information, or any other property owned by or belonging to Company in Optionees possession or under his or her control, without any originals or copies being kept by Optionee or conveyed to any other person, upon Optionees separation from employment or upon Companys request. | ||
S. | Noncompetition During Employment . During the period of Optionees employment with Company, Optionee will not, in any capacity, participate in, provide assistance to, or have a financial or other interest in any activity or other enterprise which competes with Company. The ownership of less than a 5% interest in a corporation whose shares are traded in a recognized stock exchange or traded in the over-the-counter market, even though that corporation may be a competitor of the Company, shall not be deemed financial participation in a competitor. | ||
T. | Nonsolicitation . For a period of six months following termination of Optionees employment with the Company, Optionee will not, directly or indirectly, whether as an agent, investor, employer, employee, consultant, representative, trustee, partner, proprietor or otherwise, do any of the following: |
(a) | solicit or accept business from any person or entity who is an Active Customer (as defined herein) of Associated Banc-Corp, or its subsidiaries or affiliates, and with whom Optionee has had business contact during the twelve month period prior to termination of Optionees employment with the Company (the Reference Period) for the purpose of providing competitive products or services similar to those provided by Optionee during the Reference Period; | ||
(b) | request or advise any of the Active Customers, suppliers or other business contacts of the Company who have business relationships with the Company and with whom Optionee had business contact during his/her employment with the Company to withdraw, curtail or cancel any of their business relations with the Company; | ||
(c) | induce or attempt to induce any employee or other personnel of the Company to terminate his or her relationship or breach his/her employment relationship or other contractual relationship, whether oral or written, with the Company; provided, however, that nothing shall prevent a future employer of Optionee from hiring such employee or other personnel if Optionee does not otherwise violate this provision. |
U. | Specific Performance . Optionee acknowledges and agrees that irreparable injury to Company may result in the event that Optionee breaches certain covenants in this Agreement, and that the remedy at law for the breach of any such covenant will be inadequate. Therefore, if Optionee engages in any act or in violation of the provisions of paragraphs I(P), I(Q), I(R) or I(S), Optionee agrees that Company shall be entitled, in addition to such other remedies and damages that may be available to it by law or under this Agreement, to immediate injunctive relief to enforce such provisions. | ||
V. | Disclosure of Obligation to Former Employer. Optionee represents and warrants that s/he has disclosed in writing to the Company any obligations or contractual agreements with any previous employers or other entities for which s/he has provided services, regarding any obligation to refrain from competition, solicitation of customers or employees, or to refrain from use of confidential |
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information. Optionee further represents and warrants that s/he will abide by all such contractual or other legal commitments between Optionee and a previous employer or other entity for which s/he has provided services, and will indemnify Company and hold Company harmless in the event of any claim, suit, demand, action or proceeding, in regard to an alleged breach of any of these commitments. |
II. | Miscellaneous |
A. | Definitions. |
1. | Permanent Disability . Permanent Disability means the status given to an individual who has been covered by the Associated Banc-Corp Long-Term Disability Plan for six months or longer and has been terminated by the Company for that reason. | ||
2. | Retirement . Retirement shall mean any date on which an employee retires under the terms and conditions of the Companys Profit Sharing and Retirement Savings Plan provided, however, that the employee has attained age 55 as of such date. | ||
3. | Change in Control . Change In Control shall mean a change in control of the Company which shall be deemed to have occurred only if: |
4. | Active Customer. Active Customer shall mean any customer or prospective customer of the Company which, within the Reference Period, either received any products or services supplied by or on behalf of the Company or was under Active Solicitation by the Company, and with which Optionee had business contact during the Reference Period, and who remains a customer or prospective customer as of the time of any act alleged to violate paragraph S. | ||
5. | Active Solicitation. Active Solicitation shall mean at least two business contacts, by any personnel of the Company, including Optionee, during the Reference Period. |
B. | Transfers and Leaves . A change in employment or service from the Company to an affiliated unit of the Company, or vice versa, shall not constitute termination of employment or service for purposes of the Plan. Furthermore, the Committee (or board of directors in case of a member of the Committee) may determine that for purposes of the Plan, an Optionee who is on leave of absence will still be considered as in the continuous employment or service of the Company. | ||
C. | Notices . Any notice to be given to the Committee under the terms of this agreement shall be addressed to the Company, in care of its secretary, at 200 North Adams Street, Green Bay, Wisconsin 54301. Any notice to be given to Optionee may be addressed to him or her at his or her |
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address as it appears in the Companys records or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed to have been duly given if personally delivered or if enclosed in a properly sealed envelope or wrapper addressed as aforesaid, certified and deposited, postage prepaid, in a post office or branch post office regularly maintained by the United States government. | |||
D. | Successors . This agreement shall be binding upon and inure to the benefit of any successor or successors of the Company. | ||
E. | Government and Other Regulations . The obligation of the Company to sell and deliver shares of stock under this Plan shall be subject to all applicable laws, rules and regulations and the obtaining of all such approvals by government agencies as may be deemed necessary or desirable by the board of directors of the Company, including (without limitation) the satisfaction of all applicable federal, state, and local tax withholding requirements. | ||
F. | Interpretation of Agreement . The laws of the State of residence of Optionee as of the effective date of this Agreement shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto. The agreed venue and jurisdiction for any claims or disputes under this Agreement is the residence of the Optionee as of the effective date of this Agreement. |
III. | Disclaimer |
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o | I have read and agree to the terms and conditions of this option grant as provided herein. |
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I. | Stock Option |
A. | Number of Shares Optioned-Option Price. The Company grants to Optionee the right and option to purchase, on the terms and conditions hereof, all or any part of an aggregate of shares of the presently authorized common stock of the Company, $0.01 par value, at the purchase price of $ per share, the Fair Market Value at the above date. | ||
B. | Option Governed by Terms of Agreement and Plan . This option shall be exercisable only in accordance with the terms of this agreement, which hereby incorporates by reference and makes a part hereof the Plan. In the event of any conflict between any provisions of this agreement and the provisions of the Plan, the provisions of the Plan shall control. Terms defined in the Plan, where used herein, shall have the meanings as so defined. Optionee hereby acknowledges receipt of a copy of the Plan. | ||
C. | Vesting of Options . This option shall vest, in accordance with the following percentages, only upon Optionees completion of the number of years of continuous employment with the Company and its affiliated units as set forth below: |
Number of Completed Years of | Maximum Percentage of | |||
Continuous Employment or Service | Shares Becoming Exercisable | |||
After the Date of Grant or Option | Under the Option | |||
Less than 1 year
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0 | % | ||
At least 1 year
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34 | % | ||
At least 2 years
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67 | % | ||
At least 3 years
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100 | % |
No option shall be exercisable until it has vested. Options shall be exercisable immediately upon vesting, to the extent of the percentages prescribed above. Notwithstanding the foregoing, this option shall vest immediately upon a Change in Control in the Company, as defined in Section II.A.3. as subject to the following: |
1. | Except as described below, in the event of termination of Optionees employment with the Company or its affiliated units for any reason, the non-vested portion of any option granted to Optionee shall terminate immediately. |
2. | Except as described below, in the event of Optionees voluntary or involuntary termination of employment with the Company or its affiliated units, the vested portion of an option granted to such Optionee, but not yet exercised, shall terminate on the date of termination of employment. | ||
3. | In the event of Optionees termination of employment with the Company or its affiliated units due to Optionees death, Permanent Disability or Retirement, any outstanding option then held by such Optionee shall remain exercisable, but only to the extent such option was exercisable on the date of such Optionees termination of employment, until the earlier of (a) one year following the date of termination and (b) the expiration of the term of such option. If on the date of such termination of employment, any such option shall not be fully exercisable, the Administrative Committee of the Board (the Committee) shall have the discretion to cause such option to continue to become exercisable on the date or dates specified therein as if such termination of employment had not occurred. The Committee may exercise the discretion granted to it by the preceding sentence at the time an option is granted or at any time thereafter while such an option remains outstanding. | ||
4. | Notwithstanding any other provisions of this agreement, if Optionees employment or service is terminated by reason of a breach of Optionees employment agreement with the Company or any of its affiliated units, as determined by the Committee, or by reason of Optionees commission of a felony or a misdemeanor against the Company or any of its affiliated units (whether or not prosecuted), the option granted under this agreement shall be deemed terminated and not exercisable by Optionee. |
D. | Term of Option . All rights to exercise this option shall expire ten years from the date this option is granted. | ||
E. | Deferral of Exercise. | ||
1. Securities Law Restrictions . Although the Company intends to exert its best efforts so that the shares purchasable upon the exercise of this option will be registered under or exempt from the registration requirements of the Federal Securities Act of 1933 (the Act) and any applicable state securities law at the time the option becomes exercisable, if the exercise of this option or any part of it would otherwise result in the violation by the Company of any provision of the Act or of any state securities law, the Company may require that such exercise be deferred until the Company has taken appropriate action to avoid any such violation. | |||
2. Legal and Other Requirements . No shares of common stock shall be issued or transferred upon the exercise of any option unless and until all legal requirements applicable to the issuance or transfer of such shares and such other requirements as are consistent with the Plan have been complied with to the satisfaction of the Committee. The Committee may require that prior to the issuance or transfer of common stock upon exercise of an option, the Optionee shall enter into a written agreement to comply with any restrictions on subsequent disposition that the Committee or the Company deem necessary or advisable under any applicable law, regulation or official interpretation thereof. Certificates of stock issued hereunder may be legended to reflect such restrictions. | |||
F. | Conditions of Exercise of Option During Employment . Except as provided above in Paragraph D, this option may not be exercised unless Optionee is, at the date of exercise, in the employ or service of the Company or an affiliated unit and shall have been continuously employed since the date hereof. | ||
G. | Limitations on Disposition of Shares and Non-transferability . The option granted hereunder shall be assignable or transferable by the Optionee at the discretion of the Administrative Committee of the Board or by will or the laws of descent and distribution. The option granted herein and the rights and privileges pertaining thereto shall not be subject to execution of judgment, attachment or similar process. | ||
H. | Method of Exercising Option . This option shall be exercised, as to all or part of the shares covered hereby, by Optionee delivering to the Company at its principal business office on any business day a written stock option exercise notice specifying the number of shares the Optionee desires to |
purchase and specifying a business day for the payment of the purchase price against delivery of the shares being purchased (the date of delivery of such notice is referred to herein as the Date of Purchase). | |||
I. | Manner of Payment . The purchase price shall be paid in full upon exercise, in cash or by delivery of shares of common stock of the Company (valued at the Fair Market Value determined by the Committee as of the date of purchase of the option or in a combination of cash and common stock) within 5 business days of the date of exercise. Failure to pay within this time frame could result in the cancellation of the transaction. | ||
J. | Method of Valuation . Fair Market Value of the Common Stock of the company shall be determined by the Committee and shall be the closing price as reported on NASDAQ National Market System as reported in the Wall Street Journal, for the Companys Common Stock for a specific trading day, usually the date of the grant or exercise. | ||
K. | Withholding of Taxes . Pursuant to applicable federal, state, local or foreign laws, the Company may be required to collect income or other taxes upon the exercise of an option. The Company may deduct from payments made under the Plan or require as a condition to the exercise of an option, that Optionee pay the Company, at such time as the Committee or the Company may determine, the amount of any taxes that the Committee or the Company determines, in their discretion, is required to be withheld. The Company, its subsidiaries and affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Optionee. The Optionees obligation to reimburse the Company for withholding obligations may be settled with Stock that is the subject of this option or other Stock owned by the Optionee. The maximum amount of Stock that the Optionee may use toward satisfying tax withholding requirements shall not exceed the minimum funding required for the withholding. | ||
L. | Rights as Shareholder . Optionee shall not be deemed the holder of any shares covered by this option and shall have no rights as a stockholder of the Company by virtue of the option granted hereunder unless and until such shares are fully aid and certificates for shares are issued to him after exercise of his option granted hereunder. | ||
M. | No Employment or Retention Agreement Intended . This agreement does not confer upon Optionee any right to continuation of employment or retention in service in any capacity by the Company or an affiliated unit and does not constitute an employment or retention agreement of any kind. | ||
N. | Changes in Stock. If there shall be any change in the stock subject to any option through merger, consolidation, reorganization, recapitalization, stock dividend, stock split or other change in the corporate structure, appropriate adjustments may be made by the board of directors of the Company in the aggregate number and kind of shares subject to the Plan and the number and kind of shares and the price per share subject to outstanding options. | ||
O. | Repurchase . The Committee may at any time offer to buy out an option previously granted, based on such terms and conditions as the Committee shall establish and communicate to the Optionee at the time that such offer is made. | ||
P. | Confidential Information . The parties acknowledge that Company has created and maintains at great expense strategic plans, sales data and sales strategy, methods, products, procedures, processes, techniques, financial information, customer and supplier lists, personal customer data, pricing policies, personnel data and other similar confidential and proprietary information, and has received from its customers certain confidential and proprietary information (collectively, the Confidential Information). The parties further acknowledge that Company has taken and will continue to take actions to protect this Confidential Information. Accordingly, Optionee agrees that during the term of Optionees employment with Company, and until the sooner of (i) such time as the Confidential Information becomes generally available to the public through no fault of Optionee or other person under a duty of confidentiality to Company, (ii) such time as the Confidential Information no longer provides a benefit to Company, or (iii) two years after the termination of Optionees employment with Company, Optionee will not, in any capacity, use or disclose, or cause to be used or disclosed, in any geographic territory in which Company or any of Companys customers do business, any Confidential Information Optionee acquired while employed by Company. The requirements of confidentiality and the limitations on use and disclosure described in this Agreement shall not apply to Confidential Information that Optionee |
can demonstrate by clear and convincing evidence, at the time of disclosure by Company to Optionee, was known to Optionee as evidenced by Optionees contemporaneous written records. The parties agree that nothing in this Agreement shall be construed to limit or negate the law of torts or trade secrets where it provides Company with broader protection than that provided herein. | |||
Q. | Return of Company Property . The parties acknowledge that any material (in computerized or written form) that Optionee obtained in the course of performing Optionees employment duties are the sole and exclusive property of Company. Optionee agrees to immediately return any and all records, files, computerized data, documents, confidential or proprietary information, or any other property owned by or belonging to Company in Optionees possession or under his or her control, without any originals or copies being kept by Optionee or conveyed to any other person, upon Optionees separation from employment or upon Companys request. | ||
R. | Noncompetition During Employment . During the period of Optionees employment with Company, Optionee will not, in any capacity, participate in, provide assistance to, or have a financial or other interest in any activity or other enterprise which competes with Company. The ownership of less than a 5% interest in a corporation whose shares are traded in a recognized stock exchange or traded in the over-the-counter market, even though that corporation may be a competitor of the Company, shall not be deemed financial participation in a competitor. | ||
S. | Nonsolicitation . For a period of six months following termination of Optionees employment with the Company, Optionee will not, directly or indirectly, whether as an agent, investor, employer, employee, consultant, representative, trustee, partner, proprietor or otherwise, do any of the following: |
(a) | solicit or accept business from any person or entity who is an Active Customer (as defined herein) of Associated Banc-Corp, or its subsidiaries or affiliates, and with whom Optionee has had business contact during the twelve month period prior to termination of Optionees employment with the Company (the Reference Period) for the purpose of providing competitive products or services similar to those provided by Optionee during the Reference Period; | ||
(b) | request or advise any of the Active Customers, suppliers or other business contacts of the Company who have business relationships with the Company and with whom Optionee had business contact during his/her employment with the Company to withdraw, curtail or cancel any of their business relations with the Company; | ||
(c) | induce or attempt to induce any employee or other personnel of the Company to terminate his or her relationship or breach his/her employment relationship or other contractual relationship, whether oral or written, with the Company; provided, however, that nothing shall prevent a future employer of Optionee from hiring such employee or other personnel if Optionee does not otherwise violate this provision. |
T. | Specific Performance . Optionee acknowledges and agrees that irreparable injury to Company may result in the event that Optionee breaches certain covenants in this Agreement, and that the remedy at law for the breach of any such covenant will be inadequate. Therefore, if Optionee engages in any act or in violation of the provisions of paragraphs I(P), I(Q), I(R) or I(S), Optionee agrees that Company shall be entitled, in addition to such other remedies and damages that may be available to it by law or under this Agreement, to immediate injunctive relief to enforce such provisions. | ||
U. | Disclosure of Obligation to Former Employer. Optionee represents and warrants that s/he has disclosed in writing to the Company any obligations or contractual agreements with any previous employers or other entities for which s/he has provided services, regarding any obligation to refrain from competition, solicitation of customers or employees, or to refrain from use of confidential information. Optionee further represents and warrants that s/he will abide by all such contractual or other legal commitments between Optionee and a previous employer or other entity for which s/he has provided services, and will indemnify Company and hold Company harmless in the event of any claim, suit, demand, action or proceeding, in regard to an alleged breach of any of these commitments. |
II. | Miscellaneous |
A. | Definitions. |
1. | Permanent Disability . Permanent Disability means the status given to an individual who has been covered by the Associated Banc-Corp Long-Term Disability Plan for six months or longer and has been terminated by the Company for that reason. | ||
2. | Retirement . Retirement shall mean any date on which an employee retires under the terms and conditions of the Companys Profit Sharing and Retirement Savings Plan provided, however, that the employee has attained age 55 as of such date. | ||
3. | Change in Control . Change In Control shall mean a change in control of the Company which shall be deemed to have occurred only if: | ||
(i) 25% or more of the outstanding voting securities of the Company changes beneficial ownership as a result of a tender offer; | |||
(ii) The Company is merged or consolidated with another corporation, and as a result of such merger or consolidation, less than 75% of the outstanding voting securities of the surviving or resulting corporation is owned in the aggregate by the shareholders of the Company who owned such securities immediately prior to such merger or consolidation, other than affiliates, within the meaning of the Securities and Exchange Act of 1934, as amended (the Exchange Act), of any party to such merger or consolidation; | |||
(iii) The Company sells at least 85% of its assets to any entity which is not a member of the control group of corporations, within the meaning of Code section 1563, of which the Company is a member, or | |||
(iv) A person, within the meaning of sections 3(a)(9) or 13(d)(3) of the Exchange Act, acquires 25% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record). | |||
For purposes hereof, ownership of voting securities shall take into account and shall include ownership as determined by applying the provisions of Rule 13d-3(d)(1)(I) (relating to options) as of the Exchange Act. | |||
4. | Active Customer. Active Customer shall mean any customer or prospective customer of the Company which, within the Reference Period, either received any products or services supplied by or on behalf of the Company or was under Active Solicitation by the Company, and with which Optionee had business contact during the Reference Period, and who remains a customer or prospective customer as of the time of any act alleged to violate paragraph S. | ||
5. | Active Solicitation. Active Solicitation shall mean at least two business contacts, by any personnel of the Company, including Optionee, during the Reference Period. |
B. | Transfers and Leaves . A change in employment or service from the Company to an affiliated unit of the Company, or vice versa, shall not constitute termination of employment or service for purposes of the Plan. Furthermore, the Committee (or board of directors in case of a member of the Committee) may determine that for purposes of the Plan, an Optionee who is on leave of absence will still be considered as in the continuous employment or service of the Company. | ||
C. | Notices . Any notice to be given to the Committee under the terms of this agreement shall be addressed to the Company, in care of its secretary, at 200 North Adams Street, Green Bay, Wisconsin 54301. Any notice to be given to Optionee may be addressed to him or her at his or her address as it appears in the Companys records or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed to have been duly given if personally delivered or if enclosed in a properly sealed envelope or wrapper addressed as aforesaid, certified and deposited, postage prepaid, in a post office or branch post office regularly maintained by the United States government. |
D. | Successors . This agreement shall be binding upon and inure to the benefit of any successor or successors of the Company. | ||
E. | Government and Other Regulations . The obligation of the Company to sell and deliver shares of stock under this Plan shall be subject to all applicable laws, rules and regulations and the obtaining of all such approvals by government agencies as may be deemed necessary or desirable by the board of directors of the Company, including (without limitation) the satisfaction of all applicable federal, state, and local tax withholding requirements. | ||
F. | Interpretation of Agreement . The laws of the State of residence of Optionee as of the effective date of this Agreement shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto. The agreed venue and jurisdiction for any claims or disputes under this Agreement is the residence of the Optionee as of the effective date of this Agreement. |
III. | Disclaimer |
ASSOCIATED BANC-CORP
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Paul S. Beideman, Chairman & Chief Executive Officer |
ATTEST:
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Brian R. Bodager, Chief Administrative Officer,
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o | I have read and agree to the terms and conditions of this option grant as provided herein. |
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Print Name: |
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ARTICLE 1 Establishment of Plan and Purpose
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1-1 | |||
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1.01 Establishment of Plan
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1-1 | |||
1.02 Purpose of Plan
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1-1 | |||
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ARTICLE 2 Definitions and Construction
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2-1 | |||
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2.01 Definitions
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2-1 | |||
2.02 Construction
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2-2 | |||
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ARTICLE 3 Eligibility
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3-1 | |||
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3.01 Conditions of Eligibility
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3-1 | |||
3.02 Commencement of Participation
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3-1 | |||
3.03 Termination of Participation
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3-1 | |||
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ARTICLE 4 Deferral of Compensation
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4-1 | |||
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4.01 Amount and Manner of Deferral
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4-1 | |||
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ARTICLE 5 Memorandum Account
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5-1 | |||
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5.01 Nature of Account
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5-1 | |||
5.02 Credit to Memorandum Account
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5-1 | |||
5.03 Changes in Memorandum Account
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5-1 | |||
5.04 Valuation of Memorandum Account
|
5-2 | |||
5.05 Additional Credit
|
5-2 | |||
|
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ARTICLE 6 Distributions
|
6-1 | |||
|
||||
6.01 For Reasons Other Than Death
|
6-1 | |||
6.02 Upon Death
|
6-1 | |||
6.03 Emergencies
|
6-2 | |||
6.04 Form of Payment
|
6-2 |
i
Page | ||||
ARTICLE 7 Administration of the Plan
|
7-1 | |||
|
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7.01 Appointment of Separate Administrator
|
7-1 | |||
7.02 Powers and Duties
|
7-1 | |||
7.03 Records and Notices
|
7-2 | |||
7.04 Compensation and Expenses
|
7-2 | |||
7.05 Limitation of Authority
|
7-2 | |||
|
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ARTICLE 8 General Provisions
|
8-1 | |||
|
||||
8.01 Assignment
|
8-1 | |||
8.02 Employment Not Guaranteed by Plan
|
8-1 | |||
8.03 Termination and Amendment
|
8-1 | |||
8.04 Notice
|
8-1 | |||
8.05 Limitation on Liability
|
8-1 | |||
8.06 Indemnification
|
8-1 | |||
8.07 Headings
|
8-2 | |||
8.08 Severability
|
8-2 | |||
|
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ARTICLE 9 Merger of First Financial Corporation
Deferred Compensation Plan
|
9-1 | |||
|
||||
9.01 Introduction
|
9-1 | |||
9.02 Merger
|
9-1 | |||
9.03 Investment
|
9-1 | |||
9.04 Beneficiary Designations
|
9-1 | |||
9.05 Distributions
|
9-1 | |||
|
||||
APPENDIX A First Financial Corporation Deferred Compensation
Plan and Trust
|
ii
iii
1-1
2-1
2-2
3-1
4-1
5-1
5-2
6-1
6-2
7-1
7-2
8-1
8-2
9-1
A-1
Section | Page | ||||
I
|
General | A-4 | |||
|
|||||
II
|
Definitions | A-4 | |||
|
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III
|
Eligibility and Selection of Participants | A-5 | |||
|
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IV
|
Election to Defer | A-5 | |||
|
|||||
V
|
Deferral Amount Selection | A-6 | |||
|
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VI
|
Timing and Manner of Distribution | A-7 | |||
|
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VII
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The Trust | A-7 | |||
|
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VIII
|
Rights of Participants | A-12 | |||
|
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IX
|
Death or Disability of Participant | A-13 | |||
|
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X
|
Distribution in the Event of Financial Hardship | A-13 | |||
|
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XI
|
Distribution in the Event of Significant Change in Tax Law | A-14 | |||
|
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XII
|
Administration | A-14 | |||
|
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XIII
|
Funding | A-16 | |||
|
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XIV
|
Special Provisions Applicable to Insiders | A-16 | |||
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XV
|
Execution | A-18 | |||
|
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EXHIBITS
|
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|
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Exhibit 7.3 Investment Vehicles
|
A-2
Exhibit 7.4 Election of Investment Vehicle
|
||||
Exhibit 9.1 Designation of Beneficiary
|
||||
Exhibit 12.3 Election of Deferment
|
A-3
2.1 | Annual Incentive Compensation shall include any amount earned by certain executives of First Financial Corporation or its direct or indirect subsidiaries under a Company-sponsored incentive plan or through discretionary bonuses. | |
2.2 | Beneficiary shall mean the person or persons who upon the death, disability or incompetency of a Participant shall have acquired, by will, by laws of decent and distribution or by other legal proceedings, the right to the Participants Account. | |
2.3 | Base Salary shall mean the monthly amount payable to the executive for performance of services exclusive of any amounts included as Annual Incentive Compensation. | |
2.4 | Base Salary Deferral Year shall mean the calendar year. | |
2.5 | Company shall mean First Financial Corporation or any direct or indirect subsidiary of First Financial Corporation which employs the Participant. | |
2.6 | Compensation Committee shall mean the Compensation Committee of the Board of Directors of First Financial Corporation. | |
2.7 | Disabled shall mean that a Participant has suffered a permanent and total disability as determined by the Compensation Committee. | |
2.8 | Effective Date shall mean January 1, 1988 as amended through January 1, 1993. |
A-4
2.9 | Participant shall mean an employee designated as eligible under Section 3.1 who has elected, under the terms and conditions of the Plan, to defer payments of all or allowable portions of Base Salary and/or Annual Incentive Compensation. | |
2.10 | Participant Account shall mean the Participants account established pursuant to Section 4.1. | |
2.11 | Plan shall mean this Deferred Compensation Plan and Trust. | |
2.12 | Plan Year shall mean the calendar year. | |
2.13 | Retirement shall mean retirement from employment of a Participant in accordance with the Companys normal retirement policies, as amended from time to time and as determined by the Compensation Committee. | |
2.14 | Trust shall mean the trust created under Section VII of this Plan. | |
2.15 | Trustee shall initially mean Marshall & Ilsley Trust Company which is hereby appointed to administer the Trust and the Participant Accounts in accordance with this Plan and pursuant to the requirement of Section VII hereof. Trustee shall also refer to any substitute or replacement Trustee appointed under Section VII hereof. |
3.1 | Participation in the Plan shall be determined by the Compensation Committee. |
4.1 | An eligible employee may elect, under the terms and conditions of the Plan, to defer all or an allowable portion specified under Section 5.2 of Base Salary or Annual Incentive Compensation. Such election shall be made by written notice in the manner specified by the Compensation Committee and shall be irrevocable when made. | |
4.2 | Election to defer Annual Incentive Compensation shall be made on or before December 1 of the Plan Year. |
A-5
4.3 | Election to defer Base Salary shall be made prior to the first day of the Base Salary Deferral Year. | |
4.4 | All amounts earned by the Participant and deferred under this Section IV shall be forthwith paid by the Company to the Trustee which shall administer the funds in accordance with its duties under Section VII hereof and the other requirements of the Plan. | |
4.5 | No distribution of funds deferred hereunder shall be made by the Trustee to a Participant or a Participants Beneficiary prior to the earliest of the following dates: |
(a) | the date of payment specified by the Participant in his/her deferral election, provided that such date shall be no less than five (5) years from the date of the election; | ||
(b) | the Retirement date of a Participant; | ||
(c) | the date that a Participant becomes Disabled; | ||
(d) | the date of death of a Participant; | ||
(e) | the date the Compensation Committee determines a Financial Hardship or Significant Change in Tax Law exists pursuant to Sections 10.1 or 11.1 of this Plan and Trust; or | ||
(f) | the date of termination of employment as provided in Section 8.3 of this Plan and Trust. |
5.1 | Participants of the Plan may select to defer a percentage of Annual Incentive Compensation (if any) and/or a percentage of Base Salary. Alternatively, a specified dollar amount of deferral may be selected by the Participant. | |
5.2 | If percentage deferral is selected, any percentage amount up to 100% shall be permitted. | |
5.3 | Plan Participants may independently select, to defer amounts from Annual Incentive Compensation and from Base Salary. |
A-6
6.1 | Plan Participants may choose to receive payment of deferred amounts by one of the alternative methods stated hereunder: |
(a) | Lump sum payment in any year at least five years from the date of election as specified by the Participant; | ||
(b) | Equal annual installments, the first such installment to be paid at least five years from the date of election as specified by the Participant; or | ||
(c) | Upon the anticipated retirement date (or one tax year thereafter) in either: |
(i) | One lump sum payment in the year so specified by the Participant. | ||
(ii) | Equal annual installments, the first of which shall be paid commencing in the year so specified by the Participant. |
7.1 | The Company shall deliver to the Trustee all amounts deferred under Section IV of this Plan as soon as practicable after such amounts have been earned by the Participant, to be administered and disposed of by the Trustee as provided herein. |
7.2 | (a) | As used herein, the term Trust Corpus shall mean the amounts delivered to the Trustee by the Company from time to time on behalf of each Participant pursuant to the terms hereof, less amounts distributed to the Participants pursuant to the terms hereof, plus all income earned by the Trust, in such amounts in whatever form held or invested as provided herein. | |
(b) | The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part 1, subchapter J, |
A-7
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. The principal of the Trust and any earnings thereon shall be held separate and apart from any other funds of the Company and shall be used exclusively for the uses and purposes of Plan Participants and general creditors as herein set forth. |
7.3 | That portion of the Trust Corpus held on behalf of each Participant (the Participants Account) shall be invested or reinvested at the option of the Participant in one of the investments provided on Exhibit 7.3 hereto. | |
7.4 | The Compensation Committee shall permit each Participant to select the investment vehicle(s), as provided in Section 7.3, for such portion of the Trust Corpus allocated to such Participants Account. The Compensation Committee or the Trustee shall provide descriptive information regarding each investment vehicle to the Participant at least annually. The Participant may allocate his or her Participant Account among two or more investment vehicles on a percentage basis. Such selection shall be made on or before December 1 of each Plan Year on a form to be provided to the Participant from the Compensation Committee or Trustee in the form attached hereto as Exhibit 7.4. If the Trustee fails to receive notification on or before December 1 of each Plan Year of a change in the investment vehicle selection by any Participant, such Participants Account shall continue to be invested in such investment vehicle(s) as last previously selected by the Participant | |
7.5 | The Trustee shall be permitted to withhold from any payment due to a Participant hereunder the amount required by law to be so withheld under federal, state and local wage withholding requirements or otherwise, and shall pay over to the appropriate government authority the amounts so withheld. Except as otherwise provided herein, in the event of any final determination by the Internal Revenue Service or a court of competent jurisdiction, which determination is not appealable or with respect to which the time for appeal has expired, or the receipt by the Trustee of a substantially unqualified opinion of tax counsel selected by the Trustee, which determination determines or which opinion opines, that the Participant is subject to federal income taxation on amounts held in Trust hereunder prior to the distribution to the Participant of such amounts, the Trustee shall, on receipt by the Trustee of such opinion or notice of such determination, pay to the Participant the portion of the Trust Corpus includable in the Participants federal gross income. |
A-8
7.6 | The Trust Corpus is and shall remain at all times subject to the claims of the general creditors of the Company in the event of the Companys insolvency as defined in Section 7.7. Accordingly, the Company shall not create, and this Plan shall not be construed to create, a preferred claim on or any beneficial ownership interest in the Trust Corpus in favor of any Participant or any creditor. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan Participants and their beneficiaries against the Company. If the Trustee receives the notice provided for in Section 7.7 hereof, or otherwise receives actual notice that the Company is insolvent as defined in Section 7.7 hereof, the Trustee will make no further distributions of the Trust Corpus to any Participant but will deliver the Trust Corpus only to satisfy such claims, including those of any Participant, as a court of competent jurisdiction may direct. In such event, the Trustee is authorized to institute or participate in appropriate legal proceedings to obtain such directions. The Trustee shall resume distribution of Trust Corpus to the Participants under the terms hereof, including any arrearages, after so notifying the Company, if it determines that the Company was not, or is no longer insolvent. | |
7.7 | The Company, through its Board of Directors or Chief Executive Officer, shall advise the Trustee promptly in writing of the Companys insolvency. The Company shall be deemed insolvent upon (a) the appointment of a conservator or receiver (a receiver) due to a finding that the Company is unable to pay its debts as such debts become due and the expiration, without revocation of the receivers authority, of the receivers notice period to the Companys creditors all in accordance with 12 CFR Part 549, or (b) the institution of bankruptcy or dissolution proceedings with respect to the Company. | |
7.8 | The duties and responsibilities of the Trustee shall be limited to those expressly set forth in this Plan, and no implied covenants or obligations shall be read into this Plan or Trust against the Trustee. The interests of any Participant hereunder are not subject to assignment or alienation except in accordance with the terms of the Plan. Notwithstanding any powers granted to the Trustee pursuant to this Plan or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. | |
7.9 | The Trustee shall maintain such books, records and accounts as may be necessary for the proper administration of the Trust Corpus and the Participant Accounts, and shall render to the Company and to any |
A-9
Participant, on or prior to each April 1 following the date of this Plan until the termination of this Plan (and on the date of such termination), an accounting with respect to the Trust Corpus and each Participants Account as of the end of the then most recent calendar year (and as of the date of such termination), provided that no such accounting shall be required if the Trust Corpus has a zero balance. Upon the written request of any Participant or the Company, the Trustee shall deliver to the Participant or the Company, as the case may be, a written report setting forth the amount held in the Participants Account for the Participant, the current status of the investment vehicle including earnings on the investment, and a record of the contributions made with respect thereto by the Company. Unless the Company or the Participant shall have filed with the Trustee written exceptions or objections to any such statement and account within 180 days after receipt thereof, the Company or the Participant, as the case may be, shall be deemed to have approved such statement and account, and in such case the Trustee shall be forever released and discharged with respect to all matters and things reported in such statement and account as though it had been settled by a decree of a court of competent jurisdiction in an action or proceeding to which the Company and the Participant were parties. | ||
7.10 | The Trustee shall not be liable for any act taken or omitted to be taken hereunder if taken or omitted to be taken by it in good faith. The Trustee shall also be fully protected in relying upon any notice given hereunder which it in good faith believes to be genuine and executed and delivered in accordance with this Plan. The Trustee may consult with legal counsel to be selected by it, and the Trustee shall not be liable for any action taken or suffered by it in good faith in accordance with the advice of such counsel. | |
7.11 | The Trustee shall be reimbursed by the Company for its reasonable expenses incurred in connection with the performance of its duties hereunder and shall be paid reasonable fees for the performance of such duties in the manner provided by Section 7.12 or 7.13. | |
7.12 | The Company agrees to indemnify and hold harmless the Trustee from and against any and all damages, losses, claims or expenses as incurred (including expenses of investigation and fees and disbursements of counsel to the Trustee and any taxes imposed on the Trust Corpus or income of the Trust) arising out of or in connection with the performance by the Trustee of its duties hereunder. Any amount payable to the Trustee under Section 7.11, this Section 7.12, or Section 7.13 and not previously paid by the Company shall be paid by the Company promptly upon demand therefor by the Trustee or, if the Trustee so chooses in its sole discretion, from the Trust Corpus. In the event that payment is made hereunder to the |
A-10
Trustee from the Trust Corpus, the Trustee shall promptly notify the Company in writing of the amount of such payment. The Company agrees that, upon receipt of such notice, it will deliver to the Trustee to be held in the Trust an amount in cash equal to any payments made from the Trust Corpus to the Trustee pursuant to Section 7.11, this Section 7.12, or Section 7.13. The failure of the Company to transfer any such amount shall not in any way impair the Trustees right to indemnification, reimbursement and payment pursuant to Section 7.11, this Section 7.12, or Section 7.13. | ||
7.13 | The Trustee is specifically authorized and required to take such action as may be necessary or appropriate, including the institution of litigation or other legal process, to enforce the Companys obligations hereunder on behalf of either itself or a Participant, and any expenses thus incurred by the Trustee shall be paid or reimbursed by the Company. | |
7.14 | The Trustee may resign and be discharged from its duties hereunder at any time by giving notice in writing of such resignation to the Company and all Participants specifying a date (not less than thirty days after the giving of such notice) when such resignation shall take effect. Promptly after such notice, the Company shall appoint a successor trustee, such trustee to become Trustee hereunder upon the resignation date specified in such notice. The Company may at any time substitute a new trustee by giving 15 days notice thereof to the Trustee then acting. In the event of such removal or resignation, the Trustee shall duly file with the Company a written statement or statements of accounts and proceedings as provided in Section 7.9 hereof for the period since the last previous annual accounting of the Trust. The Trustee and any successor thereto appointed hereunder shall be a corporate professional trustee which is not an affiliate of the Company. | |
7.15 | Except as provided herein, this Trust shall be irrevocable. This Trust shall be terminated upon the earliest to occur of the following events: |
(a) | the written agreement to so terminate signed by the Company and all Participants; | ||
(b) | the final payment from the Trust Corpus of all amounts payable hereunder to the Participants. |
7.16 | Subject to Sections 12.1 and 12.2 hereof, this Plan and Trust may only be amended by written agreement signed by the Company and a majority of the Participants provided that the Trustee must consent to any amendment which would increase its duties hereunder and provided further that no |
A-11
amendment shall impair any benefit vested to any Participant who has not agreed to such amendment and no amendment shall make this Plan and Trust revocable. | ||
7.17 | The Company shall, at any time and from time to time, upon the reasonable request of the Trustee, execute and deliver such further instruments and do such further acts as may be necessary or proper to effectuate the purposes of this Plan. | |
7.18 | This Plan sets forth the entire understanding of the parties with respect to the subject matter hereof and supersedes any and all prior agreements, arrangements and understandings relating thereto. This Plan shall be binding upon and inure to the benefit of the parties and their respective successors and legal representatives. This Plan shall be governed by and construed in accordance with the laws of the State of Wisconsin other than and without reference to any provisions of such laws regarding choice of laws or conflict of laws. In the event that any provision of this Plan or the application thereof to any person or circumstances shall be determined by a court of proper jurisdiction to be invalid or unenforceable to any extent, the remainder of this Plan, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Plan shall be valid and enforced to the fullest extent permitted by law. |
8.1 | Nothing contained in the Plan or Trust shall: |
(a) | Confer upon any employee any right with respect to continuation of employment with the company; | ||
(b) | Interfere in any way with the right of the Company to terminate his or her employment at any time; or | ||
(c) | Confer upon any employee or other person any claim or right to any distribution under the Plan or Trust except in accordance with its terms. |
8.2 | No right or interest of any Participant in the Plan shall, prior to actual payment or distribution to such Participant, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, or |
A-12
be subject to payment of debts of any Participant by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner. | ||
8.3 | If a Participant has elected to defer pursuant to Section 4.1 and his or her services with the Company are terminated voluntarily or involuntarily, the Participant shall retain all rights to the undistributed amounts credited to his or her Participant Account. Such amounts will be distributed by the Trustee to the Participant in a lump sum as soon as practical following the Participants termination. |
9.1 | Should a Participant die, or become Disabled, as defined herein, the amount of such Participants Account on the date of death or disability shall be distributed by the Trustee to the Participant or the Participants Beneficiary, as the case may be. Such distributions shall be made in a lump sum. Each Participant shall designate his/her beneficiary to the Compensation Committee and Trustee in writing as provided on Exhibit 9.1 hereto, and shall have the right to change such designation from time to time. |
10.1 | The Compensation Committee may, in its sole discretion, direct the Trustee to make a partial or total distribution of amounts in a Participants Account upon the Participants request and a demonstration by the Participant of an unforeseeable emergency. An unforeseeable emergency is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participants property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved - |
(i) | through reimbursement or compensation by insurance or otherwise, |
A-13
(ii) | by liquidation of the Participants assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or | ||
(iii) | by cessation of deferrals under the Plan. |
11.1 | The Compensation Committee may, in its sole discretion, direct the Trustee to make a partial or total distribution of amounts in a Participants Account upon the Participants distribution request provided that the Committee has determined that proposed changes in tax law which are reasonably anticipated to be passed by Congress would cause a significant financial impact to the Participant by adversely affecting the deferred treatment of amounts invested pursuant to this Plan. Any distribution made under this paragraph shall be made at the beginning of the calendar year following receipt of such distribution request where such request was received at least six months in advance of such distribution, and if such distribution request is received less than six months prior to the beginning of a calendar year, the distribution shall be made at the beginning of the following calendar year. |
12.1 | The Compensation Committee may from time to time amend, suspend, terminate or reinstate any or all of the provisions of the Plan as may seem necessary or advisable for the administration of the Plan, provided that no such action shall affect, without the Participants written consent, a Participants right to receive on a deferred basis funds previously deferred hereunder. |
A-14
12.2 | The Compensation Committee shall, subject to express provisions of the Plan, have power to construe the Plan, to prescribe rules and regulations relating to the Plan and to make all other determinations necessary or advisable for the administration of the Plan, and the Compensation Committee may correct any defect or supply and omission or reconcile any inconsistency in the Plan in the manner and to the extent it shall deem expedient to carry it into effect, provided however, that no such action under this Section 12.2 shall affect, without the Participants written consent, a Participants right to receive on a deferred basis the funds previously deferred hereunder. | |
12.3 | The Compensation Committee shall ensure that all individuals entitled to make the election to defer are provided an election form (in the form annexed hereto as Exhibit 12.3) at least ninety (90) days before such election must be made in accordance with Section 4.1 and all such elections must be received in writing in order to be effective. This election form shall include the following items, which must be completed in full in order to be effective: |
(a) | The amount to be deferred, expressed as a percentage of Annual Incentive Compensation (if any) or Base Salary to become payable during the calendar year in question; | ||
(b) | The number of installments for the payment of the deferred compensation; and | ||
(c) | The date of the first installment payment. |
12.4 | All expenses and costs incurred in connection with the administration and operation of the Plan shall be borne by the Company. |
A-15
13.1 | Benefits under this Plan shall be paid by the Trustee from the Trust Corpus, provided however, that the Trust Corpus shall be deemed the general assets of the Company and shall be subject to the claims of the Companys creditors in the event of the insolvency of the Company as provided in Sections 7.6 and 7.7 hereof. This Plan shall be administered as an unfunded plan which is not intended to meet the qualification requirements of Section 401 of the Internal Revenue Code. | |
13.2 | The Company shall be liable to the Participant to make all payments required under this Plan to the extent such payments have not been made by the Trustee. Distributions made from the Trust to or for the Participant pursuant to the Plan shall, to the extent of such distributions, satisfy the Companys obligation to pay benefits to such Participant under this Plan. |
14.1 | Any payment due an Insider-Participant under the Plan shall be made only in cash. No payment may be made to an Insider-Participant in the form of equity securities of First Financial Corporation. | |
14.2 | An Insider-Participants election to invest, or not to invest, all or any portion of an amount deferred under this Plan in First Financial Corporation Common Stock shall be irrevocable when made as to such deferred amount. Such investment election shall be made at the time of his or her deferral election, A different investment election may be made with respect to each deferred amount. | |
14.3 | In the case of a Participant who is not an Insider-Participant and who thereafter becomes an Insider-Participant, his or her most recent election, or deemed election, to invest, or not to invest, in First Financial Corporation Common Stock prior to becoming an Insider-Participant shall |
A-16
automatically, upon his or her becoming an Insider-Participant, and without any action on the part of the Insider- Participant, the Compensation Committee or any other party, be deemed irrevocable. | ||
14.4 | Notwithstanding the foregoing, an Insider-Participant may, in accordance with Section 7.4, change the allocation of his or her Participant Account to the extent not invested in First Financial Corporation Common Stock among any of the other investment vehicles provided in this Plan. | |
14.5 | Notwithstanding the provisions of section 8.4, an Insider-Participant may not, as to that portion of his or her Participant Account invested in First Financial Corporation Common Stock, request to further defer the date of payment elected, and the Compensation Committee shall have no authority to grant any such request if made. The foregoing shall apply without regard to whether the Insider- Participant was an Insider-Participant at the time the date of payment was originally elected under Section 6.1, or further deferred under Section 8.4, or at the time any portion of his or her Participant Account was invested in First Financial Corporation Common Stock. | |
No distribution may be made to an Insider-Participant under Section 10.1 or 11.1 of any portion of his or her Participant Account invested in First Financial Corporation Common Stock, without regard to whether the Insider-Participant was an Insider-Participant at the time any portion of his or her Participant Account was invested in First Financial Corporation Common Stock. | ||
An Insider-Participant may choose to receive payment of deferred amounts invested in First Financial Corporation Common Stock only on a fixed date or dates, or incident or death, retirement, disability or termination of employment, within the meaning of SEC Rule 16a-1(c)(3)(ii). Any such election by an Insider Participant shall be made at the time of his or her deferral election and shall be irrevocable. | ||
If in the opinion of counsel to the Compensation Committee, who may be counsel to First Financial Corporation, the timing and manner of any distribution election made by a Participant who thereafter becomes an Insider-Participant with respect to any portion of his or her Participant Account invested in First Financial Corporation Common Stock would not satisfy the requirements of SEC Rule 16a-1(c)(3)(ii), then upon his or her becoming an Insider-Participant, each such election shall automatically, and without any action on the part of the Insider-Participant, the Compensation Committee or any other party, be deemed irrevocably amended to provide, |
A-17
as to that portion of his or her Participant Account invested in First Financial Corporation Common Stock, for payment in a lump sum six months after such Insider-Participants death, retirement, disability or other termination of employment. The foregoing shall not apply to any such distribution election that is amended, with the consent of the Compensation Committee, prior to the time the Participant becomes an Insider-Participant to satisfy the requirements of SEC Rule 16a-1(c)(3)(ii), provided that the Compensation Committee has received, prior to giving its consent to any such amendment, an opinion of counsel, who may be counsel to First Financial Corporation, that such amended distribution election would satisfy the requirements of such SEC Rule and would not result in the constructive receipt of income to the Participant. | ||
14.6 | It is intended that as to Insider-Participants, any amounts deferred pursuant to, and any securities, rights or interests created under, this Plan be excluded from the definition of derivative security pursuant to SEC Rule 16a-1(c)(3)(ii). Accordingly, no Plan or Trust amendment and no action under the Plan or Trust shall become effective if, in the opinion of counsel to the Compensation Committee, who may be counsel to First Financial Corporation, such amendment or action could cause such exclusion to become unavailable, unless such counsel also opines that Insider-Participants will, nevertheless, not be subject to avoidable liability under Section 16. |
FIRST FINANCIAL CORPORATION | ||||||
|
||||||
DATE: January 1, 1993
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By: | /s/ | ||||
|
||||||
|
John C. Seramur, President |
ATTEST: | ||
|
||
/s/
|
||
Robert M. Salinger, Secretary
|
A-18
MARSHALL & ILSLEY TRUST COMPANY, TRUSTEE | ||||||
|
||||||
DATE: July 1, 1993
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By: | /s/ | ||||
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||||||
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Title: | |||||
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ATTEST:
|
||
|
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/s/
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A-19
Page | ||||
ARTICLE 1 Establishment of and Purpose of Plan
|
1-1 | |||
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ARTICLE 2 Definitions and Construction
|
2-1 | |||
|
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2.01 Definitions.
|
2-1 | |||
|
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2.02 Construction.
|
2-2 | |||
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ARTICLE 3 Participation
|
3-1 | |||
|
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3.01 Commencement of Participation
|
3-1 | |||
|
||||
3.02 Deferral of Directors Fees
|
3-1 | |||
|
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ARTICLE 4 Memorandum Account
|
4-1 | |||
|
||||
4.01 Nature of Account
|
4-1 | |||
|
||||
4.02 Credit of Deferrals to Memorandum Account
|
4-1 | |||
|
||||
4.03 Adjustments to Memorandum Account
|
4-1 | |||
|
||||
4.04 Valuation of Memorandum Account
|
4-2 | |||
|
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ARTICLE 5 Distributions
|
5-1 | |||
|
||||
5.01 Distribution Election
|
5-1 | |||
|
||||
5.02 For Reasons Other Than Death
|
5-1 | |||
|
||||
5.03 Upon Death
|
5-1 | |||
|
||||
5.04 Unforeseeable Emergencies
|
5-2 | |||
|
||||
ARTICLE 6 Administration of the Plan
|
6-1 | |||
|
||||
6.01 Appointment of Separate Administrator
|
6-1 | |||
|
||||
6.02 Powers and Duties
|
6-1 | |||
|
||||
6.03 Records and Notices
|
6-2 | |||
|
||||
6.04 Compensation and Expenses
|
6-2 |
i
Page | ||||
ARTICLE 7 General Provisions
|
7-1 | |||
|
||||
7.01 Assignment
|
7-1 | |||
|
||||
7.02 Termination and Amendment
|
7-1 | |||
|
||||
7.03 Contingency
|
7-1 | |||
|
||||
7.04 Notice
|
7-1 | |||
|
||||
7.05 Limitation on Liability
|
7-1 | |||
|
||||
7.06 Indemnification
|
7-2 | |||
|
||||
7.07 Headings
|
7-2 | |||
|
||||
7.08 Severability
|
7-2 | |||
|
||||
7.09 Director Position Not Guaranteed by Plan
|
7-2 | |||
|
||||
APPENDIX A Investment Preference Form
|
||||
APPENDIX B Beneficiary Designation Form
|
ii
1-1
(a) | Administrator . The Company, or such other person, persons or entity as may be appointed by the Board pursuant to Article 6, to control and manage the operation and administration of the Plan. | ||
(b) | Beneficiary . The beneficiary or beneficiaries designated by a Participant pursuant to section 5.03 to receive the amount (if any) payable under the Plan upon the death of the Participant. | ||
(c) | Board . The Board means the Board of Directors of the Company. | ||
(d) | Company . Associated Banc-Corp, a Wisconsin banking corporation. The Board has authorized the Compensation and Benefits Committee of the Board to act on behalf of the Company for purposes of the Plan. | ||
(e) | Eligible Director . A former director of a bank or bank holding company acquired by the Company who had a Memorandum Account in one of the Predecessor Plans. | ||
(f) | Effective Date . The effective date of this Plan shall be July 1, 1999. | ||
(g) | Memorandum Account . The bookkeeping record maintained for each Participant pursuant to Article 4 below. | ||
(h) | Participants . Such Eligible Directors who meet the participation requirements described in Article 3. Active Participants are those who are currently eligible to make deferrals under the Plan. Inactive Participants are those who have a Memorandum Account under the Plan, but are no longer eligible to make deferrals. | ||
(i) | Plan . The Associated Banc-Corp Directors Deferred Compensation Plan, as stated herein and as amended from time to time. |
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(j) | Plan Year . The period beginning January 1 and ending on December 31 and each 12-month period ending on each subsequent December 31. | ||
(k) | Predecessor Plan . Any one of the following, collectively known as the Predecessor Plans: |
| the Citizens Community Bankshares, Inc. Directors Deferred Compensation Plan; | ||
| the Citizens State Bank of Wittenberg Bank Directors Deferred Compensation Plan; | ||
| the F&M Financial Services Corporation Directors Deferred Compensation Plan; | ||
| the Iron Exchange Bank of Hurley Bank Directors Deferred Compensation Plan; and | ||
| the First Financial Corporation Directors Deferred Compensation Plan. |
(l) | Semi-Annual Averaged Fed Funds Rate means the monthly average of the Fed Funds Sold Rate as published by Bankers Bank of Wisconsin (or any successor thereto). | ||
(m) | Unforeseeable Emergency . An Unforeseeable Emergency is a severe financial hardship to a Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in section 152(a) of the Code) of the Participant, loss of the Participants property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. |
2.02 | Construction . The laws of the State of Wisconsin, as amended from time to time, shall govern the construction and application of this Plan. Words used in the masculine gender shall include the feminine and words used in the singular shall include the plural, as appropriate. The words hereof, herein, hereunder and other similar compounds of the word here shall refer to the entire Plan, not to a particular section. All references to statutory sections shall include the section so identified as amended from time to time or any other statute of similar import. If any provisions of the Internal Revenue Code or other statutes or regulations render any provisions |
2-2
2-3
3.01 | Commencement of Participation . An Eligible Director who had a bookkeeping account of benefits (referred to under this Plan as a Memorandum Account) as of June 30, 1999 under a Predecessor Plan shall automatically become a Participant in this Plan as of the Effective Date. All such Participants shall be considered inactive Participants, except as described in section 3.02. | |
3.02 | Deferral of Directors Fees . Alan Lamia is eligible to continue deferrals of his directors fees under this Plan in accordance with the deferral agreement he filed under the Citizens State Bank of Wittenberg Bank Directors Deferred Compensation Plan. His deferrals shall continue in accordance with the agreement until the earliest of the following: (1) the date his directorship with Associated Bank North terminates, unless he shall maintain status as an Advisory Board member, in which case the date his membership on an Advisory Board terminates; or (2) December 31 of the year in which he revokes his deferral agreement; or (3) his active participation is terminated by action of the Administrator. | |
No other active deferrals of directors fees shall be permitted under this Plan. |
3-1
4.01 | Nature of Account . For the sole purpose of measuring benefits due Participants hereunder, the Company shall maintain on behalf of each Participant a bookkeeping record to which the Company shall credit the amounts described in this Article 4. This bookkeeping record shall be referred to as the Memorandum Account. | |
The Memorandum Account and assets, if any and of any nature, acquired by the Company to measure a Participants benefits hereunder, shall not constitute or be treated for any reason as a trust for, property of or a security interest for the benefit of, Participant, his Beneficiaries or any other person. The Participant and the Company acknowledge that the Plan constitutes a promise by the Company to pay benefits to the Participants or their beneficiaries; that Participants rights hereunder are limited to those of general unsecured creditors of the Company; and that the establishment of the Plan, acquisition of assets to measure Participants benefits hereunder or deferral of all or any portion of an active Participants directors fees hereunder does not prevent any property of the Company from being subject to the rights of all the Companys creditors. The Company may, in its discretion, contribute amounts to a rabbi trust to provide a source of funds from which to satisfy its obligations under this Plan, but the assets of such rabbi trust shall continue to be subject to the rights of all the Companys creditors. | ||
4.02 | Credit of Deferrals to Memorandum Account . The Company shall credit to an active Participants Memorandum Account during a Plan Year deferral amounts representing directors fees as they would otherwise become payable to the active Participant during the Plan Year. | |
4.03 | Adjustments to Memorandum Account . Each Participant may specify his investment preferences for his Memorandum Account by completing and submitting an Investment Preference Form provided by the Administrator. Final approval of the Participants investment selection is within the discretion of the Administrator, and if the Administrator establishes a trust as described in section 4.01, the Trustee. The Participants Memorandum Account shall be adjusted to reflect the income and losses and increase or decrease in value experienced by assets as if the amounts were invested according to the Participants preferences, subject to final approval by the Administrator and Trustee. A Participants Memorandum Account |
4-1
shall also reflect expenses generated by, and related to, the investment choices made in accordance with the Investment Preference Form. | ||
A Participant may submit a new Investment Preference Form to the Administrator as frequently as may be allowed by the Administrator or a third-party delegate, consistent with any procedures that may be approved by the Company. | ||
4.04 | Valuation of Memorandum Account . Within 90 days after the last day of each Plan Year, the Company shall provide each Participant or his Beneficiaries a statement indicating the balance of his Memorandum Account as of the last day of such Plan Year, reflecting the amount of deferrals, if any, credited for such year, together with all other changes in value during the Plan Year, and any distributions made during the Plan Year. Participants who disagree with the information provided in such statements must submit objections, in writing, to the Administrator within 90 days of receipt such statements. |
4-2
5.01 | Distribution Election . The distribution election completed by each Participant under each Predecessor Plan shall remain irrevocable and in full force and effect under this Plan. A Participant shall make an irrevocable distribution election, prior to commencement of a Plan Year, on forms provided by the Administrator. | |
5.02 | For Reasons Other Than Death . The Company shall distribute the Participants Memorandum Account in the manner elected by the Participant pursuant to section 5.01. Amounts may be distributed in cash or Company stock in the discretion of and in accordance with procedures established by the Administrator . The Administrator shall reduce the balance in the Participants Memorandum Account by the amount of any payment pursuant to this section 5.02 immediately upon the occurrence of such payment. | |
In no event shall distributions subject to Code section 409A to a Participant who receives distributions as a result of a separation from service occur prior to six months after the Participants separation from service. | ||
5.03 | Upon Death . |
(a) | Upon a Participants death with a balance remaining in his Memorandum Account, the Company shall pay an amount equaling the entire balance of his Memorandum Account to the beneficiary or beneficiaries he specifies, or, if none, to his estate. Each Participant may designate a beneficiary or beneficiaries to receive the unpaid balance of his Memorandum Account upon his death and may revoke or modify such designation at any time and from time to time by submitting to the Administrator a Beneficiary Designation on forms approved by the Administrator. | ||
(b) | If a Participants death occurs prior to the payment of any amounts to him hereunder, other than payments for Unforeseeable Emergencies, the Company shall, as soon as practicable, pay to the Beneficiary in a lump sum the entire balance due the Participant. | ||
(c) | If a Participants death occurs after the payment of any amount to him hereunder, other than payments for |
5-1
Unforeseeable Emergencies, payments to his Beneficiary shall continue in the same form, and be calculated in the same manner, as paid to the Participant prior to his death by merely substituting the Beneficiary for the Participant. | |||
(d) | If a Beneficiary survives a Participant but dies prior to receipt of the entire amount in the Memorandum Account due him, the Company shall, as soon as practicable, pay to the estate of the Beneficiary in a lump sum the entire remaining balance therein due the Beneficiary. | ||
(e) | The Administrator shall reduce the balance in the deceased Participants Memorandum Account by the amount of any payment pursuant to this section 5.03 immediately upon the occurrence of such payment. |
5.04 | Unforeseeable Emergencies . In the event of an Unforeseeable Emergency either before or after the commencement of payments hereunder, a Participant or Beneficiary may request in writing that all or any portion of the benefits due him hereunder be paid in one or more installments prior to the normal time for payment of such amount. The Administrator shall, in its reasonable judgment, determine whether the applicant could not address the emergency through reimbursement or compensation by insurance or otherwise, by liquidation of assets (provided such liquidation, in itself, would not create a financial hardship) or by ceasing deferrals hereunder. Only if the Administrator determines that such an Unforeseeable Emergency exists, the Company shall pay to the Participant or Beneficiary, as the case may be, an amount equal to the lesser of (a) the amount requested or (b) the amount reasonably necessary to alleviate the hardship. The Administrator shall use its reasonable discretion to determine when the prepayments shall be made and shall immediately reduce the balance in the recipients Memorandum Account by the amount of such payment. |
5-2
6.01 | Appointment of Separate Administrator . The Company has appointed the Compensation and Benefits Committee of the Board of Directors (the Committee) to serve as Administrator. The Company shall accept and rely upon any document executed by the Committee until the Board revokes such appointment. No person serving on the Committee shall vote or decide upon any matter relating solely to himself or solely to any of his rights or benefits pursuant to the Plan. |
6.02 | Powers and Duties . The Administrator shall administer the Plan in accordance with its terms. The Administrator shall have full and complete authority and control with respect to Plan operations and administration unless the Administrator allocates and delegates such authority or control pursuant to the procedures stated in subsection (b) or (c) below. Any decisions of the Administrator or its delegate shall be final and binding upon all persons dealing with the Plan or claiming any benefit under the Plan. The Administrator shall have all powers which are necessary to manage and control Plan operations and administration including, but not limited to, the following: |
(a) | To employ such accountants, counsel, or other persons as it deems necessary or desirable in connection with Plan administration. The Company shall bear the costs of such services and other administrative expenses. | ||
(b) | To designate in writing persons other than the Administrator to perform any of its powers and duties hereunder. | ||
(c) | To allocate in writing any of its powers and duties hereunder to those persons who have been designated to perform Plan fiduciary responsibilities. | ||
(d) | The discretionary authority to construe and interpret the Plan, including the power to construe disputed provisions. | ||
(e) | To resolve all questions arising in the administration, interpretation, and application of the Plan, including, but not limited to, questions as to the eligibility or the right of any person to a benefit. |
6-1
(f) | To adopt such rules, regulations, forms and procedures from time to time as it deems advisable and appropriate in the proper administration of the Plan. | ||
(g) | To prescribe procedures to be followed by any person in applying for distributions pursuant to the Plan and to designate the forms or documents, evidence and other such information as the Administrator may reasonably deem necessary, desirable or convenient to support an application for such distribution. | ||
(h) | To apply consistently and uniformly Committee rules, regulations and determinations to all Participants and beneficiaries in similar circumstances. |
6.03 | Records and Notices . The Administrator shall keep a record of all its proceedings and acts and shall maintain all such books of accounts, records and other data as may be necessary for proper plan administration. The Administrator shall notify the Company of any action taken by the Administrator which affects the Trustees Plan obligations or rights and, when required, shall notify any other interested parties. | |
6.04 | Compensation and Expenses . The expenses incurred by the Administrator in the proper administration of the Plan shall be paid from the Company. An Administrator who is an Employee or a Director shall not receive any additional fee or compensation for services rendered as an Administrator. |
6-2
7.01 | Assignment . No Participant or Beneficiary may sell, assign, transfer, encumber or otherwise dispose of the right to receive payments hereunder. A Participants right to benefit payments under the Plan is not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Participant or the Participants beneficiary. | |
7.02 | Termination and Amendment . The Company may at any time and from time to time terminate, suspend, alter or amend this Plan and no Participant or any other person shall have any right, title, interest or claim against the Company, its directors, officers or employees for any amount. Subject to the rights of Company creditors as described in section 4.01, Participants shall otherwise be fully vested in their Memorandum Accounts at all times. Following Plan termination, Memorandum Accounts shall continue to be subject to adjustment under section 4.03 and valuation under section 4.04 until distributions are completed in accordance with Article 5. | |
7.03 | Contingency . The Company may apply for private letter rulings from the Internal Revenue Service (IRS) as to the deductibility from taxable income benefits paid hereunder or the exclusion of amounts deferred hereunder from the taxable income of Participant until paid. If the Company applies for a private letter ruling from the IRS and does not receive a satisfactory reply thereto, the Company may deem this Plan terminated, in which event, the parties shall treat all amounts deferred hereunder as immediately payable to the Participants and all parties rights and obligations hereunder shall thereupon cease. | |
7.04 | Notice . Any and all notices, designations or reports provided for herein shall be in writing and delivered personally or by first class priority mail addressed, in the case of the Company, its Board of Directors or Administrator, to the Companys principal business office and, in the case of a Participant or Beneficiary, to his home address as shown on the records of the Company. | |
7.05 | Limitation on Liability . In no event shall the Company, Administrator, or any employee, officer, or director of the Company incur any liability for any act or failure to act unless such act or failure to act constitutes a lack of good faith, willful misconduct or gross negligence with respect to the Plan. |
7-1
7.06 | Indemnification . The Company shall indemnify he Administrator and any employee, officer or director of the Company against all liabilities arising by reason of any act or failure to act unless such act or failure to act is due to such persons own gross negligence or willful misconduct or lack of good faith in the performance of his duties to the Plan. Such indemnification shall include, but not be limited to, expenses reasonably incurred in the defense of any claim, including attorney and legal fees, and amounts paid in any settlement or compromise; provided, however, that indemnification shall not occur to the extent that it is not permitted by applicable law. Indemnification shall not be deemed the exclusive remedy of any person entitled to indemnification pursuant to this section. The indemnification provided hereunder shall continue as to a person who has ceased acting as a director, officer, member, agent, or employee of the administrator or as an officer, director or employee of the Company, and such persons rights shall inure to the benefit of his heirs and representatives. | |
7.07 | Headings . All articles and section headings in this Plan are intended merely for convenience and shall in no way be deemed to modify or supplement the actual terms and provisions stated thereunder. | |
7.08 | Severability . Any provision of this Plan prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. The illegal or invalid provisions shall be fully severable and this Plan shall be construed and enforced as if the illegal or invalid provisions had never been inserted in this Plan. | |
7.09 | Director Position Not Guaranteed by Plan . The establishment of this Plan, its amendments and the granting of a benefit pursuant to the Plan shall not give any Participant the right to a new or continued position as director or limit the right of the Company to dismiss or impose penalties upon the Participant or modify the terms of directorship by any Participant. |
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Page | ||||
ARTICLE 1 Purpose
|
1 | |||
|
||||
ARTICLE 2 Definitions
|
1 | |||
|
||||
ARTICLE 3 Participation
|
4 | |||
|
||||
ARTICLE 4 Awards
|
4 | |||
|
||||
ARTICLE 5 Administration
|
5 | |||
|
||||
ARTICLE 6 Termination of Employment and Change of Control
|
6 | |||
|
||||
ARTICLE 7 Miscellaneous
|
7 |
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2
3
4
5
6
7
8
9
10
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ARTICLE 1 Establishment of Plan and Purpose
|
1-1 | |||
|
||||
1.01 Establishment of Plan
|
1-1 | |||
|
||||
1.02 Purpose of Plan
|
1-1 | |||
|
||||
ARTICLE 2 Definitions and Construction
|
2-1 | |||
|
||||
2.01 Definitions
|
2-1 | |||
|
||||
2.02 Construction
|
2-3 | |||
|
||||
ARTICLE 3 Eligibility
|
3-1 | |||
|
||||
3.01 Conditions of Eligibility
|
3-1 | |||
|
||||
3.02 Commencement of Participation
|
3-1 | |||
|
||||
3.03 Termination of Participation
|
3-1 | |||
|
||||
ARTICLE 4 Amount of Benefit
|
4-1 | |||
|
||||
4.01 Amount of Benefit
|
4-1 | |||
|
||||
4.02 Vesting
|
4-1 | |||
|
||||
ARTICLE 5 Distributions
|
5-1 | |||
|
||||
5.01 Time and Form of Benefits
|
5-1 | |||
|
||||
5.02 Distribution Election Change
|
5-1 | |||
|
||||
5.03 Death Benefit
|
5-1 | |||
|
||||
ARTICLE 6 Administration of the Plan
|
6-1 | |||
|
||||
6.01 Appointment of Separate Administrator
|
6-1 | |||
|
||||
6.02 Powers and Duties
|
6-1 | |||
|
||||
6.03 Records and Notices
|
6-2 |
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Page | ||||
6.04 Compensation and Expenses
|
6-2 | |||
|
||||
6.05 Limitation of Authority
|
6-2 | |||
|
||||
ARTICLE 7 General Provisions
|
7-1 | |||
|
||||
7.01 Assignment
|
7-1 | |||
|
||||
7.02 Employment Not Guaranteed by Plan
|
7-1 | |||
|
||||
7.03 Termination and Amendment
|
7-1 | |||
|
||||
7.04 Contingency
|
7-1 | |||
|
||||
7.05 Notice
|
7-1 | |||
|
||||
7.06 Limitation on Liability
|
7-2 | |||
|
||||
7.07 Indemnification
|
7-2 | |||
|
||||
7.08 Headings
|
7-2 | |||
|
||||
7.09 Severability
|
7-2 | |||
|
||||
ARTICLE 8 Memorandum Account
|
8-1 | |||
|
||||
8.01 Nature of Account
|
8-1 | |||
|
||||
8.02 Credit to Memorandum Account
|
8-1 | |||
|
||||
8.03 Changes in Memorandum Account
|
8-1 | |||
|
||||
8.04 Valuation of Memorandum Account
|
8-2 |
ii
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2-2
2-3
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6-1
6-2
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7-2
8-1
8-2
Page | ||
ARTICLE 1 Definitions
|
1-1 | |
1.01. Act
|
1-1 | |
1.02. Cause
|
1-1 | |
1.03. Change of Control
|
1-1 | |
1.04. Company
|
1-2 | |
1.05. Date of Termination
|
1-2 | |
1.06. Eligible Employee
|
1-2 | |
1.07. Notice of Termination
|
1-2 | |
1.08. Participant
|
1-2 | |
1.09. Retirement
|
1-2 | |
1.10. Termination of Employment
|
1-2 | |
1.11. Termination for Good Reason
|
1-3 | |
|
||
ARTICLE 2 Participation
|
2-1 | |
2.01. Commencement of Participation
|
2-1 | |
2.02. Termination of Participation
|
2-1 | |
ARTICLE 3 Eligibility for Benefits
|
3-1 | |
3.01. Eligibility for Benefits
|
3-1 | |
3.02. Amount of Benefits
|
3-1 | |
3.03. Mitigation of Benefits
|
3-2 | |
3.04. Payment Method
|
3-2 |
i
Page | ||
3.05. Benefits in the Event of a Participants Death
|
3-2 | |
|
||
ARTICLE 4 General Provisions
|
4-1 | |
4.01. Successors: Binding Plan
|
4-1 | |
4.02. Notice
|
4-1 | |
4.03. Companys Right to Terminate
|
4-1 | |
4.04. Termination and Amendment of the Plan
|
4-1 | |
4.05. Companys Right to Pay Benefits Prior to a Change in Control
|
4-2 | |
4.06. Applicable Law
|
4-2 | |
4.07. Severability
|
4-2 | |
|
||
APPENDIX A ELIGIBLE EMPLOYEES OF THE ASSOCIATED BANC-CORP CHANGE OF CONTROL PLAN
|
A-1 |
ii
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1-3
1-4
2-1
3-1
3-2
3-3
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4-2
Installment | ||||||||
Total Benefits | Period for | Date | Date | |||||
Payable in | Payment of | Participation | Participation | |||||
Name | Lump Sum * | Benefits | Begins | Ends |
A-1
A. | Incentive Bonus |
1. | Partial Year Prior to Date of Termination . An incentive bonus for the partial year in which your Date of Termination occurs shall be paid in a lump equal to the current calendar years target bonus pro-rated for the portion of the calendar year prior to the Date of Termination. | ||
2. | Following Date of Termination . An incentive bonus shall be paid, in lump sum, which is equivalent to the sum of two times the target bonuses for the current year. |
B. | Vacation Pay | |
Any accrued unused vacation as of your Date of Termination will be paid to you in a lump sum and will be included in your final payment under the Plan. | ||
C. | Stock Option Plans | |
If you have received options under Associated Long-Term Incentive Stock Option Plan of 1987, n.k.a. the Restated Long-Term Incentive Stock Option Plan, you should carefully review the provisions of that plan and your option agreement regarding termination of employment or retirement. Your rights and Associateds obligations shall be governed by the provisions of the plan. | ||
D. | Outplacement Benefit | |
Outplacement services with an outplacement agency of your choice at a cost not to exceed twenty thousand dollars ($20,000) shall be provided. |
A-2
1
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§
#2-77435
|
§ #333-74307 | |
§
#2-99096
|
§ #333-121012 | |
§
#33-16952
|
§ #333-121011 | |
§
#33-24822
|
§ #333-121010 | |
§
#33-35560
|
§ #333-120711 | |
§
#33-54658
|
§ #333-120714 | |
§
#33-63545
|
§ #333-120713 | |
§
#33-67436
|
§ #333-120710 | |
§
#33-86790
|
§ #333-120709 | |
§
#333-46467
|
|
||
§
#2-98922
|
§ #33-63557 | |
§
#33-28081
|
§ #33-67434 | |
§
#333-156251
|
§ #333-138390 | |
|
§ #333-143784 |
/s/ Karen T. Beckwith | ||||
Karen T. Beckwith | ||||
Director |
/s/ Lisa B. Binder | ||||
Lisa B. Binder | ||||
Director |
/s/ Ruth M. Crowley | ||||
Ruth M. Crowley | ||||
Director |
/s/ Robert C. Gallagher | ||||
Robert C. Gallagher | ||||
Director |
/s/ Ronald R. Harder | ||||
Ronald R. Harder | ||||
Director |
/s/ William R. Hutchinson | ||||
William R. Hutchinson | ||||
Director |
/s/ Eileen A. Kamerick | ||||
Eileen A. Kamerick | ||||
Director |
/s/ Richard T. Lommen | ||||
Richard T. Lommen | ||||
Director |
/s/ John C. Meng | ||||
John C. Meng | ||||
Director |
/s/ J. Douglas Quick | ||||
J. Douglas Quick | ||||
Director |
/s/ Dr. Carlos E. Santiago | ||||
Dr. Carlos E. Santiago | ||||
Director |
/s/ John C. Seramur | ||||
John C. Seramur | ||||
Director | ||||
Date: February 26, 2009 | /s/ Paul S. Beideman | |||
Paul S. Beideman | ||||
Chairman and Chief Executive Officer | ||||
Date: February 26, 2009 | /s/ Joseph B. Selner | |||
Joseph B. Selner | ||||
Chief Financial Officer |
/s/ Paul S. Beideman | ||||
Paul S. Beideman | ||||
Chief Executive Officer
February 26, 2009 |
||||
/s/ Joseph B. Selner | ||||
Joseph B. Selner | ||||
Chief Financial Officer
February 26, 2009 |
||||