EXHIBIT 10.2
COMPASS BANCSHARES, INC.
2002 INCENTIVE COMPENSATION PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of __________ ___, 2005,
between grantor Compass Bancshares, Inc., a Delaware corporation (the
"Corporation"), Compass Bank ("Compass"), and grantee, ____________________
(the "Employee").
W I T N E S S E T H:
The Compensation Committee of the Board of Directors of the Corporation
(the "Compensation Committee") on ___________ ___, 2005, upon the request of
Compass Bank, approved the grant to Employee of awards under the Corporation's
2002 Incentive Compensation Plan (the "Plan") and established the terms and
conditions of such awards, as contained in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF OPTION. Employee shall have the right and option to
purchase on the terms and conditions set forth herein and in the Plan, all or
any part of an aggregate of ___________ shares ("Option Shares") of the $2.00
par value common stock of the Corporation (the "Common Stock") at the purchase
price of $_______ per share (the "Option Price"). The Option Price is 100% of
the fair market value of the Common Stock on _____________ ___, 2005, the date
of the grant of the option covered by this Agreement.
2. TERMS AND CONDITIONS. It is understood and agreed that the option
evidenced hereby is subject to the following terms and conditions:
(a) Expiration Date. The option shall expire on _____________
___, 2015 (the "Expiration Date"). After the Expiration Date, Employee shall
have no further rights to exercise any option granted hereunder. Nothing
contained in this Agreement, including without limitation no part of this
Section 2 or Section 8, shall extend the time period during which the option
can be exercised beyond the Expiration Date.
(b) Exercise of Option. The option covered by this Agreement
may be exercised by Employee from time to time, in whole or in part, up to the
amount set forth in the following schedule during the period beginning on the
date indicated below and ending on the Expiration Date:
On or after Options exercisable
----------- -------------------
____________, 2006 50% of aggregate shares
____________, 2007 25% of aggregate shares
____________, 2008 25% of aggregate shares
(c) Method of Exercise and Payment of Purchase Price Upon
Exercise. The method of exercise of the option shall be by giving written
notice to the Corporation. Payments shall be made at the time of exercise and
shall be in cash or in shares of Common Stock. In the event payment is made in
shares of Common Stock, such shares shall be valued at their fair market value
on the date of exercise, as indicated by the closing stock price at the close
of regular trading hours of the primary stock exchange or market on which the
Common Stock is traded on that date. The option is not exercised until both
the written notice and the payment for the shares exercised are actually
received by the Corporation.
(d) Exercise Upon Death. In the event that Employee ceases to
be employed by Corporation or its subsidiaries by reason of death, the option
shall become immediately exercisable, notwithstanding the schedule in Section
2(b) hereof, and may thereafter be exercised as to all shares subject to the
option by the legal representative of the estate, by the person or persons
entitled to the option under the Employee's will or the laws of descent and
distribution, as appropriate, or by Employee's transferee under Section 7(b)
hereof, until the Expiration Date.
(e) Exercise Upon Termination of Employment While Disabled. In
the event that Employee ceases to be employed by the Corporation or its
subsidiaries while Disabled, as defined below, except for Cause, as defined in
Section 8, the option shall become immediately exercisable, notwithstanding the
schedule in Section 2(b) hereof, and may thereafter be exercised as to all
shares subject to the option until the Expiration Date. As an express
condition to the applicability of this Section 2(e), Employee agrees to
cooperate with the Corporation in determining whether Employee is Disabled,
including without limitation providing documentation from health care providers
and submitting to medical examinations upon request by the Corporation. For
purposes of this Agreement, Employee shall be considered to be Disabled if
Employee is totally and permanently disabled according to the standards
contained in the Corporation's long-term disability plan, as applied by the
Corporation, or according to such other reasonable standard that the
Corporation may apply, in its sole discretion.
(f) Exercise Upon Normal or Early Retirement. In the event
that Employee ceases to be employed by the Corporation or its subsidiaries by
reason of Normal Retirement or Early Retirement (as defined below), the option
shall become immediately exercisable, notwithstanding the schedule in Section
2(b) hereof, and may thereafter be exercised as to all shares subject to the
option until the Expiration Date. For the purposes of this section 2(f) "Early
Retirement" shall mean the Employee's retirement on a date prior to the
Employee's 65th birthday and "Normal Retirement" shall mean the Employee's
retirement on or following the Employee's 65th birthday.
(g) Exercise Upon Termination of Employment by Reason Other
than Death, Disability, or Retirement. The option or any unexercised portions
thereof shall expire upon termination of Employee's employment with the
Corporation or its subsidiaries for any reason, except as provided in Section
2(d), Section 2(e), Section 2(f), and this Section 2(g). If Employee's
employment with the Corporation or its subsidiaries
is terminated by either party prior to 15 days after the initial vesting of any
of the options as set forth in Section 2(b), then 5% of the Option Shares shall
be deemed vested, notwithstanding the schedule in Section 2(b), and available
for exercise by the employee within 30 days after the termination of Employee's
employment with the Corporation or its subsidiaries. The option may be exercised
in whole or in part until the Expiration Date in the event of the Employee's
termination of employment (i) at any time after a "Sale of the Corporation" as
defined in Section 8 hereof, or (ii) within the meaning of the Compass
Bancshares, Inc. Severance Pay Plan, as such Plan may exist from time to time
(including any amendment to, modification of, addition to, deletion from, or
replacement of said Plan), that results in eligibility for benefits under such
Plan, provided that this provision is not intended to, and does not, constitute
a guarantee or promise that the Compass Bancshares, Inc. Severance Pay Plan (in
its current or any future form) will be continued and the Corporation expressly
reserves all rights to amend, modify, add to, delete from, and terminate such
Plan. Upon the Employee's termination in the event of (i) or (ii) above, any
unexercised portion of the option shall vest and become subject to exercise
immediately and the schedule set forth in Section 2(b) hereof shall become void.
The exercise of the option after termination of employment may cause the option
to become a non-qualified stock option. Nothing contained in this Agreement
shall extend the time period set forth in Section 2(a) during which the option
can be exercised.
3. INCENTIVE STOCK OPTION. This option is intended to be an
incentive stock option within the meaning of Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code") for all of the shares subject to
the option hereunder. To the extent that any option does not qualify as an
incentive stock option, it shall constitute a separate non-qualified stock
option.
4. NO RIGHTS AS SHAREHOLDER. No option granted hereunder shall
entitle the holder thereof to any rights as a shareholder in the Corporation
with respect to any shares to which the option relates until such option has
been exercised properly and paid for in full and the corresponding shares
issued.
5. RESTRICTIONS ON TRANSFER OF SHARES. Employee hereby agrees for
himself or herself and his or her legal representative, heirs and distributees,
that if a registration statement covering the shares issuable upon exercise of
any option hereunder is not effective under the Securities Act of 1933, as
amended (the "Act"), at the time of such exercise, or if some other exemption
from the provisions of the Act is not available, then all shares of Common
Stock then received or purchased upon such exercise shall be acquired for
investment, and that the notice of exercise delivered to the Corporation shall
be accompanied by a representation in writing acceptable in scope and form to
counsel to the Corporation and signed by Employee or Employee's legal
representative, heirs or distributees, as the case may be, to the effect that
the shares are being acquired in good faith for investment and not with a view
to distribution thereof. Any shares so acquired may be deemed restricted
securities under Rule 144 as promulgated by the Securities and Exchange
Commission under the Act, and as the same may be amended or replaced and
subject to restrictions upon sale or other disposition and may bear any
required legend, or other legend deemed appropriate by the Corporation, to that
effect.
6. REGISTRATION OF SHARES. If at any time the Board of Directors of
the Corporation or the Compensation Committee shall determine that the listing,
registration or qualification of any shares subject to the option upon any
securities exchange, or under any state or federal law, or the consent or
approval of any governmental or regulatory body is necessary or desirable as a
condition of or in connection with the issuance or purchase of shares
hereunder, the option may not be exercised in whole or in part unless such
listing, registration, qualification, consent, or approval has been effected or
obtained free of any conditions not acceptable to the Board of Directors or to
the Compensation Committee.
7. TRANSFER OF RIGHTS. (a) This option is not transferable except by
will or by the laws of descent and distribution and shall be exercisable during
Employee's lifetime only by Employee. After the death of Employee, this option
may be exercised only by Employee's estate or by the person or persons entitled
to the option under Employee's will or the laws of descent and distribution, as
appropriate. In the event the option is transferred by reason of the
Employee's death, the option may be exercised thereafter only to the extent
that the Employee would have been entitled to exercise the option had the
option not been transferred.
(b) To the extent the option evidenced hereby does not qualify
as an "incentive stock option" under the Code, it may be transferred only under
the following circumstances: (i) by will or the laws of descent and
distribution, in which case the option may be exercised in accordance with the
provisions applicable to incentive stock options set forth above or (ii) by
gift or pursuant to a domestic relations order to a family member (or a trust
for their benefit), in which case the Employee shall promptly report the
transfer to the Secretary of the Corporation so that the Corporation may
deliver to his transferee all requisite documents concerning the Plan
(including the prospectus meeting the requirements of Section 10(a) of the
Securities Act of 1933, as amended). For this purpose, "family member"
includes any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, a trust in which these persons have more than fifty
(50) percent of the beneficial interest, a foundation in which these persons
(or the Employee) control the management of assets, and any other entity in
which these persons (or the Employee) own more than fifty (50) percent of the
voting interests. In the event the option is transferred pursuant to Section
7(b)(ii), the transferee may exercise the option only to the extent that the
Employee (or the Employee's estate) would have been entitled to exercise the
option had the option not been transferred.
(c) This Section 7 replaces any provision governing the
Employee's ability to transfer his rights in an option contained in any
incentive stock option agreement between the Corporation and the Employee
entered into as of a date prior to the date of this Agreement only to the
extent the option evidenced by such agreement does not qualify as an "incentive
stock option" under the Code.
8. COVENANTS. In consideration of the Corporation, Compass, or one
or more of the subsidiaries or affiliates of either (hereinafter collectively
referred to as "the Company") disclosing confidential and proprietary
information, as more fully described in section 8(c) below, after the date
hereof, the grant by the Corporation of the option, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Employee, the Corporation, and Compass, intending to be legally bound, hereby
agree as follows:
(a) While Employee is employed by the Company, Employee will
devote his or her entire time, energy and skills to the service of the Company.
Such employment shall be at the pleasure of the board of directors of each
employing corporation. Except as provided in Section 2 hereof, no option
granted under this Agreement shall be exercised after the termination of
Employee's employment with the Company. Nothing contained in this Agreement
shall extend the time period set forth in Section 2(a) during which the option
can be exercised.
(b) Employee will not, during the term of his or her employment
with the Company, or for a period of two years after termination for any reason
of his or her employment with the Company, directly or indirectly, either
individually or as a stockholder, director, officer, consultant, independent
contractor, employee, agent, member or otherwise of or through any corporation,
partnership, association, joint venture, firm, individual or otherwise
(hereinafter "Firm"), or in any other capacity:
(i) Carry on or engage in a business that competes with
the business of the Company within 100 miles of any city where Employee engaged
in business, Employee had responsibility, other employees that were supervised
by Employee worked, or Employee otherwise conducted business for the Company;
(ii) With respect to any type of product or service
offered by or available from the Company, solicit, directly or indirectly, or
do any such business with any customer of the Company called on, serviced by,
or contacted by the Employee in any capacity, or otherwise known to the
Employee by virtue of the Employee's employment with the Company in any state
in which the Employee was employed by the Company or any state in which the
customer does business; or
(iii) Solicit, directly or indirectly, any employee of the
Company to leave their employment with the Company for any reason. For
purposes of this Agreement, the Company and Employee agree that Employee shall
be presumed to have solicited an employee in violation of this Agreement if
such employee is hired by Employee or his or her Firm within six (6) months of
Employee's last employment date with the Company.
(c) The Company shall provide confidential information to
Employee and, Employee agrees, during the term of his or her employment and
thereafter, not to use, divulge, or furnish or make accessible to any third
party, company, corporation or other organization (including, but not limited
to, customers, competitors, or governmental
agencies), without the Company's prior written consent, any trade secrets,
customer lists, information regarding customers, information regarding Compass'
relationships with specific existing or prospective customers, customer goodwill
associated with Compass' trade name, or other valuable confidential and
proprietary information concerning the Company or its business, including
without limitation, confidential methods of operation and organization, trade
secrets, confidential matters related to pricing, markups, commissions and
customer lists. Employee warrants and agrees that every customer whom Employee
services in any way while employed at the Company is a customer of the Company
and not a customer of Employee, individually. Employee agrees that such
information remains confidential even if committed to Employee's memory.
(d) Employee agrees that the restrictions contained in this
Section 8 are necessary and reasonable for the protection of the legitimate
business interests and goodwill of the Company described above, and Employee
agrees that any breach of this Section 8 will cause the Company substantial and
irrevocable damage and, therefore, the Company shall have the right, in
addition to any other remedies it may have, to seek specific performance and
injunctive relief, without the need to post a bond or other security. Employee
agrees that the period during which the covenant contained in this Section 8
shall be effective shall be computed by excluding from such computation any
time during which Employee is in violation of any provision of Section 8.
Employee agrees that if any covenant contained in Section 8 of this Agreement
is found by a court of competent jurisdiction to contain limitations as to
time, geographical area, or scope of activity that are not reasonable and
impose a greater restraint than is necessary to protect the goodwill or other
business interest of the Company, then the court shall reform the covenant to
the extent necessary to cause the limitations contained in the covenant as to
time, geographical area, and scope of activity to be restrained to be
reasonable and to impose a restraint that is not greater than necessary to
protect the goodwill and other business interests of the Company and to enforce
the covenant as reformed.
(e) Employee specifically recognizes and affirms that each of
the covenants contained in subdivisions (b) and (c) of this Section 8 is a
material and important term of this Agreement which has induced the Company to
provide for the award of the option granted hereunder, the disclosure of
confidential information referenced herein, and the other promises made by the
Company herein, and Employee further agrees that should all or any part or
application of subdivisions (b) or (c) of Section 8 of this Agreement be held
or found invalid or unenforceable for any reason whatsoever by a court of
competent jurisdiction in an action between Employee and the Corporation,
Compass, or an affiliate of either, the Corporation shall be entitled to
receive (but not obligated to acquire) from Employee all Common Stock held by
Employee which was obtained by Employee under this Agreement (including all
shares obtained by virtue of any stock dividend or distribution,
recapitalization, merger, consolidation, split-up, combination, exchange of
shares, or other transaction, hereinafter "stock dividends") by returning to
Employee for each share received the Option Price paid by Employee (as adjusted
for stock dividends). If Employee has sold, transferred, or otherwise disposed
of Common Stock obtained under this Agreement (including all shares obtained by
virtue of any stock dividend), the Corporation shall be entitled to
receive from Employee the difference between the Option Price paid by Employee
and the fair market value of the Common Stock (including all shares obtained by
virtue of any stock dividends) on the date of sale, transfer, or other
disposition.
(f) Notwithstanding any provision to the contrary herein
contained, Section 8(b) shall not apply:
(i) Upon the termination of the Employee's employment by
the Corporation other than for Cause within one (1) year following a Sale of
the Corporation; and
(ii) Upon the voluntary termination of employment by the
Employee for any reason within the thirty (30) day period immediately after the
one (1) year period following a Sale of the Corporation.
For purposes of this Agreement, "Cause" shall mean (i) commission of a felony
or a crime involving moral turpitude, that is materially and demonstrably
injurious to the Corporation, (ii) substantial dependence or addiction to any
drug illegally taken or to alcohol, or (iii) willful dereliction of duties or
gross misconduct that is materially and demonstrably injurious to the
Corporation.
For purposes of this Agreement, "Sale of the Corporation" shall mean (i) the
acquisition by any individual, entity or group (within the meaning of Sections
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either the
then outstanding shares of common stock of the Corporation (the "Outstanding
Common Stock") or the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors (the "Outstanding Voting Securities"), or (ii) consummation by the
Corporation of a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets of the Corporation;
unless, following such acquisition of beneficial ownership or transaction, (A)
more than 60% of the then outstanding shares of common stock of the Person
resulting from such reorganization, merger or consolidation, or (B) more than
60% of the then outstanding shares of common stock of the Person acquiring such
beneficial ownership or assets, and the combined voting power of the then
Outstanding Voting Securities of such Person entitled to vote generally in the
election of directors of such Person is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals or entities who were
the beneficial owners, respectively, of Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such acquisition or
transaction, in substantially the same proportion as their ownership of
Outstanding Common Stock and Outstanding Voting Securities prior to such event.
(g) This Section 8 replaces section 8 in all stock option
agreements between the Corporation and the Employee entered into as of a date
prior to the date of
this Agreement. All such prior agreements are hereby amended to include this
Section 8 in place of section 8 in any such prior agreements.
9. DISPOSITION OF SHARES. Employee agrees to notify the Corporation
promptly of the disposition of any shares of Common Stock purchased pursuant to
this option which are disposed of within one year after transfer of such shares
to Employee, or within two years of the date of the grant of such option. For
purposes of such notification, "disposition" shall have the meaning assigned to
it in Section 425(c) of the Code.
10. PLAN TO CONTROL. The Plan is incorporated in this Agreement by
this reference. Any question of interpretation or application of the Plan or
this Agreement shall be resolved by the Compensation Committee and its
determination shall be final and binding on the Corporation and Employee. In
the event of any conflict between the provisions of the Plan and of this
Agreement, the Plan shall control. Employee hereby acknowledges receipt of a
copy of the Plan.
11. NOTICES. All notices hereunder shall be in writing and, if to the
Corporation, shall be delivered personally to the Corporate Secretary or mailed
to the Corporation's principal office at 00 Xxxxx 00xx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000, addressed to the attention of the Corporate Secretary; and if to
Employee, shall be delivered personally or mailed to him at the address noted
below. Such addresses may be changed at any time by notice from one party to
the other.
12. BINDING EFFECT. This Agreement shall bind and inure to the
benefit of the parties hereto, the successors and assigns of the Corporation
and the person to whom the rights of Employee are transferred by will or the
laws of descent and distribution.
13. HEADINGS. The section headings used herein are solely for
reference only and shall not affect in any way the meaning and interpretation
of the terms and conditions set forth herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPASS BANCSHARES, INC.
By:_________________________________
Name: Xxxxx X. Xxxxxx
Title: Secretary and General Counsel
COMPASS BANK
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
WITNESS: EMPLOYEE:
____________________ ______________________________
Signature Signature
____________________ Date: ________________________
Printed Name
______________________________
Address
______________________________
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