1995 Management Recognition Plan for Directors
BANK WEST FINANCIAL CORPORATION
1995 MANAGEMENT RECOGNITION
PLAN FOR DIRECTORS AND TRUST AGREEMENT
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Bank West Financial Corporation (the "Corporation") hereby
establishes the 1995 Management Recognition Plan (the "Plan") for the Directors
of the Corporation and its subsidiary, Bank West, F.S.B. (the "Bank"), and a
Trust (the "Trust") upon the terms and conditions hereinafter stated in this
1995 Management Recognition Plan for Directors and Trust Agreement (the
1.02 The Trustees hereby accept this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to improve the growth and profitability
of the Corporation by providing non-employee directors of the Corporation with a
proprietary interest in the Corporation as compensation for their contributions
to the Corporation and its Subsidiaries and as an incentive to make such
contributions in the future.
The following words and phrases when used in this Agreement, unless the
context clearly indicates otherwise, shall have the meanings set forth below.
Wherever appropriate, the masculine pronouns shall include the feminine pronouns
and the singular shall include the plural.
3.01 "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under the Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate.
3.02 "Board" means the Board of Directors of the Corporation.
3.03 "Code" means the Internal Revenue Code of 1986, as amended.
3.04 "Committee" means the entire Board of Directors of the Corporation
which administers the Plan pursuant to Article IV hereof.
3.05 "Common Stock" means shares of common stock, par value $.01 per
share, of the Corporation.
3.06 "Disability" means any physical or mental impairment which
qualifies an Employee for disability benefits under the applicable long-term
disability plan maintained by the Corporation or any Subsidiary or, if no such
plan applies, which would qualify such Employee for disability benefits under
the Federal Social Security System.
3.07 "Effective Date" means the date on which the stockholders of the
Corporation approve this Plan, which shall not be earlier than the sixth month
anniversary of the consummation of the Offering.
3.08 "Employee" means any person who is employed by the Corporation or
any Subsidiary, including officers or other employees who may be directors of
3.09 "Exchange Act" means the Securities Exchange Act of 1934, as
3.10 "Non-employee Director" means a member of the Board who is not an
3.11 "Offering" means the offering of Common Stock to the public
pursuant to the Plan of Conversion of Bank West, F.S.B.
3.12 "Plan Shares" or "Shares" means shares of Common Stock held in the
Trust which may be distributed to a Recipient pursuant to the Plan.
3.13 "Plan Share Award" or "Award" means a right granted under this
Plan to receive a distribution of Plan Shares upon completion of the service
requirements described in Article VII.
3.14 "Recipient" means a Non-employee Director who receives a Plan
Share Award under the Plan.
3.15 "Subsidiary" means any subsidiaries of the Corporation, including
the Bank, which, with the consent of the Board, agree to participate in this
3.16 "Trustee" or "Trustees" means those person or persons (which may
be members of the Committee), or firm or other entity, nominated by the
Committee and approved by the Board pursuant to Sections 4.01 and 4.02 to hold
legal title to the Plan assets for the purposes set forth herein.
ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and
interpreted by the Committee, which shall consist of the members of the entire
Board. The Committee shall have all of the powers allocated to it in this and
other sections of the Plan. The interpretation and construction by the Committee
of any provisions of the Plan or of any Plan Share Award granted hereunder shall
be final and binding. The Committee shall act by vote or written consent of a
majority of its members. Subject to the express provisions and limitations of
the Plan, the Committee may adopt such rules, regulations and procedures as it
deems appropriate for the conduct of its affairs. The Committee shall report its
actions and decisions with respect to the Plan to the Board at appropriate
times, but in no event less than one time per calendar year. The Committee shall
appoint one or more persons (which may be from among its members), or a firm or
other entity, to act as Trustee(s) in accordance with the provisions of this
Plan and Trust and the terms of Article VIII hereof.
4.02 Role of the Board. The Trustee or Trustees shall be appointed or
approved by, and will serve at the pleasure of, the Committee. The Committee may
in its discretion from time to time remove or replace the Trustees.
4.03 Limitation on Liability. No member of the Committee shall be
liable for any determination made in good faith with respect to the Plan or any
Plan Shares or Plan Share Awards granted under it. If a member of the Committee
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of anything done or not done by him in such capacity
under or with respect to the Plan, the Corporation shall, subject to the
requirements of applicable laws and regulations, indemnify such member against
all liabilities and expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in the best interests of the Corporation and any
Subsidiaries and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
4.04 Compliance with Laws and Regulations. All awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency or stockholders as
may be required.
5.01 Amount and Timing of Contributions. The Board shall determine the
amount (or the method of computing the amount) and timing of any contributions
by the Corporation to the Trust established under this Plan. Such amounts may be
paid in cash or in shares of Common Stock and shall be paid to the Trust at the
designated time of contribution. No contributions by Non-employee Directors
shall be permitted.
5.02 Investment of Trust Assets; Number of Plan Shares. Subject to
Section 8.02 hereof, the Trustees shall invest all of the Trust's assets
primarily in Common Stock. The aggregate number of Plan Shares available for
distribution pursuant to this Plan in the first year following the Offering,
subject to adjustment as provided in Section 9.01 hereof, shall be equal to 1.2%
of the shares of Common Stock which are issued by the Corporation in the
Offering (rounded down to the nearest whole number), which shares shall be
acquired by the Trust following receipt of stockholder approval of the Plan with
funds contributed by the Corporation or its Subsidiaries.
6.01 Eligibility. Plan Share Awards shall be made to each Non-employee
(a) Initial Grant. A Plan Share Award shall be granted to each
Non-employee Director on the date this Plan is approved by the stockholders of
the Corporation. Specifically, each Non-employee Director shall receive a Plan
Share Award for the number of whole shares of Common Stock (rounded down to the
nearest whole number) determined by multiplying the number of shares of Common
Stock which may be acquired pursuant to this Plan in the first year following
the Offering by 90% and dividing such product by the number of Non-employee
Directors at such time.
(b) Grant on One-Year Anniversary Date. A Plan Share Award
shall be allocated to each Non-employee Director on the one-year anniversary of
the date this Plan is approved by stockholders of the Corporation. Specifically,
each Non-employee Director shall receive a Plan Share Award for the number of
whole shares of Common Stock (rounded down to the nearest whole number)
determined by dividing the remaining number of shares of Common Stock which may
be acquired pursuant to this Plan in the first year following the Offering by
the number of Non-employee Directors at such time.
(c) Subsequent Grants. In the event any Plan Share Awards granted to a
Non-employee Director expire or terminate for any reason before they have been
earned in full, the unearned shares subject to those expired or terminated Plan
Share Awards shall be granted to persons who become a Non-employee Director for
the first time following the date Plan Share Awards are granted pursuant to
Section 6.01(b) above, as follows: (1) on the date such person is first
appointed or elected as a Non-employee Director, he shall receive a Plan Share
Award for 500 shares or such lesser number of shares as may be available for
grants under the Plan; and (2) if such person does not receive a Plan Share
Award for 500 shares as of the date he is first appointed or elected as a
Non-employee Director because sufficient shares were not available, he shall
receive one or more additional grants as of each day, if any, that a Plan Share
Award subsequently expires or terminates until the number of Plan Share Awards
granted to him shall aggregate 500 shares.
6.02 Form of Allocation. As promptly as practicable after a Plan Share
Award is to be issued, the Committee shall notify the Recipient in writing of
the grant of the Award, the number of Plan Shares covered by the Award, and the
terms upon which the Plan Shares subject to the Award shall be distributed to
the Recipient. Such terms shall be reflected in a written agreement with the
Recipient. The Committee shall maintain records as to all grants of Plan Share
Awards under the Plan.
6.03 Maximum Number of Plan Shares to any Non-Employee Director. During
the life of this Plan, no Non-employee shall be granted Plan Share Awards
pursuant to this Plan covering an aggregate number of Plan Shares in excess of
.2% of the shares of Common Stock issued and sold by the Corporation in the
Offering, subject to adjustment as provided in Section 9.01 hereof.
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earning Plan Shares; Forfeitures.
(a) General Rules. Subject to the terms hereof, Plan Shares
covered by an Award shall be earned by the Recipient at the rate of 20% of the
aggregate number of Shares covered by the Award as of each annual anniversary of
the date of grant of the Award. If service as a director by a Recipient is
terminated prior to the fifth anniversary of the date of grant of a Plan Share
Award for any reason (except as specifically provided in subsections (b) and (c)
below), the Recipient shall forfeit the right to any Shares subject to the Award
which have not theretofore been earned.
In determining the number of Plan Shares which are to be earned,
fractional Shraes shall be rounded down to the nearest whole number, provided
that such fractional Shares shall be aggregated and distributed on the fifth
annual anniversary of the date of grant.
(b) Exception for Terminations Due to Death or Disability.
Notwithstanding the general rule contained in Section 7.01(a), all Plan Shares
subject to a Plan Share Award held by a Recipient whose service as a director of
the Corporation terminates due to death or Disability shall be deemed earned as
of the Recipient's last day of service with the Corporation and shall be
distributed as soon as practicable thereafter; provided, however, that no Awards
shall be distributed prior to six months from the date of grant of the Plan
(c) Revocation for Misconduct. Notwithstanding anything
hereinafter to the contrary, the Board shall immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been distributed hereunder to the
Recipient, whether or not yet earned, in the case of any Non-employee Director
who is removed from service as a director of the Corporation for cause (as
hereinafter defined). Removal from office for cause shall include termination
because of personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and desist order. For purposes of
this paragraph, no act or failure to act on the part of the Non-employee
Director shall be considered "willful" unless done, or omitted to be done, by
the Non-employee Director not in good faith and without reasonable belief that
the action or omission of the Non-employee Director was in the best interest of
the Corporation and its Subsidiaries.
7.02 Distribution of Dividends. Any cash dividends or stock dividends
declared in respect of each Plan Share held by the Trust will be paid by the
Trust, as soon as practicable after the Trust's receipt thereof, to the
Recipient on whose behalf such Plan Share is then held by the Trust.
7.03 Distribution of Plan Shares.
(a) Timing of Distributions: General Rule. Except as provided
in Section 7.03(b), Plan Shares shall be distributed to a Recipient or his
Beneficiary, as the case may be, as soon as practicable after they have been
earned, provided, however, that no Plan Shares shall be distributed to a
Recipient or Beneficiary pursuant to a Plan Share Award within six months from
the date on which that Plan Share Award was granted to such person. In addition,
no Plan Shares shall be distributed unless and until all of the requirements of
law and of all regulatory agencies having jurisdiction over the issuance and
delivery of the Plan Shares shall have been fully complied with, including the
receipt of approval of the Plan by the stockholders of the Corporation by such
vote, if any, as may be required by applicable laws and regulations.
(b) Timing: Exception for 10% Stockholders. Notwithstanding
Section 7.03(a) above, no Plan Shares may be distributed prior to the date which
is five years from the date of consummation of the Offering to the extent the
Recipient or Beneficiary, as the case may be, would after receipt of such Shares
own in excess of 10% of the issued and outstanding shares of Common Stock. Any
Plan Shares remaining undistributed solely by reason of the operation of this
Section 7.03(b) shall be distributed to the Recipient or his Beneficiary on the
date which is five years from the date of consummation of the Offering.
(c) Form of Distributions. All Plan Shares, together with any
Shares representing stock dividends, shall be distributed in the form of Common
Stock. One share of Common Stock shall be given for each Plan Share earned and
distributable. Payments representing cash dividends shall be made in cash.
(d) Withholding. The Trustees may withhold from any cash
payment or Common Stock distribution made under this Plan sufficient amounts to
cover any applicable withholding and employment taxes, and if the amount of a
cash payment is insufficient, the Trustees may require the Recipient or
Beneficiary to pay to the Trustees the amount required to be withheld as a
condition of delivering the Plan Shares. The Trustees shall pay over to the
Corporation or any Subsidiary which employs or employed such Recipient any such
amount withheld from or paid by the Recipient or Beneficiary.
(e) Restrictions on Selling of Plan Shares. Plan Share Awards
may not be sold, assigned, pledged or otherwise disposed of prior to the time
that they are earned and distributed pursuant to the terms of this Plan.
Following distribution, the Committee may require the Recipient or his
Beneficiary, as the case may be, to agree not to sell or otherwise dispose of
his distributed Plan Shares except in accordance with all then applicable
federal and state securities laws, and the Committee may cause a legend to be
placed on the stock certificate(s) representing the distributed Plan Shares in
order to restrict the transfer of the distributed Plan Shares for such period of
time or under such circumstances as the Committee, upon the advice of counsel,
may deem appropriate.
7.04 Voting of Plan Shares. After a Plan Share Award has been made, the
Recipients shall be entitled to direct the Trustees as to the voting of the Plan
Shares which are covered by the Plan Share Award and which have not yet been
earned and distributed to them pursuant to Section 7.03, subject to rules and
procedures adopted by the Committee for this purpose. If the Recipient does not
direct the Trustees as to the voting of Plan Shares which have not yet been
earned and distributed pursuant to Section 7.03, such shares shall not be voted
by the Trustees. In the event a tender offer is made for Plan Shares, the
Trustees shall tender Plan Shares held by the Plan which have not yet been
earned and distributed in accordance with instructions from the Recipient.
8.01 Trust. The Trustees shall receive, hold, administer, invest and
make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
8.02 Management of Trust. It is the intent of this Plan and Trust that
the Trustees shall have complete authority and discretion with respect to the
arrangement, control and investment of the Trust, and that the Trustees shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except (i) to the extent that the Trustees determine that the
holding of monies in cash or cash equivalents is necessary to meet the
obligations of the Trust and (ii) contributions to the Trust by the Corporation
and Subsidiary may be temporarily invested in such interest-bearing account or
accounts as the Trustees shall determine to be appropriate. In performing their
duties, the Trustees shall have the power to do all things and execute such
instruments as may be deemed necessary or proper, including the following
(a) To invest up to 100% of all Trust assets in Common Stock
without regard to any law now or hereafter in force limiting investments for
trustees or other fiduciaries. The investment authorized herein may constitute
the only investment of the Trust, and in making such investment, the Trustees
are authorized to purchase Common Stock from the Corporation or from any other
source, and such Common Stock so purchased may be outstanding, newly issued or
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above, in such deposit accounts, certificates of deposit,
obligations of the United States Government or its agencies or such other
investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at
any time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be
registered in the name of a nominee, without the addition of words indicating
that such security is an asset of the Trust (but accurate records shall be
maintained showing that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may in
the opinion of the Trustees be reasonable for the proper operation of the Plan
(f) To employ brokers, agents, custodians, consultants and
(g) To hire counsel to render advice with respect to their
rights, duties and obligations hereunder, and such other legal services or
representation as they may deem desirable.
(h) To hold funds and securities representing the amounts to
be distributed to a Recipient or his Beneficiary as a consequence of a dispute
as to the disposition thereof, whether in a segregated account or held in common
with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustees
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of a court for the exercise of any power
herein contained, or to give any bond.
8.03 Records and Accounts. The Trustees shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.04 Expenses. All costs and expenses incurred in the operation and
administration of this Plan shall be borne by the Corporation and its
8.05 Indemnification. Subject to the requirements of applicable laws
and regulations, the Corporation shall indemnify, defend and hold the Trustees
harmless against all claims, expenses and liabilities arising out of or related
to the exercise of the Trustees' powers and the discharge of their duties
hereunder, unless the same shall be due to their gross negligence or willful
9.01 Adjustments for Capital Changes. The aggregate number of Plan
Shares available for distribution pursuant to the Plan Share Awards, the number
of Shares to which any Plan Share Award relates and the maximum number of Plan
Shares which may be granted to any Non-employee Director shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the Offering resulting
from any split, subdivision or consolidation of shares or other capital
adjustment, or other increase or decrease in such shares effected without
receipt or payment of consideration by the Corporation.
9.02 Amendment and Termination of Plan. The Board may, by resolution,
at any time amend or terminate the Plan, subject to (i) any required stockholder
approval or any stockholder approval which the Board may deem to be advisable
for any reason, such as for the purpose of obtaining or retaining any statutory
or regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements, and (ii) compliance with all
applicable federal and state laws, rules and regulations. The Board may not,
without the consent of the holder of a Plan Share Award, alter or impair any
Plan Share Award previously granted under this Plan as specifically authorized
herein. Termination of this Plan shall not affect Plan Share Awards previously
granted, and such Plan Share Awards shall remain valid and in effect until they
(a) have been fully earned, (b) are surrendered, or (c) expire or are forfeited
in accordance with their terms. Notwithstanding anything contained in this Plan
to the contrary, the provisions of Articles VI and VII of this Plan shall not be
amended more than once every six months, other than to comport with changes in
the Code, the Employee Retirement Income Security Act of 1974, as amended, or
the rules and regulations promulgated under such statutes.
9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Recipient, and during the lifetime of the Recipient,
Plan Shares may only be earned by and paid to a Recipient who was notified in
writing of an Award by the Committee pursuant to Section 6.02. No Recipient or
Beneficiary shall have any right in or claim to any assets of the Plan or Trust,
nor shall the Corporation or any Subsidiary be subject to any claim for benefits
9.04 Service Rights. Neither the Plan nor any grant of a Plan Share
Award or Plan Shares hereunder nor any action taken by the Trustees, the
Committee or the Board in connection with the Plan shall create any right on the
part of any Non-employee Director to continue as such.
9.05 Voting and Dividend Rights. No Recipient shall have any voting or
dividend rights or other rights of a stockholder in respect of any Plan Shares
covered by a Plan Share Award, except as expressly provided in Sections 7.02 and
7.04 above, prior to the time said Plan Shares are actually earned and
distributed to him.
9.06 Governing Law. The Plan and Trust shall be governed by the laws of
the State of Michigan.
9.07 Effective Date. This Plan shall be effective as of the Effective
Date, and Awards may be granted hereunder as of or after the Effective Date and
as long as the Plan remains in effect.
9.08 Term of Plan. This Plan shall remain in effect until the earlier
of (a) ten (10) years from the Effective Date, (b) termination by the Board, or
(c) the distribution to Recipients and Beneficiaries of all assets of the Trust.
9.09 Tax Status of Trust. It is intended that the trust established
hereby be treated as a Grantor Trust of the Corporation under the provisions of
Section 671 et seq. of the Code, as the same may be amended from time to time.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and the corporate seal to be affixed
and duly attested, and the initial Trustees of the Trust established pursuant
hereto have duly and validly executed this Agreement, all on this 14th day of
ATTEST: BANK WEST FINANCIAL CORPORATION
/s/ Joseph F. Kirkwood By: /s/ Paul W. Sydloski
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Joseph F. Kirkwood Paul W. Sydloski
and Chief Executive Officer
/s/ Jacob Haisma
/s/ George Jackoboice
/s/ Richard Bishop