EXHIBIT 10(b)-7

 

TCF FINANCIAL 1995 INCENTIVE STOCK PROGRAM

 

INCENTIVE STOCK OPTION AGREEMENT

 

 

ISO NO.  95-69

 

                This option is granted on May 11, 1999 by TCF Financial
Corporation (“TCF Financial”) to Craig R. Dahl (the “Optionee”) in accordance
with the following terms and conditions:

 

                                                1.             Option Grant and
Exercise Period.

 

                                a.             TCF Financial hereby grants to
the Optionee an Option (the “Option”) to purchase, pursuant to the TCF Financial
1995 Stock Incentive Program (the “Plan”), and upon the terms and conditions
therein and hereinafter set forth, an aggregate of 13,776 shares (the “Option
Shares”) of common stock of TCF Financial at an exercise price of $29.03125 per
share.  A copy of the Plan, as currently in effect, is incorporated herein by
reference and is attached hereto.

 

                                b.             This Option shall be exercisable
only during the period (the “Exercise Period”) commencing on the date of grant
of this Option, and ending at 5:00 p.m., Minneapolis, Minnesota time, on the
date ten years after the date of grant of this Option, such time and date being
hereinafter referred to as the “Expiration Date.”  This Option shall be
exercisable with respect to twenty-five percent of the Option Shares on January
1, 2000 and with respect an additional twenty five percent of the Option Shares
on January 1, in each of the years 2001, 2002, and 2003 subject to the
Optionee’s continuing employment with TCF Financial or an affiliate through each
such date, except as may be provided under paragraphs 5 and 9 of this Agreement,
provided that the total vesting percentage under this Agreement shall never in
any event exceed 100%.  Subject to the foregoing, during the Exercise Period
this Option shall be exercisable in whole at any time or in part from time to
time, except that no part of this Option shall be exercisable at any time when
the Optionee is in material breach of an employment contract with TCF Financial.

 

                2.             Method of Exercise of this Option.  To the extent
it is exercisable under Section 1.b of this Agreement, this Option may be
exercised during the Exercise Period by giving written notice to TCF Financial
specifying the number of Option Shares to be purchased.  The notice must be in
the form prescribed by the committee referred to in section 2 of the Plan or its
successor (the “Committee”) and directed to the address set forth in paragraph
12 below.  The date of exercise is the date on which such notice is received by
TCF Financial.  Such notice must be accompanied by payment in full for the
Option Shares to be purchased upon such exercise.  Payment shall be made either
(i) in cash, which may be in the form of a check, bank draft, or money order
payable to TCF Financial, or (ii) if the Committee shall have previously
approved such form of payment, by delivering shares of Common Stock already
owned by the Optionee having a “Fair Market Value” (as defined in the Plan as in
effect on the date of the grant of this

 

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Option) equal to the applicable exercise price, or (iii) if the Committee shall
have previously approved such form of payment, a combination of cash and such
shares.  Promptly after such payment, subject to paragraph 3 below, TCF
Financial shall issue and deliver to the Optionee or other person exercising
this Option a certificate or certificates representing the shares of Common
Stock so purchased, registered in the name of the Optionee (or such other
person), or, upon request, in the name of the Optionee (or other person) and in
the name of another jointly with right of survivorship.

 

                3.             Delivery and Registration of Shares of Common
Stock.  TCF Financial’s obligation to deliver shares of Common Stock hereunder
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Optionee or any other
person to whom such shares are to be delivered, in such form as the Committee
shall determine to be necessary or advisable to comply with the provisions of
the Securities Act of 1933, as amended, or any other Federal, state, or local
securities law or regulation.  In requesting any such representation, it may be
provided that such representation requirement shall become inoperative upon a
registration of such shares or other action eliminating  the necessity of such
representation under such Securities Act or other securities law or regulation. 
TCF Financial shall not be required to deliver any shares upon exercise of the
Option prior to (i) the admission of such shares to listing on any stock
exchange or system on which the shares of Common Stock may then be listed, and
(ii) the completion of such registration or other qualification of such shares
under any state or Federal law, rule, or regulation, as the Committee shall
determine to be necessary or advisable.

 

                4.             Non-transferability of this Option.  This Option
may not be assigned, encumbered, or transferred except, in the event of the
death of the Optionee, by will or the laws of descent and distribution to the
extent provided in paragraph 5 below.  This Option is exercisable during the
Optionee’s lifetime only by the Optionee.  The provisions of the Option shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto,
the successors and assigns of TCF Financial, and any person to whom this Option
is transferred by will or by the laws of descent and distribution.

 

                5.             Termination of Service or Death of the Optionee.

 

                                a.             Except as provided in
subparagraphs b. or c. of this paragraph 5 and notwithstanding any other
provision of this Option to the contrary, this Option shall not be exercisable
unless the Optionee, at the time the Optionee exercises this Option, has
maintained “Continuous Service” (as defined herein) since the date of the grant
of this Option.  “Continuous Service” shall mean that the Optionee is an
employee of TCF Financial or a subsidiary of TCF Financial at all times during
the period beginning on the date of the granting of this Option and ending on a
date no earlier than three months before the date of exercise of this Option,
provided that such employment status is determined consistently with the
requirements for this Option to continue to qualify as an incentive stock
option.

 

                                b.             If the Optionee shall cease to
maintain Continuous Service for any reason (excluding disability, retirement or
death), the Optionee may, but only within the period of three

 

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months immediately following such cessation of Continuous Service and in no
event after the Expiration Date, exercise this Option to the extent the Optionee
was entitled to exercise this Option at the date of cessation.  If the Optionee
is terminated for cause, however, all rights under this Option shall expire
immediately upon the giving to the Optionee of notice of such termination.

 

                                c.             In the event of termination of
employment due to retirement, disability or  death of the Optionee while in
Continuous Service of TCF Financial, the Optionee (or in the case of death, the
person to whom the Option has been transferred by will or by the laws of descent
and distribution) may exercise this Option at any time within one year following
such retirement, disability or death to the extent the Optionee was entitled to
exercise this Option at the date of cessation of Continuous Service, but in no
event later than the Expiration Date.  If the Optionee should die within three
months after termination of employment for any reason other than retirement or
disability, the right of the Optionee’s successor-in-interest  to exercise this
Option shall terminate upon the earlier of the Expiration Date or the date three
months after the Optionee’s death.  If the Optionee should die within twelve
months after termination of employment due to retirement or disability, the
right of the Optionee’s successor-in-interest  to exercise this Option shall
terminate upon the later of twelve months after the date of employment
termination or three months after the Optionee’s death, but not later than the
Expiration Date. Following the death of the Optionee, the Committee may, as an
alternative means of settlement of this Option, elect to pay to the person to
whom this Option is transferred by will or by the laws of descent and
distribution the amount by which the Fair Market Value (as defined in the Plan)
of a share of Common Stock on the date of exercise of this Option shall exceed
the Exercise Price per Option Share, multiplied by the number of Option Shares
with respect to which this Option is properly exercised.  Any such settlement of
this Option shall be considered an exercise of this Option for all purposes of
this Option and of the Plan.

 

                6.             Notice of Sale.  The Optionee or any person to
whom the Option or the Option Shares shall have been transferred by will or by
the laws of descent and distribution promptly shall give notice to TCF Financial
in the event of the sale or other disposition of Option Shares within the later
of (i) two years from the date of grant of this Option or (ii) one year of the
date of exercise of this Option.  Such notice shall specify the number of Option
Shares sold or otherwise disposed of and shall be directed to the address set
forth in paragraph 12 below.

 

                7.             Adjustments for Changes in Capitalization of TCF
Financial.  In the event of any change in the outstanding shares of Common Stock
by reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, or any change in the
corporate structure of TCF Financial or in the shares of Common Stock, the
number and class of shares covered by this Option and the Exercise Price shall
be appropriately adjusted by the Committee, whose determination shall be
conclusive.

 

                8.             Effect of Merger.  In the case of any merger,
consolidation, or combination of TCF Financial with or into another corporation
or other business organization (other than a merger, consolidation, or
combination in which TCF Financial is the continuing entity and which does not
result in the outstanding shares of Common Stock being converted into or
exchanged for

 

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different securities, cash or other property, or any combination thereof), the
Committee may authorize the issuance or assumption of Benefits (as defined in
the Plan) as it may deem appropriate.

 

                9.             Effect of Change in Control.   Each of the events
specified in the following clauses (a) through (d) of this paragraph 8 shall be
deemed a “change of control”; (a) any “person”, as defined in sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) is or becomes
the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company’s then outstanding securities. 
For purposes of this clause (a), the term “beneficial owner” does not include
any employee benefit plan maintained by the Company that invests in the
Company’s voting securities; or (b) during any period of two (2) consecutive
years (not including any period prior to the date on which the Program was
approved by the Company’s Board of Directors) there shall cease to be a majority
of the Board comprised as follows: individuals who at the beginning of such
period constitute the Board of new directors whose nomination for election by
the Company’s shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved; or (c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 70% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company’s assets;
provided, however, that no change in control will be deemed to have occurred if
such merger, consolidation, sale or disposition or assets, or liquidation is not
subsequently consummated; or (d) the Board of Directors of Winthrop Resources
Corporation (hereinafter referred to as Winthrop”) or the Board of Directors of
any other equipment finance leasing company (hereinafter referred to as “New
Leasing Co.”) headed by Executive which is an affiliate of Winthrop or a
subsidiary of TCF Financial shall approve, and there shall be consummated, a
dissolution or liquidation, or a merger, consolidation or other corporate
reorganization of Winthrop or New Leasing Co., or of the Value Added line of
business or either, such that Winthrop, New Leasing Co., or the Value Added line
of business or either of them is no longer owned or controlled by TCF
Financial.  Notwithstanding the foregoing, a sale, spin-off or other
reorganization of the small ticket business of Winthrop or New Leasing Co., or
other insignificant leasing-related transaction, shall not be deemed a change in
control under this Agreement.  Subject to the six month holding requirement, if
any, of Rule 16b-3 of the Securities and Exchange Commission but notwithstanding
any other provision in this Program or the previous Stock Option and Incentive
Plan of TCF Financial, all terms and conditions of this Restricted Stock Award
shall be deemed satisfied and all the Shares shall vest as of the date of a
change in control.

 

                10.           Stockholder Rights not Granted by this Option. 
The Optionee is not entitled by virtue hereof to any rights of a stockholder of
TCF Financial or to notice of meetings of

 

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stockholders or to notice of any other proceedings of TCF Financial.

 

                11.           Withholding Tax.  Where the Optionee or another
person is entitled to receive Option Shares pursuant to the exercise of this
Option, TCF Financial shall have the right to require the Optionee or such other
person to pay to TCF Financial the amount of any taxes which TCF Financial or
any of it affiliates is required to withhold with respect to such Option Shares,
or, in lieu thereof, to retain, or sell without notice, a sufficient number of
such shares to cover the amount required to be withheld or in lieu of any of the
foregoing, to withhold or direct the withholding of a sufficient sum from the
Optionee’s compensation to satisfy such tax withholding requirements.  TCF
Financial’s method of satisfying its withholding obligations shall be solely in
the discretion of TCF Financial, subject to applicable federal, state, and local
law.

 

                12.           Notices.  All notices hereunder to TCF Financial
shall be delivered or mailed to it addressed to TCF Financial Corporation, 801
Marquette Avenue, Suite 302, Minneapolis, Minnesota 55402.  Any notices
hereunder to the Optionee shall be delivered personally or mailed to the
Optionee’s address noted below.  Such addresses for the service of notices may
be changed at any time provided written notice of the change is furnished in
advance to TCF Financial or to the Optionee, as the case may be.

 

                13.           Plan and Plan Interpretations as Controlling. 
This Option and the terms and conditions herein set forth are subject in all
respects to the terms and conditions of the Plan, which are controlling.  All
determinations and interpretations of the Committee shall be binding and
conclusive upon the Optionee or his legal representatives with regard to any
question arising hereunder or under the Plan.

 

                14.           Optionee Service.  Nothing in this Option shall
limit the right of TCF Financial or any of its affiliates to terminate the
Optionee’s service as a director, officer, or employee, or otherwise impose upon
TCF Financial or any of its affiliates any obligation to employ or accept the
services of the Optionee.

 

                15.           Optionee Acceptance.  The Optionee shall signify
his or her acceptance of the terms and conditions of this Option by signing in
the space provided below and returning a signed copy hereof to TCF Financial at
the address set forth in paragraph 12 above.

 

                IN WITNESS WHEREOF, the parties hereto have caused this Option
to be executed as of the date first above written.

 

 

 

TCF FINANCIAL CORPORATION

 

 

 

 

 

By

/s/ Gregory J. Pulles

 

Secretary

 

 

 

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ACCEPTED

 

 

 

/s/ Craig R. Dahl

 

 

 

 

 

(Street address)

 

 

 

 

 

(City, State and Zip Code)

 

 

 

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