Exhibit 10.1

 

MACKINAC FINANCIAL CORPORATION

2012 INCENTIVE COMPENSATION PLAN

 

STOCK APPRECIATION RIGHT AWARD AGREEMENT

 

MACKINAC FINANCIAL CORPORATION, a Michigan corporation (the “Company”), as
permitted by the Mackinac Financial Corporation 2012 Incentive Compensation Plan
(the “Plan”), hereby grants to the individual listed below (the “Participant”),
a Stock Appreciation Right (each a “SAR”) as described herein, subject to the
terms and conditions of the Plan and this Stock Appreciation Right Award
Agreement (this “Agreement”).

 

Unless otherwise defined in this Agreement, the terms used in this Agreement
have the same meaning as defined in the Plan.  The term “Service Provider” as
used in this Agreement means an individual actively providing services to the
Company or a Subsidiary of the Company.

 

1.             NOTICE OF STOCK APPRECIATION RIGHT.

 

Participant:

 

 

 

Grant Date:

 

 

 

Per Share Exercise Price (the “Exercise Price”):

 

 

 

Number of Shares of Subject to this SAR:

 

 

 

2.             GRANT OF SAR.  The Company hereby grants to the Participant, as
of the Grant Date, a SAR on the number of shares specified above. The SAR
represents the right, upon exercise, to receive payment of an amount determined
by multiplying (a) the difference between the Fair Market Value of a Share on
the date of exercise over the Exercise Price, by (b) the number of Shares with
respect to which the SAR is exercised (the product of (a) and (b) shall be
referred to as the “SAR Payment Amount”).  Settlement of the SAR Payment Amount
shall be made by delivering Shares having a Fair Market Value as of the date of
exercise equal to the SAR Payment Amount, with cash paid in lieu of any
fractional Shares.  Notwithstanding the foregoing, the Company will not issue
any Shares unless you have satisfied the requirements of Section 9 below.

 

3.             VESTING AND EXERCISE.

 

(a)           Vesting.  Subject to your continued service with the Company or
its Subsidiaries unless otherwise provided in Section 3(c) and Section 4 below,
the SARs shall become vested and may be exercised in accordance with the
following schedule, by written notice to the Company in a form reasonably
acceptable to the Company:

 

Anniversary Date of Great

 

Cumulative Vested Percentage

[    ]

 

[    %]

[    ]

 

[    %]

[    ]

 

[    %]

 

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The right to exercise this SAR and to purchase the number of shares comprising
each vested installment shall be cumulative, and once such right has become
exercisable it may be exercised in whole at any time and in part from time to
time until the date of termination of the Grantee’s rights hereunder.

 

(b)           Committee Discretion to Accelerate Vesting.  Notwithstanding the
foregoing, the Committee may, in its sole discretion, provide for accelerated
vesting of the SAR at any time and for any reason.

 

(c)           Conditions on Exercise.  The Committee may suspend the right to
exercise the SAR during any period for which the Committee determines, in its
sole discretion, that such suspension would be necessary or advisable in order
to comply with the requirements of (i) any applicable federal securities law or
rule or regulation thereunder, (ii) any rule of a national securities exchange,
national securities association, or other self-regulatory organization, or
(iii) any other federal or state law or regulation (each an “SAR Exercise
Suspension”).  Notwithstanding the foregoing, no SAR Exercise Suspension shall
extend the term of the SAR in a manner that would result in the SAR becoming
nonqualified deferred compensation subject to Section 409A of the Code.

 

4.             TERMINATION OF SERVICES; FORFEITURE.  Notwithstanding any other
provision of this Agreement:

 

(a)           Termination for Any Reason (Other than Death, Disability, or
Retirement).  Upon the termination of Participant’s services with the Company or
a Subsidiary for any reason (other than for Death, Disability or Retirement as
described below), each SAR (whether vested or unvested) shall be immediately
canceled and terminated.

 

(b)           Death; Disability.  Upon the termination of Participant’s services
with the Company or a Subsidiary as a result of Participant’s death or
“Disability” (as defined in the Plan), each SAR shall become fully vested and
shall remain exercisable until the Expiration Date (as defined below).

 

(c)           Retirement.  Upon the termination of Participant’s services with
the Company or a Subsidiary as a result of Participant’s Retirement, (1) each
SAR which is exercisable at the date of such termination shall continue to be
exercisable until the earlier of (i) the Expiration Date, or (ii) the date such
Participant ceases to be Retired, and (2) each SAR which is not exercisable at
the date of such termination shall continue to vest in accordance with the terms
of Section 2 above as if Participant’s had not Retired and shall remain
exercisable until the earlier of (i) the Expiration Date, or (ii) the date such
Participant ceases to be Retired.  For purposes of this Agreement, “Retirement”
shall mean the Participant’s resignation from the Company on or after the date
upon which the Participant has attained at least (i)        years of age, and
(ii)        years of service with the Company[, subject to the Company’s
consent].

 

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(d)           Expiration.  Unless earlier terminated in accordance with the
terms and provisions of the Plan and/or this Agreement, all portions of the SAR
(whether vested or not vested) shall expire and shall no longer be exercisable
after the tenth (10th) anniversary of the Grant Date (the “Expiration Date”).

 

5.             CHANGE OF CONTROL.  Upon the occurrence of a Change in Control,
the SARs described in this Agreement shall become fully vested and exercisable.

 

6.             RIGHTS AS STOCKHOLDER.  Participant shall have no rights as a
stockholder with respect to any Shares subject to this SAR until the SAR has
been exercised and Shares relating thereto have been issued and recorded on the
records of the Company or its transfer agent or registrars.

 

7.             ADJUSTMENTS.  In the event of any stock dividend,
reclassification, subdivision or combination, or similar transaction affecting
this SAR, the rights of the Participant will be adjusted as provided in
Section 4 of the Plan.

 

8.             NON-TRANSFERABILITY OF SAR.  Without the express written consent
of the Committee, which may be withheld for any reason in its sole discretion,
the SARs may not be transferred in any manner otherwise than by will or by the
laws of descent or distribution and may be exercised during your lifetime only
by you. The terms of the Plan and this Agreement shall be binding upon your
executors, administrators, heirs, successors and assigns.  Any attempt to
transfer the SAR in any manner, contrary to the terms and provisions of this
Agreement and/or the Plan shall be null and void and without legal force or
effect.

 

9.             TAX WITHHOLDING.  The Participant hereby agrees that the
Participant shall make appropriate arrangements with the Company for such income
and employment tax withholding as may be required of the Company under
applicable United States federal, state or local law on account of this SAR. 
The Participant may satisfy the obligation(s), in whole or in part, by electing
(i) to make a payment to the Company in cash, by check or by other instrument
acceptable to the Company, (ii) subject to the general or specific approval of
the Committee, to have the Company withhold a number of shares which would
otherwise be issued pursuant to this Agreement having a value not greater than
the amount required to be withheld (such number may be rounded up to the next
whole share), or (iii) subject to the general or specific approval of the
Committee, by any combination of (i) and (ii).  The value of shares to be
withheld (if permitted by the Committee) shall be based on the Fair Market Value
of a share of the Company’s common stock as of the date the amount of tax to be
withheld is to be determined.

 

10.          THE PLAN; AMENDMENT.  The SAR is subject in all respects to the
terms, conditions, limitations and definitions contained in the Plan.  In the
event of any discrepancy or inconsistency between this Agreement and the Plan,
the terms and conditions of the Plan shall control.  The Committee shall have
the right, in its sole discretion, to modify or amend this Agreement from time
to time in accordance with and as provided in the Plan. This Agreement may also
be modified or amended by a writing signed by both the Company and the
Participant.

 

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The Company shall give written notice to the Participant of any such
modification or amendment of this Agreement as soon as practicable after the
adoption thereof.

 

11.          RIGHTS OF PARTICIPANTS; REGULATORY REQUIREMENTS.  Without limiting
the generality of any other provision of this Agreement or the Plan, Articles 13
and 18 of the Plan pertaining to the Participants’ rights and “Regulatory
Requirements” (as such term is defined in the Plan) are hereby explicitly
incorporated into this Agreement.

 

12.          NOTICES.  Notices hereunder shall be mailed or delivered to the
Company at its principal place of business and shall be mailed or delivered to
the Participant at the address on file with the Company or, in either case, at
such other address as one party may subsequently furnish to the other party in
writing.

 

13.          GOVERNING LAW.  This Agreement is governed by and construed in
accordance with the laws of the State of Michigan, notwithstanding conflict of
law provisions.

 

14.          TRANSFER OF PERSONAL DATA.  The Participant authorizes, agrees and
unambiguously consents to the transmission by the Company (or any Subsidiary) of
any personal data information related to the SAR awarded under this Agreement
for legitimate business purposes (including, without limitation, the
administration of the Plan). This authorization and consent is freely given by
the Participant.

 

15.          BINDING AGREEMENT; ASSIGNMENT.  This Agreement shall inure to the
benefit of, be binding upon, and be enforceable by the Company and its
successors and assigns. The Participant shall not assign (except in accordance
with Section 8 hereof) any part of this Agreement without the prior express
written consent of the Company.

 

16.          HEADINGS.  The titles and headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.

 

17.          COUNTERPARTS.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.

 

18.          SEVERABILITY.  The invalidity or unenforceability of any provisions
of this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of any provision of this Agreement in any
other jurisdiction, it being intended that all rights and obligations of the
parties hereunder shall be enforceable to the fullest extent permitted by law.

 

19.          ACQUIRED RIGHTS.  The Participant acknowledges and agrees that:
(a) the Company may terminate or amend the Plan at any time; (b) the award of
the SAR made under this Agreement is completely independent of any other award
or grant and is made at the sole discretion of the Company; (c) no past grants
or awards (including, without limitation, the SAR awarded hereunder) give the
Participant any right to any grants or awards in the future whatsoever; and
(d) any benefits granted under this Agreement are not part of the Participant’s

 

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ordinary salary, and shall not be considered as part of such salary in the event
of severance, redundancy or resignation

 

20.          BENEFICIARY DESIGNATION.  The Participant hereby designates the
following person(s) as the Participant’s beneficiary(ies) to whom shall be
transferred any rights under this SAR which survive the Participant’s death.  If
the Participant names more than one primary beneficiary and one or more of such
primary beneficiaries die, the deceased primary beneficiary’s interest will be
apportioned among any surviving primary beneficiaries before any contingent
beneficiary receives any amount, unless the Participant indicates otherwise in a
signed and dated additional page.  The same rule shall apply within the category
of contingent beneficiaries.  Unless the Participant has specified otherwise
herein, any rights which survive the Participant’s death will be divided equally
among the Participant’s primary beneficiaries or contingent beneficiaries, as
the case may be.

 

PRIMARY BENEFICIARY(IES)

 

Name

 

%

 

Address

 

 

 

 

 

 

 

(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)

 

 

 

 

 

 

 

CONTINGENT BENEFICIARY(IES)

 

Name

 

%

 

Address

 

 

 

 

 

 

 

(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)

 

 

 

 

 

 

 

In the absence of an effective beneficiary designation, the Participant
acknowledges that any rights under this SAR which survive the Participant’s
death shall be rights of his or her estate.

 

SIGNATURE PAGE FOLLOWS

 

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This Agreement may be executed in two or more counterparts, each of which is
deemed an original and all of which constitute one document.

 

 

MACKINAC FINANCIAL CORPORATION

 

 

Dated:

 

, 

 

By:

 

 

Name:

 

Title:

 

PARTICIPANT ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS STOCK APPRECIATION
RIGHT AWARD AGREEMENT, NOR IN THE COMPANY’S 2012 INCENTIVE COMPENSATION PLAN,
WHICH IS INCORPORATED INTO THIS AGREEMENT BY REFERENCE, CONFERS ON PARTICIPANT
ANY RIGHT WITH RESPECT TO CONTINUATION AS A SERVICE PROVIDER OF THE COMPANY OR
ANY PARENT OR ANY SUBSIDIARY OR AFFILIATE OF THE COMPANY, NOR INTERFERES IN ANY
WAY WITH PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PARTICIPANT’S
SERVICE PROVIDER RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE AND WITH OR
WITHOUT PRIOR NOTICE.

 

BY ACCEPTING THIS AGREEMENT, PARTICIPANT ACKNOWLEDGES RECEIPT OF A COPY OF THE
PLAN AND REPRESENTS THAT THE PARTICIPANT IS FAMILIAR WITH THE TERMS AND
PROVISIONS OF THE PLAN.  PARTICIPANT ACCEPTS THIS STOCK APPRECIATION RIGHT
SUBJECT TO ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.  PARTICIPANT HAS
REVIEWED THE PLAN AND THIS AGREEMENT IN THEIR ENTIRETY.  PARTICIPANT AGREES TO
ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE
COMMITTEE UPON ANY QUESTIONS ARISING UNDER THE PLAN OR THIS AGREEMENT.

 

Dated:

 

, 

 

By:

 

 

Name:

 

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