Exhibit 10(a)

 

HUNTINGTON BANCSHARES INCORPORATED

 

MANAGEMENT INCENTIVE PLAN

As Amended and Restated Effective for Plan Years

Beginning On or After January 1, 2004

 

ARTICLE I

 

PURPOSE; EFFECTIVE DATE

 

1.1 Purpose. The purpose of this Management Incentive Plan (“Plan”) is to
encourage, recognize, and reward exceptional levels of corporate, business unit,
and individual performance. The Plan’s intent is to use award dollars as a clear
communication vehicle linking the interests of eligible officers with the
interests of Huntington Bancshares Incorporated (“Corporation”) by establishing
a direct link between performance and incentive payments. The Plan serves to
reinforce a management style which closely ties officer rewards to performance
directly under his or her control and establishes the Corporation’s willingness
to reward individual performance that has a direct impact on incremental
earnings. The purpose of this Plan is to provide incentive for key employees
whose sustained performance directly influences the creation of shareholder
value.

 

1.2 Effective Date. The Plan, as amended, will become effective as of January 1,
2004, if approved by a majority of the votes cast by the Corporation’s
shareholders at the annual meeting on April 27, 2004. No Awards will be paid
under the Plan unless shareholder approval is obtained.

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ARTICLE II

 

DEFINITION OF TERMS

 

As used in the Plan, the following words shall have the meanings stated after
them, unless otherwise specifically provided. In the Plan, words used in the
singular shall include the plural, and words used in the plural shall include
the singular. The gender of words used in this Plan shall include whatever may
be appropriate under any particular circumstances.

 

(a) “Award” shall mean a cash incentive payment that may be due to a Participant
under the Plan.

 

(b) “Base Salary” means the annual cash salary actually paid to a Participant
for a particular Plan Year; provided however that Base Salary (a) excludes
bonuses, incentive compensation, stock options, employer contributions to
pension and benefit plans, and other forms of irregular payments, reimbursements
and fringe benefits, and (b) includes any compensation that is deferred by the
Participant pursuant to a nonqualified deferred compensation arrangement.

 

(c) “Board” or “Board of Directors” means the Board of Directors of the
Corporation.

 

(d) “Change in Control” means, with respect to the Corporation, the occurrence
of any of the following:

 

(1) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Corporation or any person who as of the effective date is a director or
officer of the Corporation or whose shares of common stock of the Corporation
are treated as “beneficially owned” (as such term is used in Rule 13d-3 of the
Exchange Act) by any such director or officer, becomes the beneficial owner,

 

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directly or indirectly, of securities of the Corporation representing 25% or
more of the combined voting power of the Corporation’s then outstanding
securities;

 

(2) Individuals who, as of the effective date any Award is granted hereunder,
constitute the Board of Directors of the Corporation (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board, provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election, was approved by a vote of at least a
majority of the directors comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding for
this purpose any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board;

 

(3) A merger or consolidation of the Corporation, other than a merger or
consolidation in which the voting securities of the Corporation immediately
prior to the merger or consolidation continue to represent (either by remaining
outstanding or being converted into securities of the surviving entity) 51% or
more of the combined voting power of the Corporation or surviving entity
immediately after the merger or consolidation with another entity;

 

(4) A sale, exchange, lease, mortgage, pledge, transfer, or other disposition
(in a single transaction or a series of related transactions) of all or
substantially all of

 

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the assets of the Corporation which shall include, without limitation, the sale
of assets or earning power aggregating more than 50% of the assets or earning
power of the Corporation on a consolidated basis;

 

(5) a liquidation or dissolution of the Corporation;

 

(6) a reorganization, reverse stock split, or recapitalization of the
Corporation which would result in any of the foregoing; or

 

(7) a transaction or series of related transactions having, directly or
indirectly, the same effect as any of the foregoing.

 

(e) “Committee” means the Compensation Committee of the Board or such other
committee appointed by the Board to administer the Plan. For purposes of
granting, administering and certifying Awards to Covered Officers, the Committee
or any sub-committee acting on behalf of the Committee shall be composed of two
or more members of the Board each of whom is an “outside director” within the
meaning of Section 162(m). Any Committee member who is not an “outside director”
within the meaning of Section 162(m) shall abstain from participating in any
decision to grant, administer or certify Awards to Covered Officers.

 

(f) “Corporation” means Huntington Bancshares Incorporated, a Maryland
corporation, together with any and all Subsidiaries, and any successor thereto
as provided in Section 8.2 herein.

 

(g) “Covered Officer” means any Participant who is designated as a Covered
Officer by the Committee because it is anticipated that such Participant’s
compensation may exceed the limit under Section 162(m) and for whom any Award is
intended to satisfy the Performance-Based Exception.

 

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(h) “Extraordinary Events” means, with respect to the Corporation, any of the
following (i) changes in tax law, generally accepted accounting principles or
other such laws or provisions affecting reported financial results, (ii)
accruals for reorganization and restructuring programs, (iii) special gains or
losses in connection with the mergers and acquisitions or on the sales of
branches or significant portions of the Corporation, (iv) any extraordinary
non-recurring items as described in Accounting Principles Board Opinion No. 30
and/or in management’s discussion and analysis of financial condition and
results of operation appearing or incorporated by reference in the annual report
on Form 10-K filed with the Securities and Exchange Commission, (v) gains on
sales of auto loans, (vi) losses on the early repayment of debt, or (vii) any
other events or occurrences of a similar nature as determined by the Committee.

 

(i) “Officer” means an officer of the Corporation or of a Subsidiary.

 

(j) “Participant” means an Officer selected by the Committee to participate in
the Plan for a particular Plan Year.

 

(k) “Performance-Based Exception” means the performance-based exception from the
tax deductibility limitations of Code Section 162(m).

 

(l) “Plan” means this Huntington Bancshares Incorporated Management Incentive
Plan, as amended by the Corporation from time to time (formerly known as the
Huntington Bancshares Incorporated Incentive Compensation Plan).

 

(m) “Plan Year” means the calendar year.

 

(n) “Qualifying Performance Criteria” means one or more of the following
criteria upon which the achievement of specific, preestablished, objective
performance goals for each Participant are based as determined by the Committee
in connection with the grant and certification of Awards: (a) net income, (b)
earnings per share, (c) return on equity, (d) return on

 

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average equity, (e) return on assets, (f) return on average assets, (g)
efficiency ratio determined as the ratio of total non-interest operating
expenses (less amortization of intangibles) divided by total revenues (less net
security gains), (h) non-interest income to total revenue ratio, (i) net
interest margin, or (j) or other strategic milestones based on objective
criteria established by the Committee, provided that, with respect to Covered
Officers, such strategic milestones must be approved by the shareholders of the
Corporation prior to the payment of any Award. The Qualifying Performance
Criteria may be expressed by the Committee on the basis of performance criteria
for the individual Participant, a specific business unit, Subsidiary or other
affiliate or the Corporation as a whole or in any combination thereof.
Qualifying Performance Criteria may be different for different Participants, as
determined in the discretion of the Committee. Qualifying Performance Criteria
with respect to Awards to Participants who are Covered Officers are limited to
preestablished, objective performance goals as defined under Section 162(m). The
Committee may include or exclude Extraordinary Events or any other objective
events or occurrences in determining whether a performance goal based on the
Qualifying Performance Criteria has been achieved; provided, however, that the
Committee shall not have the discretion to increase the amount of an Award that
would otherwise be due to a Participant who is a Covered Officer based on the
preestablished performance goals for such Covered Officer with respect to the
applicable Plan Year.

 

(o) “Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986,
as amended, or any successor statute of similar import (the “Code”) as
interpreted by any regulations, governmental rulings or other official
pronouncements promulgated under such statute.

 

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(p) “Subsidiary” means a subsidiary of the Corporation of which at least 50% of
the voting power is directly or indirectly owned or controlled by the
Corporation.

 

ARTICLE III

 

ADMINISTRATION

 

3.1 Authority of the Committee. The Committee shall have full discretion to
administer the Plan. The Committee is authorized to interpret and construe the
Plan and to adopt such rules, regulations, and procedures for the administration
of the Plan as the Committee deems necessary or advisable. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the
Plan. As permitted by law, the Committee may delegate its authority as
identified herein, except that to the extent such delegation is not permitted
under Code Section 162(m).

 

3.2 Decisions Binding. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions of
the Board (provided, however, that only the Committee, or any subcommittee
thereof, made up solely of 2 or more “outside directors” within the meaning of
Code Section 162(m) shall participate in any decision, order or resolution to
grant, administer, or certify Awards to Covered Officers) shall be final,
conclusive, and binding on all persons, including the Corporation, its
stockholders, Employees, Participants, and their estates and beneficiaries.

 

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ARTICLE IV

 

PLAN PARTICIPANTS

 

Participation in the Plan shall be limited to Officers who are specified by the
Committee to be key employees whose performance may, in the opinion of the
Committee, significantly contribute to the strategic performance and growth of
the Corporation. The Committee shall select the Officers who will participate in
the Plan for each Plan Year during the first ninety (90) days of the Plan Year
(or such other date as may be permitted or required pursuant to Section 162(m))
and may select Officers who are hired or promoted during a Plan Year to
participate for the remainder of the Plan Year. Selection to participate in this
Plan in any Plan Year does not require the Committee to, or imply that the
Committee will, select the same person to participate in the Plan in any
subsequent Plan Year.

 

ARTICLE V

 

PERFORMANCE CRITERIA AND GOALS, MAXIMUM AWARD

 

5.1 Performance Criteria. Awards under the Plan may be based upon corporate,
business unit, and individual performance; however, Awards under the Plan to
Participants who are Covered Officers will be based solely upon the achievement
of one or more performance goals based on one or more Qualifying Performance
Criteria as selected by the Committee for a Plan Year. For all other
Participants, Awards will be determined based upon performance goals established
pursuant to the Qualifying Performance Criteria selected by the Committee and
evaluations of the Participant’s business unit and individual performance. Such
evaluations will be made by the Participant’s appropriate manager or senior
officer. The Committee may select different Qualifying Performance Criteria for
different incentive groups.

 

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5.2 Performance Goals. The Committee shall establish annual written objective
performance goals reflecting corporate performance. Performance goals based on
the Qualifying Performance Criteria and the potential Award, expressed as a
percentage of Base Salary, that will be payable upon attainment of such
performance goals, will be established in writing not later than ninety (90)
days after the commencement of the Plan Year to which the goals relate (or such
earlier or later date as is permitted or required by Section 162(m)).
Performance Goals for Participants who are not Covered Officers may be revised
during the Plan Year based on Extraordinary Events or other factors. Potential
Awards may vary among Participants in different incentive groups as determined
by the Committee.

 

ARTICLE VI

 

PAYMENT OF AWARDS; MAXIMUM AWARD

 

6.1 Payment of Awards. Unless payment is deferred, Awards will be payable in
cash as soon as practicable following the close of the Plan Year and calculation
of the amount of the Awards; provided that Awards will be paid to Covered
Officers only after the Committee has certified in writing in the minutes of a
Committee meeting or otherwise that performance goals based on the Qualifying
Performance Criteria applicable to Covered Officers and other material terms of
the Plan have been satisfied. No Award will be paid to an Officer who is not
employed by the Corporation or a Subsidiary on the day the Award is paid except
in the case of death, disability, or retirement of the Officer or in the event
that payment of the Award is deferred by the Committee or that a Change in
Control of the Corporation has occurred. Awards are subject to federal, state
and local income and other payroll tax withholding.

 

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Notwithstanding the above, in the event a Participant dies, becomes disabled, or
retires before payment of an Award, the Committee may, in its discretion,
authorize payment to the Participant (or the Participant’s estate or designated
beneficiary) in such amount as the Committee deems appropriate.

 

6.2 Adjustments. The Committee may increase individual Awards based upon
extraordinary circumstances; however, under no circumstance may the Committee
increase a Covered Officer’s Award above the amount determined based on the
attainment of the specified performance goals identified in accordance with
Section 5.2. In addition, notwithstanding the attainment of specified
performance goals, the Committee has the discretion to reduce or eliminate an
Award that would otherwise be paid to any Participant, including any Covered
Officer, based on its evaluation of Extraordinary Events or any other factors,
events or occurrences as determined by the Committee. However, notwithstanding
Article IX or any provision of the Plan, an Award which is payable may not be
reduced or eliminated following a Change in Control.

 

6.3 Maximum Award. Notwithstanding any other provision in the Plan, the maximum
Award payable to a Participant for any Plan Year shall not exceed $2,500,000.

 

ARTICLE VII

 

INTERIM AWARDS; CHANGE IN CONTROL

 

In the event of a Change in Control, the following provisions shall apply:

 

(a) The Committee shall make interim Awards based upon the Corporation’s
quarterly financial statements for the quarter ending immediately prior to or
coinciding with the Change in Control.

 

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(b) In determining the amount of interim Awards, the Committee shall follow the
procedures for calculating Awards, except that the Committee shall annualize the
actual level of year-to-date performance achieved with respect to each
performance goal and such other performance objectives/assessments as the
Committee shall determine. The amount of the Awards so calculated shall be
payable on a pro-rated basis based upon the quarter ending immediately prior to
or coinciding with the Change in Control in accordance with the following
percentages:

 

First Quarter - 25% of the Award otherwise payable

Second Quarter - 50% of the Award otherwise payable

Third Quarter - 75% of the Award otherwise payable

Fourth Quarter - 100% of the Award otherwise payable

 

(c) Notwithstanding the foregoing, each interim Award to be made under this
Article 7 to any Participant who received an Award under this Plan for the Plan
Year immediately preceding the year in which the Change in Control occurs shall
not be less than the target award opportunity expressed as a percentage of Base
Salary for the preceding Plan Year paid on a pro-rated basis as provided in
subparagraph (b) above.

 

(d) The Committee shall grant an interim Award in accordance with this Article 7
to all Participants whether or not the Participants are employed by the
Corporation when the Change in Control becomes effective unless the employment
of such Participant was terminated for cause, as determined by the Corporation
in its sole discretion.

 

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ARTICLE VIII

 

MISCELLANEOUS PROVISIONS

 

8.1 Guidelines. From time to time the Committee may adopt written guidelines for
implementation and administration of the Plan.

 

8.2 Successors. All obligations of the Corporation under the Plan with respect
to Awards granted hereunder shall be binding on any successor to the
Corporation, whether the existence of such successor is the result of a direct
or indirect purchase of all or substantially all of the business and/or assets
of the Corporation, or a merger, consolidation, or otherwise. 8.3 Unfunded Plans
and Restrictions on Transfer. It is intended that the Plan be an “unfunded” plan
for incentive compensation. The Committee may authorize the use of trusts or
other arrangements to meet the obligations hereunder, provided, however, that
the existence of such trusts or arrangements is consistent with the “unfunded”
status of the Plan. Any benefits to which a Participant or his or her
beneficiary may become entitled under this Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to so transfer or encumber such benefits
shall be void. This Plan does not give a Participant any interest, lien, or
claim against any specific asset of the Corporation. Participants and
beneficiaries shall have only the rights of a general unsecured creditor of the
Corporation.

 

8.4 Status of Awards under Section 162(m). If any provision of the Plan or any
agreement relating to an Award to a Covered Officer does not comply or is
inconsistent with the requirements of Section 162(m), such provision or
agreement shall be construed or deemed amended to the extent necessary to
conform to such requirements. Notwithstanding the above, the Committee in its
sole discretion may, with respect to any Award under the Plan, determine

 

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that compliance with Section 162(m) is not desired after consideration of the
goals of the Corporation’s executive compensation philosophy and whether it is
in the best interests of the Corporation to have such Award so qualified.

 

8.5 Deferrals of Awards. Unless otherwise provided by the Committee, a
Participant may elect to defer payment of the Participant’s Award under the Plan
if deferral of an Award under the Plan is permitted pursuant to the terms of a
deferred compensation program existing at the time the election to defer is
permitted to be made, and the Participant complies with the terms of such
program. Except in the situation of a Change in Control, the Committee may defer
payment of an Award for such period as the Committee may determine.

 

8.6. Other Plans. Nothing in this Plan shall be construed as limiting the
authority of the Committee, the Board of Directors, the Corporation or any
Subsidiary to establish any other compensation plan, or as in any way limiting
its or their authority to pay bonuses or supplemental compensation to any
persons employed by the Company or a Subsidiary, whether or not such person is a
Participant in this Plan and regardless of how the amount of such compensation
or bonus is determined. However, no such plan will be established or operated in
a way that entitles or allows a Covered Officer to receive an award under such
plan as a substitution or supplement for not achieving goals under this Plan.

 

8.7 Expenses of Plan. The costs and expenses of administering the Plan will be
borne by the Corporation.

 

8.8 No Employment Rights. No Participant has any right to be retained in the
employ of the Corporation or any Subsidiary by virtue of participation in the
Plan.

 

8.9 Governing Law. The Plan shall be governed by and construed according to the
laws of the State of Ohio, without reference to its choice of law provisions.

 

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ARTICLE IX

 

AMENDMENT AND TERMINATION

 

The Corporation may at any time terminate, or from time to time, amend the Plan
by action of the Board of Directors or by action of the Committee without
shareholder approval unless such approval is required to satisfy the applicable
provisions of Section 162(m).

 

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