Document:

Exhibit 10.5
                                                        ------------
                      SEPARATION AGREEMENT
                      --------------------

     This is a Separation Agreement ("the Agreement") by and
between GERALD L. ANTHONY ("the Employee"), on the one hand, and
COAST FINANCIAL HOLDINGS, INC. ("CFHI"), and COAST BANK OF
FLORIDA, a wholly-owned subsidiary of CFHI (the "Bank") (CFHI and
the Bank are referred to collectively herein as the
"Corporation"), on the other hand.

                      Preliminary Statement
                      ---------------------

     The Employee is currently (a) employed as President and
Chief Executive Officer of CFHI, and is currently serving as a
member of the board of directors of CFHI, (b) a member of the
board of directors of the Bank, and (c) employed as the Chief
Executive Officer and Treasurer of, and serves on the board of
directors of, Coast Financial Partners, Inc., a wholly-owned
subsidiary of the Bank ("CFP").  However, his business
relationship with the Corporation shall terminate in the near
future as a result of the Employee's resignation. The Employee
and the Corporation are parting on amicable terms, and the
Employee has requested severance pay from the Corporation.  The
Corporation is willing to provide severance pay, even though it
has no legal obligation to do so in the event of the Employee's
resignation.  The Corporation also has asked the Employee to
release any claims he might have against the Corporation.  There
are other agreements regarding the Employee's separation from the
Corporation, and the parties have decided that it would be in
their mutual best interest if all of their agreements and
commitments were reduced to writing.  Accordingly, in
consideration of the mutual promises in this Agreement, the
sufficiency of which are hereby acknowledged by both parties, it
is agreed as follows:

                      Terms and Conditions
                      --------------------

     1.   Employee's Resignation.  The Employee agrees to resign his
          ----------------------
employment with CFHI, and from all of his Corporation positions,
including his membership on the Board of Directors of CFHI, his
membership on the board of directors of the Bank, and his officer
and director positions with CFP.  The Corporation agrees to
accept his resignation, which will be effective as of the date it
is submitted to the Corporation.  The Employee shall submit a
signed letter of resignation to the Corporation, in the form
attached as Exhibit "A" to this Agreement, thereby resigning his
Corporation employment and positions, on or promptly after the
Effective Date of this Agreement.  The "Effective Date" of this
Agreement shall be the first day after the expiration of the
revocation period provided by Section 13 of this Agreement.

     2.   Severance Pay.  Although there is no policy of the
          -------------
Corporation establishing a severance pay plan for its employees,
or otherwise making severance pay commitments to such employees,
CFHI agrees to pay the Employee his base salary and car allowance
through May 3, 2004, less all payroll taxes required to be
withheld by law (this payment shall be referred to collectively
hereinafter as "Severance Pay").  The Employee's Severance Pay
shall be paid at regular payroll intervals, and shall not include
any bonuses or compensation for club and organization
memberships, or the value of any other benefits associated with
employment.  The Employee and the Corporation both acknowledge
that but for the Employee's execution of

<PAGE>

the Agreement, CFHIwould not have paid the Employee any Severance
Pay whatsoever; the willingness to provide the Employee with
Severance Pay is in consideration of the Employee's release of
claims and any other promises set forth as part of the Agreement.
No monetary compensation shall be paid to the Employee by the
Corporation, after the Effective Date, except as provided by this
Agreement.  No benefits shall be provided to the Employee by the
Corporation after the Effective Date, other than group insurance
benefits continued pursuant to COBRA, at the Employee's election
and expense except to the extent otherwise provided by Section 3
of this Agreement.

     3.   Reimbursement of COBRA Expenses.  CFHI agrees to pay
          -------------------------------
the Employee's costs associated with continuation of his group
health insurance benefits, through May 3, 2004, in the event that
the Employee elects COBRA insurance continuation.

     4.   Modification of Employee Stock Option Rights.  The
          --------------------------------------------
Employee has been granted certain stock option rights under four
separate stock option agreements pursuant to which he is entitled
to purchase shares of common stock of CFHI.  The parties agree to
amend each of the Employee's stock option agreements to (a)
accelerate any existing vesting periods established in any such
agreement, and (b) to extend the expiration dates of each the
stock options agreements for the full time permitted under
Section 6.6 of the Coast Financial Holdings, Inc. 2003 Amended
and Restated Stock Option Plan.

     5.   Bank's Release of Employee from Non-Compete Commitment.
          ------------------------------------------------------
The Corporation and the Employee expressly agree that the
Employee shall not be bound by the Agreement Not to Compete set
forth in Section 9.3 of the Employment Agreement by and between
Coast Bank of Florida and Gerald L. Anthony, dated March 29,
2000, as modified by a contract entitled Modification of
Employment Agreement, dated March 31, 2003 ("the Modified
Employment Agreement").

     6.   Joint Press Release.  The Employee and the Corporation
          -------------------
both agree to issue, jointly, the Joint Press Release attached as
Exhibit "B."  This Joint Press Release shall be issued to the
media on or promptly after the Effective Date of this Agreement.

     7.   Non-Disparagement Commitments.  The Employee agrees
          -----------------------------
that he will not disparage CFHI, the Bank, or CFP, in any manner
harmful to either of them, or to their business operations, or to
their reputation.  CFHI, the Bank, and CFP agree that no member
of their Board of Directors shall disparage the Employee, in any
manner harmful to him, or to his reputation.  Provided, however,
that nothing herein is intended in any way to limit any party's
right to provide information that might be regarded as
disparaging in connection with the Corporation reports, audits,
examinations, or financial statements, or where required pursuant
to subpoena or other due process of law.

     8.   Return of Bank Documents and Property; Employee's
          -------------------------------------------------
Commitment to Maintain Confidentiality of Proprietary
-----------------------------------------------------
Information.  The Employee agrees to return to the Corporation
-----------
all Corporation documents, equipment, materials and other
Corporation property, specifically including his Corporation
cellular telephone, credit cards, and keys, on or prior to the
Effective Date.  The Employee has knowledge of information
relating to the Corporation which is confidential and proprietary
in nature; he agrees to maintain the confidentiality of all such
confidential and proprietary information of the Corporation.

     9.   Release of Claims by the Employee.  In consideration of
          ---------------------------------
the promises made by CFHI and the Bank in this Agreement, the
Employee, on the Employee's own behalf, and on

<PAGE>

behalf of theEmployee's relatives and heirs, executors,
administrators and assigns, irrevocably and unconditionally
releases, waives, acquits, and forever discharges CFHI, the Bank,
and CFP, their respective current and former officers, directors,
shareholders and employees, and their agents, officials,
representatives, attorneys, insurance carriers and any other entity
related to or affiliated with them (collectively, "the Bank
Releasees"), of and from any and all manner of actions, suits,
claims of any kind or nature whatsoever, known or unknown, in law
or equity, including, without limitation of the foregoing general
terms, any claims against any of the Bank Releasees arising from
any alleged violation by any of the Bank Releasees of any federal,
state or local statutes or ordinances, including, but not limited
to, Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act, as amended, ERISA, the
Americans with Disabilities Act, the Civil Rights Act of 1991,
the Equal Pay Act, the Florida Civil Rights Act, and any
applicable municipal ordinance prohibiting employment
discrimination, and any other employment discrimination laws, as
well as any other claims based on constitutional, statutory,
common law or regulatory grounds, arising or accruing on or prior
to the Effective Date of this Agreement, including any claim
based on a theory that his resignation amounted to a constructive
or actual discharge, and any claim for breach of the Modified
Employment Agreement; provided, however, that nothing herein is
intended to waive or release any claim the Employee may have in
the future relating to any allegation of breach of this Agreement
by CFHI or the Bank.

     10.  Corporation's Release of Employee.  In consideration of
          ---------------------------------
the promises made by the Employee in this Agreement, CFHI and the
Bank, on their own behalf, and on behalf of their successors and
assigns, irrevocably and unconditionally release, waive, acquit,
and forever discharge the Employee, his heirs, executors,
administrators and assigns (collectively, the "Employee
Releasees"), of and from any and all manner of actions, suits,
claims of any kind or nature whatsoever, in law or equity, that
are known to the Board of Directors of CFHI, or to the Board of
Directors of the Bank, including, without limitation of the
foregoing general terms, any claims against any of the Employee
Releasees based on constitutional, statutory, common law or
regulatory grounds, arising or accruing on or prior to the
Effective Date of this Agreement; provided, however, that nothing
herein is intended to waive or release any claim that CFHI or the
Bank may have in the future relating to any allegation of breach
of this Agreement by the Employee.

     11.  Employee Acknowledgements.  The Employee acknowledges
          -------------------------
being advised by the Corporation in writing, before signing the
Agreement, that he should consult with counsel regarding this
Agreement. The Employee acknowledges being given a period of at
least 21 days within which to consider the Agreement, and that
the Employee has knowingly and voluntarily entered into the
Agreement in consideration of the Severance Pay provided by the
Corporation.

     12.  Irrevocable Termination of Employment Relationship.
          --------------------------------------------------
The Employee agrees and recognizes that the Employee's
relationship with the Corporation will be permanently and
irrevocably severed by the Employee's resignation, and that
neither CFHI nor the Bank nor any of their subsidiaries,
successors will have any obligation, contractual or otherwise, to
rehire, recall, or re-employ the Employee in the future.

     13.  Employee's Revocation Right and Effective Date of the
          -----------------------------------------------------
Agreement.  For a period of seven days following the execution of
---------
the Agreement, the Employee may revoke or cancel the Agreement,
and the Agreement shall not become effective or enforceable until
this revocation period has expired. In other words, the Agreement
shall automatically become effective in seven

<PAGE>

days following execution unless the Employee revokes it first.
The Employee should provide the Corporation with a signed, written
notice of revocation if the Employee desires to exercise this right,
so there will be appropriate documentation of revocation.

     14.  Disclaimer of Liability.  The Agreement does not
          -----------------------
constitute and shall not be construed as an admission of
liability or wrongdoing by CFHI or the Bank, or by the Bank
Releasees, and the Corporation expressly denies that it has done
anything wrong or unlawful in connection with the Employee's
employment.

     15.  Entire Agreement.  This Agreement contains the entire
          ----------------
agreement between or among the parties with regard to the matters
set forth herein, and supersedes any and all prior negotiations,
correspondence, understandings, and agreements between or among
the parties with respect to termination of the Employee's
employment, specifically including the Modified Employment
Agreement, which is hereby declared null and void to the extent
it conflicts in any respect with this Agreement. There shall be
no modifications or amendments to this Agreement, except by
instrument in writing executed by authorized representatives of
the parties hereto.

     16.  Agreement Inures to the Benefit.  This Agreement shall
          -------------------------------
be binding upon and shall inure to the benefit of the parties
hereto and their respective officers, directors, agents,
representatives, employees, servants, affiliates, attorneys,
heirs, successors, assigns, or other representatives, if any, of
each of the parties hereto.

     17.  Execution of Counterparts; Governing Law.  This
          ----------------------------------------
Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same instrument. To the extent that
the law of any State may he applicable to construction of the
Agreement, it shall be governed by the law of the State of
Florida.

     18.  Full Knowledge and Volition.  The Employee acknowledges
          ---------------------------
executing this Agreement freely and voluntarily and knowingly and
without coercion or threats of any kind. The Employee also
acknowledges and confirms that the only considerations for
signing the Agreement are the terms and conditions stated in the
Agreement, that no other promise or agreement of any kind, except
those set forth in the Agreement, has been made by any person to
cause the Employee to sign the Agreement, and that the Employee
fully understands its meaning and intent. Employee also
acknowledges being informed that various federal, state and local
laws prohibit employment discrimination based on age, sex, race,
color, national origin, religion, disability, and marital status,
and that these laws are enforced by the Equal Employment
Opportunity Commission and/or other federal, state and local
agencies. The Employee also acknowledges being advised to discuss
the Agreement with the Employee's counsel and being told that in
any event the Employee should thoroughly review and understand
the Agreement before signing it.

<PAGE>

     WHEREFORE, the parties agree and stipulate to the preceding
terms and conditions of separation.

THE EMPLOYEE                  COAST FINANCIAL HOLDINGS, INC.

/s/ Gerald Anthony            By:/s/ James K. Toomey
-------------------------        --------------------------------
GERRY L. ANTHONY

                                 Its Chairman of the Board

Dated:  February 17, 2004     Dated:  February 17, 2004
      -------------------           -------------------

                              COAST BANK OF FLORIDA

                              By:/s/ James K. Toomey
                                 ---------------------------------

                                   Its Chairman of the Board

                              Dated:  February 17, 2004
                                    -------------------

<PAGE>DIRECTOR STOCK PLAN

 

Exhibit 10(B)

AMENDMENT TO BANK ONE CORPORATION

DIRECTOR STOCK PLAN

(As amended and restated effective February 1, 2003)

     WHEREAS, the Board of Directors has determined that it is necessary and
desirable to amend the Bank One Corporation Director Stock Plan (the “Plan”) as
permitted by Section 15; and

     WHEREAS, the Board of Directors has determined that the proposed
amendments to the Plan do not adversely change the terms and conditions of
outstanding awards under the Plan.

     NOW THEREFORE, effective as of January 14, 2004, the Plan is hereby
amended as follows:

	 	1.	 	Section 9(c) is hereby amended by adding the following at the end
thereof:
	 
	 	Notwithstanding anything to the contrary, the cessation of an Optionee’s
service on the Board as a result of the transactions contemplated by and
effectuated in connection with the Agreement and Plan of Merger dated as
of January 14, 2004 by and between Bank One Corporation and J.P. Morgan
Chase & Co. (the “Merger Agreement”) shall constitute a “retirement” for
purposes of this Section 9(c).
	 
	 	2.	 	Section 13 is hereby amended by adding the following at the end
thereof:
	 
	 	Notwithstanding anything to the contrary, the actions and transactions
contemplated by and effectuated in connection with the Merger Agreement
shall not constitute a Change of Control for any purpose of this Plan.
	 
	 	3.	 	Except as expressly modified hereby, the terms and provisions of the
Plan shall remain in full force and effect.

 

 

BANK ONE CORPORATION

DIRECTOR STOCK PLAN

As Amended and Restated Effective February 1, 2003

 

 

BANK ONE CORPORATION

DIRECTOR STOCK PLAN

As Amended and Restated Effective February 1, 2003

1. Purpose and History of the Plan

     The purpose of the Bank One Corporation Director Stock Plan (the “Plan”)
is to promote the long-term growth of Bank One Corporation by increasing the
proprietary interest of non-employee directors in Bank One Corporation and to
attract and retain highly qualified and capable directors. The Plan was last
restated effective April 1, 1999 and has since been amended from time to time.
This amendment and restatement of the Plan is effective February 1, 2003.

2. Definitions

     Unless the context clearly indicates otherwise, the following terms shall
have the following meanings:

          (a) “Annual Cash Retainer” means the annual cash retainer fee payable
during the Plan Year by the Corporation, or a subsidiary or affiliate thereof,
to a Director for his or her services as a Director. To the extent a Director
is also entitled to receive an additional retainer as compensation for serving
as the chairperson of a committee of the Board, “Annual Cash Retainer” shall
include such additional annual cash amount.

          (b) “Annual Stock Retainer” means the award of Stock or Stock Units made
in accordance with Section 7 of the Plan.

          (c) “Award” means an award granted to a Director under the Plan in the
form of Options, Shares, or Stock Units or any combination thereof.

          (d) “Award Grant Date” means the date upon which an Award is granted to
the Director.

          (e) “Award Summary” means a written summary setting forth the terms and
conditions of an Award made under this Plan.

          (f) “Board” means the Board of Directors of the Corporation.

          (g) “Change of Control” means a change of control of the Corporation as
defined by the Board from time to time.

          (h) “Committee” means the Organization and Compensation Committee of the
Board, or such other committee of the Board as may be designated by the Board
from time to time to administer the Plan.

          (i) “Corporation” means Bank One Corporation, a Delaware Corporation, and
its successors.

          (j) “Director” means a director serving on the Board who is not also an
employee of the Corporation or any subsidiary or affiliate thereof. “Director”
shall also include a director serving on the board of directors of any
subsidiary or affiliate of the Corporation, provided that (i)

 

 

the director is not also an employee of the Corporation or any subsidiary or
affiliate thereof, and (ii) the Board has approved adoption of the Plan by the
applicable subsidiary or affiliate.

          (k) “Fair Market Value” means the closing price of Common Stock as listed
on the New York Stock Exchange Composite Transaction Tape for the trading day
immediately preceding the applicable valuation date (or, if no closing price is
listed for Common Stock on such date, the next immediately preceding date for
which a closing price is listed).

          (l) “Option” means an option to purchase Shares awarded under Section 9.
Such option shall not be required or construed to satisfy the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended, or any successor
law.

          (m) “Optionee” means a Director to whom an Option has been granted or, in
the event of such Director’s death prior to the expiration of an Option, such
Director’s executor, administrator, beneficiary or similar person.

          (n) “Plan” means the Bank One Corporation Director Stock Plan, as amended
and restated from time to time.

          (o) “Plan Year” means the twelve-month period from April 1 to March 31.

          (p) “Share” means a share of common stock, $.01 par value per share, of
the Corporation.

          (q) “Stock Unit” means the right to receive a Share on a date elected by
the Director pursuant to rules established by the Committee, as well as such
dividend or dividend equivalent rights as may be permitted hereunder.

3. Eligibility

     Directors shall be eligible to participate in the Plan in accordance with
Sections 7, 8, 9 and 10 hereof.

4. Plan Administration

          (a) Administrator of Plan. The Plan shall be administered by the
Committee.

          (b) Authority of Committee. The Committee shall have the sole and
exclusive authority and discretion to (i) interpret and construe the Plan and
Award Summaries; (ii) adopt such rules and procedures as it shall deem
necessary and advisable to implement and administer the Plan; and (iii)
designate persons other than members of the Committee to carry out its
responsibilities, subject to such limitations, restrictions and conditions as
the Committee, in its best judgment, may determine to be in the Corporation’s
best interests and in accordance with the purposes of the Plan.

          (c) Determination of Committee. A majority of the Committee shall
constitute a quorum at any meeting of the Committee, and all determinations of
the Committee shall be made by a majority of its members. The Committee may
make determinations under the Plan without prior notice and without a meeting,
provided that such determination is made by written consent signed by all
members of the Committee.

          (d) Effect of Committee Determinations. No member of the Committee or the
Board shall be personally liable for any action or determination with respect
to the Plan, an

2

 

Award, or the settlement of a dispute between a Director and the Corporation,
provided that such action or determination is made in good faith. Any decision
or action of the Committee or the Board with respect to any Award or the
administration or interpretation of the Plan shall be conclusive and binding
upon all persons.

5. Shares Subject to the Plan

     Subject to adjustments as provided in Section 15, the aggregate number of
Shares which may be issued pursuant to Awards shall not exceed 1,620,000
Shares. To the extent that Shares subject to an outstanding Option are not
issued or delivered by reason of the expiration, termination, cancellation or
forfeiture of such Option or by reason of the delivery of Shares to pay all or
a portion of the exercise price of such Option, such Shares shall again be
available for issuance under the Plan.

6. Awards under the Plan

     Awards in the form of Shares or Stock Units shall be granted to Directors
in accordance with Section 7. Awards in the form of Shares, Stock Units or
Options may be granted to Directors in accordance with Section 8, 9 or 10, as
applicable. Each Award granted under Section 8, 9 or 10 shall be evidenced by
an Award Summary. Delivery of an Award Summary shall constitute an agreement,
subject to Section 3 and Section 12, between the Corporation and the Director
as to the terms and conditions of the Award.

7. Annual Stock Retainer

     Each Director shall annually receive an Award hereunder in the form of
either Shares or Stock Units, subject to the following terms and conditions:

     (a)  Election of Shares or Stock Units. Each Director shall be permitted to
elect to receive the Award described under this Section 7 in the form of either
Shares or Stock Units. Such election must be made by the date established by
the Committee prior to the start of the Plan Year for which the election
applies. In the absence of such election, the Award shall be granted in the
form of Shares. Each Director’s election shall remain in effect and be
applicable with respect to each quarterly grant of the Stock Retainer made for
any Plan Year. Such election shall remain in effect and be applicable to
quarterly payments made in subsequent Plan Years, unless the Director files a
revised election pursuant to this Section 7(a).

     In the event a Director is first appointed to the Board after the date
established by the Committee for the filing of elections, the quarterly Award
of the Director’s Annual Stock Retainer for the quarter in which the Director
is appointed (prorated as described in Section 7(c)) shall be made in the form
of Shares. The Director may submit a written election to receive the remaining
quarterly Awards of the Annual Stock Retainer for the Plan Year in the form of
Stock Units by a date prior to the start of the next following quarter and
within a period following his or her appointment to the Board determined by the
Committee or its designee to be necessary to avoid constructive receipt or to
comply with applicable law.

     (b)  Time of Grant. An Award of Shares or Stock Units representing each
Director’s annual stock retainer shall be made each calendar quarter during the
Plan Year to coincide with quarterly payment of the Director’s Annual Cash
Retainer. The number of Shares or Stock Units subject to such Award shall be
determined as provided in Section 7(c) below. In the case of a Director who is
appointed to the Board following the start of a calendar quarter, the Director
shall be granted, as of the effective date as of which such Director is first
appointed to the Board, his or her annual stock retainer, as prorated in the
manner described in Section 7(c) below.

3

 

     (c)  Number of Shares. The number of Shares or Stock Units granted each
calendar quarter pursuant to this Section 7 shall be equal to (i) 25% of the
Director’s Annual Cash Retainer (excluding for this purpose any additional
chairperson retainer(s)), divided by (ii) the Fair Market Value per share of
Bank One common stock as of the Award Grant Date described in paragraph (b)
above (increased to the next whole number in case of any fraction). In the
case of a Director who is appointed to the Board following the start of a
calendar quarter, the number of Shares or Stock Units granted for such quarter
shall be calculated in the manner described in the previous sentence, except
that (A) the Fair Market Value per share of Bank One common stock under part
(ii) above shall be determined using the date the Director is appointed to the
Board as the valuation date, and (B) the number of Shares or Stock Units
granted shall be prorated based upon the number of months of the calendar
quarter during which such Director will serve on the Board, with any part of a
calendar month counting as a whole month.

     8.     Elective Shares and Stock Units in Lieu of Annual Cash Retainer

     Each Director may elect to receive an Award of Shares, Stock Units or a
combination thereof as payment of such Director’s Annual Cash Retainer (or a
portion thereof) , subject to the following terms and conditions:

          (a) Time of Grant. As of each date on which a quarterly portion of a
Director’s Annual Cash Retainer would otherwise be paid, an Award shall be
granted to each Director who has filed with the Committee or its designee a
written election to receive such Award in lieu of all or a portion of such
quarterly payment of his or her Annual Cash Retainer. Such election must be
filed in advance of the start of the Plan Year in which such quarterly payment
is made, on or before a date established by the Committee as necessary to avoid
the constructive receipt of income by the Director for tax purposes and to
comply with any applicable law. Each Director’s election shall remain in
effect and be applicable with respect to each quarterly payment of an Annual
Cash Retainer made for any Plan Year for which a Director has made an election
to receive an Award under this Section 8(a) and in subsequent Plan Years,
unless the Director files a revised election pursuant to this Section 8(a). A
revised election may only be made on or before a date prior to the start of the
Plan Year for which it is being made, such date to be established by the
Committee or its designee to avoid the constructive receipt of income by the
Director for tax purposes and to comply with any applicable law.

          In the event a Director does not file a written election in accordance
with this Section 8(a) by reason of becoming a Director after the date
established by the Committee for the filing of elections (as described above),
an Award may be granted to such Director as of a day following the Director’s
submission of a written election to receive such Award in lieu of all or a
portion of such Director’s Annual Cash Retainer. Such election must be
submitted in accordance with rules established by the Committee or its designee
and as of a date determined to be necessary to avoid constructive receipt of
income by the Director and to comply with any applicable law. The Committee
may, in its sole discretion, limit an election made pursuant to the preceding
sentence to only a fraction of a quarterly payment of such Director’s Annual
Cash Retainer, the numerator of which is the number of months during the
applicable calendar quarter during which such Director will serve on the Board,
with any part of a calendar month counting as a whole month, and the
denominator of which is 3. In addition, a Director appointed to the Board
following the start of a calendar quarter during a Plan Year may not elect to
receive Stock Units in lieu of his or her Cash Retainer for such first quarter
of service; provided however, that the Director may elect to receive Stock
Units in lieu of his or her Cash Retainer for subsequent calendar quarters. An
election made pursuant to the this paragraph shall be irrevocable during the
remainder of the first Plan Year in which the Director receives an Award
hereunder.

4

 

          (b) Number of Shares and/or Stock Units. The number of Shares and/or
Stock Units subject to an Award granted pursuant to Section 8(a) shall be equal
to the amount of the Annual Cash Retainer that a Director has elected pursuant
to Section 8(a) to be payable in Shares or Stock Units, divided by the Fair
Market Value per share of Bank One common stock as of the Award Grant Date
described in paragraph 7(c) above (increased to the next whole number in case
of any fraction).

          (c) Dividends Paid on Stock Units. While Stock Units remain outstanding,
the Director who has received such Stock Units as of the applicable record date
shall receive, as of each date on which the Corporation pays a cash dividend on
outstanding Shares, additional Stock Units equal in number to:

               (1) the product of:

	 	 	 	 	 
	 	 	
(A)
	 	the amount of the cash dividend
declared by the Corporation for each outstanding Share
of the Corporation, and
	 	 	 	 	 
	 	 	
(B)
	 	the number of Stock Units
credited to the Director and still outstanding,
	 	 	 	 	 
	 	 	divided by:

               (2) the Fair Market Value of a Share on the
date the cash dividend is paid.

     Such additional Stock Units shall be issued as Shares at the same time and
in the same manner as the underlying Stock Units to which they are
attributable.

          (d) Distribution of Stock Units. Upon a date elected by a Director who
receives an Award of Stock Units under subparagraph (c) above, the Director
will receive one (1) Share for each Stock Unit, including any fractional Stock
Units thereof. In the event of a Director’s death prior to the issuance of
Shares attributable to Stock Units, such Shares shall become distributable in
accordance with Section 14 below.

9. Discretionary Awards

     In addition to any Awards granted under Section 7 or 8, the Board, in its
sole discretion, may approve Awards of Options, Shares or Stock Units to one or
more Directors in any calendar year in recognition of additional services
provided to the Board or the Corporation or as a special grant to all
Directors, subject to the following terms:

          (a) Shares and Stock Units. The number of shares subject to an award of
Shares and/or Stock Units shall be determined by the Board. In the event that
Stock Units are awarded, the Director will be eligible to receive additional
Stock Units as described in Section 8(c), and he or she may make an election to
receive a distribution in accordance with Section 8(d).

          (b) Number and Purchase Price of Options. The number of Shares subject to
an Option granted shall be determined by the Board. The purchase price per
Share under each Option granted shall not be less than 100% of the Fair Market
Value per Share determined using the Award Grant Date as the valuation date.

          (c) Exercise of Options. Each Option shall be fully exercisable on and
after the date which is six (6) months after the Award Grant Date and, subject
to Section 11 shall not be exercisable prior to such date. An Option may be
exercised until the earlier of the date which is: (i) ten (10) years after the
Award Grant Date of such Option; or (ii) two (2) years from the date

5

 

the Optionee’s service on the Board ends as a result of retirement or
death. An Option, or portion thereof, may be exercised, in whole or in part,
only with respect to whole Shares.

          Shares shall be issued to an Optionee pursuant to the exercise of an
Option only upon receipt by the Corporation from the Optionee of payment in
full either in cash or by submitting acceptable proof to the Committee of the
ownership of Shares which have been owned by the Optionee for at least six (6)
months prior to the date of exercise of the Option, or a combination of cash
and Shares, in an amount or having a combined value equal to the aggregate
purchase price for the Shares subject to the Option or portion thereof being
exercised. The Shares issued to an Optionee for the portion of any Option
exercised by submitting proof of acceptable ownership of Shares shall not
exceed the number of Shares issuable as a result of such exercise (determined
as though payment in full therefor were being made in cash), less the number of
Shares for which proof of ownership is submitted. The value of Shares for
which proof of ownership is submitted in full or partial payment for the Shares
purchased upon the exercise of an Option shall be equal to the Fair Market
Value of such previously-owned Shares on the date of the exercise of such
Option.

          (d) Restorative Stock Options. Options granted under this Section 9 may
provide for the subsequent grant of a restorative option where a Director
exercises the original Option by submitting acceptable proof to the Committee
of the ownership of Shares which have been owned by the Optionee for at least
six (6) months prior to the date of exercise of the Option. The number of
Shares covered by the restorative option shall be equal to the number of
previously-owned shares submitted in the Option exercise, and the exercise
price shall equal the Fair Market Value of Bank One common stock on the date
the Option is exercised. The restorative option shall be subject to such other
terms and conditions as are established by the Committee.

10. Transfers from Other Plans

     Stock Units shall be issued under the Plan in exchange for unfunded
accounts transferred to the Plan from the Bank One Corporation Director
Deferred Compensation Plan or other director compensation programs maintained
by the Corporation, its subsidiaries and affiliates or their predecessor,
successor and/or acquired entities. The number of Stock Units awarded shall be
determined by dividing the dollar amount being transferred to the Plan by the
Fair Market Value of one (1) Share as of the date of transfer, and additional
Stock Units shall be payable to the Director in accordance with Section 8(c).
One (1) Share shall become distributable for each Stock Unit awarded under this
Section 10 in accordance with Section 8(d). Transfers and elections under
this Section 10 shall be made in accordance with rules established by the
Committee or its designee in order to avoid the constructive receipt of taxable
income by Directors and to comply with applicable law.

11. Issuance of Shares

     Upon the grant of an Award of Shares to a Director, the Shares subject to
such Award shall be issued to the Director or his nominee, as the Director
shall designate, whereupon the Director shall become a stockholder of the
Corporation with respect to such Shares and shall be entitled to vote the
Shares.

12. Non-Transferability of Options and Stock Units

     Options and Stock Units granted under the Plan shall not be transferable
by a Director during his or her lifetime and may not be assigned, exchanged,
pledged, transferred or otherwise encumbered or disposed of except by court
order, will or by the laws of descent and distribution.

6

 

Notwithstanding the foregoing, in the event the provisions of Rule 16b-3 of the
Securities Exchange Act of 1934, as amended, allow Options to be transferable,
each Option then outstanding shall become transferable only to the extent set
forth under the terms of each Award, as determined by the Committee. In the
event that any Option is thereafter transferred as permitted by the preceding
sentence, the permitted transferee thereof shall be deemed the Optionee
hereunder, notwithstanding the provisions of subparagraph (l) of Section 2
above. Options shall be exercisable during the Optionee’s lifetime only by the
Optionee or by the Optionee’s guardian, legal representative or similar person
(except in the case of the death of the Director where the Option provides for
post-death exercise).

13. Change of Control

     Upon the occurrence of a Change of Control, any and all outstanding
Options shall become immediately exercisable, and all Stock Units shall become
distributable in Shares.

14. Payments to Beneficiaries.

     Each Director may designate a beneficiary to receive Awards under the Plan
in the event of the death of the Director, as provided under the terms of each
Award. In the event that a Director dies before designating a beneficiary, the
Director’s beneficiary shall be his surviving spouse, if any. If there is no
surviving spouse, the Director’s beneficiary shall be his estate.

15. Amendment and Termination

     The Board may amend the Plan from time to time or terminate the Plan at
any time; provided, however, than no action authorized by this Section 15 shall
adversely change the terms and conditions of an outstanding Option or Stock
Unit without the Optionee’s consent, other than to comply with changes in
applicable laws and regulations.

16. Recapitalization

     The aggregate number of shares of Common Stock as to which Awards may be
granted to Directors, the number of shares thereof covered by each outstanding
Award, and the price per share thereof in each such Award, shall all be
proportionately adjusted for any increase or decrease in the total number of
Shares issued by the Corporation resulting from a subdivision or consolidation
of Shares or other capital adjustment, or the payment of a stock dividend or
other increase or decrease in the number of such Shares effected without
receipt of consideration by the Corporation, or other change in corporate or
capital structure; provided, however, that any fractional Shares resulting from
any such adjustment shall be eliminated. The Committee may also make the
foregoing changes and any other changes, including changes in the classes of
securities available, to the extent it is deemed necessary or desirable to
preserve the intended benefits of the Plan for the Corporation and the
Directors in the event of any other reorganization, recapitalization, merger,
consolidation, spin-off, extraordinary dividend or other distribution or
similar transaction.

17. Governing Law

     To the extent that federal laws do not otherwise control, the Plan shall
be construed in accordance with and governed by the law of the State of
Delaware.

18. Savings Clause

     This Plan is intended to comply in all aspects with applicable law and
regulation, including, Section 16 of the Securities Exchange Act of 1934 and
Rule 16b-3 of the Securities and Exchange Commission. If

7

 

any provision of this Plan shall be held invalid, illegal or unenforceable in
any respect under applicable law and regulation (including Rule 16b-3), the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the invalid, illegal or
unenforceable provision shall be deemed null and void; provided however, that,
to the extent permissible by law, any provision which could be deemed null and
void shall first be construed, interpreted or revised retroactively to permit
this Plan to be construed in compliance with all applicable laws (including
Rule 16b-3) so as to foster the intent of this Plan.

8

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