Document:

exv10w1

 

EXHIBIT 10.1

CAPITOL BANCORP LTD. 2003 STOCK PLAN

1. PURPOSE OF THE PLAN. The purpose of this Capitol Bancorp Ltd. 2003 Stock
Plan is to align the interests of Employees and Directors selected to receive
Awards with those of shareholders by rewarding decision-making and actions for
the betterment of the Corporation. Accordingly, Eligible Individuals may
receive Incentive Stock Options, Nonstatutory Stock Options and Restricted
Stock Awards. Ownership of the Corporation’s stock assists in the attraction
and retention of qualified Employees and Directors, and provides them with
additional incentive to devote their best efforts to pursue and sustain the
Corporation’s superior long-term performance. This enhances the value of the
Corporation for the benefit of its shareholders.

2. DEFINITIONS. As used herein, the following definitions shall apply:

     (a) “Administrator” means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.

     (b) “Applicable Laws” means the requirements relating to the
administration of stock plans under U.S. state corporate laws, U.S. federal and
state securities laws, the Code, any stock exchange or quotation system on
which the Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction where Awards are, or will be, granted under the
Plan.

     (c) “Award” means an award of Options or Restricted Stock pursuant to the
terms of the Plan.

     (d) “Award Recipient” means an Eligible Individual who has received an
Award under the Plan.

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

     (f) “Code” means the Internal Revenue Code of 1986, as amended.

     (g) “Committee” means the committee appointed by the Board to administer
the Plan as provided herein. Unless otherwise determined by the Board, the
Compensation Committee of the Board shall be the Committee.

     (h) “Common Stock” means the common stock of the Corporation.

     (i) “Corporation” means Capitol Bancorp Ltd., a Michigan corporation.

     (j) “Director” means a member of the Board.

     (k) “Disability” means total and permanent disability as defined in
Section
22(e)(3) of the Code.

E-1

 

     (l) “Eligible Individual” means an Employee or Director.

     (m) “Employee” means any person, including Officers and Directors,
employed by the Corporation or any Subsidiary of the Corporation. An Eligible
Individual shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Corporation or (ii) transfers between locations of the
Corporation or between the Corporation, any Subsidiary, or any successor. For
purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by
the Corporation is not so guaranteed, then three (3) months following the 91st
day of such leave any Incentive Stock Option held by the Optionee shall cease
to be treated as an Incentive Stock Option and shall be treated for tax
purposes as a Nonstatutory Stock Option. Neither service as a Director nor
payment of a director’s fee by the Corporation shall be sufficient to
constitute “employment” by the Corporation.

     (n) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

     (o) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:

          (i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

          (ii) If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value of a Share of
Common Stock shall be the mean between the high bid and low asked prices for
the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or

          (iii) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the
Administrator.

     (p) “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (q) “Nonstatutory Stock Option” means an Option not intended to qualify as
an Incentive Stock Option.

E-2

 

     (r) “Notice of Grant” means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of Grant
is part of the Option Agreement.

     (s) “Officer” means a person who is an officer of the Corporation within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

     (t) “Option” means a stock option granted pursuant to the Plan.

     (u) “Option Agreement” means an agreement between the Corporation and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

     (v) “Optioned Stock” means the Common Stock subject to an Option.

     (w) “Optionee” means the holder of an outstanding Option granted under the
Plan.

     (x) “Outside Director” means a Director who is not an Employee.

     (y) “Plan” means this Capitol Bancorp Ltd., 2003 Stock Plan.

     (z) “Restricted Stock” means shares of Common Stock granted pursuant to a
Restricted Stock Agreement under Section 11 of the Plan.

     (aa) "Restricted Stock Award” means an award of Shares pursuant to Section
11 of the Plan subject to such restrictions as may be imposed by the
Administrator pursuant to a Restricted Stock Agreement. Shares of Restricted
Stock shall constitute issued and outstanding Shares for all corporate
purposes.

     (bb) "Restriction Period” means the period designated by the Administrator
during which Shares of Restricted Stock remain forfeitable.

     (cc) “Restricted Stock Agreement” means a written agreement between the
Corporation and the Award Recipient evidencing the terms and restrictions
applying to a Restricted Stock Award. The Restricted Stock Agreement is
subject to the terms and conditions of the Plan.

     (dd) “Retirement” means an Eligible Individual who leaves the employment
of the
Corporation at an age of 65 or older.

     (ee) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.

     (ff) “Section 16(b)” means Section 16(b) of the Exchange Act.

E-3

 

     (gg) “Share” means a share of the Common Stock, as adjusted in accordance
with Section 13 of the Plan.

     (hh) “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter
existing, as defined in Section 424(f) of the Code.

3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of the
Plan, the maximum aggregate number of Shares which may be optioned and granted
under the Plan is 1,000,000, plus any forfeited Shares. For purposes of this
Section 3, “forfeited Shares” means any Shares issued pursuant to Awards made
under the Plan that are forfeited to the Corporation pursuant to award terms
and conditions, plus any Shares covered by Awards granted under the Plan that
are canceled or forfeited. In no event, however, except as to Section 13 of the
Plan, shall more than 100,000 of the Shares eligible for issuance under the
Plan be issued upon the exercise of Incentive Stock Options. The Shares may be
authorized, but unissued, or reacquired Common Stock.

If an Award expires or becomes unexercisable without having been exercised in
full, the unpurchased or unissued Shares which were subject thereto shall
become available for future issuance under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or a Restricted Stock Award,
shall not be returned to the Plan and shall not become available for future
issuance under the Plan, except that if Shares of Restricted Stock are
repurchased by the Corporation at their original purchase price, such Shares
shall become available for future award under the Plan.

4. ADMINISTRATION OF THE PLAN.

	 	(a)	Procedure.

          (i) Administration. The Plan shall be administered by (A) the Board
or (B) a Committee, which committee shall be constituted to satisfy Applicable
Laws.

          (ii) Section 162(m). To the extent that the Administrator determines it to
be desirable to qualify Awards granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan shall
be administered by a Committee of two or more “outside directors” within the
meaning of Section 162(m) of the Code.

          (iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.

     (b) Powers of the Administrator. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

          (i) to determine the Fair Market Value;

E-4

 

          (ii) to select the Eligible Individuals to whom Awards may be granted
hereunder;

          (iii) to determine the number of shares of Common Stock to be covered by
each Award granted hereunder;

          (iv) to approve forms of agreement for use under the Plan;

          (v) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Options may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Awards or the Shares relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;

          (vi) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;

          (vii) to prescribe, amend and rescind rules and regulations relating to
the Plan;

          (viii) to modify or amend each Award (subject to Section 15(c) of the
Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;

          (ix) to allow Award Recipients to satisfy required withholding tax
obligations in accordance with Section 14(b) of the Plan. All elections by an
Award Recipient to have Shares withheld for this purpose shall be made in such
form and under such conditions as the Administrator may deem necessary or
advisable;

          (x) to authorize any person to execute on behalf of the Corporation any
instrument required to effect an Award previously granted by the Administrator;
and

          (xi) to make all other determinations deemed necessary or
advisable for administering the Plan.

     (c) Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Award
Recipients and any other holders of Awards.

5. ELIGIBILITY. Nonstatutory Stock Options and Restricted Stock Awards
may be granted to Eligible Individuals. Incentive Stock Options may be granted
only to Employees.

E-5

 

6. LIMITATIONS.

     (a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Corporation and any Subsidiary) exceeds $100,000, such Options shall be treated
as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive
Stock Options shall be taken into account in the order in which they were
granted. The Fair Market Value of the Shares shall be determined as of the time
the Option with respect to such Shares is granted.

     (b) Neither the Plan nor any Award shall confer upon an Optionee any right
with respect to continuing the Optionee’s relationship as an Employee with the
Corporation, nor shall they interfere in any way with the Optionee’s right or
the Corporation’s right to terminate such relationship at any time, with or
without cause.

     (c) The following limitations shall apply to grants of Options:

          (i) No Eligible Individual shall be granted, in any fiscal year of the
Corporation, Options to purchase more than 500,000 Shares.

          (ii) In connection with his or her initial service, an Eligible Individual
may be granted Options to purchase up to an additional 500,000 Shares which
shall not count against the limit set forth in subsection (i) above.

     (d) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Corporation’s capitalization as described in
Section 13.

7. TERM OF PLAN. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a
term of ten (10) years unless terminated earlier under Section 15 of the Plan.

8. TERM OF OPTION. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Corporation or any Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.

E-6

 

9. OPTION EXERCISE PRICE AND CONSIDERATION.

     (a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be no less than 100% of Fair
Market Value, as shall be determined by the Administrator.

     (b) Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than 100% of the Fair Market Value per Share on the date
of grant pursuant to a merger or other corporate transaction.

     (c) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option
may be exercised.

     (d) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may, in the discretion of the Administrator, consist entirely of:

	 	(i)	 	cash;
	 
	 	(ii)	 	check;
	 
	 	(iii)	 	promissory note;
	 
	 	(iv)	 	other Shares which (A) in the case of Shares acquired upon exercise
of an option, have been owned by the Optionee for more than six months on the
date of surrender, and (B) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised;

	 
	 	(v)	 	consideration received by the Corporation under a cashless exercise
program implemented by the Corporation in connection with the Plan;

	 
	 	(vi)	 	a reduction in the amount of any Corporation liability to the
Optionee, including any liability attributable to the Optionee’s participation
in any Corporation-sponsored deferred compensation program or arrangement;

	 
	 	(vii)	 	any combination of the foregoing methods of payment; or

	 
	 	(viii)	 	such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws.

E-7

 

10. EXERCISE OF OPTION.

     (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.

     An Option shall be deemed exercised when the Corporation receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Corporation or of a duly authorized transfer agent of the
Corporation), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Corporation shall issue (or cause to be issued)
such Shares promptly after the Option is exercised. No adjustment will be made
for a dividend or other right for which the record date is prior to the date
the Shares are issued, except as provided in Section 13 of the Plan.

     Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

     (b) Termination of Relationship as an Employee or Director. If an
Optionee ceases to be an Employee or Director, other than upon the Optionee’s
Death, Disability, or Retirement, the Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement to the
extent that the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for 12 months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

     (c) Disability of Optionee. If an Optionee ceases to be an Employee or
Director as a result of the Optionee’s Disability, the Optionee may exercise
his or her Option within such period of time as is specified in the Option
Agreement to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee’s termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares

E-8

 

covered by the unvested portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

     (d) Death of Optionee. If an Optionee dies while an Employee or Director,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee’s estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death.
Immediately upon an Optionee’s death while an Employee or Director, each of the
Optionee’s outstanding Options shall become vested on an accelerated basis with
respect to all Shares that would have become vested during the twelve (12)
months following such death if Optionee had remained an Employee or Director.
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for twelve (12) months following the Optionee’s death. If,
at the time of death, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. The Option may be exercised by the executor or
administrator of the Optionee’s estate or, if none, by the person(s) entitled
to exercise the Option under the Optionee’s will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

     (e) Retirement. In the event of Optionee’s Retirement, the Option may be
exercised within such period of time as is specified in the Option Agreement
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant), by the Optionee, but only to the extent that the
Option is vested on the date of retirement. Immediately upon an Optionee’s
Retirement while an Employee, each of the Optionee’s outstanding Options shall
become vested on an accelerated basis with respect to all Shares that would
have become vested during the twelve (12) months following such Retirement if
Optionee had remained an Employee. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twenty-four (24)
months following the Optionee’s Retirement. If, at the time of Retirement, the
Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall immediately revert to the Plan. If,
after Retirement, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

     (f) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to
the Optionee at the time that such offer is made.

11. RESTRICTED STOCK. The Administrator may make Restricted Stock Awards to
Eligible Individuals in accordance with the provisions of this subsection
subject to such additional terms and conditions not inconsistent with the
provisions of the Plan as the Administrator shall determine to be appropriate.

E-9

 

     (a) Restricted Stock Awards. Restricted Stock Awards may be issued either
alone, in addition to, or in tandem with other Awards granted under the Plan
and/or cash awards made outside of the Plan.

     (b) Nature of Restrictions. Each Restricted Stock Award shall be
evidenced by a Restricted Stock Agreement that shall specify such restrictions,
as the Administrator may impose (including, without limitation, any limitation
on the right to vote a Share of Restricted Stock or the right to receive any
dividend or other right or property with respect thereto, a requirement that an
Award Recipient pay a stipulated purchase price for each Share and other
restrictions under applicable Federal or state securities laws), which
restrictions may lapse separately or in combination at such time or times, in
such installments or otherwise as the Administrator may deem appropriate;
provided, however, that the minimum Restriction Period with respect to a
Restricted Stock Award that is made subject to restrictions which are
performance-related shall be one year. In the event a Restricted Stock Award
is made subject to restrictions which are not performance-related, the minimum
Restriction Period shall be three years.

     (c) Stock Certificates. Shares of Restricted Stock under the Plan shall
be evidenced by issuance of a stock certificate(s), which shall be held by the
Corporation. Such certificate(s) shall be registered in the name of the Award
Recipient and shall bear an appropriate legend which refers to the restrictions
applicable to such Restricted Stock Award. Alternatively, shares of Restricted
Stock under the Plan may be recorded in book entry form.

     (d) Forfeiture; Delivery of Shares. Except as otherwise determined by the
Administrator, upon termination of an Award Recipient’s employment (as
determined under criteria established by the Administrator) during the
applicable Restriction Period, all Shares of Restricted Stock shall be
forfeited and reacquired by the Corporation. However, in such circumstances,
the Administrator may waive, in whole or in part, any or all remaining
restrictions applicable to the Restricted Stock Award. Shares comprising any
Restricted Stock Award held by the Corporation that are no longer subject to
restrictions shall be delivered to the Award Recipient (or his or her
beneficiary) promptly after the applicable restrictions lapse or are waived.

12. TRANSFERABILITY OF AWARDS. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Award
Recipient, only by the Award Recipient. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as
the Administrator deems appropriate.

13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
SALE.

     (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Corporation, the number of shares of Common Stock covered
by each outstanding Award,

E-10

 

the number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Awards have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Award, the
number of shares of Common Stock subject to the Incentive Stock Option limit
set forth in Section 3, as well as the price per share of Common Stock covered
by each such outstanding Award, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Corporation; provided, however, that conversion of any
convertible securities of the Corporation shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Corporation
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Award.

     (b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Corporation, the Administrator shall notify each Award
Recipient as soon as practicable prior to the effective date of such proposed
transaction. The Administrator may, in its discretion, provide (i) for an
Optionee to have the right to exercise his or her Option until ten (10) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable,
(ii) that any Corporation repurchase option applicable to any Shares acquired
upon exercise of an Option or grant of a Restricted Stock Award shall lapse as
to all such Shares, and (iii) that any restrictions imposed upon Shares of
Restricted Stock shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Award will
terminate immediately prior to the consummation of such proposed action.

     (c) Merger or Asset Sale. In the event of a merger of the Corporation with or
into another corporation, or the sale of substantially all of the assets of the
Corporation, each outstanding Award shall be assumed or an equivalent award
substituted by the successor corporation or a parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for such Awards: (i) each Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable;
(ii) any Corporation repurchase option applicable to any Shares acquired upon
exercise of an Option or grant of a Restricted Stock Award shall lapse as to
all such Shares; and (iii) any restrictions imposed upon Shares of Restricted
Stock shall lapse as to all such Shares. If either the restrictions on Shares
of Restricted Stock have lapsed or an Option has become fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Award Recipient in writing
or electronically that the restrictions on such Shares of Restricted Stock have
lapsed or in the case of an Optionee, that the Option is fully vested and with
respect to the Option, that such Option will remain exercisable for a period of
fifteen (15) days from the date of such notice. For the purposes of this
paragraph, an Award shall be

E-11

 

considered assumed if, following the merger or sale of assets, the award
confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or each Share of Restricted Stock subject to a Restricted
Stock Agreement immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received
in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the merger or sale of assets is not solely common stock of the
successor corporation or its parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received for
each Share of Restricted Stock subject to a Restricted Stock Agreement or upon
the exercise of an Option, for each Share of Optioned Stock subject to such
Option, to be solely common stock of the successor corporation or its parent
equal in fair market value to the per share consideration received by holders
of Common Stock in the merger or sale of assets.

14. DATE OF GRANT; WITHHOLDING.

     (a) Date of Grant. The date of grant of an Award shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Award Recipient within a
reasonable time after the date of such grant.

     (b) Withholding. The Corporation shall have the power and the right to
deduct or withhold, or require an Award Recipient to remit to the Corporation,
an amount sufficient to satisfy Federal, state, and local taxes required by law
to be withheld with respect to any taxable event arising as a result of this
Plan. The Corporation may cause any tax withholding obligation described in
this Section 14(b) to be satisfied by the Corporation withholding Shares having
a Fair Market Value on the date the tax is to be determined equal to the
minimum statutory total tax which could be imposed on the transaction. In the
alternative, the Corporation may permit Award Recipients to elect to satisfy
the tax withholding obligation, in whole or in part, by either (i) having the
Corporation withhold Shares having a Fair Market Value on the date the tax is
to be determined equal to the minimum statutory total tax which could be
imposed on the transaction or (ii) tendering previously acquired Shares having
an aggregate Fair Market Value equal to the minimum statutory total tax which
could be imposed on the transaction (provided that in the case of Shares
acquired upon exercise of an option, such Shares shall have been owned by the
Optionee for more than six months on the date of surrender). All such
elections shall be irrevocable, made in writing, signed by the Award Recipient,
and shall be subject to any restrictions or limitations that the Administrator,
in its sole discretion, deems appropriate.

15. AMENDMENT AND TERMINATION OF THE PLAN.

     (a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.

E-12

 

     (b) Shareholder Approval. The Corporation shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

     (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Award
Recipient, unless mutually agreed otherwise between the Award Recipient and the
Administrator, which agreement must be in writing and signed by the Award
Recipient and the Corporation. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with
respect to Awards granted under the Plan prior to the date of such termination.

16. CONDITIONS UPON ISSUANCE OF SHARES.

     (a) Legal Compliance. Shares shall not be issued pursuant to the exercise
or grant of an Award unless the exercise or grant of such Award and the
issuance and delivery of such Shares shall comply with Applicable Laws and
shall be further subject to the approval of counsel for the Corporation with
respect to such compliance.

     (b) Securities Law Compliance. With respect to insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Administrator fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Administrator.

     (c) Investment Representations. As a condition to the grant or exercise
of an Award, the Corporation may require the person receiving or exercising
such Award to represent and warrant at the time of any such receipt or exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Corporation, such a representation is required.

17. INABILITY TO OBTAIN AUTHORITY. The inability of the Corporation to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Corporation’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Corporation of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

18. RESERVATION OF SHARES. The Corporation, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

19. SHAREHOLDER APPROVAL. The Plan shall be subject to approval by the
shareholders of the Corporation within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the manner and
to the degree required under Applicable Laws.

E-13exv10w2

 

EXHIBIT 10.2

CAPITOL BANCORP LTD. 2003 STOCK PLAN

STOCK OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I. NOTICE OF STOCK OPTION GRANT

	 	 	 	 	 
	Optionee:

	 	EID	 	 
	

	 	 	 	

	

	 	Name	 	 
	

	 	 	 	

	

	 	Address	 	 
	

	 	 	 	

	

	 	Address	 	 
	

	 	 	 	

	

	 	City, St., Zip	 	 
	

	 	 	 	

     You have been granted an option to purchase Common Stock of the
Corporation, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:

	 	 	 
	Grant Number:
	 	 
	

	 	

	Date of Grant:
	 	 
	

	 	

	Exercise Price per Share:
	 	 
	

	 	

	Total Number of Shares Granted:
	 	 
	

	 	

	Type of Option:
	 	 
	

	 	

	Term/Expiration Date:
	 	 
	

	 	

Vesting Schedule:

     This Option may be exercised, in whole or in part, in accordance with
the following schedule:

E-14

 

     In the event that an Optionee is terminated due to a job elimination or
reduction in force, the following provision shall apply. Immediately upon an
Optionee’s termination, due to job elimination or reduction in force, while an
Employee, each of the Optionee’s outstanding Options shall become vested on an
accelerated basis with respect to all Shares that would have become vested
during the 90 days following such termination if Optionee had remained an
Employee.

Termination Period:

     This Option may be exercised for 60 days after Optionee ceases to be an
Employee or Director. Upon the death or Disability of the Optionee, this Option
may be exercised for one year after Optionee ceases to be an Employee or
Director. Upon the Retirement of the Optionee, this Option may be exercised for
two years after Optionee ceases to be an Employee. In no event shall this
Option be exercised later than the Term/Expiration Date as provided above.

II. AGREEMENT

     1. Grant of Option. The Plan Administrator of the Corporation hereby
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the “Optionee”) an option (the “Option”) to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the “Exercise Price”), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject
to Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

     If this Option is intended to be an Incentive Stock Option under Section
422 of the Code (“ISO”), to the extent that it exceeds the $100,000 limit of
Code Section 422(d), the excess shall be treated as a Nonstatutory Stock Option
(“NSO”).

     2. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
“Exercised Shares”), and such other representations and agreements as may be
required by the Corporation pursuant to the provisions of the Plan. The
Exercise Notice shall be completed by the Optionee and delivered to Shareholder
Services Department of the Corporation. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the
Corporation of such fully executed Exercise Notice accompanied by such
aggregate Exercise Price.

E-15

 

     No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

     3. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee
(subject to the Administrator’s prior written consent): (a) cash; or (b)
cashier’s or certified check; or (c) consideration received by the Corporation
under a cashless exercise program implemented by the Corporation in connection
with the Plan; or (d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

     4. Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

     5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

     6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY
IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.

          (a) Exercising the Option.

                    (i) Nonstatutory Stock Option. The Optionee may incur regular federal
income tax liability upon exercise of a NSO. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the Fair Market Value of the Exercised Shares
on the date of exercise over their aggregate Exercise Price. If the Optionee is
an Employee or a former Employee, the Corporation will be required to withhold
from his or her compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.

                    (ii) Incentive Stock Option. If this Option qualifies as an ISO, the Optionee
will have no regular federal income tax liability upon its exercise, although
the excess, if any, of the Fair Market Value of the Exercised Shares on the
date of exercise over their aggregate Exercise Price will be treated as an
adjustment to alternative minimum taxable income

E-16

 

for federal tax purposes and may subject the Optionee to alternative minimum
tax in the year of exercise. In the event that the Optionee ceases to be an
Employee but remains an Eligible Individual, any Incentive Stock Option of the
Optionee that remains unexercised shall cease to qualify as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option on
the date three (3) months and one (1) day following such change of status.

         (b) Disposition of Shares.

                    (i) NSO. If the Optionee holds NSO Shares for at least one year, any gain
realized on disposition of the Shares will be treated as long-term capital gain
for federal income tax purposes.

                    (ii) ISO. If the Optionee holds ISO Shares for at least one year after
exercise and two years after the grant date, any gain realized on disposition
of the Shares will be treated as long-term capital gain for federal income tax
purposes. If the Optionee disposes of ISO Shares within one year after exercise
or two years after the grant date, any gain realized on such disposition will
be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the lesser of (A) the difference between the
Fair Market Value of the Shares acquired on the date of exercise and the
aggregate Exercise Price, or (B) the difference between the sale price of such
Shares and the aggregate Exercise Price. Any additional gain will be taxed as
capital gain, short-term or long-term depending on the period that the ISO
Shares were held.

      (c) Notice of Disqualifying Disposition of ISO Shares. If the Optionee
sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on
or before the later of (i) two years after the grant date, or (ii) one year
after the exercise date, the Optionee shall immediately notify the Corporation
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Corporation on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

     7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Corporation and the
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee’s interest except by means of a writing signed by the
Corporation and the Optionee. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of Michigan.

     8. NO GUARANTEE OF CONTINUED SERVICE. THE OPTIONEE ACKNOWLEDGES AND AGREES THAT
THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS AN EMPLOYEE AT THE WILL OF THE CORPORATION (AND NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER).
THE OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED

E-17

 

HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE
OPTIONEE’S RIGHT OR THE CORPORATION’S RIGHT TO TERMINATE THE OPTIONEE’S
RELATIONSHIP AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT CAUSE.

     By your signature and the signature of the Corporation’s representative
below, you and the Corporation agree that this Option is granted under and
governed by the terms and conditions of the Plan and this Option Agreement. The
Optionee has reviewed the Plan and this Option Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Option Agreement and fully understands all provisions of the Plan and Option
Agreement. The Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Option Agreement. The Optionee further agrees to
notify the Corporation upon any change in the residence address indicated
below.

	 	 	 	 	 	 	 
	The Optionee:	 	Capitol Bancorp Ltd., a Michigan	 	 
	 	 	corporation	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	
 

	 	 	 	
 	 	 
	Signature
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Its:	 	 	 	 
	
 

	 	 	 	
 	 	 
	Print Name
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Residence Address:	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	One Business & Trade Center
	
	 	200 Washington Square North
	
	 	Lansing, Michigan 48933

E-18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]