FirstMerit Corporation 10-K/Amendment No. 1

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A
(Amendment No. 1)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

COMMISSION FILE NUMBER 0-10161

FIRSTMERIT CORPORATION

(Exact name of registrant as specified in its charter)


OHIO (State or other jurisdiction of incorporation or organization)		34-1339938 (I.R.S. employer identification no.)


III Cascade Plaza, Akron, Ohio (Address of principal executive offices)		44308 (Zip code)		(330) 996-6300 (Telephone Number)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, NO PAR VALUE

and

PREFERRED SHARE PURCHASE RIGHTS

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [X] No [ ]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter: $1,926,340,787.

Indicate the number of shares outstanding of registrant’s common stock as of March 31, 2004: 84,781,079 shares of common stock, without par value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement of FirstMerit Corporation, dated March 3, 2004, are incorporated by reference in Part III.

PLAN FINANCIAL STATEMENTS

The undersigned registrant hereby amends the following item of its Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 2003 for the purpose of furnishing the financial statements of the FirstMerit Corporation and Subsidiaries Employees’ Salary Savings Retirement Plan.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FirstMerit Corporation and
Affiliates Employees’ Salary
Savings Retirement Plan
Financial Statements And Supplemental
Schedules
December 31, 2003 and 2002

FIRSTMERIT CORPORATION AND AFFILIATES
EMPLOYEES’ SALARY SAVINGS RETIREMENT PLAN

FINANCIAL REPORT

DECEMBER 31, 2003 AND 2002

FIRSTMERIT CORPORATION AND AFFILIATES
EMPLOYEES’ SALARY SAVINGS RETIREMENT PLAN

CONTENTS


	Page
INDEPENDENT AUDITORS’ REPORT		1
FINANCIAL STATEMENTS
Statements of net assets available for benefits		2
Statements of changes in net assets available for benefits		3
Notes to financial statements		4-10
SUPPLEMENTAL INFORMATION
Schedule of assets (held at end of year)		11
Schedule of reportable transactions		12

(HAUSSER + TAYLOR LLC LOGO)

To the Board of Directors
of FirstMerit Corporation

Independent Auditors’ Report

We have audited the accompanying statement of net assets available for benefits of FirstMerit Corporation and Affiliates Employees’ Salary Savings Retirement Plan (the “Plan”) as of December 31, 2003, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Plan as of and for the year ended December 31, 2002 were audited by other auditors, whose report dated April 28, 2003 expressed an unqualified opinion on those financial statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2003, and changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets (held at end of year) as of December 31, 2003 and reportable transactions for the year ended December 31, 2003 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

(HAUSSER + TAYLOR LLC)

Cleveland, Ohio
April 8, 2004

(NEXIA INTERNATIONAL LOGO)

-1-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2003 and 2002


	2003			2002
ASSETS
Investments:
Mutual funds, at fair value	$	45,423,119		$	33,626,716
FirstMerit Corporation Common Stock, at fair value		64,480,403			48,686,417
Loans to participants		923,993			910,271

Total investments		110,827,515			83,223,404
Receivables:
Contributions receivable from participants		237,110			242,524
Contributions receivable from employer		135,228			135,625
Investment income		68,445			—

Total receivables		440,783			378,149

Total assets		111,268,298			83,601,553

LIABILITIES
(Book overdraft) cash		(5,734	)		(7,939	)

NET ASSETS AVAILABLE FOR BENEFITS	$	111,262,564		$	83,593,614

The accompanying notes are an integral part of these financial statements.

-2-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

Years Ended December 31, 2003 and 2002


	2003		2002
ADDITIONS
Contributions:
Participants’ contributions	$	6,430,366	$	6,433,340
Employer’s contributions		3,535,814		2,980,908

		9,966,180		9,414,248
Investment income:
Interest		57,884		57,352
Dividends		2,930,183		2,648,037
Net appreciation (depreciation) of investments		19,658,855		(20,522,376	)

		22,646,922		(17,816,987	)
Assets received from new participants		242,987		138,661

Total additions		32,856,089		(8,264,078	)
DEDUCTIONS
Benefits paid to participants		5,187,139		6,608,131

Total deductions		5,187,139		6,608,131

NET INCREASE (DECREASE)		27,668,950		(14,872,209	)
NET ASSETS AVAILABLE FOR BENEFITS - BEGINNING OF YEAR		83,593,614		98,465,823

END OF YEAR	$	111,262,564	$	83,593,614

The accompanying notes are an integral part of these financial statements.

-3-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS

Note 1. Description of the Plan

The following brief description of the FirstMerit Corporation and Affiliates (“FirstMerit”) (the “Company”) Employees’ Salary Savings Retirement Plan (the “Plan”) provides only general information. Participants should refer to the Plan Agreement for a more complete description of the Plan’s provisions.

A. General

The Board of Directors of FirstMerit Corporation established this defined contribution plan as of October 1, 1985. The Plan covers all employees of FirstMerit who have six months of service and have attained the age of twenty-one. The Plan is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.

B. Contributions

The Plan permits each participant to contribute from one percent to fifteen percent of compensation. Such contributions are known as voluntary pretax employee contributions. A participant’s voluntary pretax contributions and earnings are immediately vested and non-forfeitable.

FirstMerit contributes as a matching contribution an amount equal to 50 percent of the participant’s voluntary pretax contribution. FirstMerit will not make a matching contribution with respect to any portion of a participant voluntary pre-tax contribution that exceeds six percent of the participant’s basic compensation. These employer matching contributions and earnings are immediately vested and non-forfeitable.

The Plan also includes a supplemental matching account whereby FirstMerit makes additional matching contributions equal to 50% of the participant’s voluntary pretax employee contributions which do not exceed three percent of the participant’s basic compensation. Participants become vested in the Supplemental Matching Program upon achieving five years of service or upon attaining normal retirement age. Effective January 1, 2002 the Plan was amended whereby participants are immediately vested in the Supplemental Matching account. All prior Supplemental Matching contributions were merged into, and future contributions are being made to, the Matching ESOP account.

-4-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 1. Description of the Plan (Continued)

C. Investments

During 2002, the Company discontinued use of the FirstMerit Equity Fund, for which the Company acted as investment advisor. As of August 15, 2002, the FirstMerit Equity Fund was merged with the Federated Capital Appreciation Fund, which became a new plan investment option. Two additional funds, the Fidelity Advisor Equity Income Fund and the T. Rowe Price Small-Cap Stock Fund, were also added as investment options in 2002. The following is a summary of investment options (Investment Funds) available to participants at December 31, 2003 and 2002:

Federated Government Obligations Fund: The fund seeks to provide conservative investors with a high quality portfolio, current income and relative safety. This money market fund invests in U.S. Treasury, government agency securities and repurchase agreements backed by government securities.

Federated U.S. Government Securities Fund 1-3 Years: The fund seeks to provide investors with current income and limited price volatility by investing in U.S. Treasury and government agency securities.

Federated Capital Preservation Fund: The fund seeks to offer investors stable principal with high current income by investing in Guaranteed Investment Contracts issued by major U.S. and Canadian life insurance companies and other stable value products.

Federated Capital Appreciation Fund: The fund is an established equity fund that pursues capital appreciation over the long-term by investing predominantly in medium to large capitalization common stocks.

Fidelity Advisor Intermediate Bond Fund: The fund invests in investment-grade bonds from different sectors of the market to give investors greater return potential through exposure to corporate and mortgage-backed securities.

Fidelity Advisor Equity Growth Fund: The fund invests in attractively priced stocks of companies that demonstrate the potential for above-average earnings and revenue growth, a strategy that may translate into strong returns for investors.

Fidelity Advisor Equity Income Fund: The fund is a value-oriented fund which invests in undervalued securities to take advantage of growth potential while striving to provide below average risk compared to similar funds.

Fidelity Balanced Fund: The fund seeks income and capital growth consistent with reasonable risk by investing approximately 60% of the fund’s assets in equities and the remainder in a broadly diversified portfolio of debt securities. It invests at least 25% of assets in fixed-income senior securities.

-5-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 1. Description of the Plan (Continued)

C. Investments (Continued)

Fidelity Blue Chip Growth Fund: The fund seeks growth of capital over the long-term by investing primarily in a diversified portfolio of common stocks of well-known and established companies with a market capitalization of at least $200,000,000.

Fidelity Overseas Fund: The fund seeks long-term growth of capital by investing in equities issued by companies, whose principal business activities are outside of the United States. The fund seeks diversity among both industries and countries outside of North America.

T. Rowe Price Small-Cap Stock Fund: The fund seeks long-term growth of capital through investment in stock of small companies that are potentially undervalued or have growth prospects.

Vanguard 500 Index Fund: The fund seeks investment results that correspond with the price and yield performance of the S&P 500 Index. The fund employs a passive management strategy designed to track the performance of the S&P 500 Index, which is dominated by the stock of large U.S. companies.

FirstMerit Corporation Common Stock: The Plan provides for participants to invest directly in Common Shares of the Company. Each participant electing to purchase Common Shares of the Company through the Plan is permitted to vote such Common Shares in the same manner as any other shareholder and is furnished proxy materials to such effect. Dividends paid by FirstMerit are reinvested in the Plan.

D. Participants’ Accounts

FirstMerit Bank, N.A. (a subsidiary of FirstMerit), as the trustee for the Plan, maintains separate accounts for each participant. Participants can contribute to one investment or a combination thereof with the minimum investment in any option of 5%. Employer matching contributions are invested solely in FirstMerit Corporation common stock purchased on the open market by the trustee.

E. Payment of Benefits

Distributions to participants are made by one or more of the following methods: (1) a single lump-sum payment, in cash and/or FirstMerit stock; or (2) payments in equal or nearly equal monthly, quarterly, semiannual, or annual installments over any period not exceeding 10 years or the participant’s life expectancy at the date such payments commence, if less. Benefit distributions are recorded when paid to participants.

-6-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 1. Description of the Plan (Continued)

F. Loans

The loan feature allows participants to borrow against amounts accumulated in the Plan on their behalf. The plan document sets forth guidelines as to certain limitations, and permissible interest rates and repayment terms.

G. Administrative Expenses

All expenses associated with administering the Plan, including the trustee’s fees and brokerage commissions on purchases of and transfers between Investment Funds, are paid by FirstMerit.

H. Diversification

Prior to participants attainment of age 55, all amounts in their Matching ESOP Account and Supplemental Retirement ESOP Account are invested entirely in shares of FirstMerit Corporation common stock. However, when participants reach age 55, they will be entitled to direct the trustee to invest up to 25% of the amount held in their Matching Contribution ESOP Account among the funds described in Note 1, Section C. The percentage increases to 50% when they reach age 60.

Further, if participants have completed at least ten years of participation in the Plan and attained age 55, they are a “Qualified Member.” This means that they have the right to make an election to direct the investment of a portion of their Supplemental Retirement ESOP Account. Within 90 days after the close of each Plan Year in the six-Plan Year period beginning with the Plan Year in which they first become a Qualified Member, they may elect to diversify the investment of at least 25% of these accounts. In the last year of the six-Plan Year period, the percentage increases to 50%. The amounts they may elect to diversify may be invested in any of the investment funds described above.

Note 2. Summary of Significant Accounting Policies

A. Basis of Presentation

The accompanying financial statements have been prepared on an accrual basis in accordance with accounting principles generally accepted in the United States of America.

B. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes. Actual results could differ from those estimates.

-7-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 2. Summary of Significant Accounting Policies (Continued)

C. Investments

Investments in securities and mutual funds are stated at fair value. The fair value of marketable securities is based on quotations obtained from national securities exchanges.

The fair value of the investments in the mutual funds is based upon the number of units held by the Plan at December 31, 2003 and 2002, respectively, and the current value of each unit is based upon the net asset value disclosed by the registered investment company as of the last trading day of the reporting period. Participant loans are stated at cost, which approximates fair value.

Securities transactions are recognized on the trade date (the date the order to buy or sell is executed).

The Plan presents in the Statements of Changes in Net Assets Available for Benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on these investments.

D. Risk and Uncertainties

The Plan generates a significant portion of its revenue from investments in domestic and international mutual funds, bonds and FirstMerit Corporation common stock. As a result, the Plan’s revenues and net assets available for plan benefits are dependent on the performance and volatility of the both the U.S. and global financial markets and economic conditions.

E. Fair Value Disclosure of Financial Instruments

Management has determined that the carrying amount of financial instruments, as reported on the Statements of Net Assets Available for Benefits, approximates fair value.

F. Reclassification

Participant loans have been reclassified from receivables to investments to conform to the current year’s presentation.

-8-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 3. Investments

The Plan’s investments are maintained in Investment Funds and common shares of the Company, as described in Note 1. The following presents the market value of investments that represent 5 percent or more of the Plan’s Net Assets Available for Plan Benefits at December 31, 2003 and 2002:


	2003		2002
Mutual funds:
Fidelity Advisor Equity Growth Fund	$	9,815,958	$	6,827,562
Fidelity Blue Chip Growth Fund		10,509,457		7,998,187
Federated Capital Preservation Fund		*		4,431,551
FirstMerit Corporation Common Stock
(nonparticipant directed)		64,480,403		48,686,417

* Balance is under 5% for respective year.

As stated in Note 2, the Plan presents, in the Statement of Changes in Net Assets Available for Benefits, net appreciation (depreciation) of investments, which consist of realized gains or losses and change in unrealized appreciation (depreciation). Total realized losses for 2003 and 2002 were $(222,017) and $(43,367), respectively, and the change in unrealized appreciation (depreciation) was $19,880,872 and $(20,479,009) for 2003 and 2002, respectively.

In summary, the net appreciation (depreciation) in the Plan’s investments, which includes investments bought, sold, and held during the below periods is as follows:


	2003		2002
Mutual funds	$	7,121,021	$	(7,176,951	)
FirstMerit Corporation Common Stock		12,537,834		(13,302,058	)

	$	19,658,855	$	(20,479,009	)

Note 4. Federal Income Taxes

The Plan and Trust qualify under Section 401 of the Internal Revenue Code and the Trust is exempt from federal income taxes under Section 501(a).

The Plan obtained its latest determination letter on May 9, 2001, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended and restated (effective January 1, 2002) since receiving the determination letter. However, the Plan administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

-9-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 5. Plan Termination

Although they have not expressed any intent to do so, the Plan may be terminated by unanimous action of the FirstMerit Corporation Board of Directors. In the event the Plan is terminated, FirstMerit will direct the trustee to distribute the assets of the trust fund, after payment of any expenses properly chargeable against the trust fund, to participants in proportion to the value of their total account balances as of the date of termination, in cash or in kind and in such a manner as FirstMerit shall determine.

Note 6. Transactions with Party-In-Interest

Transactions involving participant notes, common shares of FirstMerit Corporation and the funds administered by FirstMerit Corporation, trustee of the Plan, are considered party-in-interest transactions. These transactions are not, however, considered prohibited transactions under 29 CFR 408(b) of the ERISA regulations. During the year ended December 31, 2002, the Plan held units of participation in the FirstMerit Equity Fund (formerly called the NewPoint Equity Fund), a mutual fund in which the Trust and Financial Services Division of FirstMerit Bank, N.A. is the advisor to the fund.

The FirstMerit Equity Fund merged into the Federated Capital Appreciation Fund in August 2002, as described in Note 1. During the fiscal period 2002, transactions with the fund included aggregate purchases of $576,975 and aggregate sales totaling $824,710.

-10-

SUPPLEMENTAL INFORMATION

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

SCHEDULE OF ASSETS (HELD AT END OF YEAR)

Schedule H, Line 4i
Employer No. 34-1339938
Plan No. 002

December 31, 2003


					Current
(a)	(b) Identity of Party	(c) Description of Investment	(d) Cost		(e) Value
	Mutual Funds
	Federated Government Obligations Fund		$	49,392	$	49,392
	Federated U.S. Government Securities Fund 1-3 Years			2,822,389		2,871,368
	Federated Capital Preservation Fund			5,216,990		5,216,990
	Fidelity Advisor Intermediate Bond Fund			3,089,448		3,212,292
	Federated Capital Appreciation Fund			6,481,412		5,180,809
	Fidelity Advisor Equity Growth Fund			10,378,485		9,815,958
	Fidelity Advisor Equity Income Fund			606,326		697,503
	Fidelity Balanced Fund			1,036,371		1,180,596
	Fidelity Blue Chip Growth Fund			10,856,150		10,509,457
	Fidelity Overseas Fund			2,922,896		2,940,972
	T. Rowe Price Small-Cap Stock Fund			902,552		1,043,103
	Vanguard 500 Index Fund			2,624,440		2,704,679

				46,986,851		45,423,119
*	FirstMerit Corporation Common Stock			44,370,043		64,480,403
*	Participant Loans	Participant Loans Outstanding
		Bearing Interest of 3.29 - 9.44%		923,993		923,993

			$	92,280,887	$	110,827,515

* Represents a party-in-interest

-11-

FIRSTMERIT CORPORATION AND AFFILIATES EMPLOYEES’
SALARY SAVINGS RETIREMENT PLAN

SCHEDULE OF REPORTABLE TRANSACTIONS

Schedule H, Line 4j
Employer No. 34-1339938
Plan No. 002

Year Ended December 31, 2003

(h)

Current

Value of

(i)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

Asset on

Net

Identity of

Description

Purchase

Selling

Lease

Expense

Cost of

Transaction

Gain or

Party

of Asset

Price

Rental

Incurred

Asset

Date

(Loss)

Category II: Series of transactions with same broker exceeds 5% of value

FirstMerit Corporation

286,039 shares

Issue: 337915102

Common stock

24 transactions

6,533,308

N/A

17,762

6,533,308

N/A

Category III: Series of transactions in same security exceeds 5% of value

FirstMerit Corporation

286,081 shares

Issue: 337915102

Common stock

25 transactions

6,534,400

N/A

17,767

6,534,400

N/A

FirstMerit Corporation

96,758 shares

Issue: 337915102

Common stock

227 transactions

N/A

2,207,995

N/A

8,713

2,095,374

2,207,995

112,621

Federated Government

6,534,202 shares

Obligations Fund

Mutual fund

Issue: 60934N104

222 transactions

6,534,202

N/A

6,534,202

N/A

Federated Government

6,533,496 shares

Obligations Fund

Mutual fund

Issue: 60934N104

58 transactions

N/A

6,533,496

N/A

6,533,496

—

There were no reportable transactions for Categories I or IV during the year.

-12-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Akron, State of Ohio, on the 30th day of April, 2004.


		FirstMerit Corporation

		By:		/s/ JOHN R. COCHRAN John R. Cochran, Chairman and Chief Executive Officer

Exhibit Index


Exhibit
Number

	3.1	Amended and Restated Articles of Incorporation of FirstMerit Corporation, as amended (incorporated by reference from Exhibit 3.1 to the Form 10-K/A filed by the Registrant on April 29, 1999)
	3.2	Amended and Restated Code of Regulations of FirstMerit Corporation (incorporated by reference from Exhibit 3(b) to the Form 10-K filed by the registrant on April 9, 1998)
	4.1	Shareholders Rights Agreement dated October 21, 1993, between FirstMerit Corporation and FirstMerit Bank, N.A., as amended and restated May 20, 1998 (incorporated by reference from Exhibit 4 to the Form 8-A/A filed by the registrant on June 22, 1998)
	4.2	Instrument of Assumption of Indenture between FirstMerit Corporation and NBD Bank, as Trustee, dated October 23, 1998 regarding FirstMerit Corporation’s 6 1/4% Convertible Subordinated Debentures, due May 1, 2008 (incorporated by reference from Exhibit 4(b) to the Form 10-Q filed by the registrant on November 13, 1998)
	4.3	Supplemental Indenture, dated as of February 12, 1999, between FirstMerit and Firstar Bank Milwaukee, National Association, as Trustee relating to the obligations of the FirstMerit Capital Trust I, fka Signal Capital Trust I (incorporated by reference from Exhibit 4.3 to the Form 10-K filed by the Registrant on March 22, 1999)
	4.4	Indenture dated as of February 13, 1998 between Firstar Bank Milwaukee, National Association, as trustee and Signal Corp (incorporated by reference from Exhibit 4.1 to the Form S-4, No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
	4.5	Amended and Restated Declaration of Trust of FirstMerit Capital Trust I, fka Signal Capital Trust I, dated as of February 13, 1998 (incorporated by reference from Exhibit 4.5 to the Form S-4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
	4.6	Form Capital Security Certificate (incorporated by reference from Exhibit 4.6 to the Form S-4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
	4.7	Series B Capital Securities Guarantee Agreement (incorporated by reference from Exhibit 4.7 to the Form No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
	4.8	Form of 8.67% Junior Subordinated Deferrable Interest Debenture, Series B (incorporated by reference from Exhibit 4.7 to the Form S-4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
	10.1	Amended and Restated 1992 Stock Option Program of FirstMerit Corporation (incorporated by reference from Exhibit 10.1 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.2	Amended and Restated 1992 Directors Stock Option Program (incorporated by reference from Exhibit 10.2 to the Form 10-K filed by the registrant on March 9, 2001) *
	10.3	Amended and Restated 1995 Restricted Stock Plan (incorporated by reference from Exhibit 10.3 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.4	Amended and Restated 1997 Stock Option Program (incorporated by reference from Exhibit 10.4 to the Form 10-K filed by the registrant on March 9, 2001) *
	10.5	Amended and Restated 1999 Stock Option Program (incorporated by reference from Exhibit 10.5 to the Form 10-K/A filed by the registrant on April 30, 2001)*
	10.6	Amended and Restated 2002 Stock Plan*
	10.7	Amended and Restated 1987 Stock Option and Incentive Plan (SF) (incorporated by reference from Exhibit 10.6 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.8	Amended and Restated 1996 Stock Option and Incentive Plan (SF) (incorporated by reference from Exhibit 10.7 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.9	Amended and Restated 1994 Stock Option and Incentive Plan (SF) ((incorporated by reference from Exhibit 10.8 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.10	Amended and Restated 1989 Stock Incentive Plan (SB) (incorporated by reference from Exhibit 10.9 to the Form 10-K filed by the registrant on March 9, 2001) *


Exhibit
Number

	10.11	Amended and Restated Stock Option and Incentive Plan (SG) (incorporated by reference from Exhibit 10.10 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.12	Non-Employee Director Stock Option Plan (SG) (incorporated by reference from Exhibit 4.3 to the Form S-8/A (No. 333-63797) filed by the registrant on February 12, 1999)*
	10.13	Amended and Restated 1997 Omnibus Incentive Plan (SG) (incorporated by reference from Exhibit 10.12 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.14	Amended and Restated 1993 Stock Option Plan (FSB) (incorporated by reference from Exhibit 10.13 to the Form 10-K filed by the registrant on March 9, 2001)*
	10.15	Amended and Restated Executive Deferred Compensation Plan (incorporated by reference from Exhibit 10.14 to the Form 10-K/A filed by the registrant on April 30, 2001)*
	10.16	Amended and Restated Director Deferred Compensation Plan (incorporated by reference from Exhibit 10.15 to the Form 10-K/A filed by the registrant on April 30, 2001)*
	10.17	Executive Supplemental Retirement Plan (incorporated by reference from Exhibit 10.16 to the Form 10-K/A filed by the registrant on April 30, 2002)*
	10.18	Form of Amended and Restated Membership Agreement with respect to the Executive Supplemental Retirement Plan (incorporated by reference from Exhibit 10.39 to the Form 10-K filed by the Registrant on March 22, 1999)*
	10.19	Unfunded Supplemental Benefit Plan (incorporated by reference from Exhibit 10.19 to the Form 10-K filed by the registrant on March 6, 2003)*
	10.20	First Amendment to the Unfunded Supplemental Benefit Plan (incorporated by reference from Exhibit 10.19 to the Form 10-K/A filed by the registrant on April 30, 2002)*
	10.21	Executive Insurance Program Summary (incorporated by reference from Exhibit 10.20 to the Form 10-K/A filed by the registrant on April 30, 2002)*
	10.22	Long Term Disability Plan (incorporated by reference from Exhibit 10.21 to the Form 10-K/A filed by the registrant on April 30, 2002)*
	10.23	Amended and Restated Employment Agreement of John R. Cochran (incorporated by reference from Exhibit 10.24 to the Form 10-K/A filed by the registrant on April 30, 2001)*
	10.24	Restricted Stock Award Agreement of John R. Cochran dated March 1, 1995 (incorporated by reference from Exhibit 10.24 to the Form 10-K/A filed by the registrant on April 30, 2002)*
	10.25	First Amendment to Restricted Stock Award Agreement for John R. Cochran (incorporated by reference from Exhibit 10.38 to the Form 10-K filed by the Registrant on March 22, 1999)*
	10.26	Second Amendment to Restricted Stock Award Agreement for John R. Cochran (incorporated by reference from Exhibit 10.27 to the Form 10-K/A filed by the registrant on April 30, 2001)*
	10.27	Restricted Stock Award Agreement of John R. Cochran dated April 9, 1997 (incorporated by reference from Exhibit 10.28 to the Form 10-K filed by the registrant on March 6, 2003)*
	10.28	First Amendment to Restricted Stock Award Agreement for John R. Cochran (incorporated by reference from Exhibit 10.29 to the Form 10-K/A filed by the registrant on April 30, 2001)*
	10.29	Amended and Restated SERP Agreement for John R. Cochran (incorporated by reference from Exhibit 10.30 to the Form 10-K/A filed by the registrant on April 30, 2001)*
	10.30	Form of FirstMerit Corporation Amended and Restated Change in Control Termination Agreement (incorporated by reference from Exhibit 10.34 to the Form 10-K filed by the registrant on March 6, 2003)*
	10.31	Form of FirstMerit Corporation Amended and Restated Displacement Agreement (incorporated by reference from Exhibit 10.35 to the Form 10-K filed by the registrant on March 6, 2003)*
	10.32	Form of Director and Officer Indemnification Agreement and Undertaking (incorporated by reference from Exhibit 10.35 to the Form 10-K/A filed by the registrant on April 30, 2002)


Exhibit
Number

	10.33	Credit Agreement among FirstMerit Corporation, Bank One, N.A., and Lenders, dated November 27, 2000 (incorporated by reference from Exhibit 10.36 to the Form 10-K filed by the registrant on March 9, 2001)
	10.34	Distribution Agreement, by and among FirstMerit Bank, N.A. and the Agents, dated July 15, 1999 (incorporated by reference from Exhibit 10.41 to the Form 10-K filed by the Registrant on March 10, 2000)
	10.35	Employment Agreement of David G. Lucht dated May 16, 2002 (incorporated by reference from Exhibit 10.35 to the Form 10-Q filed by the registrant on August 13, 2002)*
	10.36	Restricted Stock Award Agreement of David G. Lucht dated May 16, 2002 (incorporated by reference from Exhibit 10.36 to the Form 10-Q filed by the registrant on August 13, 2002)*
	10.37	Amendment to the Amended and Restated Employment Agreement of John R. Cochran dated December 1, 2003 (incorporated by reference from Exhibit 10.37 to the Form 10-K filed by the registrant on March 3, 2004)
	21	Subsidiaries of FirstMerit Corporation (incorporated by reference from Exhibit 21 to the Form 10-K filed by the registrant on March 3, 2004)
	23	Consent of Hausser + Taylor LLC
	31.1	Rule 13a-14(a)/ Section 302 Certification of John R. Cochran, Chairman and Chief Executive Officer of FirstMerit Corporation.
	31.2	Rule 13a-14(a)/ Section 302 Certification of Terrence E. Bichsel, Executive Vice President and Chief Financial Officer of FirstMerit Corporation.
	32.1	Rule 13a-14(b)/ Section 906 Certifications of John R. Cochran, Chairman and Chief Executive Officer of FirstMerit Corporation, and Terrence E. Bichsel, Executive Vice President and Chief Financial Officer of FirstMerit Corporation.

* Indicates management contract or compensatory plan or arrangement

EX-10.6 2 l07289aexv10w6.htm EX-10.6 AMENDED AND RESTATED 2002 STOCK PLAN EX-10.6 Amended and Restated 2002 Stock Plan

EXHIBIT 10.6

FIRSTMERIT CORPORATION

AMENDED AND RESTATED
2002 STOCK PLAN

EFFECTIVE APRIL 22, 2004

FIRSTMERIT CORPORATION
AMENDED AND RESTATED
2002 STOCK PLAN

TABLE OF CONTENTS

INTRODUCTION

Purpose Of The Plan

Definitions

II.

EMPLOYEES STOCK OPTION PROGRAM

Administration

Participation

Maximum Number Of Shares Available

Adjustments

Registration Conditions

Committee Action

Stock Options

Amendment And Termination

III.

DIRECTORS STOCK OPTION PROGRAM

Administration

Participation

Maximum Number Of Shares Available

Adjustments

Registration Conditions

Stock Options

Amendment And Termination

IV.

EMPLOYEES RESTRICTED STOCK PROGRAM

Administration

Participation

Maximum Number Of Shares Available

Awards

Restrictions

Enforcement Of Restrictions

Privileges Of Employee- Participant

Non-Transferability

Withholding Taxes

Lien On Shares

Share Issuance And Transfer Restrictions

Acceleration On Change Of Control

Effective Date And Duration

Exclusivity

Amendment And Termination

DIRECTORS RESTRICTED STOCK PROGRAM

Administration

Participation

Maximum Number Of Shares Available

Awards

Restrictions

Enforcement Of Restrictions

Privileges Of Employee-Participant

Non-Transferability

Withholding Taxes

Lien Of Shares

Share Issuance And Transfer Restrictions

Acceleration On Change Of Control

Effective Date And Duration

Exclusivity

Amendment And Termination

GENERAL PROVISIONS

Government And Other Regulations

Other Compensation Plans And Programs

Miscellaneous Provisions

Effective Date

FIRSTMERIT CORPORATION
AMENDED AND RESTATED
2002 STOCK PLAN

FirstMerit Corporation (the “Company”) adopted the 2002 Stock Plan (“Plan”), subject to shareholder approval at the 2002 Annual Shareholders Meeting, and amendments approved by the Board were approved by the shareholders at the 2004 Annual Shareholders Meeting. The number of shares of “Common Stock” approved and reserved under the Plan, subject to the actual shares available for grant under the Plan, is 3,700,000 for the “Employees Stock Option Program” and the “Employees Restricted Stock Program,” and 300,000 for the “Directors Stock Option Program” and the “Directors Restricted Stock Program.” The maximum number of shares of Common Stock which can be granted as part of the 3,700,000 shares under the Employees Restricted Stock Program is 500,000. The maximum number of shares of Common Stock which can be granted as part of the 300,000 shares under the Directors Restricted Stock Program is 75,000. No stock option can be granted under the Plan for less than “Fair Market Value” on the date of grant. The maximum annual grant of options or restricted shares under the Plan to any one individual shall not exceed one and one-half percent (1.5%) of the total outstanding shares of Common Stock of the Company, in the aggregate, per calendar year.

I. INTRODUCTION

A. Purpose Of The Plan

FirstMerit Corporation has established the Plan to further its long-term financial success by creating the opportunity to employees and non-employee Directors of the Company and its Subsidiaries to receive stock and stock-based compensation whereby they can share in achieving and sustaining such success. The Plan also provides a means to attract and retain the executive talent needed to achieve the Company’s long-term growth and profitability objectives.

B. Definitions

When used in the Plan, the following terms shall have the meanings set forth below:

“Award(s)” shall mean Incentive Stock Options, Non-Qualified Stock Options, Reload Stock Options, or Restricted Stock Awards granted under the Plan.

“Award Agreement” shall mean an agreement which shall evidence the particular terms, conditions, rights and duties of the Company and the Participant with respect to an Award.

“Board” shall mean the Board of Directors of the Company.

“Change of Control” shall mean the occurrence of any one of the following events:

(a) individuals who, on April 19, 2000, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to April 19, 2000 whose election or nomination for election was approved by a vote of at least 2/3rds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no director

of the Company initially as a result of an actual or threatened election contest with respect to directors or any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

(b) any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that the event described in this paragraph (b) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions:

(i) by the Company or any Subsidiary,

(ii) by any employee benefit plan sponsored or maintained by the Company or any Subsidiary,

(iii) by any underwriter temporarily holding securities pursuant to an offering of such securities,

(iv) pursuant to a Non-Control Transaction (as defined in paragraph (c)), or

(v) a transaction (other than one described in (c) below) in which Company Voting Securities are acquired from the Company, if a majority of the Incumbent Directors then on the Board approve a resolution providing expressly that the acquisition pursuant to this clause (v) does not constitute a Change in Control under this paragraph (b);

(c) the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its Subsidiaries that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination:

(i) more than 50% of the total voting power of (x) the corporation resulting from such Business Combination (the “Surviving Entity”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors (“Total Voting Power”) of the Surviving Entity (the “Parent Entity”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination,

(ii) no person (other than any employee benefit plan (or related trusts) sponsored or maintained by the Surviving Entity or the Parent Entity), is or becomes the beneficial owner, directly or indirectly, of 25% or more of the Total Voting Power of the outstanding voting securities eligible to elect directors of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity), and

(iii) at least a majority of the members of the Board of Directors of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the

initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Control Transaction”); or

(d) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of more than 25% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding; provided, that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person by more than one percent, a Change in Control of the Company shall then occur.

“Committee” shall mean the Compensation Committee of the Board, or such other Committee of the Board which shall be designated by the Board to administer the Plan. If the Board does not designate the Nominating Committee as the Committee, the Committee will be composed of two (2) or more persons who are from time to time appointed to serve by the Board. Each member of the Committee will be a “non-employee director” within the meaning of Rule 16b-3 of the Securities Exchange Act or any successor rule, as any such rule may be amended from time to time and will qualify as an “outside director” within the meaning of Code Section 162(m) (“Qualified Director”). A person may be appointed to the Committee who does not qualify as a “non-employee director” if the Committee adopts and follows a recusal procedure which qualifies under the Section 16 Rules.

“Company” shall mean FirstMerit Corporation and any successor in a reorganization or similar transaction.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Common Stock” shall mean the common stock of the Company, no par value per share, and may be either stock previously authorized but unissued, or stock reacquired by the Company.

“Director” shall mean a duly elected member of the Board.

“Directors Restricted Stock Program” shall mean the restricted stock program delineated in Article V of this Plan.

“Directors Stock Option Program” shall mean the stock option program delineated in Article III of this Plan.

“Director-Participant” shall mean a Director who is not also a full-time employee of the Company or any of its Subsidiaries.

“Disability” shall mean the inability of an Employee-Participant to perform the services normally rendered due to any physical or mental impairment that can be expected to be of either permanent or indefinite duration, as determined by the Committee on the basis of appropriate medical evidence, and that results in the Employee-Participant’s Termination of Employment; provided, however, that with respect to any Employee-Participant who has entered into an employment agreement with the Company or any of its Subsidiaries, the term of which has not expired at the time a determination concerning

Disability is to be made, Disability shall have the meaning attributed to “permanent disability” in such employment agreement.

“Employees Restricted Stock Program” shall mean the restricted stock program delineated in Article IV of this Plan.

“Employees Stock Option Program” shall mean the stock option program delineated in Article II of this Plan.

“Employee-Participant” shall mean an employee (including a Director who is also a full-time employee) of the Company or any of its Subsidiaries.

“Fair Market Value” shall mean with respect to a given day, the closing sales price of a share of Common Stock, as reported by such responsible reporting service as the Committee may select, or if there were no transactions in the Common Stock on such day, then the last preceding day on which transactions took place. The foregoing notwithstanding, the Committee may determine the Fair Market Value in such other manner as it may deem more appropriate for Plan purposes or as is required by applicable laws or regulations.

“Incentive Stock Option” or “ISO” shall mean a right to purchase the Company’s Common Stock which is intended to comply with the terms and conditions for an incentive stock option as set forth in Section 422 of the Code, or such other sections of the Code as may be in effect from time to time.

“Nasdaq” shall mean The Nasdaq Stock Market, Inc.

“Non-Qualified Stock Option” or “NQSO” shall mean a right to purchase the Company’s Common Stock which is not intended to comply with the terms and conditions for a tax-qualified stock option, as set forth in Section 422 of the Code, or such other sections of the Code as may be in effect from time to time.

“Participant” shall mean an Employee-Participant or a Director-Participant.

“Plan” shall mean the Company’s 2002 Stock Plan, as set forth herein.

“Reload Stock Option” shall mean an option granted to an Employee-Participant who has paid for shares subject to option through the delivery of shares of Common Stock having an aggregate Fair Market Value as determined on the date of exercise equal to the option price.

“Restricted Shares” shall mean those shares of Common Stock reserved for issuance as Awards under the Employees Restricted Stock Program and the Directors Restricted Stock Program, as further provided in Article IV(D) and Article V(D).

“Retirement” shall mean an Employee-Participant’s Termination of Employment by reason of retirement at his normal retirement date, pursuant to and in accordance with a pension, retirement or similar plan or other regular retirement practice of the Company or any of its Subsidiaries, or in accordance with the early retirement provision(s) thereof.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Securities Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Subsidiaries” shall mean the majority-owned subsidiaries of the Company.

“Termination of Employment” shall mean a cessation of the employee-employer relationship between an Employee-Participant and the Company or its Subsidiaries for any reason.

“Termination of Service” shall mean a cessation of the Director’s relationship with the Company for any reason.

II. EMPLOYEES STOCK OPTION PROGRAM

A. Administration

The Employees Stock Option Program shall be administered by the Committee, which, subject to the express provisions of the Employees Stock Option Program, shall have full and exclusive authority to interpret the Employees Stock Option Program, to prescribe, amend and rescind rules and regulations relating to the Employees Stock Option Program and to make all other determinations deemed necessary or advisable in the implementation and administration of the Employees Stock Option Program; provided, however, that subject to the express provisions hereof or unless required by applicable law or regulation, no action of the Committee shall adversely affect the terms and conditions of any Award made to, or any rights hereunder or under any Award Agreement of, any Employee-Participant, without such Employee-Participant’s consent. The Committee’s interpretation and construction of the Employees Stock Option Program shall be conclusive and binding on all persons, including the Company and all Employee-Participants.

B. Participation

The Committee shall, from time to time, make recommendations to the Board with respect to the selection of Employee-Participants and the Award or Awards to be granted to each Employee-Participant, and thereafter grant such Award or Awards upon the approval of a majority of the members of the Board present and voting upon such approval, who are Qualified Directors. In making its recommendations, the Committee may take into account the nature of the services rendered or expected to be rendered by the respective Employee-Participants, their present and potential contributions to the Company’s success, and such other factors as the Committee in its discretion shall deem relevant.

C. Maximum Number Of Shares Available

The maximum number of shares which may be granted under the Employees Stock Option Program is three million seven hundred thousand (3,700,000) shares, less shares granted under the Employees Restricted Stock Program.

No Incentive Stock Options shall be granted after January 1, 2012, or such other period required under the Code.

D. Adjustments

price of outstanding stock options shall be similarly adjusted. No adjustment to the exercise price of an outstanding stock option shall be made without there having been a change in the capitalization of the Company of a type set forth above.

E. Registration Conditions

Unless issued pursuant to a registration statement under the Securities Act, no shares shall be issued to an Employee-Participant under the Employees Stock Option Program unless the Employee-Participant represents to and agrees with the Company that such shares are being acquired for investment and not with a view to the resale or distribution thereof, or such other documentation as may be required by the Company unless, in the opinion of counsel to the Company, such representation, agreement or documentation is not necessary to comply with the Securities Act.

Any restriction on the resale of shares shall be evidenced by an appropriate legend on the stock certificate.

The Company shall not be obligated to deliver any Common Stock until it has been listed on each securities exchange on which the Common Stock may then be listed or until there has been qualification under or compliance with such federal or state laws, rules or regulations as the Company may deem applicable.

The Company shall use reasonable efforts to obtain such listing, qualification and compliance.

F. Committee Action

The Committee may, through Award Agreements, limit its discretion under this Employees Stock Option Program. To the extent such discretion is not specifically waived in an Award Agreement, the Committee shall retain such discretion.

G. Stock Options

All stock options granted to Employee-Participants under the Employees Stock Option Program shall be evidenced by Award Agreements which shall be subject to applicable provisions of the Employees Stock Option Program, and such other provisions as the Committee may adopt, including the following provisions:

1. PRICE. The option price per share of Non-Qualified Stock Options (“NQSOs”) and the option price per share of Incentive Stock Options (“ISOs”) shall not be less than 100 percent of the Fair Market Value of a share of Common Stock on the date of grant. If a NQSO is to meet the requirements of Section 162(m) of the Code, it shall be issued at Fair Market Value on the date of grant.

2. PERIOD. An ISO shall not be exercisable for a term longer than ten (10) years from date of grant. NQSOs shall have a term as established by the Committee.

3. TIME OF EXERCISE. The Committee may prescribe the timing of the exercise of the stock option and any minimums and installment provisions and may accelerate the time at which a stock option becomes exercisable, provided that with respect to ISOs, no such acceleration shall result in a violation of Section 6 of this Paragraph G.

4. EXERCISE PROCEDURES. A stock option, or portion thereof, shall be exercised by delivery of a written notice of exercise to the Company and payment of the full price of the shares being purchased.

5. PAYMENT. The price of an exercised stock option, or portion thereof, may be paid pursuant to Paragraph VI.C.11.

6. SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. If the aggregate Fair Market Value of Common Stock with respect to which ISOs are exercisable for the first time by an Employee-Participant during any calendar year (under this Employees Stock Option Program and all other plans of the Company and its Subsidiaries) exceeds One Hundred Thousand Dollars ($100,000), such ISOs shall be treated as NQSOs to the extent of the excess. In applying the foregoing limitation, ISOs shall be taken into account in the order in which they were granted, and the Fair Market Value of Common Stock subject to such ISOs shall be determined as of the date of grant. If such limit is exceeded in any calendar year, the Company shall have the right to designate which shares of Common Stock purchased pursuant to such ISOs shall be treated as having been acquired by the Employee-Participant pursuant to an ISO.

7. RELOAD STOCK OPTIONS. A Reload Stock Option may be granted by the Committee in an Award Agreement. If a Reload Stock Option has been granted, and the stock option is exercised while the Employee-Participant is employed by the Company and the Employee-Participant pays for the shares subject to an option through the delivery of Common Stock having an aggregate Fair Market Value as determined on the date of exercise equal to the option price, the Employee-Participant will be granted a Reload Stock Option on the date of such exercise. The Reload Stock Option Award shall equal the number of whole shares of Common Stock used to pay the purchase price, and the exercise price of the Reload Stock Option shall equal the then Fair Market Value of the Common Stock on the date of grant of the Reload Stock Option. If the Company withholds shares of Common Stock to cover applicable income and employment taxes related to the exercise of an option, then the Reload Stock Option Award shall equal the number of whole shares of Common Stock used to pay the purchase price less the number of shares withheld. Shares of stock acquired upon the exercise of the stock option where a Reload Stock Option Award has been made, may not be sold or otherwise transferred, including, without limitation, transfers by way of gift, for a period of six months after the date of such shares are received.

Subject to the provisions of the Employees Stock Option Program, the Reload Stock Option may be exercised between its date of grant and the date of expiration of the original stock option. If any of the shares of stock acquired upon the exercise of the stock option which resulted in the grant of the Reload Stock Option during the six-month period following the date such shares were received, are sold or otherwise transferred, including, without limitation, transfers by way of gift, the Reload Stock Option shall be cancelled.

A Reload Stock Option shall be evidenced by an Award Agreement containing such other terms and conditions as the Committee approves. No Reload Stock Option shall be granted with respect to a stock option exercised after the Employee-Participant’s Retirement, Disability, death or other Termination of Employment.

8. EFFECT OF LEAVES OF ABSENCE. It shall not be considered a Termination of Employment when an Employee-Participant is placed by the Company or any of its Subsidiaries on military leave, sick leave or other bona fide leave of absence. In case of such leave of absence, the employment relationship for Employees Stock Option Program purposes shall be continued until the later of the date when such leave of absence equals ninety (90) days or when the Employee-Participant’s right to reemployment with the Company or any of its Subsidiaries shall no longer be guaranteed either by statute or contract.

9. TERMINATION OF EMPLOYMENT. In the event of Termination of Employment, the following provisions shall apply with respect to ISOs and NQSOs unless waived by the Committee, or as otherwise specifically provided in the Award Agreement.

a. TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. NQSOs and ISOs shall be exercisable for a period equal to the lesser of five (5) years or the remaining option term; provided, however, that if the Employee-Participant elects to exercise his ISOs (i) later than three (3) months after the date of his Termination of Employment due to Retirement or (ii) twelve (12) months after the date of his Termination of Employment due to Disability, such ISOs shall be treated as NQSOs under the Code for purposes of calculating the federal income tax applicable as a result of the exercise of such ISOs and the subsequent disposition of the acquired shares.

b. OTHER TERMINATION. If an Employee-Participant’s employment with the Company or any of its Subsidiaries is terminated for any reason other than death, Disability or Retirement, all Awards under this Employees Stock Option Program shall be immediately canceled, except that if the termination is by the Company or any of its Subsidiaries or for any reason other than misconduct or misfeasance, the Employee-Participant shall have thirty (30) days thereafter within which to exercise his options to the extent that the options are otherwise exercisable immediately prior to such termination; and further, if such termination is attributable to a Change of Control, such Award shall not be canceled but shall continue as though the Employee-Participant remained in the employ of the Company or any of its Subsidiaries during the remaining option term of the Award and shall vest immediately.

c. LIMITATIONS ON EXERCISE. Notwithstanding the foregoing, the Committee may rescind the right to exercise stock options following Termination of Employment if the Employee-Participant has been found to be directly or indirectly engaged in any activity which is in competition with the Company or any of its Subsidiaries or is otherwise adverse to, or not in the best interest of, the Company or any of its Subsidiaries. Further, no option agreement for ISOs may extend their exercise period beyond the time allowed by the Code.

H. Amendment And Termination

The Board may, at any time and from time to time, suspend or terminate the Employees Stock Option Program in whole or amend it from time to time in such respects as the Board may deem appropriate, subject, however, to the Code, the securities laws and the rules of Nasdaq.

III. DIRECTORS STOCK OPTION PROGRAM

A. Administration

The Directors Stock Option Program is a self-executing grant program which shall be administered by the Secretary of the Company. Subject to the express provisions of the Directors Stock Option Program, the Secretary shall have full and exclusive authority to interpret the Directors Stock Option Program, and to make such determinations deemed necessary or advisable in the implementation and administration of the Directors Stock Option Program; provided, however, that subject to the express provisions hereof or unless required by applicable law or regulation, no action of the Secretary shall adversely affect the terms and conditions of any Award made to, or any rights hereunder or under any Award Agreement of, any Director-Participant without such Director-Participant’s consent.

B. Participation

All Directors who are not also full-time employees of the Company or a Subsidiary shall be Director-Participants in the Directors Stock Option Program and shall be awarded options to purchase three thousand (3,000) shares each year on the day following the annual shareholders meeting. The Board reserves the right to amend the Plan from time to time to change the number of options granted to the Directors, but in no event can the Committee increase the annual grant to exceed options to acquire ten thousand (10,000) shares per year.

C. Maximum Number Of Shares Available

The maximum number of shares which may be granted under this Directors Stock Option Program is three hundred thousand (300,000) shares, less shares granted under the Directors Restricted Stock Program.

D. Adjustments

In the event of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations, exchanges of shares, spin-offs, liquidations, reclassifications or other similar changes in the capitalization of the Company, the number of shares of Common Stock available for grant under this Directors Stock Option Program shall be adjusted proportionately or otherwise by the Board, and where deemed appropriate, the number of shares covered by outstanding stock options and the option price of outstanding stock options shall be similarly adjusted. No adjustment to the exercise price of an outstanding stock option shall be made without there having been a change in the capitalization of the Company of a type set forth above.

E. Registration Conditions

Unless issued pursuant to a registration statement under the Securities Act, no shares shall be issued to a Director-Participant under the Directors Stock Option Program unless the Director-Participant represents to and agrees with the Company that such shares are being acquired for investment and not with a view to the resale or distribution thereof, or such other documentation as may be required by the Company unless, in the opinion of counsel to the Company, such representation, agreement or documentation is not necessary to comply with the Securities Act.

Any restriction on the resale of shares shall be evidenced by an appropriate legend on the stock certificate.

F. Stock Options

All stock options granted to Director-Participants under the Directors Stock Option Program shall be evidenced by Award Agreements which shall be subject to applicable provisions of the Directors Stock Option Program, including the following provisions:

1. PRICE. The option price per share shall be 100 percent of the Fair Market Value of a share of Common Stock on the date of grant.

2. PERIOD. Any option granted under the Directors Stock Option Program shall be exercisable for a term of ten (10) years from the date of grant.

4. EXERCISE PROCEDURES. A stock option, or portion thereof, shall be exercised by delivery of a written notice of exercise to the Company and payment of the full price of the shares being purchased.

5. PAYMENT. The price of an exercised stock option, or portion thereof, may be paid pursuant to Paragraph VI.C.11.

6. TERMINATION OF SERVICE. In the event of Termination of Service, the following provisions shall apply:

a. DISCHARGE FOR CAUSE. All outstanding options shall be canceled at termination if a Director’s Termination of Service is for cause.

b. TERMINATION OTHER THAN FOR CAUSE. Options shall be exercisable for a period equal to the lesser of five (5) years or the remaining option term if a Director is discharged other than for Cause.

G. Amendment And Termination

The Board may, at any time and from time to time, amend, suspend or terminate the Directors Stock Option Program, subject to the applicable requirements and restrictions of the Code, the securities laws and the rules of Nasdaq. The Directors Stock Option Program may not be materially amended without shareholder approval, however, an increase in the number of shares for which an annual option may be granted as provided in Article III, Section B, shall not be deemed a material amendment requiring shareholder approval.

IV. EMPLOYEES RESTRICTED STOCK PROGRAM

A. Administration

The Employees Restricted Stock Program shall be administered by the Committee. A majority of members of the Committee shall constitute a quorum, and all determinations of the Committee shall be made by a majority of its members. Any determination of the Committee under the Employees Restricted Stock Program may be made without notice or meeting, by a writing signed by a majority of the Committee members.

In accordance with and subject to the provisions of the Employees Restricted Stock Program, the Committee shall, from time to time, recommend to the Board:

1. the Employee-Participants from those employees meeting the eligibility criteria described in Paragraph B,

2. the number of shares to be subject to each Award,

3. the time at which Awards are made,

4. the duration and nature of Award restrictions,

5. such other provisions of the Awards as may be deemed necessary or desirable, consistent with the terms of the Employees Restricted Stock Program, and

6. the form or forms of the Award Agreements to be entered into with Employee- Participants.

The Committee shall have the authority, subject to the provisions of the Employees Restricted Stock Program, to establish, adopt and revise such rules and regulations relating to the Employees Restricted Stock Program as it may deem necessary or desirable for the administration of the Employees Restricted Stock Program. Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Employees Restricted Stock Program shall be conclusive and binding for all purposes and on all persons, including without limitation the Company, the stockholders of the Company, the Committee and each of the members thereof, the Board, officers and employees of the Company and the Employee-Participants and their respective successors in interest.

B. Participation

Employee-Participants shall be such key employees (including officers) of the Company and any present or future Subsidiary as the Committee, in its sole discretion, determines to be mainly responsible for the success and future growth and profitability of the Company and value to its stockholders and whom the Committee may designate from time to time to receive Awards under the Employees Restricted Stock Program. Awards may be granted under this Employees Restricted Stock Program to persons who have previously received Awards or other benefits under this or other plans of the Company.

recommendations, the Committee may take into account the nature of the services rendered or expected to be rendered by the respective Employee-Participants, their present and potential contributions to the Company’s success, and such other factors as the Committee in its discretion shall deem relevant.

C. Maximum Number Of Shares Available

The maximum number of shares which may be granted under the Employees Restricted Stock Program is five hundred thousand (500,000) shares, which may be authorized but unissued or treasury shares.

Any shares subject to Awards may thereafter be subject to new Awards under this Employees Restricted Stock Program if shares of Common Stock are issued under such Awards and are thereafter reacquired by the Company pursuant to rights reserved by the Company upon issuance thereof, including, without limitation, the forfeiture of shares subject to an Award prior to the lapse of restrictions.

If the Company shall at any time change the number of issued shares of Common Stock without new considerations to the Company (by stock dividends, stock splits or similar transactions), the total number of shares reserved for issuance under the Employees Restricted Stock Program shall be adjusted proportionately. Awards may also contain provisions for their continuation or for other equitable adjustments after changes in the Common Stock resulting from reorganization, sale, merger, consolidation or similar circumstances.

D. Awards

Awards may consist of grants of Restricted Shares to Employee-Participants as a bonus for service rendered to the Company without other payment therefor or for payment at less than Fair Market Value. In addition to the restrictions described in Paragraph E, any Award under the Employees Restricted Stock Program may be subject to such other provisions (whether or not applicable to an Award to any other Employee-Participant) as the Committee deems appropriate, including, without limitation, provisions for the forfeiture of and restrictions on the sale, resale or other disposition of shares acquired under any Award, provisions giving the Company the right to repurchase shares acquired under any Award, provisions to comply with federal and state securities laws, or understandings or conditions as to the Employee-Participant’s employment in addition to those specifically provided for under the Employees Restricted Stock Program.

E. Restrictions

An Employee-Participant shall not have a right to retain any Restricted Shares granted under an Award unless and until such restrictions have by their terms lapsed. The lapsing of such restrictions is referred to herein as “Vesting,” and the shares after Vesting has occurred are referred to herein as “Vested Shares.” The restrictions which the Committee may place on the Awards include, without limitation, the Employee-Participant’s continued employment with the Company for certain periods of time as determined by the Committee and the attainment of various performance goals by the Employee-Participant and/or the Company as specified by the Committee with respect to such Award. The Committee may, in its sole discretion, require different periods of employment or different performance goals with respect to different Employee-Participants, with respect to different Awards or with respect to separate, designated portions of an Award. The Committee may, in its sole discretion, terminate restrictions on shares issued pursuant to an Award prior to the time such restrictions otherwise would have lapsed. Any Restricted Shares granted under an Award which have not become Vested Shares on or before the termination date, if any, set forth in the Award Agreement shall permanently be forfeited, and shall thereafter become available for reissuance under the Plan.

F. Enforcement Of Restrictions

The Committee, in its sole discretion, may employ one or more methods of enforcing the restrictions referred to in Paragraphs E, G, H and J including, without limitation, the following:

1. placing a legend on the stock certificates referring to the restrictions,

2. requiring the Employee-Participant to keep stock certificates, duly endorsed, in the custody of the Company or its designated agent while the restrictions remain in effect,

3. not issuing certificates for Restricted Shares until the shares become Vested Shares, or

4. retaining a possessory lien in the Award Shares as provided in Paragraph J below.

G. Privileges Of Employee Participant

Restricted Shares shall constitute issued and outstanding shares of the Company for all corporate purposes, and the Employee-Participant shall have all voting and (subject to any Award restrictions) all dividend, liquidation and other rights with respect to Restricted Shares while the corresponding Award remains in effect, as if such Employee-Participant were a holder of record of unrestricted shares of Common Stock. Notwithstanding the foregoing, prior to the time at which a Restricted Share becomes a Vested Share, the Employee-Participant’s right to assign or transfer such Restricted Share shall be subject to the limitations of Paragraph H. Certificates representing Restricted Shares shall bear a restrictive legend disclosing the restrictions, the existence of the Employees Restricted Stock Program and the existence of the applicable Award.

H. Non-Transferability

No right or interest of any Employee-Participant in any Award made pursuant to the Employees Restricted Stock Program shall, prior to the satisfaction of all restrictions applicable thereto, be assignable or transferable, in whole or in part, during the lifetime of the Employee-Participant, either voluntarily or involuntarily, or be made subject to any lien (except as provided in Paragraphs F and J), directly or indirectly, by operation of law or otherwise, including execution, levy, garnishment, attachment, pledge or bankruptcy. In the event of an Employee-Participant’s death, his right and interest in any Award shall, to the extent provided in the Award, be transferable by testamentary will or the laws of descent and distribution, and the issuance of any shares subject to an Award shall be made to the Employee-Participant’s legal representatives, heirs or legatees upon furnishing the Committee with evidence satisfactory to the Committee of such status.

I. Withholding Taxes

The Company is entitled to withhold and deduct or take such other action as delineated in Section VI.C.4.

J. Lien On Shares

The Company may, in its sole discretion, require that an Employee-Participant, as a condition to the receipt of an Award, grant to the Company a possessory lien on the Restricted Shares in order to secure retransfer of the shares into the name of the Company, and ensure adequate provision for any tax withholding obligations arising with respect to such Award, and to that end, may require that certificates

evidencing Restricted Shares be deposited by the Employee-Participant with the Company, together with stock powers or other instruments of assignment, each endorsed in blank, which will permit the transfer to the Company of all or any portion of the Restricted Shares which are forfeited or required to be retained to satisfy the Employee-Participant’s withholding obligations to the Company.

K. Share Issuance And Transfer Restrictions

1. SHARE ISSUANCE. Notwithstanding any other provision of the Employees Restricted Stock Program or any Award Agreement entered into pursuant hereto, the Company shall not be required to issue or deliver any certificate for shares under this Employees Restricted Stock Program unless and until both of the following are satisfied:

a. either:

i. there shall be in effect with respect to such shares a registration statement under the Securities Act and any applicable state securities laws, if the Committee, in its sole discretion, shall have determined to file, cause to become effective and maintain the effectiveness of such registration statement, or

ii. if the Committee has determined not to so register the shares, exemptions from registration under the Securities Act and applicable state securities laws shall be available for such issuance as determined by counsel for the Company, and there shall have been received from the Employee-Participant (or in the event of death or Disability, the Employee-Participant’s heir(s) or legal representative(s)) any representations or agreements requested by the Company in order to permit such issuance to be made pursuant to such exemptions, and

b. there shall have been obtained any other consent, approval or permit from any state or federal government agency which the Committee shall, in its sole discretion and upon the advice of counsel, deem necessary or advisable.

2. TRANSFERS OF VESTED SHARES. Vested Shares may not be sold, assigned, transferred, pledged, encumbered or otherwise disposed of (whether voluntarily or involuntarily) except pursuant to registration under the Securities Act and applicable state securities laws or pursuant to exemptions from such registrations. The Company may condition the sale, assignment, transfer, pledge, encumbrance or other disposition of such shares not issued pursuant to an effective and current registration statement under the Securities Act and all applicable state securities laws, on the receipt from the party to whom the shares are to be so transferred of any representations or agreements requested by the Company in order to permit such transfer to be made.

3 LEGENDS. Unless a registration under the Securities Act is in effect with respect to the issuance or transfer of Vested Shares, each certificate representing such shares will be endorsed with a legend in the form determined necessary by the Committee or its counsel.

L. Acceleration On Change Of Control

The Committee may provide, in its sole discretion, in one or more Awards, that notwithstanding the provisions of each Award which would result in a forfeiture as a result of the Employee-Participant’s

termination of employment with the Company prior to the Vesting of Restricted Shares, the Restricted Shares subject to such Award shall immediately become Vested Shares as a result of a Change of Control.

M. Effective Date And Duration

The Employees Restricted Stock Program shall continue in effect until it is terminated by action of the Board, but such termination shall not affect the then outstanding terms of any Award. No Award shall be granted more than ten (10) years after the date of adoption of the Employees Restricted Stock Option Program.

N. Exclusivity

Nothing contained in this Employees Restricted Stock Program is intended to amend, modify or rescind any previously approved compensation plans or programs adopted by the Company. The Employees Restricted Stock Program will be construed to be in addition to any and all such other plans or programs.

O. Amendment And Termination

The Board may amend the Employees Restricted Stock Program from time to time or terminate the Employees Restricted Stock Program at any time. The Employees Restricted Stock Program may not be materially amended without shareholder approval, although an increase in the number of shares for which an annual Restricted Share Award may be granted as provided in Article IV, Section B, shall not be deemed a material amendment requiring shareholder approval. In addition, the Company may amend the terms of any Award previously granted under this Employees Restricted Stock Program, prospectively or retroactively, although no action authorized by this Paragraph O shall impair the rights of any Employee-Participant without his consent.

V. DIRECTORS RESTRICTED STOCK PROGRAM

A. Administration

The Directors Restricted Stock Program is a self-executing grant program which shall be administered by the Secretary of the Company. Subject to the express provisions of the Directors Restricted Stock Program, the Secretary shall have full and exclusive authority to interpret the Directors Restricted Stock Program, and to make such determinations deemed necessary or advisable in the implementation and administration of the Directors Restricted Stock Program; provided, however, that subject to the express provisions hereof or unless required by applicable law or regulation, no action of the Secretary shall adversely affect the terms and conditions of any Award made to, or any rights hereunder or under any Award Agreement of, any Director-Participant without such Director-Participant’s consent.

B. Participation

All Directors who are not also full-time employees of the Company or a Subsidiary shall be Director-Participants in the Directors Restricted Stock Program and shall be awarded 500 Restricted Shares each year on the day following the annual shareholders meeting. In addition, each Director-Participant shall be awarded 1,000 Restricted Shares on the date immediately after such Director-Participant is first elected to the Board, and each Director-Participant on April 22, 2004, shall receive on April 22, 2004, a one-time Award of 1,000 Restricted Shares. The Board reserves the right to amend the

Plan from time to time to change the number of Restricted Shares granted to the Directors, but in no event can the Committee (i) increase the annual grant to exceed two-thousand five hundred (2,500) shares per year or (ii) grant a combination of Restricted Shares and options pursuant to the Directors Stock Option Program, such that the sum of (x) four times the number of Restricted Shares awarded under the Directors Restricted Stock Program plus (y) the number of shares that may be purchased upon the exercise of options awarded under the Directors Stock Option Plan, exceeds 10,000 in one year to each Director-Participant.

C. Maximum Number Of Shares Available

The maximum number of shares which may be granted under the Directors Restricted Stock Program is seventy-five thousand (75,000) shares, which may be authorized but unissued or treasury shares.

Any shares subject to Awards may thereafter be subject to new Awards under this Directors Restricted Stock Program if shares of Common Stock are issued under such Awards and are thereafter reacquired by the Company pursuant to rights reserved by the Company upon issuance thereof, including, without limitation, the forfeiture of shares subject to an Award prior to the lapse of restrictions.

If the Company shall at any time change the number of issued shares of Common Stock without new consideration to the Company (by stock dividends, stock splits or similar transactions), the total number of shares reserved for issuance under the Directors Restricted Stock Program shall be adjusted proportionately. Awards may also contain provisions for their continuation or for other equitable adjustments after changes in the Common Stock resulting from reorganization, sale, merger, consolidation or similar circumstances.

D. Awards

Any Award under the Directors Restricted Stock Program will be evidenced by a written award agreement and may be subject to such provisions as the Committee deems appropriate, including, without limitation, provisions for the forfeiture of and restrictions on the sale, resale or other disposition of shares acquired under any Award, provisions giving the Company the right to repurchase shares acquired under any Award, provisions to comply with federal and state securities laws, or understandings or conditions as to the Director-Participant’s service on the Board, in addition to those specifically provided for under the Directors Restricted Stock Program.

E. Restrictions

A Director-Participant shall not have a right to retain any Restricted Shares granted under an Award unless and until such restrictions have by their terms lapsed. The lapsing of such restrictions is referred to herein as “Vesting,” and the shares after Vesting has occurred are referred to herein as “Vested Shares.” The restrictions which the Committee may place on the Awards include, without limitation, the Director-Participant’s continued service on the Board for certain periods of time as determined by the Committee and the attainment of various performance goals by the Company as specified by the Committee with respect to such Award. The Committee may, in its sole discretion, terminate restrictions on shares issued pursuant to an Award prior to the time such restrictions otherwise would have lapsed. Any Restricted Shares granted under an Award which have not become Vested Shares on or before the termination date, if any, set forth in the Award Agreement shall permanently be forfeited, and shall thereafter become available for reissuance under the Plan.

F. Enforcement Of Restrictions

The Committee, in its sole discretion, may employ one or more methods of enforcing the restrictions referred to in Paragraphs E, G, H and J including, without limitation, the following:

1. placing a legend on the stock certificates referring to the restrictions,

2. requiring the Director-Participant to keep stock certificates, duly endorsed, in the custody of the Company or its designated agent while the restrictions remain in effect,

3. not issuing certificates for Restricted Shares until the shares become Vested Shares, or

4. retaining a possessory lien in the Award Shares as provided in Paragraph J below.

G. Privileges Of Director Participant

Restricted Shares shall constitute issued and outstanding shares of the Company for all corporate purposes, and the Director-Participant shall have all voting and (subject to any Award restrictions) all dividend, liquidation and other rights with respect to Restricted Shares while the corresponding Award remains in effect, as if such Director-Participant were a holder of record of unrestricted shares of Common Stock. Notwithstanding the foregoing, prior to the time at which a Restricted Share becomes a Vested Share, the Employee-Participant’s right to assign or transfer such Restricted Share shall be subject to the limitations of Paragraph H. Certificates representing Restricted Shares shall bear a restrictive legend disclosing the restrictions, the existence of the Directors Restricted Stock Program and the existence of the applicable Award.

H. Non-Transferability

No right or interest of any Director-Participant in any Award made pursuant to the Directors Restricted Stock Program shall, prior to the satisfaction of all restrictions applicable thereto, be assignable or transferable, in whole or in part, during the lifetime of the Director-Participant, either voluntarily or involuntarily, or be made subject to any lien (except as provided in Paragraphs F and J), directly or indirectly, by operation of law or otherwise, including execution, levy, garnishment, attachment, pledge or bankruptcy. In the event of a Director-Participant’s death, his right and interest in any Award shall, to the extent provided in the Award, be transferable by testamentary will or the laws of descent and distribution, and the issuance of any shares subject to an Award shall be made to the Director-Participant’s legal representatives, heirs or legatees upon furnishing the Committee with evidence satisfactory to the Committee of such status.

I. Withholding Taxes

The Company is entitled to withhold and deduct or take such other action as delineated in Section VI.C.4.

J. Lien On Shares

The Company may, in its sole discretion, require that a Director-Participant, as a condition to the receipt of an Award, grant to the Company a possessory lien on the Restricted Shares in order to secure retransfer of the shares into the name of the Company, and ensure adequate provision for any tax withholding obligations arising with respect to such Award, and to that end, may require that certificates evidencing Restricted Shares be deposited by the Director-Participant with the Company, together with

stock powers or other instruments of assignment, each endorsed in blank, which will permit the transfer to the Company of all or any portion of the Restricted Shares which are forfeited or required to be retained to satisfy the Director-Participant’s withholding obligations to the Company.

K. Share Issuance And Transfer Restrictions

1. SHARE ISSUANCE. Notwithstanding any other provision of the Directors Restricted Stock Program or any Award Agreement entered into pursuant hereto, the Company shall not be required to issue or deliver any certificate for shares under this Directors Restricted Stock Program unless and until both of the following are satisfied:

a. either:

i. there shall be in effect with respect to such shares a registration statement under the Securities Act and any applicable state securities laws, if the Committee, in its sole discretion, shall have determined to file, cause to become effective and maintain the effectiveness of such registration statement, or

ii. if the Committee has determined not to so register the shares, exemptions from registration under the Securities Act and applicable state securities laws shall be available for such issuance as determined by counsel for the Company, and there shall have been received from the Director-Participant (or in the event of death or Disability, the Director-Participant’s heir(s) or legal representative(s)) any representations or agreements requested by the Company in order to permit such issuance to be made pursuant to such exemptions, and

L. Acceleration On Change Of Control

All Restricted Shares subject to Awards under the Directors Restricted Stock Program shall immediately become Vested Shares as a result of a Change of Control.

M. Effective Date And Duration

The Directors Restricted Stock Program shall continue in effect until it is terminated by action of the Board, but such termination shall not affect the then outstanding terms of any Award. No Award shall be granted more than ten (10) years after the date of adoption of the Directors Restricted Stock Program.

N. Exclusivity

Nothing contained in this Directors Restricted Stock Program is intended to amend, modify or rescind any previously approved compensation plans or programs adopted by the Company. The Directors Restricted Stock Program will be construed to be in addition to any and all such other plans or programs.

O. Amendment And Termination

The Board may amend the Directors Restricted Stock Program from time to time or terminate the Directors Restricted Stock Program at any time. The Directors Restricted Stock Program may not be materially amended without shareholder approval, although an increase in the number of shares for which an annual Restricted Share Award may be granted as provided in Article V, Section B, shall not be deemed a material amendment requiring shareholder approval. In addition, the Company may amend the terms of any Award previously granted under this Directors Restricted Stock Program, prospectively or retroactively, although no action authorized by this Paragraph O shall impair the rights of any Director-Participant without his consent.

VI. GENERAL PROVISIONS

A. Government And Other Regulations

The obligation of the Company to issue Awards under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any government agencies as may be required.

B. Other Compensation Plans And Programs

The Plan shall not be deemed to preclude the implementation by the Company and its Subsidiaries of other compensation plans or programs which may be in effect from time to time.

C. Miscellaneous Provisions

1. NO RIGHT TO CONTINUE EMPLOYMENT. Nothing in the Plan or in any Award or Award Agreement confers upon any Employee-Participant the right to continue in the employ of the Company or its Subsidiaries or interferes with or restricts in any way the rights of the Company or its Subsidiaries to discharge any Employee-Participant at any time for any reason whatsoever, with or without cause.

2. NON-TRANSFERABILITY. Except as provided herein, no right or interest of any Participant in any Award under the Plan shall be (a) assignable or transferable, except by will or the laws of descent and distribution, a valid beneficiary designation made in accordance with procedures established by the Committee, or as expressly stated herein, or (b) liable for, or subject to, any lien, obligation or liability. An ISO may be exercised only by the Participant during his lifetime, by his estate or by the person who acquires the right to exercise such option by bequest or inheritance.

The Board may, in its discretion, authorize all or a portion of the options to be granted to a Participant, and may also amend outstanding options to provide, that they include terms which permit transfer by such Participant to (i) the spouse, children or grandchildren of the Participant (the “Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, (iii) a partnership in which such Immediate Family Members are the only partners, (iv) a limited liability company in which such Immediate Family Members are the only members; provided that (x) there may be no consideration for any such transfer, (y) the stock option agreement pursuant to which such options are granted must be approved by the Board, and must expressly provide for transferability in a manner consistent with this Section, and (z) subsequent transfers of transferred options shall be prohibited except those in accordance with the section(s) herein dealing with transfers by will or the laws of descent and distribution. Following transfer, any such options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for all purposes hereof, the term “Participant” shall be deemed to refer to the “Transferee.” The events of termination of any option will continue to be applied with respect to the original Participant, following which the options shall be exercisable by the transferee only to the extent (if at all), and for the periods specified in the Program or option agreement. The Participant in all such cases will remain subject to and liable for the withholding taxes due or payable upon exercise by the Transferee.

The Board may also, in its discretion, pursuant to the requirements and restrictions listed above, and except as listed in this paragraph, authorize all or a portion of the options to be granted to a Participant, to permit a non-conforming transfer, such as a sale to a family member or family corporation for estate planning purposes. Nothing herein or in any action by the Board shall be construed as an amendment to any option other than those expressly indicated by the action of the Board.

The Company shall not have any obligation to provide notice to the Transferee of the termination or acceleration of an option for any reason.

3. DESIGNATION OF BENEFICIARY. A Participant, in accordance with procedures established by the Committee, may designate a person or persons to receive, in the event of the Participant’s death, (a) any payments with respect to which the Participant would then be entitled, and (b) the right to continue to participate in the Plan to the extent of such Participant’s outstanding Awards. Such designation shall be made upon forms supplied by and delivered to the Company and may be revoked in writing.

4. WITHHOLDING TAXES.

The Company’s obligation to deliver shares of Common Stock or cash upon the exercise of stock options granted will be subject to the satisfaction of all applicable federal, state and local income tax and employment tax withholding requirements. The Committee (or plan administrator) may, in its discretion and in accordance with any applicable tax or securities laws (including the applicable safe-harbor provisions of Securities and Exchange Commission Rule 16b-3), provide any or all holders of a NQSOs (other than the automatic grants made pursuant to Directors Stock Option Program) or Restricted Shares that are not Vested Shares under the Plan, with the right to use shares of the Company’s Common Stock in satisfaction of all or part of the federal, state and local income tax and employment tax liabilities incurred by such holders in connection with the exercise of their options or the Vesting of their Restricted Shares (the “Taxes”). Such right may be provided to any such option holder in either or both of the following formats:

(a) Stock Withholding: The holder of the NQSO or Restricted Shares may be provided with the election to have the Company withhold, from the shares of

Common Stock otherwise issuable upon the exercise of such NQSO or the Vesting of such Restricted Shares, a portion of those shares with an aggregate fair market value not to exceed one hundred percent (100%) of the applicable Taxes.

(b) Stock Delivery: Provide the holder of the NQSO or the Restricted Shares with the election to deliver to the Company, at the time the NQSO is exercised or the Vesting of such Restricted Shares, one or more shares of Common Stock previously acquired by such individual (other than in connection with the option exercise or share Vesting triggering the Taxes) with an aggregate fair market value equal to the designated percentage (up to 100% as specified by the option holder) of the Taxes incurred in connection with such option exercise or share Vesting.

5. PLAN EXPENSES. Any expenses of administering the Plan shall be borne by the Company.

6. CONSTRUCTION OF PLAN. The interpretation of the Plan and the application of any rules implemented hereunder shall be determined solely in accordance with the laws of the State of Ohio.

7. UNFUNDED PLAN. The Plan shall be unfunded, and the Company shall not be required to segregate any assets which may at any time be represented by Awards. Any liability of the Company to any person with respect to an Award under this Plan shall be based solely upon any obligations which may be created by this Plan; no such obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company.

8. BENEFIT PLAN COMPUTATIONS. Any benefits received or amounts paid to a Participant with respect to any Award granted under the Plan shall not have any effect on the level of benefits provided to or received by any Participant, or the Participant’s estate or beneficiary, as part of any employee benefit plan (other than the Plan) of the Company.

9. PRONOUNS, SINGULAR AND PLURAL. The masculine may be read as feminine, the singular as plural and the plural as singular as necessary to give effect to the Plan.

10. MAXIMUM ANNUAL GRANT. In no event shall any one individual participating in the Plan, be granted stock options and/or Restricted Shares for more than one and one-half percent (1.5%) of the total outstanding shares of Common Stock of the Company, in the aggregate, per calendar year.

11. PAYMENT. The exercise price will be payable in one of the alternative forms specified below:

(a) full payment in cash or check made payable to the Company’s order; or

(b) full payment in shares of Common Stock held for the requisite period necessary to avoid a charge to the Company’s reported earnings and valued at fair market value on the Exercise Date (as such term is defined below); or

(c) full payment in a combination of shares of Common Stock held for the requisite period necessary to avoid a charge to the Company’s reported earnings and valued at Fair Market Value on the Exercise Date and cash or check payable to the Company’s order; or

(d) full payment through a sale and remittance procedure pursuant to which the Participant will provide irrevocable written directives to a designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares and shall concurrently provide written instructions to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction.

For purposes of this subparagraph, the “Exercise Date” will be the date on which written notice of the option exercise is delivered to the Company. Except to the extent the sale and remittance procedure specified above is utilized for the exercise of the option, payment of the option price for the purchased shares must accompany the exercise notice.

D. Effective Date

The Plan and amendments became effective on approval by shareholders of the Company. The Plan and all outstanding Awards shall remain in effect until all outstanding Awards have been exercised, expired or canceled.

	A.		General

			The Board of Directors of FirstMerit Corporation established this defined contribution plan as of October 1, 1985. The Plan covers all employees of FirstMerit who have six months of service and have attained the age of twenty-one. The Plan is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.

	B.		Contributions

			The Plan permits each participant to contribute from one percent to fifteen percent of compensation. Such contributions are known as voluntary pretax employee contributions. A participant’s voluntary pretax contributions and earnings are immediately vested and non-forfeitable.

			FirstMerit contributes as a matching contribution an amount equal to 50 percent of the participant’s voluntary pretax contribution. FirstMerit will not make a matching contribution with respect to any portion of a participant voluntary pre-tax contribution that exceeds six percent of the participant’s basic compensation. These employer matching contributions and earnings are immediately vested and non-forfeitable.

			The Plan also includes a supplemental matching account whereby FirstMerit makes additional matching contributions equal to 50% of the participant’s voluntary pretax employee contributions which do not exceed three percent of the participant’s basic compensation. Participants become vested in the Supplemental Matching Program upon achieving five years of service or upon attaining normal retirement age. Effective January 1, 2002 the Plan was amended whereby participants are immediately vested in the Supplemental Matching account. All prior Supplemental Matching contributions were merged into, and future contributions are being made to, the Matching ESOP account.

	C.		Investments

			During 2002, the Company discontinued use of the FirstMerit Equity Fund, for which the Company acted as investment advisor. As of August 15, 2002, the FirstMerit Equity Fund was merged with the Federated Capital Appreciation Fund, which became a new plan investment option. Two additional funds, the Fidelity Advisor Equity Income Fund and the T. Rowe Price Small-Cap Stock Fund, were also added as investment options in 2002. The following is a summary of investment options (Investment Funds) available to participants at December 31, 2003 and 2002:

			Federated Government Obligations Fund: The fund seeks to provide conservative investors with a high quality portfolio, current income and relative safety. This money market fund invests in U.S. Treasury, government agency securities and repurchase agreements backed by government securities.

			Federated U.S. Government Securities Fund 1-3 Years: The fund seeks to provide investors with current income and limited price volatility by investing in U.S. Treasury and government agency securities.

			Federated Capital Preservation Fund: The fund seeks to offer investors stable principal with high current income by investing in Guaranteed Investment Contracts issued by major U.S. and Canadian life insurance companies and other stable value products.

			Federated Capital Appreciation Fund: The fund is an established equity fund that pursues capital appreciation over the long-term by investing predominantly in medium to large capitalization common stocks.

			Fidelity Advisor Intermediate Bond Fund: The fund invests in investment-grade bonds from different sectors of the market to give investors greater return potential through exposure to corporate and mortgage-backed securities.

			Fidelity Advisor Equity Growth Fund: The fund invests in attractively priced stocks of companies that demonstrate the potential for above-average earnings and revenue growth, a strategy that may translate into strong returns for investors.

			Fidelity Advisor Equity Income Fund: The fund is a value-oriented fund which invests in undervalued securities to take advantage of growth potential while striving to provide below average risk compared to similar funds.

			Fidelity Balanced Fund: The fund seeks income and capital growth consistent with reasonable risk by investing approximately 60% of the fund’s assets in equities and the remainder in a broadly diversified portfolio of debt securities. It invests at least 25% of assets in fixed-income senior securities.

	C.		Investments (Continued)

			Fidelity Blue Chip Growth Fund: The fund seeks growth of capital over the long-term by investing primarily in a diversified portfolio of common stocks of well-known and established companies with a market capitalization of at least $200,000,000.

			Fidelity Overseas Fund: The fund seeks long-term growth of capital by investing in equities issued by companies, whose principal business activities are outside of the United States. The fund seeks diversity among both industries and countries outside of North America.

	T.		Rowe Price Small-Cap Stock Fund: The fund seeks long-term growth of capital through investment in stock of small companies that are potentially undervalued or have growth prospects.

			Vanguard 500 Index Fund: The fund seeks investment results that correspond with the price and yield performance of the S&P 500 Index. The fund employs a passive management strategy designed to track the performance of the S&P 500 Index, which is dominated by the stock of large U.S. companies.

			FirstMerit Corporation Common Stock: The Plan provides for participants to invest directly in Common Shares of the Company. Each participant electing to purchase Common Shares of the Company through the Plan is permitted to vote such Common Shares in the same manner as any other shareholder and is furnished proxy materials to such effect. Dividends paid by FirstMerit are reinvested in the Plan.

	D.		Participants’ Accounts

			FirstMerit Bank, N.A. (a subsidiary of FirstMerit), as the trustee for the Plan, maintains separate accounts for each participant. Participants can contribute to one investment or a combination thereof with the minimum investment in any option of 5%. Employer matching contributions are invested solely in FirstMerit Corporation common stock purchased on the open market by the trustee.

	E.		Payment of Benefits

			Distributions to participants are made by one or more of the following methods: (1) a single lump-sum payment, in cash and/or FirstMerit stock; or (2) payments in equal or nearly equal monthly, quarterly, semiannual, or annual installments over any period not exceeding 10 years or the participant’s life expectancy at the date such payments commence, if less. Benefit distributions are recorded when paid to participants.

	F.		Loans

			The loan feature allows participants to borrow against amounts accumulated in the Plan on their behalf. The plan document sets forth guidelines as to certain limitations, and permissible interest rates and repayment terms.

	G.		Administrative Expenses

			All expenses associated with administering the Plan, including the trustee’s fees and brokerage commissions on purchases of and transfers between Investment Funds, are paid by FirstMerit.

	H.		Diversification

			Prior to participants attainment of age 55, all amounts in their Matching ESOP Account and Supplemental Retirement ESOP Account are invested entirely in shares of FirstMerit Corporation common stock. However, when participants reach age 55, they will be entitled to direct the trustee to invest up to 25% of the amount held in their Matching Contribution ESOP Account among the funds described in Note 1, Section C. The percentage increases to 50% when they reach age 60.

			Further, if participants have completed at least ten years of participation in the Plan and attained age 55, they are a “Qualified Member.” This means that they have the right to make an election to direct the investment of a portion of their Supplemental Retirement ESOP Account. Within 90 days after the close of each Plan Year in the six-Plan Year period beginning with the Plan Year in which they first become a Qualified Member, they may elect to diversify the investment of at least 25% of these accounts. In the last year of the six-Plan Year period, the percentage increases to 50%. The amounts they may elect to diversify may be invested in any of the investment funds described above.

	A.		Basis of Presentation

			The accompanying financial statements have been prepared on an accrual basis in accordance with accounting principles generally accepted in the United States of America.

	B.		Use of Estimates

			The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes. Actual results could differ from those estimates.

	C.		Investments

			Investments in securities and mutual funds are stated at fair value. The fair value of marketable securities is based on quotations obtained from national securities exchanges.

			The fair value of the investments in the mutual funds is based upon the number of units held by the Plan at December 31, 2003 and 2002, respectively, and the current value of each unit is based upon the net asset value disclosed by the registered investment company as of the last trading day of the reporting period. Participant loans are stated at cost, which approximates fair value.

			Securities transactions are recognized on the trade date (the date the order to buy or sell is executed).

			The Plan presents in the Statements of Changes in Net Assets Available for Benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on these investments.

	D.		Risk and Uncertainties

			The Plan generates a significant portion of its revenue from investments in domestic and international mutual funds, bonds and FirstMerit Corporation common stock. As a result, the Plan’s revenues and net assets available for plan benefits are dependent on the performance and volatility of the both the U.S. and global financial markets and economic conditions.

	E.		Fair Value Disclosure of Financial Instruments

			Management has determined that the carrying amount of financial instruments, as reported on the Statements of Net Assets Available for Benefits, approximates fair value.

	F.		Reclassification

			Participant loans have been reclassified from receivables to investments to conform to the current year’s presentation.


	*	Indicates management contract or compensatory plan or arrangement

	a.		TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. NQSOs and ISOs shall be exercisable for a period equal to the lesser of five (5) years or the remaining option term; provided, however, that if the Employee-Participant elects to exercise his ISOs (i) later than three (3) months after the date of his Termination of Employment due to Retirement or (ii) twelve (12) months after the date of his Termination of Employment due to Disability, such ISOs shall be treated as NQSOs under the Code for purposes of calculating the federal income tax applicable as a result of the exercise of such ISOs and the subsequent disposition of the acquired shares.

	b.		OTHER TERMINATION. If an Employee-Participant’s employment with the Company or any of its Subsidiaries is terminated for any reason other than death, Disability or Retirement, all Awards under this Employees Stock Option Program shall be immediately canceled, except that if the termination is by the Company or any of its Subsidiaries or for any reason other than misconduct or misfeasance, the Employee-Participant shall have thirty (30) days thereafter within which to exercise his options to the extent that the options are otherwise exercisable immediately prior to such termination; and further, if such termination is attributable to a Change of Control, such Award shall not be canceled but shall continue as though the Employee-Participant remained in the employ of the Company or any of its Subsidiaries during the remaining option term of the Award and shall vest immediately.

	c.		LIMITATIONS ON EXERCISE. Notwithstanding the foregoing, the Committee may rescind the right to exercise stock options following Termination of Employment if the Employee-Participant has been found to be directly or indirectly engaged in any activity which is in competition with the Company or any of its Subsidiaries or is otherwise adverse to, or not in the best interest of, the Company or any of its Subsidiaries. Further, no option agreement for ISOs may extend their exercise period beyond the time allowed by the Code.

	a.		DISCHARGE FOR CAUSE. All outstanding options shall be canceled at termination if a Director’s Termination of Service is for cause.

	b.		TERMINATION OTHER THAN FOR CAUSE. Options shall be exercisable for a period equal to the lesser of five (5) years or the remaining option term if a Director is discharged other than for Cause.

	1.		the Employee-Participants from those employees meeting the eligibility criteria described in Paragraph B,

	2.		the number of shares to be subject to each Award,

	3.		the time at which Awards are made,

	4.		the duration and nature of Award restrictions,

	5.		such other provisions of the Awards as may be deemed necessary or desirable, consistent with the terms of the Employees Restricted Stock Program, and

	6.		the form or forms of the Award Agreements to be entered into with Employee- Participants.

	1.		placing a legend on the stock certificates referring to the restrictions,

	2.		requiring the Employee-Participant to keep stock certificates, duly endorsed, in the custody of the Company or its designated agent while the restrictions remain in effect,

	3.		not issuing certificates for Restricted Shares until the shares become Vested Shares, or

	4.		retaining a possessory lien in the Award Shares as provided in Paragraph J below.

	i.		there shall be in effect with respect to such shares a registration statement under the Securities Act and any applicable state securities laws, if the Committee, in its sole discretion, shall have determined to file, cause to become effective and maintain the effectiveness of such registration statement, or

	ii.		if the Committee has determined not to so register the shares, exemptions from registration under the Securities Act and applicable state securities laws shall be available for such issuance as determined by counsel for the Company, and there shall have been received from the Employee-Participant (or in the event of death or Disability, the Employee-Participant’s heir(s) or legal representative(s)) any representations or agreements requested by the Company in order to permit such issuance to be made pursuant to such exemptions, and

	1.		placing a legend on the stock certificates referring to the restrictions,

	2.		requiring the Director-Participant to keep stock certificates, duly endorsed, in the custody of the Company or its designated agent while the restrictions remain in effect,

	3.		not issuing certificates for Restricted Shares until the shares become Vested Shares, or

	4.		retaining a possessory lien in the Award Shares as provided in Paragraph J below.

			Common Stock otherwise issuable upon the exercise of such NQSO or the Vesting of such Restricted Shares, a portion of those shares with an aggregate fair market value not to exceed one hundred percent (100%) of the applicable Taxes.

	(b)		Stock Delivery: Provide the holder of the NQSO or the Restricted Shares with the election to deliver to the Company, at the time the NQSO is exercised or the Vesting of such Restricted Shares, one or more shares of Common Stock previously acquired by such individual (other than in connection with the option exercise or share Vesting triggering the Taxes) with an aggregate fair market value equal to the designated percentage (up to 100% as specified by the option holder) of the Taxes incurred in connection with such option exercise or share Vesting.

	(a)		full payment in cash or check made payable to the Company’s order; or

	(b)		full payment in shares of Common Stock held for the requisite period necessary to avoid a charge to the Company’s reported earnings and valued at fair market value on the Exercise Date (as such term is defined below); or

	(c)		full payment in a combination of shares of Common Stock held for the requisite period necessary to avoid a charge to the Company’s reported earnings and valued at Fair Market Value on the Exercise Date and cash or check payable to the Company’s order; or


1.	I have reviewed this annual report on Form 10-K/A of FirstMerit Corporation.

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows for the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:


	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the periods in which this report is being prepared;


	(b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


	(c)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: April 30, 2004		/s/ JOHN R. COCHRAN ----------------------------------------------------- John R. Cochran Chairman and Chief Executive Officer



Date: April 30, 2004		/s/ TERRENCE E. BICHSEL ----------------------------------------------------- Terrence E. Bichsel Executive Vice President and Chief Financial Officer



Date: April 30, 2004		By: /s/ JOHN R. COCHRAN John R. Cochran Chairman and Chief Executive Officer

		By: /s/ TERRENCE E. BICHSEL Terrence E. Bichsel Executive Vice President and Chief Financial Officer