REGISTRATION STATEMENT NO. 333-_____
Filed November 6, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SHS BANCORP, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2912920
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One North Shore Center
Suite 120
Pittsburgh, Pennsylvania 15212
(412) 231-0809
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(Address of principal executive offices)
1998 Stock Option Plan
Management Recognition and Development Plan
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(Full title of the Plan)
Copies to:
Thomas F. Angotti Eric S. Kracov, Esquire
President and Chief Executive Officer Breyer & Aguggia LLP
SHS Bancorp, Inc. 1300 I Street, N.W.
One North Shore Center, Suite 120 Suite 470 East
Pittsburgh, Pennsylvania 15212 Washington, D.C. 20005
(412) 231-0809 (202) 737-7900
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Name, address and telephone
number of agent for service
Page 1 of 7 Pages
Exhibit Index Appears on Page 5
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Calculation of Registration Fee
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Title of
Securities Amount Proposed Maximum Proposed Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
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Common Stock,
$.01 par value 114,793 $11.31(2) $1,298,309 $361
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Rule 457(c) under the Securities Act of
1933, as amended (the "Securities Act"), the price per share is estimated
to be $11.31, based upon the average of the bid and ask prices of the
common stock, $.01 par value per share (the "Common Stock"), of SHS
Bancorp, Inc. (the "Registrant"), as reported on the OTC-Bulletin Board
on November 5, 1998.
(2) Of this number, 81,995 shares are being registered for issuance under the
1998 Stock Option Plan and 32,798 shares are being registered for
issuance under the Management Recognition and Development Plan (the
foregoing plans are referred to collectively herein as the "Plans");
together with an indeterminate number of shares reserved for issuance
pursuant to the Plans as a result of any future stock split, stock
dividend or similar adjustment of the outstanding Common Stock.
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This Registration Statement shall become effective automatically upon the
date of filing in accordance with Section 8(a) of the Securities Act of 1933,
as amended, and 17 C.F.R. Section 230.462.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
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The following documents filed with the Commission are incorporated in
this Registration Statement by reference:
(1) the Registrant's Registration Statement on Form SB-2 (333-30231)
filed June 27, 1997 and amendments thereto;
(2) the Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1997;
(3) the Registrant's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1998;
(4) the Registrant's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1998; and
(5) the description of the Common Stock set forth in the Registrant's
Registration Statement on Form 8-A registering the Registrant's Common Stock,
pursuant to Section 12(g) of the Securities Exchange Act of 1934, filed July
30, 1997.
All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Exchange Act, after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
covered hereby then remaining unsold, shall also be deemed to be incorporated
by reference in this Registration Statement and to be a part hereof commencing
on the respective dates on which such documents are filed.
Any statement contained in this Registration Statement, or in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein, or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 4. Description of Securities
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Not Applicable
Item 5. Interests of Named Experts and Counsel
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Not Applicable
Item 6. Indemnification of Directors and Officers
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Article 9 of the Certificate of Incorporation of SHS Bancorp, Inc.
requires indemnification of directors, officers and employees to the fullest
extent permitted by Pennsylvania law.
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the
Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"), contain
provisions for mandatory and discretionary indemnification of a corporation's
directors, officers and other personnel, and related matters.
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Under Section 1741, subject to certain limitations, a corporation has the
power to indemnify directors and officers under certain prescribed
circumstances against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred in connection
with an action or proceeding, whether civil, criminal, administrative or
investigative (other than derivative actions), to which any of them is a party
or is threatened to be made a party by reason of his being a representative of
the corporation or serving at the request of the corporation as a
representative of another corporation, partnership, joint venture, trust or
other enterprise, if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation
and, with respect to any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful.
Section 1742 permits indemnification in derivative actions if the
appropriate standard of conduct is met, except in respect of any claim, issue
or matter as to which the person has been adjudged to be liable to the
corporation unless and only to the extent that the proper court determines
upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for the expenses that the court deems proper.
Under Section 1743, indemnification is mandatory to the extent that the
officer or director has been successful on the merits or otherwise in defense
of any action or proceeding referred to in Section 1741 or 1742.
Section 1744 provides that, unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the corporation
only as authorized in the specific case upon a determination that the
representative met the applicable standard of conduct and that such
determination will be made (i) by the board of directors by a majority vote of
a quorum of directors not parties tot he action or proceeding; (ii) if a
quorum is not obtainable, or if obtainable and a majority of disinterested
directors so directs, by independent legal counsel; or (iii) by the
shareholders.
Section 1745 provides that expenses incurred by an officer or director in
defending an action or proceeding may be paid by the corporation in advance of
the final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determining that he is not entitled to be indemnified by the
corporation.
Section 1746 provides generally that the indemnification and advancement
of expenses provided by Subchapter 17D of the BCL (i) will not be deemed
exclusive of any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding that
office, and (ii) may not be made in any case where the act or failure to act
giving rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
Section 1747 grants a corporation the power to purchase and maintain
insurance on behalf of any director or officer against any liability incurred
by him in his capacity as officer or director, whether or not the corporation
would have the power to indemnify him against that liability under Subchapter
17D of BCL.
Sections 1748 and 1749 extend the indemnification and advancement of
expenses provisions contained in Subchapter 17D of the BCL to successor
corporations in fundamental corporate changes and to representatives serving
as fiduciaries of employee benefit plans.
Section 1750 provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, Subchapter 17D of the BCL shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs and personal representative of such person.
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Item 7. Exemption From Registration Claimed
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Not Applicable
Item 8. Exhibits
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The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:
No. Exhibit
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5 Opinion of Breyer & Aguggia LLP
23.1 Consent of S.R. Snodgrass, A.C.
23.2 Consent of Breyer & Aguggia (see Exhibit 5)
24 Power of attorney (see signature pages)
99.1 1998 Stock Option Plan
99.2 Management Recognition and Development Plan
Item 9. Undertakings
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The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act, (ii) to reflect
in the prospectus any facts or events arising after the effective date of the
Registration Statement (or most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement, and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change in such
information in the Registration Statement; provided, however, that clauses (i)
and (ii) do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
2. That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
4. That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to a new registration
statement relating to the securities offered therein, and that offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
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5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officer and controlling
persons of the registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by it is
against public policy expressed in the Securities Act will and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, SHS Bancorp,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Pittsburgh, and the State of Pennsylvania the 21st
day of October 1998.
SHS BANCORP, INC.
By: /s/ Thomas F. Angotti
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Thomas F. Angotti
President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Thomas F. Angotti his true and
lawful attorney, with full power to sign for such person and in such person's
name and capacity indicated below, and with full power of substitution any and
all amendments to this Registration Statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.
By: /s/ Thomas F. Angotti Date: October 21, 1998
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Thomas F. Angotti
President, Chief Executive Officer and Director
(Principal Executive Officer)
By: /s/ Vincent C. Ashoff Date: October 21, 1998
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Vincent C. Ashoff
Chief Financial Officer and Director (Principal
Financial and Accounting Officer)
By: /s/ Guy Dille Date: October 21, 1998
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Guy Dille
Director
By: /s/ George C. Dorsch Date: October 21, 1998
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George C. Dorsch
Director
By: /s/ Edward W. Preskar Date: October 21, 1998
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Edward W. Preskar
Director
By: /s/ Charles W. Hergenroeder, III Date: October 21, 1998
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Charles W. Hergenroeder, III
Director
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Exhibit 5
Opinion of Breyer & Aguggia LLP<PAGE>
1300 I Street, N.W.
Suite 470 East
Washington, D.C. 20005
Telephone (202) 737-7900
Breyer & Aguggia LLP Facsimile (202) 737-7979
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ATTORNEYS AT LAW
November 6, 1998
Board of Directors
SHS Bancorp, Inc.
One North Shore Center
Suite 120
Pittsburgh, Pennsylvania 15212
Gentlemen:
We have acted as special counsel to SHS Bancorp, Inc., a Pennsylvania
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission ("Registration Statement") under the Securities Act of 1933, as
amended, relating to shares of common stock, par value $.01 per share (the
"Common Stock") of the Company which may be issued pursuant to the terms of
the Company's 1998 Stock Option Plan and the Management Recognition and
Development Plan (the "Plans"), all as more fully described in the
Registration Statement. You have requested the opinion of this firm with
respect to certain legal aspects of the proposed offering.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to and in accordance with
the terms of the Plans will be duly and validly issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8.
Sincerely,
/s/ Breyer & Aguggia LLP
BREYER & AGUGGIA LLP
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Exhibit 23.1
Consent of S.R. Snodgrass, A.C.
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[LETTERHEAD OF S.R.SNODGRASS, A.C.]
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement of
SHS Bancorp, Inc. on Form S-8 of our report dated March 3, 1998 appearing in
the Annual Report on Form 10-KSB of SHS Bancorp, Inc. for the year ended
December 31, 1997.
/s/ S.R. Snodgrass, A.C.
Wexford, PA
November 2, 1998
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Exhibit 23.2
Consent of Breyer & Aguggia LLP (see Exhibit 5)
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Exhibit 24
Power of Attorney (see signature page)
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Exhibit 99.1
1998 Stock Option Plan
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SHS BANCORP, INC.
1998 STOCK OPTION PLAN
SECTION 1. PURPOSE
The SHS Bancorp, Inc. 1998 Stock Option Plan (the "Plan") is hereby
established to foster and promote the long-term success of SHS Bancorp, Inc.
and its shareholders by providing directors, officers and employees of the
Corporation and its subsidiaries with an equity interest in the Corporation.
The Plan will assist the Corporation in attracting and retaining the highest
quality of experienced persons as directors, officers and employees and in
aligning the interests of such persons more closely with the interests of the
Corporation's shareholders by encouraging such parties to maintain an equity
interest in the Corporation.
SECTION 2. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth below shall
have the following meanings:
BOARD means the Board of Directors of the Corporation.
CHANGE IN CONTROL shall mean an event deemed to occur if and when (a) an
offeror other than the Corporation purchases shares of the stock of the
Corporation pursuant to a tender or exchange offer for such shares, (b) any
person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the beneficial owner, directly or indirectly, of securities
of the Corporation representing twenty-five percent (25%) or more of the
combined voting power of the Corporation's then outstanding securities, (c)
the membership of the board of directors of the Corporation changes as the
result of a contested election, such that individuals who were directors at
the beginning of any twenty-four (24) month period (whether commencing before
or after the date of adoption of this Plan) do not constitute a majority of
the Board at the end of such period, or (d) shareholders of the Corporation
approve a merger, consolidation, sale or disposition of all or substantially
all of the Corporation's assets, or a plan of partial or complete liquidation.
If any of the events enumerated in clauses (a) - (d) occur, the Board shall
determine the effective date of the change in control resulting therefrom, for
purposes of the Plan.
CODE means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
CORPORATION means SHS Bancorp, Inc., a Pennsylvania corporation.
DIRECTOR shall mean a director of the Corporation who is not also an
employee of the Corporation or its subsidiaries.
DISABILITY means any physical or mental injury or disease of a permanent
nature which renders a Participant incapable of meeting the requirements of
the employment or service performed by such Participant immediately prior to
the commencement of such disability. The determination of whether a
Participant is disabled shall be made by the Board in its sole and absolute
discretion.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations promulgated thereunder.
FAIR MARKET VALUE shall be determined as follows:
(a) If the Stock is traded or quoted on the Nasdaq Stock Market or other
national securities exchange on any date, then the Fair Market Value shall be
the average of the highest and lowest selling price on such exchange on such
date or, if there were no sales on such date, then on the next prior business
day on which there was a sale.
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(b) If the Stock is not traded or quoted on the Nasdaq Stock Market or
other national securities exchange, then the Fair Market Value shall be a
value determined by the Board in good faith on such basis as it deems
appropriate.
INCENTIVE STOCK OPTION means an option to purchase shares of Stock granted
to a Participant under the Plan which is intended to meet the requirements of
Section 422 of the Code.
NON-QUALIFIED STOCK OPTION means an option to purchase shares of Stock
granted to a Participant under the Plan which is not intended to be an
Incentive Stock Option.
OPTION means an Incentive Stock Option or a Non-Qualified Stock Option.
PARTICIPANT means a Director or employee of the Corporation or its
subsidiaries selected by the Board to receive an Option under the Plan.
PLAN means this SHS Bancorp, Inc. 1998 Stock Option Plan.
STOCK means the common stock, $0.01 par value, of the Corporation.
TERMINATION FOR CAUSE shall mean termination because of a Participant's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or material breach of any provision of any
employment agreement between the Corporation and/or any subsidiary of the
Corporation and a Participant.
SECTION 3. ADMINISTRATION
(a) The Plan shall be administered by the Board. Among other things, the
Board shall have authority, subject to the terms of the Plan, to grant
Options, to determine the individuals to whom and the time or times at which
Options may be granted, to determine whether such Options are to be Incentive
Stock Options or Non-Qualified Stock Options (subject to the requirements of
the Code), to determine the terms and conditions of any Option granted
hereunder, and the exercise price thereof.
(b) Subject to the other provisions of the Plan, the Board shall have
authority to adopt, amend, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from
time to time consider advisable, to interpret the provisions of the Plan and
any Option and to decide all disputes arising in connection with the Plan. The
Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option agreement in the manner and to the
extent it shall deem appropriate to carry the Plan into effect, in its sole
and absolute discretion. The Board's decision and interpretations shall be
final and binding. Any action of the Board with respect to the administration
of the Plan shall be taken pursuant to a majority vote or by the unanimous
written consent of its members.
SECTION 4. ELIGIBILITY AND PARTICIPATION.
Officers and employees of the Corporation and its subsidiaries and
Directors shall be eligible to participate in the Plan. The Participants under
the Plan shall be selected from time to time by the Board, in its sole
discretion, from among those eligible, and the Board shall determine, in its
sole discretion, the numbers of shares to be covered by the Option or Options
granted to each Participant. Options intended to qualify as Incentive Stock
Options shall be granted only to persons who are eligible to receive such
options under Section 422 of the Code.
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SECTION 5. SHARES OF STOCK AVAILABLE FOR OPTIONS
(a) The maximum number of shares of Stock which may be issued and
purchased pursuant to Options granted under the Plan is 81,995, subject to the
adjustments as provided in Section 5 and Section 9, to the extent applicable.
If an Option granted under this Plan expires or terminates before exercise or
is forfeited for any reason, the shares of Stock subject to such Option, to
the extent of such expiration, termination or forfeiture, shall again be
available for subsequent Option grants under Plan. Shares of Stock issued
under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
(b) In the event that the Board determines, in its sole discretion, that
any stock dividend, stock split, reverse stock split or combination,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reclassification, reorganization, merger, consolidation,
split-up, spin-off, combination, exchange of shares, or other similar
transaction affects the Stock such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be granted or made
available under the Plan to Participants, the Board shall have the right to
proportionately and appropriately adjust equitably any or all of (i) the
maximum number and kind of shares of Stock in respect of which Options may be
granted under the Plan to Participants, (ii) the number and kind of shares of
Stock subject to outstanding Options held by Participants, and (iii) the
exercise price with respect to any Options held by Participants, without
changing the aggregate purchase price as to which such Options remain
exercisable, provided that no adjustment shall be made pursuant to this
Section if such adjustment would cause the Plan to fail to comply with Section
422 of the Code with regard to any Incentive Stock Options granted hereunder.
No fractional Shares shall be issued on account of any such adjustment.
(c) Any adjustments under this Section will be made by the Board, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive.
SECTION 6. NON-QUALIFIED STOCK OPTIONS
The Board may, from time to time, grant Non-Qualified Stock Options to
Participants upon such terms and conditions as the Board may determine. Non-
Qualified Stock Options granted under this Plan are subject to the following
terms and conditions:
(a) Price. The purchase price per share of Stock deliverable upon the
exercise of each Non-Qualified Stock Option shall be determined by the Board
on the date the option is granted. Such purchase price shall not be less than
one hundred percent (100%) of the Fair Market Value of the Stock on the date
of grant. Shares may be purchased only upon full payment of the purchase
price. Payment of the purchase price may be made, in whole or in part, through
the surrender of shares of the Stock at the Fair Market Value of such shares
on the date of surrender or through a "cashless exercise" involving a stock
brokerage firm.
(b) Terms of Options. The term during which each Non-Qualified Stock
Option may be exercised shall be determined by the Board, but in no event
shall a Non-Qualified Stock Option be exercisable in whole or in part more
than ten (10) years from the date of grant. Except as provided herein, no Non-
Qualified Stock Option granted under this Plan is transferable except by will
or the laws of descent and distribution. The Board shall have discretionary
authority to permit the transfer of any Non-Qualified Stock Option to members
of a Participant's immediate family, including trusts for the benefit of such
family members and partnerships in which such family members are the only
partners; provided, however, that a transferred Non-Qualified Stock Option may
be exercised by the transferee on any date only to the extent that the
Participant would have been entitled to exercise the Non-Qualified Stock
Option on such date had the Non-Qualified Stock Option not been transferred.
Any transferred Non-Qualified Stock Option shall remain subject to the terms
and conditions of the Participant's stock option agreement.
(c) Termination of Service. Unless otherwise determined by the Board,
upon the termination of a Participant's employment (or, in the case of a
Director, service as a member of the Board) for any reason other than
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Disability, death or Termination for Cause, the Participant's Non-Qualified
Stock Options shall be exercisable only as to those shares which were
immediately exercisable by the Participant at the date of termination and only
for a period of one (1) year following termination. Notwithstanding any
provision set forth herein nor contained in any Agreement relating to the
award of an Option, in the event of Termination for Cause, all rights under
the Participant's Non-Qualified Stock Options shall expire upon termination.
In the event of death or termination as a result of Disability of any
Participant, all Non-Qualified Stock Options held by the Participant, whether
or not exercisable at such time, shall be exercisable by the Participant or
his legal representatives or beneficiaries of the Participant for two (2)
years or such longer period as determined by the Board following the date of
the Participant's death or termination of service due to Disability, provided
that in no event shall the period extend beyond the expiration of the
Non-Qualified Stock Option term.
SECTION 7. INCENTIVE STOCK OPTIONS
The Board may, from time to time, grant Incentive Stock Options to
eligible employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) Price. The purchase price per share of Stock deliverable upon the
exercise of each Incentive Stock Option shall be not less than one hundred
percent (100%) of the Fair Market Value of the Stock on the date of grant.
However, if a Participant owns (or, under Section 422(d) of the Code, is
deemed to own) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of Stock, the purchase price per share of
Stock deliverable upon the exercise of each Incentive Stock Option shall not
be less than one hundred ten percent (110%) of the Fair Market Value of the
Stock on the date of grant. Shares may be purchased only upon payment of the
full purchase price. Payment of the purchase price may be made, in whole or in
part, through the surrender of shares of the Stock at the Fair Market Value of
such shares on the date of surrender or through a "cashless exercise"
involving a stock brokerage firm.
(b) Amounts of Options. Subject to Sections 4(b) and (c), Incentive
Stock Options may be granted to any eligible employee in such amounts as
determined by the Board. In the case of an option intended to qualify as an
Incentive Stock Option, the aggregate Fair Market Value (determined as of the
time the option is granted) of the Stock with respect to which Incentive Stock
Options granted are exercisable for the first time by the Participant during
any calendar year shall not exceed $100,000. The provisions of this Section
7(b) shall be construed and applied in accordance with Section 422(d) of the
Code and the regulations, if any, promulgated thereunder. To the extent an
award is in excess of such limit, it shall be deemed a Non-Qualified Stock
Option. The Board shall have discretion to redesignate options granted as
Incentive Stock Options as Non-Qualified Stock Options.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Board, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than ten (10)
years from the date of grant. If at the time an Incentive Stock Option is
granted to an employee, the employee owns Stock representing more than ten
percent (10%) of the total combined voting power of the Corporation (or, under
Section 422(d) of the Code, is deemed to own Stock representing more than ten
percent (10%) of the total combined voting power of all such classes of Stock,
by reason of the ownership of such classes of Stock, directly or indirectly,
by or for any brother, sister, spouse, ancestor or lineal descendent of such
employee, or by or for any corporation, partnership, estate or trust of which
such employee is a shareholder, partner or beneficiary), the Incentive Stock
Option granted to such employee shall not be exercisable after the expiration
of five (5) years from the date of grant. No Incentive Stock Option granted
under this Plan is transferable except by will or the laws of descent and
distribution.
(d) Termination of Employment. Upon the termination of a Participant's
service for any reason other than Disability, death or Termination for Cause,
the Participant's Incentive Stock Options which are then exercisable at the
date of termination may only be exercised by the Participant for a period of
three (3) months following termination, after which time they shall be void.
Notwithstanding any provisions set forth herein nor contained in any
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Agreement relating to an award of an Option, in the event of Termination for
Cause, all rights under the Participant's Incentive Stock Options shall expire
immediately upon termination.
Unless otherwise determined by the Board, in the event of death or
termination of service as a result of Disability of any Participant, all
Incentive Stock Options held by such Participant, whether or not exercisable
at such time, shall be exercisable by the Participant or the Participant's
legal representatives or the beneficiaries of the Participant for one (1) year
following the date of the Participant's death or termination of employment as
a result of Disability. In no event shall the exercise period extend beyond
the expiration of the Incentive Stock Option term.
(f) Compliance with Code. The options granted under this Section 7 of
the Plan are intended to qualify as incentive stock options within the meaning
of Section 422 of the Code, but the Corporation makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code. A Participant shall notify the Board in writing in
the event that he disposes of Stock acquired upon exercise of an Incentive
Stock Option within the two-year period following the date the Incentive Stock
Option was granted or within the one-year period following the date he
received Stock upon the exercise of an Incentive Stock Option and shall comply
with any other requirements imposed by the Corporation in order to enable the
Corporation to secure the related income tax deduction to which it will be
entitled in such event under the Code.
SECTION 8. EXTENSION
The Board may, in its sole discretion, extend the dates during which all
or any particular Option or Options granted under the Plan may be exercised;
provided, however, that no such extension shall be permitted without the
Participant's consent if it would cause Incentive Stock Options issued under
the Plan to fail to comply with Section 422 of the Code.
SECTION 9. GENERAL PROVISIONS APPLICABLE TO OPTIONS
(a) Each Option under the Plan shall be evidenced by a writing delivered
to the Participant specifying the terms and conditions thereof and containing
such other terms and conditions not inconsistent with the provisions of the
Plan as the Board considers necessary or advisable to achieve the purposes of
the Plan or comply with applicable tax and regulatory laws and accounting
principles.
(b) Each Option may be granted alone, in addition to or in relation to
any other Option. The terms of each Option need not be identical, and the
Board need not treat Participants uniformly. Except as otherwise provided by
the Plan or a particular Option, any determination with respect to an Option
may be made by the Board at the time of grant or at any time thereafter.
(c) Notwithstanding anything in this Plan to the contrary, in the event
of a Change in Control, all then outstanding Options shall become one hundred
percent vested and exercisable as of the effective date of the Change in
Control. If, in connection with or as a consequence of a Change in Control,
the Corporation is merged into or consolidated with another corporation, if
the Corporation becomes a subsidiary of another corporation or if the
Corporation sells or otherwise disposes of substantially all of its assets to
another corporation, then unless provisions are made in connection with such
transactions for the continuance of the Plan and/or the assumption or
substitution of then outstanding Options with new options covering the stock
of the successor corporation, or parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices, such
Options shall be canceled as of the effective date of the merger,
consolidation, or sale and the Participant shall be paid in cash an amount
equal to the difference between the Fair Market Value of the Stock subject to
the Options on the effective date of such corporate event and the exercise
price of the Options. Notwithstanding anything in this Section 9(c) or any
Option agreement to the contrary, in the event that the consummation of a
Change in Control is contingent on using pooling of interests accounting
methodology, the Board may, in its discretion, take any action necessary to
preserve the use of pooling of interests accounting.
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(d) The Corporation shall be entitled to withhold (or secure payment from
the Participant in lieu of withholding) the amount of any withholding or other
tax required by law to be withheld or paid by the Corporation with respect to
any Options exercised under this Plan, and the Corporation may defer issuance
of Stock hereunder until and unless indemnified to its satisfaction against
any liability for any such tax. The amount of such withholding or tax payment
shall be determined by the Board or its delegate and shall be payable by the
Participant at such time as the Board determines. To the extent authorized by
the Board, such withholding obligation may also be satisfied by the payment of
cash by the Participant to the Corporation, the tendering of previously
acquired shares of Stock of the Participant or the withholding, at the
appropriate time, of shares of Stock otherwise issuable to the Participant, in
a number sufficient, based upon the Fair Market Value of such Stock, to
satisfy such tax withholding requirements. The Board shall be authorized, in
its sole discretion, to establish such rules and procedures relating to any
such withholding methods as it deems necessary or appropriate, including,
without limitation, rules and procedures relating to elections by Participants
who are subject to the provisions of Section 16 of the Exchange Act.
(e) Subject to the terms of the Plan, the Board may at any time, and from
time to time, amend, modify or terminate the Plan or any outstanding Option
held by a Participant, including substituting therefor another Option of the
same or a different type or changing the date of exercise or realization,
provided that the Participant's consent to each action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
SECTION 10. MISCELLANEOUS
(a) No person shall have any claim or right to be granted an Option, and
the grant of an Option shall not be construed as giving a Participant the
right to continued employment or service on the Board. The Corporation
expressly reserves the right at any time to dismiss a Participant free from
any liability or claim under the Plan, except as expressly provided in the
Plan or the applicable Option.
(b) Nothing contained in the Plan shall prevent the Corporation from
adopting other or additional compensation arrangements.
(c) Subject to the provisions of the applicable Option, no Participant
shall have any rights as a shareholder (including, without limitation, any
rights to receive dividends, or non cash distributions with respect to such
shares) with respect to any shares of Stock to be distributed under the Plan
until he or she becomes the holder thereof.
(d) Notwithstanding anything to the contrary expressed in this Plan, any
provisions hereof that vary from or conflict with any applicable Federal or
State securities laws (including any regulations promulgated thereunder) shall
be deemed to be modified to conform to and comply with such laws.
(e) No member of the Board shall be liable for any action or
determination taken or granted in good faith with respect to this Plan nor
shall any member of the Board be liable for any agreement issued pursuant to
this Plan or any grants under it. Each member of the Board shall be
indemnified by the Corporation against any losses incurred in such
administration of the Plan, unless his action constitutes serious and willful
misconduct.
(f) The Plan shall be effective on October 1, 1998 but only if, prior to
such date, the Plan is approved by the Corporation's shareholders. The Plan
will be so approved if at an annual or special meeting of shareholders held
prior to such date a quorum is present and the votes of the holders of a
majority of the securities of the Corporation entitled to vote on such matter
shall be cast in favor of its approval.
(g) The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that no amendment shall be made without
shareholder approval if such approval is necessary to comply with any
applicable tax laws or regulatory requirement.
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(h) Options may not be granted under the Plan after the tenth anniversary
of the effective date of the Plan, but then outstanding Options may extend
beyond such date.
(i) To the extent that State laws shall not have been preempted by any
laws of the United States, the Plan shall be construed, regulated, interpreted
and administered according to the other laws of the State of Pennsylvania.
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Exhibit 99.2
Management Recognition and Development Plan
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SHS BANCORP, INC.
MANAGEMENT RECOGNITION AND DEVELOPMENT PLAN
SECTION 1. PURPOSE AND ADOPTION OF THE PLAN
(a) PURPOSE. The purpose of the SHS Bancorp, Inc. Management Recognition
and Development Plan is to assist the Corporation and its subsidiaries in
attracting, retaining and motivating key management employees and non-employee
directors who will contribute to the Corporation's success. The Plan is
intended to recognize the contributions of key management personnel to the
success of the Corporation and its subsidiaries, to link the benefits paid to
eligible employees and directors who have substantial responsibility for the
successful operation, administration and management of the Corporation with
the enhancement of shareholder value and to provide eligible employees and
directors with an opportunity to acquire a greater proprietary interest in the
Corporation through the grant of restricted shares of Stock which, in
accordance with the terms and conditions set forth below, will vest only if
the employees meet the vesting criteria established by the Board and this
Plan.
(b) ADOPTION AND EFFECTIVE DATE. The Plan shall be effective on October
1, 1998 but only if, prior to such date, the Plan is approved by the
Corporation's shareholders. The Plan will be so approved if at an annual or
special meeting of shareholders held prior to such date a quorum is present
and the votes of the holders of a majority of the securities of the
Corporation entitled to vote on such a matter shall be cast in favor of its
approval.
SECTION 2. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth below shall
have the following meanings:
AWARD AGREEMENT means a written agreement between the Corporation and a
Participant specifically setting forth the terms and conditions of an award of
Restricted Stock granted to a Participant pursuant to Section 5 of the Plan.
BOARD means the Board of Directors of the Corporation.
CHANGE IN CONTROL shall mean an event deemed to occur if and when (a) an
offeror other than the Corporation purchases shares of the common stock of the
Corporation pursuant to a tender or exchange offer for such shares, (b) any
person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the beneficial owner, directly or indirectly, of securities
of the Corporation representing twenty-five percent (25%) or more of the
combined voting power of the Corporation's then outstanding securities, (c)
the membership of the board of directors of the Corporation changes as the
result of a contested election, such that individuals who were directors at
the beginning of any twenty-four (24) month period (whether commencing before
or after the date of adoption of this Plan) do not constitute a majority of
the Board at the end of such period, or (d) shareholders of the Corporation
approve a merger, consolidation, sale or disposition of all or substantially
all of the Corporation's assets or a plan of partial or complete liquidation.
If any of the events enumerated in clauses (a) - (d) occur, the Board shall
determine the effective date of the change in control resulting therefrom.
CORPORATION means SHS Bancorp, Inc., a Pennsylvania corporation, and its
successors.
DATE OF GRANT means the date as of which an award of Restricted Stock is
granted in accordance with Section 5.
DIRECTOR means a member of the Board of Directors of the Corporation who
is not also an employee of the Corporation or its subsidiaries.
DISABILITY means any physical or mental injury or disease of a permanent
nature which renders a Participant incapable of meeting the requirements of
the employment or service performed by such Participant
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immediately prior to the commencement of such disability. The determination
of whether a Participant is disabled shall be made by the Board in its sole
and absolute discretion.
EFFECTIVE DATE means the date as of which the Plan shall become effective,
as determined in accordance with Section 1(b).
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
FAIR MARKET VALUE shall be determined as follows:
(a) If the stock is traded or quoted on the Nasdaq Stock Market or other
national securities exchange on any date, then the Fair Market Value shall be
the average of the highest and lowest selling price on such exchange on such
date or, if there were no sales on such date, then on the next prior business
day on which there was a sale.
(b) If the stock is not traded or quoted on the Nasdaq Stock Market or
other national securities exchange, then the Fair Market Value shall be a
value determined by the Board in good faith on such basis as it deems
appropriate.
PARTICIPANT means any person selected by the Board, pursuant to Section
3(b), to participate under the Plan.
PLAN means this SHS Bancorp, Inc. Management Recognition and Development
Plan, as the same may be amended from time to time.
RESTRICTED STOCK means shares of Stock awarded to a Participant subject to
restrictions as described in Section 5.
STOCK means the common stock, par value $0.01 per share, of the
Corporation.
SECTION 3. ADMINISTRATION AND PARTICIPATION
(a) ADMINISTRATION. The Plan shall be administered by the Board which
shall have exclusive and final authority and discretion in each determination,
interpretation or other action affecting the Plan and its Participants. The
Board shall have the sole and absolute authority and discretion to interpret
the Plan, to establish and modify administrative rules for the Plan, to
select, in accordance with Section 3(b), the persons who will be Participants
hereunder, to impose, in accordance with Section 5(a), such conditions and
restrictions as it determines appropriate and to take such other actions and
make such other determinations in connection with the Plan as it may deem
necessary or advisable.
(b) DESIGNATION OF PARTICIPANTS. Participants in the Plan shall be such
employees of the Corporation and its subsidiaries or Directors as the Board,
in its sole discretion, may designate. The Board shall consider such factors
as it deems pertinent in selecting Participants.
SECTION 4. STOCK ISSUABLE UNDER THE PLAN
(a) NUMBER OF SHARES OF STOCK ISSUABLE. Subject to adjustments as
provided in Section 6(c), the maximum number of shares of Stock available for
issuance under the Plan shall be 32,798. The Stock to be offered under the
Plan shall be authorized and unissued Stock, Stock which shall have been
reacquired by the Corporation and held in its treasury, or Stock held in a
trust established by the Corporation for the purpose of funding awards under
the Plan with shares acquired on the open market with funds contributed by the
Corporation or any subsidiary.
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(b) SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock forfeited as
provided in Section 5(b) may again be issued under the Plan.
SECTION 5. RESTRICTED STOCK
Subject to the terms of this Plan, the Board may grant to any Participant
an award of Restricted Stock in respect of such number of shares of Stock, and
subject to such terms and conditions relating to forfeitability and
restrictions on delivery and transfer (whether based on performance standards,
periods of service or otherwise), as the Board shall determine in its sole
discretion. The terms of all such Restricted Stock awards shall be set forth
in an Award Agreement between the Corporation and the Participant which shall
contain such provisions, not inconsistent with this Plan, as shall be
determined by the Board.
(a) ISSUANCE OF RESTRICTED STOCK. As soon as practicable after the Date
of Grant of Restricted Stock, the Corporation shall cause to be transferred on
the books of the Corporation shares of Stock, registered on behalf of the
Participant, evidencing such Restricted Stock, but subject to forfeiture to
the Corporation retroactive to the Date of Grant if an Award Agreement
delivered to the Participant by the Corporation with respect to the Restricted
Stock is not duly executed by the Participant and timely returned to the
Corporation. Unless the Board determines otherwise, until the lapse or
release of all restrictions applicable to an award of Restricted Stock, the
stock certificates representing such Restricted Stock shall be held in custody
by the Corporation or its designee. Notwithstanding the foregoing, the
Corporation may, in its sole discretion, establish a trust for the purpose of
holding Restricted Stock awarded pursuant to this Plan. In the event that a
trust is established, the Corporation may elect to hold any or all shares of
Stock subject to awards in the name of the trust for the benefit of the
Participant and subject to the forfeiture conditions applicable to the award.
(b) SHAREHOLDER RIGHTS. Beginning on the Date of Grant of the Restricted
Stock and subject to execution of the Award Agreement as provided in Section
5(a), the Participant shall become a shareholder of the Corporation with
respect to all Stock subject to the Award Agreement and shall have all of the
rights of a shareholder, including, but not limited to, the right to vote such
Stock and the right to receive dividends and other distributions paid with
respect to such Stock; provided, however, that any Stock distributed as a
dividend or otherwise with respect to any Restricted Stock as to which the
restrictions have not yet lapsed shall be subject to the same restrictions as
such Restricted Stock and shall be held as prescribed in Section 5(a). Cash
dividends paid with respect to Restricted Stock may, at the Board's
discretion, be held by the Corporation in escrow until such time as the
Participant vests in such shares or distributed to the Participant during the
forfeiture period. The Corporation may credit a reasonable rate of interest
to such cash dividends prior to distribution.
(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted Stock may be
assigned, transferred (other than by will or the laws of descent and
distribution), pledged, sold or otherwise disposed of prior to lapse or
release of the restrictions applicable thereto.
(d) DELIVERY OF STOCK UPON RELEASE OF RESTRICTIONS. Upon expiration or
earlier termination of the forfeiture period without a forfeiture, and the
satisfaction of or release from any other conditions prescribed by the Board,
the restrictions applicable to the Restricted Stock shall lapse. As promptly
as administratively feasible thereafter, subject to the requirements of
Section 6(b), the Corporation shall deliver to the Participant or, in case of
the Participant's death, to the Participant's legal representatives, one or
more stock certificates for the appropriate number of shares of Stock, free of
all such restrictions, except for any restrictions that may be imposed by law.
(e) TERMS OF RESTRICTED STOCK; FORFEITURE OF RESTRICTED STOCK. All
Restricted Stock shall be forfeited and returned to the Corporation and all
rights of the Participant with respect to such Restricted Stock shall cease
and terminate in their entirety if during the forfeiture period the employment
(or, in the case of a Director, service) of the Participant with the
Corporation and/or its subsidiaries terminates for any reason. Subject
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to the terms of the Plan, the Board, in its sole discretion, shall establish
the forfeiture period for each grant of Restricted Stock, and may provide for
the forfeiture period to lapse in installments. Notwithstanding the
foregoing, upon the termination of a Participant's employment (or, in the case
of a Director, service) by reason of death or Disability, all forfeiture
restrictions imposed on Restricted Stock shall immediately and fully lapse.
In addition, upon the effective date of a Change in Control, all forfeiture
restrictions imposed on outstanding Restricted Stock awards shall immediately
and fully lapse.
SECTION 6. MISCELLANEOUS
(a) LIMITATIONS ON TRANSFER. The rights and interest of a Participant
under the Plan may not be assigned or transferred other than by will or the
laws of descent and distribution. During the lifetime of a Participant, only
the Participant personally may exercise rights under the Plan.
(b) TAXES. The Corporation shall be entitled to withhold (or secure
payment from the Participant in lieu of withholding) the amount of any
withholding or other tax required by law to be withheld or paid by the
Corporation with respect to any Stock issuable under this Plan, or with
respect to any income recognized upon the lapse of restrictions applicable to
Restricted Stock and the Corporation may defer issuance of Stock hereunder
until and unless indemnified to its satisfaction against any liability for any
such tax. The amount of such withholding or tax payment shall be determined
by the Board or its delegate and shall be payable by the Participant at such
time as the Board determines. To the extent authorized by the Board, such
withholding obligation may be satisfied by the payment of cash by the
Participant to the Corporation, the tendering of previously acquired shares of
Stock of the Participant or the withholding, at the appropriate time, of
shares of Stock otherwise issuable to the Participant, in a number sufficient,
based upon the Fair Market Value of such Stock, to satisfy such tax
withholding requirements. The Board shall be authorized, in its sole
discretion, to establish such rules and procedures relating to any such
withholding methods as it deems necessary or appropriate, including, without
limitation, rules and procedures relating to elections by Participants who are
subject to the provisions of Section 16 of the Exchange Act.
(c) ADJUSTMENTS TO REFLECT CAPITAL CHANGES. The amount and kind of Stock
available for issuance under the Plan and the limit on the number of shares of
Stock in respect of which awards may be made to any Participant in any
calendar year shall be appropriately adjusted to reflect any stock dividend,
stock split, combination or exchange of shares, merger, consolidation or other
change in capitalization with a similar substantive effect upon the Plan. The
Board shall have the power and sole discretion to determine the nature and
amount of the adjustment, if any, to be made pursuant to this Section 6(c).
(d) NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT. No employee or other
person shall have any claim of right to be permitted to participate or be
granted an award under this Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained
in the employ of the Corporation.
(e) GOVERNING LAW. The Plan and all determinations made and actions
taken pursuant to the Plan shall be governed by the laws of the State of
Pennsylvania other than the conflict of laws provisions of such laws, and
shall be construed in accordance therewith.
(f) CAPTIONS. The captions (i.e., all Section and subsection headings)
used in the Plan are for convenience only, do not constitute a part of the
Plan, and shall not be deemed to limit, characterize or affect in any way any
provisions of the Plan, and all provisions of the Plan shall be construed as
if no captions had been used in the Plan.
(g) SEVERABILITY. Whenever possible, each provision in the Plan and
every Award Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of the Plan or any Award
Agreement shall be held to be prohibited by or invalid under applicable law,
then (x) such provision shall
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be deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (y) all other provisions of
the Plan and every Award Agreement shall remain in full force and effect.
(h) LEGENDS. All certificates for Stock delivered under the Plan shall
be subject to such transfer restrictions set forth in the Plan and such other
restrictions as the Board may deem advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed and any applicable federal or
state securities law, and the Board may cause a legend or legends to be
endorsed on any such certificates making appropriate references to such
restrictions.
(i) AMENDMENT AND TERMINATION.
(A) AMENDMENT. Subject to applicable law and regulations, the Board
shall have complete power and authority to amend the Plan at any time it is
deemed necessary or appropriate; provided, however, that no amendment shall be
made without shareholder approval if such approval is necessary for the
Corporation to comply with an applicable tax law or regulatory requirement.
No termination or amendment of the Plan may, without the consent of the
Participant to whom any award shall theretofore have been granted under the
Plan, adversely affect the right of such individual under such award.
(B) TERMINATION. The Board shall have the right and the power to
terminate the Plan at any time. Unless sooner terminated by action of the
Board, the Plan shall automatically terminate, without further action of the
Board or the Corporation's shareholders, on the tenth anniversary of the
Effective Date. No award shall be granted under the Plan after the
termination of the Plan, but the termination of the Plan shall not have any
other effect and any award outstanding at the time of the termination of the
Plan shall continue in effect in accordance with its terms as if the Plan has
not terminated.
* * *
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