<PAGE>
<PAGE>
SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
PEOPLES BANKCORP, INC.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which
transaction applies:
________________________________________________________________
2. Aggregate number of securities to which transaction
applies:
________________________________________________________________
3. Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee is calculated and state
how it was determined):
________________________________________________________________
4. Proposed maximum aggregate value of transaction:
________________________________________________________________
5. Total fee paid:
________________________________________________________________
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1. Amount Previously Paid:
____________________________________________
2. Form, Schedule or Registration Statement no.:
____________________________________________
3. Filing Party:
____________________________________________
4. Date Filed:
____________________________________________
<PAGE>
<PAGE>
PEOPLES BANKCORP, INC.
825 STATE STREET
OGDENSBURG, NEW YORK 13669
April 14, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Peoples Bankcorp, Inc. to be held at the offices
of Ogdensburg Federal Savings and Loan Association, 825 State
Street, Ogdensburg, New York on Tuesday, May 16, 2000 at 10:00
a.m., local time. Your Board of Directors and Management look
forward to personally greeting those stockholders able to
attend.
The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the
Company. Directors and officers of the Company will be present
to respond to any questions the stockholders may have.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND
THE ANNUAL MEETING. Your vote is important, regardless of the
number of shares you own. This will not prevent you from voting
in person but will assure that your vote is counted if you are
unable to attend the meeting. On behalf of your Board of
Directors, thank you for your interest and support.
Sincerely,
/s/ Robert E. Wilson
Robert E. Wilson
President
<PAGE>
<PAGE>
________________________________________________________________
PEOPLES BANKCORP, INC.
825 STATE STREET
OGDENSBURG, NEW YORK 13669
(315) 393-4340
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2000
________________________________________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders (the "Meeting") of Peoples Bankcorp, Inc. (the
"Company"), will be held at the offices of Ogdensburg Federal
Savings and Loan Association, 825 State Street, Ogdensburg, New
York at 10:00 a.m. on Tuesday, May 16, 2000.
A Proxy Card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting
upon:
1. The election of two directors of the Company;
2. The approval of the Peoples Bankcorp, Inc.
2000 Stock Option and Incentive Plan;
3. The approval of the Peoples Bankcorp, Inc.
Management Recognition Plan; and
4. The transaction of such other matters as may
properly come before the Meeting or any
adjournments thereof.
The Board of Directors is not aware of any other business
to come before the Meeting.
Any action may be taken on any one of the foregoing
proposals at the Meeting on the date specified above or on any
date or dates to which, by original or later adjournment, the
Meeting may be adjourned. Stockholders of record at the close
of business on April 6, 2000, are the stockholders entitled to
notice of and to vote at the Meeting and any adjournments
thereof.
You are requested to fill in and sign the enclosed form of
proxy which is solicited by the Board of Directors and to mail
it promptly in the enclosed envelope. The proxy will not be
used if you attend and vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Todd R. Mashaw
TODD R. MASHAW
SECRETARY
Ogdensburg, New York
April 14, 2000
________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A
QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. PLEASE ACT PROMPTLY.
________________________________________________________________
<PAGE>
<PAGE>
________________________________________________________________
PROXY STATEMENT
OF
PEOPLES BANKCORP, INC.
825 STATE STREET
OGDENSBURG, NEW YORK 13669
ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 2000
________________________________________________________________
________________________________________________________________
GENERAL
________________________________________________________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Peoples
Bankcorp, Inc. (the "Company") to be used at the Annual Meeting
of Stockholders of the Company (the "Meeting") which will be
held at the offices of Ogdensburg Federal Savings and Loan
Association (the "Association"), 825 State Street, Ogdensburg,
New York on Tuesday, May 16, 2000, at 10:00 a.m., local time.
The accompanying notice of meeting and this Proxy Statement are
being first mailed to stockholders on or about April 14, 2000.
________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
________________________________________________________________
Stockholders who execute proxies retain the right to
revoke them at any time. Unless so revoked, the shares
represented by such proxies will be voted at the Meeting and all
adjournments thereof. Proxies may be revoked by written notice
to the Secretary of the Company, at the address shown above, by
filing of a later dated proxy prior to a vote being taken on a
particular proposal at the Meeting or by attending the Meeting
and voting in person. Proxies solicited by the Board of
Directors of the Company will be voted in accordance with the
directions given therein. WHERE NO INSTRUCTIONS ARE INDICATED,
PROXIES WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR SET FORTH
BELOW AND FOR THE OTHER PROPOSALS SET FORTH HEREIN. The proxy
confers discretionary authority on the persons named therein to
vote with respect to the election of any person as a director
where the nominee is unable to serve or for good cause will not
serve, and matters incident to the conduct of the Meeting.
Proxies marked as abstentions, and shares held in street name
which have been designated by brokers on proxies as not voted,
will not be counted as votes cast. Proxies marked as
abstentions or as broker non-votes will, however, be treated as
shares present for purposes of determining whether a quorum is
present.
________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________
The securities entitled to notice of and to vote at the
Meeting consist of the Company's common stock, par value $.01
per share (the "Common Stock"). Stockholders of record as of
the close of business on April 6, 2000 (the "Record Date"), are
entitled to one vote for each share of Common Stock then held.
As of the Record Date, there were 134,390 shares of Common Stock
issued and outstanding. The presence, in person or by proxy, of
at least one-third of the total number of shares of Common Stock
outstanding and entitled to vote will be necessary to constitute
a quorum at the Meeting.
Persons and groups owning in excess of 5% of the Common
Stock are required to file certain reports regarding such
ownership pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act") with the Company and the Securities
and Exchange Commission ("SEC"). Based on such reports (and
certain other written information received by the Company),
management knows of no persons other than those set forth below
who owned more than 5% of the outstanding shares of Common Stock
as of the Record Date. The following table sets forth, as of
the Record Date, certain information as to those persons who
were the beneficial owners of more than five percent (5%) of the
Company's outstanding shares of Common Stock and the shares of
Common Stock beneficially owned by all executive officers and
directors of the Company as a group.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OUTSTANDING
- ------------------- ----------------------- -----------------
<S> <C> <C>
Paul B. Lee, Jr. 8,500 6.32%
765 Meeks Road
Oakland, KY 42189
Edward Gruca 9,500 7.07%
Lourdes Gruca
29450 Cedar Road
Pepper Pike, Ohio 44124
Peoples Bankcorp, Inc. 10,751 (2) 8.00%
Employee Stock Ownership Plan
825 State Street
Ogdensburg, New York 13669
Robert E. Hentschel
Jolanne K. Hentschel
3897 B State Highway 37
Ogdensburg, NY 13669 7,000 (3) 5.21%
Anthony P. LeBarge, Sr.
Evelyn M. LeBarge
92 Ross Road
Ogdensburg, NY 13669 9,700 (3) 7.22%
George E. Silver
Jane B. Silver
306 Jay Street
Ogdensburg, NY 13669 8,600 (3) 6.40%
Wesley L. Stitt
Janet A. Stitt
7 Annette Street
Heuvelton, NY 13654 8,000 (3) 5.95%
Robert E. Wilson
Barbara R. Wilson
405 Proctor Avenue
Ogdensburg, NY 13669 10,458 (4) 7.78%
All Executive Officers and Directors 45,729 (3)(5) 34.00%
as a Group (6 persons)
<FN>
__________
(1) For purposes of this table, a person is deemed to be the beneficial owner
of any shares of Common Stock if he or she has or shares voting or
investment power with respect to such Common Stock or has a right to
acquire beneficial ownership at any time within 60 days from the Record
Date. As used herein, "voting power" is the power to vote or direct the
voting of shares and "investment power" is the power to dispose or direct
the disposition of shares. Except as otherwise noted, ownership is
direct, and the named persons exercise sole voting and investment power
over the shares of the Common Stock.
(footnotes continued on succeeding page)
2
<PAGE>
<PAGE>
(2) These shares are held in a suspense account for future allocation among
participating employees as the loan used to purchase the shares is
repaid. The trustees of the Peoples Bankcorp, Inc. Employee Stock
Ownership Plan (the "ESOP"), currently Directors Hentschel, LeBarge,
Silver and Stitt, vote all allocated shares in accordance with
instructions of the participants. Unallocated shares and shares for
which no instructions have been received generally are voted by the ESOP
trustees in the same ratio as participants direct the voting of allocated
shares or, in the absence of such direction, as directed by the Company's
Board of Directors. As of the Record Date 1,075 shares had been
allocated.
(3) Does not include 9,676 unallocated shares held by the ESOP.
(4) Includes 358 shares allocated to Mr. Wilson's account under the ESOP.
(5) Includes 629 shares allocated to the accounts of executive officers
under the ESOP.
</FN>
</TABLE>
________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________
The Company's Board of Directors is composed of five
members. The Company's Certificate of Incorporation requires
that directors be divided into three classes, as nearly equal in
number as possible, each class to serve for a three year period,
with approximately one-third of the directors elected each year.
The Board of Directors has nominated Robert E. Wilson and
Anthony P. LeBarge, Sr., each to serve as director for a three-
year period.
If any nominee is unable to serve, the shares represented
by all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend or the size
of the Board may be reduced to eliminate the vacancy. At this
time, the Board knows of no reason why any nominee might be
unavailable to serve.
Under the Company's Bylaws, directors shall be elected by
a plurality of the votes of the shares present in person or by
proxy at the Meeting. Votes which are not cast at the Meeting,
either because of abstentions or broker non-votes, are not
considered in determining the number of votes which have been
cast for or against the election of a nominee.
Unless otherwise specified on the proxy, it is intended
that the persons named in the proxies solicited by the Board
will vote for the election of the named nominees.
The following table sets forth the name of the Board's
nominee for election as director of the Company and of those
directors who will continue to serve as such after the Meeting.
Also set forth is certain other information with respect to each
person's age, the year he or she first became a director of the
Company's wholly owned subsidiary, the Association, the
expiration of his term as a director, and the number and
percentage of shares of the Common Stock beneficially owned.
All of the individuals were initially appointed as director of
the Company in 1998 in connection with the Company's
incorporation.
<TABLE>
<CAPTION>
SHARES OF
YEAR FIRST COMMON STOCK
ELECTED AS BENEFICIALLY
AGE AT THE DIRECTOR CURRENT TERM OWNED AT THE PERCENT OF
NAME RECORD DATE OF THE ASSOCIATION TO EXPIRE RECORD DATE (1) CLASS
- ---- ----------- ------------------ ------------ --------------- ----------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2003
Robert E. Wilson 62 1966 2000 10,458 (2) 7.78%
Anthony P. LeBarge, Sr. 50 1991 2000 9,700 (3) 7.22
DIRECTORS CONTINUING IN OFFICE
George E. Silver 59 1989 2001 8,600 (3) 6.40
Robert E. Hentschel 65 1992 2002 7,000 (3) 5.21
Wesley L. Stitt 70 1980 2002 8,000 (3) 5.95
(footnotes on succeeding page)
3
<PAGE>
<PAGE>
<FN>
___________
(1) Includes stock held in joint tenancy; stock owned as
tenants in common; stock owned or held by a spouse or other
member of the individual's household; stock allocated
through certain employee benefit plans of the Company;
stock in which the individual either has or shares voting
and/or investment power and shares which the individual has
the right to acquire at any time within 60 days of the
Record Date. Each person or relative of such person whose
shares are included herein exercises sole or shared
voting and dispositive power as to the shares reported.
The ESOP trustees must vote all allocated shares held in
the ESOP in accordance with the instructions of the
participants. Unallocated shares and allocated shares for
which no timely direction is received are voted by
the ESOP trustees in proportion to the participant-directed
voting of allocated shares.
(2) Includes 358 shares allocated to Mr. Wilson's account under
the ESOP.
(3) Does not include 9,676 unallocated shares held by the ESOP.
</FN>
</TABLE>
The principal occupation of each director of the Company
for the last five years is set forth below.
ROBERT E. WILSON has served as our President and Chief
Executive Officer since 1963. He is a former member of the
Ogdensburg City School Board having served 15 years with two
terms as President and two terms as Vice President. He was a
member of Kiwanis International for 15 years and served on their
Board of Directors. For 25 years he participated in the Kiwanis
youth activity programs.
ANTHONY P. LEBARGE served as our Chairman of the Board
until January 1998. He is the general manager of Noco
Lubricants East Corp. He is a member of S.U.N.Y. Canton College
Council and the Masonic Lodge No. 128.
GEORGE E. SILVER is an attorney for the law firm of Silver
and Silver, and a judge for the Office of Court Administration.
He served as Chairman of the Board from 1994 to 1995. He is a
member of the Board of Directors of Ogdensburg Rescue Squad. He
is also President Emeritus of the Board of Trustees of the
Remington Art Museum.
ROBERT E. HENTSCHEL serves as our Chairman of the Board of
Directors. He is a general surgeon in private practice and has
been the Regional Medical Director of the New York State
Department of Corrections, Riverview Corrections Facility, since
1984. He is a Board member and past president of the Remington
Art Museum and is a Board member of AAA Automobile Travel Club.
WESLEY L. STITT has been retired since 1990. Prior to his
retirement, he was the Superintendent of Schools of the
Ogdensburg City Schools. He is Vice President of Remington
Endowment Board, a Trustee of the Remington Art Museum, Chairman
of S.U.N.Y. Canton College Council and Vice President of
Augsbury Institute. He is also a member of Heuvelton
Development Committee, Rural Rehabilitation Committee and the
Institute of Ethical Behavior.
EXECUTIVE OFFICERS WHO IS NOT A DIRECTOR
The following sets forth information including his age as
of the Record Date with respect to the sole executive officer of
the Company who does not sit on the Board of Directors.
Executive officers are appointed annually by the Board of
Directors.
TODD R. MASHAW, 36, has served as Vice President since
1989. He has been a member of the Board of Assessment and
Review for the City of Ogdensburg since 1995 and has been a
member of S.U.N.Y. Canton College Business Administration
Advisory Committee since 1991. He has also coached Kiwanis
Baseball.
________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
________________________________________________________________
The Board of Directors conducts its business through
meetings of the board and through activities of its committees.
During the year ended December 31, 1999, the board of directors
held 12 regular meetings and 18 special meetings. No director
attended fewer than 75% of the total meetings of the board of
directors and committees on which such director served during
the year ended December 31, 1999.
4
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________________________________________________________________
EXECUTIVE COMPENSATION
________________________________________________________________
SUMMARY COMPENSATION TABLE. The following table sets
forth the cash and non-cash compensation awarded to or earned by
the Chief Executive Officer of the Company and the Association.
No other employee earned in excess of $100,000 for the year
ended December 31, 1999.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND FISCAL ------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)
- ------------------ ------ ------ ----- ---------------
<S> <C> <C> <C> <C>
Robert E. Wilson 1999 $79,800 $3,900 $13,116
President and Chief 1998 79,800 3,900 13,058
Executive Officer 1997 74,685 3,650 12,107
<FN>
_________
(1) Consists of board fees of $8,950 and $4,166 of contributions by the
Company to Mr. Wilson's account under the ESOP.
</FN>
</TABLE>
EMPLOYMENT AGREEMENT. The Association has entered into an
employment agreement with Robert E. Wilson, President and Chief
Executive Officer. Mr. Wilson's base salary under the
employment agreement is $78,000. The employment agreement had
an initial term of three years. Effective January 12, 2000, the
term was extended for an additional one year period. The
agreement is terminable by the Association for "just cause" as
defined in the agreement. If the Association terminates Mr.
Wilson without just cause or if Mr. Wilson terminates his
employment for "good reason," he will be entitled to a
continuation of his salary from the date of termination through
the remaining term of the agreement, plus an additional 12
months. The employment agreement also contains a provision
stating that in the event of the termination of employment in
connection with any change in control of the Company or the
Association, Mr. Wilson will be paid a lump sum amount equal to
2.99 times his five year average annual taxable cash
compensation. If such payments had been made under the
agreement as of December 31, 1999, such payments would have
equaled approximately $236,146. The aggregate payments that
would have been made to him would be an expense to the
Association, thereby reducing net income and capital by that
amount. The agreement may be renewed annually by the board of
directors upon a determination of satisfactory performance
within the board's sole discretion. If Mr. Wilson shall become
disabled during the term of his respective agreement, he shall
continue to receive payment of 100% of the base salary for a
period of up to 180 days. Such payments shall not be reduced by
any other benefit payments made under other disability program
in effect for employees. If Mr. Wilson's employment terminates
for a reason other than just cause, he will be entitled to
purchase family medical insurance through any group health plan
maintained by the Association.
________________________________________________________________
DIRECTORS' COMPENSATION
________________________________________________________________
Each of the directors is paid a fee of $550 ($575 for the
Chairman) per regular monthly meeting of the Association's Board
attended and are paid for one missed regular or annual meeting.
In addition, they receive a fee of $100 per executive committee
meeting attended. Directors also receive a fee of $100 per
quarterly meeting of the Company's Board of Directors. Total
aggregate fees paid to the current directors for the year ended
December 31, 1999 were $44,575.
5
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<PAGE>
________________________________________________________________
TRANSACTIONS WITH MANAGEMENT
________________________________________________________________
During the year ended December 31, 1999, certain officers
and directors had loans from the Association in amounts
exceeding $60,000. All of such loans were made in the ordinary
course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and did
not involve more than the normal risk of collectibility or
present other unfavorable features.
________________________________________________________________
PROPOSAL II -- APPROVAL OF THE PEOPLES BANKCORP, INC.
2000 STOCK OPTION AND INCENTIVE PLAN
________________________________________________________________
GENERAL
The Board of Directors of the Company has adopted the
Peoples Bankcorp, Inc. 2000 Stock Option and Incentive Plan (the
"Plan"). The initial grant of stock options under the Plan will
occur upon the Plan's receipt of stockholder approval. The Plan
is attached hereto as Exhibit A and should be consulted for
additional information. All statements made herein regarding
the Plan, which are only intended to summarize the Plan, are
qualified in their entirety by reference to the Plan.
PURPOSE OF THE PLAN
The purpose of the Plan is to advance the interests of the
Company by providing directors and selected employees of the
Company and its affiliates, including the Association, with the
opportunity to acquire shares of Common Stock. By encouraging
such stock ownership, the Company seeks to attract, retain and
motivate the best available personnel for positions of
substantial responsibility and to provide additional incentive
to directors and employees of the Company and its affiliates to
promote the success of the business of the Company.
DESCRIPTION OF THE PLAN
EFFECTIVE DATE. The Plan became effective on the date of
its approval by the Company's Board of Directors (the "Effective
Date"). No awards have been made.
ADMINISTRATION. The Plan is administered by a committee
(the "Committee"), appointed by the Board of Directors,
consisting of at least two directors of the Company who are
"Non-employee Directors" within the meaning of the federal
securities laws. The Committee has discretionary authority to
select participants and grant awards, to determine the form and
content of any awards made under the Plan, to interpret the
Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make other decisions necessary or
advisable in connection with administering the Plan. All
decisions, determinations, and interpretations of the Committee
are final and conclusive on all persons affected thereby.
Members of the Committee will be indemnified to the full extent
permissible under the Company's governing instruments in
connection with any claims or other actions relating to any
action taken under the Plan. It is expected that the Committee
will initially consist of Directors Hentschel, Stitt, Silver and
LeBarge.
ELIGIBLE PERSONS; TYPES OF AWARDS. Under the Plan, the
Committee has discretionary authority to grant stock options
("Options") and stock appreciation rights ("SARs")
(collectively, "Awards") to such employees and directors
(including members of the Committee) as the Committee shall
designate. Awards shall be made at the discretion of the
Committee. As of the Record Date, the Company and its
subsidiaries had approximately seven employees and five
directors who were eligible to participatein the Plan.
6
<PAGE>
<PAGE>
SHARES AVAILABLE FOR GRANTS. The Plan reserves 13,439
shares of Common Stock for issuance upon the exercise of Options
or SARs. Although the Company is authorized under the Plan to
issue Options to purchase up to an aggregate of 13,439 shares,
initially the Company intends to issue Options to acquire an
aggregate of 7,392 shares and reserve the remaining 6,047 shares
for possible future option grants. See " -- Proposed Stock
Option Grants." Shares subject to Awards may be (i) authorized
but unissued shares, (ii) shares held in treasury, (iii) shares
repurchased on the open market, or (iv) shares held in a grantor
trust. In the event of any merger, consolidation,
recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in
which the number or kind of shares is changed without receipt or
payment of consideration by the Company, the Committee will
adjust the number and kind of shares reserved for issuance under
the Plan and the exercise prices of such Awards. Generally, the
number of shares as to which SARs are granted are charged
against the aggregate number of shares available for grant under
the Plan, provided that, in the case of an SAR granted in
conjunction with an Option, under circumstances in which the
exercise of the SAR results in termination of the Option and
vice versa, only the number of shares of Common Stock subject to
the Option shall be charged against the aggregate number of
shares of Common Stock remaining available under the Plan. If
Awards should expire, become unexercisable or be forfeited for
any reason without having been exercised, the shares of Common
Stock subject to such Options shall, unless the Plan shall have
been terminated, be available for the grant of additional Awards
under the Plan.
OPTIONS. Options may be either incentive stock options
("ISOs") as defined in Section 422 of the Internal Revenue Code,
or Options that are not ISOs ("Non-ISOs"). The exercise price
as to any Option may not be less than the fair market value
(determined under the Plan) of the optioned shares on the date
of grant. In the case of a participant who owns more than 10%
of the outstanding Common Stock on the date of grant, such
exercise price may not be less than 110% of fair market value of
the shares. As required by federal tax laws, to the extent that
the aggregate fair market value (determined when an ISO is
granted) of the Common Stock with respect to which ISOs are
exercisable by an optionee for the first time during any
calendar year (under all plans of the Company and of any
subsidiary) exceeds $100,000, the Options granted in excess of
$100,000 will be treated as Non-ISOs, and not as ISOs.
SARS. An SAR may be granted in tandem with all or part of
any Option granted under the Plan, or without any relationship
to any Option. An SAR granted in tandem with an ISO must expire
no later than the ISO, must have the same exercise price as the
ISO and may be exercised only when the ISO is exercisable and
when the fair market value of the shares subject to the ISO
exceeds the exercise price of the ISO. For SARs granted in
tandem with Options, the optionee's exercise of the SAR cancels
his or her right to exercise the Option, and vice versa.
Regardless of whether an SAR is granted in tandem with an
Option, exercise of the SAR will entitle the optionee to
receive, as the Committee prescribes in the grant, all or a
percentage of the difference between (i) the fair market value
of the shares of Common Stock subject to the SAR at the time of
its exercise, and (ii) the fair market value of such shares at
the time the SAR was granted (or, in the case of SARs granted in
tandem with Options, the exercise price). The exercise price as
to any particular SAR may not be less than the fair market value
of the optioned shares on the date of grant.
EXERCISE OF OPTIONS AND SARS. The exercise of Options and
SARs will be subject to such terms and conditions as are
established by the Committee in a written agreement between the
Committee and the optionee. All Options expected to be granted
upon stockholder approval of the Plan will vest and become
exercisable with respect to 20% of the Optioned Shares upon the
optionee's completion of each of five years of service.
Notwithstanding the foregoing, an Option will become fully
exercisable immediately upon termination of the participant's
continuous service due to death or disability. Vesting will
also accelerate to 100% upon a participant's retirement at age
65 or upon a "Change in Control" (as defined below). In the
absence of Committee action to the contrary, an otherwise
unexpired Option shall cease to be exercisable upon (i) an
optionee's termination of employment for "just cause" (as
defined in the Plan), (ii) the date that is one year after an
optionee terminates service for a reason other than just cause
or death, or (iii) the date that is two years after an
optionee's death.
7
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<PAGE>
An optionee may exercise Options or SARs, subject to
provisions relative to their termination and limitations on
their exercise, only by (i) written notice of intent to exercise
the Option or SAR with respect to a specified number of shares
of Common Stock, and (ii) in the case of Options, payment to the
Company (contemporaneously with delivery of such notice) in
cash, in Common Stock owned for more than six months, or a
combination of cash and Common Stock owned for more than six
months, of the amount of the exercise price for the number of
shares with respect to which the Option is then being exercised.
Common Stock owned for more than six months utilized in full or
partial payment of the exercise price for Options shall be
valued at its market value at the date of exercise, and may
consist of shares subject to the Option being exercised. An
Option may not be exercised for a fractional share.
CONDITIONS ON ISSUANCE OF SHARES. The Committee will have
the discretionary authority to impose, in agreements, such
restrictions on shares of Common Stock issued pursuant to the
Plan as it may deem appropriate or desirable, including but not
limited to the authority to impose a right of first refusal or
to establish repurchase rights or both of these restrictions.
In addition, the Committee may not issue shares unless the
issuance complies with applicable securities laws, and to that
end may require that a participant make certain representations
or warranties.
CHANGE IN CONTROL. The Plan provides that upon a "Change
in Control" all Awards shall become fully exercisable,
notwithstanding any other provision of the Plan or any agreement
with an optionee. For purposes of the Plan, Change in Control
means any one of the following events: (i) the acquisition of
the ownership, holding or power to vote of more than 25% of the
voting stock of the Association or the Company, (ii) the
acquisition of the control of the election of a majority of the
Association's or the Company's directors, (iii) the exercise of
a controlling influence over the management or policies of the
Association or the Company by any person or by persons acting as
a "group" (within the meaning of Section 13(d) of the Exchange
Act), or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company or the Association (the
"Company Board" and the "Continuing Directors") cease for any
reason to constitute at least two-thirds thereof, provided that
any individual whose election or nomination for election as a
member of the Company Board was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. For purposes of defining
Change in Control, the term "person" refers to an individual
other than an employee, or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of
entity not specifically listed.
Although these provisions are included in the Plan
primarily for the protection of an optionee in the event of a
Change in Control of the Company, they may be regarded as having
a takeover defensive effect, which may reduce the Company's
vulnerability to hostile takeover attempts and certain other
transactions which have not been negotiated with and approved by
the Board of Directors.
LIMITS ON TRANSFERABILITY. Optionees may transfer their
Awards (other than ISOs) to family members or trusts under
specified circumstances. Awards may not otherwise be sold,
pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent and
distribution. In addition, Common Stock that is purchased upon
the exercise of an Option or SAR may not be sold within the six-
month period following the grant date of that Option or SAR,
except in the event of the optionee's death or disability, or
such other event as the Board of Directors may specifically deem
appropriate.
EFFECT OF DISSOLUTION AND RELATED TRANSACTIONS. In the
event of (i) the liquidation or dissolution of the Company, (ii)
a merger or consolidation in which the Company is not the
surviving entity, or (iii) the sale or disposition of all or
substantially all of the Company's assets (any of the foregoing
to be referred to herein as a "Transaction"), all outstanding
Awards, together with the exercise prices thereof, will be
equitably adjusted for any change or exchange of shares for a
different number or kind of shares or other securities which
results from the Transaction. However, any such adjustment will
be made in such a manner as to not constitute a modification,
within the meaning of Section 424(h) of the Internal Revenue
Code, of outstanding ISOs.
8
<PAGE>
<PAGE>
DURATION OF THE PLAN AND GRANTS. The Plan has a term of
10 years from the Effective Date, after which date no Awards may
be granted. The maximum term for an Award is 10 years from the
date of grant, except that the maximum term of an ISO (and SAR
granted in tandem with an ISO) may not exceed five years if the
optionee owns more than 10% of the Common Stock on the date of
grant. The expiration of the Plan, or its termination by the
Committee, will not affect any Award then outstanding.
AMENDMENT AND TERMINATION OF THE PLAN; MODIFICATION OF
AWARDS. The Board of Directors of the Company may from time to
time amend the terms of the Plan and, with respect to any shares
at the time not subject to Awards, suspend or terminate the
Plan. No amendment, suspension, or termination of the Plan
will, without the consent of any affected optionee, alter or
impair any rights or obligations under any Award previously
granted.
The Board of Directors may also authorize the Committee to
modify the terms of any existing Award, provided that no such
modification shall confer on the holder of said Award any right
or benefit which could not be conferred on him by the grant of a
new Award at such time, or impair the Award without the consent
of the holder of the Award.
FINANCIAL EFFECTS OF OPTIONS. The Company will receive no
monetary consideration for the granting of Awards under the
Plan. It will receive no monetary consideration other than the
exercise price for shares of Common Stock issued to optionees
upon the exercise of their Option, and will receive no monetary
consideration upon the exercise of SARs. Under applicable
accounting standards, recognition of compensation expense is not
required when Options are granted at an exercise price equal to
or exceeding the fair market value of the Common Stock on the
date the Option is granted.
The granting of SARs will require charges to the income of
the Company based on the amount of the appreciation, if any, in
the average market price of the Common Stock to which the SARs
relate over the exercise price of those shares. If the average
market price of the Common Stock declines subsequent to a charge
against earnings due to estimated appreciation in the Common
Stock subject to SARs, the amount of the decline will reverse
such prior charges against earnings (but not by more than the
aggregate of such prior charges).
FEDERAL INCOME TAX CONSEQUENCES
ISOS. An optionee recognizes no taxable income upon the
grant of ISOs. If the optionee holds the shares purchased upon
exercise of an ISO for at least two years from the date the ISO
is granted, and for at least one year from the date the ISO is
exercised, any gain realized on the sale of the shares received
upon exercise of the ISO is taxed as long-term capital gain.
However, the difference between the fair market value of the
Common Stock on the date of exercise and the exercise price of
the ISO will be treated by the optionee as an item of tax
preference in the year of exercise for purposes of the
alternative minimum tax. If an optionee disposes of the shares
before the expiration of either of the two special holding
periods noted above, the disposition is a "disqualifying
disposition." In this event, the optionee will be required, at
the time of the disposition of the Common Stock, to treat the
lesser of the gain realized or the difference between the
exercise price and the fair market value of the Common Stock at
the date of exercise as ordinary income and the excess, if any,
as capital gain.
The Company will not be entitled to any deduction for
federal income tax purposes as the result of the grant or
exercise of an ISO, regardless of whether or not the exercise of
the ISO results in liability to the optionee for alternative
minimum tax. However, if an optionee has ordinary income
taxable as compensation as a result of a disqualifying
disposition, the Company will be entitled to deduct an
equivalent amount.
NON-ISOS. In the case of a Non-ISO, an optionee will
recognize ordinary income upon the exercise of the Non-ISO in an
amount equal to the difference between the fair market value of
the shares on the date of exercise and the option price (or, if
the optionee is subject to certain restrictions imposed by the
federal securities laws, upon the lapse of those restrictions
unless the optionee makes a special tax election within 30 days
after the date of exercise to have the general rule apply).
Upon a subsequent disposition of such shares, any amount
received by the optionee in excess
9
<PAGE>
<PAGE>
of the fair market value of the shares as of the exercise will
be taxed as capital gain. The Company will be entitled to a
deduction for federal income tax purposes at the same time and
in the same amount as the ordinary income recognized by the
optionee in connection with the exercise of a Non-ISO.
SARS. The grant of an SAR has no tax effect on the
optionee or the Company. Upon exercise of the SARs, however,
any cash or Common Stock received by the optionee in connection
with the surrender of his or her SAR will be treated as
compensation income to the optionee, and the Company will be
entitled to a business expense deduction for the amounts treated
as compensation income.
PROPOSED STOCK OPTION GRANTS
Set forth below is certain information relating to all
Options which are to be granted to the specified individuals and
groups of individuals upon approval of the Plan by the Company's
stockholders. All such Options (i) will be subject to the terms
and conditions described above, and are contingent on, and not
exercisable until, the Option Plan receives stockholder
approval, and (ii) will automatically expire ten years after the
date of their grant. The exercise price for these Options will
equal the per share fair market value of the Common Stock on the
date of grant.
<TABLE>
<CAPTION>
NUMBER OF SHARES
PARTICIPANT OR GROUP SUBJECT TO OPTIONS
- -------------------- ------------------
<S> <C>
Robert E. Wilson 3,360
Robert E. Hentschel 1,008
Anthony P. LeBarge, Sr. 1,008
George E. Silver 1,008
Wesley L. Stitt 1,008
All executive officers as a group (2 persons) 3,360
All directors who are not executive officers
as a group (4 persons) 4,032
</TABLE>
For additional information relating to proposed option
grants, see "New Plan Benefits" below.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the Plan is
desirable, cost effective, and produces incentives which will
benefit the Company and its stockholders. The Board of
Directors is seeking stockholder approval of the Plan in order
to comply with the requirements of applicable corporate law, to
satisfy the requirements of the Code for favorable tax treatment
of ISOs and to exempt certain option transactions from the
short-swing trading rules of the SEC.
Stockholder approval of the Plan requires the affirmative
vote of the holders of a majority of the votes cast at the
Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF THE PLAN.
________________________________________________________________
PROPOSAL III -- APPROVAL OF MANAGEMENT RECOGNITION PLAN
________________________________________________________________
GENERAL
The Board of Directors of the Company has adopted the
Peoples Bankcorp, Inc. Management Recognition Plan (the "MRP"),
subject to its approval by the Company's stockholders. The
initial grant of MRP awards will occur upon the MRP's receipt of
stockholder approval. A copy of the MRP is attached hereto as
Exhibit B, and should be consulted
10
<PAGE>
<PAGE>
for additional information. All statements made herein
regarding the MRP, which are only intended to summarize the MRP,
are qualified in their entirety by reference to the MRP.
PURPOSE OF THE MRP
The purpose of the MRP is to reward and retain personnel
of experience and ability in key positions of responsibility by
providing employees and directors of the Company, the
Association and their affiliates with a proprietary interest in
the Company, with compensation for their past contributions to
the Company and the Association, and with an incentive to make
such contributions in the future.
DESCRIPTION OF THE MRP
EFFECTIVE DATE. The MRP will become effective immediately
upon its approval by the Board, subject to approval by the
Company's stockholders (the "Effective Date"), and prior thereto
no awards may be made.
ADMINISTRATION. The MRP will be administered by an MRP
Committee consisting of not less than two members of the
Company's Board of Directors who are "Non-employee Directors"
within the meaning of the federal securities laws. Except as
limited by the express provisions of the MRP or by resolutions
adopted by the Board, the MRP Committee has sole and complete
authority and discretion (i) to grant MRP awards to such
employees as the MRP Committee may select, (ii) to determine the
form and content of MRP awards to be issued under the MRP, (iii)
to interpret the MRP, (iv) to prescribe, amend, and rescind
rules and regulations relating to the MRP, and (v) to make other
determinations necessary or advisable for the administration of
the MRP. The MRP provides that members of the MRP Committee
shall be indemnified and held harmless for actions taken under
the MRP in good faith and which he or she reasonably believed to
be in the best interests of the Company and its affiliate and,
with respect to criminal actions or proceedings, he or she has
no reasonable cause to believe his or her conduct was unlawful.
As of the Record Date, the MRP Committee consisted of Directors
Hentschel, Stitt, Silver and LeBarge.
MRP TRUST; PURCHASE LIMITATIONS. The Company may award up
to 5,375 shares (4% of the number of the shares of Common Stock
issued in the Association's conversion). Shares awarded may
come from authorized but unissued shares or shares purchased in
the open market. If the Company determines to purchase shares
in the open market, it will contribute sufficient funds to the
MRP Trust to purchase up to 5,375 shares. The assets of the MRP
will be held in a trust (the "MRP Trust"), as to which Directors
Hentschel, Stitt, Silver and LeBarge will act as trustees ("MRP
Trustees") and thereby have the responsibility to invest all
funds contributed to the MRP Trust by the Company or the
Association. Although the Company would be authorized to issue
up to 5,375 shares under the MRP, initially the Company intends
to award an aggregate of 2,956 shares of Common Stock and
reserve the remaining 2,419 shares for possible future awards.
In the event an MRP award is forfeited for any reason, the MRP
Committee may make awards with respect to such shares.
TYPES OF AWARDS; ELIGIBLE PERSONS. The MRP Committee may
make MRP awards, in the form of restricted stock, with respect
to shares held in the underlying MRP Trust. The MRP Committee
has the discretion to select employees and directors of the
Company and/or of the Association who will receive MRP awards.
In selecting those employees and directors to whom MRP awards
will be granted and the number of shares covered by such awards,
the MRP Committee will consider the position, duties and
responsibilities of eligible employees, the value of their
services to the Company and its affiliates (including the
Association) and any other factors the MRP Committee may deem
relevant. Plan Share Awards shall be granted at the discretion
of the MRP Committee.
VESTING. Pursuant to the MRP, except as may be otherwise
determined by the Committee, it is expected that twenty percent
of the Plan Shares subject to a Plan Share Award shall be earned
and become non-forfeitable by a participant upon his or her
completion of each of five years of service after the date of
the Plan Share Award. All shares of Common Stock subject to
awards held by a participant whose service with the Company
terminates due to the Participant's death or disability, shall
be deemed earned as of the participant's last day of service
with the Company and
11
<PAGE>
<PAGE>
shall be distributed as soon as practicable thereafter. Vesting
will accelerate to 100% upon a participant's retirement or upon
a "Change in Control" (as defined below). If a participant
terminates employment for reasons other than death, disability
or retirement, the participant forfeits all rights to the shares
then under restriction. For purposes of the MRP, Change in
Control is defined to mean any one of the following events: (i)
acquisition of the ownership, holding or power to vote more than
25% of the voting stock of the Association or the Company; (ii)
acquisition of the control of the election of a majority of the
Association's or the Company's directors; (iii) the exercise of
controlling influence over the management or policies of the
Association or the Company by any person or by persons acting as
a "group" (within the meaning of Section 13(d) of the Exchange
Act); or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company or the Association (the
"Company Board" and the "Continuing Directors") cease for any
reason to constitute at least two-thirds thereof, provided that
any individual whose election or nomination for election as a
member of the Company Board was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. For purposes of the
definition of Change in Control, the term "person" refers to an
individual other than an employee, or a corporation,
partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other
form of entity not specifically listed.
No shares may be distributed from the MRP Trust prior to
the date which is five (5) years from the date of the
Association's conversion from mutual to stock form (the
"Conversion") to the extent the recipient would after receipt of
such shares own in excess of 10% of the issued and outstanding
shares of Common Stock, unless such action is approved in
advance by a majority vote of the nonemployee directors of the
Company's Board of Directors. Any shares remaining
undistributed solely by reason of the operation of this rule
shall be distributed to the recipient on the date which is five
years from the date of the Conversion.
DISTRIBUTIONS OF SHARES; VOTING; DIVIDENDS. All unvested
shares of Common Stock held by the MRP Trust (whether or not
subject to an MRP award) shall be voted by the MRP Trustees in
the same proportion as the trustee of the Company's ESOP trust
votes Common Stock held therein, and in the absence of any such
voting, shall be voted in the manner directed by the Board of
Directors. The MRP Trustees shall distribute all shares,
together with any shares representing stock dividends, in the
form of Common Stock. One share of Common Stock shall be given
for each share earned. Payments representing cash dividends
(and earnings thereon) will be made in cash.
ACCRUAL OF DIVIDENDS. Whenever shares of Common Stock are
paid to an award recipient or beneficiary thereof, such
recipient or beneficiary shall also be entitled to receive, with
respect to each share paid, an amount equal to any cash
dividends (including special large and nonrecurring dividends,
including one that has the effect of a return of capital to the
Company's stockholders) and a number of shares of Common Stock
equal to any stock dividends, declared and paid with respect to
a share of Common Stock between the date the relevant MRP award
was initially granted to such participant and the date the
shares are being distributed. There shall also be distributed
an appropriate amount of net earnings, if any, of the Trust with
respect to any cash dividends so paid out.
DEFERRAL OF AWARDS. The MRP provides that at any time
prior to December 31st of any year prior to the next date on
which a participant is scheduled to become vested in his or her
award, a participant who is a member of a select group of
management or highly compensated employees (within the meaning
of the Employees' Retirement Income Security Act of 1973) may
irrevocably elect to defer the receipt of all or a percentage of
the shares that would otherwise be transferred to the
participant upon the future vesting of such award (the "Deferred
Shares"). MRP participants shall receive earnings on dividends
paid on Deferred Shares at a rate equal to the dividend-adjusted
total return on the Common Stock, as determined from time to
time by the MRP Committee in its sole discretion. The MRP
Trustees shall hold each Participant's Deferred Shares and
deferred earnings in the MRP Trust until distribution is
required pursuant to the participant's election.
LIMITS ON TRANSFERABILITY. Participants may transfer
their MRP awards to family members or trusts under specified
circumstances. MRP awards and rights to shares held in the MRP
Trust are not otherwise transferable by
12
<PAGE>
<PAGE>
participants in the MRP, and during the lifetime of a
participant, shares held in the MRP Trust may only be earned by
and paid to the participant.
TAXATION. Participants will recognize compensation income
when their interest vests, or at an earlier date pursuant to a
participant's election to accelerate recognition pursuant to
Section 83(b) of the Internal Revenue Code.
FINANCIAL EFFECTS OF AWARDS. Neither the Company nor the
Association will receive any monetary consideration for the
granting of awards under the MRP. Under applicable accounting
standards, when MRP awards are granted, the Company must
recognize compensation expense based on the fair market value of
the Common Stock on the date the MRP awards are granted, with
such amount being amortized over the expected vesting period for
the award.
ADJUSTMENTS FOR CAPITAL CHANGES. In the event of any
merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of
shares, or similar event in which the number or kind of shares
is changed without receipt or payment of consideration by the
Company, the MRP Committee will adjust both the number and kind
of shares of stock which may be purchased under the MRP and the
number and kind of shares of stock subject to outstanding MRP
awards. In the event of (i) the liquidation or dissolution of
the Company, (ii) a merger or consolidation in which the Company
is not the surviving entity, or (iii) the sale or disposition of
all or substantially all of the Company's assets, all
outstanding MRP awards shall be adjusted for any change or
exchange of shares of Common Stock for a different number or
kind of shares or other securities which results from the
transaction.
AMENDMENT AND TERMINATION OF THE MRP. The Company's Board
of Directors may, by resolution, amend or terminate the MRP at
any time, provided that no amendment or termination of the MRP
will, without the written consent of any affected holders of an
MRP award, impair any rights or obligations under any MRP award
previously granted.
The power to amend or terminate includes the power to
direct the MRP Trustees to return to the Company all or any part
of the assets of the MRP Trust, including shares of Common Stock
held in the plan share reserve of the MRP. However, the
termination of the MRP Trust will not affect a participant's
right to earn outstanding MRP awards and to receive Common Stock
relating thereto, including earnings thereon, in accordance with
the terms of the MRP and the particular MRP award made to the
participant.
DURATION OF THE MRP. The MRP and MRP Trust will remain in
effect until the earlier of (i) termination by the Company's
Board of Directors, or (ii) the distribution of all assets of
the MRP Trust. Termination of the MRP will not affect any MRP
awards previously granted, and such MRP awards will remain valid
and in effect until they have been earned and distributed from
the MRP Trust, or by their terms expire or are forfeited.
PROPOSED MRP AWARDS. For information relating to proposed
MRP awards, see "New Plan Benefits" below.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the MRP is
desirable, cost effective, and produces incentives which will
benefit the Company and its stockholders. The Board of
Directors is seeking stockholder approval of the MRP to comply
with the requirements of applicable corporate law and to exempt
certain transactions from the short-swing trading rules of the
SEC.
Approval of the MRP requires the affirmative vote of the
holders of a majority of the votes cast at the Meeting. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE MRP.
13
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<PAGE>
________________________________________________________________
NEW PLAN BENEFITS
________________________________________________________________
<TABLE>
<CAPTION>
OPTION PLAN MRP (1)
--------------------------------------------------
DOLLAR NUMBER DOLLAR NUMBER
NAME AND POSITION VALUE ($)(2) OF UNITS VALUE ($)(3) OF UNITS
- ----------------- --------------------------------------------------
<S> <C> <C> <C> <C>
Robert E. Wilson, President $ -- 3,360 $15,624 1,344
and Chief Executive Officer
All current executive officers $ -- 3,360 $15,624 1,344
as a group (2 persons)
All current directors who are
not executive $ -- 4,032 $18,740 1,612
officers as a group (4 persons)
<FN>
_________
(1) None of the shares of Common Stock awarded pursuant to the MRP currently is
vested. For information regarding the vesting of shares awarded pursuant
to the MRP, see "Proposal III -- Approval of Management Recognition Plan."
(2) All Options will be granted at an exercise price equal to the fair market value
of the underlying shares of Common Stock on the date of the grant. Any Option
granted will only have value of the market value of the stock rises subsequent
to the date of grant.
(3) Based on the Common Stock's fair market value of $11.625 per share.
</FN>
</TABLE>
________________________________________________________________
RELATIONSHIP WITH INDEPENDENT AUDITORS
________________________________________________________________
Morrow & Poulsen, P.C. was the Company's independent
certified public accountants for the 1999 fiscal year. The
Board of Directors presently intends to renew the Company's
arrangement with Morrow & Poulsen, P.C. to be its independent
certified public accountant for the fiscal year ending December
31, 2000. A representative of Morrow & Poulsen, P.C. is
expected to be present at the Meeting to respond to appropriate
questions and to make a statement if desired.
________________________________________________________________
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange
Act, the Company's officers, directors and persons who own more
than ten percent of the outstanding Common Stock are required to
file reports detailing their ownership and changes of ownership
in such Common Stock, and to furnish the Company with copies of
all such reports. Based on the Company's review of such reports
which the Company received during the last fiscal year, or
written representations from such persons that no annual report
of change in beneficial ownership was required, the Company
believes that, during the last fiscal year, all persons subject
to such reporting requirements have complied with the reporting
requirements.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to
come before the Meeting other than those matters described above
in this Proxy Statement. However, if any other matters should
properly come before the Meeting, it
14
<PAGE>
<PAGE>
is intended that proxies in the accompanying form will be voted
in respect thereof in accordance with the determination of the
Board of Directors.
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may
solicit proxies personally or by telegraph or telephone without
additional compensation.
The Company's Annual Report to Stockholders, including
financial statements, is being mailed to all stockholders of
record as of the Record Date. Any stockholder who has not
received a copy of such Annual Report may obtain a copy by
writing to the Secretary of the Company. Such Annual Report is
not to be treated as a part of the proxy solicitation material
or as having been incorporated herein by reference.
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
It is expected that the Company's 2001 Annual Meeting of
Stockholders will be held in May 2001. In order to be eligible
to be considered for inclusion in the Company's proxy materials
for such Annual Meeting, any stockholder proposal to take action
at such meeting must be received at the Company's executive
office at 825 State Street, Ogdensburg, New York 13669, no later
than December 15, 2000. Any such proposal shall be subject to
the requirements of the proxy rules adopted under the Exchange
Act.
Stockholder proposals to be considered at such Annual
Meeting, other than those submitted pursuant to the Exchange
Act, must be stated in writing, delivered or mailed to the
Secretary of the Company, not less than thirty days nor more
than sixty days prior to the date of the Annual Meeting. If
less than forty days' notice of the meeting is given to
stockholders, such notice shall be delivered or mailed to the
Secretary not later than the close of business on the tenth day
following the day on which notice of the meeting was mailed to
stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Todd R. Mashaw
TODD R. MASHAW
SECRETARY
Ogdensburg, New York
April 14, 2000
________________________________________________________________
FORM 10-KSB
________________________________________________________________
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1999 AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE
SECRETARY, PEOPLES BANKCORP, INC., 825 STATE STREET, OGDENSBURG,
NEW YORK 13669.
________________________________________________________________
15
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<PAGE>
Exhibit A
PEOPLES BANKCORP, INC.
2000 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Plan is to advance the interests of the
Company through providing select key Employees and Directors of
the Bank, the Company, and their Affiliates with the opportunity
to acquire Shares. By encouraging such stock ownership, the
Company seeks to attract, retain and motivate the best available
personnel for positions of substantial responsibility and to
provide additional incentives to Directors and key Employees of
the Company or any Affiliate to promote the success of the
business.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Code.
(b) "Agreement" shall mean a written agreement entered
into in accordance with Paragraph 5(c).
(c) "Awards" shall mean, collectively, Options and SARs,
unless the context clearly indicates a different meaning.
(d) "Bank" shall mean Ogdensburg Federal Savings and Loan
Association.
(e) "Board" shall mean the Board of Directors of the
Company.
(f) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(g) "Committee" shall mean not only the Stock Option
Committee consisting of at least two Non-Employee Directors
appointed by the Board in accordance with Paragraph 5(a) hereof,
but also the Board.
(h) "Common Stock" shall mean the common stock of the
Company.
(i) "Company" shall mean Peoples Bankcorp, Inc.
(j) "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company, in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a successor,
or in the case of a Director's performance of services in an
emeritus or advisory capacity.
(k) "Date of Conversion" shall mean the date of the
conversion of the Bank from mutual to stock form.
(l) "Director" shall mean any member of the Board, and any
member of the board of directors of any Affiliate that the Board
has by resolution designated as being eligible for participation
in this Plan.
(m) "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his
or her duties or responsibilities to the Company or an
Affiliate.
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(n) "Effective Date" shall mean the date specified in
Paragraph 14 hereof.
(o) "Employee" shall mean any person employed by the
Company, the Bank, or an Affiliate.
(p) "Exercise Price" shall mean the price per Optioned
Share at which an Option or SAR may be exercised.
(q) "ISO" shall mean an option to purchase Common Stock
which meets the requirements set forth in the Plan, and which is
intended to be and is identified as an "incentive stock option"
within the meaning of Section 422 of the Code.
(r) "Market Value" shall mean the fair market value of the
Common Stock, as determined under Paragraph 8(b) hereof.
(s) "Non-Employee Director" shall have the meaning
provided in Rule 16b-3.
(t) "Non-ISO" means an option to purchase Common Stock
which meets the requirements set forth in the Plan but which is
not intended to be and is not identified as an ISO.
(u) "Option" means an ISO and/or a Non-ISO.
(v) "Optioned Shares" shall mean Shares subject to an
Award granted pursuant to this Plan.
(w) [reserved]
(x) "Participant" shall mean any person who receives an
Award pursuant to the Plan.
(y) "Plan" shall mean this Peoples Bankcorp, Inc. 2000
Stock Option and Incentive Plan.
(z) "Rule 16b-3" shall mean Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended.
(aa) "Share" shall mean one share of Common Stock.
(bb) "SAR" (or "Stock Appreciation Right") means a right to
receive the appreciation in value, or a portion of the
appreciation in value, of a specified number of shares of Common
Stock.
(cc) "Year of Service" shall mean a full twelve-month
period, measured from the date of an Award and each annual
anniversary of that date, during which a Participant has not
terminated Continuous Service for any reason.
3. TERM OF THE PLAN AND AWARDS.
(a) Term of the Plan. The Plan shall continue in effect
for a term of ten years from the Effective Date, unless sooner
terminated pursuant to Paragraph 16 hereof. No Award shall be
granted under the Plan after ten years from the Effective Date.
(b) Term of Awards. The term of each Award granted under
the Plan shall be established by the Committee, but shall not
exceed 10 years; provided, however, that in the case of an
Employee who owns Shares representing more than 10% of the
outstanding Common Stock at the time an ISO is granted, the term
of such ISO shall not exceed five years.
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4. SHARES SUBJECT TO THE PLAN.
(a) General Rule. Except as otherwise required under
Paragraph 11, the aggregate number of Shares deliverable
pursuant to Awards shall not exceed 13,439 Shares, which equals
10% of the Shares issued by the Company in connection with the
Bank's conversion from mutual to stock form ("Conversion").
Such Shares may either be authorized but unissued Shares, Shares
held in treasury, or Shares held in a grantor trust created by
the Company. If any Awards should expire, become unexercisable,
or be forfeited for any reason without having been exercised,
the Optioned Shares shall, unless the Plan shall have been
terminated, be available for the grant of additional Awards
under the Plan.
(b) Special Rule for SARs. The number of Shares with
respect to which an SAR is granted, but not the number of Shares
which the Company delivers or could deliver to an Employee or
individual upon exercise of an SAR, shall be charged against the
aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in
conjunction with an Option, under circumstances in which the
exercise of the SAR results in termination of the Option and
vice versa, only the number of Shares subject to the Option
shall be charged against the aggregate number of Shares
remaining available under the Plan. The Shares involved in an
Option as to which option rights have terminated by reason of
the exercise of a related SAR, as provided in Paragraph 10
hereof, shall not be available for the grant of further Options
under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) Appointment of the Committee. The Plan shall be
administered by the Committee. Members of the Committee shall
serve at the pleasure of the Board. In the absence at any time
of a duly appointed Committee, the Plan shall be administered by
the Board.
(b) Powers of the Committee. Except as limited by the
express provisions of the Plan or by resolutions adopted by the
Board, the Committee shall have sole and complete authority and
discretion (i) to select Participants and grant Awards, (ii) to
determine the form and content of Awards to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan,
(iv) to prescribe, amend and rescind rules and regulations
relating to the Plan, and (v) to make other determinations
necessary or advisable for the administration of the Plan. The
Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to
time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at
any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee without a meeting, shall
be deemed the action of the Committee.
(c) Agreement. Each Award shall be evidenced by a written
agreement containing such provisions as may be approved by the
Committee. Each such Agreement shall constitute a binding
contract between the Company and the Participant, and every
Participant, upon acceptance of such Agreement, shall be bound
by the terms and restrictions of the Plan and of such Agreement.
The terms of each such Agreement shall be in accordance with the
Plan, but each Agreement may include such additional provisions
and restrictions determined by the Committee, in its discretion,
provided that such additional provisions and restrictions are
not inconsistent with the terms of the Plan. In particular, the
Committee shall set forth in each Agreement (i) the Exercise
Price of an Option or SAR, (ii) the number of Shares subject to
the Award, and its expiration date, (iii) the manner, time, and
rate (cumulative or otherwise) of exercise or vesting of such
Award, and (iv) the restrictions, if any, to be placed upon such
Award, or upon Shares which may be issued upon exercise of such
Award. The Chairman of the Committee and such other Directors
and officers as shall be designated by the Committee are hereby
authorized to execute Agreements on behalf of the Company and to
cause them to be delivered to the recipients of Awards.
(d) Effect of the Committee's Decisions. All decisions,
determinations and interpretations of the Committee shall be
final and conclusive on all persons affected thereby.
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(e) Indemnification. In addition to such other rights of
indemnification as they may have, the members of the Committee
shall be indemnified by the Company in connection with any
claim, action, suit or proceeding relating to any action taken
or failure to act under or in connection with the Plan or any
Award, granted hereunder to the full extent provided for under
the Company's governing instruments with respect to the
indemnification of Directors.
6. GRANT OF OPTIONS.
(a) General Rule. Only Employees and Directors shall be
eligible to receive Awards. In selecting those Employees and
Directors to whom Awards will be granted and the number of
shares covered by such Awards, the Committee shall consider the
position, duties and responsibilities of the eligible Employees
and Directors, the value of their services to the Company and
its Affiliates, and any other factors the Committee may deem
relevant. Awards shall be made at the discretion of the
Committee.
(b) Special Rules for ISOs. The aggregate Market Value,
as of the date the Option is granted, of the Shares with respect
to which ISOs are exercisable for the first time by an Employee
during any calendar year (under all incentive stock option
plans, as defined in Section 422 of the Code, of the Company or
any present or future Affiliate of the Company) shall not exceed
$100,000. Notwithstanding the foregoing, the Committee may
grant Options in excess of the foregoing limitations, in which
case Options granted in excess of such limitation shall be
Non-ISOs.
7. GRANTS OF OPTIONS TO DIRECTORS.
(a) Terms of Exercise. Options received under this
Paragraph will become exercisable in accordance with the general
rule set forth in Paragraph 9(a) hereof and shall be exercisable
in accordance with the terms of Paragraph 9(b) hereof.
Options granted under this Paragraph shall have a term of
ten years; provided that Options granted under this Paragraph
shall expire one year after the date on which a Director
terminates Continuous Service on the Board for a reason other
than death, but in no event later than the date on which such
Options would otherwise expire. In the event of such Director's
death during the term of his directorship, Options granted under
this Paragraph shall be immediately exercisable, and may be
exercised within two years from the date of his death by the
personal representatives of his estate or person or persons to
whom his rights under such Option shall have passed by will or
by laws of descent and distribution, but in no event later than
the date on which such Options would otherwise expire. In the
event of such Director's Disability during his or her
directorship, the Director's Option shall be immediately
exercisable, and such Option may be exercised within one year of
the termination of directorship due to Disability, but not later
than the date that the Option would otherwise expire. Unless
otherwise inapplicable or inconsistent with the provisions of
this Paragraph, the Options to be granted to Directors hereunder
shall be subject to all other provisions of this Plan.
(b) Effect of the Committee's Decisions. The Committee's
determination whether a Participant's Continuous Service has
ceased, and the effective date thereof, shall be final and
conclusive on all persons affected thereby.
8. EXERCISE PRICE FOR OPTIONS.
(a) Limits on Committee Discretion. The Exercise Price as
to any particular Option shall not be less than 100% of the
Market Value of the Optioned Shares on the date of grant. In
the case of an Employee who owns Shares representing more than
10% of the Company's outstanding Shares of Common Stock at the
time an ISO is granted, the Exercise Price shall not be less
than 110% of the Market Value of the Optioned Shares at the time
the ISO is granted.
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(b) Standards for Determining Exercise Price. If the
Common Stock is listed on a national securities exchange
(including the NASDAQ National Market System) on the date in
question, then the Market Value per Share 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 the Exercise
Price shall be the mean between the bid and asked price on such
date. If the Common Stock is traded otherwise than on a
national securities exchange on the date in question, then the
Market Value per Share shall be the mean between the bid and
asked price on such date, or, if there is no bid and asked price
on such date, then on the next prior business day on which there
was a bid and asked price. If no such bid and asked price is
available, then the Market Value per Share shall be its fair
market value as determined by the Committee, in its sole and
absolute discretion.
9. EXERCISE OF OPTIONS.
(a) Generally. Except as otherwise provided by the
Committee in an Agreement, each Option shall become exercisable
with respect to twenty percent (20%) of the Optioned Shares upon
the Participant's completion of each of five Years of Service,
provided that an Option shall become fully (100%) exercisable
immediately upon termination of the Participant's Continuous
Service due to the Participant's Disability or death. Vesting
will accelerate to 100% upon a Participant's retirement at age
65 or upon a change in control. For this purpose, "change in
control" shall mean (1) acquisition of the ownership, holding or
power to vote more than 25% of the voting stock of the Bank or
the Company, (2) acquisition of the control of the election of a
majority of the Bank or the Company's directors, (3) the
exercise of a controlling influence over the management or
policies of the Bank or the Company by any person or by person
acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (4) during any period of
two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Bank or the
Company (the "Company Board" and the "Continuing Directors")
cease for any reason to constitute at least two-thirds thereof,
provided that any individual who election or nomination for
election as a member of the Company Board was approved by a
vote of at least two-thirds of the Continuing Directors then in
office shall be considered a Continuing Director. The term
"person" means an individual other than the Employee, or a
corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed
herein.
(b) Procedure for Exercise. A Participant may exercise
Options, subject to provisions relative to its termination and
limitations on its exercise, only by (1) written notice of
intent to exercise the Option with respect to a specified number
of Shares, and (2) payment to the Company (contemporaneously
with delivery of such notice) in cash, in Common Stock owned for
more than six months, or a combination of cash and Common Stock
owned for more than six months, of the amount of the Exercise
Price for the number of Shares with respect to which the Option
is then being exercised. Each such notice (and payment where
required) shall be delivered, or mailed by prepaid registered or
certified mail, addressed to the Treasurer of the Company at its
executive offices. Common Stock owned for more than six months
utilized in full or partial payment of the Exercise Price for
Options shall be valued at its Market Value at the date of
exercise. An Option may not be exercised for a fractional
Share.
(c) Period of Exercisability. Except to the extent
otherwise provided in the terms of an Agreement, an Option may
be exercised by a Participant only while he is an Employee and
has maintained Continuous Service from the date of the grant of
the Option, or within one year after termination of such
Continuous Service or Disability (but not later than the date on
which the Option would otherwise expire), except if the
Employee's Continuous Service terminates by reason of --
(1) "Just Cause" which for purposes hereof shall have
the meaning set forth in any unexpired employment or
severance agreement between the Participant and the Bank
and/or the Company (and, in the absence of any such
agreement, shall mean termination because of the Employee'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
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offenses) or final cease-and-desist order), then the
Participant's rights to exercise such Option shall expire
on the date of such termination; or
(2) death, then to the extent that the Participant
would have been entitled to exercise the Option immediately
prior to his death, such Option of the deceased Participant
may be exercised within two years from the date of his
death (but not later than the date on which the Option
would otherwise expire) by the personal representatives of
his estate or person or persons to whom his rights under
such Option shall have passed by will or by laws of descent
and distribution.
(d) Effect of the Committee's Decisions. The Committee's
determination whether a Participant's Continuous Service has
ceased, and the effective date thereof, shall be final and
conclusive on all persons affected thereby.
(e) Mandatory Six-Month Holding Period. Notwithstanding
any other provision of this Plan to the contrary, common stock
of the Company that is purchased upon exercise of an Option or
SAR may not be sold within the six-month period following the
grant of that Option or SAR, except in the event of the
Participant's death or Disability, or such other event as the
Board may specifically deem appropriate.
10. SARS (STOCK APPRECIATION RIGHTS)
(a) Granting of SARs. In its sole discretion, the
Committee may from time to time grant SARs to Employees either
in conjunction with, or independently of, any Options granted
under the Plan. An SAR granted in conjunction with an Option
may be an alternative right wherein the exercise of the Option
terminates the SAR to the extent of the number of shares
purchased upon exercise of the Option and, correspondingly, the
exercise of the SAR terminates the Option to the extent of the
number of Shares with respect to which the SAR is exercised.
Alternatively, an SAR granted in conjunction with an Option may
be an additional right wherein both the SAR and the Option may
be exercised. An SAR may not be granted in conjunction with an
ISO under circumstances in which the exercise of the SAR affects
the right to exercise the ISO or vice versa, unless the SAR, by
its terms, meets all of the following requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the difference
between the Exercise Price of the ISO and the
Market Value of the Shares subject to the ISO at
the time the SAR is exercised;
(3) The SAR is transferable only when the ISO is
transferable, and under the same conditions;
(4) The SAR may be exercised only when the ISO may
be exercised; and
(5) The SAR may be exercised only when the Market
Value of the Shares subject to the ISO exceeds
the Exercise Price of the ISO.
(b) Terms of SAR Awards. The provisions of Paragraphs
8 and 9 are incorporated by reference herein, and shall
determine the terms of SARs (to the extent not inconsistent
herewith).
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(c) Exercise of SARs. An SAR granted hereunder shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement
granted to a Participant, provided that an SAR may not be
exercised for a fractional Share. Upon exercise of an SAR, the
Participant shall be entitled to receive, without payment to the
Company except for applicable withholding taxes, an amount equal
to the excess of (or, in the discretion of the Committee if
provided in the Agreement, a portion of) the excess of the then
aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the
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aggregate Exercise Price of such number of Optioned Shares.
This amount shall be payable by the Company, in the discretion
of the Committee, in cash or in Shares valued at the then Market
Value thereof, or any combination thereof.
11. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE PLAN.
(a) Recapitalizations; Stock Splits, Etc. The number and
kind of shares reserved for issuance under the Plan, and the
number and kind of shares subject to outstanding Awards, and the
Exercise Price thereof, shall be proportionately adjusted for
any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of the
Company which results from a merger, consolidation,
recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in
which the number or kind of shares is changed without the
receipt or payment of consideration by the Company.
(b) Transactions in which the Company is Not the Surviving
Entity. In the event of (i) the liquidation or dissolution of
the Company, (ii) a merger or consolidation in which the Company
is not the surviving entity, or (iii) the sale or disposition of
all or substantially all of the Company's assets (any of the
foregoing to be referred to herein as a "Transaction"), all
outstanding Awards, together with the Exercise Prices thereof,
shall be equitably adjusted for any change or exchange of Shares
for a different number or kind of shares or other securities
which results from the Transaction.
(c) Special Rule for ISOs. Any adjustment made pursuant
to subparagraphs (a) or (b) hereof shall be made in such a
manner as not to constitute a modification, within the meaning
of Section 424(h) of the Code, of outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or
Different Shares or Securities. If, by reason of any adjustment
made pursuant to this Paragraph, a Participant becomes entitled
to new, additional, or different shares of stock or securities,
such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and
restrictions which were applicable to the Shares pursuant to the
Award before the adjustment was made.
(e) Other Issuances. Except as expressly provided in this
Paragraph, the issuance by the Company or an Affiliate of shares
of stock of any class, or of securities convertible into Shares
or stock of another class, for cash or property or for labor or
services either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, shall not affect, and no
adjustment shall be made with respect to, the number, class, or
Exercise Price of Shares then subject to Awards or reserved for
issuance under the Plan.
(f) Certain Special Dividends. The Exercise Price of
shares subject to outstanding Awards shall be proportionately
adjusted upon the payment of a special large and nonrecurring
dividend that has the effect of a return of capital to the
stockholders.
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12. NON-TRANSFERABILITY OF AWARDS.
Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or
by the laws of descent and distribution. Notwithstanding the
foregoing, or any other provision of this Plan, a Participant
who holds Awards may transfer such Awards (but not Incentive
Stock Options) to his or her spouse, lineal ascendants, lineal
descendants, or to a duly established trust for the benefit of
one or more of these individuals. Awards so transferred may
thereafter be transferred only to the Participant who originally
received the grant or to an individual or trust to whom the
Participant could have initially transferred the Awards pursuant
to this Paragraph 12. Awards which are transferred pursuant to
this Paragraph 12 shall be exercisable by the transferee
according to the same terms and conditions as applied to the
Participant.
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13. TIME OF GRANTING AWARDS.
The date of grant of an Award shall, for all purposes, be
the later of the date on which the Committee makes the
determination of granting such Award, and the Effective Date.
Notice of the determination shall be given to each Participant
to whom an Award is so granted within a reasonable time after
the date of such grant.
14. EFFECTIVE DATE.
The Plan shall become effective immediately upon its
approval by the Board provided, that ISOs shall not be available
for grant under the Plan unless it is approved by the Company's
stockholders within 12 months after the Effective Date.
15. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may authorize
the Committee to direct execution of an instrument providing for
the modification of any outstanding Award, provided no such
modification shall confer on the holder of said Award any right
or benefit which could not be conferred on him by the grant of a
new Award at such time, or impair the Award without the consent
of the holder of the Award.
16. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend the terms of the Plan
and, with respect to any Shares at the time not subject to
Awards, suspend or terminate the Plan. No amendment, suspension
or termination of the Plan shall, without the consent of any
affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.
17. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common
Stock shall not be issued with respect to any Award unless the
issuance and delivery of such Shares shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and
the requirements of any stock exchange upon which the Shares may
then be listed.
(b) Special Circumstances. The inability of the Company
to obtain approval from any regulatory body or authority deemed
by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder shall relieve the Company of
any liability in respect of the non-issuance or sale of such
Shares. As a condition to the exercise of an Option or SAR, the
Company may require the person exercising the Option or SAR to
make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration
requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the
discretionary authority to impose in Agreements such
restrictions on Shares as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of
first refusal or to establish repurchase rights or both of these
restrictions.
18. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and
keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
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19. WITHHOLDING TAX.
The Company's obligation to deliver Shares upon exercise of
Options and/or SARs shall be subject to the Participant's
satisfaction of all applicable federal, state and local income
and employment tax withholding obligations. The Committee, in
its discretion, may permit the Participant to satisfy the
obligation, in whole or in part, by irrevocably electing to have
the Company withhold Shares, or to deliver to the Company Shares
that he already owns, having a value equal to the amount
required to be withheld. The value of the Shares to be
withheld, or delivered to the Company, shall be based on the
Market Value of the Shares on the date the amount of tax to be
withheld is to be determined. As an alternative, the Company
may retain, or sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld. The
amount of the withholding requirement shall be the applicable
statutory minimum federal, state or local income tax with
respect to the award on the date that amount of tax is to be
withheld.
20. NO EMPLOYMENT OR OTHER RIGHTS.
In no event shall an Employee's or Director's eligibility
to participate or participation in the Plan create or be deemed
to create any legal or equitable right of the Employee,
Director, or any other party to continue service with the
Company, the Bank, or any Affiliate of such corporations. No
Employee or Director shall have a right to be granted an Award
or, having received an Award, the right to again be granted an
Award. However, an Employee or Director who has been granted an
Award may, if otherwise eligible, be granted an additional Award
or Awards.
21. GOVERNING LAW.
The Plan shall be governed by and construed in accordance
with the laws of the State of New York, except to the extent
that federal law shall be deemed to apply.
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Exhibit B
PEOPLES BANKCORP, INC.
MANAGEMENT RECOGNITION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.01 The Company hereby establishes this Plan upon the
terms and conditions hereinafter stated.
1.02 Through acceptance of their appointment to the
Committee, each member of the Committee hereby accepts his or
her appointment hereunder upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and retain
personnel of experience and ability in key positions of
responsibility by providing Employees and Directors of the
Company, the Bank, and their Affiliates with a proprietary
interest in the Company, and as compensation for their past
contributions to the Bank, and as an incentive to make such
contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Plan with
an initial capital letter, shall have the meanings set forth
below unless the context clearly indicates otherwise. Wherever
appropriate, the masculine pronoun shall include the feminine
pronoun and the singular shall include the plural.
3.01 "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended.
3.02 "Bank" means Ogdensburg Federal Savings and Loan
Association.
3.03 "Beneficiary" means the person or persons designated
by a Participant to receive any benefits payable under the Plan
in the event of such Participant's death. Such person or
persons shall be designated in writing on forms provided for
this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence
of a written designation, the Beneficiary shall be the
Participant's surviving spouse, if any, or if none, his estate.
3.04 "Board" means the Board of Directors of the Company.
3.05 "Committee" means the Management Recognition Plan
Committee appointed by the Board pursuant to Article IV hereof.
3.06 "Common Stock" means shares of the common stock of the
Company.
3.07 "Company" means Peoples Bankcorp, Inc.
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3.08 "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a successor,
or in the case of a Director's performance of services in an
emeritus or advisory capacity.
3.09 "Date of Conversion" means the date of the conversion
of the Bank from mutual to stock form.
3.10 "Director" means a member of the Board, and any member
of the board of directors of an Affiliate whose members the
Board has by resolution designated as being eligible for
participation in this Plan.
3.11 "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his
or her duties or responsibilities to the Company or an
Affiliate.
3.12 "Effective Date" means the date on which the Plan
first becomes effective, as determined under Section 8.07
hereof.
3.13 "Employee" means any person who is employed by the
Company or an Affiliate.
3.14 "Non-Employee Director" shall have the meaning
provided in Rule 16b-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
3.15 [reserved]
3.16 "Participant" means an Employee or Director who holds
a Plan Share Award.
3.17 "Plan" means this Peoples Bankcorp, Inc. Management
Recognition Plan.
3.18 "Plan Shares" means shares of Common Stock held in the
Trust which are awarded or issuable to a Participant pursuant to
the Plan.
3.19 "Plan Share Award" means a right granted under this
Plan to receive Plan Shares.
3.20 "Plan Share Reserve" means the shares of Common Stock
held by the Trustee pursuant to Sections 5.02 and 5.03.
3.21 "Trust" and "Trust Agreement" mean that agreement
entered into pursuant to the terms hereof between the Company
and the Trustee, and "Trust" means the trust created thereunder.
3.22 "Trustee" means that person(s) or entity appointed by
the Board pursuant to the Trust Agreement to hold legal title to
the Plan assets for the purposes set forth herein.
3.23 "Year of Service" shall mean a full twelve-month
period, measured from the date of a Plan Share Award and each
annual anniversary of that date, during which a Participant's
Continuous Service has not terminated for any reason.
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ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE AND POWERS OF THE COMMITTEE. The Plan shall be
administered and interpreted by the Committee, which shall
consist of not less than two members of the Board who are
Non-Employee Directors. In the absence at any time of a duly
appointed Committee, the Plan shall be administered by those
members of the Board who are Non-Employee Directors, and by the
Board if there are less than two Non-Employee Directors.
The Committee shall have all of the powers allocated to it
in this and other Sections of the Plan. Except as limited by
the express provisions of the Plan or by resolutions adopted by
the Board, the Committee shall have sole and complete authority
and discretion (i) to make Plan Share Awards to such Employees
as the Committee may select, (ii) to determine the form and
content of Plan Share Awards to be issued under the Plan, (iii)
to interpret the Plan, (iv) to prescribe, amend and rescind
rules and regulations relating to the Plan, and (v) to make
other determinations necessary or advisable for the
administration of the Plan. The Committee shall have and may
exercise such other power and authority as may be delegated to
it by the Board from time to time. Subject to Section 4.02, the
interpretation and construction by the Committee of any
provisions of the Plan or of any Plan Share Award granted
hereunder shall be final and binding. The Committee shall act
by vote or written consent of a majority of its members,
and shall report its actions and decisions with respect to the
Plan to the Board at appropriate times, but in no event less
than one time per calendar year. The Committee may recommend to
the Board one or more persons or entity to act as Trustee(s) in
accordance with the provisions of this Plan and the Trust.
4.02 ROLE OF THE BOARD. The members of the Committee shall
be appointed or approved by, and will serve at the pleasure of,
the Board. The Board may in its discretion from time to time
remove members from, or add members to, the Committee. The
Board shall have all of the powers allocated to it in this and
other Sections of the Plan, may take any action under or with
respect to the Plan which the Committee is authorized to take,
and may reverse or override any action taken or decision made by
the Committee under or with respect to the Plan, provided,
however, that the Board may not revoke any Plan Share Award
already made or impair a participant's vested rights under a
Plan Share Award. Further, with respect to all actions taken by
the Board in regard to the Plan, such action shall be taken by a
majority of the Board where such a majority of the directors
acting in the matter are Non-Employee Directors.
4.03 LIMITATION ON LIABILITY. No member of the Board or
the Committee or the Trustee(s) shall be liable for any
determination made in good faith with respect to the Plan or any
Plan Shares or Plan Share Awards granted under it. If a member
of the Board or the Committee or any Trustee is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of anything done or
not done by him in such capacity under or with respect to the
Plan, the Company shall indemnify such member, subject to the
indemnification provisions of 12 C.F.R. Section 545.121, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him or her in connection with such action, suit or proceeding if
he or she acted in good faith and in a manner he or she
reasonably believed to be in the best interests of the Company
and its Affiliates and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.
ARTICLE V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall
determine the amounts (or the method of computing the amounts)
to be contributed by the Company to the Trust, provided that the
Bank may also make contributions to the Trust. Such amounts
shall be paid to the Trustee at the time of contribution. No
contributions to the Trust by Employees shall be permitted.
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5.02 INVESTMENT OF TRUST ASSETS; MAXIMUM PLAN SHARE AWARDS.
The Trustee shall invest Trust assets only in accordance with
the Trust Agreement; provided that the Trust shall not purchase,
and Plan Share Awards shall not be made with respect to, more
than four percent (4%) of the number of Shares issued on the
Date of Conversion.
5.03 EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON
PLAN SHARE RESERVES. Upon the allocation of Plan Share Awards
under Section 6.02, the Plan Share Reserve shall be reduced by
the number of Shares subject to the Awards so allocated. Any
Shares subject or attributable to an Award that are not be
earned because of a forfeiture by the Participant pursuant to
Section 7.01 shall be added to the Plan Share Reserve.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. Except as otherwise provided in Section
6.04 hereof, the Committee shall make Plan Share Awards only to
Employees and Directors. In selecting those Employees and
Directors to whom Plan Share Awards will be granted and the
number of shares covered by such Awards, the Committee shall
consider the position, duties and responsibilities of the
eligible Employees, the value of their services to the Company
and its Affiliates, and any other factors the Committee may deem
relevant. Plans Share Awards shall be granted at the discretion
of the Committee.
6.02 ALLOCATIONS. The Committee will determine which
Employees and Directors will be granted discretionary Plan Share
Awards, and the number of Shares covered by each Plan Share
Award, provided that in no event shall any Awards be made that
will violate the governing instruments of the Bank or its
Affiliates or any applicable federal or state law or regulation.
In the event Plan Shares are forfeited for any reason or
additional shares of Common Stock are purchased by the Trustee,
the Committee may, from time to time, determine which of the
Participants referenced in Section 6.01 above will be granted
additional Plan Share Awards to be awarded from the forfeited or
acquired Plan Shares.
6.03 FORM OF ALLOCATION. As promptly as practicable after
a determination is made pursuant to Section 6.02 that a Plan
Share Award is to be made, the Committee shall notify the
Participant in writing of the grant of the Award, the number of
Plan Shares covered by the Award, and the terms upon which the
Plan Shares subject to the Award may be earned. The date on
which the Committee so notifies the Participant shall be
considered the date of grant of the Plan Share Awards. The
Committee shall maintain records as to all grants of Plan Share
Awards under the Plan.
6.04 ALLOCATIONS NOT REQUIRED. Notwithstanding anything to
the contrary in Sections 6.01 and 6.02, no Employee or Director
shall have any right or entitlement to receive a Plan Share
Award hereunder, such Awards being at the total discretion of
the Committee, nor shall any Employees or Directors as a group
have such a right. The Committee may, with the approval of the
Board (or, if so directed by the Board) return all Common Stock
in the Plan Share Reserve to the Company at any time, and cease
issuing Plan Share Awards.
ARTICLE VII
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Except as otherwise provided by
the Committee, Plan Shares subject to a Plan Share Award shall
be earned and become non-forfeitable by a Participant with
respect to twenty percent (20%) of the Plan Shares upon the
Participant's completion of each of five Years of Service.
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(b) EXCEPTION FOR TERMINATIONS DUE TO DEATH,
DISABILITY, RETIREMENT OR CHANGE IN CONTROL. Notwithstanding
the general rule contained in Section 7.01(a) above, all Plan
Shares subject to a Plan Share Award held by a Participant whose
service with the Company or an Affiliate terminates due to the
Participant's death or Disability, shall be deemed earned as of
the Participant's last day of service with the Company or an
Affiliate and shall be distributed as soon as practicable
thereafter. Vesting will accelerate to 100% upon a Participant's
retirement at or after age 65 or upon a change in control. For
this purpose, "change in control" shall mean (1) acquisition of
the ownership, holding or power to vote more than 25% of the
voting stock of the Bank or the Company, (2) acquisition of the
control of the election of a majority of the Bank or the
Company's directors, (3) the exercise of controlling influence
over the management or policies of the Bank or the Company by
any person or by persons acting as a "group" (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934), or (4)
during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors
of the Bank or the Company (the"Company Board") (the "Continuing
Directors") cease for any reason to constitute at least
two-thirds thereof, provided that any individual whose election
or nomination for election as a member of the Company Board was
approved by a vote of at least two-thirds of the Continuing
Directors then in office shall be considered a Continuing
Director. The term "person" means an individual other than the
Employee, or a corporation, partnership, trust, association,
joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not
specifically listed herein.
7.02 ACCRUAL OF DIVIDENDS. Whenever Plan Shares are paid
to a Participant or Beneficiary under Section 7.03, such
Participant or Beneficiary shall also be entitled to receive,
with respect to each Plan Share paid, an amount equal to any
cash dividends (including special large and nonrecurring
dividends, including one that has the effect of a return of
capital to the Company's stockholders) and a number of shares of
Common Stock equal to any stock dividends, declared and paid
with respect to a share of Common Stock between the date the
relevant Plan Share Award was initially granted to such
Participant and the date the Plan Shares are being distributed.
There shall also be distributed an appropriate amount of net
earnings, if any, of the Trust with respect to any cash
dividends so paid out.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Except
as provided in subsections (c), and (d) below, the Trustee shall
distribute Plan Shares and accumulated cash from dividends and
interest to the Participant or his Beneficiary, as the case may
be, as soon as practicable after they have been earned. No
fractional shares shall be distributed.
(b) FORM OF DISTRIBUTION. The Trustee shall
distribute all Plan Shares, together with any shares
representing stock dividends, in the form of Common Stock. One
share of Common Stock shall be given for each Plan Share earned.
Payments representing cash dividends (and earnings thereon)
shall be made in cash.
(c) WITHHOLDING. The Trustee shall withhold from any
cash payment made under this Plan sufficient amounts to cover
any applicable withholding and employment taxes, and if the
amount of such cash payment is not sufficient, the Trustee shall
require the Participant or Beneficiary to pay to the Trustee the
amount required to be withheld as a condition of delivering the
Plan Shares. The Trustee shall pay over to the Company or
Affiliate which employs or employed such Participant any such
amount withheld from or paid by the Participant or Beneficiary.
(d) TIMING: EXCEPTION FOR 10% SHAREHOLDERS.
Notwithstanding Subsections (a) and (b) above, no Plan Shares
may be distributed prior to the date which is five (5) years
from the Date of Conversion to the extent the Participant or
Beneficiary, as the case may be, would after receipt of such
Shares own in excess of ten percent (10%) of the issued and
outstanding shares of Common Stock unless such action is
approved in advance by a majority vote of non-employee directors
of the Board. To the extent this limitation would delay the
date on which a Participant receives Plan Shares, the
Participant may elect to receive from the Trust, in lieu of such
Plan Shares, the cash
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equivalent thereof. Any Plan Shares remaining undistributed
solely by reason of the operation of this Subsection (d) shall
be distributed to the Participant or his Beneficiary on the date
which is five years from the Date of Conversion.
(e) REGULATORY EXCEPTIONS. No Plan Shares shall be
distributed unless and until all of the requirements of all
applicable law and regulation shall have been fully complied
with, including the receipt of approval of the Plan by the
stockholders of the Company by such vote, if any, as may be
required by applicable law and regulations.
7.04 VOTING OF PLAN SHARES. All shares of Common Stock
held by the Trust (whether or not subject to a Plan Share Award)
shall be voted by the Trustee in the same proportion as the
trustee of the Company's Employee Stock Ownership Plan votes
Common Stock held in the trust associated therewith, and in the
absence of any such voting, shall be voted in the manner
directed by the Board.
7.05 DEFERRAL ELECTIONS BY PARTICIPANTS.
(a) ELECTIONS TO DEFER. At any time prior to
December 31st of any year prior to the next date on which a
Participant is scheduled to become vested in his or her Plan
Share Award, a Participant who is a member of a select group of
management or highly compensated employees (within the meaning
of the Employees' Retirement Income Security Act of 1973) may
irrevocably elect, on the form attached hereto as Exhibit "A"
(the "Election Form"), to defer the receipt of all or a
percentage of the Plan Shares that would otherwise be
transferred to the Participant upon the future vesting of such
award (the "Deferred Shares").
(b) RECORDKEEPING; HOLDING OF DEFERRED SHARES. The
MRP Committee shall establish and maintain an individual account
in the name of each Participant who files an Election Form for
the purpose of tracking deferred earnings attributable to cash
dividends paid on Deferred Shares (the "Cash Account"). On the
last day of each fiscal year of the Company, the Committee shall
credit to the Participant's Cash Account earnings on the balance
of the Cash Account at a rate equal to the dividend-adjusted
total return on Common Stock, as determined from time to time by
the MRP Committee in its sole discretion. The Trustees shall
hold each Participant's Deferred Shares and Deferred Earnings in
the Trust until distribution is required pursuant to the
election set forth in the Participant's Election Form.
(c) DISTRIBUTIONS OF DEFERRED SHARES. The Trustee
shall distribute a Participant's Deferred Shares and Deferred
Earnings in accordance with the Participant's Election Form.
All distributions made by the Company and/or the Trustees
pursuant to elections made hereunder shall be subject to
applicable federal, state, and local tax withholding and to such
other deductions as shall at the time of such payment be
required under any income tax or other law, whether of the
United States or any other jurisdiction, and, in the case of
payments to a beneficiary, the delivery to the Committee and/or
Trustees of all necessary waivers, qualifications and other
documentation. Within 90 days after receiving notice of a
Participant's death, the Trustee shall distribute any balance of
the Participant's Deferred Shares and Deferred Earnings to the
Participant's designated beneficiary, if living, or if such
designated beneficiary is deceased or the Participant failed to
designate a beneficiary, to the Participant's estate. If, on
the other hand, a Participant's Continuous Service terminates
for a reason other than the Participant's death, Disability,
early retirement, or normal retirement, the Participant's
Deferred Shares and Deferred Earnings shall be distributed to
the Participant in a lump sum occurring as soon as reasonably
practicable. The distribution provisions of a Participant's
Election Form shall become irrevocable on the date that occurs
(i) one year before the Participant's termination of Continuous
Service for a reason other than death, and (ii) on the
Participant's death if that terminates the Participant's
Continuous Service.
(d) HARDSHIP WITHDRAWALS. Notwithstanding any other
provision of the Plan or a Participant's Election Form, in the
event the Participant suffers an unforeseeable emergency
hardship within the contemplation of this paragraph, the
Participant may apply to the Committee for an immediate
distribution of all or a portion of his Deferred Shares and
Deferred Earnings. The hardship must result from a sudden and
unexpected illness or accident
B-6
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of the Participant or a dependent of the Participant, casualty
loss of property, or other similar conditions beyond the control
of the Participant. Examples of purposes which are not
considered hardships include post-secondary school expenses or
the desire to purchase a residence. In no event will a
distribution be made to the extent the hardship could be
relieved through reimbursement or compensation by insurance or
otherwise, or by liquidation of the Participant's nonessential
assets to the extent such liquidation would not itself cause a
severe financial hardship. The amount of any distribution
hereunder shall be limited to the amount necessary to relieve
the Participant's financial hardship. The determination
of whether a Participant has a qualifying hardship and the
amount which qualifies for distribution, if any, shall be made
by the Committee in its sole discretion. The Committee may
require evidence of the purpose and amount of the need, and may
establish such application or other procedures as it deems
appropriate.
(e) RIGHTS TO DEFERRED SHARES AND EARNINGS. A
Participant may not assign his or her claim to Deferred Shares
and Deferred Earnings during his or her lifetime, except in
accordance with Section 8.03 of this Plan. A Participant's right
to Deferred Shares and Deferred Earnings shall at all times
constitute an unsecured promise of the Company to pay benefits
as they come due. The right of the Participant or his or her
beneficiary to receive benefits hereunder shall be solely an
unsecured claim against the general assets of the Company.
Neither the Participant nor his or her beneficiary shall have
any claim against or rights in any specific assets or other fund
of the Company, and any assets in the Trust shall be deemed
general assets of the Company.
ARTICLE VIII
MISCELLANEOUS
8.01 ADJUSTMENTS FOR CAPITAL CHANGES.
(a) RECAPITALIZATIONS; STOCK SPLITS, ETC. The number
and kind of shares which may be purchased under the Plan, and
the number and kind of shares subject to outstanding Plan Share
Awards, shall be proportionately adjusted for any increase,
decrease, change or exchange of shares of Common Stock for a
different number or kind of shares or other securities of the
Company which results from a merger, consolidation,
recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in
which the number or kind of shares is changed without the
receipt or payment of consideration by the Company.
(b) TRANSACTIONS IN WHICH THE COMPANY IS NOT THE
SURVIVING ENTITY. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the sale
or disposition of all or substantially all of the Company's
assets (any of the foregoing to be referred to herein as a
"Transaction"), all outstanding Plan Share Awards shall be
adjusted for any change or exchange of shares of Common Stock
for a different number or kind of shares or other securities
which results from the Transaction.
(c) CONDITIONS AND RESTRICTIONS ON NEW, ADDITIONAL,
OR DIFFERENT SHARES OR SECURITIES. If, by reason of any
adjustment made pursuant to this Section, a Participant becomes
entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock
or securities shall thereupon be subject to all of the
conditions and restrictions which were applicable to the shares
pursuant to the Plan Share Award before the adjustment was made.
In addition, the Committee shall have the discretionary
authority to impose on the Shares subject to Plan Share Awards
to Employees such restrictions as the Committee may deem
appropriate or desirable, including but not limited to a right
of first refusal, or repurchase option, or both of these
restrictions.
<PAGE>
(d) OTHER ISSUANCES. Except as expressly provided
in this Section, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
shares of Common Stock or stock of another class, for cash or
property or for labor or services either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor,
shall not affect, and no adjustment shall be made with respect
to, the number or class of shares of Common Stock then subject
to Plan Share Awards or reserved for issuance under the Plan.
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8.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by
resolution, at any time amend or terminate the Plan; provided
that no amendment or termination of the Plan shall, without the
written consent of a Participant, impair any rights or
obligations under a Plan Share Award theretofore granted to the
Participant.
The power to amend or terminate the Plan in accordance with
this Section 8.02 shall include the power to direct the Trustee
to return to the Company all or any part of the assets of the
Trust, including shares of Common Stock held in the Plan Share
Reserve. However, the termination of the Trust shall not affect
a Participant's right to earn Plan Share Awards and to receive a
distribution of Common Stock relating thereto, including
earnings thereon, in accordance with the terms of this Plan and
the grant by the Committee or the Board.
8.03 NONTRANSFERABILITY. Plan Share Awards may not be
sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent
and distribution. Notwithstanding the foregoing, or any other
provision of this Plan, a Participant who holds Plan Share
Awards may transfer such Awards to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust
for the benefit of one or more of these individuals. Plan Share
Awards so transferred may thereafter be transferred only to the
Participant who originally received the grant or to an
individual or trust to whom the Participant could have initially
transferred the Awards pursuant to this Section 8.03. Plan
Share Awards which are transferred pursuant to this Section 8.03
shall be exercisable by the transferee according to the same
terms and conditions as applied to the Participant.
8.04 NO EMPLOYMENT OR OTHER RIGHTS. Neither the Plan nor
any grant of a Plan Share Award or Plan Shares hereunder nor any
action taken by the Trustee, the Committee or the Board in
connection with the Plan shall create any right, either express
or implied, on the part of any Employee or Director to continue
in the service of the Company, the Bank, or an Affiliate
thereof.
8.05 VOTING AND DIVIDEND RIGHTS. No Participant shall have
any voting or dividend rights or other rights of a stockholder
in respect of any Plan Shares covered by a Plan Share Award
prior to the time said Plan Shares are actually distributed to
him.
8.06 GOVERNING LAW. The Plan and Trust shall be governed
and construed under the laws of the State of New York to the
extent not preempted by Federal law.
8.07 EFFECTIVE DATE. The Plan shall become effective
immediately upon its approval by the Board, subject to
stockholder approval. In no event shall Plan Share Awards be
made prior to the Effective Date.
8.08 TERM OF PLAN. This Plan shall remain in effect until
the earlier of (i) termination by the Board, or (ii) the
distribution of all assets of the Trust. Termination of the
Plan shall not affect any Plan Share Awards previously granted,
and such Awards shall remain valid and in effect until they have
been earned and paid, or by their terms expire or are forfeited.
8.09 TAX STATUS OF TRUST. It is intended that (i) the
Trust associated with the Plan be treated as a grantor trust of
the Company under the provisions of Section 671 et seq. of the
Code, as the same may be amended from time to time, and (ii)
that in accordance with Revenue Procedure 92-65 (as the same may
be amended from time to time), Participants have the status of
general unsecured creditors of the Company, the Plan constitutes
a mere unfunded promise to make benefit payments in the future,
the Plan is unfunded for tax purposes and for purposes of Title
I of the Employee Retirement Income Security Act of 1974, as
amended, and the Trust has been and will continue to be
maintained in conformity with Revenue Procedure 92-64 (as the
same may be amended from time to time).
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<PAGE>
PEOPLES BANKCORP, INC.
825 STATE STREET
OGDENSBURG, NEW YORK 13669
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The undersigned hereby appoints Robert E. Hentschel, Wesley L.
Stitt and George E. Silver, with full powers of substitution, to
act as proxies for the undersigned, to vote all shares of common
stock of Peoples Bankcorp, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting"), to be held at the offices of
Ogdensburg Federal Savings and Loan Association, 825 State
Street, Ogdensburg, New York, on Tuesday, May 16, 2000 at 10:00
a.m., local time, and at any and all adjournments thereof, as
follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES AND
PROPOSITIONS LISTED BELOW.
1. Election of directors
[ ] FOR all nominees listed below (except as marked to the
contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees
Robert E. Wilson Anthony P. LeBarge, Sr.
INSTRUCTION: To withhold your vote for the nominees, insert his
name on the line provided below.
____________________________
2. Approval of the Peoples Bankcorp, Inc. 2000 Stock Option and
Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the Peoples Bankcorp, Inc. Management Recognition
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR
DIRECTOR LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT
THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN ACCORDANCE WITH THE DETERMINATION OF THE BOARD OF
DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE
WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE
NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND
MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
Should the undersigned be present and elect to vote at the
annual meeting or at any adjournment thereof and after
notification to the Secretary of the Company at the Annual
Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed
terminated and of no further force and effect. The undersigned
acknowledges receipt from the Company prior to the execution of
this proxy of Notice of the Annual Meeting, a proxy statement
dated March 20, 2000 and an Annual Report to Stockholders for
the 1999 fiscal year.
________________________, 2000
_______________________________
Signature
_______________________________
Signature if Held Jointly
Please sign exactly as your name
appears above. For joint accounts,
both owners should sign. When
signing as executor, administrator,
attorney, trustee or guardian,
etc., please give your full title.
If a corporation, please sign in
full corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
