As filed with the Securities and Exchange Commission on March 10, 1999
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Skibo Financial Corp.
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(Exact name of registrant as specified in its charter)
United States 25-1820465
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
242 East Main Street
Carnegie, Pennsylvania 15106-0664
(412) 276-2424
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(Address of principal executive offices)
Skibo Financial Corp.
1998 Stock Option Plan
------------------------
(Full Title of the Plan)
Richard Fisch, Esq.
Evan M. Seigel, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
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(Name, address and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Proposed
Title of Proposed Maximum Amount of
Securities to Amount to Maximum Offering Aggregate Offering Registration
be Registered be Registered Price Per Unit Price (2) Fee (2)
- ------------- ------------- -------------- ----------- --------
<S> <C> <C> <C> <C>
Common Stock
$.10 par value 155,246 shares(1) $6.83 $1,060,330 $294.77
============================================================================================================================
</TABLE>
(1) The maximum number of shares of common stock issuable upon exercise of
options granted or to be granted under the Skibo Financial Corp. 1998
Stock Option Plan consists of 155,246 shares which are being registered
under this Registration Statement and for which a registration fee is
being paid. Additionally, an indeterminate number of additional shares
which may be offered and issued to prevent dilution resulting from
stock splits, stock dividends or similar transactions are being
registered hereunder for which no additional fee is required.
(2) Under Rule 457(h) of the 1933 Act, the registration fee may be
calculated, inter alia, based upon the price at which the stock options
may be exercised. 155,246 shares are being registered hereby, of which
155,246 shares are under option at an exercise price of $6.83 per share
($1,060,330 in the aggregate).
Under Rule 462 of the 1933 Act, the Registration Statement on Form S-8
shall be effective upon filing with the Commission.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information. *
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Item 2. Registrant Information and Employee Plan Annual Information. *
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*This Registration Statement relates to the registration of 155,246
shares of Skibo Financial Corp. (the "Company" or "Registrant") common stock,
$.10 par value per share (the "Common Stock") issuable to employees, officers
and directors of the Registrant or its subsidiaries as compensation for services
in accordance with the Skibo Financial Corp. 1998 Stock Option Plan (the
"Plan"). Documents containing the information required by Part I of this
Registration Statement will be sent or given to participants in the Plan as
specified by Rule 428(b)(1). Such documents are not filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424, in
reliance on Rule 428.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
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The Company became subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") on October 30, 1998 and,
accordingly, files periodic reports and other information with the Commission.
Reports, proxy statements and other information concerning the Company filed
with the Commission may be inspected and copies may be obtained (at prescribed
rates) at the Commission's Public Reference Section, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549.
The following documents filed by the Company are incorporated in this
Registration Statement and the Prospectus constituting Part I of this
Registration Statement:
(1) The Company's Form 8-K filed with the Commission on October 30,
1998; and
(2) The Company's Quarterly Report on Form 10-QSB for the quarters
ended September 30, 1998 and December 31, 1998, as filed with the Commission.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
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Not Applicable
1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
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Not Applicable
Item 6. Indemnification of Directors and Officers.
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Federal Regulations define areas for indemnity coverage by the First
Carnegie Deposit (the "Bank") as follows:
(a) Any person against whom any action is brought or threatened because
that person is or was a director or officer of the Bank shall be indemnified by
the Bank, as the case may be, for:
(i) Any amount for which such person becomes liable under a judgment
in such action; and
(ii) Reasonable costs and expenses, including reasonable attorney's
fees, actually paid or incurred by such person in defending or settling
such action, or in enforcing his or her rights to indemnification if
the person attains a favorable judgment in such enforcement action.
(b) Indemnification provided for in subparagraph (a) shall be made to
such officer or director only if the requirements of this subparagraph are met:
(i) The Bank shall make the indemnification provided by subparagraph
(a) in connection with any such action which results in a final
judgment on the merits in favor of such officer or director.
(ii) The Bank shall make the indemnification provided by
subparagraph (a) in case of settlement of such action, final judgment
against such director or officer or final judgment in favor of such
director or officer other than on the merits, if a majority of the
disinterested directors of the Bank determines that such a director or
officer was acting in good faith within the scope of his or her
employment or authority as he or she could reasonably have perceived it
under the circumstances and for a purpose which he or she could
reasonably have believed under the circumstances was in the best
interest of the Bank or its members.
(c) As used in this paragraph:
(i) "action" means any judicial or administrative proceeding, or
threatened proceeding, whether civil, criminal, or otherwise, including
any appeal or other proceeding for review;
(ii) "final judgment" means a judgment, decree, or order which is
not appealable and as to which the period for appeal has expired with
no appeal taken;
2
<PAGE>
(iii) "settlement" includes the entry of a judgment by consent or by
confession or a plea of guilty of nolo contendere.
Office of Thrift Supervision regulations subject the Company to the
same indemnification regulations applicable to the Bank and described above.
Item 7. Exemption from Registration Claimed.
- ------
Not Applicable
Item 8. Exhibits.
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For a list of all exhibits filed or included as part of this
Registration Statement, see "Index to Exhibits" at the end of this Registration
Statement.
Item 9. Undertakings.
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(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do no apply if the
Registration Statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the Registration Statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any delayed
offering or throughout a continuous offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Carnegie in the Commonwealth of Pennsylvania, on the
10th day of March, 1999.
SKIBO FINANCIAL CORP.
By: /s/Walter G. Kelly
------------------------------------
Walter G. Kelly
President and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of Skibo Financial Corp., do
hereby severally constitute and appoint Walter G. Kelly as our true and lawful
attorney and agent, to do any and all things and acts in our names in the
capacities indicated below and to execute any and all instruments for us and in
our names in the capacities indicated below which said Walter G. Kelly may deem
necessary or advisable to enable Skibo Financial Corp. to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the Registration
Statement on Form S-8 relating to the offering of the Company's Common Stock,
including specifically, but not limited to, power and authority to sign, for any
of us in our names in the capacities indicated below, the Registration Statement
and any and all amendments (including post-effective amendments) thereto; and we
hereby ratify and confirm all that said Walter G. Kelly shall do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
/s/Walter G. Kelly /s/Carol A. Gilbert
- ----------------------------------- -----------------------------------
Walter G. Kelly Carol A. Gilbert
President, Chief Executive Officer Chief Financial, Operating Officer
(Principal Executive Officer) and Treasurer
(Principal Financial and Accounting
Officer)
Date: March 10, 1999 Date: March 10, 1999
/s/John C. Burne /s/John T. Mendenhall, Jr.
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John C. Burne John T. Mendenhall, Jr.
Chairman of the Board and Director Director
Date: March 10, 1999 Date: March 10, 1999
/s/Alexander J. Senules
- ----------------------------------- -----------------------------------
Layne W. Craig Alexander J. Senules
Director Vice President and Secretary
Date: __________ ___, 1999 Date: March 10, 1999
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
4.1 Skibo Financial Corp.
1998 Stock Option Plan
4.2 Form of Stock Option Agreement to be entered into
with respect to Incentive Stock Options
4.3 Form of Stock Option Agreement to be entered into
with Directors with respect to Non-Incentive Stock
Options
4.4 Form of Stock Award Tax Notice
5.1 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the
validity of the Common Stock being registered
23.1 Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears
in their opinion filed as Exhibit 5.1)
24 Reference is made to the Signatures section of this
Registration Statement for the Power of Attorney
contained therein
EXHIBIT 4.1
SKIBO FINANCIAL CORP.
1998 STOCK OPTION PLAN
<PAGE>
SKIBO FINANCIAL CORP.
1998 STOCK OPTION PLAN
1. Purpose of the Plan. The Plan which was formerly known as the First
Carnegie Deposit 1998 Stock Option Plan shall be known as the Skibo Financial
Corp. ("Company") 1998 Stock Option Plan (the "Plan"). The purpose of the Plan
is to attract and retain qualified personnel for positions of substantial
responsibility and to provide additional incentive to officers, directors, key
employees and other persons providing services to the Company, the Bank, or any
present or future parent or subsidiary of the Company to promote the success of
the business. The Plan is intended to provide for the grant of "Incentive Stock
Options," within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") and Non-Incentive Stock Options, options that do
not so qualify. The provisions of the Plan relating to Incentive Stock Options
shall be interpreted to conform to the requirements of Section 422 of the Code.
2. Definitions. The following words and phrases when used in this Plan
with an initial capital letter, unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever appropriate, the masculine
pronoun shall include the feminine pronoun and the singular shall include the
plural.
(a) "Award" means the grant by the Committee of an Incentive
Stock Option or a Non-Incentive Stock Option, or any combination thereof, as
provided in the Plan.
(b) "Bank" shall mean First Carnegie Deposit.
(c) "Board" shall mean the Board of Directors of the Bank for
the period of time prior to October 29, 1998 and shall mean the Board of
Directors of the Company for the period of time on or after October 29, 1998.
(d) "Change in Control" shall mean: (i) the sale of all, or a
material portion, of the assets of the Company or the Bank; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company, as otherwise defined or determined by
the Office of Thrift Supervision or regulations promulgated by it; or (iv) the
acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of that term as it is used in Section 13(d) of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder) of twenty-five
percent (25%) or more of the outstanding voting securities of the Company by any
person, trust, entity or group other than by Skibo Bancshares, M.H.C., the
mutual holding company of the Bank. This limitation shall not apply to the
purchase of shares by underwriters in connection with a public offering of
Company stock, or the purchase of shares of up to 25% of any class of securities
of the Bank by a tax-qualified employee stock benefit plan which is exempt from
the approval requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now
in effect or as may hereafter be amended. The term "person" refers to an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein. The decision of the Committee as
to whether a Change in Control has occurred shall be conclusive and binding. A
Change in Control shall not include a transaction whereby a Parent is formed
which shall be the owner of 100% of the stock of the Bank.
<PAGE>
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and regulations promulgated thereunder.
(f) "Committee" shall mean the Board or the Stock Option
Committee appointed by the Board in accordance with Section 5(a) of the Plan.
The members of the Committee as of October 29, 1998 shall continue unless
otherwise amended by the Board after October 29, 1998.
(g) "Common Stock" shall mean the common stock of the Company,
or any successor or parent corporation thereto.
(h) "Company" shall mean Skibo Financial Corp.
(i) "Continuous Employment" or "Continuous Status as an
Employee" shall mean the absence of any interruption or termination of
employment with the Company or any present or future Parent or Subsidiary of the
Company. Employment shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Company or
in the case of transfers between payroll locations, of the Company or between
the Company, its Subsidiaries or a successor.
(j) "Director" shall mean a member of the Board of the
Company, or any successor or Parent thereto.
(k) "Director Emeritus" shall mean a person serving as a
director emeritus, advisory director, consulting director, or other similar
position as may be appointed by the Board of Directors of the Bank or the
Company from time to time.
(l) "Disability" means (a) with respect to Incentive Stock
Options, the "permanent and total disability" of the Employee as such term is
defined at Section 22(e)(3) of the Code; and (b) with respect to Non-Incentive
Stock Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Company or any
present or future Parent or Subsidiary of the Company in his then current
capacity as determined by the Committee.
(m) "Effective Date" shall mean the date specified in Section
14 hereof.
(n) "Employee" shall mean any person employed by the Company
or any present or future Parent or Subsidiary of the Company.
(o) "Fair Market Value" shall mean: (i) if the Common Stock is
traded otherwise than on a national securities exchange, then the Fair Market
Value per Share shall be equal to the mean between the last bid and ask price of
such Common Stock on such date or, if there is no bid and ask price on said
date, then on the immediately prior business day on which there was a bid and
ask price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith; or (ii) if the Common Stock
is listed on a national securities exchange, then the Fair Market Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date, then the Fair Market Value shall be not less than the mean between
the last bid and ask price on such date.
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<PAGE>
(p) "Incentive Stock Option" or "ISO" shall mean an option to
purchase Shares granted by the Committee pursuant to Section 8 hereof which is
subject to the limitations and restrictions of Section 8 hereof and is intended
to qualify as an incentive stock option under Section 422 of the Code.
(q) "Non-Incentive Stock Option" or "Non-ISO" shall mean an
option to purchase Shares granted pursuant to Section 9 hereof, which option is
not intended to qualify under Section 422 of the Code.
(r) "Option" shall mean an Incentive Stock Option or
Non-Incentive Stock Option granted pursuant to this Plan providing the holder of
such Option with the right to purchase Common Stock.
(s) "Optioned Stock" shall mean stock subject to an Option
granted pursuant to the Plan.
(t) "Optionee" shall mean any person who receives an Option or
Award pursuant to the Plan.
(u) "Parent" shall mean any present or future stock
corporation which would be a "parent corporation" as defined in Sections 424(e)
and (g) of the Code.
(v) "Participant" means any director, officer or key employee
of the Company or any Parent or Subsidiary of the Company or any other person
providing a service to the Company who is selected by the Committee to receive
an Award, or who by the express terms of the Plan is granted an Award.
(w) "Plan" shall mean the Skibo Financial Corp. 1998 Stock
Option Plan.
(x) "Share" shall mean one share of the Common Stock.
(y) "Subsidiary" shall mean any present or future corporation
which constitutes a "subsidiary corporation" as defined in Sections 424(f) and
(g) of the Code.
3. Shares Subject to the Plan. Except as otherwise required by
the provisions of Section 13 hereof, the aggregate number of Shares with respect
to which Awards may be made pursuant to the Plan shall not exceed *155,246
Shares. Such Shares may either be from authorized but unissued shares or shares
purchased in the market for Plan purposes. If an Award shall expire, become
unexercisable, or be forfeited for any reason prior to its exercise, new Awards
may be granted under the Plan with respect to the number of Shares as to which
such expiration has occurred.
4. Six Month Holding Period.
Subject to vesting requirements, if applicable, except in the
event of death or disability of the Optionee, a minimum of six months must
elapse between the date of the grant of an Option and the date of the sale of
the Common Stock received through the exercise of such Option.
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* 10% of shares outstanding as of date of Board adoption.
- 3 -
<PAGE>
5. Administration of the Plan.
(a) Composition of the Committee. The Plan shall be
administered by the Board of Directors of the Company or a Committee which shall
consist of not less than two Directors of the Company appointed by the Board and
serving at the pleasure of the Board. All persons designated as members of the
Committee shall meet the requirements of a "Non-Employee Director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, as
found at 17 CFR ss.240.16b-3.
(b) Powers of the Committee. The Committee is authorized (but
only to the extent not contrary to the express provisions of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the form and
content of Awards to be issued under the Plan and to make other determinations
necessary or advisable for the administration of the Plan, and 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 shall be deemed the action of the Committee. In no
event may the Committee revoke outstanding Awards without the consent of the
Participant.
The President of the Company and such other officers as shall
be designated by the Committee are hereby authorized to execute written
agreements evidencing Awards on behalf of the Company and to cause them to be
delivered to the Participants. Such agreements shall set forth the Option
exercise price, the number of shares of Common Stock subject to such Option, the
expiration date of such Options, and such other terms and restrictions
applicable to such Award as are determined in accordance with the Plan or the
actions of the Committee.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be final and
conclusive on all persons affected thereby.
6. Eligibility for Awards and Limitations.
(a) The Committee shall from time to time determine the
officers, Directors, key employees and other persons who shall be granted Awards
under the Plan, the number of Awards to be granted to each such persons, and
whether Awards granted to each such Participant under the Plan shall be
Incentive and/or Non-Incentive Stock Options. In selecting Participants and in
determining the number of Shares of Common Stock to be granted to each such
Participant, the Committee may consider the nature of the prior and anticipated
future services rendered by each such Participant, each such Participant's
current and potential contribution to the Company and such other factors as the
Committee may, in its sole discretion, deem relevant. Participants who have been
granted an Award may, if otherwise eligible, be granted additional Awards.
(b) The aggregate Fair Market Value (determined as of the
date the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by each 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 Parent or Subsidiary of the
Company) shall not exceed $100,000. Notwithstanding the prior provisions of this
Section 6, the Committee may grant Options in excess of the foregoing
limitations, provided said Options shall be clearly and specifically designated
as not being Incentive Stock Options.
- 4 -
<PAGE>
(c) In no event shall Shares subject to Options granted
to non-employee Directors in the aggregate under this Plan exceed more than 28%
of the total number of Shares authorized for delivery under this Plan pursuant
to Section 3 herein or more than 7% to any individual non-employee Director. In
no event shall Shares subject to Options granted to any Employee exceed more
than 25% of the total number of Shares authorized for delivery under the Plan.
7. Term of the Plan. The Plan shall continue in effect for a term of
ten (10) years from the Effective Date, unless sooner terminated pursuant to
Section 17 hereof. No Option shall be granted under the Plan after ten (10)
years from the Effective Date.
8. Terms and Conditions of Incentive Stock Options. Incentive Stock
Options may be granted only to Participants who are Employees. Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Incentive Stock
Option granted pursuant to the Plan shall comply with, and be subject to, the
following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive Stock
Option granted by the Committee under the Plan may be exercised shall not, as to
any particular Incentive Stock Option, be less than the Fair Market Value of the
Common Stock on the date that such Incentive Stock Option is granted.
(ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding Common Stock at the
time the Incentive Stock Option is granted, the Incentive Stock Option exercise
price shall not be less than one hundred and ten percent (110%) of the Fair
Market Value of the Common Stock on the date that the Incentive Stock Option is
granted.
(b) Payment. Full payment for each Share of Common Stock
purchased upon the exercise of any Incentive Stock Option granted under the Plan
shall be made at the time of exercise of each such Incentive Stock Option and
shall be paid in cash (in United States Dollars), Common Stock or a combination
of cash and Common Stock. Common Stock utilized in full or partial payment of
the exercise price shall be valued at the Fair Market Value at the date of
exercise. The Company shall accept full or partial payment in Common Stock only
to the extent permitted by applicable law. No Shares of Common Stock shall be
issued until full payment has been received by the Company, and no Optionee
shall have any of the rights of a stockholder of the Company until Shares of
Common Stock are issued to the Optionee.
(c) Term of Incentive Stock Option. The term of exercisability
of each Incentive Stock Option granted pursuant to the Plan shall be not more
than ten (10) years from the date each such Incentive Stock Option is granted,
provided that in the case of an Employee who owns stock representing more than
ten percent (10%) of the Common Stock outstanding at the time the Incentive
Stock Option is granted, the term of exercisability of the Incentive Stock
Option shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in
Section 10 hereof, no Incentive Stock Option may be exercised unless the
Optionee shall have been in the employ of the Company, the Bank, or any present
or future Parent or Subsidiary of the Company at all times during the period
beginning with the date of grant of any such Incentive Stock Option and ending
on the date
- 5 -
<PAGE>
three (3) months prior to the date of exercise of any such Incentive Stock
Option. The Committee may impose additional conditions upon the right of an
Optionee to exercise any Incentive Stock Option granted hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by action of the Committee at the time of the grant of the Options, the
Options will be first exercisable at the rate of 50% on the date of grant and
50% one year thereafter during such periods of service as an Employee, Director
or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if
applicable, an Optionee who has held an Incentive Stock Option for at least six
months may engage in the "cashless exercise" of the Option. Upon a cashless
exercise, an Optionee shall give the Company written notice of the exercise of
the Option together with an order to a registered broker-dealer or equivalent
third party, to sell part or all of the Optioned Stock and to deliver enough of
the proceeds to the Company to pay the Option exercise price and any applicable
withholding taxes. If the Optionee does not sell the Optioned Stock through a
registered broker-dealer or equivalent third party, the Optionee can give the
Company written notice of the exercise of the Option and the third party
purchaser of the Optioned Stock shall pay the Option exercise price plus any
applicable withholding taxes to the Company.
(f) Transferability. An Incentive Stock Option granted
pursuant to the Plan shall be exercised during an Optionee's lifetime only by
the Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
9. Terms and Conditions of Non-Incentive Stock Options. Each
Non-Incentive Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee shall from time to time approve. Each
Non-Incentive Stock Option granted pursuant to the Plan shall comply with and be
subject to the following terms and conditions.
(a) Options Granted to Directors. Subject to the limitations
of Section 6(c), Non-Incentive Stock Options to purchase 10,867 shares of Common
Stock will be granted to each Director who is not an Employee as of the
Effective Date, at an exercise price equal to the Fair Market Value of the
Common Stock on such date of grant. The Options will be first exercisable at the
rate of 50% on the Effective Date and 50% one year thereafter during such
periods of service as a Director or Director Emeritus. Upon the death or
Disability of the Director or Director Emeritus, such Option shall be deemed
immediately 100% exercisable. Such Options shall continue to be exercisable for
a period of ten years following the date of grant without regard to the
continued services of such Director as a Director or Director Emeritus. In the
event of the Optionee's death, such Options may be exercised by the personal
representative of his estate or person or persons to whom his rights under such
Option shall have passed by will or by the laws of descent and distribution.
Options may be granted to newly appointed or elected non-employee Directors
within the sole discretion of the Committee. The exercise price per Share of
such Options granted shall be equal to the Fair Market Value of the Common Stock
at the time such Options are granted. 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) Option Price. The exercise price per Share of Common Stock
for each Non-Incentive Stock Option granted pursuant to the Plan shall be at
such price as the Committee may determine in its sole discretion, but in no
event less than the Fair Market Value of such Common Stock on the date of grant
as determined by the Committee in good faith.
- 6 -
<PAGE>
(c) Payment. Full payment for each Share of Common Stock
purchased upon the exercise of any Non-Incentive Stock Option granted under the
Plan shall be made at the time of exercise of each such Non-Incentive Stock
Option and shall be paid in cash (in United States Dollars), Common Stock or a
combination of cash and Common Stock. Common Stock utilized in full or partial
payment of the exercise price shall be valued at its Fair Market Value at the
date of exercise. The Company shall accept full or partial payment in Common
Stock only to the extent permitted by applicable law. No Shares of Common Stock
shall be issued until full payment has been received by the Company and no
Optionee shall have any of the rights of a stockholder of the Company until the
Shares of Common Stock are issued to the Optionee.
(d) Term. The term of exercisability of each Non-Incentive
Stock Option granted pursuant to the Plan shall be not more than ten (10) years
from the date each such Non-Incentive Stock Option is granted.
(e) Exercise Generally. The Committee may impose additional
conditions upon the right of any Participant to exercise any Non-Incentive Stock
Option granted hereunder which is not inconsistent with the terms of the Plan.
Except as otherwise provided by the terms of the Plan or by action of the
Committee at the time of the grant of the Options, the Options will be first
exercisable at the rate of 50% on the date of grant and 50% one year thereafter
during such periods of service as an Employee, Director or Director Emeritus.
(f) Cashless Exercise. Subject to vesting requirements, if
applicable, an Optionee who has held a Non-Incentive Stock Option for at least
six months may engage in the "cashless exercise" of the Option. Upon a cashless
exercise, an Optionee shall give the Company written notice of the exercise of
the Option together with an order to a registered broker-dealer or equivalent
third party, to sell part or all of the Optioned Stock and to deliver enough of
the proceeds to the Company to pay the Option exercise price and any applicable
withholding taxes. If the Optionee does not sell the Optioned Stock through a
registered broker-dealer or equivalent third party, the Optionee can give the
Company written notice of the exercise of the Option and the third party
purchaser of the Optioned Stock shall pay the Option exercise price plus any
applicable withholding taxes to the Company.
(g) Transferability. Any Non-Incentive Stock Option granted
pursuant to the Plan shall be exercised during an Optionee's lifetime only by
the Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
10. Effect of Termination of Employment, Disability or Death on
Incentive Stock Options.
(a) Termination of Employment. In the event that any
Optionee's employment with the Company, the Bank, or other present or future
Parent or Subsidiaries shall terminate for any reason, other than Disability or
death, all of any such Optionee's Incentive Stock Options, and all of any such
Optionee's rights to purchase or receive Shares of Common Stock pursuant
thereto, shall automatically terminate on (A) the earlier of (i) or (ii): (i)
the respective expiration dates of any such Incentive Stock Options, or (ii) the
expiration of not more than three (3) months after the date of such termination
of employment; or (B) at such later date as is determined by the Committee at
the time of the grant of such Award based upon the Optionee's continuing status
as a Director or Director Emeritus of the Company or the Bank, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment, and further that
such Award shall thereafter
- 7 -
<PAGE>
be deemed a Non-Incentive Stock Option. In the event that a Subsidiary ceases to
be a Subsidiary of the Company, the employment of all of its employees who are
not immediately thereafter employees of the Company shall be deemed to terminate
upon the date such Subsidiary so ceases to be a Subsidiary of the Company.
(b) Disability. In the event that any Optionee's employment
with the Bank, the Company, or any present or future Parent or Subsidiaries of
the Company shall terminate as the result of the Disability of such Optionee,
such Optionee may exercise any Incentive Stock Options granted to the Optionee
pursuant to the Plan at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment.
(c) Death. In the event of the death of an Optionee, any
Incentive Stock Options granted to such Optionee may be exercised by the person
or persons to whom the Optionee's rights under any such Incentive Stock Options
pass by will or by the laws of descent and distribution (including the
Optionee's estate during the period of administration) at any time prior to the
earlier of (i) the respective expiration dates of any such Incentive Stock
Options or (ii) the date which is two (2) years after the date of death of such
Optionee but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of death. For purposes of
this Section 10(c), any Incentive Stock Option held by an Optionee shall be
considered exercisable at the date of his death if the only unsatisfied
condition precedent to the exercisability of such Incentive Stock Option at the
date of death is the passage of a specified period of time. At the discretion of
the Committee, upon exercise of such Options the Optionee may receive Shares or
cash or a combination thereof. If cash shall be paid in lieu of Shares, such
cash shall be equal to the difference between the Fair Market Value of such
Shares and the exercise price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes
of Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee shall be considered exercisable at the date of termination of
employment if any such Incentive Stock Option would have been exercisable at
such date of termination of employment without regard to the Disability or death
of the Participant.
(e) Termination of Incentive Stock Options. Except as may be
specified by the Committee at the time of grant of an Option, to the extent that
any Incentive Stock Option granted under the Plan to any Optionee whose
employment with the Company or the Bank terminates shall not have been exercised
within the applicable period set forth in this Section 10, any such Incentive
Stock Option, and all rights to purchase or receive Shares of Common Stock
pursuant thereto, as the case may be, shall terminate on the last day of the
applicable period.
11. Effect of Termination of Employment, Disability or Death on
Non-Incentive Stock Options. The terms and conditions of Non-Incentive Stock
Options relating to the effect of the termination of an Optionee's employment or
service, Disability of an Optionee or his death shall be such terms and
conditions as the Committee shall, in its sole discretion, determine at the time
of termination of service, unless specifically provided for by the terms of the
Agreement at the time of grant of the Award.
- 8 -
<PAGE>
12. Recapitalization, Merger, Consolidation, and Other Transactions.
(a) Adjustment. Subject to any required action by the
stockholders of the Company, within the sole discretion of the Committee, the
aggregate number of Shares of Common Stock for which Options may be granted
hereunder, the number of Shares of Common Stock covered by each outstanding
Option, and the exercise price per Share of Common Stock of each such Option,
shall all be proportionately adjusted for any increase or decrease in the number
of issued and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt or payment of consideration by the Company (other
than Shares held by dissenting stockholders).
(b) Extraordinary Corporate Action. Notwithstanding any
provisions of the Plan to the contrary, subject to any required action by the
stockholders of the Company, in the event of any Change in Control,
recapitalization, merger, consolidation, exchange of Shares, spin-off,
reorganization, tender offer, partial or complete liquidation or other
extraordinary corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common
Stock subject to each Option, the Option exercise price per Share of Common
Stock, and the consideration to be given or received by the Company upon the
exercise of any outstanding Option;
(ii) cancel any or all previously granted Options,
provided that appropriate consideration is paid to the Optionee in connection
therewith; and/or
(iii) make such other adjustments in connection with the
Plan as the Committee, in its sole discretion, deems necessary, desirable,
appropriate or advisable; provided, however, that no action shall be taken by
the Committee which would cause Incentive Stock Options granted pursuant to the
Plan to fail to meet the requirements of Section 422 of the Code without the
consent of the Optionee.
(c) Acceleration. The Committee shall at all times have the
power to accelerate the exercise date of Options previously granted under the
Plan.
(d) Non-recurring Dividends. Upon the payment of a special or
non-recurring cash dividend that has the effect of a return of capital to the
stockholders, the Option exercise price per share shall be adjusted
proportionately.
Except as expressly provided in Sections 12(a) and 12(d) hereof, no
Optionee shall have any rights by reason of the occurrence of any of the events
described in this Section 12.
13. Time of Granting Options. The date of grant of an Option under the
Plan shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
- 9 -
<PAGE>
14. Effective Date. The Plan became effective upon the date of approval
of the Plan by the stockholders of the Bank on April 16, 1998. The Committee may
make a determination related to Awards prior to the Effective Date with such
Awards to be effective upon the date of stockholder approval of the Plan.
15. Approval by Stockholders. The Plan shall be approved by a majority
of the stockholders of the Bank within twelve (12) months before or after the
date the Plan is approved by the Board. Furthermore, the Plan must be approved
by a majority of the votes cast by stockholders other than Skibo Bancshares,
M.H.C.
16. Modification of Options. At any time and from time to time, the
Board may authorize the Committee to direct the execution of an instrument
providing for the modification of any outstanding Option, provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or benefit which could not be conferred on the Optionee by the grant of a
new Option at such time, or shall not materially decrease the Optionee's
benefits under the Option without the consent of the holder of the Option,
except as otherwise permitted under Section 17 hereof.
17. Amendment and Termination of the Plan.
(a) Action by the Board. The Board may alter, suspend or
discontinue the Plan, except that no action of the Board may increase the
maximum number of Shares permitted to be optioned under the Plan, materially
increase the benefits accruing to Participants under the Plan or materially
modify the requirements for eligibility for participation in the Plan unless
such action of the Board shall be subject to approval or ratification by the
stockholders of the Company.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part of any
previously granted Option unlawful or subject the Company to any penalty, the
Committee may restrict any such exercise without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.
18. Conditions Upon Issuance of Shares; Limitations on Option Exercise;
Cancellation of Option Rights.
(a) Shares shall not be issued with respect to any Option granted
under the Plan unless the issuance and delivery of such Shares shall comply with
all relevant provisions of applicable law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed.
(b) The inability of the Company to obtain any necessary
authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares issuable hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.
(c) As a condition to the exercise of an Option, the Company
may require the person exercising the Option 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.
- 10 -
<PAGE>
(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Bank or its
Subsidiaries for "cause" as defined at 12 C.F.R. 563.39(b)(1) as determined by
the Board of Directors, all Options held by such Participant shall cease to be
exercisable as of the date of such termination of employment or service.
(e) Upon the exercise of an Option by an Optionee (or the
Optionee's personal representative), the Committee, in its sole and absolute
discretion, may make a cash payment to the Optionee, in whole or in part, in
lieu of the delivery of shares of Common Stock. Such cash payment to be paid in
lieu of delivery of Common Stock shall be equal to the difference between the
Fair Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Bank under Section 16(b) of the Securities Exchange Act of 1934, as amended, and
regulations promulgated thereunder.
19. Reservation of Shares. During the term of the Plan, the Company
will reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
20. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
21. Withholding Tax. The Bank shall have the right to deduct from all
amounts paid in cash with respect to the cashless exercise of Options under the
Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option, the Bank shall have the right to require
the Participant or such other person to pay the Bank the amount of any taxes
which the Bank is required to withhold with respect to such Shares, or, in lieu
thereof, to retain, or to sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
22. No Employment Rights. No Director, Employee or other person shall
have a right to be selected as a Participant under the Plan. Neither the Plan
nor any action taken by the Committee in administration of the Plan shall be
construed as giving any person any rights of employment or retention as an
Employee, Director or in any other capacity with the Company, the Bank, or any
present or future Parent or Subsidiary.
23. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, except to the
extent that federal law shall be deemed to apply.
- 11 -
EXHIBIT 4.2
FORM OF STOCK OPTION AGREEMENT TO BE ENTERED INTO
WITH RESPECT TO INCENTIVE STOCK OPTIONS
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
SKIBO FINANCIAL CORP.
1998 STOCK OPTION PLAN
formerly known as the
FIRST CARNEGIE DEPOSIT
1998 STOCK OPTION PLAN
----------------------
FOR OFFICERS AND EMPLOYEES
STOCK OPTIONS for a total of _______ shares of Common Stock of Skibo
Financial Corp. (the "Company"), which Option is intended to qualify as an
Incentive Stock Option under Section 422 of the Internal Revenue Code of 1986,
as amended, is hereby granted to __________ (the "Optionee") at the price
determined as provided in, and in all respects subject to the terms, definitions
and provisions of the 1998 Stock Option Plan (the "Plan") adopted by the Company
which is incorporated by reference herein, receipt of which is hereby
acknowledged.
1. Option Price. The Option price is $__________ for each Share, being
100% of the fair market value, as determined by the Committee, of the Common
Stock on the date of grant of this Option. Such exercise price accurately
reflects any price adjustments resulting from the corporate reorganization of
First Carnegie Deposit (the "Bank") pursuant to which the Bank became a
wholly-owned subsidiary of the Company.
2. Exercises of Option. This Option shall be exercisable in accordance
with provisions of the Plan, provided the holder of such Option is an employee,
director or director emeritus of the Bank or the Company as of such date, as
follows:
(a) Schedule of Rights to Exercise.
Date Percentage of Total Total
Shares Awarded Which Shares
Become Non-Forfeitable Non-Forfeitable
---------------------- ---------------
Upon grant....................... 50% _____
As of April 16, 1999............. 50% _____
Notwithstanding any provisions in this Section 2, in no event shall
this Option be exercisable prior to six months following the date of grant.
Options shall be 100% vested and exercisable upon the death or disability of the
Optionee, or upon retirement following not less than 10 years of service.
<PAGE>
(b) Method of Exercise. This Option shall be exercisable by a
written notice which shall:
(i) State the election to exercise the Option, the
number of Shares with respect to which it is being exercised, the
person in whose name the stock certificate or certificates for such
Shares of Common Stock is to be registered, his address and Social
Security Number (or if more than one, the names, addresses and Social
Security Numbers of such persons);
(ii) Contain such representations and agreements as
to the holder's investment intent with respect to such shares of Common
Stock as may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person
or persons other than the Optionee, be accompanied by proof,
satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Option; and
(iv) Be in writing and delivered in person or by
certified mail to the Treasurer of the Company.
Payment of the purchase price of any Shares with respect to which the
Option is being exercised shall be by certified or bank cashier's or teller's
check. The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised
if the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or valid regulation. As
a condition to the Optionee's exercise of this Option, the Company may require
the person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
<PAGE>
4. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
5. Related Matters. Notwithstanding anything herein to the contrary,
additional conditions or restrictions related to such Options may be contained
in the Plan or the resolutions of the Plan Committee authorizing such grant of
Options.
Skibo Financial Corp.
Date of Grant:_________________ By:_____________________________________
Attest:
_______________________________
[SEAL]
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
SKIBO FINANCIAL CORP.
1998 STOCK OPTION PLAN
_______________
(Date)
Skibo Financial Corp.
242 East Main Street
Carnegie, Pennsylvania 15106
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to
purchase __________ shares of Common Stock of Skibo Financial Corp. under and
pursuant to a Stock Option Agreement dated _____________, 19__.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$_____________ of cash or check
_____________ of Common Stock
$
============= Total
The name or names to be on the stock certificate or certificates and
the address and Social Security Number of such person(s) is as follows:
Name____________________________________________________
Address_________________________________________________
Social Security Number__________________________________
Very truly yours,
____________________
EXHIBIT 4.3
FORM OF STOCK OPTION AGREEMENT TO BE ENTERED INTO
WITH RESPECT TO NON-INCENTIVE STOCK OPTIONS
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR NON-INCENTIVE STOCK OPTIONS
PURSUANT TO THE
SKIBO FINANCIAL CORP.
1998 STOCK OPTION PLAN
formerly known as the
FIRST CARNEGIE DEPOSIT
1998 STOCK OPTION PLAN
----------------------
FOR NON-EMPLOYEE DIRECTORS
STOCK OPTIONS for a total of __________ shares of Common Stock of Skibo
Financial Corp. (the "Company"), which Option is not intended to qualify as an
Incentive Stock Option under Section 422 of the Internal Revenue Code of 1986,
as amended, is hereby granted to __________ (the "Optionee"), at the price
determined as provided in, and in all respects subject to the terms, definitions
and provisions of the 1998 Stock Option Plan (the "Plan") adopted by the Company
which is incorporated by reference herein, receipt of which is hereby
acknowledged.
1. Option Price. The Option price is $__________ for each Share, being
100% of the fair market value, as determined by the Committee, of the Common
Stock on the date of grant of this Option. Such exercise price accurately
reflects any price adjustments resulting from the corporate reorganization of
First Carnegie Deposit (the "Bank") pursuant to which the Bank or the Company
became a wholly-owned subsidiary of the Company.
2. Exercises of Option. This Option shall be exercisable in accordance
with provisions of the Plan, provided the holder of such Option is an employee,
director or director emeritus of the Bank or the Company as of such date, as
follows:
(a) Schedule of Rights to Exercise.
Date Percentage of Total Total
Shares Awarded Which Shares
Become Non-Forfeitable Non-Forfeitable
---------------------- ---------------
Upon grant..................... 50% ______
As of April 16, 1999........... 50% ______
Notwithstanding any provisions in this Section 2, in no event shall
this Option be exercisable prior to six months following the date of grant.
Options shall be 100% vested and exercisable upon the death or disability of the
Optionee, or upon retirement following not less than 10 years of service.
<PAGE>
(b) Method of Exercise. This Option shall be exercisable by a
written notice which shall:
(i) State the election to exercise the Option, the
number of Shares with respect to which it is being exercised, the
person in whose name the stock certificate or certificates for such
Shares of Common Stock is to be registered, his address and Social
Security Number (or if more than one, the names, addresses and Social
Security Numbers of such persons);
(ii) Contain such representations and agreements as
to the holder's investment intent with respect to such shares of Common
Stock as may be satisfactory to the Company's counsel;
(iii) Be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person
or persons other than the Optionee, be accompanied by proof,
satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Option; and
(iv) Be in writing and delivered in person or by
certified mail to the Treasurer of the Company.
Payment of the purchase price of any Shares with respect to which the
Option is being exercised shall be by certified or bank cashier's or teller's
check. The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised
if the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or valid regulation. As
a condition to the Optionee's exercise of this Option, the Company may require
the person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
<PAGE>
4. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
5. Related Matters. Notwithstanding anything herein to the contrary,
additional conditions or restrictions related to such Options may be contained
in the Plan or the resolutions of the Plan Committee authorizing such grant of
Options.
Skibo Financial Corp.
Date of Grant:__________________ By:_________________________________
Attest:
________________________________
[SEAL]
<PAGE>
NON-INCENTIVE STOCK OPTION EXERCISE FORM
----------------------------------------
PURSUANT TO THE
SKIBO FINANCIAL CORP.
1998 STOCK OPTION PLAN
________________
(Date)
Skibo Financial Corp.
242 East Main Street
Carnegie, Pennsylvania 15106
Dear Sir:
The undersigned elects to exercise the Non-Incentive Stock Option to
purchase _________ shares of Common Stock of Skibo Financial Corp. under and
pursuant to a Stock Option Agreement dated __________, 19__.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$_____________ of cash or check
_____________ of Common Stock
$
============= Total
The name or names to be on the stock certificate or certificates and
the address and Social Security Number of such person(s) is as follows:
Name____________________________________________________
Address_________________________________________________
Social Security Number__________________________________
Very truly yours,
____________________
EXHIBIT 4.4
FORM OF STOCK AWARD TAX NOTICE
<PAGE>
TAX ISSUES RELATED TO EXERCISE OF STOCK OPTIONS
This memorandum reviews the tax effects upon the exercise of
"Non-Incentive Stock Options" ("NSOs") (those options awarded to non-employee
directors and perhaps to some officers) and "Incentive Stock Options" ("ISOs")
(those options generally awarded to officers and employees).
A. Exercise of an NSO
------------------
Upon the exercise of an NSO, the amount by which the fair market value
of the shares on the date of exercise exceeds the exercise price will be taxed
to the optionee as ordinary income. The Company will be entitled to a deduction
in the same amount, provided it makes all required withholdings on the
compensation element of the exercise. In general, the optionee's tax basis in
the shares acquired by exercising an NSO is equal to the fair market value of
such shares on the date of exercise. Upon a subsequent sale of any such shares
in a taxable transaction, the optionee will realize capital gain or loss
(long-term or short-term, depending on whether the shares were held for more
than 12 months before the sale) in an amount equal to the difference between his
or her basis in the shares and the sale price.
Special rules apply if an optionee pays the exercise price upon exercise
of NSOs with previously acquired shares of stock. Except as described below with
respect to shares acquired pursuant to ISOs, such a transaction is treated as a
tax-free exchange of the old shares for the same number of new shares. To that
extent, the optionee's basis in the new shares is the same as his or her basis
in the old shares, i.e., there is a carryover of basis, and the capital gain
holding period runs without interruption from the date when the old shares were
acquired. The value of any new shares received by the optionee in excess of the
number of old shares surrendered less any cash the optionee pays for the new
shares will be taxed as ordinary income. The optionee's basis in the additional
shares is equal to the fair market value of such shares on the date the shares
were transferred, and the capital gain holding period commences on the same
date. The effect of these rules is to defer the date when any gain in the old
shares that are used to buy new shares must be recognized for tax purposes.
Stated differently, these rules allow an optionee to finance the exercise of an
NSO by using shares of stock that he or she already owns, without paying current
tax on any unrealized appreciation in the value of all or a portion of those old
shares.
B. Exercise of an ISO
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The holder of an ISO will not be subject to federal income tax upon the
exercise of the ISO, and the Company will not be entitled to a tax deduction by
reason of such exercise, provided that the holder is still employed by the
Company (or terminated employment no longer than three months before the
exercise date). Additional exceptions to this exercise timing requirement apply
upon the death or disability of the optionee. A sale of the shares received upon
the exercise of an ISO which occurs both more than one year after the exercise
of the ISO and more than two years after the grant of the ISO will result in the
realization of long-term
<PAGE>
capital gain or loss in the amount of the difference between the amount realized
on the sale and the exercise price for such shares. Generally, upon a sale or
disposition of the shares prior to the foregoing holding requirements (referred
to as a "disqualifying disposition"), the optionee will recognize ordinary
income, and the Company will receive a corresponding deduction equal to the
lesser of (i) the excess of the fair market value of the shares on the date of
transfer to the optionee over the exercise price, or (ii) the excess of the
amount realized on the disposition over the exercise price for such shares.
Currently, ISO exercises are exempt from FICA and FUTA taxes and a disqualifying
disposition is exempt from employer withholding.
A special rule applies if an optionee pays all or part of the exercise
price of an ISO by surrendering shares of stock that he or she previously
acquired by exercising any other ISO. If the optionee has not held the old
shares for the full duration of the applicable holding periods before
surrendering them, then the surrender of such shares to exercise the new ISO
will be treated as a disqualifying disposition of the old shares. As described
above, the result of a disqualifying disposition is the loss of favorable tax
consequences with respect to the acquisition of the old shares pursuant to the
previously exercised ISO.
Where the applicable holding period requirements have been met, the use
of previously acquired shares of stock to pay all or a portion of the exercise
price of an ISO may offer significant tax advantages, particularly a deferral of
the recognition of any appreciation in the surrendered shares in the same manner
as discussed above with respect to NSOs.
C. Alternative Minimum Tax
-----------------------
The "alternative minimum tax" is paid when such tax exceeds a taxpayer's
regular federal income tax. The alternative minimum tax is calculated based on
alternative minimum taxable income, which is taxable income for federal income
tax purposes, modified by certain adjustments and increased by tax preference
items.
The spread under an ISO - i.e., the difference between (a) the fair
market value of the shares at exercise and (b) the exercise price - is
classified as alternative minimum taxable income for the year of exercise.
Alternative minimum taxable income may be subject to the alternative minimum
tax. However, a disqualifying disposition of the shares subject to the ISO
during the same year in which the ISO was exercised will generally cancel the
alternative minimum taxable income generated upon exercise of the ISO.
When a taxpayer sells stock acquired through the exercise of an ISO,
generally only the difference between the fair market value of the shares on the
date of exercise and the date of sale is used in computing the alternative
minimum tax. The portion of a taxpayer's minimum tax attributable to certain
items of tax preference (including the spread upon the exercise of an ISO) can
be credited against the taxpayer's regular liability in later years to the
extent that liability exceeds the alternative minimum tax.
EXHIBIT 5.1
OPINION OF MALIZIA, SPIDI, SLOANE & FISCH, P.C. AS TO
THE VALIDITY OF THE COMMON STOCK BEING REGISTERED
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March 10, 1999
Board of Directors
Skibo Financial Corp.
242 East Main Street
Carnegie, Pennsylvania 15106-0664
RE: Registration Statement on Form S-8:
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Skibo Financial Corp. 1998 Stock Option Plan
Board Members:
We have acted as special counsel to Skibo Financial Corp., a
federally-chartered corporation (the "Company"), in connection with the
preparation of the Registration Statement on Form S-8 to be filed with the
Securities and Exchange Commission (the "Registration Statement") under the
Securities Act of 1933, as amended, relating to 155,246 shares of common stock,
par value $.10 per share (the "Common Stock") of the Company which may be issued
upon the exercise of options granted or which may be granted under the Skibo
Financial Corp. 1998 Stock Option Plan (the "Plan"), as more fully described in
the Registration Statement. You have requested the opinion of this firm with
respect to certain legal aspects of the proposed offering.
We have examined such documents, records, and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to the exercise of options
granted under and in accordance with the terms of the Plan will be duly and
validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/Malizia, Spidi, Sloane & Fisch, P.C.
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Malizia, Spidi, Sloane & Fisch, P.C.
EXHIBIT 23.1
CONSENT OF MALIZIA, SPIDI, SLOANE & FISCH, P.C.
(APPEARS IN THEIR OPINION FILED AS EXHIBIT 5.1)
