As filed with the Securities and Exchange Commission on April 21, 2000.
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Steelton Bancorp, Inc.
--------------------------------------
(Exact name of Registrant as specified in its charter)
Pennsylvania 25-1830745
- -------------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
51 South Front Street
Steelton, Pennsylvania 17113
------------------------------------
(Address of principal executive offices)
Steelton Bancorp, Inc. 2000 Stock Option Plan
Mechanics Savings Bank Restricted Stock Plan
--------------------------------------------
(Full Title of the Plans)
Richard Fisch, Esq.
Evan M. Seigel, Esq.
Malizia Spidi & Fisch, PC
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
---------------------------------------
(Name, address and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================== =================== ====================== ======================= ===============
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to be Offering Aggregate Offering Registration
be Registered Registered (1) Price Per Share Price (2) Fee (2)
- ------------- -------------- --------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
Common Stock
$0.10 par value
per share 53,900 shares (2) $503,965 $133.05
======================== =================== ====================== ======================= ===============
</TABLE>
(1) The maximum number of shares of Common Stock issuable upon awards to be
granted under the Steelton Bancorp, Inc. 2000 Stock Option Plan
consists of 38,500 shares, and under the Mechanics Savings Bank
Restricted Stock Plan (the "RSP") consists of 15,400 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, dividends or similar
transactions.
(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. An aggregate of 53,900 shares are being registered
hereby, of which 38,500 shares are under option at a weighted average
exercise price of $9.19 per share ($353,815 in the aggregate). The
remainder of such shares (15,400 shares) awarded under the RSP, are
being registered based upon the average of the bid and ask prices of
the Common Stock of the Registrant as reported on the OTC Bulletin
Board on April 18, 2000, of $9.75 per share ($150,150 in the
aggregate), for a total offering of $503,965.
This Registration Statement shall become effective automatically upon
the date of filing, in accordance with Section 8(a) of the Securities Act of
1933 ("1933 Act") and Rule 462 of the 1933 Act.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information. *
- ------
Item 2. Registrant Information and Employee Plan Annual Information. *
- ------
*This Registration Statement relates to the registration of 53,900
shares of Steelton Bancorp, Inc. (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 subsidiary as compensation for services
in accordance with the Steelton Bancorp, Inc. 2000 Stock Option Plan under which
38,500 shares are issuable, and the Mechanics Savings Bank Restricted Stock Plan
under which 15,400 shares are issuable (together, the "Plans"). 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.
- ------
The Company became subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") on June 25, 1999 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 by reference:
(a) The Company's Annual Report on Form 10-KSB or the fiscal year ended
December 31, 1999;
(b) Current Report on Form 8-K (Date of Event: February 17, 2000), as
filed with the Commission on February 25, 2000; and
(c) The description of the Company's securities as contained in the
Company's Registration Statement on Form 8-A, as filed with the Commission on
June 25, 1999.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14, and 15(d) of the 1934 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.
- ------
Not Applicable
2
<PAGE>
Item 5. Interests of Named Experts and Counsel.
- ------
Not Applicable
Item 6. Indemnification of Directors and Officers.
- ------
Sections 1741 through 1747 of the Pennsylvania Business Corporation Law
provide that an officer, director, employee or agent may be indemnified by the
Company from and against expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred in connection with threatened, pending
or contemplated proceedings (other than an action by or in the right of the
Company) if such person acted in good faith and in a manner that such person
reasonably believes to be in, or not opposed to, the best interests of the
Company.
Provisions regarding indemnification of directors, officers, employees
or agents of the Company are contained in Article 10 of the Company's Articles
of Incorporation.
Under a directors' and officers' liability insurance policy, directors
and officers of the Company are insured against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended.
The Registrant believes that these provisions assist the Registrant in,
among other things, attracting and retaining qualified persons to serve the
Registrant and its subsidiary. However, a result of such provisions could be to
increase the expenses of the Registrant and effectively reduce the ability of
stockholders to sue on behalf of the Registrant because certain suits could be
barred or amounts that might otherwise be obtained on behalf of the Registrant
could be required to be repaid by the Registrant to an indemnified party.
The Company may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee, or agent of the Company or is or
was serving at the request of the Company as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise against any liability asserted against the person and incurred by the
person in any such capacity or arising out of his status as such, whether or not
the Company would have the power to indemnify the person against such liability
under the provisions of the Certificate of Incorporation.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933 Act") may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed 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.
Item 7. Exemption from Registration Claimed.
- ------
Not Applicable
Item 8. Exhibits.
- ------
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.
3
<PAGE>
Item 9. Undertakings.
- ------
(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
1933 Act;
(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
1934 Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the 1933 Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act each filing of the Registrant's
annual report pursuant to section 13(a) or section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the 1934 Act) 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 1934 Act; 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 1933
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or
4
<PAGE>
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.
<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 Steelton in the Commonwealth of Pennsylvania, as of
April 19, 2000.
Steelton Bancorp, Inc.
By: /s/Harold E. Stremmel
-------------------------------------
Harold E. Stremmel
President and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of Steelton Bancorp, Inc.,
do hereby severally constitute and appoint Harold E. Stremmel 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 Harold E. Stremmel may
deem necessary or advisable to enable Steelton Bancorp, Inc., 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 Harold E. Stremmel 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 indicated as of the date indicated.
/s/Marino Falcone /s/Harold E. Stremmel
- --------------------------------------- --------------------------------------
Marino Falcone Harold E. Stremmel
Director President, CEO, and Director
April 19, 2000 April 19, 2000
- --------------------------------------- --------------------------------------
Date Date
/s/James F. Stone /s/Joseph A. Wiedeman
- --------------------------------------- --------------------------------------
James F. Stone Joseph A. Wiedeman
Director Director and Treasurer
April 19, 2000 April 19, 2000
- --------------------------------------- --------------------------------------
Date Date
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
/s/Victor J. Segina /s/Richard E. Farina
- --------------------------------------- --------------------------------------
Victor J. Segina Richard E. Farina
Director and Secretary Director
April 19, 2000 April 19, 2000
- --------------------------------------- --------------------------------------
Date Date
/s/James S. Nelson /s/Shannon Aylesworth
- --------------------------------------- --------------------------------------
James S. Nelson Shannon Aylesworth
Senior Vice President and Director Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
April 19, 2000 April 19, 2000
- --------------------------------------- --------------------------------------
Date Date
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
4.1 Steelton Bancorp, Inc. 2000 Stock Option Plan
4.2 Mechanics Savings Bank Restricted Stock Plan
4.3 Form of Stock Option Agreement to be entered into
with respect to Incentive Stock Options under the Stock Option
Plan
4.4 Form of Stock Option Agreement to be entered into with
respect to Non-Incentive Stock Options under the Stock
Option Plan
4.5 Form of Restricted Stock Award Agreement
4.6 Form of Stock Award Tax Notice
5.1 Opinion of Malizia Spidi & Fisch, PC as to the validity of the
Common Stock being registered
23.1 Consent of Malizia Spidi & Fisch, PC (appears in their opinion
filed as Exhibit 5.1)
23.2 Consent of McKonly & Asbury LLP
24 Reference is made to the Signatures section of this
Registration Statement for the Power of Attorney contained
therein
EXHIBIT 4.1
STEELTON BANCORP, INC.
2000 STOCK OPTION PLAN
<PAGE>
STEELTON BANCORP, INC.
2000 STOCK OPTION PLAN
1. Purpose of the Plan. The Plan shall be known as the STEELTON
---------------------
BANCORP, INC. ("Company") 2000 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, employees and other persons providing services to the Company, 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.
"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.
"Board" shall mean the Board of Directors of the Company, or
any successor or parent corporation thereto.
"Change in Control" shall mean: (i) the sale of all, or a
material portion, of the assets of the Company; (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. 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 Company
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.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and regulations promulgated thereunder.
1
<PAGE>
"Committee" shall mean the Board or the Stock Option Committee
appointed by the Board in accordance with Section 5(a) of the Plan.
"Common Stock" shall mean common stock of the Company, or any
successor or parent corporation thereto.
"Company" shall mean the Steelton Bancorp, Inc., the parent
corporation of the Savings Bank, or any successor or Parent thereof.
"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 Parent,
its Subsidiaries or a successor.
"Director" shall mean a member of the Board of the Company, or
any successor or parent corporation thereto.
"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 Savings Bank or the Company
from time to time.
"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 Savings Bank or the
Parent in his then current capacity as determined by the Committee.
"Effective Date" shall mean the date specified in Section 15
hereof.
"Employee" shall mean any person employed by the Company or
any present or future Parent or Subsidiary of the Company.
"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.
"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.
2
<PAGE>
"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.
"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.
"Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.
"Optionee" shall mean any person who receives an Option or
Award pursuant to the Plan.
"Parent" shall mean any present or future corporation which
would be a "parent corporation" as defined in Sections 424(e) and (g) of the
Code.
"Participant" means any Director, Director Emeritus, officer
or 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.
"Plan" shall mean the Steelton Bancorp, Inc. 2000 Stock Option
Plan.
"Savings Bank" shall mean Mechanics Savings Bank, or any
successor corporation thereto.
"Share" shall mean one share of the Common Stock.
"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 38,500 Shares.
Such Shares may either be from authorized but unissued shares, treasury 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.
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
3
<PAGE>
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, Directors Emeritus, 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.
(c) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 30% of
the total number of Shares authorized for delivery under this Plan pursuant to
Section 3 herein or more than 5% to any individual non-employee Director.
4
<PAGE>
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 18 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 at all times during the
period beginning with the date of grant of any such Incentive Stock Option and
ending on the date 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
5
<PAGE>
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 20% on the one
year anniversary of the date of grant and 20% annually 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 gives 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 1,925 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 20% on the one year anniversary of the Effective Date and 20% annually
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. All outstanding Awards shall
become immediately exercisable in the event of a Change in Control of the
Savings Bank or the Company, provided that such accelerated vesting is not
inconsistent with applicable regulations of the Office of Thrift Supervision or
other appropriate banking regulatory agency at the time of such Change in
Control. 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.
6
<PAGE>
(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.
(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 20% on the one year anniversary of the date of grant
and 20% annually 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 gives 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 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
7
<PAGE>
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 Savings Bank or the Company, 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 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 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 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
8
<PAGE>
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.
12. Withholding Tax. The Company shall have the right to deduct from
----------------
all amounts paid in cash with respect to the cashless exercise of Options 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 Company shall have the right to require the
Participant or such other person to pay the Company the amount of any taxes
which the Company 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.
13. Recapitalization, Merger, Consolidation, Change in Control and
------------------------------------------------------------------
Other Transaction.
-----------------
(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) Change in Control. All outstanding Awards shall become
immediately exercisable in the event of a Change in Control of the Company, as
determined by the Committee, provided that such accelerated vesting is not
inconsistent with applicable regulations of the Office of Thrift Supervision or
other appropriate banking regulatory agency at the time of such Change in
Control. In the event of such a Change in Control, the Committee and the Board
of Directors will take one or more of the following actions to be effective as
of the date of such Change in Control:
(i) provide that such Options shall be assumed,
or equivalent options shall be substituted, ("Substitute Options") by the
acquiring or succeeding corporation (or an affiliate thereof), provided that:
(A) any such Substitute Options exchanged for Incentive Stock Options shall meet
the requirements of Section 424(a) of the Code, and (B) the shares of stock
issuable upon the exercise of such Substitute Options shall constitute
securities registered in accordance with the Securities Act of 1933, as amended,
("1933 Act") or such securities shall be exempt from such registration in
accordance with Sections 3(a)(2) or 3(a)(5) of the 1933 Act, (collectively,
"Registered Securities"), or in the alternative, if the securities issuable upon
the exercise of such Substitute Options shall not constitute Registered
Securities, then the Optionee will receive upon consummation of the Change in
Control transaction a cash payment for each Option surrendered equal to the
difference between (1) the Fair Market Value of the consideration to be received
for each share of Common Stock in the Change in Control transaction times the
number of shares of Common Stock subject to such surrendered Options, and (2)
the aggregate exercise price of all such surrendered Options, or
(ii) in the event of a transaction under the terms
of which the holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment (the "Merger
9
<PAGE>
Price") for each share of Common Stock exchanged in the Change in Control
transaction, to make or to provide for a cash payment to the Optionees equal to
the difference between (A) the Merger Price times the number of shares of Common
Stock subject to such Options held by each Optionee (to the extent then
exercisable at prices not in excess of the Merger Price) and (B) the aggregate
exercise price of all such surrendered Options in exchange for such surrendered
Options.
(c) 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.
(d) Acceleration. The Committee shall at all times have the
power to accelerate the exercise date of Options previously granted under the
Plan; provided that such action is not contrary to regulations of the OTS or
other appropriate banking regulatory agency then in effect.
Except as expressly provided in Sections 13(a) and 13(b),
no Optionee shall have any rights by reason of the occurrence of any of the
events described in this Section 13.
14. 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.
15. Effective Date. The Plan shall become effective upon the date of
---------------
approval of the Plan by the stockholders of the Company, subject to approval or
non-objection by the Office of Thrift Supervision, if applicable. 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.
16. Approval by Stockholders. The Plan shall be approved by
---------------------------
stockholders of the Company within twelve (12) months before or after the date
the Plan is approved by the Board.
17. 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
10
<PAGE>
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 18 hereof.
18. 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 (other
than as provided in Section 13 hereof) 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, regulation or policy 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.
19. 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.
(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Company 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
11
<PAGE>
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 Company under Section 16(b) of
the Securities Exchange Act of 1934, as amended, and regulations promulgated
thereunder.
20. 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.
21. 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.
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 Savings Bank
or other Subsidiaries.
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.
EXHIBIT 4.2
MECHANICS SAVINGS BANK
RESTRICTED STOCK PLAN
<PAGE>
Mechanics Savings Bank
Restricted Stock Plan
and Trust Agreement
Article I
---------
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Mechanics Savings Bank ("Savings Bank") hereby establishes the
Restricted Stock Plan (the "Plan") and Trust (the "Trust") upon the terms and
conditions hereinafter stated in this Restricted Stock Plan and Trust Agreement
(the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
Article II
----------
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and to retain personnel of
experience and ability in key positions of responsibility with the Savings Bank
and its subsidiaries, by providing such personnel of the Savings Bank and its
subsidiaries with an equity interest in the parent corporation of the Savings
Bank, Steelton Bancorp, Inc. ("Parent"), as compensation for their prior and
anticipated future professional contributions and service to the Savings Bank
and its subsidiaries.
Article III
-----------
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.
"Beneficiary" means the person or persons designated by the 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, the Participant's estate.
"Board" means the Board of Directors of the Savings Bank, or any
successor corporation thereto.
1
<PAGE>
"Cause" means the personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profits, intentional
failure to perform stated duties, willful violation of a material provision of
any law, rule or regulation (other than traffic violations and similar offense),
or a material violation of a final cease-and-desist order or any other action
which results in a substantial financial loss to the Parent, Savings Bank or its
Subsidiaries.
"Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Parent or Savings Bank; (ii) the merger or
recapitalization of the Parent or the Savings Bank whereby the Parent or Savings
Bank is not the surviving entity; (iii) a change in control of the Parent or
Savings Bank, as otherwise defined or determined by the Office of Thrift
Supervision ("OTS") 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 1934 Act and the rules and
regulations promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding voting securities of the Parent or Savings Bank by any person,
trust, entity or group. This limitation shall not apply to the purchase of
shares of up to 25% of any class of securities of the Parent or Savings 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.
"Committee" means the Board of Directors of the Parent or the
Restricted Stock Plan Committee appointed by the Board of Directors of the
Parent pursuant to Article IV hereof.
"Common Stock" means shares of the common stock of the Parent, or any
successor corporation or parent thereto.
"Conversion" means the effective date of the stock charter of the
Savings Bank and simultaneous acquisition of all of the outstanding stock of the
Savings Bank by the Parent.
"Director" means a member of the Board of the Savings Bank.
"Director Emeritus" means 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 Savings Bank or the Parent from time
to time.
"Disability" means any physical or mental impairment which renders the
Participant incapable of continuing in the employment or service of the Savings
Bank or the Parent in his current capacity as determined by the Committee.
"Effective Date" shall mean the date of stockholder approval of the
Plan by the Parent's stockholders.
"Employee" means any person who is employed by the Savings Bank or a
Subsidiary.
"Parent" shall mean Steelton Bancorp, Inc., the parent corporation of
the Savings Bank.
2
<PAGE>
"Participant" means an Employee, Director or Director Emeritus who
receives a Plan Share Award under the Plan.
"Plan Shares" means shares of Common Stock held in the Trust which are
awarded or issuable to a Participant pursuant to the Plan.
"Plan Share Award" or "Award" means a right granted to a Participant
under this Plan to earn or to receive Plan Shares.
"Plan Share Reserve" means the shares of Common Stock held by the Trust
pursuant to Sections 5.03 and 5.04.
"Savings Bank" means Mechanics Savings Bank, and any successor
corporation thereto.
"Subsidiary" means those subsidiaries of the Savings Bank which, with
the consent of the Board, agree to participate in this Plan.
"Trustee" or "Trustee Committee" means that person(s) or entity
nominated by the Committee and approved by the Board pursuant to Sections 4.01
and 4.02 to hold legal title to the Plan assets for the purposes set forth
herein.
Article IV
----------
ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and
interpreted by the Board of Directors of the Parent or a Committee appointed by
said Board, which shall consist of not less than two non-employee members of the
Board, which shall have all of the powers allocated to it in this and other
sections of the Plan. All persons designated as members of the Committee shall
be "Non-Employee Directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended ("1934 Act"). 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. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. The Committee 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 shall recommend to the Board one or more
persons or entity to act as Trustee in accordance with the provision of this
Plan and Trust and the terms of Article VIII hereof.
4.02 Role of the Board. The members of the Committee and the Trustee
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, and may remove, replace or add Trustees. 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 except as provided in
Section 7.01(b) herein.
3
<PAGE>
4.03 Limitation on Liability. No member of the Board, the Committee or
the Trustee shall be liable for any determination made in good faith with
respect to the Plan or any Plan Share Awards granted. If a member of the Board,
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 any reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Parent and
the Savings Bank shall indemnify such member against expenses (including
attorney's 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 Parent, the Savings Bank and its
Subsidiaries and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Notwithstanding anything
herein to the contrary, in no event shall the Savings Bank take any actions with
respect to this Section 4.03 which is not in compliance with the limitations or
requirements set forth at 12 CFR 545.121, as may be amended from time to time.
Article V
---------
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 Amount and Timing of Contributions. The Board of Directors of the
Savings Bank shall determine the amounts (or the method of computing the
amounts) to be contributed by the Savings Bank to the Trust established under
this Plan. Such amounts shall be paid to the Trustee at the time of
contribution. No contributions to the Trust by Participants shall be permitted
except with respect to amounts necessary to meet tax withholding obligations.
5.02 Initial Investment. Any funds held by the Trust prior to
investment in the Common Stock shall be invested by the Trustee in such
interest-bearing account or accounts at the Savings Bank as the Trustee shall
determine to be appropriate.
5.03 Investment of Trust Assets. Following approval of the Plan by
stockholders of the Parent and receipt of any other necessary regulatory
approvals, the Trust shall purchase Common Stock of the Parent in an amount
equal to up to 100% of the Trust's assets, after providing for any required
withholding as needed for tax purposes, provided, however, that the Trust shall
not purchase more than 15,400 shares of Common Stock, representing 4% of the
aggregate shares of Common Stock issued by the Parent in the Conversion. The
Trustee may purchase shares of Common Stock in the open market or, in the
alternative, may purchase authorized but unissued shares of the Common Stock or
treasury shares from the Parent sufficient to fund the Plan Share Reserve.
5.04 Effect of Allocations, Returns and Forfeitures Upon Plan Share
Reserves. Upon the allocation of Plan Share Awards under Sections 6.02 and 6.05,
or the decision of the Committee to return Plan Shares to the Parent, the Plan
Share Reserve shall be reduced by the number of Shares subject to the Awards so
allocated or returned. Any Shares subject to an Award which are not earned
because of forfeiture by the Participant pursuant to Section 7.01 shall be added
to the Plan Share Reserve.
4
<PAGE>
Article VI
----------
ELIGIBILITY; ALLOCATIONS
6.01 Eligibility. Employees and Directors Emeritus are eligible to
receive Plan Share Awards within the sole discretion of the Committee. Directors
who are not otherwise Employees shall receive Plan Share Awards pursuant to
Section 6.05.
6.02 Allocations. The Committee will determine which of the Employees
will be granted Plan Share Awards and the number of Shares covered by each
Award, provided, however, that in no event shall any Awards be made which will
violate the Charter or Bylaws of the Savings Bank or its Parent or Subsidiaries
or any applicable federal or state law or regulation. In the event Shares are
forfeited for any reason or additional Shares are purchased by the Trustee, the
Committee may, from time to time, determine which of the Employees will be
granted Plan Share Awards to be awarded from forfeited Shares. In selecting
those Employees and Directors Emeritus to whom Plan Share Awards will be granted
and the number of shares covered by such Awards, the Committee shall consider
the prior and anticipated future position, duties and responsibilities of the
Employees, the value of their prior and anticipated future services to the
Savings Bank and its Subsidiaries, and any other factors the Committee may deem
relevant. All actions by the Committee shall be deemed final, except to the
extent that such actions are revoked by the Board. Notwithstanding anything
herein to the contrary, in no event shall any Participant receive Plan Share
Awards in excess of 25% of the aggregate Plan Shares authorized under the Plan.
6.03 Form of Allocation. As promptly as practicable after a
determination is made pursuant to Section 6.02 or Section 6.05 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 makes its award determination or the date the Committee so
notifies the Participant shall be considered the date of grant of the Plan Share
Awards as determined by the Committee. 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
at Sections 6.01, 6.02 or 6.05, no Employee shall have any right or entitlement
to receive a Plan Share Award hereunder, such Awards being at the sole
discretion of the Committee and the Board, nor shall the Employees 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
Savings Bank at any time, and cease issuing Plan Share Awards.
6.05 Awards to Directors. Notwithstanding anything herein to the
contrary, upon the Effective Date, a Plan Share Award consisting of 770 Plan
Shares shall be awarded to each Director of the Savings Bank that is not
otherwise an Employee. Such Plan Share Award shall be earned and non-forfeitable
at the rate of one-fifth as of the one-year anniversary of the Effective Date
and an additional one-fifth following each of the next four successive years
during such periods of service as a Director or Director Emeritus. Further, such
Plan Share Award shall be immediately 100% earned and non-forfeitable in the
event of the death or Disability of such Director or Director Emeritus, or upon
a Change in Control of the Savings Bank or Parent; provided that such
accelerated vesting is not inconsistent with applicable regulations of the
Office of Thrift Supervision ("OTS") or other applicable banking regulatory
agency at the time of such Change in Control. Subsequent to the Effective Date,
Plan Share Awards may be
5
<PAGE>
awarded to newly elected or appointed Directors of the Savings Bank by the
Committee, provided that total Plan Share Awards granted to non-employee
Directors of the Savings Bank shall not exceed 30% of the total Plan Share
Reserve in the aggregate under the Plan or 5% of the total Plan Share Reserve to
any individual non-employee Director.
Article VII
-----------
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earnings Plan Shares; Forfeitures.
(a) General Rules. Unless the Committee shall specifically state to the
contrary at the time a Plan Share Award is granted, Plan Shares subject to an
Award shall be earned and non-forfeitable by a Participant at the rate of
one-fifth of such Award following one year after the granting of such Award, and
an additional one-fifth following each of the next four successive years;
provided that such Participant remains an Employee, Director, or Director
Emeritus during such period. Notwithstanding anything herein to the contrary, in
no event shall a Plan Share Award granted hereunder be earned and
non-forfeitable by a Participant more rapidly than at the rate of one-fifth of
such Award as of the one year anniversary of the date of grant and an additional
one-fifth following each of the next four successive years.
(b) Revocation for Misconduct. Notwithstanding anything herein to the
contrary, the Board shall, by resolution, immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been delivered thereunder to the
Participant, whether or not yet earned, in the case of a Participant who is
discharged from the employ or service of the Parent, Savings Bank or a
Subsidiary for Cause, or who is discovered after termination of employment or
service to have engaged in conduct that would have justified termination for
Cause. A determination of Cause shall be made by the Board within its sole
discretion.
(c) Exception for Terminations Due to Death or Disability.
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 employment or
service with the Parent, Savings Bank or a Subsidiary terminates due to death or
Disability, shall be deemed earned and nonforfeitable as of the Participant's
last date of employment or service with the Parent, Savings Bank or Subsidiary
and shall be distributed as soon as practicable thereafter.
(d) Exception for Termination after a Change in Control.
Notwithstanding the general rule contained in Section 7.01 above, all Plan
Shares subject to a Plan Share Award held by a Participant shall be deemed to be
immediately 100% earned and non-forfeitable in the event of a Change in Control
of the Parent or Savings Bank and shall be distributed as soon as practicable
thereafter; provided that such accelerated vesting is not inconsistent with
applicable regulations of the OTS or other applicable banking regulatory agency
at the time of such Change in Control.
7.02 Accrual and Payment of Dividends. A holder of a Plan Share Award,
whether or not earned, shall also be entitled to receive an amount equal to any
cash dividends declared and paid with respect to shares of Common Stock
represented by such Plan Share Award between the date the relevant Plan Share
Award was granted to such Participant and the date the Plan Shares are
distributed. Such cash
6
<PAGE>
dividend amounts shall be held in arrears under the Trust and distributed upon
the earning of the applicable Plan Share Award. Such payment shall also include
an appropriate amount of earnings, if any, of the Trust assets with respect to
any cash dividends so distributed.
7.03 Distribution of Plan Shares.
(a) Timing of Distributions: General Rule. Except as provided in
Subsections (d) and (e) below, Plan Shares shall be distributed 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.
Notwithstanding anything herein to the contrary, at the discretion of the
Committee, Plan Shares may be distributed prior to such Shares being 100%
earned, provided that such Plan Shares shall contain a restrictive legend
detailing the applicable limitations of such shares with respect to transfer and
forfeiture.
(b) Form of Distribution. All Plan Shares, together with any shares
representing stock dividends, shall be distributed 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.
Notwithstanding anything within the Plan to the contrary, upon a Change in
Control whereby substantially all of the Common Stock of the Parent shall be
acquired for cash, all Plan Shares associated with Plan Share Awards, together
with any shares representing stock dividends associated with Plan Share Awards,
shall be, at the sole discretion of the Committee, distributed as of the
effective date of such Change in Control, or as soon as administratively
feasible thereafter, in the form of cash equal to the consideration received in
exchange for such Common Stock represented by such Plan Shares.
(c) Withholding. The Trustee may withhold from any payment or
distribution made under this Plan sufficient amounts of cash or shares of Common
Stock necessary to cover any applicable withholding and employment taxes, and if
the amount of such payment or distribution is not sufficient, the Trustee may
require the Participant or Beneficiary to pay to the Trustee the amount required
to be withheld in taxes as a condition of delivering the Plan Shares. The
Trustee shall pay over to the Parent, Savings Bank or Subsidiary 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 Subsection
(a) above, no Plan Shares may be distributed prior to the date which is five
years from the effective date of the 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
held by parties other than Parent, unless such action is approved in advance by
a majority vote of disinterested directors of the Board of the Parent. 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 effective date of the Conversion.
(e) Regulatory Exceptions. No Plan Shares shall be distributed,
however, 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 Parent by such vote, if any, as
may be required by applicable law and regulations.
7.04 Voting of Plan Shares. After a Plan Share Award has become earned
and non-forfeitable, the Participant shall be entitled to direct the Trustee as
to the voting of the Plan Shares which are
7
<PAGE>
associated with the Plan Share Award and which have not yet been distributed
pursuant to Section 7.03, subject to rules and procedures adopted by the
Committee for this purpose. All shares of Common Stock held by the Trust as to
which Participants are not entitled to direct, or have not directed, the voting
of such Shares, shall be voted by the Trustee as directed by the Committee.
Article VIII
------------
TRUST
8.01 Trust. The Trustee shall receive, hold, administer, invest and
make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
the Plan.
8.02 Management of Trust. It is the intention of this Plan and Trust
that the Trustee shall have complete authority and discretion with respect to
the management, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust, except those attributable to cash dividends paid
with respect to Plan Shares not held in the Plan Share Reserve, in Common Stock
to the fullest extent practicable, except to the extent that the Trustee
determines that the holding of monies in cash or cash equivalents is necessary
to meet the obligations of the Trust. In performing their duties, the Trustees
shall have the power to do all things and execute such instruments as may be
deemed necessary or proper, including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust assets in
the Common Stock without regard to any law now or hereafter in force
limiting investments for Trustees or other fiduciaries. The investment
authorized herein may constitute the only investment of the Trust, and
in making such investment, the Trustee is authorized to purchase Common
Stock from the Parent or from any other source, and such Common Stock
so purchased may be outstanding, newly issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in accordance
with (a) above in such deposit accounts, and certificates of deposit
(including those issued by the Savings Bank), obligations of the United
States government or its agencies or such other investments as shall be
considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any time
held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered in the
name of a nominee, without the addition of words indicating that such
security is an asset of the Trust (but accurate records shall be
maintained showing that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may be in the
opinion of the Trustee reasonable for the proper operation of the Plan
and Trust.
(f) To employ brokers, agents, custodians, consultants and accountants.
8
<PAGE>
(g) To hire counsel to render advice with respect to their rights,
duties and obligations hereunder, and such other legal services or
representation as they may deem desirable.
(h) To hold funds and securities representing the amounts to be
distributed to a Participant or his Beneficiary as a consequence of a
dispute as to the disposition thereof, whether in a segregated account
or held in common with other assets.
(i) As may be directed by the Committee or the Board from time to
time, the Trustee shall pay to the Saving Bank earnings of the Trust
attributable to the Plan Share Reserve.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of a court for the exercise of any power
herein contained, or to maintain bond.
8.03 Records and Accounts. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.04 Earnings. All earnings, gains and losses with respect to Trust
assets shall be allocated in accordance with a reasonable procedure adopted by
the Committee, to bookkeeping accounts for Participants or to the general
account of the Trust, depending on the nature and allocation of the assets
generating such earnings, gains and losses. In particular, any earnings on cash
dividends received with respect to shares of Common Stock shall be allocated to
accounts for Participants, except to the extent that such cash dividends are
distributed to Participants, if such shares are the subject of outstanding Plan
Share Awards, or, otherwise to the Plan Share Reserve.
8.05 Expenses. All costs and expenses incurred in the operation and
administration of this Plan, including those incurred by the Trustee, shall be
paid by the Savings Bank.
8.06 Indemnification. Subject to the requirements and limitations of
applicable laws and regulations, the Parent and the Savings Bank shall
indemnify, defend and hold the Trustee harmless against all claims, expenses and
liabilities arising out of or related to the exercise of the Trustee's powers
and the discharge of their duties hereunder, unless the same shall be due to
their gross negligence or willful misconduct.
Article IX
----------
MISCELLANEOUS
9.01 Adjustments for Capital Changes. The aggregate number of Plan
Shares available for issuance pursuant to the Plan Share Awards and the number
of Shares to which any Plan Share Award relates shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of the Plan resulting
from any split, subdivision or consolidation of the Common Stock or other
capital adjustment, change or exchange of the Common Stock, or other increase or
decrease in the number or kind of shares effected without receipt or payment of
consideration by the Parent.
9
<PAGE>
9.02 Amendment and Termination of the Plan. The Board may, by
resolution, at any time, amend or terminate the Plan. The power to amend or
terminate the Plan shall include the power to direct the Trustee to return to
the Parent all or any part of the assets of the Trust, including shares of
Common Stock held in the Plan Share Reserve, as well as shares of Common Stock
and other assets subject to Plan Share Awards which have not yet been earned by
the Participants to whom they have been awarded. However, the termination of the
Trust shall not affect a Participant's right to earn Plan Share Awards and to
the 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. Notwithstanding the foregoing, no action of the Board may increase (other
than as provided in Section 9.01 hereof) the maximum number of Plan Shares
permitted to be awarded under the Plan as specified at Section 5.03, 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 ratification by the stockholders of
the Parent.
9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Participant, and during the lifetime of the
Participant, Plan Shares may only be earned by and paid to the Participant who
was notified in writing of the Award by the Committee pursuant to Section 6.03.
No Participant or Beneficiary shall have any right in or claim to any assets of
the Plan or Trust, nor shall the Parent, Savings Bank, or any Subsidiary be
subject to any claim for benefits hereunder.
9.04 No Employment 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 Participant to continue in the
employ or service of the Parent, Savings Bank, or a Subsidiary thereof.
9.05 Voting and Dividend Rights. No Participant shall have any voting
or dividend rights of a stockholder with respect to any Plan Shares covered by a
Plan Share Award, except as expressly provided in Sections 7.02 and 7.04 above,
prior to the time said Plan Shares are actually distributed to such Participant.
9.06 Governing Law. The Plan and Trust shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania, except to the
extent that Federal Law shall be deemed applicable.
9.07 Effective Date. The Plan shall be effective as of the date of
approval of the Plan by stockholders of the Parent, subject to the receipt of
approval or non-objection by the OTS or other applicable banking regulator, if
applicable.
9.08 Term of Plan. This Plan shall remain in effect until the earlier
of (i) termination by the Board, (ii) the distribution of all assets of the
Trust, or (iii) 21 years from the Effective Date. Termination of the Plan shall
not effect any Plan Share Awards previously granted, and such Plan Share Awards
shall remain valid and in effect until they have been earned and paid, or by
their terms expire or are forfeited.
9.09 Tax Status of Trust. It is intended that the Trust established
hereby shall be treated as a grantor trust of the Savings Bank under the
provisions of Section 671 et seq. of the Internal Revenue Code of 1986, as
amended, as the same may be amended from time to time.
10
EXHIBIT 4.3
FORM OF STOCK OPTION AGREEMENT TO BE ENTERED INTO
WITH RESPECT TO INCENTIVE STOCK OPTIONS UNDER
THE STOCK OPTION PLAN
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
STEELTON BANCORP, INC.
2000 STOCK OPTION PLAN
----------------------
FOR OFFICERS AND EMPLOYEES
STOCK OPTIONS for a total of _______________shares of Common Stock of
Steelton Bancorp, Inc. (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 2000 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.
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 Company as of such date, as follows:
(a) Schedule of Rights to Exercise.
Percentage of Total
Shares
Awarded Which Are
Exercisable/
Date Options Non-forfeitable
---- ------- ---------------
Upon grant 0 0%
As of February 3, 2001................. _____ 20%
As of February 3, 2002................. _____ 40%
As of February 3, 2003................. _____ 60%
As of February 3, 2004................. _____ 80%
As of February 3, 2005................. _____ 100%
1
<PAGE>
Options awarded to the Optionee shall continue to vest annually during
such period that he serves as an employee, director or director emeritus of
Mechanics Savings Bank or the Company. 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 a Change in Control of the
Company, subject to limitations under applicable regulations and policies of the
Office of Thrift Supervision.
(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.
2
<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.
Steelton Bancorp, Inc.
Date of Grant: February 3, 2000 By:
---------------- ------------------------------
Attest:
- ----------------------------
[SEAL]
3
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
------------------------------------
PURSUANT TO THE
STEELTON BANCORP, INC.
2000 STOCK OPTION PLAN
------------------------
(Date)
Steelton Bancorp, Inc.
51 South Front Street
Steelton, Pennsylvania 17113
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to
purchase ____________shares of Common Stock of Steelton Bancorp, Inc. under and
pursuant to a Stock Option Agreement dated ________________.
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 OPTION AGREEMENT TO BE ENTERED INTO
WITH RESPECT TO NON-INCENTIVE STOCK OPTIONS UNDER
THE STOCK OPTION PLAN
<PAGE>
STOCK OPTION AGREEMENT
----------------------
FOR NON-INCENTIVE STOCK OPTIONS
PURSUANT TO THE
STEELTON BANCORP, INC.
2000 STOCK OPTION PLAN
----------------------
NON-EMPLOYEE DIRECTORS
STOCK OPTIONS for a total of __________ shares of Common Stock of
Steelton Bancorp, Inc. (the "Company") 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
2000 Stock Option Plan (the "Plan") adopted by the Company which is incorporated
by reference herein, receipt of which is hereby acknowledged. Such Stock Options
do not comply with Options granted under Section 422 of the Internal Revenue
Code of 1986, as amended.
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 (February 3, 2000).
2. Exercise of Option. This Option shall be exercisable in accordance
------------------
with provisions of the Plan as follows:
(a) Schedule of Rights to Exercise.
Percentage of Total Shares
Awarded Which Are
Date Options Non-forfeitable
---- ------- ---------------
Upon grant 0 0%
As of February 3, 2001................ _____ 20%
As of February 3, 2002................ _____ 40%
As of February 3, 2003................ _____ 60%
As of February 3, 2004................ _____ 80%
As of February 3, 2005................ _____ 100%
Options shall continue to vest annually provided that such holder
remains a director or director's emeritus of Mechanics Savings Bank or the
Company. 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 a Change in Control of the Company, subject to limitations
under applicable regulations and policies of the Office of Thrift Supervision.
1
<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 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.
2
<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.
Steelton Bancorp, Inc.
Date of Grant: February 3, 2000 By:
---------------- ------------------------------
Attest:
- ---------------------------
[SEAL]
3
EXHIBIT 4.5
FORM OF RESTRICTED STOCK AWARD AGREEMENT
<PAGE>
RESTRICTED STOCK AGREEMENT
--------------------------
PURSUANT TO THE
MECHANICS SAVINGS BANK
RESTRICTED STOCK PLAN
---------------------
FOR OFFICERS AND EMPLOYEES
This Agreement shall constitute an award of Restricted Stock ("Award")
for a total of __________ shares of Common Stock of STEELTON BANCORP, INC. (the
"Corporation"), which is hereby granted to
_______________________________________________ (the "Participant") at the price
determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Mechanics Savings Bank Restricted Stock Plan
(the "Plan") adopted by the Corporation which is incorporated by reference
herein, receipt of which is hereby acknowledged.
1. Purchase Price. The purchase price for each share of Common Stock
---------------
awarded by this Agreement is $0.00.
2. Vesting of Plan Awards. The Award of such Common Stock shall be
-----------------------
deemed non-forfeitable in accordance with the provisions of the Plan, provided
the holder of such Award is an employee, director or director emeritus of the
Corporation as of such date, as follows:
(a) Schedule of Vesting of Awards.
Number Percentage of Total Shares
of Awarded Which Are
Date Shares Non-forfeitable
---- ------ ---------------
Upon Grant 0 0%
As of February 3, 2001................. _____ 20%
As of February 3, 2002................. _____ 40%
As of February 3, 2003................. _____ 60%
As of February 3, 2004................. _____ 80%
As of February 3, 2005................. _____ 100%
(b) Restrictions on Awards. This Award may not be delivered to
the recipient if the issuance of the Shares pursuant to the Award would
constitute a violation of any applicable federal or state securities or other
law or valid regulation. As a condition to the Participant's receipt of this
Award, the Corporation may require the person receiving this Award to make any
representation and warranty to the Corporation as may be required by any
applicable law or regulation.
<PAGE>
3. Non-transferability of Award. This Award may not be transferred in
-----------------------------
any manner prior to such Award, or portion thereof, being deemed
non-forfeitable. Notwithstanding anything herein or in the Plan to the contrary,
all Shares subject to an Award held by a Participant whose employment or service
with the Corporation or the Bank terminates due to death shall be deemed 100%
earned and nonforfeitable as of the Participant's last date of employment or
service with the Corporation or the Bank and shall be distributed as soon as
practicable thereafter to the Beneficiary as set forth in accordance with the
Plan.
4. Other Restrictions on Award. This Award shall be subject to such
-----------------------------
other restrictions and limitations as are contained in the Plan or as determined
by the Plan Committee administering such Plan. Such Award shall be immediately
100% vested upon death or disability (as determined by the Plan Committee) of
the Participant or upon a change in control of the Corporation or the Bank,
subject to limitations under applicable regulations and policies of the Office
of Thrift Supervision.
Mechanics Savings Bank
Date of Grant: February 3, 2000 By:
---------------- ----------------------------------
Attest:
- -------------------------------------
[SEAL]
2
EXHIBIT 4.6
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
------------------
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 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
<PAGE>
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.
<PAGE>
RESTRICTED STOCK PLAN
TAX NOTICE
The awards granted under the Mechanics Savings Bank Restricted Stock
Plan (the "Plan") will be in the form of Common Stock which shall vest in five
installments at the rate of 20% of such shares per installment. Taxable
compensation equal to the fair market value of the Common Stock at the date of
vesting of each such stock award will be recognized by each recipient.
Federal Tax Consequences of Awards.
-----------------------------------
1. Stock awarded under the Plan is generally taxable to the
recipient at the time that such awards become 100% vested and
non-forfeitable, based upon the fair market value of such
stock at the time of such vesting. Therefore, the vesting of
stock as of February 3, 2001, and annually thereafter,
constitutes an tax event.
2. A recipient may make an election pursuant to Section 83(b) of
the Internal Revenue Code ("Code") within 30 days of the date
of the transfer of an award to elect to include in gross
income for the current taxable year the fair market value of
such stock as of the date of the transfer of an award. Such
election must be filed with the Internal Revenue Service
within 30 days of the date of the transfer of the stock award.
Therefore, such an election may be filed for stock awards to
vest at a future date.
3. Tax withholding obligations related to stock awards that vest
may be satisfied by either the Participant paying the Bank (by
check) an amount sufficient to satisfy applicable withholding
taxes, or receiving a fewer number of shares upon vesting of
stock awards. The latter choice would work as follows: an
employee could elect to receive, upon vesting of an award, a
number of shares equal to the excess of the total number of
shares subject to the award less a number of shares having a
fair market value sufficient to satisfy applicable withholding
and employment taxes.
For example, suppose that an employee was scheduled to vest in 1,000
shares having a fair market value equal to $20 per share ($20,000 in the
aggregate). Assuming the employee's liability for withholding and employment
taxes totaled 45% of the ordinary income being recognized, the amount necessary
to pay such taxes would be 45% of $20,000 or $9,000. The employee could either
pay the Bank $9,000, or direct the Plan trustees to reduce the number of shares
to be transferred from the Plan to the employee. If an employee elected the
latter choice, the employee would receive 550 shares from the Plan, with the
other 450 shares withheld in satisfaction of the employee's $9,000 tax
obligation. In either event, the employee would recognize $20,000 of ordinary
income.
For individuals who are subject to the short-swing profit rule imposed
under Section 16 of the Securities Exchange Act of 1934, if shares are withheld
in satisfaction of the withholding taxes then such withholding should be
reported on a Form 4 or 5 to be filed with the SEC.
EXHIBIT 5.1
OPINION OF MALIZIA SPIDI & FISCH, PC AS TO
THE VALIDITY OF THE COMMON STOCK BEING REGISTERED
<PAGE>
April 21, 2000
Board of Directors
Steelton Bancorp, Inc.
51 South Front Street
Steelton, Pennsylvania 17113
RE: Registration Statement on Form S-8:
----------------------------------
Steelton Bancorp, Inc. 2000 Stock Option Plan
Mechanics Savings Bank Restricted Stock Plan
Gentlemen:
We have acted as special counsel to Steelton Bancorp, Inc., a
Pennsylvania 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 53,900 shares of common stock, par value $.10 per
share (the "Common Stock") of the Company which may be issued (i) upon the
exercise of options for 38,500 shares of Common Stock granted under the Steelton
Bancorp, Inc. 2000 Stock Option Plan, and (ii) upon the award of 15,400 shares
of Common Stock under the Mechanics Savings Bank Restricted Stock Plan
(collectively, the "Plans"), 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 stock awards granted
under and in accordance with the terms of the Plans will be duly and validly
issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8.
Sincerely,
/s/Malizia Spidi & Fisch, PC
--------------------------------
Malizia Spidi & Fisch, PC
EXHIBIT 23.1
CONSENT OF MALIZIA SPIDI & FISCH, PC
(APPEARS IN THEIR OPINION FILED AS EXHIBIT 5.1)
EXHIBIT 23.2
CONSENT OF McKONLY & ASBURY LLP
<PAGE>
[LETTERHEAD OF MCKONLY & ASBURY LLP]
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
Steelton Bancorp, Inc.
Steelton, Pennsylvania
We consent to the incorporation by reference in this Registration
Statement of Steelton Bancorp, Inc. on Form S-8 of our report dated January 24,
2000, incorporated by reference in the Annual Report on Form 10-KSB of Steelton
Bancorp, Inc. for the year ended December 31, 1999.
/s/McKonly & Asbury LLP
-----------------------
McKonly & Asbury LLP
April 21, 2000
Harrisburg, Pennsylvania
