EXHIBIT 99.1
THREE RIVERS BANCORP, INC.
STOCK OPTION PLAN
February 24, 2000
THREE RIVERS BANCORP, INC.
STOCK OPTION PLAN
The purposes of the Stock Option Plan (the "Plan") are to
encourage eligible employees of THREE RIVERS BANCORP, INC. (the
"Corporation") and its Subsidiaries, including directors and
officers of the Corporation who are employees, to increase their
efforts to make the Corporation and each Subsidiary more
successful, to provide an additional inducement for such
employees to remain with the Corporation or a Subsidiary, to
reward such employees by providing an opportunity to acquire the
Common Stock, par value $0.01 per share, of the Corporation (the
"Common Stock") on favorable terms and to provide a means
through which the Corporation may attract able persons to enter
the employment of the Corporation or one of its Subsidiaries.
For purposes of the Plan, the term "Subsidiary" means any
corporation in an unbroken chain of corporations beginning with
the Corporation if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing at
least fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations
in the chain. An additional limited purpose of the Plan is to
provide a single grant of stock options to option holders of the
Corporation's present parent corporation (who may or may not
become employees of the Corporation) in connection with the
adjustment of the parent corporation stock options necessary to
give proper effect to the proposed spin-off of the Corporation
by its parent corporation.
SECTION 1
Administration
The Plan shall be administered by a Committee (the
"Committee") appointed from time to time by the Board of
Directors of the Corporation (the "Board") and consisting of no
fewer than two members of the Board, each of whom qualifies as
an "outside director" under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code). The Board may at
any time, without cause, remove any person from the Committee by
written notice to such person. Any member of the Committee may
resign by written notice to the Board.
The Committee shall interpret the Plan and prescribe such
rules, regulations and procedures in connection with the
operations of the Plan as it shall deem to be necessary and
advisable for the administration of the Plan consistent with the
purposes of the Plan.
The Committee shall keep records of any action taken at its
meetings. A majority of the Committee shall constitute a quorum
at any meeting and the acts of a majority of the members present
at any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be the acts of the
Committee.
SECTION 2
Eligibility
Those salaried employees of the Corporation or any
Subsidiary with executive, managerial, technical or professional
responsibility ("Key Employees"), who may or may not be an
officer or a member of the Board of Directors, shall be eligible
to receive stock options as described herein. In addition,
individuals described in the last sentence of the purpose
paragraph of this Plan document shall be eligible to receive a
stock option grant for the limited purpose described therein.
Subject to the provisions of the Plan, the Committee shall
have full and final authority, in its discretion, to grant stock
options as described herein and to determine the Key Employees
to whom stock options shall be granted and the number of shares
to be covered by each stock option. In determining the
eligibility of any employee, as well as in determining the
number of shares which may be acquired pursuant to each stock
option, the Committee shall consider the positions and the
responsibilities of the employee being considered, the nature
and value to the Corporation or a Subsidiary of his or her
services, his or her present and/or potential contribution to
the success of the Corporation or a Subsidiary and such other
factors as the Committee may deem relevant.
SECTION 3
Shares Available under the Plan
The aggregate number of shares of the Common Stock which
may be issued or delivered and as to which stock options may be
granted under the Plan is 300,000 shares. All of such shares
are subject to adjustment and substitution as set forth in
Section 6.
If any stock option granted under the Plan is cancelled by
mutual consent or terminates or expires for any reason without
having been exercised in full, the number of shares subject to
such stock option shall again be available for purposes of the
Plan.
The shares which may be issued or delivered under the Plan
may be either authorized but unissued shares or treasury shares,
or partly each, as shall be determined from time to time by the
Board.
SECTION 4
Grant of Stock Options
The Committee shall have authority, in its discretion, to
grant "incentive stock options" pursuant to Section 422 of the
Code, to grant "non-statutory stock options" (stock options
which do not qualify under Section 422 of the Code) or to grant
both types of stock options, provided that the exercise of one
type of option shall not affect the other type.
To the extent that the aggregate fair market value of stock
with respect to which incentive stock options are exercisable
for the first time by any individual during any calendar year
(under all plans of the individual's employer corporation and
its parent and subsidiary corporations) exceeds $100,000, such
stock options shall be treated as options which are non-
statutory stock options. The preceding sentence shall be
applied by taking options into account in the order in which
they are granted. Also, for this purpose, the fair market value
of any stock shall be determined as of the date the option with
respect to such stock was granted.
SECTION 5
Terms and Conditions of Stock Options
Stock options granted under the Plan shall be subject to
the following terms and conditions:
(A) The purchase price at which each stock option may
be exercised (the "option price") shall be such price as the
Committee, in its discretion, shall determine but (i) in the
case of an incentive stock option generally, shall not be less
than one hundred percent (100%) of the fair market value per
share of Common Stock which may be acquired pursuant to the
stock option on the date of grant, and (ii) in the case of an
incentive stock option granted to an employee who, immediately
prior to such grant, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock
of the Corporation or any Subsidiary (or parent corporation) (a
"Ten Percent Employee"), the option price shall not be less than
110% of such fair market value on the date of grant. For
purposes of this Section 5(A), the fair market value of the
Common Stock shall be determined as provided in Section 5(H)
below. Also, for purposes of this Section 5(A), an individual
(i) shall be considered as owning not only shares of the Common
Stock owned individually, but also all shares that are at the
time owned, directly or indirectly, by or for the spouse,
ancestors, lineal descendants and brothers and sisters (whether
by the whole or half blood) of such individual and (ii) shall be
considered as owning proportionately any shares owned, directly
or indirectly, by or for any corporation, partnership, estate or
trust in which such individual shall be a stockholder, partner
or beneficiary.
(B) The option price shall be payable in full in any
one or more of the following ways:
(i) in cash; and/or
(ii) subject to any conditions imposed by the
Committee, in shares of the Common Stock (which (a) are owned by
the optionee free and clear of all liens and other encumbrances
and which are not subject to the restrictions set forth in
Section 7 below, and (b) if such shares were acquired through
the exercise of an incentive stock option, the holding period
requirements of Section 422(a) of the Code are satisfied) having
a fair market value on the date of exercise of the stock option,
determined as provided in Section 5(H), equal to the option
price for the shares being purchased.
If the option price is paid in whole or in part in shares
of Common Stock, any portion of the option price representing a
fraction of a share shall be paid in cash. The date of exercise
of a stock option shall be determined under procedures
established by the Committee, and the option price shall be
payable at such time or times as the Committee, in its
discretion, shall determine. No shares shall be issued or
delivered upon exercise of a stock option until full payment of
the option price has been made. When full payment of the option
price has been made and subject to the restrictions set forth in
Section 7, the optionee shall be considered for all purposes to
be the owner of the shares with respect to which payment has
been made. Payment of the option price with shares shall not
increase the number of shares of Common Stock which may be
issued or delivered under the Plan as provided in Section 3.
In addition, the Committee may, from time to time, permit
and provide for the exercise of options through brokers, at an
optionee's election, in accordance with federal law governing
such exercises, including related short-term loans necessary to
facilitate the same.
(C) Subject to Section 8 hereof, stock options may be
exercised under the vesting schedules established by the
Committee. No incentive stock option shall be exercisable after
the expiration of ten years (five years in the case of a Ten
Percent Employee) from the date of grant. No non-statutory
stock option shall be exercisable after the expiration of ten
years and six months from the date of grant. Subject to this
Section 5(C) and Sections 5(F), 5(G) and 5(H) below, stock
options may be exercised at such times, in such amounts and
subject to such restrictions as shall be determined, in its
discretion, by the Committee.
(D) No stock option rights shall be transferable by
an optionee other than by will, or if an optionee dies
intestate, by the laws of descent and distribution of the state
of domicile of the optionee at the time of death, and all stock
options shall be exercisable during the lifetime of an optionee
only by the optionee; provided, however, that the Committee may
permit the limited transferability of non-statutory stock
options in accordance with Internal Revenue Service and
Securities and Exchange Commission guidelines from time to time
in effect.
(E) Unless otherwise determined by the Committee and
set forth in the stock option agreement referred to in
Section 5(G) or an amendment thereto:
(i) If the employment of an optionee who is not
a Disabled Optionee (as defined in Section 5(F) below) is
voluntarily terminated with the consent of the Corporation or a
Subsidiary, any then outstanding stock option held by such
optionee shall be exercisable (to the extent exercisable on the
date of termination of employment) by such optionee at any time
prior to the earlier of the expiration date of such stock option
or the date which is three months after the date of termination
of employment;
(ii) If an optionee retires under any retirement
plan of the Corporation or a Subsidiary specified by the
Committee, any then outstanding stock option held by such
optionee shall be exercisable in full (whether or not so
exercisable on the date of termination of employment) by such an
optionee at any time prior to the earlier of the expiration date
of such stock option or the date which is three months after the
date of termination of employment;
(iii) If the employment of an optionee who is a
Disabled Optionee is terminated, any then outstanding stock
option held by such optionee shall be exercisable in full
(whether or not so exercisable on the date of termination of
employment) by the optionee at any time prior to the earlier of
the expiration date of such stock option or the date which is
one year after the date of termination of employment;
(iv) The following transfers of employees will
not be treated as a termination of employment:
(a) A transfer of an employee between
Subsidiaries of the Corporation;
(b) A transfer of an employee from the
Corporation to one of its Subsidiaries; or
(c) A transfer of an employee to the
Corporation from one of its Subsidiaries.
(v) Following the death of an optionee during
employment, any outstanding stock option held by the optionee at
the time of death shall be exercisable in full (whether or not
so exercisable on the date of the death of the optionee) by the
person or persons entitled to do so under the will of the
optionee, or, if the optionee shall fail to make testamentary
disposition of the stock option or shall die intestate, by the
legal representative of the optionee, at any time prior to the
expiration date of such stock option or within one year after
the date of death, whichever is the shorter period. Following
the death of an optionee after termination of employment during
a period when a stock option is exercisable as provided in
clauses (i), (ii) and (iii) above, any outstanding stock option
held by the optionee at the time of death shall, to the extent
the stock option was exercisable by the optionee at the time of
death, be exercisable by such person or persons as would have
been so entitled had the employee died prior to the termination
of employment, so long as such exercise occurs prior to the
earlier of the expiration date of such stock option or the date
which is one year after the date of death.
(F) If the employment of an optionee terminates for
any reason other than voluntary termination with the consent of
the Corporation or a Subsidiary, disability, retirement under
any specified retirement plan of the Corporation or a
Subsidiary, or death, the rights of such optionee under any then
outstanding stock option shall terminate at the time of such
termination of employment. In addition, the Committee may in
its discretion immediately terminate all stock options held by
the optionee if an optionee (i) engages in the operation or
management of a business, whether as owner, partner, officer,
director, employee or otherwise and whether during or after
termination of employment, which is in competition with the
Corporation or any of its Subsidiaries; (ii) uses for his own
benefit or discloses to a third party information pertaining to
the Corporation or any of its Subsidiaries which the Corporation
or its Subsidiaries consider to be confidential; or
(iii) interferes with the relationship between the Corporation
or a Subsidiary and its employees, suppliers or customers.
"Disabled Optionee" shall mean an individual who is unable
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months.
Whether termination of employment is a voluntary
termination with the consent of the Corporation or a Subsidiary;
whether an optionee is a Disabled Optionee; whether an optionee
has engaged in the operation or management of a business which
is in competition with the Corporation or any of its
Subsidiaries; whether an optionee uses for his own benefit or
discloses to a third party information pertaining to the
Corporation or any of its Subsidiaries which is confidential;
and whether an optionee has interfered with the relationship
between the Corporation or a Subsidiary and its employees,
suppliers or customers shall be determined in each case by the
Committee, whose determination shall be final and binding unless
such determination is demonstrably arbitrary and capricious.
(G) All stock options shall be confirmed by a stock
option agreement, or an amendment thereto, which shall be
executed by the Chief Executive Officer, the President (if other
than the Chief Executive Officer) or any Executive Vice
President on behalf of the Corporation and by the employee to
whom such stock options are granted.
(H) Fair market value of the Common Stock, so long as
the Common Stock trades in the Over-the-Counter market or on a
stock exchange, shall be computed by taking the mean between the
highest and lowest selling prices per share of the Common Stock
as quoted in such reliable publication as the Committee, in its
discretion, may choose to rely upon, on the date an option is
granted (or any other relevant measurement date) or, if no trade
occurs on such date, the immediately preceding date on which a
trade did occur.
If at any time the Common Stock does not trade in the Over-
the-Counter market or on a stock exchange, the fair market value
of the Common Stock shall be determined by an independent and
experienced appraiser which is selected by the Committee. Fair
market value shall be determined without regard to any
restriction applicable to the Common Stock other than a
restriction which, by its terms, will never lapse.
(I) The obligation of the Corporation to issue or
deliver shares of the Common Stock under the Plan shall be
subject to (i) the effectiveness of a registration statement
under the Securities Act of 1933, as amended (the "1933 Act"),
with respect to such shares, if deemed necessary or appropriate
by counsel for the Corporation, (ii) the condition that the
shares shall have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange on which
such shares may then be listed and (iii) all other applicable
laws, regulations, rules and orders which may then be in effect;
provided, however, that if the Company Stock shall be delisted
from all national stock exchanges and/or deregistered in
accordance with the provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Corporation shall
have the obligation to issue and deliver shares of Common Stock
under the Plan upon the exercise of any then outstanding stock
option.
Subject to the foregoing provisions of this Section 5 and
the other provisions of the Plan, any stock option granted under
the Plan shall be subject to such other terms and conditions as
the Committee shall deem advisable.
For purposes of administering stock options granted
pursuant to the last sentence of the purpose paragraph of this
Plan document, past service credit with the Corporation's
present parent corporation and its affiliates shall be given for
vesting purposes. The vesting and exercise rights of optionees
who remain employees of the Corporation's present parent
corporation and its affiliates (other than the Corporation and a
Subsidiary) shall be determined by reference to their employment
(and termination thereof) with such parent corporation and
affiliates. To the extent the terms of this Plan document
permit option terms more favorable than those under the
USBANCORP, INC. 1991 Stock Option Plan, the terms of the options
described in this paragraph shall not include such more
favorable terms.
SECTION 6
Adjustment and Substitution of Shares
If a dividend or other distribution shall be declared upon
the Common Stock payable in shares of Common Stock, the number
of shares of Common Stock then subject to any outstanding stock
option and the number of shares which may be issued or delivered
under the Plan but are not then subject to an outstanding stock
option shall be adjusted by adding thereto the number of shares
which would have been distributable thereon if such shares had
been outstanding on the date fixed for determining the
stockholders entitled to receive such stock dividend or
distribution.
If the outstanding shares of Common Stock shall be changed
into or exchangeable for a different number or kind of shares of
stock or other securities of the Corporation or another
corporation, whether through reorganization, reclassification,
recapitalization, stock split-up, reverse stock split-up,
combination of shares, merger or consolidation, then there shall
be substituted for each share of Common Stock subject to any
then outstanding stock option and for each share of Common Stock
which may be issued or delivered under the Plan but is not then
subject to an outstanding stock option, the number and kind of
shares of stock or other securities into which each outstanding
share of Common Stock shall be so changed or for which each such
share shall be exchangeable.
In the case of any adjustment or substitution as provided
for in this Section 6, the aggregate option price for all shares
subject to each then outstanding stock option prior to such
adjustment or substitution shall be the aggregate option price
for all shares of stock or other securities (including any
fraction) to which such shares shall have been adjusted or which
shall have been substituted for such shares. Any new option
price per share shall be carried to at least three decimal
places with the last decimal place rounded upwards to the
nearest whole number.
No adjustment or substitution provided for in this
Section 6 shall require the Corporation to issue or sell a
fraction of a share or other security. Accordingly, all
fractional shares or other securities which result from any such
adjustment or substitution shall be eliminated and not carried
forward to any subsequent adjustment or substitution, unless
otherwise provided by the Committee.
If any such adjustment or substitution provided for in this
Section 6 requires the approval of stockholders in order to
enable the Corporation to grant incentive stock options, then no
such adjustment or substitution shall be made without prior
stockholder approval. Notwithstanding the foregoing, in the
case of incentive stock options, if the effect of any such
adjustment or substitution would be to cause the stock option to
fail to continue to qualify as an incentive stock option or to
cause a modification, extension or renewal of such stock option
within the meaning of Section 424 of the Code, the Committee may
elect that such adjustment or substitution not be made but
rather shall use reasonable efforts to effect such other
adjustment of each then outstanding stock option as the
Committee in its sole discretion shall deem equitable and which
will not result in any disqualification, modification, extension
or renewal (within the meaning of Section 424 of the Code) of
such incentive stock option.
All share adjustments made pursuant to this section shall
result in a correlative adjustment to the authorized shares in
Section 3.
SECTION 7
Restrictions on Transfer of Certain Shares
Shares of Common Stock acquired under exercise of an option
pursuant to Section 5(B) by a person then subject to the
provisions of Section 16 of the Exchange Act shall not be sold
or otherwise transferred prior to the expiration of the six
months after the date of the grant of the option. The
Corporation is authorized to (i) retain the certificate(s)
representing such shares or place such certificates in the
custody of its transfer agent, (ii) place a restrictive legend
on such shares, and/or (iii) issue a stop transfer order to the
transfer agent with respect to such shares in order to enforce
the transfer restrictions of this Section.
SECTION 8
Acceleration of the Exercise Date of Stock Options
Notwithstanding any other provision of this Plan, all stock
options shall become exercisable upon the occurrence of any of
the events listed below, whether or not such options are then
exercisable under the provisions of the applicable agreements
relating thereto:
(A) Stock option rights shall be exercisable during
any one or more of the following periods:
(i) for a period of 60 days beginning on the
date on which shares of Common Stock are first purchased
pursuant to a tender offer or exchange offer (other than such an
offer by the Corporation or a Subsidiary) (or an employee
benefit plan or either), whether or not such offer is approved
or opposed by the Corporation or a Subsidiary and regardless of
the number of shares of Common Stock purchased pursuant to such
offer;
(ii) for a period of 60 days beginning on the
date the Corporation acquires knowledge that any person or group
deemed a person under Section 13(d)(3) of the Exchange Act, in a
transaction or series of transactions, shall become the
beneficial owner, directly or indirectly (with beneficial
ownership determined as provided in Rule 13d-3, or any successor
rule, under the Exchange Act), of securities of the Corporation
entitling the person or group to 24.99% or more of all votes
(without consideration of the rights of any class of stock to
elect directors by a separate class vote) to which all
shareholders of the Corporation would be entitled if the
election of directors were an election held on such date;
(iii) for a period of 60 days beginning on the
date of filing under the Exchange Act of a Statement on
Schedule 13D, or any amendment thereto, by any person or group
deemed a person under Section 13(d)(3) of the Exchange Act,
disclosing an intention or possible intention to acquire or
change control of the Corporation;
(iv) for a period of 60 days beginning on the
date, during any period of two consecutive years, when
individuals who at the beginning of such period constitute the
Board of Directors of the Corporation cease for any reason to
constitute at least a majority thereof, unless the election, or
the nomination for election by the shareholders of the
Corporation, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were
directors at the beginning of such period; and
(v) for a period of 60 days beginning on the
date of approval by the shareholders of the Corporation of an
agreement (a "reorganization agreement") providing for (a) the
merger or consolidation of the Corporation with another
corporation where the shareholders of the Corporation,
immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation,
shares of the corporation issuing cash or securities in the
merger or consolidation entitling such shareholders to 40% or
more of all votes (without consideration of the rights of any
class of stock to elect directors by a separate class vote) to
which all shareholders of such corporation would be entitled in
the election of directors or where the members of the Board of
directors of the Corporation, immediately prior to the merger or
consolidation, do not, immediately after the merger or
consolidation, constitute a majority of the Board of Directors
of the corporation issuing cash or securities in the merger or
consolidation or (b) the sale or other disposition of all or
substantially all the assets of the Corporation.
SECTION 9
Effect of the Plan on the Rights of Employees and Employer
Neither the adoption of the Plan nor any action of the
Board or the Committee pursuant to the Plan shall be deemed to
give any employee any right to be granted a stock option under
the Plan and nothing in the Plan, in any stock option granted
under the Plan or in any stock option agreement shall confer any
right upon any employee to continue in the employment of the
Corporation or any Subsidiary or diminish in any way the right
of the Corporation or any Subsidiary to terminate the employment
of any employee at any time. The granting of a stock option
shall impose no obligation upon the Optionee to exercise such
option.
SECTION 10
Amendment
The right to alter and amend the Plan at any time and from
time to time and the right to revoke or terminate the Plan are
hereby specifically reserved to the Board; provided always, that
no such revocation or termination shall terminate any
outstanding stock option theretofore granted under the Plan; and
provided further, that no such alteration or amendment of the
Plan shall, without prior stockholder approval, (a) increase the
total number of shares which may be issued under the Plan,
(b) make any change in the class of eligible employees or
(c) make any other change that requires such approval for
favorable or desirable treatment under tax, securities or other
applicable laws. No alteration, amendment, revocation or
termination of the Plan shall, without the written consent of
the holder of a stock option theretofore granted under the Plan,
adversely affect the rights of such holder with respect to such
stock option.
SECTION 11
Effective Date and Duration of Plan
The effective date and date of adoption of the Plan shall
be February 24, 2000 (the "Effective Date"), the date of
adoption of the Plan by the Board, provided that such adoption
of the Plan by the Board is approved by the affirmative vote of
the holders of at least a majority of the outstanding shares of
Common Stock at a meeting of such holders duly called, convened
and held within one year of the Effective Date, or by written
consent in lieu of a meeting. Notwithstanding any provision of
the Plan to the contrary (except for options granted under the
purpose paragraph of this Plan document set forth above), no
stock option granted under the Plan prior to such shareholder
approval may be exercised until after such approval. No stock
option may be granted under the Plan subsequent to February 23,
2010.
Notwithstanding the preceding provisions of this Section,
in the event this Plan document is resubmitted to the
Corporations' Shareholders for approval at a later date in
accordance with the provisions of 162(m) of the Code, the
failure to secure such approval shall not adversely affect or
otherwise result in the cancellation of options described in the
last sentence of the purpose paragraph of this Plan document set
forth above.
SECTION 12
Application of Funds
The proceeds received by the Corporation for the sale of
the Common Stock pursuant to exercise of stock options shall be
used for general corporate purposes.
SECTION 13
Reservation of the Stock
The grant of stock options to employees hereunder shall not
be construed to constitute the establishment of a trust of the
Common Stock issuable pursuant to such stock options, and no
particular Common Stock shall be identified as optioned and
reserved for employees hereunder. The Corporation shall be
deemed to have complied with the terms of the Plan if, at the
time of issuance and delivery pursuant to the exercise of a
stock option, it has a sufficient number of shares of the Common
Stock authorized and unissued or in its treasury which may then
be appropriated and issued for purposes of the Plan,
irrespective of the date when such Common Stock was authorized.
SECTION 14
Governing Law
Except to the extent pre-empted by federal law, the Plan
and all determinations and actions taken pursuant thereto shall
be governed by the domestic internal laws of the Commonwealth of
Pennsylvania and construed in accordance therewith.
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