Exhibit 99.3
HARLEYSVILLE SAVINGS BANK
1995 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I - ESTABLISHMENT OF PLAN
Harleysville Savings Bank ("Bank") hereby establishes this 1995
Employee Stock Purchase Plan (the "Plan") on the terms and conditions
hereinafter set forth. The Bank intends that this Plan shall qualify as an
"employee stock purchase plan" under section 423 of the Internal Revenue Code of
1986 (the "Code") (including any future amendments or replacements of such
section), and the Plan shall be so construed. Any term not expressly defined in
the Plan but defined for purposes of section 423 of the Code shall have the same
definition herein.
ARTICLE II - PURPOSE
The Plan is established to provide eligible employees of the Bank and
any current or future parent and/or subsidiary corporation(s) of the Bank
(collectively referred to as the "Bank") with an opportunity through payroll
deductions to acquire a proprietary interest in the Bank by the purchase of
Common Stock of the Bank. For purposes of this Plan, a parent corporation and a
subsidiary corporation shall be as defined in sections 425(e) and 425(f) of the
Code. Because a participant in the Plan (a "Participant") may withdraw the
Participant's accumulated payroll deductions and terminate participation in the
Plan at any time during an Offering Period as defined below, the Participant is,
in effect, given an option which may or may not be exercised during any Offering
Period.
ARTICLE III - SHARES SUBJECT TO THE PLAN
The number of shares which may be issued under this Plan shall be
31,500 (the "Shares"); and such Shares may be authorized but unissued shares of
Common Stock or shares of Common Stock reacquired by the Bank from stockholders
of the Bank in public or private transactions. In the event that any option
granted under the Plan (an "Option") for any reason expires or is terminated,
the Shares allocable to the unexercised portion of such Option may again be the
subject of an Option.
ARTICLE IV - ADMINISTRATION
The Plan shall be administered by a duly appointed committee of the
Board of directors of the Bank having such powers as shall be specified by the
Board ("Committee"). All questions of interpretation of the Plan or of any
Options shall be determined by the Committee and shall be final and binding upon
all persons having an interest in the Plan and/or any Option, unless otherwise
determined by the Board. Subject to the provisions of the Plan, the Board shall
determine all of the relevant terms and conditions of Options granted pursuant
to the Plan; provided, however, that all Participants granted Options pursuant
to the Plan shall have the same rights and privileges within the meaning of
section 423(b)(5) of the Code. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan
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or any Option granted under it. All expenses incurred in connection with the
administration of the Plan shall be held by the Bank.
ARTICLE V - ELIGIBILITY
Any employee of the Bank is eligible to participate in the Plan,
provided that employees who own or hold options to purchase or who, as a result
of participation in this Plan, would own or hold options to purchase stock of
the Bank possessing five percent (5%) or more of the total combined voting power
or value of all classes of stock of the Bank within the meaning of section
423(b)(3) of the Code shall not be eligible to participate in the Plan.
ARTICLE VI - OFFERING DATES
(a) Individual Offering Periods. The Committee may establish up to two
Offering Periods during which payroll deductions will be accumulated under the
Plan during any calendar year, provided, however, that there may be only one
Offering Period outstanding at any one time. The Committee shall announce an
Offering Period by taking actions reasonably expected to notify all employees of
the Offering Period. Each Offering Period shall include only regular paydays
falling within it.
(b) Governmental Approval; Stockholder Approval. Notwithstanding any
other provision to the contrary, any Option granted pursuant to the Plan shall
be subject, in addition to the requirements specified in Article XX, to (i)
obtaining all necessary governmental approvals and/or qualifications of the sale
and/or issuance of the Options and/or Shares, and (ii) in the case of Options
relating to an Offering Period after an amendment to the Plan, obtaining any
necessary approval of the stockholders of the Bank required by Article XIX.
ARTICLE VII - PARTICIPATION IN THE PLAN
(a) Initial Participation. An eligible employee shall become a
Participant in an Offering Period after satisfying the eligibility requirements
by delivering to the Bank's payroll office a subscription agreement authorizing
payroll deductions not less than ten (10) business days prior to such Offering
Period. An eligible employee who does not deliver a subscription agreement to
the Bank's payroll office ten (10) business days prior to an Offering Period
after becoming eligible to participate in the Plan shall not participate in the
Plan for that Offering Period or for any subsequent Offering Period unless such
employee subsequently enrolls in the Plan by filing the subscription agreement
with the Bank at least ten (10) business days prior to a subsequent Offering
Period.
(b) Continued Participation. A Participant shall automatically
participate in each successive Offering Period until such time as such
Participant withdraws from the Plan pursuant to Article XII. A Participant is
not required to file any additional subscription agreements for subsequent
Offering Periods in order to continue participation in the Plan. A Participant
may not concurrently participate in more than one Offering Period.
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ARTICLE VIII - PURCHASE PRICE
(a) Purchase Price. The purchase price at which Shares shall be sold in
any Offering Period under the Plan shall be set by the Committee; provided,
however, that the purchase price shall not be less than eighty-five percent
(85%) of the lesser of (a) the fair market value of the Shares on the first
business day in the Offering Period, or (b) the fair market value of the Shares
on the last business day of such Offering Period. Unless otherwise provided by
the Committee prior to the commencement of an Offering Period, the purchase
price for the Offering Period shall be eighty-five percent (85%) of the lesser
of (a) the fair market value of the Shares, as determined by the Board, on the
first business day in the Offering Period or (b) the fair market value of the
Shares, as determined by the Board, on the last business day of such Offering
Period.
(b) Fair Market Value. The fair market value of a Share shall be the
closing sale price on the date in question of a share of Common Stock on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934 on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with respect to a
share of such stock on the date in question on the National Association of
Securities Dealers Automated Quotation System or any system then in use, or if
no such quotations are available, the fair market value on the date in question
of a Share shall be as determined by the Committee in good faith.
ARTICLE IX - PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
(a) Accumulation of Payroll Deductions. The purchase price of the
Shares shall be accumulated by payroll deductions over the Offering Period.
Deductions made from the Participant's pay on each payday during the Offering
Period shall not be less than two percent (2%) nor more than ten percent (10%)
of the Participant's total compensation for that pay period. Total compensation
means total taxable compensation paid to an employee and reflected on such
employee's Internal Revenue Service Form W-2, as prepared by the Bank, including
salary, commissions, bonuses, overtime pay, shift differentials, vacation pay
and holiday pay, and shall also include any contributions made by the Bank on
behalf of an employee pursuant to a salary deferral agreement pursuant to Code
Section 401 and/or Code Section 125. Payroll deductions shall commence on the
first payday during the Offering Period and shall continue to the end of the
Offering Period unless sooner altered or terminated as provided in the Plan.
(b) Change in Payroll Deduction Rate. A Participant may decrease (but
not increase) the rate of payroll deductions during an Offering Period by filing
with the Bank a new authorization for payroll deductions, in which case the new
rate shall become effective within fifteen (15) business days after the Bank's
receipt of the authorization. Such change in the rate of payroll deductions may
be made at any time during an Offering Period, but not more than one change may
be made in any Offering Period. A Participant may increase or decrease the rate
of payroll deductions for any subsequent Offering Period by filing with the Bank
a new authorization for payroll deductions not less than ten (10) business days
prior to such subsequent Offering Period.
(c) Participant Accounts. Individual accounts shall be maintained for
each Participant in the Plan. All payroll deductions made for a Participant
shall be credited to the Participant's account under the Plan and shall be
deposited with the general funds of the Bank. Interest shall be paid on, and
added to, such amounts at the same rate and in the same manner as interest is
paid on
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a regular passbook savings account with the Bank. All payroll deductions
received or held by the Bank may be used by the Bank for any corporate purpose.
ARTICLE X - PURCHASE OF SHARES
(a) Purchase. On the last business day of an Offering Period, a
Participant shall automatically purchase, subject to the limitations in Article
X(b) and X(c) below, that number of whole Shares that can be acquired based on
funds credited to the Participant's account pursuant to Article IX(c) at the
purchase price established for the Offering Period pursuant to Article VIII. Any
cash balance remaining in a Participant's account shall be credited to the
Participant's account for a succeeding Offering Period, provided that such
succeeding period commences no later than thirty (30) days after the current
Offering Period, unless the Participant elects to have such balance refunded as
soon as practicable after the last day of the Offering Period. No shares shall
be purchased on behalf of a Participant whose participation in the Plan has
terminated prior to the last day of the Offering Period.
(b) Share Limitation. The maximum number of Shares which a Participant
may purchase in each Offering Period shall be that number of whole Shares
arrived at by dividing the total amount of the Participant's expected payroll
deductions during the Offering Period (determined by multiplying the payroll
deductions withheld during the first pay period of the Offering Period by the
number of pay periods during the Offering Period) by the purchase price of the
shares as shall be set by the Committee pursuant to Article VIII hereof.
(c) Fair Market Value Limitation. No Participant shall be granted an
Option which permits his or her rights to purchase shares of Common Stock under
this Plan and any similar plans of the Bank to accrue at a rate which exceeds
$25,000 of fair market value of such shares (determined at the time such Option
is granted) for each calendar year in which such Option is outstanding at any
time, as determined in accordance with section 423(b)(8) of the Code.
(d) Rights as a Stockholder and Employee. A Participant shall have no
rights as a stockholder by virtue of the Participant's participation in the Plan
until the date of the issuance of a stock certificate(s) for the Shares being
purchased pursuant to the exercise of the Participant's Option. Unless otherwise
determined by the Board, no adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to the date
such stock certificate(s) are issued. Nothing herein shall confer upon a
Participant any right to continue in the employ of the Bank or interfere in any
way with any right of the Bank to terminate the Participant's employment at any
time.
ARTICLE XI - LEGENDS
Each certificate representing any Shares issued hereunder shall have
endorsed thereon such legends as may be designated by the Bank.
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ARTICLE XII - WITHDRAWAL
(a) Notice of Withdrawal. A Participant may withdraw from the Plan by
signing and delivering to the Bank's payroll office a written notice of
withdrawal on a form provided by the Bank for such purpose. Such withdrawal may
be elected at any time prior to the end of an Offering Period.
(b) Return of Payroll Deductions; Subsequent Participant. Upon
withdrawal from the Plan, the withdrawn Participant's accumulated payroll
deductions shall be returned to the Participant and the Participant's interest
in the Plan shall terminate. In the event a Participant voluntarily elects to
withdraw from the Plan, the Participant may not resume participation in the Plan
during the same Offering Period, but may participate in any succeeding Offering
Period under the Plan by filing a new authorization for payroll deductions in
the same manner as set forth above for initial participation in the Plan.
ARTICLE XIII - TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the Bank for any reason,
including retirement or death or the failure of a Participant to remain an
eligible employee, shall terminate the Participant's participation in the Plan
immediately. In such event, the payroll deductions credited to the Participant's
account shall be returned to the Participant or, in the case of the
Participant's death, to the Participant's legal representative, and all rights
under the Plan shall terminate. A Participant whose participation has been so
terminated may again become eligible to participate in the Plan by again
satisfying the requirements of Article V.
ARTICLE XIV - REPAYMENT OF PAYROLL DEDUCTIONS WITH INTEREST
In the event a Participant's interest in the Plan is terminated, the
Bank shall promptly deliver to the Participant the payroll deductions credited
to the Participant's account, with interest as provided herein.
ARTICLE XV - CAPITAL CHANGES
In the event of changes in the Common Stock of the Bank due to stock
dividends or other changes in capitalization, or in the event of any merger,
sale or any other reorganization, appropriate adjustments shall be made by the
Bank in the Shares subject to purchase and in the purchase price per share.
ARTICLE XVI- NONASSIGNABILITY
Only the Participant may elect to exercise the Participant's Option by
continuing participation in the Plan, and no rights or accumulated payroll
deductions of any Participant under the Plan may be pledged, assigned or
transferred for any reason and any such attempt may be treated by the Bank as an
election by the Participant to withdraw from the Plan.
ARTICLE XVII - REPORTS
Each Participant shall receive promptly after the last day of each
Offering Period a report of the Participant's account setting forth the total
payroll deductions accumulated, the number of Shares
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purchased and the remaining cash balance, if any, to be refunded or applied to a
succeeding Offering Period pursuant to Article X(a).
ARTICLE XVIII - PLAN TERM
This Plan will continue until terminated by the Board or until all of
the Shares reserved for issuance under the Plan have been issued, whichever
shall first occur.
ARTICLE XIX - AMENDMENT OR TERMINATION OF THE PLAN
The Board may at any time amend or terminate the Plan, except that such
termination cannot affect Options previously granted under the Plan, nor may any
amendment make any change in an Option previously granted which would adversely
affect the right of any Participant, nor may any amendment be made without
approval of the stockholders of the Bank within twelve (12) months of the
adoption of such amendment if such amendment would authorize the sale of more
shares than are authorized for issuance under the Plan or would change the
designation of corporations whose employees may be offered Options under the
Plan. Notwithstanding any other provision of the Plan to the contrary, in the
event of an amendment to the Plan which affects the rights or privileges of
Options to be offered under the Plan, each Participant with an outstanding
Option shall have the right to exercise such outstanding Option on the effective
date of the amendment and to participate in the Plan for the remaining term of
such outstanding Option pursuant to the terms and conditions of the Plan as
amended. If in accordance with the preceding sentence a Participant elects to
exercise such outstanding Option and to commence participation in the Plan as
amended on the effective date of such amendment, the Participant shall be deemed
to have received a new Option on such effective date.
ARTICLE XX - APPROVAL OF STOCKHOLDERS
This Plan shall be subject to approval by the holders of the Common
Stock of the Bank at a duly called meeting of stockholders, which approval must
occur within the period ending twelve months after the date on which this Plan
was adopted by the Board of Directors. In the event that the approval of the
stockholders is not received before the last day of the first Offering Period,
any and all Options granted on the first business day of the first Offering
Period shall be rescinded, and the Bank shall promptly refund the balance of
each participating Eligible Employee's deductions, with interest as provided
herein.
ARTICLE XXI - GOVERNING LAW
To the extent not governed by federal law, this Plan shall be construed
under the laws of the
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