As filed with the Securities and Exchange Commission on June 4, 1999
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HARLEYSVILLE NATIONAL CORPORATION
(Exact Name of Registrant As Specified In Its Charter)
Pennsylvania 23-2210237
------------ --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
483 Main Street
P. O. Box 195
Harleysville, Pennsylvania 19438
-------------------------- -----
(Address of principal executive offices) (Zip Code)
HARLEYSVILLE NATIONAL CORPORATION 1998 STOCK INCENTIVE PLAN
(Full title of the plan)
Walter E. Daller, Jr. Copies To:
President and Chief Executive Officer Nicholas Bybel, Jr., Esquire
HARLEYSVILLE NATIONAL CORPORATION SHUMAKER WILLIAMS, P.C.
483 Main Street Post Office Box 88
Harleysville, Pennsylvania 19438 Harrisburg, Pennsylvania 17108
(215) 256-8851 (717) 763-1121
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Class Amount Proposed Maximum
of Securities to to be Offering Price
be Registered Registered(1) Per Share(2)
- ------------------------------------------------------------------------------
<S> <C> <C>
Common Stock,
$1.00 Par Value 575,000 $34.875
- ------------------------------------------------------------------------------
Title of Each Class Proposed Maximum Amount of
of Securities to Aggregate Registration
be Registered Offering Price(2) Fee
- ------------------------------------------------------------------------------
<S> <C> <C>
Common Stock,
$1.00 Par Value $20,053,125 $5,574.77
- ------------------------------------------------------------------------------
<FN>
(1) Based on the maximum number of shares of Harleysville National Corporation
common stock, par value $1.00 per share, ("common stock") authorized for
issuance under the plan set forth above. An indeterminate number of shares
of common stock as may become issuable by reason of the anti-dilution
provisions of the plans are also hereby registered.
(2) Estimated pursuant to Rule 457(c) and (h)(1) solely for the purpose of
calculating the amount of the registration fee based upon the average of
the high and low prices of the common stock on June 3, 1999, with respect
to the shares of common stock issuable under the plans.
</FN>
</TABLE>
Page 1 of 29 Sequentially Numbered Pages
Index to Exhibits Found on Page 13
<PAGE>
TO PARTICIPANTS IN THE
HARLEYSVILLE NATIONAL CORPORATION
1998 STOCK INCENTIVE PLAN
Harleysville National Corporation files this Registration Statement on Form
S-8 to register with the Securities and Exchange Commission the Harleysville
common stock issuable pursuant to the Harleysville National Corporation 1998
Stock Incentive Plan. This prospectus is part of that Registration Statement and
consists of certain documents and explanatory memoranda regarding the plan. As
allowed by Commission rules, this prospectus does not contain all the
information you can find in the Registration Statement or the exhibits to the
Registration Statement. Some of the information is not physically included in
this prospectus but rather is "incorporated by reference" to documents that
Harleysville filed with the Commission. The information that is incorporated by
reference consists of the following: (File No. 0-15237)
(a) Harleysville's Annual Report on Form 10-K for the year ended December
31, 1998, filed with the Commission on March 29, 1999;
(b) Harleysville's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, filed with the Commission on May 14, 1999;
(c) Harleysville's Current Report on Form 8-K filed with the Commission on
January 22, 1999;
(d) Harleysville's Current Report on Form 8-K filed with the Commission on
March 25, 1999; and
(e) description of Harleysville's common stock that appears in
Harleysville's prospectus filed with the Commission on November 12,
1998, which forms a part of Harleysville's Registration Statement No.
333-67201 on Form S-4, and as amended on November 20, 1998 and
December 7, 1998, and Harleysville's Report on Form 10-C, filed with
the Commission on March 1, 1996.
All documents filed by Harleysville under Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 after the date of this prospectus are
also incorporated by reference into this prospectus and deemed a part of this
prospectus from the date of filing.
Any statement contained in a document that is incorporated by reference
will be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently
filed with the Commission and incorporated by reference) modifies or is contrary
to that previous statement.
<PAGE>
Documents incorporated by reference are available without charge to each
participant in the plan who requests, a copy of any or all of the documents. In
addition, you may obtain all documentation relating to the plan that is required
to be delivered to participants pursuant to the rules adopted under the
Securities Act of 1933 from Harleysville. Requests for copies should be
addressed verbally or in writing to:
Harleysville National Corporation
Attention: Walter E. Daller, Jr.
President and Chief Executive Officer
483 Main Street
P. O. Box 195
Harleysville, Pennsylvania 19438
(215) 256-8851
June 4, 1999
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Harleysville incorporates following documents filed by Harleysville with
the Commission by reference in this Registration Statement:
(a) Harleysville's Annual Report on Form 10-K for the year ended December
31, 1998, filed with the Commission on March 29, 1999;
(b) Harleysville's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, filed with the Commission on May 14, 1999;
(c) Harleysville's Current Report on Form 8-K filed with the Commission on
January 22, 1999;
(d) Harleysville's Current Report on Form 8-K filed with the Commission on
March 25, 1999; and
(e) description of Harleysville's common stock that appears in
Harleysville's prospectus filed with the Commission on November 12,
1998, which forms a part of Harleysville's Registration Statement No.
333-67201 on Form S-4, and as amended on November 20, 1998 and
December 7, 1998, and Harleysville's Report on Form 10-C, filed with
the Commission on March 1, 1996.
All documents filed by Harleysville under Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 after the date of this prospectus are
also incorporated by reference into this prospectus and deemed a part of this
prospectus from the date of filing.
Any statement contained in a document that is incorporated by reference
will be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently
filed with the Commission and incorporated by reference) modifies or is contrary
to that previous statement.
The document(s) containing the information specified in Items 1 and 2 of
Part I of this Form S-8 that will be sent or given to the plan participants, as
specified in Rule 428(b)(1) and in accordance with the instructions to Part I of
Form S-8, are not filed with the Securities and Exchange Commission as a part of
this Registration Statement.
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<PAGE>
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The general corporate law of the Commonwealth of Pennsylvania, as
applicable to Harleysville, together with Harleysville's Bylaws, as amended,
provides Harleysville's officers and directors with a broad range of limitation
from liability and indemnification for actions and inactions in connection with
the performance of their duties. Generally, Article 23 of Harleysville's Bylaws,
as amended, provides for indemnification of directors and officers. Aside from
matters involving criminal statutes or tax laws, the Bylaws provide that the
directors are not personally liable for monetary damages for any action or
inaction taken unless the director has breached or failed to perform his or her
duties of office and such breach or failure constitutes self-dealing, willful
misconduct or recklessness. Harleysville's officers and directors are entitled
to be indemnified if they are named as a party to any type of proceeding as a
result of actions or inactions taken while in the course of their association
with Harleysville provided that such action or inaction was in good faith and in
a manner reasonably believed to be in, or not opposed to, the best interests of
Harleysville. Officers and directors of Harleysville will be presumed to be
entitled to this indemnification absent breaches of fiduciary duty, lack of good
faith or self-dealing and will be entitled to be indemnified unless their
conduct is determined by a court to have constituted willful misconduct or
recklessness.
The specific provisions of Pennsylvania corporate law that provide for
indemnification of directors and officers are set forth herein. Subchapter D of
Chapter 17 of the Pennsylvania Business Corporation Law of 1988, as amended (the
BCL), (15 Pa. C.S.A. Sections 1741-1750) provides that a business corporation
shall have the power under certain circumstances to indemnify directors,
officers, employees and agents against certain expenses incurred by them in
connection with any threatened, pending or completed action, suit or proceeding.
Section 1721 of the BCL (relating to the Board of Directors) declares that
unless otherwise provided by statute or in a by-law adopted by the shareholders,
all powers enumerated in Section 1502 (relating to general powers) and elsewhere
in the BCL or otherwise vested by law in a business corporation shall be
exercised by or under the authority of, and the business and affairs of every
business corporation shall be managed under the direction of, a board of
directors. If any such provision is made in the by-laws, the powers and duties
conferred or imposed upon the board of directors under the BCL shall be
exercised or performed to such extent and by such person or persons as shall be
provided in the by-laws.
Section 1712 of the BCL provides that a director shall stand in a fiduciary
relation to the corporation and shall perform his duties as a director,
including his duties as a member of any committee of the board upon which he may
serve, in good faith, in a manner he reasonably believes to be in the best
interests of the corporation and with such care, including reasonable inquiry,
skill and diligence, as a person of ordinary prudence would use under similar
circumstances. In performing his duties, a director shall be entitled to rely in
good faith on information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by any
of the following:
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<PAGE>
(1) one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters
presented;
(2) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within the professional or expert
competence of such person; or
(3) a committee of the board upon which he does not serve, duly designated
in accordance with law, as to matters within its designated authority,
which committee the director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith, if he has
knowledge concerning the matter in question that would cause his reliance to be
unwarranted.
Section 1716 also states that in discharging the duties of their respective
positions, the board of directors, committees of the board and individual
directors may, in considering the best interests of the corporation, consider
the effects of any action upon employees, upon suppliers and customers of the
corporation and upon communities in which offices or other establishments of the
corporation are located, and all other pertinent factors. The consideration of
those factors shall not constitute a violation of Section 1712. In addition,
absent breach of fiduciary duty, lack of good faith or self-dealing, actions
taken as a director or any failure to take any action shall be presumed to be in
the best interests of the corporation.
Moreover, Section 1713 addresses the personal liability of directors and
states that if a by-law adopted by the shareholders so provides, a director
shall not be personally liable, as such, for monetary damages for any action
taken, or any failure to take any action, unless:
(1) the director has breached or failed to perform the duties of his
office under this section; and
(2) the breach or failure to perform constitutes self-dealing, willful
misconduct or recklessness.
The provisions discussed above shall not apply to:
(1) the responsibility or liability of a director pursuant to any criminal
statute; or
(2) the liability of a director for the payment of taxes pursuant to
local, state or federal law.
Finally, Section 1714 states that a director of a corporation who is
present at a meeting of its board of directors, or of a committee of the board,
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his dissent is entered in the minutes of the
meeting or unless he files his written dissent to the action with the secretary
of the meeting before the adjournment thereof or transmits the dissent in
writing to the secretary of the corporation immediately after the adjournment of
the meeting. The right to dissent shall not apply to a director who voted in
favor of the action. Nothing in this Section 1721 shall bar a director from
asserting that minutes of the meeting incorrectly omitted his dissent if,
promptly upon receipt of a copy of such minutes, he notified the secretary, in
writing, of the asserted omission or inaccuracy.
Section 1741 of the BCL (relating to third party actions) provides that
unless otherwise restricted in its by-laws, a business corporation shall have
the power to indemnify any person who was or is a
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<PAGE>
party, or is threatened to be made a party to any threatened, pending or
completed action or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that such person is or was a representative of the
corporation, or is or was serving at the request of the corporation as a
representative of another domestic or foreign corporation for profit or
not-for-profit, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
the action or proceeding if such person acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action or
proceeding by judgment, order, settlement or conviction or upon a plea of nolo
contendere or its equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner that he reasonably believed to
be in, or not opposed to, the best interests of the corporation, and with
respect to any criminal proceeding, had reasonable cause to believe that his
conduct was not unlawful.
Section 1742 of the BCL (relating to derivative actions) provides that
unless otherwise restricted in its by-laws, a business corporation shall have
the power to indemnify any person who was or is a party, or is threatened to be
made a party, to any threatened, pending or completed action by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
such person is or was a representative of the corporation, or is or was serving
at the request of the corporation as a representative of another domestic or
foreign corporation for profit or not-for-profit, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with the defense or
settlement of the action if such person acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation. Indemnification shall not be made under this section in respect of
any claim, issue or matter as to which such person has been adjudged to be
liable to the corporation unless, and only to the extent that, the court of
common pleas of the judicial district embracing the county in which the
registered office of the corporation is located or the court in which such
action was brought determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court of
common pleas or such other court shall deem proper.
Section 1743 of the BCL (relating to mandatory indemnification) provides
for mandatory indemnification of directors and officers such that to the extent
that a representative of the business corporation has been successful on the
merits or otherwise in defense of any action or proceeding referred to in
Sections 1741 (relating to third party actions) or 1742 (relating to derivative
actions), or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
Section 1744 of the BCL (relating to procedure for effecting
indemnification) provides the procedure for effecting indemnification. Under
this section unless ordered by a court, any indemnification under Section 1741
(relating to third party actions) or 1742 (relating to derivative actions) shall
be made by the business corporation only as authorized in the specific case upon
a determination that indemnification of the representative is proper in the
circumstances because such person has met the applicable standard of conduct set
forth in those sections. The determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the action or proceeding;
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<PAGE>
(2) if such quorum is not obtainable, or, if obtainable and a majority
vote of a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or
(3) by the shareholders.
Section 1745 of the BCL (relating to advancing expenses) provides that
expenses (including attorneys' fees) incurred in defending any action or
proceeding referred to above may be paid by the business corporation in advance
of the final disposition of the action or proceeding upon receipt of an
undertaking by or on behalf of the representative to repay such amount if it is
ultimately determined that such person is not entitled to be indemnified by the
corporation as authorized by the BCL or otherwise.
Section 1746 of the BCL (relating to supplementary coverage) provides that
the indemnification and advancement of expenses provided by or granted pursuant
to the other sections of the BCL shall not be deemed exclusive of any other
rights to which a person seeking indemnification or advancement of expenses may
be entitled under any other by-law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
Section 1746 of the BCL also provides that indemnification referred to
above shall not be made in any case where the act or failure to act giving rise
to the claim for indemnification is determined by a court to have constituted
willful misconduct or recklessness.
Section 1746 further declares that indemnification under any by-law,
agreement, vote of shareholders or directors or otherwise, may be granted for
any action taken or any failure to take any action and may be made whether or
not the corporation would have the power to indemnify the person under any other
provision of law except as provided in this section and whether or not the
indemnified liability arises or arose from any threatened, pending or completed
action by or in the right of the corporation. Such indemnification is declared
to be consistent with the public policy of the Commonwealth of Pennsylvania.
Section 1747 of the BCL (relating to the power to purchase insurance)
provides that unless otherwise restricted in its by-laws, a business corporation
shall have power to purchase and maintain insurance on behalf of any person who
is or was a representative of the corporation or is or was serving at the
request of the corporation as a representative of another domestic or foreign
corporation for profit or not-for-profit, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against that liability under
the provisions of the BCL. Such insurance is declared to be consistent with the
public policy of the Commonwealth of Pennsylvania.
Section 1750 of the BCL (relating to duration and extent of coverage)
declares that the indemnification and advancement of expenses provided by, or
granted pursuant to, the BCL shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a representative of the
corporation and shall inure to the benefit of the heirs and personal
representative of that person.
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 otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore, unenforceable.
II-5
<PAGE>
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit No.
4.1 Articles of Incorporation of Harleysville National Corporation, as
amended. (Incorporated by reference to Exhibit 4A to Registrant's
Registration Statement No. 333-17813 on Form S-8 filed with the
Commission on December 13, 1996.)
4.2 Bylaws of Harleysville National Corporation, as amended. (Incorporated
by reference to Exhibit 4B to Registrant's Registration Statement No.
333-17813 on Form S-8 filed with the Commission on December 13, 1996.)
4.3 Harleysville National Corporation 1998 Stock Incentive Plan.
5 Opinion of Shumaker Williams, P.C.
23.1 Consent of Grant Thornton LLP.
23.2 Consent of Shumaker Williams, P.C. (Contained at Exhibit 5 of this
Registration Statement.)
24 Power of Attorney of Directors and Officers (Included on Signature
Pages.)
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 Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and
(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) shall not
apply if the information required to be included in a
post-effective amendment
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<PAGE>
by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each 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 the 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 Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934,
and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities, other than the payment of 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 as 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 as
expressed in the Securities Act of 1933 and will be governed by
the final adjudication of such issue.
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<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 Harleysville, Commonwealth of Pennsylvania, on May
28, 1999.
HARLEYSVILLE NATIONAL CORPORATION
/s/ Walter E. Daller, Jr.
By:_______________________________________
Walter E. Daller, Jr.
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Walter E. Daller, Jr. and Vernon L. Hunsberger,
and each of them, his or her true and lawful attorney-in-fact, as agent with
full power of substitution and resubstitution for him or her and in his or her
name, place and stead, in any and all capacity, to sign any or all amendments to
this Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully and to all intents and purposes
as they might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully 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 by the following person in the capacities
and on the date indicated.
Name Capacity Date
/s/ Walter E. Daller, Jr.
________________________ Chairman of the Board, President May 28, 1999
Walter E. Daller, Jr. and Chief Executive Officer
(Principal Executive Officer)
/s/ Vernon L. Hunsberger
________________________ Treasurer, Senior Vice President May 28, 1999
Vernon L. Hunsberger and Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
________________________ Director May ______, 1999
LeeAnn Bergey
/s/ Martin E. Fossler
_______________________ Director May 28, 1999
Martin E. Fossler
/s/ Harold A. Herr
________________________ Director May 26, 1999
Harold A. Herr
/s/ Thomas S. McCready
________________________ Director May 21, 1999
Thomas S. McCready
/s/ Henry M. Pollak
________________________ Director June 2, 1999
Henry M. Pollak
/s/ Palmer E. Retzlaff
________________________ Director May 25, 1999
Palmer E. Retzlaff
/s/ Walter F. Vilsmeier
________________________ Director May 24, 1999
Walter F. Vilsmeier
/s/ William M. Yocum
________________________ Director May 28, 1999
William M. Yocum
<PAGE>
Exhibit Index
Page Number
In Sequential
Exhibit Numbering
No. System
4.1 Articles of Incorporation of Harleysville National *
Corporation, as amended.(Incorporated by reference
to Exhibit 4A to Registrant's Registration
Statement No. 333-17813 on Form S-8 filed with the
Commission on December 13, 1996.)
4.2 Bylaws of Harleysville National Corporation, as amended. *
(Incorporated by reference to Exhibit 4B to
Registrant's Registration Statement No.333-17813 on
Form S-8 filed with the Commission on December 13, 1996.)
4.3 Harleysville National Corporation 1998 Stock Incentive Plan. 14
5 Opinion of Shumaker Williams, P.C. 25
23.1 Consent of Grant Thornton LLP. 28
23.2 Consent of Shumaker Williams, P.C. (Contained at
Exhibit 5 of this Registration Statement.)
24 Power of Attorney of Directors and Officers.
(Included on Signature Pages.)
* Incorporated by reference.
EXHIBIT 4.3
HARLEYSVILLE NATIONAL CORPORATION
1998 STOCK INCENTIVE PLAN
<PAGE>
HARLEYSVILLE NATIONAL CORPORATION
1998 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Stock Incentive Plan (the "Plan") is to
advance the development, growth and financial condition of Harleysville
National Corporation (the "Corporation") and each subsidiary thereof, as
defined in Section 424 of the Internal Revenue Code of 1986, as amended
(the "Code"), by providing incentives through participation in the
appreciation of the common stock of the Corporation to secure, retain and
motivate personnel who may be responsible for the operation and for
management of the affairs of the Corporation and any subsidiary now or
hereafter existing ("Subsidiary").
2. Term. The Plan shall become effective as of the date it is adopted by the
Corporation's Board of Directors (the "Board"), and shall be presented for
approval at the next meeting of the Corporation's shareholders. Any and all
options and rights awarded under the Plan (the "Awards") before it is
approved by the Corporation's shareholders shall be conditioned upon, and
may not be exercised before, receipt of shareholder approval, and shall
lapse upon failure to receive such approval. Unless previously terminated
by the Board, the Plan shall terminate on, and no options shall be granted
after the tenth anniversary of the effective date of the Plan.
3. Stock. Shares of the Corporation's common stock (the "Stock"), that may be
issued under the Plan shall not exceed, in the aggregate, 575,000 shares,
as may be adjusted pursuant to Section 19 hereof. Shares may be either
authorized and unissued shares, or authorized shares, issued by and
subsequently reacquired by the Corporation as treasury stock. Under no
circumstances shall any fractional shares be awarded under the Plan. Except
as may be otherwise provided in the Plan, any Stock subject to an Award
that, for any reason, lapses or terminates prior to exercise, shall again
become available for grant under the Plan. While the Plan is in effect, the
Corporation shall reserve and keep available the number of shares of Stock
needed to satisfy the requirements of the Plan. The Corporation shall apply
for any requisite governmental authority to issue shares under the Plan.
The Corporation's failure to obtain any such governmental authority, deemed
necessary by the Corporation's legal counsel for the lawful issuance and
sale of Stock under the Plan, shall relieve the Corporation of any duty, or
liability for the failure to issue or sell the Stock.
4. Administration. The ability to control and manage the operation and
administration of the Plan shall be vested in the Board or in a committee
of two or more members of the Board, selected by the Board (the
"Committee"). The Committee shall have the authority and discretion to
interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of
any agreements made pursuant to the Plan, and to make any and all
determinations that may be necessary or advisable for the administration of
the Plan. Any interpretation of the Plan by the Committee and any decision
made by the Committee under the Plan is final and binding.
The Committee shall be responsible and shall have full, absolute and final power
of authority to determine what, to whom, when and under what facts and
circumstances Awards shall be made, and the form, number, terms, conditions and
duration thereof, including but not limited to when
1
<PAGE>
exercisable, the number of shares of Stock subject thereto, and the stock option
exercise prices. The Committee shall make all other determinations and
decisions, take all actions and do all things necessary or appropriate in and
for the administration of the Plan. No member of the Committee or of the Board
shall be liable for any decision, determination or action made or taken in good
faith by such person under or with respect to the Plan or its administration.
5. Awards. Awards may be made under the Plan in the form of: (a) "Qualified
Options" to purchase Stock, which are intended to qualify for certain tax
treatment as incentive stock options under Sections 421 and 422 of the
Code, (b) "Non-Qualified Options" to purchase Stock, which are not intended
to qualify under Sections 421 through 424 of the Code, (c) Stock
Appreciation Rights ("SARs"), or (d) "Restricted Stock". More than one
Award may be granted to an eligible person, and the grant of any Award
shall not prohibit the grant of another Award, either to the same person or
otherwise, or impose any obligation to exercise on the participant. All
Awards and the terms and conditions thereof shall be set forth in written
agreements, in such form and content as approved by the Committee from time
to time, and shall be subject to the provisions of the Plan whether or not
contained in such agreements. Multiple Awards for a particular person may
be set forth in a single written agreement or in multiple agreements, as
determined by the Committee, but in all cases each agreement for one or
more Awards shall identify each of the Awards thereby represented as a
Qualified Option, Non-Qualified Option or Stock Appreciation Right, as the
case may be.
6. Eligibility. Persons eligible to receive Awards shall be those key officers
and other employees of the Corporation and each Subsidiary, as determined
by the Committee. A person's eligibility to receive an Award shall not
confer upon him or her any right to receive an Award. Except as otherwise
provided, a person's eligibility to receive, or actual receipt of an Award
under the Plan shall not limit or affect his or her benefits under or
eligibility to participate in any other incentive or benefit plan or
program of the Corporation or of its affiliates.
7. Qualified Options. In addition to other applicable provisions of the Plan,
all Qualified Options and Awards thereof shall be under and subject to the
following terms and conditions:
(a) The maximum number of shares of Stock that may be issued by options
intended to be Qualified Options shall be 575,000 shares.
(b) No Qualified Option shall be awarded more than ten (10) years after
the date the Plan is adopted by the Board or the date the Plan is
approved by the Corporation's shareholders, whichever is earlier;
(c) The time period during which any Qualified Option is exercisable, as
determined by the Committee, shall not commence before the expiration
of six (6) months or continue beyond the expiration of ten (10) years
after the date the Qualified Option is awarded;
(d) If a participant, who was awarded a Qualified Option, ceases to be
employed by the Corporation or any Subsidiary for any reason other
than his or her death, the Committee may permit the participant
thereafter to exercise the option during its remaining term for a
period of not more than three (3) months after cessation of employment
to the extent that the Qualified Option was then and remains
exercisable, unless such employment
2
<PAGE>
cessation was due to the participant's disability, as defined in
Section 22(e)(3) of the Code, in which case the three (3) month period
shall be twelve (12) months; if the participant dies while employed by
the Corporation or a Subsidiary, the Committee may permit the
participant's qualified personal representatives, or any persons who
acquire the Qualified Option pursuant to his or her Will or laws of
descent and distribution, to exercise the Qualified Option during its
remaining term for a period of not more than twelve (12) months after
the participant's death to the extent that the Qualified Option was
then and remains exercisable; the Committee may impose terms and
conditions upon and for the exercise of a Qualified Option after the
cessation of the participant's employment or his or her death;
(e) The purchase price of Stock subject to any Qualified Option shall not
be less than the Stock's fair market value at the time the Qualified
Option is awarded and shall not be less than the Stock's par value;
and
(f) Qualified Options may not be sold, transferred or assigned by the
participant except by will or the laws of descent and distribution.
8. Non-Qualified Options. In addition to other applicable provisions of the
Plan, all Non-Qualified Options and Awards thereof shall be under and
subject to the following terms and conditions:
(a) The time period during which any Non-Qualified Option is exercisable
shall not commence before the expiration of six (6) months or continue
beyond the expiration of ten (10) years after the date the
Non-Qualified Option is awarded;
(b) If a participant, who was awarded a Non-Qualified Option, ceases to be
eligible under the Plan, before lapse or full exercise of the option,
the Committee may permit the participant to exercise the option during
its remaining term, to the extent that the option was then and remains
exercisable, or for such time period and under such terms and
conditions as may be prescribed by the Committee;
(c) The purchase price of a share of Stock subject to any Non-Qualified
Option shall not be less than the Stock's par value; and
(d) Except as otherwise provided by the Committee, Non-Qualified Stock
Options granted under the Plan are not transferable except as
designated by the participant by Will and the laws of descent and
distribution.
9. Stock Appreciation Rights. In addition to other applicable provisions of
the Plan, all SARs and Awards thereof shall be under and subject to the
following terms and conditions:
(a) SARs may be granted either alone, or in connection with another
previously or contemporaneously granted Award (other than another SAR)
so as to operate in tandem therewith by having the exercise of one
affect the right to exercise the other, as and when the Committee may
determine; however, no SAR shall be awarded in connection with a
Qualified Option more than ten (10) years after the date the Plan is
adopted by the Board
3
<PAGE>
or the date the Plan is approved by the Corporation's stockholders,
whichever date is earlier;
(b) Each SAR shall entitle the participant to receive upon exercise of the
SAR all or a portion of the excess of (i) the fair market value at the
time of such exercise of a specified number of shares of Stock as
determined by the Committee, over (ii) a specified price as determined
by the Committee of such number of shares of Stock that, on a per
share basis, is not less than the Stock's fair market value at the
time the SAR is awarded, or if the SAR is connected with another
Award, such lesser percentage of the Stock purchase price thereunder
as may be determined by the Committee;
(c) Upon exercise of any SAR, the participant shall be paid either in cash
or in Stock, or in any combination thereof, as the Committee shall
determine; if such payment is to be made in Stock, the number of
shares thereof to be issued pursuant to the exercise shall be
determined by dividing the amount payable upon exercise by the Stock's
fair market value at the time of exercise;
(d) The time period during which any SAR is exercisable, as determined by
the Committee, shall not commence before the expiration of six (6)
months; however, no SAR connected with another Award shall be
exercisable beyond the last date that such other connected Award may
be exercised;
(e) If a participant holding a SAR, before its lapse or full exercise,
ceases to be eligible under the Plan, the Committee may permit the
participant thereafter to exercise such SAR during its remaining term,
to the extent that the SAR was then and remains exercisable, for such
time period and under such terms and conditions as may be prescribed
by the Committee;
(f) No SAR shall be awarded in connection with any Qualified Option unless
the SAR (i) lapses no later than the expiration date of such connected
Option, (ii) is for not more than the difference between the Stock
purchase price under such connected Option and the Stock's fair market
value at the time the SAR is exercised, (iii) is transferable only
when and as such connected Option is transferable and under the same
conditions, (iv) may be exercised only when such connected Option may
be exercised, and (v) may be exercised only when the Stock's fair
market value exceeds the Stock purchase price under such connected
Option.
10. Restricted Stock. In addition to other applicable provisions of the Plan,
all Restricted Stock and Awards thereof shall be under and subject to the
following terms and conditions:
(a) Restricted Stock shall consist of shares of Stock that may be acquired
by and issued to a participant at such time, for such or no purchase
price, and under and subject to such transfer, forfeiture and other
restrictions, conditions or terms as shall be determined by the
Committee, including but not limited to prohibitions against transfer,
substantial risks of forfeiture within the meaning of Section 83 of
the Code, and attainment of performance or other goals, objectives or
standards, all for or applicable to such time periods as determined by
the Committee;
4
<PAGE>
(b) Except as otherwise provided in the Plan or the Restricted Stock
Award, a participant holding shares of Restricted Stock shall have all
the rights as does a holder of Stock, including without limitation the
right to vote such shares and receive dividends with respect thereto;
however, during the time period of any restrictions, conditions or
terms applicable to such Restricted Stock, the shares thereof and the
right to vote the same and receive dividends thereon shall not be
sold, assigned, transferred, exchanged, pledged, hypothecated,
encumbered or otherwise disposed of except as permitted by the Plan or
the Restricted Stock Award;
(c) Each certificate issued for shares of Restricted Stock shall be
deposited with the Secretary of the Corporation, or the office
thereof, and shall bear a legend in substantially the following form
and content:
This Certificate and the shares of Stock hereby represented are
subject to the provisions of the Corporation's 1998 Stock
Incentive Plan and a certain agreement entered into between the
holder and the Corporation pursuant to the Plan. The release of
this Certificate and the shares of Stock hereby represented from
such provisions shall occur only as provided by the Plan and
agreement, a copy of which are on file in the office of the
Secretary of the Corporation.
Upon the lapse or satisfaction of the restrictions, conditions and
terms applicable to the Restricted Stock, a certificate for the shares
of Stock free of restrictions and without the legend shall be issued
to the participant;
(d) If a participant's employment with the Corporation or a Subsidiary
ceases for any reason prior to the lapse of the restrictions,
conditions or terms applicable to his or her Restricted Stock, all of
the participant's Restricted Stock still subject to unexpired
restrictions, conditions or terms shall be forfeited absolutely by the
participant to the Corporation without payment or delivery of any
consideration or other thing of value by the Corporation or its
affiliates, and thereupon and thereafter neither the participant nor
his or her heirs, personal or legal representatives, successors,
assigns, beneficiaries, or any claimants under the participant's Last
Will or laws of descent and distribution, shall have any rights or
claims to or interests in the forfeited Restricted Stock or any
certificates representing shares thereof, or claims against the
Corporation or its affiliates with respect thereto.
11. Exercise. Except as otherwise provided in the Plan, Awards may be exercised
in whole or in part by giving written notice thereof to the Secretary of
the Corporation, or his or her designee, identifying the Award to be
exercised, the number of shares of Stock with respect thereto, and other
information pertinent to exercise of the Award. The purchase price of the
shares of Stock with respect to which an Award is exercised shall be paid
with the written notice of exercise, either in cash or in securities of the
Corporation, including securities issuable hereunder, at its then current
fair market value, or in any combination thereof, as the Committee shall
determine. Funds received by the Corporation from the exercise of any Award
shall be used for its general corporate purposes.
5
<PAGE>
The number of shares of Stock subject to an Award shall be reduced by
the number of shares of Stock with respect to which the participant has
exercised rights under the Award. If a SAR is awarded in connection with
another Award, the number of shares of Stock that may be acquired by the
participant under the other connected Award shall be reduced by the number
of shares of Stock with respect to which the participant has exercised his
or her SAR, and the number of shares of Stock subject to the participant's
SAR shall be reduced by the number of shares of Stock acquired by the
participant pursuant to the other connected Award.
The Committee may permit an acceleration of previously established
exercise terms of any Awards as, when, under such facts and circumstances,
and subject to such other or further requirements and conditions as the
Committee may deem necessary or appropriate. In addition:
(a) if the Corporation or its shareholders execute an agreement to dispose
of all or substantially all of the Corporation's assets or stock by
means of sale, merger, consolidation, reorganization, liquidation or
otherwise, as a result of which the Corporation's shareholders,
immediately before the transaction, will not own at least fifty
percent (50%) of the total combined voting power of all classes of
voting stock of the surviving entity (be it the Corporation or
otherwise) immediately after the consummation of the transaction, then
any and all outstanding Awards shall immediately become and remain
exercisable or, if the transaction is not consummated, until the
agreement relating to the transaction expires or is terminated, in
which case, all Awards shall be treated as if the agreement was never
executed;
(b) if there is an actual, attempted or threatened change in the ownership
of at least twenty-five percent (25%) of all classes of voting stock
of the Corporation through the acquisition of, or an offer to acquire
such percentage of the Corporation's voting stock by any person or
entity, or persons or entities acting in concert or as a group, and
such acquisition or offer has not been duly approved by the Board,
then any and all outstanding awards shall immediately become and
remain exercisable; or
(c) if during any period of two (2) consecutive years, the individuals who
at the beginning of such period constituted the Board cease, for any
reason, to constitute at least a majority of the Board (unless the
election of each director of the Board, who was not a director of the
Board at the beginning of such period, 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) then any and all Awards
shall immediately become and remain exercisable.
12. Right of First Refusal. Each written agreement for an Award may contain a
provision that requires as a condition to exercising a Qualified Option or
a Non Qualified Option that the participant agree prior to selling,
transferring or otherwise disposing of any shares of Stock obtained through
the exercise of the Award to first offer such shares of Stock to the
Corporation for purchase. The terms and conditions of such right of first
refusal shall be determined by the Committee in its sole and absolute
discretion, provided that the purchase price shall be at least equal to the
Stock's fair market value as determined under paragraph 14 below, and shall
be subject to all applicable federal and state laws, rules and regulations.
6
<PAGE>
13. Withholding. When a participant exercises a stock option or Stock
Appreciation Right awarded under the Plan, the Corporation, in its
discretion and as required by law, may require the participant to remit to
the Corporation an amount sufficient to satisfy fully any federal, state
and other jurisdictions' income and other tax withholding requirements
prior to the delivery of any certificates for shares of Stock. At the
Committee's discretion, remittance may be made in cash, shares already held
by the participant or by the withholding by the Corporation of sufficient
shares issuable pursuant to the option to satisfy the participant's
withholding obligation.
14. Value. Where used in the Plan, the "fair market value" of Stock or any
options or rights with respect thereto, including Awards, shall mean and be
determined by (a) the average of the highest and lowest reported sales
prices thereof on the principal established domestic securities exchange on
which listed, and if not listed, then (b) the average of the dealer "bid"
and "ask" prices thereof on the over-the-counter market, as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), in either case as of the specified or otherwise required or
relevant time, or if not traded as of such specified, required or relevant
time, then based upon such reported sales or "bid" and "ask" prices before
and/or after such time in accordance with pertinent provisions of and
principles under the Code and the regulations promulgated thereunder.
15. Amendment. To the extent permitted by applicable law, the Board may amend,
suspend, or terminate the Plan at any time. The amendment or termination of
this Plan shall not, without the consent of the participants, alter or
impair any rights or obligations under any Award previously granted
hereunder.
From time to time, the Committee may rescind, revise and add to any of
the terms, conditions and provisions of the Plan or of an Award as
necessary or appropriate to have the Plan and any Awards thereunder be or
remain qualified and in compliance with all applicable laws, rules and
regulations, and the Committee may delete, omit or waive any of the terms
conditions or provisions that are no longer required by reason of changes
of applicable laws, rules or regulations, including but not limited to, the
provisions of Sections 421 and 422 of the Code, Section 16 of the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and the rules
and regulations promulgated by the Securities and Exchange Commission.
Without limiting the generality of the preceding sentence, each Qualified
Option shall be subject to such other and additional terms, conditions and
provisions as the Committee may deem necessary or appropriate in order to
qualify as a Qualified Option under Section 422 of the Code, including, but
not limited to, the following provisions:
(a) At the time a Qualified Option is awarded, the aggregate fair market
value of the Stock subject thereto and of any Stock or other capital
stock with respect to which incentive stock options qualifying under
Sections 421 and 422 of the Code are exercisable for the first time by
the participant during any calendar year under the Plan and any other
plan of the Corporation or its affiliates, shall not exceed
$100,000.00; and
(b) No Qualified Option, shall be awarded to any person if, at the time of
the Award, the person owns shares of the stock of the Corporation
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Corporation or its affiliates,
unless, at the time the Qualified Option is awarded, the exercise
price of the
7
<PAGE>
Qualified Option is at least one hundred and ten percent (110%) of the
fair market value of the Stock on the date of grant and the option, by
its terms, is not exercisable after the expiration of five (5) years
from the date it is awarded.
16. Continued Employment. Nothing in the Plan or any Award shall confer upon
any participant or other persons any right to continue in the employ of, or
maintain any particular relationship with, the Corporation or its
affiliates, or limit or affect any rights, powers or privileges that the
Corporation or its affiliates may have to supervise, discipline and
terminate the participant. However, the Committee may require, as a
condition of making and/or exercising any Award, that a participant agree
to, and in fact provide services, either as an employee or in another
capacity, to or for the Corporation or any Subsidiary for such time period
as the Committee may prescribe. The immediately preceding sentence shall
not apply to any Qualified Option, to the extent such application would
result in disqualification of the option under Sections 421 and 422 of the
Code.
17. General Restrictions. If the Committee or Board determines that it is
necessary or desirable to: (a) list, register or qualify the Stock subject
to the Award, or the Award itself, upon any securities exchange or under
any federal or state securities or other laws, (b) obtain the approval of
any governmental authority, or (c) enter into an agreement with the
participant with respect to disposition of any Stock (including, without
limitation, an agreement that, at the time of the participant's exercise of
the Award, any Stock thereby acquired is and will be acquired solely for
investment purposes and without any intention to sell or distribute the
Stock), then such Award shall not be consummated in whole or in part unless
the listing, registration, qualification, approval or agreement, as the
case may be, shall have been appropriately effected or obtained to the
satisfaction of the Committee and legal counsel for the Corporation.
18. Rights. Except as otherwise provided in the Plan, participants shall have
no rights as a holder of the Stock unless and until one or more
certificates for the shares of Stock are issued and delivered to the
participant.
19. Adjustments. In the event that the shares of common stock of the
Corporation, as presently constituted, shall be changed into or exchanged
for a different number or kind of shares of common stock or other
securities of the Corporation or of other securities of the Corporation or
of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares or
otherwise) or if the number of such shares of common stock shall be
increased through the payment of a stock dividend, stock split or similar
transaction, then, there shall be substituted for or added to each share of
common stock of the Corporation that was theretofore appropriated, or which
thereafter may become subject to an option under the Plan, the number and
kind of shares of common stock or other securities into which each
outstanding share of the common stock of the Corporation shall be so
changed or for which each such share shall be exchanged or to which each
such shares shall be entitled, as the case may be. Each outstanding Award
shall be appropriately amended as to price and other terms, as may be
necessary to reflect the foregoing events.
If there shall be any other change in the number or kind of the
outstanding shares of the common stock of the Corporation, or of any common
stock or other securities in which such common stock shall have been
changed, or for which it shall have been exchanged, and if a
8
<PAGE>
majority of the disinterested members of the Committee shall, in its sole
discretion, determine that such change equitably requires an adjustment in
any Award that was theretofore granted or that may thereafter be granted
under the Plan, then such adjustment shall be made in accordance with such
determination.
The grant of an Award under the Plan shall not affect in any way the
right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
to consolidate, to dissolve, to liquidate or to sell or transfer all or any
part of its business or assets.
Fractional shares resulting from any adjustment in Awards pursuant to
this Section 19 may be settled as a majority of the members of the Board of
Directors or of the Committee, as the case may be, shall determine.
To the extent that the foregoing adjustments relate to common stock or
securities of the Corporation, such adjustments shall be made by a majority
of the members of the Board or of the Committee, as the case may be, whose
determination in that respect shall be final, binding and conclusive.
Notice of any adjustment shall be given by the Corporation to each holder
of an Award that is so adjusted.
20. Forfeiture. Notwithstanding anything to the contrary in this Plan, if the
Committee finds, after full consideration of the facts presented on behalf
of the Corporation and the involved participant, that he or she has been
engaged in fraud, embezzlement, theft, commission of a felony, or
dishonesty in the course of his or her employment by the Corporation or by
any Subsidiary and such action has damaged the Corporation or the
Subsidiary, as the case may be, or that the participant has disclosed trade
secrets of the Corporation or its affiliates, the participant shall forfeit
all rights under and to all unexercised Awards, and under and to all
exercised Awards under which the Corporation has not yet delivered payment
or certificates for shares of Stock (as the case may be), all of which
Awards and rights shall be automatically canceled. The decision of the
Committee as to the cause of the participant's discharge from employment
with the Corporation or any Subsidiary and the damage thereby suffered
shall be final for purposes of the Plan, but shall not affect the finality
of the participant's discharge by the Corporation or Subsidiary for any
other purposes. The preceding provisions of this paragraph shall not apply
to any Qualified Option to the extent such application would result in
disqualification of the option as an incentive stock option under Sections
421 and 422 of the Code.
21. Indemnification. In and with respect to the administration of the Plan, the
Corporation shall indemnify each member of the Committee and/or of the
Board, each of whom shall be entitled, without further action on his or her
part, to indemnification from the Corporation for all damages, losses,
judgments, settlement amounts, punitive damages, excise taxes, fines,
penalties, costs and expenses (including without limitation attorneys' fees
and disbursements) incurred by the member in connection with any
threatened, pending or completed action, suit or other proceedings of any
nature, whether civil, administrative, investigative or criminal, whether
formal or informal, and whether by or in the right or name of the
Corporation, any class of its security holders, or otherwise, in which the
member may be or may have been involved, as a party or otherwise, by reason
of his or her being or having been a member of the Committee
9
<PAGE>
and/or of the Board, whether or not he or she continues to be a member of
the Committee or of the Board. The provisions, protection and benefits of
this Section shall apply and exist to the fullest extent permitted by
applicable law to and for the benefit of all present and future members of
the Committee and/or of the Board and their respective heirs, personal and
legal representatives, successors and assigns, in addition to all other
rights that they may have as a matter of law, by contract, or otherwise,
except (a) to the extent there is entitlement to insurance proceeds under
insurance coverages provided by the Corporation on account of the same
matter or proceeding for which indemnification hereunder is claimed, or (b)
to the extent there is entitlement to indemnification from the Corporation,
other than under this Section, on account of the same matter or proceeding
for which indemnification hereunder is claimed.
22. Taxes. The issuance of shares of Common Stock under the Plan shall be
subject to any applicable taxes or other laws or regulations of the United
States of America and any state or local authority having jurisdiction
there over.
23. Miscellaneous.
(a) Any reference contained in this Plan to particular section or
provision of law, rule or regulation, including but not limited to the
Code and the 1934 Act, shall include any subsequently enacted or
promulgated section or provision of law, rule or regulation, as the
case may be. With respect to persons subject to Section 16 of the 1934
Act, transactions under this Plan are intended to comply with all
applicable conditions of Section 16 and the rules and regulations
promulgated thereunder, or any successor rules and regulations that
may be promulgated by the Securities and Exchange Commission, and to
the extent any provision of this Plan or action by the Committee fails
to so comply, it shall be deemed null and void, to the extent
permitted by applicable law and deemed advisable by the Committee.
(b) Where used in this Plan: the plural shall include the singular, and
unless the context otherwise clearly requires, the singular shall
include the plural; and the term "affiliates" shall mean each and
every Subsidiary and any parent of the Corporation.
(c) The captions of the numbered Sections contained in this Plan are for
convenience only, and shall not limit or affect the meaning,
interpretation or construction of any of the provisions of the Plan.
- - - - - - - - - - - -
END
- - - - - - - - - - - -
10
EXHIBIT 5
OPINION OF SHUMAKER WILLIAMS, P.C.
<PAGE>
June 4, 1999
Walter E. Daller, Jr.
President and Chief Executive Officer
HARLEYSVILLE NATIONAL CORPORATION
483 Main Street
Harleysville, Pennsylvania 19438
RE: Harleysville National Corporation (the "Corporation")
Registration Statement on Form S-8 Our File No. 622-99
Dear Mr. Daller:
We have acted as Special Corporate Counsel to the Corporation in connection
with preparation of the Corporation's Registration Statement on Form S-8
relating to the Corporation's 1998 Stock Incentive Plan (the plan).
In connection with this matter, we, as counsel to the Corporation, have
reviewed the following:
1. the Pennsylvania Business Corporation Law of 1988, as amended;
2. the Corporation's Articles of Incorporation, as amended;
3. the Corporation's By-Laws, as amended;
4. Resolutions adopted by the Corporation's Board of Directors; and
5. the Plan.
Based upon such review, it is our opinion that the Corporation's common
stock, $1.00 par value, (the common stock) issuable under the plan, when and as
issued in accordance with the provisions of the plan, will be duly and validly
issued, fully paid and nonassessable. In giving the foregoing opinion, we have
assumed that the Corporation will have, at the time of the issuance of common
stock under the plan, a sufficient number of authorized shares available for
issue.
<PAGE>
Walter E. Daller, Jr.
President and Chief Executive Officer
HARLEYSVILLE NATIONAL CORPORATION
June 4, 1999
Page 2
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement on Form S-8, filed by the Corporation, relating to the
plan.
Very truly yours,
SHUMAKER WILLIAMS, P.C.
/s/ Nicholas Bybel, Jr.
By Nicholas Bybel, Jr.
NB\py:95745
EXHIBIT 23.1
CONSENT OF GRANT THORNTON LLP
<PAGE>
Consent of Independent Certified Public Accountants
We have issued our report dated January 7, 1999 (except for Note 2, as to
which the date is January 20, 1999) accompanying the consolidated financial
statements of Harlesyville National Corporation and subsidiaries appearing in
the 1998 Annual Report of the Corporation to its shareholders and included in
the Annual Report on Form 10-K for the year ended December 31, 1998 which are
incorporated by reference in this Registration Statement. We consent to the
incorporation by reference in the Registration Statement of the aforementioned
report.
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Philadelphia, Pennsylvania
June 1, 1999
