As filed with the Securities and Exchange Commission on August 12, 1998
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SUN BANCORP, INC.
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(Exact Name of Registrant As Specified In Its Charter)
Pennsylvania
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(State or other jurisdiction of
incorporation or organization)
2-16 South Market Street, Selinsgrove, Pennsylvania
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(Address of principal executive offices
23-2233584
------------------
(I.R.S. Employer Identification No.)
17870
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(Zip Code)
SUN BANCORP, INC. 1998 STOCK INCENTIVE PLAN
-------------------------------------------
(Full title of the plan)
Fred W. Kelly, Jr., President
SUN BANCORP, INC.
2-16 South Market Street
Selinsgrove, Pennsylvania 17870
(717) 374-1131
------------------------------------------
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies To:
Nicholas Bybel, Jr., Esquire
B. Tyler Lincoln, Esquire
SHUMAKER WILLIAMS, P.C.
Post Office Box 88
Harrisburg, Pennsylvania 17108
(717) 763-1121
<PAGE>
<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>
No Par Value 650,000 $29.25
<CAPTION>
Title of Each Class Proposed Maximum Amount of
of Securities to Aggregate Registration
be Registered Offering Price(2) Fee
<S> <C> <C>
Common Stock, $19,012,500.00 $5,608.69
No Par Value
<FN>
(1) Based on the maximum number of shares of Sun Bancorp, Inc. common stock, no
par value ("Common Stock") authorized for issuance under the plan set forth
above. There are also registered hereby such indeterminate number of shares
of Common Stock as may become issuable by reason of the anti-dilution
provisions of the plan.
(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 closing bid and asked prices of the Common Stock on August 7, 1998,
with respect to the shares of Common Stock issuable under the plan.
</FN>
</TABLE>
Page 1 of 55 Sequentially Numbered Pages
Index to Exhibits Found on Page 16
<PAGE>
TO PARTICIPANTS IN THE SUN BANCORP, INC.
1998 STOCK INCENTIVE PLAN
Sun Bancorp, Inc. (the "Company") has filed a Registration Statement,
concerning the shares of Common Stock, no par value ( the "Common Stock") that
the Company may, from time to time, issue pursuant to the Sun Bancorp, Inc. 1998
Stock Incentive Plan, (the "Plan"). The Prospectus deemed to form a part of the
Registration Statement consists of certain documents and explanatory memoranda
regarding the Plan. Also deemed to comprise part of the Prospectus, are the
following documents, each of which is specifically incorporated by reference
into the Registration Statement and each of which is on file with the Securities
and Exchange Commission (the "Commission") File No. 0-14745):
(a) the Company's Annual Report on Form 10-K for the year ended December 31,
1997, filed with the Commission on March 27, 1998;
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, filed with the Commission on May 15, 1998; and
(c) description of the Company's Common Stock that appears at pages 15 and 16
of the Corporation's Prospectus, which forms a part of the Corporation's
Registration Statement No. 333-30723, filed with the Commission on July 3,
1997.
All documents filed with the Commission by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
after the date of the Prospectus and prior to the termination of the offering
made hereby, shall be deemed to be incorporated by reference in the Prospectus
and to be a part thereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
the Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Prospectus.
The Company will provide, without charge, to each participant in the Plan
who so requests, a copy of any or all of the documents mentioned above, as well
as, all documentation relating to the Plan required to be delivered to
participants pursuant to the rules adopted under the Securities Act of 1933, as
amended. Requests for such copies should be addressed orally or in writing to:
Attention: Fred W. Kelly, Jr.
President and Chief Executive Officer
Sun Bancorp, Inc.
2-16 South Market Street
Selinsgrove, Pennsylvania 17870
(717) 374-1131
August 12, 1998
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference in this Registration Statement
the following documents filed by the Company with the Commission, under File No.
0-14745:
(a) the Company's Annual Report on Form 10-K for the year ended December 31,
1997, filed with the Commission on March 27, 1998;
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, filed with the Commission on May 15, 1998; and
(c) description of the Company's Common Stock that appears at pages 15 and 16
of the Corporation's Prospectus, which forms a part of the Corporation's
Registration Statement No. 333-30723, filed with the Commission on July 3,
1997.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment that indicates that all securities offered have been sold or that
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement, to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
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.
Item 4. Description of Securities
Not applicable.
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Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
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:
(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.
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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 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
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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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(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,
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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.
Section A of Article XIII of the Company's Articles of Incorporation and
Section 7-1 of Article VII of the Company's By-laws provide that the Company
shall indemnify, to the fullest extent now or hereafter permitted by law, each
director or officer (including each former director or officer) of the Company
who was or is made a party to or a witness in or is threatened to be made a
party to or a witness in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was an authorized representative of the Company,
against all expenses (including attorney's fees and disbursements), judgments,
fines (including excise taxes and penalties) and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding.
Section B of the Company's Articles of Incorporation and Section 7-2 of
Article VII of the Company's By-laws provide that the Company shall pay expenses
(including attorneys' fees and disbursements) incurred by a director or officer
of the Company referred to in Section A and Section 7-1, respectively, thereof,
in defending or appearing as a witness in any civil or criminal action, suit or
proceeding described in Section A and Section 7-1, respectively, thereof in
advance of the final disposition of such action, suit or proceeding. The
expenses incurred by such director officer shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding referred to
in such Section C or Section 73 in advance of the final disposition of such
action, suit or proceeding only upon receipt of an undertaking by or on behalf
of such director or officer to repay all amounts advanced if it shall be
determined that he is not entitled to be indemnified by the Company.
Section C of Article XIII of the Company's Articles of Incorporation and
Section 7-3 of Article VII of the Company's By-laws provide that the Company
may, as determined by the Board of Directors from time to time, indemnify to the
fullest extent now or hereafter permitted by law, any person who was or is a
party to or a witness in or is threatened to be made a party to or a witness in,
or is otherwise involved in, any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was an authorized representative of the
Company, both as to action is his official capacity and as to action in another
capacity while holding such office or position, against all expenses (including
attorney's fees and disbursements), judgments, fines (including excise taxes and
penalties), and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding. The Company may, as
determined by the Board of Directors from time to time, pay expenses incurred by
any such person by reason of his participation in an action, suit or proceeding
upon receipt of an undertaking by or on behalf of such person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Company.
Section D Article XIII of the Company Articles of Incorporation and Section
7-4 of Article VII of the Company's By-laws provide that indemnification under
such Articles is provided pursuant to Section 8365 of the Pennsylvania
Director's Liability Act (or successor provision or statute) and such Articles
are intended to provide indemnification in accordance with their terms whether
the
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Company would have the power to so indemnify under any other provision of law
except such Act and whether or not the indemnified liability arises or arose
from any threatened, pending or completed action by or in the right of the
Company; indemnification under such provisions shall not be made by the Company
in any case where the alleged act or failure to act giving rise to the claim for
indemnification is expressly prohibited by the Pennsylvania Director's Liability
Act or any successor statue as in effect at the time of such alleged action or
failure to take action.
Section E of Article XIII of the Company's Articles of Incorporation and
Section 7-5 of Article VII of the Company's By-laws provide that the Company
shall have the power to purchase and maintain insurance on behalf of any
authorized representative of the Company 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 Company would have the power to indemnify him against
such liability. The Board of Directors, without further approval of the
shareholders, shall have the power to borrow money on behalf of the Company,
including the power to pledge the assets of the Company, from time to time, to
discharge the Company's obligations with respect to indemnification and the
advancement and reimbursement of expenses, and the purchase and maintenance of
insurance on behalf of each director and officer against any liability asserted
against or incurred by such director or officer in any capacity.
Finally, Section F of Article XIII of the Company's Articles of
Incorporation and Section 7-6 of Article VII of the Company's By-laws provide
that each director and officer of the Company shall be deemed to act in such
capacity in reliance upon such rights of indemnification and advancement of
expenses. The rights of indemnification and advancement of expenses provided
shall not be deemed exclusive of any other rights to which any person seeking
indemnification or advancement or expenses may be entitled under any agreement,
vote of shareholders or disinterested directors, statute or otherwise, both as
to action in such person's official capacity and as to action in another
capacity while holding such office or position, and shall continue as to a
person who has ceased to be an authorized representative of the Company and
shall inure to the benefit of the heirs, executors and administrators of such
person. Any repeal or modification such Articles or By-laws by the shareholders
or the Board of Directors of the Company shall not adversely affect any right or
protection existing at the time of such repeal or modification to which any
person may be entitled under such Articles or By-laws.
The Company maintains insurance insuring its directors, officer, employees
or agents against certain liabilities which they might incur as directors,
officer, employees or agents including, if possible, certain liabilities under
the Securities Act of 1933, as amended (the "1933 Act").
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. In
the event that a claim for indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by a director, officer or controlling person in
connection with the securities being registered, the Registrant will,
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unless in the opinion of its counsel the manner 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 1933 Act
and will be governed by the final adjudication of such issue.
Item 7. Exemption From Registration Claimed
Not applicable.
Items 8. Exhibits
Exhibit No.
3(i) Articles of Incorporation of Sun Bancorp, Inc., as amended and
restated.
3(ii) Bylaws of Sun Bancorp, Inc., as amended and restated.
4.1 Articles of Incorporation of Sun Bancorp, Inc., as amended and
restated (included at Exhibit 3(i) of this Registration
Statement).
4.2 Bylaws of Sun Bancorp, Inc., as amended and restated (included at
Exhibit 3(ii) of this Registration Statement).
4.3 Sun Bancorp, Inc. 1998 Stock Incentive Plan.
5 Opinion of Shumaker Williams, P.C.
23.1 Consent of Parente, Randolph, Orlando, Carey & Associates.
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;
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(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 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
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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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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 Selinsgrove, Commonwealth of Pennsylvania, on August
3, 1998.
SUN BANCORP, INC.
By: /s/ Fred W. Kelly, Jr.
-----------------------------
Fred W. Kelly, Jr.
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Fred W. Kelly, Jr. and Jeffrey E. Hoyt, and each
of them, his true and lawful attorney-in-fact, as agent with full power of
substitution and resubstitution for him and in his 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 dates indicated.
Capacity Date
-------- ----
/s/ Fred W. Kelly, Jr.
- ------------------------ President and Chief Executive August 3, 1998
Fred W. Kelly, Jr. Officer; Director
/s/ Jeffrey E. Hoyt
- ------------------------ Executive Vice President; Chief August 3, 1998
Jeffrey E. Hoyt Operating Officer; Secretary and
Director
<PAGE>
/s/ Max E. Bingaman
- ------------------------ Director August 3, 1998
Max E. Bingaman
/s/ David R. Dieck
- ------------------------ Director August 3, 1998
David R. Dieck
/s/ Louis A. Eaton
- ------------------------ Director August 3, 1998
Louis A. Eaton
/s/ Robert E. Funk
- ------------------------ Director August 3, 1998
Dr. Robert E. Funk
/s/ Stephen J. Gurgovits
- ------------------------ Director August 3, 1998
Stephen J. Gurgovits
/s/ Thomas B. Hebble
- ------------------------ Director August 3, 1998
Thomas B. Hebble
/s/ Robert A. Hormell
- ------------------------ Director August 3, 1998
Robert A. Hormell
/s/ Paul R. John
- ------------------------ Director August 3, 1998
Paul R. John
/s/ George F. Keller
- ------------------------ Director August 3, 1998
George F. Keller
/s/ Lehman B. Mengel
- ------------------------ Director August 3, 1998
Lehman B. Mengel
/s/ Howard H. Schnure
- ------------------------ Director August 3, 1998
Howard H. Schnure
/s/ Marlin T. Sierer
- ------------------------ Director August 3, 1998
Marlin T. Sierer
<PAGE>
/s/ Jerry A. Soper
- ------------------------ Director August 3, 1998
Jerry A. Soper
/s/ Dennis J. Van
- ------------------------ Director August 3, 1998
Dennis J. Van
<PAGE>
Exhibit Index
Page Number
In Sequential
Numbering
Exhibit No. System
- ----------- ---------
3(i) Articles of Incorporation of Sun Bancorp, Inc., 18
as amended and restated.
3(ii) Bylaws of Sun Bancorp, Inc., as amended and restated. 23
4.1 Articles of Incorporation of Sun Bancorp, Inc.,
as amended and restated (included at Exhibit 3(i)
of this Registration Statement).
4.2 Bylaws of Sun Bancorp, Inc., as amended and restated
(included at Exhibit 3(ii) of this Registration Statement).
4.3 Sun Bancorp, Inc. 1998 Stock Incentive Plan. 40
5 Opinion of Shumaker Williams, P.C. 49
23.1 Consent of Parente, Randolph, Orlando, Carey & Associates. 52
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 53
on Signature Pages).
EXHIBIT 3(i)
ARTICLES OF INCORPORATION OF
SUN BANCORP, INC., AS AMENDED AND RESTATED
<PAGE>
SUN BANCORP, INC.
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
Article 1
The name of the Corporation is SUN BANCORP, INC.
Article 2
The location and post office address of its registered office in the
Commonwealth of Pennsylvania is: 2-16 South Market Street, P.O. Box 57,
Selinsgrove, Snyder County.
Article 3
The purpose or purposes for which the Corporation is incorporated are: To
have unlimited power to engage in and do any lawful act concerning any or all
lawful business for which corporations may be incorporated under the provisions
of the Business Corporation Law of the Commonwealth of Pennsylvania. The
Corporation is incorporated under the provisions of the Business Corporation Law
of the Commonwealth of Pennsylvania (Act of May 5, 1933, as amended).
Article 4
The term for which the Corporation is to exist is perpetual.
Article 5
No cumulative voting for the election of Directors or with respect to any
other matter shall be permitted.
Article 6
The aggregate number of shares that the Corporation shall have authority to
issue is 20,000,000 shares of Common Stock (the "Common Stock").
Article 7
A. The Board of Directors may, if it deems advisable, oppose a tender or
other offer for the Corporation's securities, whether the offer is in cash or in
the securities of a corporation or otherwise. When considering whether to oppose
an offer, the Board of Directors may, but is not legally obligated to, consider
any relevant, germane or pertinent issue; by way of illustration, but not
<PAGE>
to be considered any limitation on the power of the Board of Directors to oppose
a tender offer or other offer for this Corporation's securities, the Board of
Directors may, but shall not be legally obligated to, consider any or all of the
following:
(i) Whether the offer price is acceptable based on the historical and
present operating results or financial condition of the Corporation;
(ii) Whether a more favorable price could be obtained for this
Corporation's securities in the future;
(iii)The social and economic effects of the offer or transaction on this
Corporation and any of its subsidiaries, employees, depositors, loan
and other customers, creditors, shareholders and other elements of the
communities in which this Corporation and any of its subsidiaries
operate or are located;
(iv) The reputation and business practice of the offeror and its management
and affiliates as they would affect the shareholders, employees,
depositors and customers of the Corporation and its subsidiaries and
the future value of the Corporation's stock;
(v) The value of the securities (if any) which the offeror is offering in
exchange for the Corporation's securities, based on an analysis of the
worth of the corporation or other entity whose securities are being
offered;
(vi) The business and financial conditions and earnings prospects of the
offeror, including, but not limited to, debt service and other
existing or likely financial obligations of the offeror, and the
possible effect of such conditions upon this Corporation and any of
its subsidiaries and the other elements of the communities in which
this Corporation and any of its subsidiaries operate or are located;
(vii)Any antitrust or other legal and regulatory issues that are raised by
the offer.
If the Board of Directors determines that an offer should be rejected, it
may take any lawful action to accomplish its purpose including, but not limited
to, any or all of the following: advising shareholders not to accept the offer;
litigation against the offeror; filing complaints with all governmental and
regulatory authorities; acquiring the offeror corporation's securities; selling
or otherwise issuing authorized or unissued securities or treasury stock or
granting options with respect thereto; acquiring a company to create an
antitrust or other regulatory problem for the offeror; and obtaining a more
favorable offer from another individual or entity.
B. No merger, consolidation, liquidation or dissolution of the Corporation
nor any action that would result in the sale or other disposition of all or
substantially all of the assets of the
<PAGE>
Corporation shall be valid unless first approved by the affirmative vote of the
holders of at least seventy-five percent (75%) of the outstanding shares of
Common Stock of the Corporation.
This Article 7 shall not be amended unless first approved by the
affirmative vote of the holders of at least seventy-five percent (75%) of the
outstanding shares of Common Stock of the Corporation.
Article 8
A. The power and authority to make, amend and repeal these Articles of
Incorporation and the By-Laws is hereby expressly vested in the Board of
Directors, subject always to the power of the stockholders to change such
action, provided, however, that Seventy-Five Per Cent (75%) of all of the issued
and outstanding shares entitled to vote in the election of Directors shall vote
in favor of making, amending or repealing these Articles of Incorporation or the
By-Laws, or any portion thereof, in any manner different from that recommended
by the Board of Directors. If the Board of Directors by a three-fourths (3/4)
vote (or if there is a person or persons serving on the Board other than
Continuing Directors, in which event this requirement shall be for three-fourths
(3/4) of the Continuing Directors) recommends any making, amending or repealing
of any portion or all of these Articles of Incorporation or if three-fourths
(3/4) of the Board of Directors vote to amend the ByLaws, they may waive the
provisions above requiring a greater percentage of stockholder vote and in such
case a vote of sixty-six and two-thirds percent (662/3%) of all the issued and
outstanding shares entitled to vote in the election of Directors shall be
required in favor of taking such action. Unless any resolution to make, amend or
repeal these Articles of Incorporation or by the By-Laws, in whole or in part,
or any other motion, resolution, petition or other action of the stockholders is
approved by Seventy-Five Per Cent (75%) or more of all of the issued and
outstanding shares entitled to vote in the election of Directors and does not
expressly provide to the contrary, all resolutions, petitions or actions of the
stockholders may be amended, modified, expanded, contracted or terminated by the
Board of Directors. In the event any of the foregoing provisions are finally
judicially determined to be invalid, then the By-Laws can only be amended by the
stockholders upon affirmative vote of sixty-six and two-thirds (662/3) of all
the issued and outstanding shares of stock entitled to vote for the election of
Directors.
B. The number of Directors shall not be less than six (6) or more than
twenty-five (25). The power and authority to change the number of Directors and
fix a new number of Directors within not less than six (6) or more than
twenty-five (25) is hereby vested in the Board of Directors; and it shall be
exercised by the Board of Directors adopting an appropriate resolution. The
By-Laws may provide for classification of Directors, subject to the provisions
of applicable law.
Article 9
The Corporation shall, to the fullest extent permitted by applicable law,
indemnify any and all persons whom it shall have power to indemnify from and
against any and all expenses, liabilities or other matters for which
indemnification is permitted by applicable law, and the indemnification
<PAGE>
provided for herein shall not be deemed exclusive of any other rights to which
those indemnified may be entitled under any By-Law, agreement, vote of
stockholders or disinterested Directors or otherwise, both as to action in their
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be Director,
officer, employee or agent and shall insure to the benefit of the heirs,
executors and administrators of such a person.
EXHIBIT 3(ii)
BYLAWS OF SUN BANCORP, INC.,
AS AMENDED AND RESTATED
<PAGE>
AMENDED AND RESTATED
BY-LAWS
OF
SUN BANCORP, INC.
Selinsgrove, Pennsylvania
Effective as of July 10, 1990
ARTICLE I.
MEETINGS OF STOCKHOLDERS
Section 1. Annual Meeting of Stockholders. The annual meeting of the
stockholders of SUN BANCORP, INC. (the "Corporation") for the purpose of
electing a Board of Directors of the Corporation, and for the transaction of
such other business as may properly come before it, shall be held on the fourth
Thursday of April in each year between the hours of ten o'clock a.m. and twelve
o'clock noon, local time, at the principal office of the Corporation or such
other time and place as designated by the Board of Directors. Written notice
stating the time and the place of said meeting shall be mailed by the Secretary,
to each stockholder entitled to vote at the meeting, to the address of the
stockholder on the stock records of the Corporation, at least ten (10) days
before the date of said meeting, unless a greater period is required by law.
Such notice shall be deemed to be given at the time it is deposited in the
United States mail.
Section 2. Special Meetings of Stockholders.
(a) Special meetings of the stockholders may be called at any time by the
Chairman of the Board, the President or the Board of Directors.
(b) The holders of not less than forty percent (40%) of all the shares
outstanding and entitled to vote may at any time apply to the
Secretary of the Corporation to call a special meeting of the
stockholders and upon such application shall state the object of the
meeting. The Secretary shall estimate the cost of the preparation,
printing and mailing of the notice of the meeting and the proxy
material and the review thereof by the appropriate regulatory
authorities and counsel for the Corporation. The stockholders who
desire the special meeting shall deposit the sum of the estimated cost
of holding the special meeting with the Secretary and as determined by
the Board may be liable for the cost of the meeting in addition to the
deposit. After receipt of such deposit, the Board of Directors shall
call such meeting at a time and place determined by it. The Board of
Directors in its sole discretion shall determine whether the
stockholder(s) requesting the special meeting shall pay the cost of
holding the special meeting or whether the Corporation shall pay such
costs and, in the latter event, the Secretary shall refund the
estimated costs so deposited.
(c) Stockholder requests for inclusion of matters in proxy materials for
the annual or special meetings shall be handled in accordance with
applicable law. Stockholder requests for
<PAGE>
inclusion of matters in the proxy material for the annual meeting must
be submitted in the form required by law in writing before the end of
the calendar year preceding the annual meeting.
(d) Notice of special meetings of stockholders is to be likewise mailed as
required by Section 1 of this Article I for the annual stockholders
meetings. Such notice of a special meeting shall state its purpose and
no business shall be transacted at any special meeting unless such
business shall be included in the purpose stated in such notice.
Section 3. Quorum. At all regular and special meetings of the stockholders,
a quorum shall consist of a majority of the total number of shares outstanding,
represented in person or by proxy, unless otherwise provided by law. If a
majority of the Corporation's stock is not represented at any meeting, the
stockholders may adjourn the meeting to any subsequent time or day without any
further notice to stockholders.
Section 4. Proxies.
(a) Stockholders may vote by proxy authorized in writing. No proxy shall
be valid or entitle the holder to vote unless executed and dated
within two (2) months previous to any meeting or election at which it
my be offered. All proxies must be filed with the Secretary before the
start of voting.
(b) The Board of Directors shall select proxies for annual and special
meetings of the stockholders on or before the record date for the
meeting. If any proxy so selected shall be unwilling or unable to act,
the Board of Directors may designate one or more successors.
(c) Except as provided in Section 2 of this Article I, proxy forms shall
be printed at the expense of the Corporation and shall be forwarded to
all stockholders, indicating that the proxy is solicited on behalf of
the Board of Directors and the then present management of the
Corporation and that the proxies so selected shall vote for those
nominated for the office of Director as selected by the Corporation
management. In the event of any contest for the position of Director,
the Board of Directors shall have the right to use the funds of the
Corporation for advertising, notice, telegram or letter or any
reasonable means to induce the stockholders to vote for the nominees
selected by the Board of Directors.
Section 5. Election of Directors. All elections of Directors shall be by
ballot and each stockholder shall be entitled to one vote for each share of
stock for each Director to be elected. Upon failure to elect Directors at the
annual meeting, a special meeting of stockholders shall be called for that
purpose by the Directors within sixty (60) days of the annual meeting. Such
election to be subject to similar notice and procedure as required by Section 1
of this Article I for the annual stockholders' meeting.
Section 6. Voting.
(a) All persons holding and owning stock of the Corporation as of the
record date, either in their own right or as trustee or as the legal
representative of stockholders shall have the right to
<PAGE>
attend and vote at all meetings of the stockholders, and shall have as
many votes as the number of shares held or represented by them
respectively, but no person shall be permitted at any such meeting or
election to act as the proxy or attorney of any stockholder without a
power of attorney therefore duly executed and presented.
(b) For election of Directors and amendments to By-Laws, there shall be a
vote ballot and all other voting need not be by ballot except by
demand by a majority of stockholders entitled to vote in person or by
proxy or as determined by the Chairman of the meeting before the
voting begins. When a quorum is present or represented at any meeting,
the vote of the holders of a majority of the shares having voting
powers and present in person or represented by proxy or by an apparent
majority in case of a viva voce shall decide any questions brought
before such meeting, unless the question is one upon which, by express
provision of applicable law, the Corporation's Articles of
Incorporation or these By-Laws, a different vote is required, in which
case such express provision shall govern and control the decision of
such question. Except as otherwise provided by applicable law, or in
the Corporation's Articles of Incorporation, every stockholder of
record shall have the right, at every stockholders' meeting, to one
vote for every share standing in his/her name on the books of the
Corporation.
Section 7. Stockholder Record Dates. The Board of Directors may fix a date
for the determination of the stockholders entitled to receive notice of and to
vote at any meeting or to receive any dividend, distribution or allotment of
rights or a date for any change, conversion or exchange of shares as required by
law.
Section 8. Stockholders' Meeting Procedures.
(a) At the stockholders' meetings, the Chairman of the meeting shall
determine the time of the opening of the polls, and the judges of
election shall determine the time of the closing of the polls, and the
Secretary shall note these times in the minutes.
(b) At the stockholders' meetings, the Chairman of the meeting shall have
the right and authority to prescribe such rules, regulations and
procedures and to do all such acts as are necessary or desirable for
the proper conduct of the meeting, including, without limitation, the
establishment of procedures for voting, the maintenance of order,
safety, limitations on the time allocated to questions or comments on
the affairs of the Corporation.
Section 9. Cumulative Voting Not Authorized. As specified in the
Corporation's Articles of Incorporation, cumulative voting shall not be
permitted. Each stockholder shall be entitled to one (1) vote for each share
standing in his/her name and may vote, either in person or by proxy, on all
matters and elections, including election of Directors.
Section 10. Removal of Directors. The stockholders of the Corporation may,
by vote of seventy five percent (75%) of all issued and outstanding stock, at
any meeting duly convened, remove any one or more Directors of the Corporation
for cause specified in paragraph (c) of Section 4 of Article II of these By-Laws
and may then proceed to fill the vacancy or vacancies caused by such removal or
removals.
<PAGE>
Section 11. Judges of Election. All elections of Directors by the
stockholders shall be conducted by three (3) judges appointed for that purpose.
Said judges shall be sworn and shall certify the result of the election. The
judges shall be appointed by the Board of Directors, and in case of the failure
of any of the judges to act, substitutes may be appointed by the Chairman or
elected at the stockholders' meeting.
Section 12. List of Stockholders. The Corporation officer or agent having
charge of the transfer books for shares of the Corporation shall prepare and
make, at least five (5) days before each meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, with the address and the number of shares held by each,
which list shall be kept on file at the registered office of the Corporation and
shall be subject to inspection by any stockholder at any time during usual
business hours. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any stockholder
during the whole time of the meeting.
Section 13. Address of Stockholders. Each stockholder shall, in writing, at
the time of original issuance of each stock certificate notify the Secretary of
the Corporation of the address to which notices relating to meetings and the
business of the Corporation may be sent. Changes in address shall be given in
writing to the Secretary. The most recent address of each stockholder appearing
on the Corporation's records shall be conclusively presumed to be the correct
address, and notice mailed, charges prepaid by ordinary mail, to that address
shall be valid.
ARTICLE II.
DIRECTORS
Section 1. Number and Powers. The property and business of the Corporation
shall be managed by a Board of Directors of not less than six (6) nor more than
twenty five (25) Directors. The Board shall exercise every corporate right and
power of the Corporation not herein expressly reserved to the stockholders, and
the Board shall be authorized to increase or decrease within said limits the
number of Directors from time to time without the vote of the stockholders.
Section 2. Eligibility. Any person being the owner of not less than one
hundred and fifty (150) shares of stock of the Corporation shall be eligible as
a Director. No person shall be considered eligible as a candidate for a Director
at any stockholders' meeting, unless written notice of the nomination or
candidacy shall have been filed with the Secretary of the Corporation, for the
information of the stockholders, not less than one hundred and twenty (120) days
prior to the election. Members of the then existing Board of Directors are
eligible for election as Directors and may be nominated for office without such
notice being filed with the Secretary. Only persons so nominated or eligible as
Directors may be voted for as candidates for Directors of the Corporation at an
annual meeting or a special meeting for election of Directors as provided in
Section 5 of Article I of these By-Laws.
Section 3. Term of Service of Directors. At the first corporate election,
the stockholders shall determine the number of Directors to be elected at such
election. If such number be divisible
<PAGE>
by three, a third of such number shall be severally elected for one, two and
three year terms. The assignment of Directors to the several terms to be
determined by lot by the judges of election. If not so divisible, one extra
Director shall be elected to the shortest term and a second extra Director to
the next shortest term. All subsequent elections shall be for a three (3) year
term and for a sufficient number to fill the term expiring at such annual
election. The stockholders may, at any annual election, determine the period of
service of extra Directors to be elected at such meeting. Each Director shall
hold office, unless removed or disqualified for some cause, until the expiration
of the term for which the Director was elected or until a successor shall be
chosen, except as provided in paragraph (b) of Section 4 of this Article II.
Section 4. Vacancies on Board of Directors.
(a) Vacancies on the Board of Directors or in nominees for election to
membership on the Board of Directors occurring before the record date
preceding the annual meeting, caused by death, resignation,
disqualification or otherwise, may be filled by the remaining members
of the Board even though less than a quorum. Each person so elected
shall be a Director until the next annual meeting of the stockholders,
and then a successor shall be chosen, except as provided in paragraph
(b) of this Section 4.
(b) Vacancies on the Board of Directors or in nominees for election to
membership on the Board of Directors occurring after the record date
preceding the annual meeting, caused by death, removal, resignation,
disqualification or otherwise, may also be filled by the remaining
members of the Board even though less than a quorum. However, because
of the time requirements relating to the preparation of proxy
materials, the term of the person filling the vacancy shall
automatically continue to, through and beyond the annual meeting and
until the next annual meeting thereafter and until a successor is
chosen, qualified and takes office, when it shall terminate and that
person seeks to continue in office for the unexpired portion of the
term of office, if any. The foregoing shall apply regardless of the
length of the term of the office in which the vacancy occurred, except
if the vacancy occurred in a term ending at the annual meeting with
respect to a person not intending to seek a new term and where a
nomination is properly made before the record date for the new term.
In this latter instance, the nomination shall be disclosed to the
stockholders in a timely distributed proxy statement and the
stockholders shall vote at the annual election upon whether the
nominee shall be elected a full term as a Director of the Corporation.
(c) The Board of Directors shall be the sole judge as to when a vacancy
has occurred on the Board of Directors and it shall make the
determination by majority vote of the entire Board. Continued
unexcused absence for six (6) months, conviction of a felony,
adjudication of incompetence, and such other grounds as are set forth
in the Pennsylvania Business Corporation Law, as amended, shall be
grounds for the Board of Directors to remove a Director or determine
if a vacancy exists on the Board. The determination of the Board may
be appealed to the Court of Common Pleas of Snyder County,
Pennsylvania.
Section 5. Regular Meetings of Directors. Regular meetings shall be held on
such day and at such hour and place as agreed upon by a resolution adopted by a
majority of the Board of
<PAGE>
Directors. The Directors may from time to time, by resolution, change the time,
place and number of such meetings.
Section 6. Special and Emergency Meetings of Directors. Special meetings of
the Board of Directors shall be all meetings other than regular meetings, and
notice of the same shall be given at least twenty four (24) hours before the
time called for such meeting and at such meeting no business shall be transacted
for which notice was not given in the call. Special meetings of the Board may at
any time be called by the President and shall be called whenever requested in
writing by not less than four (4) members of the Board, and in the absence,
disability, or refusal of the President, any five (5) Directors may make such
call. In case of emergency, requiring, in the opinion of the President, prompt
attention, the President may call special meetings of the Board at any time by
giving the Directors notice by telephone or messenger sent to the address of
each Director.
Section 7. Informal Action. Any action which may be taken at a meeting of
the Directors or the members of the Executive Committee or other Committees of
the Board of Directors may be taken without a meeting if a consent or consents
in writing setting forth the action so taken shall be signed by all Directors or
the members of the Executive Committee or other Board Committee, as the case may
be, and is filed with the Secretary of the Corporation.
Section 8. Recording Vote. All questions shall be decided by a majority of
the Directors present. On request of any Director, the yeas and nays shall be
taken on any question and recorded in the minutes.
Section 9. Order of Business. The order of business at regular meetings of
the Board shall be as follows or as altered by the Board from time to time:
1. Call to Order.
2. Reading and approval of minutes of preceding meeting.
3. Review of financial statements.
4. Reports of Committees.
5. Business fixed for consideration at the meeting, and such as, in the
opinion of the President, calls for action of the Board.
6. Reports of Chairman of the Board.
7. Deferred business.
8. New business.
9. Adjournment.
Section 10. Quorum. A majority of the whole number of Directors shall
constitute a quorum for the transaction of business, but a lesser number may
meet and adjourn from time to time until a quorum shall be present. One or more
Directors may participate in a meeting of the Board by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other.
Section 11. Duty of Director to Corporation.
<PAGE>
(a) A Director of the Corporation 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 of Directors 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:
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.
3. A committee of the Board of Directors, upon which the Director
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.
(b) 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 paragraph (a) of this Section 11.
(c) Absent a 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.
Section 12. Limitation of Personal Liability of a Director. A Director of
the Corporation shall not be personally liable for monetary damages as such for
any action taken or for any failure to take any action, unless:
(i) the Director has breached or failed to perform the duties of his
office under the provisions of Section 11 of this Article II of
these By-Laws (relating to standard of care and justifiable
reliance); and
(ii) the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
<PAGE>
The provisions of this Section 12 shall not apply to (i) the
responsibility or liability of a Director pursuant to any
criminal statute, or (ii) the liability of a Director for the
payment of taxes pursuant to local, state or federal laws. The
provisions of this Section 12 shall be effective January 27, 1987
but shall not apply to any action filed prior to that date nor to
any breach of performance of duty or failure of performance of
duty by a Director occurring prior to that date.
Section 13. Stockholder Approval Required to Amend Section 11 and Section
12. Notwithstanding any other provisions of these By-Laws, the approval by the
stockholders shall be required to amend, alter, change, repeal or adopt any
provision as part of these By-Laws which is inconsistent with the purpose or
intent of Sections 11 and 12 of this Article II.
ARTICLE III.
STANDING COMMITTEES
Section 1. Executive Committee. An Executive Committee may be established
by a resolution of the Board of Directors. The Executive Committee shall consist
of the President, at least three (3) other Directors, appointed by the President
and/or Chairman of the Board and any other officer so appointed. When so
determined by the Board of Directors, the Executive Committee shall be annually
constituted and its members shall serve until their successors are appointed.
Vacancies during the year are to be filled by the President and/or Chairman of
the Board of Directors at a regular or special meeting of the Board. The
Executive Committee shall meet whenever called by the President for the
consideration and examination of the current business of the Corporation. All
the powers and duties of the Board of Directors not herein excepted or delegated
to the other Board committees or officers of the Corporation shall be exercised
and discharged during the recess of the said Board by the Executive Committee.
Section 2. Audit Committee. An Audit Committee may be established by
resolution of the Board of Directors. The Audit Committee shall consist of at
least three (3) Directors to be appointed by the President and/or Chairman of
the Board. The Audit Committee shall recommend to the Board of Directors their
selection of an independent public accounting firm to examine all the books and
assets of the Corporation at least annually, and prepare a written report to the
Board of Directors annually and at such other times as deemed necessary.
Section 3. Personnel Committee. A Personnel Committee may be established by
resolution of the Board of Directors. The Personnel Committee shall consist of
at least three (3) Directors to be appointed by the President and/or Chairman of
the Board. The Personnel Committee shall be responsible to recommend to the
Board of Directors a yearly salary administration program and benefits program.
It will also be their duty to oversee and evaluate approved programs, analyze
and suggest changes in the programs which will be beneficial to the Corporation
and the employees and officers.
Section 4. Other Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more other committees
or authorize the President to appoint such other committees as they deem the
best interests of the Corporation require. Any such
<PAGE>
committee shall consist of two (2) or more Directors and shall perform such
duties and exercise such authority as my be delegated to it in the resolution of
the Board. Each Board committee shall keep regular minutes of its proceedings
and report the same to the Board when required.
Section 5. Donations. The Board of Directors may authorize contributions
and donations for public, charitable, educational and like purposes permitted by
law, in such amounts as it may from time to time determine.
Section 6. Compensation. The Board of Directors shall fix from time to time
the compensation payable to a Director for his service as Director.
ARTICLE IV.
OFFICERS
Section 1. Corporation Officers. The officers of the Corporation shall be
chosen by the Board of Directors and shall include a Chairman, President,
Secretary and Treasurer, and such other officers as the Board of Directors may
from time to time deem advisable for the best interest of the Corporation. Any
two (2) or more offices may be held by one person except President and
Secretary. All officers shall be elected annually at the first meeting of the
Board of Directors after their own election, or as soon thereafter as
circumstances will permit.
Section 2. The Chairman of the Board. The Chairman of the Board shall
preside at the meetings of the Board and in general shall perform such duties as
are incident to the office or are prescribed by the Board and he may also serve
as its chief executive officer.
Section 3. The President. The President shall have general supervision of
all the departments and business of the Corporation and may also be its chief
executive officer. The President shall prescribe the duties of the other
officers and employees, and see to the proper performance thereof. In the
absence of the Chairman of the Board, the President shall preside at the
meetings of the Board, and in general shall perform all the acts incident to
that office or prescribed by the Board.
Section 4. The Vice President. The Vice Presidents shall perform such
duties and do such acts as may be prescribed by the President, the Board of
Directors, or the Executive Committee. The Chairman of the Board or the Vice
Presidents shall perform the duties and have the powers of the President in the
absence of the latter.
Section 5. The Treasurer. The Treasurer shall receive and take charge of
all money, securities, and evidences of indebtedness belonging to or coming into
the Corporation. The Treasurer shall see that proper accounts are kept and that
proper reports are made to the Board of Directors, other officers, and other
persons or authorities entitled thereto. The Treasurer shall deposit such of the
funds of the Corporation as are to be deposited in such other institution or
institutions as are authorized by law, to receive the same and as may be
designated as a depositor for such funds by a majority of all the members of the
Board of Directors. The Treasurer shall also perform such other
<PAGE>
duties as are incident to the office of Treasurer and as may from time to time
be prescribed by the Board, the Executive Committee or the President.
Section 6. The Secretary. The Secretary shall act under the direction and
superintendency of the President, may attend the meetings of the Board of
Directors, its committees and the Corporation's stockholders, and keep in
suitable books the minutes thereof; shall have charge of the records and papers
of the Corporation; take charge of and affix the seal of the Corporation to such
documents as may require attestation; issue notices for all meetings; may assist
in the registry and transfer of all stocks of which the Corporation is registrar
or transfer agent, and perform the duties incident to the office of the
Secretary and from time to time are prescribed by the Board, the Executive
Committee or President.
Section 7. Terms of Office. The officers of the Corporation shall hold
office until their successors are chosen, qualify and take office. Any officer
elected or appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board.
ARTICLE V.
Section 1. Duties and Authority of Officers. The Chairman, President or the
Vice Presidents, together with the Treasurer or Secretary and the other officers
of the Corporation, are authorized to do and perform such corporate and official
acts as are appropriate in the carrying on of the business of the Corporation,
subject always to the directions of the Board of Directors, Executive Committee
and the President.
ARTICLE VI.
Section 1. Dividends. The Board of Directors may declare, subject to the
limitations prescribed by law, a dividend on the shares of the Corporation of so
much of the profits as shall appear advisable to the Board, making the same
payable at a time in their discretion.
ARTICLE VII.
CORPORATION'S CERTIFICATES OF STOCK
Section 1. Form of Stock Certificates. The certificates of the capital
stock of the Corporation shall be issued in such form as the Board may direct,
and shall be numbered and registered as they are issued, shall exhibit the
holder's name and the number of shares, and shall be signed by any two of the
following:
President, Vice President, Treasurer, Secretary, Assistant Treasurer,
Assistant Secretary and sealed with the seal of the Corporation
When a certificate is signed by a transfer agent or a registrar, the
signature of any such corporate officer may be a facsimile, engraved or printed.
If any officer whose signature appears on such certificate shall cease to be
such officer of the Corporation for any reason, such certificate may
<PAGE>
nevertheless be adopted by the Corporation and be issued and delivered with the
same effect as though the person had not ceased to be such officer of the
Corporation.
Section 2. Registered Stockholder. The Corporation shall be entitled to
treat the registered holder of any share as the absolute owner thereof, and
accordingly shall not be bound to recognize any equitable or other claim to, or
interest in, such share on the part of any other person whether or not it shall
have express or other notice thereof.
Section 3. Transfer of Stock. Transfer of stock shall be made only on the
books of the Corporation, in the presence of the Treasurer or other authorized
officer or agent of the Corporation, either by the holder in person, or by power
of attorney to his attorney-in-fact and evidence of authority to make such
transfer shall be produced to the Corporation. In cases of transfers of stock by
executors, administrators, guardians, or other legal representatives, duly
authenticated evidences of their authority shall also be provided to the
Corporation.
Section 4. Procedure for Transfer of Stock. No transfer shall be made until
the stock certificate(s) granted to the transferor is delivered to the
Corporation; and the possession of a certificate of stock shall not be regarded
as vesting any ownership in the same in any other than the person in whose
name(s) it is issued (as between the Corporation and such holder) until the
transfer be duly made upon the books of the Corporation, as aforesaid. Upon the
transfer and surrender of any stock certificate, it shall be immediately
canceled and affixed to the margin of the certificate book from which it was
originally taken. A register shall be kept of every stock certificate issued
showing the number thereof, the name of the party to whom it was issued and the
number of shares evidenced by each stock certificate which is issued, which
register shall be kept by the Secretary of the Corporation. On the transfer and
cancellation of any certificate of stock, the Secretary shall note the date
thereof on the register of certificates, opposite the proper numbers, and mark
such certificate canceled.
Section 5. Lost Certificates. If any person requests that a certificate of
stock of the Corporation be issued in lieu of one lost or destroyed, that person
shall make an affidavit or affirmation of the fact and therein state the
circumstances of the loss or destruction and that person shall advertise once a
week for two (2) consecutive weeks in a newspaper which circulates in Snyder
County, giving an account of the loss or destruction, describing the certificate
and its number and the number of shares specified in it, and calling on all
persons to show cause why a new certificate shall not be issued by the
Corporation, in lieu of the one lost or destroyed; and the person claiming the
certificate shall transmit to the Corporation the affidavit or affirmation and
proof of publication from the newspaper containing the advertisements, and give
the Corporation a bond of indemnity with one or more sureties, if so required,
in the sum of not less than double the market value of the stock for each share
of stock to be issued, against any damage that may arise from issuing the new
certificate, whereupon, a new certificate shall be issued. The Corporation's
Board of Directors may revise this policy concerning lost stock certificates.
ARTICLE VIII.
BONDING OF OFFICERS AND EMPLOYEES
<PAGE>
Section 1. Bonding of Officers and Employees. The officers and employees of
the Corporation may be required to give bond with approved sureties in such sum
as the Board of Directors may determine. No Directors or officer shall be surety
in such bond and these bonds shall be in the custody of the President, (except
the bond of the President which shall be held by the Secretary of the
Corporation) who shall report their sufficiency annually or more often to the
Board and these bonds shall be retained by the Corporation for two (2) years
after the persons giving the same shall have left its service.
ARTICLE IX.
SURETYSHIP BY THE CORPORATION
Section 1. Suretyship by the Corporation. The Corporation may become sole
surety in any case when by law one or more sureties may be required for the
faithful performance of any trust or office and may demand the deposit of such
securities or property as may in the opinion of the President and Board of
Directors sufficient to the Corporation for becoming such surety.
ARTICLE X.
INDEMNIFICATION
Section 1. Indemnification of Directors, Officers, Employees and Agents.
(a) The Corporation shall indemnify any Director or officer, and may
indemnify any other employee or agent, who was or is a party to, or is
threatened to be made a party to or who is called as a witness in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the Corporation, by reason
of the fact that he is or was a Director, officer, employee or agent
of the Corporation, or is or was serving at the request of the
Corporation as a Director, officer, employee or agent of another
Corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding unless 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. The discretionary authority granted by this paragraph
(a) shall be exercised by the Board of Directors.
(b) The Corporation shall pay expenses incurred by a Director or officer
and may pay expenses incurred by any other employee or agent, in
defending a civil or criminal action, suit or proceeding in advance of
the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such person to repay such amount
if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation. The discretionary authority granted by
this paragraph (b) shall be exercised by the Board of Directors.
(c) The indemnification and advancement of expenses provided by or granted
pursuant to this Section 1 shall not be deemed exclusive of any other
rights to which those seeking
<PAGE>
indemnification or advancement of expenses may be entitled under any
By-Law, agreement, contract, vote of stockholders or Directors or
pursuant to the direction, howsoever embodied, of any court of
competent jurisdiction or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office. It is the policy of the Corporation that indemnification of,
and advancement of expenses to, Directors and officers of the
Corporation shall be made to the fullest extent permitted by law,
including without limitation, the law of Pennsylvania. To this end,
the provisions of this Section 1 shall be deemed to have been amended
for the benefit of Directors and officers of the Corporation,
effective immediately upon any modification of the Business
Corporation Law of the Commonwealth of Pennsylvania (the "Business
Corporation Law") or the Directors' Liability Act of the Commonwealth
of Pennsylvania (the "Directors' Liability Act") or any other
applicable law which expands or enlarges the power of obligation of
Corporations organized under the Business Corporation Law or subject
to the Directors' Liability Act to indemnify, or advance expenses to
Directors and officers of the Corporation.
(d) The indemnification and advancement of expenses provided by, or
granted pursuant to this Section 1 shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to
be a Director, officer, employee or agent of the Corporation and shall
inure to the benefit of the heirs, executors and administrators of
such person.
(e) The Corporation shall have the authority to create a fund of any
nature, which may, but need not be, under the control of a trustee, or
otherwise secure or insure in any manner, its indemnification
obligations, whether arising under these By-Laws or otherwise. This
authority shall include, without limitation, the authority to (i)
deposit funds in trust or in escrow, (ii) establish any form of
self-insurance, (iii) secure its indemnity obligation by grant of a
security interest, mortgage or other lien on the assets of the
Corporation or (iv) establish a letter of credit, guaranty or surety
agreement for the benefit of such persons in connection with the
anticipated indemnification or advancement of expenses contemplated in
this Section 1. The provisions in this Section 1 shall not be deemed
to preclude the indemnification of, or advancement of expenses to, any
person who is not specified in this Section 1 but whom this
Corporation has the power or obligation to indemnify, or to advance
expenses for, under the provisions of the Business Corporation Law or
the Directors' Liability Act or otherwise. The authority granted by
this paragraph (e) shall be exercised by the Board of Directors of the
Corporation.
(f) Notwithstanding any other provision of these By-Laws, any amendment,
alteration, change, repeal or adoption of any provision of these
By-Laws, which diminishes, impairs or otherwise adversely affects any
right of indemnification or advancement of expenses under this Section
1 shall be effective only with regard to claim of right of
indemnification or advancement of expenses arising from transactions,
acts or omissions occurring on or after the effective date of such
amendment, alteration, change, repeal or adoption and shall not
diminish, impair or otherwise adversely affect any claims of right of
indemnification or advancement of expenses arising from transactions,
acts or omissions occurring prior to the effective date of such
amendment, alteration, change, repeal or adoption.
(g) Each person who is a Director or officer and when authorized by the
Board of Directors, each employee and agent of the Corporation shall
be deemed to be acting in reliance upon
<PAGE>
the rights of indemnification provided by this Section 1. All rights
to indemnification under this Section 1 shall be deemed a contract
between the Corporation and person or entity indemnified pursuant to
which the Corporation and each person intend to be legally bound.
(h) Notwithstanding any other provision of this Section 1, the Corporation
shall not indemnify under this Section, a Director, officer, employee
or agent for any liability incurred in a proceeding initiated (which
shall not be deemed to include counterclaims or affirmative defenses)
or participated in as an intervenor or amicus curiae by the person
seeking indemnification, unless such initiation of or participation in
the proceeding is authorized, either before or after its commencement,
by the affirmative vote of a majority of the Directors in office. This
paragraph (h) does not apply to reimbursement of expenses incurred in
successfully prosecuting or defending the rights of an indemnified
person granted by or pursuant to this Section 1.
(i) The provisions of this Section 1 have been adopted by the stockholders
of the Corporation and are intended to constitute By-Laws authorized
by Section 410F of the Business Corporation Law and the Directors'
Liability Act.
ARTICLE XI.
GENERAL PROVISIONS
Section 1. Financial Reports. Subject to the requirement of applicable law,
the Board of Directors shall have discretion to determine whether financial
reports shall be sent to stockholders, what such reports shall contain, and
whether such reports shall be audited or accompanied by the report of an
independent or certified public accountant.
Section 2. Corporate Seal. The common or corporate seal of the Corporation
is and, until otherwise ordered by the Board of Directors, shall be an
impression upon paper or wax bearing words, SUN BANCORP, INC., in the form
impressed hereon. A facsimile of the corporate seal of the Corporation my be
used whenever lawful.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be fixed
by resolution of the Board of Directors.
Section 4. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 5. Waiver of Notice. Whenever any notice is required to be given
under the provisions of the statutes or these By-Laws, a waiver thereof in
writing signed by the person or persons entitled to said notice, whether before
or after the time stated thereon, shall be deemed equivalent to the giving of
such notice. Attendance of a person, either in person or by proxy, at any
meeting shall constitute a waiver of notice of such meeting.
<PAGE>
Section 6. Participation in Meetings via Communications Equipment. One or
more Directors' may participate in a meeting of the Board of Directors (or a
committee thereof) by means of conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other. A Director participating in a meeting by such a means shall be
deemed to be present in person at the meeting for all purposes, including
without limitation, for purposes of determining whether a quorum is present at
the meeting and for voting on any matters before the meeting.
ARTICLE XII.
AMENDMENTS OF BY-LAWS
Section 1. Amendment of By-Laws. The authority to make, amend or repeal
these ByLaws shall be vested in the Board of Directors by a majority vote of the
whole Board, subject to the power of the stockholders to change or repeal such
By-Laws by a vote of seventy five percent (75%) or more of shares, entitled to
vote in the election of Directors, in favor of any amendment of these By-Laws,
which is opposed by the Board of Directors. If the Board of Directors approves a
proposed amendment of these By-Laws by a vote of at least three fourths (3/4) of
its members, then a vote of at least sixty six and two thirds percent (66 2/3%)
of the shares entitled to vote in the election of Directors is required to
authorize such an amendment to these By-Laws.
ARTICLE XIII.
OPT OUT AND NONAPPLICABILITY OF SUBSECTIONS (d) THROUGH (f) OF
SECTION 511, SUBSECTIONS (e) THROUGH (g) OF SECTION 1721 OF THE BUSINESS
CORPORATION LAW OF 1988, AS ADDED AND AMENDED BY ACT 36, AND
SUBCHAPTER G AND SUBCHAPTER H OF CHAPTER 25 OF THE BUSINESS
CORPORATION LAW OF 1988 AS ADDED AND AMENDED BY ACT 36 OF 1990
Section 1. Opt Out and Nonapplicability of Subsections (d) through (f) of
Section 511 and Subsections (e) through (g) of Section 1721 and Subchapters G
and H. This Corporation specifically opts out and shall not be governed by
Subsections (d) through (f) of Section 511, Subsections (e) through (g) of
Section 1721, pertaining to Standards of Care and Fiduciary Duties of Directors,
of the Business Corporation Law of 1988, as added and amended by Act 36 of 1990,
and Subchapter G, Control-share Acquisitions, and Subchapter H, Disgorgement by
Certain Controlling Shareholders Following Attempts to Acquire Control, of
Chapter 25 of the Business Corporation Law of 1988, as added and amended by Act
36 of 1990. Subsections (d) through (f) of Section 511, Subsections (e) through
(g) of Section 1721, pertaining to Standards of Care and Fiduciary Duties of
Directors, of the Business Corporation Law of 1988, as added and amended by Act
36 of 1990, and Subchapter G, Control-share Acquisitions, and Subchapter H,
Disgorgement by Certain Controlling Shareholders Following Attempts to Acquire
Control, of Chapter 25 of the Business Corporation Law of 1988, as added and
amended by Act 36 of 1990, shall not be applicable to the Corporation.
EXHIBIT 4.3
SUN BANCORP, INC.
1998 STOCK INCENTIVE PLAN
<PAGE>
SUN BANCORP, INC.
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 Sun Bancorp,
Inc. (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, 650,000 shares,
as may be adjusted pursuant to Section 16 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.
1
<PAGE>
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
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, or (b) "Non-Qualified Options" to purchase Stock, which are not
intended to qualify under Sections 421 through 424 of the Code. More than
one Award may be granted to an eligible person, and the grant of any Award
shall not prohibit the grant 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 or Non-Qualified Option, 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) 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;
(b) 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;
2
<PAGE>
(c) 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 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;
(d) 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 or less than the Stock's par value; and
(e) 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 NonQualified 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.
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<PAGE>
9. 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 it 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.
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
the acquisition or offer has not been duly approved by the Board; 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) thereupon any and all
Awards immediately shall become and remain exercisable.
10. Withholding. When a participant exercises a stock option 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
4
<PAGE>
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.
11. 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 New York over-the-counter market, as
reported by the National Association of Securities Dealers, Inc., 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.
12. 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, 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
plans 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 Qualified Option is at least one hundred and ten percent
(110%) of the fair
5
<PAGE>
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.
13. 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.
14. 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.
15. 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.
16. 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.
6
<PAGE>
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 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 16 may be settled as a majority of the disinterested 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, 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.
17. 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.
18. 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
7
<PAGE>
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 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.
19. 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
- - - - - - - - - - - -
EXHIBIT 5
OPINION OF SHUMAKER WILLIAMS, P.C.
<PAGE>
SHUMAKER WILLIAMS, P.C.
3425 SIMPSON FERRY ROAD
CAMP HILL, PENNSYLVANIA 17011
717-763-1121
August 3, 1998
Fred W. Kelly, Jr.
President and Chief Executive Officer
Sun Bancorp, Inc.
2-16 South Market Street
Selinsgrove, Pennsylvania 17870
RE: Sun Bancorp, Inc. (the "Corporation")
Registration Statement Form S-8
Our File No.: 274-98
Dear Mr. Kelly:
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 and restated;
3. the Corporation's By-Laws; as amended and restated;
4. Resolutions adopted by the Corporation's Board of Directors on
February 9, 1998; and
5. the Plan.
Based upon such review, it is our opinion that the Corporation's common
stock, no 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>
Fred W. Kelly, Jr.
Sun Bancorp, Inc.
August 3, 1998
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.
By: /s/ B. Tyler Lincoln
------------------------------
B. Tyler Lincoln
BTL\kec
cc: Nicholas Bybel, Jr., Esquire
EXHIBIT 23.2
CONSENT OF PARENTE, RANDOLPH, ORLANDO,
CAREY & ASSOCIATES
<PAGE>
PARENTE, RANDOLPH, ORLANDO,
CAREY & ASSOCIATES
- ------------------------------
CONSULTANTS & ACCOUNTANTS
Consent of Independent Auditors
The Board of Directors
Sun Bancorp, Inc.
We consent to the incorporation by reference in the Registration Statement on
Form S-8 relating to the Sun Bancorp, Inc. 1998 Stock Incentive Plan of our
report dated January 30, 1998, which appears on page 27 of the Sun Bancorp, Inc.
Annual Report to Shareholders for the year ended December 31, 1997, and relates
to the consolidated balance sheet of Sun Bancorp, Inc. and subsidiaries as of
December 31, 1997, and 1996, and the related consolidated statements of income,
changes in shareholders' equity and cash flows for each of the three years in
the period ended December 31, 1997.
/s/ Parente, Randolph, Orlando, Carey & Associates
--------------------------------------------------
Parente, Randolph, Orlando, Carey & Associates
August 4, 1998
Williamsport, Pennsylvania
