<PAGE>
As filed with the Securities and Exchange Commission May 17, 2000
Registration No.: ________________
-----------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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COMMUNITY BANKS, 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)
6022
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(Primary Standard Industrial Classification No.)
23-2251762
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(I.R.S. Employer Identification No.)
150 Market Square, Millersburg, Pennsylvania 17061 (717) 692-4781
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(Address, including zip code, and telephone number, including area code, or
registrant's principal executive offices)
2000 Employee Stock Purchase Plan
---------------------------------
(Full title of plan)
EDDIE L. DUNKLEBARGER
President and C.E.O.
COMMUNITY BANKS, INC.
150 Market Square
Millersburg, Pennsylvania 17061 (717) 692-4781
----------------------------------------------------
(Name, address and telephone number of Agent for Service)
Copies to:
BRADLEY A. WALKER
METTE, EVANS & WOODSIDE
3401 North Front Street
P.O. Box 5950
Harrisburg, Pennsylvania 17110-0950
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Title of each Amount Proposed Proposed Amount of
classof securities to be maximum maximum registration fee
to be registered Registered offering aggregate offering
price per unit /1/ price
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 100,000 $18.75 $1,875,000 $568.18
Par value
$5.00 per share
</TABLE>
/1/ Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, and based on the average of the high and low prices
of the Common Stock on May 11, 2000, as reported on the American Stock
Exchange.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Community Banks, Inc. (the "Company") with
the SEC, or other governing body as appropriate, are incorporated herein by
reference:
(1) The Annual Report of the Company on Form 10-K for its fiscal year ended
December 31, 1999.
(2) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act of 1934 since December 31, 1999.
(3) The description of the Company's common stock contained in the
Registration Statement filed with the Board of Governors of the Federal Reserve
System pursuant to Section 12(g) of the Exchange Act of 1934, which Registration
Statement became effective on or about October 7, 1994.
(4) All documents subsequently filed by the Company with the SEC pursuant
to Section 13(a), (c), 14 or 15(d) or the Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be part hereof from the date of filing of such documents.
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<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 1741 and 1742 of the Pennsylvania Business Corporation Law of
1988, as amended (the "BCL") provide that a business corporation may indemnify
directors and officers against liability they may incur as such provided that
the particular person acted in good faith and in a manner he or she 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
or her conduct was unlawful. In the case of actions against a director or
officer by or in the right of the corporation, the power to indemnify extends
only to expenses (not judgments and amounts paid in the settlement) and such
power generally does not exist if the person otherwise entitled to
indemnification shall have been adjudged to be liable to the corporation unless
it is judicially determined that, despite the adjudication of liability but in
view of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnification for specified expenses. Under Section 1743 of the
BCL, the Company is required to indemnify directors and officers against
expenses they may incur in defending actions against them in such capacities if
they are successful on the merits or otherwise in the defense of such actions.
Under Section 1745 of the BCL, a corporation may pay the expenses of a director
or officer incurred in defending an action or proceeding in advance of the final
amounts advanced unless it is ultimately determined that such person is entitled
to indemnification from the corporation. Article 12 of the Company's Articles of
Incorporation and Article 20 of the Company's Bylaws provide indemnification of
directors, officers and other agents of the Company and advancement of expenses
to the extent otherwise permitted by the BCL.
Section 1746 of the BCL grants a corporation broad authority to indemnify
is directors, officers and other agents for liabilities and expenses incurred in
such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted wilful misconduct or recklessness. Article 12 of the Company's
Articles of Incorporation provides that the Company indemnify any and all
persons whom it shall have the power to indemnify for and against any and all
expenses, liabilities or other matters for which indemnification is permitted by
applicable laws.
Article 20 of the Company's Bylaws conditions any indemnification or
advancement of expenses upon a determination, made in accordance with the
procedures specified in Section 1744 of the BCL, by the Company's directors or
shareholders that indemnification or advancement of expenses is proper because
the director or officer met the standard of conduct set forth in Section 1741 or
1742 of the BCL, as applicable.
As authorized by Section 1747 of the BCL and Article XIV, the Company
maintains, on behalf of its directors and officers, insurance protection against
certain liabilities arising out of the discharge of their duties, as well as
insurance covering the Company for indemnification payments made to its
directors and officers for certain liabilities. The premiums for such insurance
are paid by the Company.
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<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable. No exemption from registration is claimed.
ITEM 8. EXHIBITS.
4. 2000 Employee Stock Purchase Plan of the Company.
5. Opinion of Mette, Evans & Woodside, General Counsel of the Company.
23.a. Consent of Mette, Evans & Woodside, General Counsel of the Company -
included in Exhibit 5.
23.b. Consent of PricewaterhouseCoopers, LLP (Auditors).
24. Powers of Attorney included in "SIGNATURES" on page 5.
ITEM 9. UNDERTAKINGS.
1. The undersigned Registrant hereby undertakes as follows:
(a) to file, during any period in which offers or sales are being made, a post
effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(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.
(b) that, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) 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.
2. The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of such request,
and to send the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents filed subsequent
to the effective date of the Registration Statement through the date of
responding to the request.
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<PAGE>
3. The undersigned Registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
4. 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.
5. 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
6. The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of a registration statement as
permitted by Rule 430A and contained in the form of prospectus to be filed by
the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of the registration statement at the time it was
declared effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in Millersburg,
Pennsylvania, on May 12, 2000.
COMMUNITY BANKS, INC.
By: /s/ Eddie L. Dunklebarger
-----------------------------------
Eddie L. Dunklebarger
President and Chief Executive Officer
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated. Each person whose
signature appears below in so signing also makes, constitutes and appoints Eddie
L. Dunklebarger and Ernest L. Lowe, and each of them acting alone, his true and
lawful attorney-in-fact, with full power of substitution, for him in any and all
capacities, to execute and cause to be filed with the Securities and Exchange
Commission any or all amendments and post-effective amendments to this
Registration Statement, with exhibits thereto and other documents in connection
therewith, and hereby ratifies and confirms all that said attorney-in-fact or
his substitute or substitutes may do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
- ----------------------- ----------------------------- ------------
<S> <C> <C>
/s/ President and Chief Executive May 12, 2000
- ----------------------- Officer and a Director
Eddie L. Dunklebarger
/s/ Chairman May 12, 2000
- ----------------------- and a Director
Ernest L. Lowe
/s/ Director May 12, 2000
- -----------------------
Ronald E. Boyer
/s/ Director May 12, 2000
- -----------------------
Samuel E. Cooper
/s/ Director May 12, 2000
- -----------------------
Kenneth L. Deibler
/s/ Director May 12, 2000
- -----------------------
Peter DeSoto
/s/ Director May 12, 2000
- -----------------------
Leon E. Kocher
/s/ Director May 12, 2000
- -----------------------
Ray N. Leidich
/s/ Director May 12, 2000
- -----------------------
Thomas W. Long
/s/ Director May 12, 2000
- -----------------------
Donald L. Miller
/s/ Director May 12, 2000
- -----------------------
Susan K. Nenstiel
/s/ Director May 12, 2000
- -----------------------
Robert W. Rissinger
/s/ Director May 12, 2000
- -----------------------
Allen Shaffer
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Director May 12, 2000
- -----------------------
Thomas L. Miller
/s/ Director May 12, 2000
- -----------------------
James A. Ulsh
/s/ Director May 12, 2000
- -----------------------
Earl L. Mummert
/s/ Director May 12, 2000
- -----------------------
John W. Taylor, Jr.
/s/ Director May 12, 2000
- -----------------------
Wayne H. Mummert
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
4. 2000 Employee Stock Purchase Plan of the Company.
5. Opinion of Mette, Evans & Woodside, General Counsel of the Company.
23.a. Consent of Mette, Evans & Woodside, General Counsel of the Company -
included in Exhibit 5.
23.b. Consent of PricewaterhouseCoopers, LLP (Auditors).
24. Powers of Attorney included in "SIGNATURES" on page 5.
-8-
<PAGE>
EXHIBIT 4.
COMMUNITY BANKS, INC.
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
ARTICLE I - PURPOSE
1.01. PURPOSE
The Community Banks, Inc. Employee Stock Purchase Plan will provide a
method for employees of Community Banks, Inc. and its subsidiaries to acquire a
proprietary interest in Community Banks, Inc. (the "Company"). Under the
Employee Stock Purchase Plan, participating employees may purchase shares of the
Common Stock of the Company. The Company intends to have the Employee Stock
Purchase Plan qualify as an "employee stock purchase plan" under (S)423 of the
Internal Revenue Code of 1986, as amended. The Employee Stock Purchase Plan
shall be construed to comply with the requirements of that section of the
Internal Revenue Code.
ARTICLE II - DEFINITIONS
2.01. BASE PAY
"Base Pay" means the regular straight-time earnings of an employee,
excluding payments for overtime, shift premium, bonuses and other special
payments, commissions and other marketing incentive payments.
2.02. BOARD OF DIRECTORS
"Board of Directors" means the Board of Directors of the Company.
2.03. CODE
"Code" means the Internal Revenue Code of 1986, as amended.
2.04. COMMITTEE
"Committee" means the committee administering the Employee Stock Purchase
Plan, which is more fully described in Article XI.
2.05. COMPANY
"Company" means Community Banks, Inc.
2.06. EMPLOYEE
"Employee" means any person who is employed by the Company or any of its
subsidiaries, except those employees who work twenty (20) hours or less per
week, or five (5) months or less per calendar year.
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<PAGE>
2.07. OFFERINGS
"Offerings" means the monthly offerings of the Company's common stock. The
first Offering will begin on July 1, 2000 and end on July 31, 2000.
2.08. OFFERING COMMENCEMENT DATE
"Offering Commencement Date" means the first day of each month.
2.09. OFFERING TERMINATION DATE
"Offering Termination Date" means the last day of each month.
2.10. PARTICIPANT
"Participant" means any eligible employee of the Company or any of its
subsidiaries that has completed an authorization for payroll deduction on the
form provided by the Company and filed the form with the Secretary of the
Company.
2.12. PLAN
"Plan" means the Community Banks, Inc. Employee Stock Purchase Plan.
2.13. STOCK
"Stock" means the common stock of the Company.
ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.01. INITIAL ELIGIBILITY
An employee is eligible to participate in the Plan if: (i) he or she has
completed ninety (90) days' employment; and (ii) he or she is employed by the
Company or any of its subsidiaries on the date the employee's participation in
the Plan becomes effective. Eligible employees may participate in Offerings
under the Plan which commence on or after the employee meets the eligibility
requirements set forth in this section.
3.02. LEAVE OF ABSENCE
For purposes of the Plan, a person on leave of absence will be considered
an employee for the first 90 days of the leave of absence. The person's
employment shall be considered terminated at the close of business on the 90th
day of the leave of absence. Termination by the Company (or a subsidiary as the
case may be) of any employee's leave of absence, other than termination of the
leave of absence on return to full time or part time employment, will terminate
the employee's participation in the Plan and the employee's right to exercise
any option outstanding under the Plan.
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<PAGE>
3.03. RESTRICTIONS ON PARTICIPATION
Any provision of the Plan to the contrary notwithstanding, no employee will
be granted an option:
(a) if, immediately after the grant, the employee would own stock, and/or
hold outstanding options to purchase stock, possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company (for
purposes of this paragraph, the rules of (S)424(d) of the Code shall apply in
determining stock ownership of any employee); or
(b) which permits the Participant's rights to purchase stock under all
employee stock purchase plans of the Company to accrue at a rate which exceeds
$25,000 determined by the fair market value of the stock (determined at the time
the option is granted) for each calendar year in which the option is
outstanding.
3.04. COMMENCEMENT OF PARTICIPATION
An eligible employee may become a Participant by completing an
authorization for a payroll deduction on the form provided by the Company and
filing it with the Secretary of the Company. With respect to each Offering, the
payroll deduction authorization must be received by the Company on or before the
date set therefor by the Committee. For each Offering, payroll deductions for a
Participant will commence on the applicable Offering Commencement Date, and will
end on the Offering Termination Date, unless sooner terminated by the
Participant as provided in Article VIII.
ARTICLE IV - OFFERINGS
4.01. MONTHLY OFFERINGS
The Plan will be implemented by monthly Offerings of the Company's Common
Stock beginning on the 1st day of each month and terminating on the last day of
each month.
ARTICLE V - PAYROLL DEDUCTIONS
5.01. AMOUNT OF DEDUCTION
At the time a Participant files the authorization for payroll deduction, he
or she shall elect to have deductions made from his or her pay. The deductions
shall be made on each payday during the time the employee is a Participant in an
Offering. The rate of each deductions shall be at the rate of 2, 3, 4, 5, 6, 7,
8, 9 or 10% of the Participant's base pay in effect at the Offering Commencement
Date.
5.02. PARTICIPANT'S ACCOUNT
All payroll deductions made for a Participant shall be credited to the
Participant's account under the Plan. A Participant may not make any separate
cash payments into the account except when on leave of absence, and then only as
provided in (S)5.04.
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<PAGE>
5.03. CHANGES IN PAYROLL DEDUCTIONS
A Participant may discontinue participation in the Plan as provided in
Article VIII. No other change can be made during an Offering. Specifically, a
Participant may not alter the amount of his or her payroll deductions for that
Offering.
5.04 LEAVE OF ABSENCE
If a Participant goes on a leave of absence, that Participant will have the
right to elect:
(a) to withdraw the balance in his or her account pursuant to (S)7.02;
(b) to discontinue contributions to the Plan but remain a Participant in
the Plan; or
(c) remain a Participant in the Plan during the leave of absence,
authorizing deductions to be made from payments by the Company to the
Participant during the leave of absence and undertaking to make cash
payments to the Plan at the end of each payroll period to the extent that
amounts payable by the Company to the Participant are insufficient to meet
the Participant's authorized Plan deductions.
ARTICLE VI - GRANTING OF OPTION
6.01. NUMBER OF OPTION SHARES
On the Commencement Date of each Offering, a Participant will be granted an
option to purchase as many whole and fractional shares of the Stock as he or she
will be able to purchase with the aggregate sum of the payroll deduction
deposited in his or her account during that Offering.
6.02. OPTION PRICE
The option price of Stock purchased during each Offering for a Participant
shall be ninety (90%) percent of the fair market value of the Stock on the
Offering Commencement Date or the nearest prior business day to the Offering
Commencement Date. The percentage used shall be subject to change in the sole
and exclusive discretion of the Board of Directors.
ARTICLE VII - EXERCISE OF OPTION
7.01. AUTOMATIC EXERCISE
Unless a Participant gives written notice to the Secretary of the Company
as hereinafter provided, the Participant's option for the purchase of Stock with
payroll deductions made during any offering will be exercised automatically on
the Offering Termination Date for the purchase of the number of whole and
fractional shares of Stock which the balance in his or her account at that time
will purchase at the applicable option price (but not in excess of the number of
shares for which options have been granted to the employee pursuant to (S)6.01).
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<PAGE>
7.02. WITHDRAWAL OF ACCOUNT
By written notice to the Secretary of the Company, at any time prior to the
Offering Termination Date applicable to any Offering, a Participant may elect to
withdraw all the money in the Participant's account.
7.03. FRACTIONAL SHARES
Fractional shares will be issued under the Plan.
7.04. TRANSFERABILITY OF OPTION
During a Participant's lifetime, options held by the Participant shall be
exercisable only by that Participant.
ARTICLE VIII - WITHDRAWAL
8.01. IN GENERAL
A Participant may withdraw payroll deductions credited to his or her
account under the Plan at any time (subject to Section 7.02) by giving written
notice to the Secretary of the Company. All of the Participant's payroll
deductions credited to his or her account will be paid to the Participant
promptly after receipt of notice of withdrawal. No further payroll deductions
will be made from the Participant's pay during such Offering.
8.02. EFFECT ON SUBSEQUENT PARTICIPATION
A Participant's withdrawal from any Offering will not have any effect upon
his or her eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by the Company.
8.03. TERMINATION OF EMPLOYMENT
Upon termination of the Participant's employment for any reason, including
retirement (but excluding death or continuation of a leave of absence for a
period beyond 90 days), the Participant's participation in the Plan shall
automatically terminate, the Participant shall not be entitled to purchase any
shares at the end of the Offering, and the payroll deductions credited to the
Participant's account will be returned to the Participant.
8.04. TERMINATION OF EMPLOYMENT DUE TO DEATH
Upon termination of the Participant's employment because of death, the
Participant's beneficiary (as defined in (S)12.01) shall have the right to
elect, by written notice given to the Secretary of the Company prior to the
earlier of the Offering Termination Date or the expiration of a period of sixty
(60) days commencing with the date of death of the Participant, either:
(a) to withdraw all of the payroll deductions credited to the Participant's
account under the Plan; or
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<PAGE>
(b) to exercise the Participant's option for the purchase of Stock on the
Offering Termination Date following the date of the Participant's death under
the terms described in Section 7.01.
In the event that no written notice of election is received by the
Secretary of the Company, the beneficiary shall automatically be deemed to have
elected, pursuant to paragraph (b), to exercise the Participant's option.
8.05. LEAVE OF ABSENCE
A Participant on leave of absence shall, subject to the election made by
the Participant pursuant to (S)5.04, continue to be a Participant in the Plan so
long as the Participant is on continuous leave of absence. A Participant who
has been on leave of absence for more than 90 days will not be entitled to
participate in any offering commencing after the 90th day of such leave of
absence. Notwithstanding any other provisions of the Plan, unless a Participant
on leave of absence returns to regular full time or part time employment with
the Company at the earlier of: (a) the termination of such leave of absence or
(b) three months from the 90th day of the leave of absence, the Participant's
participation in the Plan shall terminate on whichever of such dates first
occurs.
ARTICLE IX - INTEREST
9.01 PAYMENT OF INTEREST
No interest will be credited to a Participant's account regardless of
whether the funds in the account are used to exercise options or are withdrawn.
ARTICLE X - STOCK
10.01 MAXIMUM SHARES
The maximum number of shares which will be issued under the Plan, for all
Offerings shall be 100,000 shares, subject to adjustment upon changes in
capitalization of the Company as provided in (S)12.03
10.02. PARTICIPANT'S INTEREST IN OPTION STOCK
The Participant will have no interest in Stock covered by his or her option
until the option has been exercised.
10.03. DIVIDENDS
By participating in an Offering, each Participant shall be deemed to have
authorized the Company to collect and accumulate all dividends paid on shares
held in his or her account and to apply those dividends to the purchase of
additional shares of Stock as of the dividend payment date, and at the then
applicable fair market value (without any discount).
10.04. REGISTRATION OF STOCK
Stock to be delivered to a Participant under the Plan will be registered in
the name of the Participant, or, if the Participant directs by written notice to
the Company prior to the Offering Termination Date, in the names of the
Participant and one such other person as may be designate by
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<PAGE>
the Participant, as joint tenants with rights of survivorship or as tenants by
the entireties, to the extent permitted by applicable law, or in the name of a
registered broker-dealer.
ARTICLE XI - ADMINISTRATION
11.01. APPOINTMENT OF COMMITTEE
The Board of Directors shall appoint a committee (the "Committee") to
administer the Plan. The Committee which shall consist of no fewer than three
members of the Board of Directors. No member of the Committee shall be eligible
to purchase stock under the Plan.
11.02. AUTHORITY OF COMMITTEE
The Committee shall have plenary authority in its discretion to interpret
and construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, and to make all other determinations necessary or
advisable for administering the Plan. The Committee's determination shall be
conclusive.
11.03. RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE
The Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed and
may fill vacancies, however caused, in the Committee. The Committee may select
one of its members as its Chairman and shall hold its meetings at such times and
places as it shall deem advisable. Meetings by telephone are permissible. A
majority of its members shall constitute a quorum. All decisions of the
Committee shall be made by a majority of its members. The Committee may correct
any defect or omission or reconcile any inconsistency in the Plan, in the manner
and to the extent it shall deem desirable. Any decision or determination
reduced to writing and signed by a majority of the members of the Committee will
be as fully effective as if it had been made by a majority vote at a meeting
duly called and held. The Committee may appoint a secretary and shall make such
rules and regulations for the conduct of its business as it shall deem
advisable.
ARTICLE XII - MISCELLANEOUS
12.01. TRANSFERABILITY
In no event may any rights with regard to the exercise of an option or to
receive stock under the Plan be assigned, transferred, pledged, or otherwise
disposed of in any way by the Participant other than by will or the laws of
descent and distribution. Any such attempted assignment, transfer, pledge or
other disposition shall be without effect, except that the Company may treat
such act as an election to withdraw funds in accordance with (S)7.02.
12.02. USE OF FUNDS
All payroll deductions received or held by the Company under this Plan may
be used by the Company for any corporate purpose. The Company shall not be
obligated to segregate such payroll deductions.
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<PAGE>
12.03. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
(a) If, while any options are outstanding, the outstanding shares of Common
Stock of the Company have increased, decreased, changed into, or been exchanged
for a different number or kind of shares or securities of the Company through
reorganization, stock split, reverse stock split or similar transaction,
appropriate and proportionate adjustments may be made by the Committee. In
addition, the number and/or kind of shares which may be offered in the Offerings
described in Article IV hereof shall also be proportionately adjusted. No
adjustments shall be made for stock dividends. For the purposes of this
Paragraph, any distribution of shares to shareholders in an amount aggregating
20% or more of the outstanding shares shall be deemed a stock split and any
distributions of shares aggregating less than 20% of the outstanding shares
shall be deemed a stock dividend.
(b) Upon the (i) dissolution or liquidation of the Company; (ii)
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation;
or (iii) upon a sale of substantially all of the property or stock of the
Company to another corporation, the holder of each option then outstanding under
the Plan will thereafter be entitled to receive at the next Offering Termination
Date upon the exercise of such option for each share as to which such option
shall be exercised, as nearly as reasonably may be determined, the cash,
securities and/or property which a holder of one share of the Common stock was
entitled to receive upon and at the time of such transaction. The Board of
Directors shall take such steps in connection with such transactions as the
Board shall deem necessary to assure that the provisions of this (S)12.04 shall
thereafter be applicable, as nearly as reasonably may be determined, in relation
to the said cash, securities and/or property as to which such holder of such
option might thereafter be entitled to receive.
12.04. AMENDMENT AND TERMINATION
The Board of Directors shall have complete power and authority to terminate
or amend the Plan. The Board of Directors shall not, without the approval of
the stockholders of the Corporation (i) increase the maximum number of shares
which may be issued under any Offering (except pursuant to (S)12.04); (ii) amend
the requirements as to the class of employees eligible to purchase stock under
the Plan or permit the members of the Committee to purchase stock under the
Plan. No termination, modification, or amendment of the Plan may, without the
consent of an employee then having an option under the Plan to purchase stock,
adversely affect the rights of such employee under such option.
12.05. EFFECTIVE DATE
The Plan shall become effective as of July 1, 2000, subject to approval by
the holders of the majority of the Stock present and represented at the 2000
annual meeting of the shareholders. If the Plan is not approved, the Plan shall
not become effective.
12.06. NO EMPLOYMENT RIGHTS
The Plan does not, directly or indirectly, create any right for the benefit
of any employee or class of employees to purchase any shares under the Plan, or
create in any employee or class of employees any right with respect to
continuation of employment by the Company. The Plan shall not be deemed to
interfere in any way with the Company's right to terminate, or otherwise modify,
an employee's employment at any time.
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<PAGE>
12.07. EFFECT OF PLAN
The provisions of the Plan will be binding upon all successors of each
employee participating in the Plan, including, without limitation, the
employee's estate and the executors, administrators or trustees thereof, heirs
and legatees, and any receiver, trustee in bankruptcy or representative of
creditors of such employee.
12.08. GOVERNING LAW
The law of the State of Pennsylvania will govern all matters relating to
this Plan except to the extent it is superseded by the laws of the United
States.
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<PAGE>
EXHIBIT 5
OPINION OF COUNSEL
Community Banks, Inc.
150 Market Square
Millersburg, PA 17061
Re: Community Banks, Inc. 2000 Employee
Stock Purchase Plan Form S-8 Registration
Gentlemen:
This opinion is rendered in connection with the Registration Statement filed on
Form S-8 with the Securities and Exchange Commission under the Securities Act of
1933, under which up to 100,000 shares of common stock of Community Banks, Inc.
("Community"), par value $5.00 per share, are to be registered pursuant to the
2000 Employee Stock Purchase Plan adopted by Community's Board of Directors and
Shareholders.
We have reviewed the corporate proceedings relating to the proposed stock
offering and such other legal matters as we have deemed appropriate for the
purpose of this opinion. Based on the foregoing, and assuming all necessary
shareholder and governmental approvals, we are of the opinion that the shares of
common stock covered by the aforesaid Registration Statement will, when issued
in accordance with the terms set forth in the Prospectus, applicable law and the
Bylaws of Community, be validly issued, fully paid and nonassessable by
Community.
We hereby consent to the filing of this opinion as an Exhibit to the
aforementioned Registration Statement.
Very truly yours,
METTE, EVANS & WOODSIDE
By /s/ Bradley A. Walker
--------------------------------------
Bradley A. Walker, Esquire
<PAGE>
EXHIBIT 23.b.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated January 20, 2000, on our audits of the consolidated
financial statements of Community Banks, Inc.
/s/ PricewaterhouseCoopers, LLP
PricewaterhouseCoopers, LLP
Harrisburg, Pennsylvania
May 17, 2000
