As filed with the Securities and Exchange Commission on November 25, 1996
Registration No. _______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
F&M Bancorp
(Exact name of registrant as specified in its charter)
---------------
Maryland 52-1316473
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
---------------
110 Thomas Johnson Drive
Frederick, Maryland 21702
(301) 694-4000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
---------------
F&M Bancorp Stock Options substituted for Home Federal Corporation
Stock Options granted under the Home Federal Corporation 1988 Stock
Option and Stock Appreciation Rights Plan
(Full title of the plan)
---------------
Gordon M. Cooley James J. Winn, Jr., Esquire
F&M Bancorp Piper & Marbury L.L.P.
110 Thomas Johnson Drive 36 South Charles Street
Frederick, Maryland 21702 Baltimore, Maryland 21201
(301) 694-4000 (410) 539-2530
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share(a) Offering Price(a) Registration Fee(a)
Common Stock,
par value $5.00 per 8,578 shares $23.50 $ 201,583.00 $ 100.00
</TABLE>
(a) Pursuant to Rules 457(c), the proposed maximum offering price per share,
proposed maximum aggregate offering price and amount of registration fee
are based upon the average of the high and low prices of the Common Stock
of the registrant on the NASDAQ National Market System on November 21,
1996.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
The following documents have been filed by F&M Bancorp (the "Company")
with the Securities and Exchange Commission (the "Commission") and are
incorporated herein by reference: (a) Annual Report on Form 10-K for the year
ended December 31, 1995 (File No. 0-12638); (b) Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996, June 30, 1996, and September 30, 1996
(File No. 0-12638) and (c) the description of the Company's capital stock
contained in its Registration Statement on Form 8-B (File No. 0-12638) filed
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including all amendments and reports filed for the purpose
of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof 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 this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. The documents required to be so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. Description of Securities.
Not required.
ITEM 5. Interests of Named Experts and Counsel.
Certain legal matters in connection with the issuance of the Common
Stock offered by this Registration Statement are being passed upon for the
Company by Piper & Marbury L.L.P. of Baltimore, Maryland.
II-1
<PAGE>
ITEM 6. Indemnification of Directors and Officers.
As permitted by the Maryland General Corporation Law ("MGCL"), Article
Eighth, Paragraph 5 of the Company's Charter provides for indemnification of
directors and officers of the Company, as follows:
The Company shall indemnify (a) its directors to the full
extent provided by the general laws of the State of Maryland now or
hereafter in force, including the advance of expenses under the
procedures provided by such laws; (b) its officers to the same extent
it shall indemnify its directors; and (c) its officers who are not
directors to such further extent as shall be authorized by the Board of
Directors and be consistent with law. The foregoing shall not limit the
authority of the company to indemnify other employees and agents
consistent with law.
The Company's By-Laws contain indemnification procedures that implement
those of the Charter. The MGCL permits a corporation to indemnify its directors
and officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with any proceeding
to which they may be made a party by reason of their service in those or other
capacities, unless it is established that (a) the act or omission of the
director or officer was material to the matter giving rise to such proceeding
and (i) was committed in bad faith or (ii) was the result of active and
deliberate dishonesty, (b) the director or officer actually received an improper
personal benefit in money, property or services, or (c) in the case of any
criminal proceeding, the director or officer had reasonable cause to believe
that the action or omission was unlawful. The Company also maintains directors
and officers liability insurance.
The MGCL permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, except to the extent that
(i) the person actually received an improper benefit or profit in money,
property or services or (ii) a judgment or other final adjudication is entered
in a proceeding based on a finding that the person's action, or failure to act,
was the result of active and deliberate dishonesty and was material to the cause
of action adjudicated in the proceeding. The Company's Charter contains a
provision providing for elimination of the liability of its directors or
officers to the Company or its stockholders for money damages to the fullest
extent permitted by Maryland law.
As permitted under Section 2-418(k) of the MGCL, the Company has
purchased and maintains insurance on behalf of its directors and officers
against any liability asserted against such directors and officers in their
capacities as such, whether or not the registrant would have the power to
indemnify such persons under the provisions of Maryland law governing
indemnification.
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<PAGE>
ITEM 7. Exemption From Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
Exhibit
Number Description
5 Opinion of Piper & Marbury L.L.P. (contains Consent of Counsel).
23.1 Consent of Counsel (contained in Exhibit 5).
23.2 Consent of Independent Accountants.
24 Power of Attorney.
99.1 Home Federal Corporation 1988 Stock Option and Stock Appreciation
Rights Plan, as amended.
99.2 Home Federal Corporation Form Stock Option Agreement.
99.3 F&M Bancorp Form Substitute Stock Option.
ITEM 9. Undertakings.
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 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.
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<PAGE>
(2) 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.
(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.
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.
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 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Frederick, and the State of Maryland on this 20th
day of November, 1996.
F&M BANCORP
By: /s/ Faye E. Cannon
-----------------------
Faye E. Cannon
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Principal Executive Officer:
/s/ Faye E. Cannon President and Chief Date: November 20, 1996
---------------------- Executive Officer
Faye E. Cannon
Principal Financial and Accounting Officer:
/s/ Kenneth M. Sabanosh Vice President and Date: November 20, 1996
---------------------- Treasurer
Kenneth M. Sabanosh
A Majority of the Board of Directors:
Charles W. Hoff, III; R. Carl Benna; John D. Brunk; Beverly B. Byron; Faye
E. Cannon; Martha E. Church, Ph.D.; Albert H. Cohen; George B. Delaplaine, Jr.;
Maurice A. Gladhill; Robert K. Moler; Charles A. Nicodemus; H. Deets Warfield,
Jr.; John C. Warfield; Thomas R. Winkler; Faye E. Cannon and James K. Kluttz.
By: /s/ Faye E. Cannon For herself and as Date: November 20, 1996
---------------------- Attorney-in-Fact
Faye E. Cannon
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
5 Opinion of Piper & Marbury L.L.P. (contains Consent of Counsel).
23.1 Consent of Counsel (contained in Exhibit 5).
23.2 Consent of Independent Accountants.
24 Power of Attorney.
99.1 Home Federal Corporation 1988 Stock Option and Stock Appreciation Rights
Plan, as amended.
99.2 Home Federal Corporation Form Stock Option Agreement.
99.3 F&M Bancorp Form Substitute Stock Option.
-II-6-
Exhibit 5
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH WASHINGTON
36 SOUTH CHARLES STREET NEW YORK
BALTIMORE, MARYLAND 21201-3018 PHILADELPHIA
410-539-2530 EASTON
FAX: 410-539-0489
November 20, 1996
F&M Bancorp
110 Thomas Johnson Drive
Frederick, Maryland 21705
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for F&M Bancorp, a Maryland corporation (the
"Company"), in connection with a Registration Statement on Form S-8 which was
filed by the Company under the Securities Act of 1933, as amended, (the
"Registration Statement"), and which registers 8,578 shares of the Common Stock
of the Company (the "Shares") to be issued pursuant to the exercise of F&M
Bancorp Stock Options substituted for Home Federal Corporation Stock Options
granted under the Home Federal Corporation 1988 Stock Option and Stock
Appreciation Rights Plan (the "Substitute Options").
In our capacity as counsel for the Company, we have examined the
Registration Statement (and all amendments thereto), the Charter and By-Laws of
the Company, the Substitute Options, the proceedings of the Board of Directors
of the Company relating to the issuance of the Shares pursuant to the exercise
of the Substitute Options, a Certificate of the Secretary of the Company dated
November 15, 1996, and such other statutes, certificates, instruments and
documents relating to the Company and matters of law as we have deemed necessary
to the issuance of this opinion. In such examination, we have assumed, without
independent investigation, the genuineness of all signatures, the legal capacity
of all individuals who have executed any of the aforesaid documents, the
authenticity of all documents submitted to us as originals, the conformity with
originals of all documents submitted to us as copies (and the authenticity of
the originals of such copies), and all public records reviewed are accurate and
complete. As to factual matters, we have relied on the Certificate of the
Secretary and have not independently verified the matters stated therein. We
<PAGE>
assume that the Company will have at the time of exercise of each Substitute
Option at least that number of authorized but unissued shares of Common Stock of
the Company equal to the number of shares then being exercised under such
option.
Based upon the foregoing, we are of the opinion and advise you that the
Shares to be issued by the Company pursuant to the exercise of the Substitute
Options have been duly and validly authorized and, when issued and delivered as
contemplated in the Registration Statement will be validly issued, fully paid,
and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm and to our opinion in
the Registration Statement.
Very truly yours,
/s/ Piper & Marbury L.L.P.
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report, dated January 24, 1996, relating to the
consolidated financial statements of F&M Bankcorp that is incorporated by
reference in the annual report on Form 10-K of F&M Bancorp for the year ended
December 31, 1995, which have not been restated to reflect the November 15, 1996
consummation of the pooling-of-interest transaction, which was the subject of
the Registration Statement Number 333-4967 on Form S-4 filed with the Commission
on June 7, 1996.
/s/ Keller Bruner & Company L.L.C.
------------------------------
Keller Bruner & Company L.L.C.
Frederick, Maryland
November 18, 1996
Exhibit 24
F&M BANCORP
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and
officers of F&M Bancorp, a Maryland corporation, constitute and appoint Faye E.
Cannon and Kenneth M. Sabanosh, or either of them, the true and lawful agents
and attorneys-in-fact of the undersigned with full power and authority in said
agents and attorneys-in-fact, and in any one or both of them, to sign for the
undersigned in their respective names as directors and officers of F&M Bancorp,
a Registration Statement on Form S-8 (or other appropriate form) to be filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and any amendment or supplement to such registration statement relating
to the sale of Common Stock under F&M Bancorp Stock Options substituted for Home
Federal Corporation Stock Options granted under the Home Federal Corporation
1988 Stock Option and Stock Appreciation Rights Plan. We hereby confirm all acts
taken by such agents and attorneys-in-fact, or any one or more of them, as
herein authorized.
Dated: November 20, 1996
/s/Faye E. Cannon
-----------------
Faye E. Cannon
President and Chief Executive Officer
/s/Kenneth M. Sabanosh
-------------------------
Kenneth M. Sabanosh
Vice President and Treasurer
<PAGE>
F&M BANCORP
Power of Attorney
November 20, 1996 (continued)
/s/ John D. Brunk
- ------------------------- -------------------------
R. Carl Benna John D. Brunk
/s/ Beverly B. Byron /s/ Martha E. Church
- ------------------------- -------------------------
Beverly B. Byron Martha E. Church, Ph.D.
/s/ Albert H. Cohen
- ------------------------- -------------------------
Albert H. Cohen George B. Delaplaine, Jr.
/s/ Maurice A. Gladhill /s/ Charles W. Hoff
- ------------------------- -------------------------
Maurice A. Gladhill Charles W. Hoff, III
/s/ Robert K. Moler /s/ Charles A. Nicodemus
- ------------------------- -------------------------
Robert K. Moler Charles A. Nicodemus
/s/ H. Deets Warfield, Jr. /s/ John C. Warfield
- ------------------------- -------------------------
H. Deets Warfield, Jr. John C. Warfield
/s/ Thomas R. Winkler /s/ Faye E. Cannon
- ------------------------- -------------------------
Thomas R. Winkler Faye E. Cannon
/s/ James K. Kluttz
- -------------------------
James K. Kluttz
Exhibit 99.1
HOME FEDERAL CORPORATION
1988 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
ARTICLE I
Establishment of the Plan
Home Federal Corporation (the "Corporation") hereby establishes this
Stock Option and Stock Appreciation Rights Plan (the "Plan") upon the terms and
conditions hereinafter stated.
ARTICLE II
Purpose of the Plan
The purpose of the Plan is to improve the growth and profitability of
the Corporation and its Subsidiary Companies by attracting and retaining
qualified personnel in key positions, providing such key Employees and Directors
with a proprietary interest in the Corporation as an incentive to contribute to
the success of the Corporation and its Subsidiary Companies, and rewarding those
key Employees and Directors for outstanding performance and the attainment of
targeted goals. All Incentive Stock Options issued under this Plan are intended
to comply with the requirements of Section 422A of the Code, and the regulations
thereunder, and all provisions shall be read, interpreted and applied with that
purpose in mind.
ARTICLE III
Definitions
3.01 "Board" means the Board of Directors of the Corporation.
3.02 "Code" means the Internal Revenue Code of 1986.
3.03 "Committee" means the Compensation Committee appointed by the
Board pursuant to Article IV hereof.
3.04 "Common Stock" means shares of the common stock, $1.00 par value
per share, of the Corporation.
3.05 "Director" means any person currently serving as a director of the
Corporation or a subsidiary company, or as an advisory director on an advisory
board which may be established from time to time by the Board of Directors of
the Corporation or a subsidiary company.
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<PAGE>
3.06 "Disability" means any physical or mental impairment which
qualifies an Employee or Director for disability benefits under the applicable
long-term disability plan maintained by the Corporation or a Subsidiary Company,
or, if no such plan applies, which would qualify such Employee or Director for
disability benefits under the long-term disability plan maintained by the
Corporation, if such Employee or Director were covered by that plan.
3.07 "Effective Date" means March 17, 1988, the date on which this Plan
was adopted by the Board of Directors of the Corporation.
3.08 "Employee" means any person who is currently employed by the
Corporation or a Subsidiary Company, including Officers, but not including
directors who are not also officers of or otherwise employed by the Corporation
or a Subsidiary Company.
3.09 "Fair Market Value" shall be equal to the fair market value per
share of the Corporation's Common Stock on the date an Option is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price on the date in question of a share of Common Stock on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on which such stock is
listed, or, if such stock is not listed on any such exchange, the highest
closing bid quotation with respect to a share of such stock on the date in
question on the National Association of Securities Dealers Automated Quotation
System or any system then in use, or if no such quotations are available, the
Fair Market Value on the date in question of a share of such stock as determined
by the Board of Directors of the Corporation in good faith.
3.10 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422A of the Code.
3.11 "Non-Qualified Stock Option" means any Option granted under this
Plan which is not an Incentive Stock Option.
3.12 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.13 "Option" means a right granted under this Plan to purchase Common
Stock.
3.14 "Optionee" means an Employee, former Employee, or Director to
whom an Option is granted under the Plan.
3.15 "Retirement" means a termination of service as a Director or of
employment which constitutes a "retirement" under any applicable qualified
pension benefit plan maintained by the Corporation or a Subsidiary Company, or,
if no such plan is applicable, which would constitute "retirement" under the
Corporation's Employee Retirement Plan, if such individual were a participant in
that Plan.
-2-
<PAGE>
3.16 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.10.
3.17 "Subsidiary Company" means those subsidiaries of the Corporation
which meet the definition of "subsidiary corporations" set forth in Section
425(f) of the Code, at the time of granting of the Option in question.
3.18 For purposes of this Plan, a participant shall not be considered
to have terminated employment with the Corporation or a Subsidiary Company by
reason of any unpaid leave of absence authorized as such by the Corporation or a
Subsidiary Company under its personnel policies.
ARTICLE IV
Administration of the Plan
4.01 Duties of the Committee. The Plan shall be administered and
interpreted by the Committee as appointed from time to time by the Board
pursuant to Section 4.02 of the Plan. The Committee shall be composed of at
least three members of the Board who are not also Employees of the Corporation
or a Subsidiary Company. The Committee shall have all of the powers allocated to
it in this and other Sections of the Plan. The interpretation and construction
by the Committee of any provisions of the Plan or of any Option or Stock
Appreciation Right granted under it shall be final and binding. The Committee
shall act by vote or written consent of a majority of its members. Subject to
the express provisions and limitations of the Plan, the Committee may adopt such
rules, regulations and procedures as it deems appropriate for the conduct of its
affairs. It may appoint one of its members to be chairman and any person,
whether or not a member, to be its secretary or agent. The Committee shall
report its actions and decisions to the Board at appropriate times but in no
event less than one time per Plan Year.
4.02 Role of the Board. The members of the Committee shall be appointed
by, and will serve at the pleasure of, the Board. The Board from time to time
may remove members from, or add members to, the Committee. The Board shall have
all of the powers allocated to it in this and other sections of the Plan, may
take any action under or with respect to the Plan which the Committee is
authorized to take, and may reverse or override any action taken or decision
made by the Committee under or with respect to the Plan, provided, however, that
the Board may not revoke any Option or Stock Appreciation Right that has been
delivered to an eligible Employee or Director of the Corporation or its
Subsidiary Companies by the Committee, except in accordance with Section 4.03
below. Members of the Board who are eligible for or have been granted Options or
Stock Appreciation Rights may not vote on any matters affecting the
administration of the Plan or the grant of Options or Stock Appreciation Rights
pursuant to the Plan (although such members may be counted in determining the
existence of a quorum at any meeting of the Board during which actions with
regard thereto are taken), except that the Board of Directors, with the members
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<PAGE>
of the Committee not voting, shall administer the Program with respect to
Options and Stock Appreciation Rights granted to the members of the Committee.
4.03 Revocation for Misconduct. The Board may by resolution immediately
revoke, rescind and terminate any Option, or portion thereof, to the extent not
yet vested, or any Stock Appreciation Right, to the extent not yet exercised,
previously granted or awarded under this Plan to an Employee who is discharged
from the employ of the Corporation or a Subsidiary Company or previously granted
or awarded under this Plan to a Director whose service as a Director is
terminated for cause, which, for purposes hereof, shall mean termination for:
(1) conviction of a felony involving the misappropriation of the Corporation's
or any Subsidiary's assets or a conviction of a felony which results in a
substantial, demonstrable threat to the Corporation's or any Subsidiary's
reputation, or (ii) gross and willful failure to perform a substantial portion
of the Employee's or Director's duties and responsibilities as an Employee or
Director, which failure continues for more than thirty (30) days after written
notice given to employee or Director pursuant to a two-thirds vote of all of the
members of the Board of Directors of the Corporation or any Subsidiary, as the
case may be, then in office, such vote to set forth in reasonable detail the
nature of such failure.
4.04 Limitation on Liability. No member of the Board or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Options or Stock Appreciation Rights granted under it. If a
member of the Board or the Committee is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of anything
done or not done by him in such capacity under or with respect to the Plan, the
Corporation shall indemnify such member 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 if he acted
in good faith and in a manner he reasonably believed to be in the best interests
of the Corporation and its Subsidiary Companies and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
4.05 Compliance with Law and Regulations. The Options and Stock
Appreciation Rights granted hereunder shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation shall not be required to
issue or deliver any certificates for shares of Common Stock prior to the
completion of any registration or qualification of or obtaining of consents or
approvals with respect to such shares under any federal or state law or any rule
or regulation of any government body, which the Corporation shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option or Stock
Appreciation Right may be exercised if such exercise or the receipt of shares of
Common Stock pursuant thereto would be contrary to applicable laws and
regulations.
4.06 Restrictions on Transfer. The Corporation may place a legend upon
any certificate representing shares purchased pursuant to exercise of an Option
granted hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
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<PAGE>
ARTICLE V
Eligibility
5.01 Incentive Stock Options, Non-Qualified Stock Options, and Stock
Appreciation Rights may be granted to key Employees of the Corporation and its
Subsidiary Companies. Non-Qualified Stock Options and Stock Appreciation Rights
may be granted to Directors of the Corporation and its Subsidiary Companies. The
designation of an Employee as a key Employee shall be left to the discretion of
the Committee or the Board. Non-Qualified Stock Options or Stock Appreciation
Rights may be granted to Directors of either the Corporation or its Subsidiary
Companies only if the conditions stated in Section 4.01 are satisfied.
ARTICLE VI
Common Stock Covered by the Plan
6.01 Option Shares. The aggregate number of shares of Common Stock for
which Options may be granted under the Plan, subject to adjustment as provided
in Article IX, shall be 108,355. None of such shares shall be the subject of
more than one Option at any time, but if an Option as to any shares is
surrendered before exercise (including surrender in connection with exercise of
a Stock Appreciation Right), or expires or terminates for any reason without
having been exercised in full, or for any other reason ceases to be exercisable,
the number of unpurchased shares covered thereby shall again become available
for grant under the Plan as if no Options had been previously granted with
respect to such shares. The maximum number of shares of Common Stock for which
Non-Qualified Stock Options may be granted to all Directors who are not
full-time salaried employees of the Corporation or a Subsidiary Company shall
not exceed 35 percent of the shares of Common Stock covered by the Plan.
6.02 Source of Shares. The Shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market for use under the Plan.
ARTICLE VII
Number of Shares;
Designation of Grantees and Optionees
7.01 Options. The Committee shall, in its discretion, determine from
time to time which key Employees and Directors of either the Corporation or its
Subsidiary Companies will be granted Options under the Plan, the number of
shares of Common Stock subject to each Option, whether each Option will be an
Incentive Stock Option or a Non-Qualified Option and the exercise price of such
Option. In making all such determinations there shall be taken into account the
duties, responsibilities and performance of each respective Employee or
Director, his present and potential contributions to the growth and success of
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<PAGE>
the Corporation, his compensation and such other factors as the Committee shall
deem relevant to accomplishing the purposes of the Plan.
7.02 Special Limitation on Incentive Stock Option Grants.
Notwithstanding any contrary provisions contained elsewhere in this Plan, the
aggregate Fair Market Value, determined as of the time an Incentive Stock Option
is granted, of the Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar year,
under this Plan and stock options that satisfy the requirements of Section 422A
of the Code under any other stock option plan or plans maintained by the
Corporation (or any parent or Subsidiary Company), shall not exceed $100,000.
7.03 (a) Grants to Non-Employee Directors. Each Director of the
Corporation who is not an Employee of the Corporation ("Non-Employee Director")
on the date this provision is adopted by the Board shall be granted a
Non-Qualified Stock Option to purchase 1,778 shares of Common Stock effective at
such time and with a per share exercise price equal to the Fair Market Value of
a share of Common Stock on such date.
(b) Subsequent Grants. Each Non-Employee Director of the
Corporation one year from the date of the initial grants pursuant to Section
7.03(a) shall receive a Non-Qualified Stock Option to purchase 1,776 shares of
Common Stock at such time, and on the next anniversary date thereafter, in each
instance, at the per share exercise price equal to the Fair Market Value of a
share of Common Stock on such date.
(c) Vesting and Exercise of Options. Options granted to the
Non-Employee Directors shall be vested and exercisable six (6) months following
the date of grant.
ARTICLE VIII
Option Terms
Each Option granted under the Plan shall be on the following terms and
conditions:
8.01 Stock Option Agreement. The proper Officers of the Corporation and
each Optionee shall execute a Stock Option Agreement which shall set forth the
total number of shares of Common Stock to which it pertains, the exercise price,
whether it is a Non-Qualified Stock Option or an Incentive Stock Option, and
such other terms, conditions, restrictions and privileges as the Committee in
each instance shall deem appropriate, provided they are not inconsistent with
the terms, conditions and provisions of this Plan. Each Optionee shall receive a
copy of his executed Stock Option Agreement.
8.02. Option Exercise Price.
(a) Incentive Stock Options. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option shall
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be no less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock at the time such Incentive Stock Option is granted, except as
provided in Section 8.09(a) below.
(b) Non-Qualified Stock Options. The per share price at which the
subject Common Stock may be purchased upon exercise of a Non-Qualified Stock
Option may be less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock at the time such Non-Qualified Stock Option is granted.
8.03. Vesting and Exercises of Options.
(a) General Rules. Incentive Stock Options and Non-Qualified Stock
Options shall become vested and exercisable at the rate and to the extent
specified by the Committee or as set forth in Section 7.03 of this Plan.
Notwithstanding the foregoing, no vesting shall occur on or after an Optionee's
employment with the Corporation and all Subsidiary Companies, or his service as
a Director of the Corporation and all Subsidiary Companies is terminated for any
reason other than his death, Disability or Retirement. In determining the number
of shares of Common Stock with respect to which Options are vested and/or
exercisable, fractional shares will be rounded up to the nearest whole number if
the fraction is 0.5 or higher, and down if it is less. In the case of any Option
exercisable within the first six months following the date the Option is
granted, the shares of Common Stock received upon exercise of such Option may
not be sold or disposed of by the Optionee for the first six months following
the date of grant.
(b) Accelerated Vesting Upon Death, Disability or Retirement. Unless
the Committee shall specifically state otherwise at the time an Option is
granted, all Options granted under this Plan shall become vested and exercisable
in full on the date an Optionee terminates his employment with the Corporation
or a Subsidiary Company, or his service as a Director of the Corporation or a
Subsidiary Company, because of his death, Disability or Retirement.
(c) Accelerated Vesting for Changes in Control. Notwithstanding the
general rule described in Section 8.03(a), all outstanding Options shall become
immediately vested and exercisable in the event there is an actual or threatened
change in control of the Corporation.
(1) Change in Control. A "change in control of the
Corporation" shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act, whether or not the
Corporation in fact is required to comply with Regulation 14A
thereunder, provided that, without limitation, such a change in control
shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than the
Corporation, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
the Corporation representing 25% or more of the combined voting power
of the Corporation's then outstanding securities, or (ii) during any
period of twenty-four (24) consecutive months during the term of an
Option, individuals who at the beginning of such period constitute the
Board of the Corporation cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election
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by the Corporation's stockholders, of each director who was not a
director at the date of grant has been approved in advance by directors
representing at least two-thirds of the directors then if office who
were directors at the beginning of a period.
(2) Threatened Change in Control. A "threatened change in
control of the Corporation" shall mean any set of circumstances which
in the opinion of the Board, as expressed through a resolution, poses a
real, substantial and immediate possibility of leading to a change in
control of the Corporation as defined in clause (1) above.
(d) Special Exercise Restrictions. Notwithstanding Sections 8.03(a),
8.03(b) and 8.03(c) above, no Option shall be exercisable at any time while the
Optionee is employed by the Corporation or a Subsidiary Company or is serving as
a Director of the Corporation or a Subsidiary Company except between the third
and twelfth business day following the issuance of the Corporation's quarterly
or annual financial statements, unless the Committee, in its discretion,
determines to modify or waive this restriction in any individual case.
8.04 Duration of Options.
(a) General Rule. Except as provided in Section 8.03(d), 8.04(b) and
8.09, each Option or portion thereof shall be exercisable at any time on or
after it vests and becomes exercisable until the earlier of (i) ten (10) years,
in the case of an Incentive Stock Option, or ten (10) years plus one (1) month,
in the case of a Non-Qualified Stock Option, after its date of grant, or (ii)
three (3) months after the date on which the optionee ceases to be employed by,
or to serve as a Director of the Corporation and all Subsidiary Companies,
unless, in the case of a Non-Qualified Stock Option, the Committee in its
discretion decides to extend such period of exercise upon termination of
employment, or service as a Director, from three (3) months to a period not
exceeding five (5) years.
(b) Exception for Terminations Due to Death, Disability or Retirement.
If an Optionee dies while in the employ of, or serving as a Director of the
Corporation or a Subsidiary Company or terminates employment with, or service as
a Director of the Corporation or a Subsidiary Company as a result of Disability
or Retirement without having fully exercised his Options, the Optionee or the
executors, administrators, legatees or distributees of his estate shall have the
right, during the twelve (12) month period following the earlier of his death,
Disability or Retirement, to exercise such options to the extent vested on the
date of such death, Disability or Retirement. In no event, however, shall any
Option be exercisable more than ten (10) years, in the case of an Incentive
Stock Option, or ten (10) years plus one (1) month, in the case of a
Non-Qualified Stock Option, from the date it was granted.
8.05 Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an optionee's
lifetime shall be exercisable only by such Optionee.
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8.06 Manner of Exercise. Options may be exercised in part or in whole
and at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.
8.07 Payment for Shares. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall be
made to the Corporation upon exercise of the Option. All shares sold under the
Plan shall be fully paid and nonassessable. Payment for shares may be made by
the Optionee in cash or, at the discretion of the Committee, by delivering
shares of Common Stock (excluding shares acquired pursuant to the exercise of an
option) equal in Fair Market Value to the purchase price of the shares to be
acquired pursuant to the Option.
8.08 Voting and Dividend Rights. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.
8.09 Additional Terms Applicable to Incentive Stock Options. All
Options issued under the Plan as Incentive Stock Options will be subject, in
addition to the terms detailed in Section 8.01-8.08 above, to those contained in
this Section 8.09.
(a) Limitation on Ten Percent Stockholders. The price at which shares
of Common Stock may be purchased upon exercise of an Incentive Stock Option
granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option shall by its
terms not be exercisable after the earlier of the date determined under Section
8.03 or the expiration of five (5) years from the date such Incentive Stock
Option is granted.
(b) Notice of Disposition; Withholding; Escrow. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one 91) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Corporation shall be entitled to withhold from any compensation
or other payments then or thereafter due to the Optionee such amounts as may be
necessary to satisfy any withholding requirements of federal or state law or
regulation and, further, to collect from the Optionee any additional amounts
which may be required for such purpose. The Committee may, in its discretion,
require shares of Common Stock acquired by an Optionee upon exercise of an
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Incentive Stock Option to be held in an escrow arrangement for the purpose of
enabling compliance with the provisions of this Section 8.09(b).
8.10 Stock Appreciation Rights.
(a) General Terms and Conditions. The Committee may, but shall not be
obligated to, authorize the Corporation, on such terms and conditions as it
deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment by
the Corporation of an amount equal to the excess of the Fair Market Value of the
shares of Common Stock subject to the Option, or portion thereof, surrendered
over the exercise price of the Option with respect to such shares (any such
authorized surrender and payment being hereinafter referred to as a "Stock
Appreciation Right"). Such payment, at the discretion of the Committee, may be
made in shares of Common Stock valued at the then Fair Market Value thereof, or
in cash, or partly in cash and partly in shares of Common Stock.
The terms and conditions set with respect to a Stock Appreciation Right
may include (without limitation), subject to other provisions of this Section
8.10 and the Plan: the period during which, date by which or event upon which
the Stock Appreciation Right may be exercised; the method for valuing shares of
Common Stock for purposes of this Section 8.10; a ceiling on the amount of
consideration which the Corporation may pay in connection with exercise and
cancellation of the Stock Appreciation Right; and arrangements for income tax
withholding. The Committee shall have complete discretion to determine whether,
when and to whom Stock Appreciation Rights may be granted.
(b) Time Limitations. Any election by an Optionee to exercise a Stock
Appreciation Right provided pursuant to this Section 8.10 shall be made only
during the period beginning on the third business day following the release for
publication of quarterly or annual financial information required to be prepared
and disseminated by the Corporation pursuant to the requirements of the Exchange
Act and ending on the twelfth business day following such date, unless, in the
discretion of the Committee, solely Common Stock is issued upon such exercise or
such election is pursuant to a date of exercise which is automatic or fixed in
advance under the Plan, at least six months beyond the date of the grant of the
Stock Appreciation Right and outside of the control of the Optionee. The
aforesaid release date shall be deemed to have occurred when the specified
financial data appears on or in a wire service, financial news service or
newspaper of general circulation or is otherwise first made publicly available.
If a holder of a Stock Appreciation Right terminates service with the
Corporation as an Officer, Employee or Director, the Stock Appreciation Right
may be exercised only within the period, if any, within which the Option to
which it relates may be exercised.
Any election by an Optionee to exercise a Stock Appreciation Right
provided pursuant to this Section 8.10, other than a Stock Appreciation Right
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exercisable solely for Common Stock, shall be made during a quarterly window
period specified in this Section 8.10(b) which commences at least six months
from the date of grant of such Stock Appreciation Right.
(c) Effects of Exercise of Stock Appreciation Rights or Options. Upon
the exercise of a Stock Appreciation Right, the number of shares of Common Stock
available under the Option to which it relates shall decrease by a number equal
to the number of shares for which the Stock Appreciation Right was exercised.
Upon the exercise of an Option, any related Stock Appreciation Right shall
terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.
(d) Time of Grant. A Stock Appreciation Right may be granted
concurrently with the option which it relates or at any time thereafter prior to
the exercise or expiration of such Option.
(e) Nontransferable. The holder of a Stock Appreciation Right may not
transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.
(f) Tandem Incentive Stock Option -- Stock Appreciation Right. Whenever
an Incentive Stock Option and a Stock Appreciation Right authorized hereunder
are granted together and the exercise of one affects the rights to exercise the
other, the following requirements apply:
(1) The Stock Appreciation Right shall expire no
later than the expiration of the underlying Incentive Stock Option;
(2) The payment available under the Stock Appreciation Right
may not exceed the difference between the exercise price of the
underlying Option and the Fair Market Value of the Common Stock subject
to the underlying Option at the time the Stock Appreciation Right is
exercised;
(3) The Stock Appreciation Right is transferable only when the
underlying Incentive Stock Option is transferable, and under the same
conditions.
(4) The Stock Appreciation Right may be exercised only
when the underlying Incentive Stock Option is eligible to be
exercised; and
(5) The Stock Appreciation Right may be exercised only when
the Fair Market Value of the Common Stock subject to the Option exceeds
the exercise price of the Common Stock subject to the Option.
(g) Sequential Exercise Restriction Effects. For the purposes of
Section 8.09, a tandem Incentive Stock Option -- Stock Appreciation Right will
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be considered exercised in full when either the underlying Incentive Stock
Option or the Stock Appreciation Right is fully exercised.
ARTICLE IX
Adjustments for Capital Changes
The aggregate number of shares of Common Stock available for Option
under the Plan, the number of shares to which any Option or Stock Appreciation
Right relates and the exercise price per share of Common Stock under any Option
shall be proportionately adjusted for any increase or decrease in the total
number of outstanding shares of Common Stock issued subsequent to the effective
date of the Plan resulting from a split, subdivision or consolidation of shares
or any other capital adjustment, the payment of a stock dividend, or other
increase or decrease in such shares effected without receipt or payment of
consideration by the Corporation. If, upon a merger, consolidation,
reorganization, liquidation, recapitalization or the like of the Corporation,
the shares of the Corporation's Common Stock shall be exchanged for other
securities of the Corporation or of another corporation, each optionee shall be
entitled, subject to the conditions herein stated, to purchase such number of
shares of Common stock or amount of other securities of the Corporation or such
other corporation as were exchangeable for the number of shares of Common Stock
of the Corporation which such optionees would have been entitled to purchase
except for such action, and appropriate adjustments shall be made to the per
share exercise price of such options.
ARTICLE X
Amendment and Termination of the Plan
The Board may, by resolution, at any time terminate, amend or revise
the Plan with respect to any shares of Common Stock as to which Options have not
been granted. However, without approval by the affirmative vote of the holders
of a majority of the outstanding voting shares of the Corporation, no amendment
shall (a) change the maximum number of shares that may be offered for sale under
Options in the aggregate (except in accordance with the provisions of Article
IX), (b) change the class of Employees or Directors that may be granted Options,
or (c) extend the term of the Plan. The Board may not, without the consent of
the holder of an Option or Stock Appreciation Right alter or impair any Option
or Stock Appreciation Right previously granted or awarded under the Plan as
specifically authorized herein. Notwithstanding anything contained in this Plan
to the contrary, the provisions of Section 7.03 of this Plan relating to Awards
granted to Non-Employee Directors shall not be amended more than once every six
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules and regulations
promulgated under such statutes.
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ARTICLE XI
Employment Rights
Neither the Plan nor the grant of any Options or Stock Appreciation
Rights hereunder nor any action taken by the Committee or the Board in
connection with the Plan shall create any right on the part of any Employee of
the Corporation or a Subsidiary Company to continue in the employ of the
Corporation or a Subsidiary Company.
ARTICLE XII
Withholding
The Company may withhold from any cash payment made under this Plan
sufficient amounts to cover any applicable withholding and employment taxes, and
if the amount of such cash payment is insufficient, the Corporation may require
the Optionee to pay to the Corporation the amount required to be withheld as a
condition of delivering the shares acquired pursuant to an Option or Stock
Appreciation Right. The Corporation also may withhold or collect amounts with
respect to a disqualifying disposition of shares of Common Stock acquired
pursuant to exercise of an Incentive Stock Option, as provided in Section
8.09(b).
ARTICLE XIII
Effective Date of the Plan; Term
13.01. Effective Date of the Plan. This Plan shall become effective on
the Effective Date, and Options and Stock Appreciation Rights may be granted
hereunder on or after the Effective Date and prior to the termination of the
Plan. However, no Option or Stock Appreciation Right may be exercised unless
this Plan is approved by a vote of the holders of a majority of the outstanding
voting shares of the Corporation at a meeting of stockholders of the Corporation
held within twelve (12) months following adoption of this Plan by the Board of
Directors.
13.02. Term of Plan. Unless sooner terminated, the Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Options or Stock
Appreciation Rights previously granted and such Options and Stock Appreciation
Rights shall remain valid and in effect until they have been fully exercised or
earned, are surrendered or by their terms expire or are forfeited.
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ARTICLE XIV
Miscellaneous
14.01 Governing Law. To the extent not governed by federal law,
this Plan shall be construed under the laws of the State of Delaware.
14.02 Pronouns. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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Exhibit 99.2
HOME FEDERAL CORPORATION
Form Non-Qualified Stock Option Agreement
A NON-QUALIFIED STOCK OPTION ("Option") for a total of ______ shares of
Common Stock, par value $1.00 per share, of HOME FEDERAL CORPORATION (the
"Company") is hereby granted to _______________ (the "Optionee") pursuant to
Articles VII and VIII of the Company's 1988 Stock Option and Stock Appreciation
Rights Plan, as amended (the "Plan"). The Option granted hereby is subject in
all respects to the terms and provisions of the Plan and this Agreement. The
Plan is hereby incorporated by reference herein.
1. Option Price. The option price shall be ____ for each share
of Common Stock eligible to be exercised hereunder, which price is 100%
of the fair market value of the Common Stock on the date of grant of
this Option, as determined in accordance with Sections 3.09 and 7.03(a)
of the Plan.
2. Exercise of Option. Subject to any other restriction
set forth herein or in the Plan, this Option shall be exercisable six
months from the date of grant pursuant to the provisions of Section
7.03(c) and 8.03.
(a) Method of Exercise. The option shall be
exercisable by a written notice which shall:
(i) State the election to exercise the
Option, the number of shares with respect to which it is being
exercised, the person in whose name the stock certificate or
certificates for such shares of Common Stock is to be registered,
his or her address and Social Security number (or if more than one,
the names, addresses and Social Security numbers of such persons);
(ii) be signed by the person or persons
entitled to exercise the Option and, if the Option is being exercised
by any person or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of the right of such
person or persons to exercise the Option; and
(iii) be in writing and delivered in person
or by certified mail to the Company at its main office, 128 West
Washington Street.
Payment of the purchase price of any shares
with respect to which the Option is being exercised shall be by cash,
certified cashier's check payable to the order of the Company or, if
permitted by the Committee at the time of exercise, in shares of Common
Stock with a market value equivalent to the amount of the purchase
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price, as determined pursuant to Section 3.09 of the Plan, or by a
combination of cash, check or shares of Common Stock. The certificate
or certificates for shares of Common Stock as to which the Option
shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(b) Restrictions on Exercise. This Option may not be
exercised if the issuance of the shares upon such exercise would
constitute a violation of any applicable federal or state securities or
other law or valid regulation. As a condition to the exercise of this
Option, the Company may require the person exercising this Option to
make any representation or warranty to the Company as may be required
by any applicable law or regulation, and may require the Optionee to
comply with the matters set forth in Section 4.05 of the Plan.
3. Non-transferability of Option. This Option may not be
transferred in any manner otherwise than by will or the laws of descent
or distribution, and may be exercised during the lifetime of the
Optionee only by him or her. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of
the Optionee.
4. Term of Option. This Option may not be exercised more than
ten years plus one month from the date of grant of this Option, and may
be exercised during such term only in accordance with the Plan and the
terms of this Option. In no event will this Option be exercisable more
than one year after the death of the Optionee.
HOME FEDERAL CORPORATION
Date of Grant: ______________
BY: ______________________________
President
ATTEST: __________________________
Secretary
(Seal)
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Exhibit 99.3
F&M BANCORP
Conversion of Home Federal Stock Options Held by Directors
November ___, 1996
Pursuant to Section 9.4 of the Plan and Agreement to Merge (the "Plan")
dated as of April 2, 1996, by and between F&M Bancorp ("F&M Bancorp") and Home
Federal Corporation ("Home Corporation") F&M Bancorp hereby grants to you
substitute stock options as approved by the Compensation Committee and as set
forth below.
Each Home Corporation stock option held by you is hereby
converted into an F&M Bancorp stock option which entitles you to purchase a
number of shares of F&M Bancorp Common Stock equal to the number of shares of
Home Corporation Common Stock (as to each whole share) which could have been
purchased under each Home Corporation stock option multiplied by the Conversion
Ratio (as defined in the Plan). The per share exchange price of each F&M Bancorp
stock option granted hereunder shall be equal to the price per share set forth
in each Home Corporation stock option divided by the Conversion Ratio (as
defined in the Plan), rounded up to the nearest whole cent.
Conversion Calculation:
Conversion Ratio: ___________.
Name of Director: _______________________
Home Corporation stock options:
Shares Subject
Date of Grant to Option Expiration Date Exercise Price
F&M Bancorp substitute stock options:
Shares Subject
Date of Grant to Option Expiration Date Exercise Price
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IN WITNESS WHEREOF, having been duly authorized, we have signed this
document as of the ____ day of November, 1996.
F&M BANCORP
By: _____________________________________
Name: Faye E. Cannon
Title: President and Chief Executive Officer
By: _____________________________________
Name: Gordon M. Cooley
Title: Secretary
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