As filed with the Securities and Exchange Commission on May 2, 1997.
Registration No. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
Fidelity Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Pennsylvania 25-1705405
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1009 Perry Highway
Pittsburgh, Pennsylvania 15237
(412) 367-3300
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(Address of principal executive offices)
Fidelity Bancorp, Inc. 1993 Employee Stock Compensation Program,
Fidelity Bancorp, Inc. 1993 Directors' Stock Option Plan and the
Fidelity Savings Association Employee Stock Compensation Program
---------------------
(Full Title of the Plans)
Richard Fisch, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
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(Name, address and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================
Title of Proposed Proposed Maximum Amount of
Securities to Amount to be Maximum Offering Aggregate Offering Registration
be Registered Registered(1)(2) Price Per Share Price (3) Fee (3)
- ------------- ---------------- ---------------- ------------------ ------------
Common Stock
$0.01 par value
<S> <C> <C> <C> <C>
per share 147,538 shares (3) $1,899,004.60 $575.40
============================================================================================
</TABLE>
(1) The maximum number of shares of common stock issuable upon awards to be
granted under the Fidelity Bancorp, Inc. 1993 Employee Stock Compensation
Program, the Fidelity Bancorp, Inc. 1993 Directors' Stock Option Plan and
the Fidelity Savings Association Employee Stock Compensation Program
(collectively, the "Plans)" consists of 147,538 shares which are being
registered under this Registration Statement and for which a registration
fee is being paid.
(2) Plus an indeterminate number of additional shares which may be offered and
issued to prevent dilution resulting from stock splits, dividends or
similar transactions.
(3) Under Rule 457(h) of the 1933 Act, the registration fee may be calculated,
inter alia, based upon the price at which the stock options may be
exercised. An aggregate of 147,538 shares are being registered hereby, of
which 132,413 shares are under option at a weighted average exercise price
of $11.80 per share ($1,562,473.40 in the aggregate). The remainder of
such shares, which are not presently subject to options (15,125 shares),
are being registered based upon the last reported sale price of the common
stock of Fidelity Bancorp, Inc. as reported on the Nasdaq National Market
on April 25, 1997, of $22.25 per share ($336,531.25 in the aggregate) for
a total offering of $1,899,004.60.
This Registration Statement shall become effective automatically upon the
date of filing, in accordance with Section 8(a) of the Securities Act of 1933
("1933 Act") and Rule 462 of the 1933 Act.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information. *
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Item 2. Registrant Information and Employee Plan Annual Information. *
- ------
*This Registration Statement relates to the registration of 147,538 shares
of Fidelity Bancorp, Inc. (the "Company" or "Registrant") common stock, $.01 par
value per share (the "Common Stock") issuable to employees, officers and
directors of the Registrant or its subsidiaries as compensation for services in
accordance with the Fidelity Bancorp, Inc. 1993 Employee Stock Compensation
Program, the Fidelity Bancorp, Inc. 1993 Directors' Stock Option Plan and the
Fidelity Savings Association Employee Stock Compensation Program (collectively
the "Plans"). Documents containing the information required by Part I of this
Registration Statement will be sent or given to participants in the Plan as
specified by Rule 428(b)(1). Such documents are not filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424, in
reliance on Rule 428.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
- ------
The Company became subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") on August 19, 1993 and,
accordingly, files periodic reports and other information with the Commission.
Reports, proxy statements and other information concerning the Company filed
with the Commission may be inspected and copies may be obtained (at prescribed
rates) at the Commission's Public Reference Section, Room 1024, 450 Fifth
Street, N.W., Washington, D.C.
20549.
The following documents filed by the Company are incorporated in this
Registration Statement by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1996, as amended, as filed with the Commission;
(b) The Company's Quarterly Reports on Form 10-QSB for the periods ended
December 31, 1996, as filed with the Commission;
(c) The Fidelity Savings Association Employee Stock Compensation Program
filed as an exhibit included in the Registration Statement on Form S-4
(registration no. 33-55384) filed with the Commission on December 3, 1992;
(d) all other reports to be filed pursuant to Section 13(a) or 15(d) of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"); and
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act, 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 a part
hereof from the date of filing of such documents.
<PAGE>
Item 4. Description of Securities.
- ------
Not Applicable
Item 5. Interests of Named Experts and Counsel.
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Not Applicable
Item 6. Indemnification of Directors and Officers.
- ------
Section 1741 of the Pennsylvania Business Corporation Law provides that an
officer, director, employee or agent may be indemnified by the Company from and
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with threatened, pending or contemplated
proceedings (other than an action by or in the right of the Company) if such
person acted in good faith and in a manner that such person reasonably believes
to be in, or not opposed to, the best interests of the Company.
Provisions regarding indemnification of directors, officers, employees or
agents of the Company are contained in Article 9 of the Company's Articles of
Incorporation.
Under a directors' and officers' liability insurance policy, directors and
officers of the Company are insured against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended.
Additionally, the Company has in force a Directors and Officers Liability
Policy underwritten by Fidelity and Deposit with a $3.0 million aggregate limit
of liability and an aggregate deductible of $50,000 per loss both for claims
directly against officers and directors and for claims where the Company is
required to indemnify directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933 Act") may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is
therefore unenforceable.
Item 7. Exemption from Registration Claimed.
- ------
Not Applicable
Item 8. Exhibits.
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For a list of all exhibits filed or included as part of this Registration
Statement, see "Index to Exhibits" at the end of this Registration Statement.
Item 9. Undertakings.
- ------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
<PAGE>
(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;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do no apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each 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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any delayed
offering or throughout a continuous offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) 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 1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than
<PAGE>
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
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
<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 Pittsburgh, Pennsylvania, as of April 30, 1997.
FIDELITY BANCORP, INC.
By: /s/ William L. Windisch
----------------------------------------
William L. Windisch
President and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of Fidelity Bancorp, Inc., do
hereby severally constitute and appoint William L. Windisch as our true and
lawful attorney and agent, to do any and all things and acts in our names in the
capacities indicated below and to execute any and all instruments for us and in
our names in the capacities indicated below which said William L. Windisch may
deem necessary or advisable to enable Fidelity Bancorp, Inc., to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the Registration
Statement on Form S-8 relating to the offering of the Company's Common Stock,
including specifically, but not limited to, power and authority to sign, for any
of us in our names in the capacities indicated below, the Registration Statement
and any and all amendments (including post-effective amendments) thereto; and we
hereby ratify and confirm all that said William L.
Windisch shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated as of April 30, 1997.
/s/ William L. Windisch /s/ Richard G. Spencer
- ------------------------------------- ----------------------------------
William L. Windisch Richard G. Spencer
President and Chief Executive Officer Vice President and Treasurer
(Principal Executive Officer) (Principal Financial and
Accounting Officer)
<PAGE>
/s/ John R. Gales /s/ Robert F. Kastelic
- ------------------------------ -----------------------------
John R. Gales Robert F. Kastelic
Director Director
/s/ Oliver D. Keefer /s/ Charles E. Nettrour
- ------------------------------ -----------------------------
Oliver D. Keefer Charles E. Nettrour
Director Director
/s/ Joanne Ross Wilder
-----------------------------
Joanne Ross Wilder
Director
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Description Page Number
- ------- ----------- ------------
<S> <C>
4.1 Fidelity Bancorp, Inc. 1993 Employee Stock Compensation Plan __
4.2 Fidelity Bancorp, Inc. 1993 Directors Stock Option Plan __
4.3 Form of Stock Option Agreement Form __
4.4 Form of Stock Award Tax Notice __
5.1 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the
validity of the Common Stock being registered __
23.1 Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears
in the opinion filed as Exhibit 5.1) __
23.2 Consent of Independent Accountants __
24 Reference is made to the Signatures section of this
Registration Statement for the Power of Attorney
contained therein __
</TABLE>
EXHIBIT 4.1
Fidelity Bancorp, Inc.
1993 Employees Stock Compensation Program
<PAGE>
FIDELITY BANCORP, INC.
1993 EMPLOYEE STOCK COMPENSATION PROGRAM
1. Purpose. This Fidelity Bancorp, Inc. 1993 Employee Stock
Compensation Program ("Program") is intended to secure for Fidelity Bancorp,
Inc., Fidelity Savings Bank ("Bank"), any subsidiaries of either Fidelity
Bancorp, Inc. or the Bank (collectively, the "Corporation") and its
stockholders, the benefits arising from ownership of the Corporation's common
stock, par value $.01 per share ("Common Stock"), by those selected officers and
other key employees of the Corporation who will be reasonable for its future
growth. The Program is designed to help attract and retain superior personnel
for positions of responsibility with the Corporation and to provide officers and
key employees with an additional incentive to contribute to the success of the
Corporation.
2. Elements of the Program. In order to maintain flexibility in the
award of stock benefits, the Program is comprised of four parts. The first part
is the Incentive Stock Option Plan ("Incentive Plan"). The second part is the
Compensatory Stock Option Plan ("Compensatory Plan"). The third part is the
Stock Appreciation Rights Plan ("S.A.R. Plan"). The fourth part is the
Performance Shares Plan ("Performance Plan"). Copies of the Incentive Plan,
Compensatory Plan, S.A.R. Plan and Performance Plan are attached hereto as Part
I, Part II, Part III and Part IV, respectively, and are collectively referred to
herein as the "Plans." The grant of an option, appreciation right or performance
share under one of the Plans shall not be construed to prohibit the grant of an
option, appreciation right or performance share under any of the other Plans.
3. Applicability of General Provisions. Unless any Plan specifically
indicates to the contrary, all Plans shall be subject to the General Provisions
of the Program set forth below.
4. Administration of the Plans. The Plans shall be administered,
construed, governed and amended in accordance with their respective terms.
GENERAL PROVISIONS OF THE PROGRAM
Article 1. Administration. The Program shall be administered by a
committee appointed by the Board of Directors of the Corporation and composed of
not less than two directors of the Corporation, none of whom is a full-time
officer or employee of the Corporation. The committee, when acting to administer
the Program, is referred to as the "Program Administrators." Each Program
Administrator shall be a "disinterested person" as set forth in Rule
16b-3(c)(2)(i) under the Securities Exchange Act of 1934. Any action of the
Program Administrators shall be taken by majority vote or the unanimous written
consent of the Program Administrators. No Program Administrator shall be liable
for any action or determination made in good faith with respect to the Program
or to any option, stock appreciation right, or performance share granted
thereunder.
<PAGE>
Article 2. Authority of Program Administrators. Subject to the other
provisions of this Program, and with a view to effecting its purpose, the
Program Administrators shall have sole authority in their absolute discretion:
(a) to construe and interpret the Program; (b) to define the terms used herein;
(c) to prescribe, amend and rescind rules and regulations relating to the
Programs; (d) to determine the employees to whom options, appreciation rights
and performance shares shall be granted under the Program; (e) to determine the
time or times at which options, appreciation rights and performance shares shall
be granted under the Program; (f) to determine the number of shares subject to
any option or stock appreciation right under the Program and the number of
shares to be awarded as performance shares under the Program as well as the
option price, and the duration of each option, appreciation right and
performance share, and any other terms and conditions of options, appreciation
rights and performance shares; (g) to terminate the Program; and (h) to make any
other determinations necessary or advisable for the administration of the
Program and to do everything necessary or appropriate to administer the Program.
All decisions, determinations an interpretations made by the Program
Administrators shall be binding and conclusive on all participants in the
Program and on their legal representatives, heirs and beneficiaries.
Article 3. Maximum Number of Shares Subject to the Program. The
maximum aggregate number of shares of Common Stock available pursuant to the
Plans, subject to adjustment as provided in Article 6 hereof, shall be 60,000
shares of the Corporation's Common Stock. If any of the options granted under
this Program expire or terminate for any reason before they have been exercised
in full, the unpurchased shares subject to those expired or terminated options
shall again be available for the purposes of the Program. If the performance
objectives associated with the grant of any performance share(s) are not
achieved within the specified performance period or if the performance share
grant terminates for any reason before the performance objective date arrives,
the shares of the Common Stock associated with such performance shares shall
again be available for the purposes of the Program.
Article 4. Eligibility and Participation. Only regular full-time
employees of the Corporation, including officers whether or not directors of the
Corporation, or of any subsidiary, shall be eligible for selection by the
Program Administrators to participate in the Program. Directors who are not
full-time, salaried employees of the Corporation, or of any subsidiary, shall
not be eligible to participate in the Program.
Article 5. Effective Date and Term of Program. The Program shall
become effective upon its adoption by the Board of Directors of the Corporation,
subject to the subsequent approval of the Program by the stockholders of the
Corporation by such vote as may be required by applicable laws and regulations,
which vote shall be taken within 12 months of adoption of the Program by the
Corporation's Board of Directors. Options, appreciation rights and performance
shares may be granted under this Program prior to obtaining stockholder approval
of the Program, provided that any such options or appreciation rights or
performance shares shall be contingent upon such stockholder approval being
obtained and may not be exercised prior to such approval. The Program shall
continue in effect for a term of ten years unless sooner terminated under
Article 2 of the General Provisions.
Article 6. Adjustments. If the shares of Common Stock of the
Corporation as a whole are increased, decreased, changed into or exchanged for a
different number or kind of
<PAGE>
shares or securities through merger, consolidation, combination, exchange of
shares, other reorganization, recapitalization, reclassification, stock
dividend, stock, split or reverse stock split, or reverse stock split, an
appropriate and proportionate adjustment shall be made in the maximum number and
kind of shares as to which options, appreciation rights and performance shares
may be granted under this Program. A corresponding adjustment changing the
number or kind of shares allocated to unexercised options, appreciation rights,
performance shares or portions thereof, which shall have been granted prior to
any such change, shall likewise be made. Any such adjustment in outstanding
options and appreciation rights shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the option or
appreciation right, but with a corresponding adjustment in the price for each
shares or other unit of any security covered by the option or appreciation
right. In making any adjustment to the number of shares pursuant to this Article
6, any fractional shares shall be disregarded.
Article 7. Termination and Amendment of Program. The Program shall
terminate no later than ten years from the date such Program is adopted by the
Board of Directors or the date such Program is approved by the stockholders,
whichever is earlier. No options, appreciation rights or performance shares
shall be granted under the Program after that date. Subject to the limitation
contained in Article 8 of the General Provisions, the Program Administrators may
at any time amend or revise the terms of the Program, including the form and
substance of the option, appreciation right, and performance share agreements to
be used hereunder; provided that no amendment or revision shall (a)increase the
maximum aggregate number of shares that may be sold, appreciated or distributed
pursuant to options, appreciation rights or performance shares granted under
this Program, except as permitted under Article 6 of the General Provisions or
as may be approved by the stockholders of the Corporation; (b) change the
minimum purchase price for shares under Section 4 of Plan I; (c)increase the
maximum term established under the Plans for any option, appreciation right or
performance share; (d) permit the granting of an option, appreciation right or
performance share to anyone other than as provided in Article 4 of the General
Provisions; or (e) without the approval or consent of the affected optionee,
change or impair any option previously granted.
Article 8. Prior Rights and Obligations. No amendment, suspension or
termination of the Program shall, without the consent of the employee who has
received an option, appreciation right or performance share, alter or impair any
of that employee's rights or obligations under any option, appreciation right or
performance share granted under the Program prior to such amendment, suspension
or termination.
Article 9. Privileges of Stock Ownership. Notwithstanding the exercise
of any options granted pursuant to the terms of this Program or the achievement
of any performance objective specified in any performance share granted pursuant
to the terms of this Program, no employee shall have any of the rights or
privileges of a stockholder of the Corporation in respect of any shares of stock
issuable upon the exercise of his or her option or achievement of his or her
performance goal until certificates representing the shares have been issued and
delivered. No shares shall be required to be issued and delivered upon exercise
of any option or achievement of any performance goal as specified in a
performance share unless and until all of the requirements of law and of all
regulatory agencies having jurisdiction over the issuance and delivery of the
securities shall have been fully complied with. No adjustment shall be made for
<PAGE>
dividends or any other distributions for which the record date is prior to the
date on which such stock certificate is issued.
Article 10. Reservation of Shares of Common Stock. The Corporation,
during the term of this Program, will at all times reserve and keep available
such number of shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Program. In addition, the Corporation will from time to
time, as is necessary to accomplish the purposes of this Program, seek to obtain
from any regulatory agency having jurisdiction any requisite authority in order
to issue and sell shares of Common Stock hereunder. The inability of the
Corporation to obtain from any regulatory agency having jurisdiction the
authority deemed by the Corporation's counsel to be necessary to the lawful
issuance and sale of any shares of its stock hereunder shall relieve the
Corporation of any liability in respect of the non-issuance or sale of the stock
as to which the requisite authority shall not have been obtained.
Article 11. Tax Withholding. The exercise of any option, appreciation
right of performance share granted under the Program is subject to the condition
that if at any time the Corporation shall determine, in its discretion, that the
satisfaction of withholding tax or other withholding liabilities under any state
or federal law is necessary or desirable as a condition of, or in any connection
with, such exercise or the delivery or purchase of shares pursuant thereto, then
in such event, the exercise of the option, appreciation right or performance
share shall not be effective unless such withholding tax or other withholding
liabilities shall have been satisfied in a manner acceptable to the Corporation.
Article 12. Employment. Nothing in the Program or in any option, stock
appreciation right or performance share award shall confer upon any eligible
employee any right to continued employment by the Corporation, o r by any
subsidiary corporations, or limit in any way the right of the Corporation or its
subsidiary corporations at any time to terminate or alter the terms of that
employment.
PLAN I
INCENTIVE STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Incentive Plan is to promote
the growth and general prosperity of the Corporation by permitting the
Corporation to grant options to purchase shares of its Common Stock. This
Incentive Plan is designed to help attract and retain superior personnel for
positions of responsibility with the Corporation, or of any subsidiary, and to
provide key employees with an additional incentive to contribute to the success
of the Corporation. The Corporation intends that options granted pursuant to the
provisions of the Incentive Plan will qualify and will be identified as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Code"). This Incentive Plan is Part I of the
Corporation's Program. Unless any provision herein indicates to the contrary,
this Incentive Plan shall be subject to the General Provisions of the Program.
<PAGE>
Section 2. Option Terms and Conditions. The terms and conditions of
options granted under this Incentive Plan may differ from one another as the
Program Administrators shall, in their discretion, determine, as long as all
options granted under this Incentive Plan satisfy the requirements of the
Incentive Plan.
Section 3. Duration of Options. Each option and all rights thereunder
granted pursuant to the terms of this Incentive Plan shall expire on the date
determined by the Program Administrators, but in no event shall any option
granted under this Incentive Plan expire later than ten years from the date on
which the option is granted, except that any employee who owns more than 10% of
the combined voting power of all classes of stock of the Corporation, or of its
subsidiaries, must exercise any options within five years from the date of
grant. In addition, each option shall be subject to early termination as
provided in this Incentive Plan.
Section 4. Purchase Price. The purchase price for shares acquired
pursuant to the exercise, in whole or in part, of any option shall not be less
than the fair market value of the shares at the time of the grant of the option;
except that for any employee who owns more than 10% of the combined voting power
of all classes of stock of the Corporation, or of its subsidiaries, the purchase
price shall not be less than 110% of fair market value. For purposes of this
Plan I, fair market value shall be the mean of the high and low sales prices of
a share of Common Stock on the date in question (or, if such day is not a
trading day in the U.S. markets, on the nearest preceding trading day), as
reported with respect to the principal market (or the composite of the markets,
if more than one) or national quotation system in which such shares are then
traded, or if no such prices are reported, the mean between the closing high bid
and low asked prices of a share of Common Stock on that day on the principal
market or national quotation system then in use, of if no such quotations are
available, the price furnished by a professional securities dealer making a
market in such shares selected by the Board of Directors of the Corporation.
Section 5. Maximum Amount of Options in Any Calendar Year. The
aggregate fair market value (determined as of the time the option is granted) of
the Common Stock with respect to which incentive stock options, as defined in
Section 422(b) of the Code, are exercisable for the first time by any employee
during any calendar year (under the terms of this Plan and all such plans of the
Corporation and any subsidiaries) shall not exceed $100,000.
Section 6. Exercise of Options. Each option shall be exercisable in
one or more installments during its term, and the right to exercise may be
cumulative as determined by the Program Administrators. A holder of an option
may be required to agree not to dispose of either the option (other than upon
exercise or conversion) or the underlying Common Stock until at least six (6)
months shall have elapsed from the date of grant of the option. With respect to
any options that may be granted prior to the receipt of stockholder approval of
the Program, the six-month period shall not commence until the date such
stockholder approval is obtained. No option may be exercised for a fraction of a
share of Common Stock. The purchase price of any shares purchased shall be paid
in full in cash or by certified or cashier's check payable to the order of the
Corporation or by shares of Common Stock (including shares acquired pursuant to
the exercise of an option), if permitted by the Program Administrators, or by a
combination of cash, check or shares of Common Stock, at the time of exercise of
the option, provided that the form(s) of payment allowed the employee shall be
established when the option is granted. If any
<PAGE>
portion of the purchase price is paid in shares of Common Stock, those shares
shall be tendered at their then fair market value as determined by the Program
Administrators in accordance with Section 4 of this Incentive Plan.
Section 7. Acceleration of Right of Exercise of Installments.
Notwithstanding the first sentence of Section 6 of this Incentive Plan, in the
event the Corporation or its stockholders enter into an agreement to dispose of
all or substantially all of the assets or stock of the Corporation by means of a
sale, merger or other reorganization, liquidation or otherwise, or the sale of
assets or stock of any subsidiary with which an optionee is employed so that the
optionee would no longer be an employee of the Corporation or its subsidiaries,
any option granted pursuant to the terms of this Incentive Plan shall become
immediately exercisable with respect to the full number of shares subject to
that option during the period commencing as of the date of the agreement to
dispose of all or substantially all of the assets or stock of the Corporation
(or any subsidiary) and ending when the disposition of assets or stock
contemplated by that agreement is consummated or the option is otherwise
terminated in accordance with its provisions or the provisions of this Incentive
Plan, whichever occurs first; provided, however, that no option shall be
immediately exercisable under this Section 7 on account of any agreement to
dispose of all or substantially all of the assets or stock of the Corporation by
means of a sale, merger or other reorganization, liquidation or otherwise where
the stockholders of the Corporation immediately before the consummation of the
transaction will own at least 50% of the total combined voting power of all
classes of stock entitled to vote of the surviving entity, whether the
Corporation or some other entity, immediately after the consummation of the
transaction. In the event the transaction contemplated by the agreement referred
to in this Section 7 is not consummated, but rather is terminated, canceled or
expires, the options granted pursuant to this Incentive Plan shall thereafter be
treated as if that agreement had never been entered into.
Notwithstanding the first sentence of Section 6 of this Incentive
Plan, in the event of a change in control of the Corporation or threatened
change in control of the Corporation as determined by a vote of not less than a
majority of the Board of Directors of the Corporation, all options granted prior
to such change in control or threatened change of control shall become
immediately exercisable. The term "control" for purposes of this Section shall
refer to the acquisition of 10% of more of the voting securities of the
Corporation by any person or by persons acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended; provided,
however, that for purposes of this Incentive Plan, no change in control or
threatened change in control shall be deemed to have occurred if prior to the
acquisition of, or offer to acquire, 10% or more of the voting securities of the
Corporation, the full Board of Directors of the Corporation shall have adopted
by not less than two-thirds vote a resolution specifically approving such
acquisition or offer. The term "person" for purposes of this Section refers to
an individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
Section 8. Written Notice Required. Any option granted pursuant to the
terms of this Incentive Plan shall be exercised when written notice of that
exercise has been given to the Corporation at its principal office by the person
entitled to exercise the option and full
<PAGE>
payment for the shares with respect to which the option is exercised has been
received by the Corporation.
Section 9. Compliance With Securities Laws. Shares of Common Stock
shall not be issued with respect to any option granted under this Incentive Plan
unless the exercise of that option and the issuance and delivery of those shares
pursuant to that exercise shall comply with all relevant provisions of state and
federal law including, without limitation, the Securities Act of 1933, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange or national quotation system upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Corporation with respect to such compliance. The Program Administrators may also
require an employee to whom an option has been granted under this Incentive Plan
("Optionee") to furnish evidence satisfactory to the Corporation, including a
written and signed representation letter and consent to be bound by any transfer
restriction imposed by law, legend, condition or otherwise, that the shares are
being purchased only for investment and without any present intention to sell or
distribute the shares in violation of any state or federal law, rule or
regulation. Further, each Optionee shall consent to the imposition of a legend
on the shares of Common Stock subject to his or her option restricting their
transferability to the extent required by law or by this Section 9.
Section 10. Employment of optionee. Each Optionee, if requested by the
Program Administrators when the option is granted, must agree in writing as a
condition of receiving his or her option that he or she will remain in the
employ of the Corporation or any subsidiary of the Corporation, as the case may
be, following the date of the granting of that option for a period specified by
the Program Administrators, which period shall in no event exceed three years.
Nothing in this Incentive Plan or in any option granted hereunder shall confer
upon any Optionee any right to continued employment by the Corporation, or its
subsidiary corporations, or limit in any way the right of the Corporation or any
of its subsidiary corporations at any time to terminate or alter the terms of
that employment.
Section 11. Option Rights Upon Termination of Employment. If an
Optionee ceases to be employed by the Corporation or any subsidiary corporation
(or a corporation or a parent or subsidiary of such corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies), for any reason other than death or disability, his or her option shall
immediately terminate; provided, however, that the Program Administrators may,
in their discretion, allow such option to be exercised (to the extent
exercisable on the date of termination of employment) at any time within three
months after the date of termination of employment, unless either the option or
this Incentive Plan otherwise provides for earlier termination.
Section 12. Option Rights Upon Disability. If an Optionee becomes
disabled within the meaning of Section 22(e)(3) of the Code while employed by
the Corporation or any subsidiary corporation (or a corporation or a parent or
subsidiary of such corporation issuing or assuming a stock option in a
transaction to which Section 424(a) of the Code applies), the option may be
exercised, to the extent exercisable on the date of termination of employment,
at any time within one year after the date of termination of employment due to
disability, unless either the option or this Incentive Plan otherwise provides
for earlier termination.
<PAGE>
Section 13. Option Rights upon Death of Optionee. Except as otherwise
limited by the Program Administrators at the time of the grant of an option, if
an Optionee dies while employed by the Corporation or any subsidiary corporation
(or a corporation or a parent or subsidiary of such corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies), or within three months after ceasing to be an employee thereof, his or
her option shall expire one year after the date of death unless by its term it
expires sooner. During this one year or shorter period, the option may be
exercised, to the extent that it remains unexercised on the date of death, by
the person or persons to whom the Optionee's rights under the option shall pass
by will or by the laws of descent and distribution, but only to the extent that
the Optionee is entitled to exercise the option at the date of death. However,
in order for the option to continue to be treated as an incentive stock option
under Section 422 of the Code, the option must be exercised no later than three
months after the date of termination of employment.
Section 14. Options Not Transferable. Options granted pursuant to the
terms of this Incentive Plan may not be sold, pledged, assigned or transferred
in any manner otherwise than by will or the laws of descent and distribution and
may be exercised during the lifetime of an Optionee only by that Optionee or his
guardian or legal representative.
PLAN II
COMPENSATORY STOCK OPTION PLAN
Section 1. Purpose. The purpose of this Compensatory Plan is to permit
the Corporation to grant options to purchase shares of its Common Stock to
selected officers and full-time, key employees of the Corporation or any
subsidiary. This Compensatory Plan is designed to help attract and retain
superior personnel for positions of responsibility with the Corporation and its
subsidiaries and to provide key employees with an additional incentive to
contribute to the success of the Corporation. Any option granted pursuant to
this Compensatory Plan shall be clearly and specifically designated as not being
an incentive stock option, as defined in Section 422(b) of the Code. This
Compensatory Plan is Part II of the Corporation's Program. Unless any provision
herein indicates to the contrary, this Compensatory Plan shall be subject to the
General Provisions of the Program.
Section 2. Option Terms and Conditions. The terms and conditions of
options granted under this Compensatory Plan may differ from one another as the
Program Administrators shall, in their discretion, determine as long as all
options granted under this Compensatory Plan satisfy the requirements of the
Compensatory Plan.
Section 3. Duration of Options. Each option and all rights thereunder
granted pursuant to the terms of this Compensatory Plan shall expire on the date
determined by the Program Administrators, but in no event shall any option
granted under this Compensatory Plan expire later than ten years and one month
from the date on which the option is granted. In addition, each option shall be
subject to early termination as provided in this Compensatory Plan.
<PAGE>
Section 4. Purchase Price. The purchase price for shares acquired
pursuant to the exercise, in whole or in part, of any option shall be equal to
or less than the fair market value of the shares at the time of the grant of the
option. For purposes of this Plan II, fair market value shall be the mean of the
high and low sales prices of a share of Common Stock on the date in question
(or, if such day is not a trading day in the U.S. markets, on the nearest
preceding trading day), as reported with respect to the principal market (or the
composite of the markets, if more than one) or national quotation system in
which such shares are then traded, or if no such prices are reported, the mean
between the closing high bid and low asked prices of a share of Common Stock on
that day on the principal market or national quotation system then in use, or if
no such quotations are available, the price furnished by a professional
securities dealer making a market in such shares selected by the Board of
Director of the Corporation.
Section 5. Exercise of Options. Each option shall be exercisable in
one or more installments during its term and the right to exercise may be
cumulative as determined by the Program Administrators. A holder of an option
may be required to agree not to dispose of either the option (other than upon
exercise or conversion) or the underlying Common Stock until at least six (6)
months shall have elapsed from the date of grant of the option. With respect to
any options that may be granted prior tot he receipt of stockholder approval of
the Program, the six-month period shall not commence until the date such
stockholder approval is obtained. No options may be exercised for a fraction of
a share of Common Stock. The purchase price of any shares purchased shall be
paid in full in cash or by certified or cashier's check payable to the order of
the Corporation or by shares of Common Stock (including shares acquired pursuant
to the exercise of an option), if permitted by the Program Administrators, or by
a combination of cash, check or shares of Common Stock, at the time of exercise
of the option. If any portion f the purchase price is paid in shares of Common
Stock, those shares shall be tendered at their then fair market value as
determined by the Program Administrators in accordance with Section 4 of this
Compensatory Plan.
Section 6. Acceleration of Right of Exercise of Installments.
Notwithstanding the first sentence of Section 5 of this Compensatory Plan, if
the Corporation or its stockholders enter into an agreement to dispose of all or
substantially all of the assets or stock of the Corporation by means of a sale,
merger or other reorganization, liquidation, or otherwise, any option granted
pursuant to the terms of this Compensatory Plan shall become immediately
exercisable with respect to the full number of shares subject to that option
during the period commencing as of the date of the agreement to dispose of all
or substantially all of the assets or stock of the Corporation and ending when
the disposition of assets or stock contemplated by that agreement is
consummated, or the option os otherwise terminated in accordance with its
provisions or the provisions of this Compensatory Plan, whichever occurs first;
provided, however, that no option shall be immediately exercisable under this
Section 6 on account of any agreement to dispose of all or substantially all of
the assets or stock of the Corporation by means of a sale, merger or other
reorganization, liquidation or otherwise where the stockholders of the
Corporation immediately before the consummation of the transaction will own at
least 50% of the total combined voting power of all classes of stock entitled to
vote of the surviving entity, whether the Corporation or some other entity,
immediately after the consummation of the transaction. In the event the
transaction contemplated by the agreement referred to in this Section 6 is not
consummated but rather is terminated, canceled or expires, the options granted
<PAGE>
pursuant to this Compensatory Plan shall thereafter be treated as if that
agreement had never been entered into.
Notwithstanding the first sentence of Section 5 of this Compensatory
Plan, in the event of a change in control of the Corporation, or threatened
change in control of the Corporation as determined by a vote of not less than a
majority of the Board of Directors of the Corporation, all options granted prior
to such change in control or threatened change in control shall become
immediately exercisable. The term "control" for purposes of this Section shall
refer to the acquisition of 10% or more of the voting securities of the
Corporation by any person or by persons acting as a group within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended; provided,
however, that for purposes of this Compensatory Plan, no change in control or
threatened change in control shall be deemed to have occurred if prior to the
acquisition of, or offer to acquire, 10% or more of the voting securities of the
Corporation, the full Board of Directors of the Corporation shall have adopted
by not less than two-thirds vote a resolution specifically approving such
acquisition or offer. The term "person" for purposes of this Section refers to
an individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
Section 7. Written Notice Required. Any option granted pursuant to the
terms of this Compensatory Plan shall be exercised when written notice of that
exercise has been given to the Corporation at its principal office by the person
entitled to exercise the option and full payment for the shares with respect to
which the option is exercised has been received by the Corporation.
Section 8. Compliance With Securities Laws. Shares shall not be issued
with respect to any option granted under this Compensatory Plan unless the
exercise of that option and the issuance and delivery of the shares pursuant
thereto shall comply with all relevant provisions of state and federal law,
including, without limitation, the Securities Act of 1933, as amended, the rules
and regulations promulgated thereunder and the requirements of any stock
exchange or national quotation system upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Corporation with
respect to such compliance. The Program Administrators may also require an
employee to whom an option has been granted ("Optionee") to furnish evidence
satisfactory tot he Corporation, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition or otherwise, that the shares are being purchased only for
investment purposes and without any present intention to sell or distribute the
shares in violation of any state or federal law, rule or regulation. Further,
each Optionee shall consent to the imposition of a legend on the shares of
Common Stock subject to his or her option restricting their transferability to
the extent required by law or by this Section 8.
Section 9. Employment of Optionee. Each Optionee, if requested by the
Program Administrators, must agree in writing as a condition of receiving his or
her option that he or she will remain in the employment of the Corporation or
any subsidiary, following the date of the granting of that option for a period
specified by the Program Administrators, which period shall in no event exceed
three years. Nothing in this Compensatory Plan or in any option granted
hereunder shall confer upon any Optionee any right to continued employment by
the
<PAGE>
Corporation or any of its subsidiaries, or limit in any way the right of the
Corporation or any subsidiary at any time to terminate or alter the terms of
that employment.
Section 10. Option Rights Upon Termination of Employment. If any
Optionee under this Compensatory Plan ceases to be employed by the Corporation
or any subsidiary (or a corporation or a parent or subsidiary of such
corporation issuing or assuming a stock option in a transaction to which Section
424(a) of the Code applies), for any reason other than disability or death, his
or her option shall immediately terminate; provided, however, that the Program
Administrators may, in their discretion, allow such option to be exercised, to
the extent exercisable on the date of termination of employment, at any time
within three months after the date of termination of employment, unless either
the option or this Compensatory Plan otherwise provides for earlier termination.
Section 11. Option Rights Upon Disability. If an Optionee becomes
disabled within the meaning of Section 22(e)(3) of the Code while employed by
the Corporation or any subsidiary corporation (or a corporation or a parent or
subsidiary of such corporation issuing or assuming a stock option in a
transaction to which Section 424(a) of the Code applies), the Program
Administrators, in their discretion, may allow the option to be exercised, to
the extent exercisable on the date of termination of employment or directorship,
at any time within one year after the date of termination of employment due to
disability, unless either the option or this Compensatory Plan otherwise
provides for earlier termination.
Section 12. Option Rights Upon Death of Optionee. Except as otherwise
limited by the Program Administrators at the time of the grant of an option, if
an Optionee dies while employed by the Corporation or any subsidiary corporation
(or a corporation or a parent or subsidiary of such corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies), his or her option shall expire one year after the date of death unless
by its terms it expires sooner. During this one year or shorter period, the
option may be exercised, to the extent that it remains unexercised on the date
of death, by the person or persons to whom the Optionee's rights under the
option shall pass by will or by the laws of descent and distribution, but only
to the extent that the Optionee is entitled to exercise the option at the date
of death.
Section 13. Options Not Transferable. Options granted pursuant to the
terms of this Compensatory Plan may not be sold, pledged, assigned or
transferred in any manner otherwise than by will or the laws of descent and
distribution and may be exercised during the lifetime of an Optionee only by
that Optionee or his guardian or legal representative.
<PAGE>
PLAN III
STOCK APPRECIATION RIGHTS PLAN
Section 1. Purpose. The purpose of this S.A.R. Plan is to permit the
Corporation to grant stock appreciation rights for its Common Stock to its
full-time, key employees. This S.A.R. Plan is designed to help attract and
retain superior personnel for positions of responsibility with the Corporation
and any subsidiary and to provide key employees with an additional incentive to
contribute to the success of the Corporation. This S.A.R. Plan is Part III of
the Corporation's Program. Unless any provision herein indicates to the
contrary, this S.A.R. Plan shall be subject to the General Provisions of the
Program.
Section 2. Terms and Conditions. The Program Administrators may, but
shall not be obligated to, authorize, on such terms and conditions as they deem
appropriate in each case, the Corporation to accept the surrender by the
recipient of a stock option granted under Plan I or Plan II of the right to
exercise that option, or 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 such surrendered option, or portion thereof,
over the option price of such shares. Such payment, at the discretion of the
Program Administrators, may be made in shares of Common Stock valued at the then
fair market value thereof, determined as provided in Section 4 of Plan I, in
cash or partly in cash and partly in shares of Common Stock; provided that with
respect to rights granted in tandem with incentive stock options, the Program
Administrators shall establish the form(s) of payment allowed the Optionee at
the date of grant. The Program Administrators shall not be authorized to make
payment to any Optionee in shares of the Corporation's Common Stock unless
Section 83 of the Code would apply to the Common Stock transferred to the
Optionee.
Section 3. Time Limitations. Any election by an Optionee to exercise
the stock appreciation rights provided in this S.A.R. Plan shall be made 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. The required
release of information shall be deemed to have been satisfied 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.
In addition, no stock appreciation right may be exercised for the first six
months following the date the stock appreciation right is granted.
Section 4. Exercise of Stock Appreciation Rights; Effect on Stock
Options and Vice Versa. Upon the exercise of a stock appreciation right, the
number of shares available under the stock option to which it relates shall
decrease by a number equal to the number of shares for which the right was
exercised. Upon the exercise of a stock option, any related stock appreciation
right shall terminate as to any number of shares subject to the right that
exceeds the total number of shares for which the stock option remains
unexercised.
<PAGE>
Section 5. Time of Grant. With respect to options granted under Plan
I, stock appreciation rights must be granted concurrently with the stock options
to which they relate; with respect to options granted under Plan II, stock
appreciation rights may be granted concurrently or at any time thereafter prior
to the exercise or expiration of such options.
Section 6. Non-Transferable. The holder of a stock appreciation right
may not transfer or assign the right otherwise than by will or in accordance
with the laws of descent and distribution. Furthermore, in the event of the
termination of his or her service with the Corporation as an officer and/or
employee, the right may be exercised only within the period, if any, which the
option to which it relates may be exercised.
Section 7. Tandem Incentive Stock Option-Stock Appreciation Right.
Whenever an incentive stock option authorized pursuant to Plan I and a stock
appreciation right authorized hereunder are granted together and the exercise of
one affects the right to exercise the other, the following requirements shall
apply:
(a) The stock appreciation right will expire no later than the
expiration of the underlying incentive stock option.
(b) The stock appreciation right may be for no more than the
difference between the exercise price of the underlying option and the market
price of the stock subject to the underlying option at the time the stock
appreciation right is exercised;
(c) The stock appreciation right is transferable only when the
underlying incentive stock option is transferable and under the same conditions;
(d) The stock appreciation right may be exercised only when the
underlying incentive stock option is eligible to be exercised; and
(e) The stock appreciation right may be exercised only when the market
price of the stock subject to the option exceeds the exercise price of the stock
subject to the option.
Section 8. Tandem Stock Option-Limited Stock Appreciation Right. The
Program Administrators may provide that any tandem stock appreciation right
granted pursuant to this Section 8 shall be a limited stock appreciation right,
in which event:
(a) The limited stock appreciation right shall be exercisable during
the period beginning on the first day following the expiration of an Offer (as
defined below) (but in no event less than six months after the date of grant of
the right) and ending on the thirtieth day following such date;
(b) Neither the option tandem to the limited stock appreciation right
nor any other stock appreciation right tandem to such option may be exercised at
any time that the limited stock appreciation right may be exercised, provided
that this requirement shall not apply in the case of an incentive stock option
tandem to a limited stock appreciation right if and to the extent that the
Program Administrators determine that such requirement is not consistent with
<PAGE>
applicable statutory provisions regarding incentive stock options and the
regulations issued thereunder;
(c) Upon exercise of the limited stock appreciation right, the fair
market value of the shares to which the right relates for purposes of Section 4
of Plan I shall be determined as the highest price per share paid in any Offer
that is in effect at any time during the period beginning on the sixtieth day
prior to the date on which the limited stock appreciation right is exercised and
ending on such exercise date; provided, however, with respect to a limited stock
appreciation right tandem to an incentive stock option, the Program
Administrators shall determine the fair market value of such shares in a
different manner if and to the extent that the Program Administrators deem
necessary or desirable to conform with applicable statutory provisions regarding
incentive stock options and the regulations issued thereunder.
The term "Offer" shall mean any tender offer or exchange offer for
shares of the Corporation, provided that the person making the offer acquires
shares of the Corporation's capital stock pursuant to such offer.
Section 9. Request for Reports. A copy of the Corporation's annual
report to stockholders shall be delivered to each Optionee. Upon written
request, the Corporation shall furnish to each Optionee a copy of its most
recent Form 10-KSB Annual Report and each Form 10-QSB Quarterly Report and Form
8-K Current Report filed with the Securities and Exchange Commission since the
end of the Corporation's prior fiscal year.
PLAN IV
PERFORMANCE SHARE PLAN
Section 1. Purpose. The purpose of this Performance Plan is to promote
the growth and general prosperity of the Corporation by permitting the
Corporation to grant performance shares to help attract and retain superior
personnel for positions of responsibility with the Corporation and any
subsidiary and to provide key employees with an additional incentive to
contribute to the success of the Corporation. This Performance Plan is Part IV
of the Corporation's Program. Unless any provision herein indicates to the
contrary, this Performance Plan shall be subject to the General Provisions of
the Program.
Section 2. Terms and Conditions. The Program Administrators may grant
performance shares to any employee eligible under Article 4 of the General
Provisions. Each performance share grant shall confer upon the recipient thereof
the right to receive a specified number of shares of Common Stock of the
Corporation contingent upon the achievement of specified performance objectives
within a specified period. The Program Administrators shall specify the
performance objective and the period of duration of the performance share grant
at the time that such performance share is granted. Any performance shares
granted under this Plan shall constitute an unfunded promise to make future
payments to the affected employee upon the completion of specified conditions.
The grant of an opportunity to receive performance
<PAGE>
shares shall not entitle the affected employee to any rights to specific fund(s)
or assets of the Corporation, or any parent or subsidiary.
Section 3. Cash in Lieu of Stock. In lieu of some or all of the shares
earned achievement of the specified performance objectives within the specified
period, the Program Administrators may distribute cash in an amount equal to the
fair market value of the Common Stock at the time that the employee achieves the
performance objective within the specified period. Such fair market value shall
be determined by Section 4 of Plans I and II, on the business day next preceding
the date of payment.
Section 4. Performance Objective Period. The duration of the period
within which to achieve the performance objectives is to be determined by the
Program Administrators. The period may not be less than one year nor more than
five years from the date the performance share is granted.
Section 5. Non-Transferable. A participating employee may not transfer
or assign a performance share.
Section 6. Performance Share Rights Upon Death or Termination of
Employment. If a participating employee dies or terminates service with the
Corporation or any subsidiary of the Corporation (or a corporation or a parent
or subsidiary of such corporation issuing or assuming a performance share in a
transaction to which Section 424(a) of the Code applies), prior to the
expiration of the performance objective period, any performance shares granted
to him during that period shall be terminated.
Section 7. Tax Consequences. No federal income tax consequences are
incurred by the Corporation or the participating employee at the time a
performance share is granted. However, if the specified performance objectives
are met, the employee will realize ordinary income at the end of the award
period equal to the amount of cash or the fair market value of the stock
received by him or her. The Corporation will ordinarily be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount. The Program Administrators shall be authorized to make payment in shares
of Common Stock only if Section 83 of the Code would apply to the transfer of
Common Stock to the employee.
<PAGE>
PLAN IV
PERFORMANCE SHARE PLAN
Section 1. Purpose. The purpose of this Performance Plan is to promote
the growth and general prosperity of the corporation by permitting the
Corporation to grant performance shares to help attract and retain superior
personnel for positions of responsibility with the Corporation and any
subsidiary and to provide key employees with an additional incentive to
contribute to the success of the Corporation. This Performance Plan is Part IV
of the Corporation's Program. Unless any provision herein indicates to the
contrary, this Performance Plan shall be subject to the General Provisions of
the Program.
Section 2. Terms and Conditions. The Program Administrators may grant
performance shares to any employee eligible under Article 4 of the general
Provisions. Each performance share grant shall confer upon the recipient thereof
the right to receive a specified number of shares of Common Stock of the
Corporation contingent upon the achievement of specified performance objectives
within a specified period. The Program Administrators shall specify the
performance objective and the period of duration of the performance share grant
at the time that such performance share is granted. Any performance shares
granted under this Plan shall constitute an unfunded promise to make future
payments to the affected employee upon the completion of specified conditions.
The grant of an opportunity to receive performance shares shall not entitle the
affected employee to any rights to specific fund(s) or assets of the
Corporation, or any parent or subsidiary.
Section 3. Cash in Lieu of Stock. In lieu of some or all of the shares
earned by achievement of the specified performance objectives within the
specified period, the Program Administrators may distribute cash in an amount
equal to the fair market value of the Common Stock at the time that the employee
achieves the performance objective within the specified period. Such fair market
value shall be determined by Section 4 of Plans I and II, on the business day
next preceding the date of payment.
Section 4. Performance Objective Period. The duration of the period
within which to achieve the performance objectives is to be determined by the
Program Administrators. The period may not be less than one year nor more than
five years from the date the performance share is granted.
Section 5. Non-Transferable. A participating employee may not transfer
or assign a performance share.
Section 6. Performance Share Rights Upon Death or Termination of
Employment. If a participating employee dies or terminates service with the
Corporation or any subsidiary of the Corporation (or a corporation or a parent
or subsidiary of such corporation issuing or assuming a performance share in a
transaction to which Section 424(a) of the Code applies), prior to the
expiration of the performance objective period, any performance shares granted
to him during that period shall be terminated.
<PAGE>
Section 7. Tax Consequences. No federal income tax consequences are
incurred by the Corporation or the participating employee at the time a
performance share is granted. However, if the specified performance objectives
are met, the employee will realize ordinary income at the end of the aware
period equal to the amount of cash or the fair market value of the stock
received by him or her. The Corporation will ordinarily be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount. The Program Administrators shall be authorized to make payment in shares
of Common Stock only if Section 83 of the Code would apply to the transfer of
Common Stock to the employee.
EXHIBIT 4.2
Fidelity Bancorp, Inc.
1993 Directors Stock Option Plan
<PAGE>
FIDELITY BANCORP, INC.
1993 DIRECTORS' STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Fidelity Bancorp, Inc. (the "Corporation") hereby establishes this
1993 Directors' Stock Option Plan (the "Plan") upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of
the Corporation by attracting and retaining qualified non-employee directors and
providing such directors with a proprietary interest in the Corporation through
non-discriminatory grants of non-qualified stock options (an "Option" or
"Options") to purchase shares of the Corporation's common stock, par value $.01
per share (Common Stock").
ARTICLE III
ADMINISTRATION OF THE PLAN
3.01 Administration. This Plan is intended to be a "formula award"
plan under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and
shall be administered by the entire Board of Directors of the Corporation (the
"Board"). The Board shall have the power, subject to and within the limits of
the express provisions of this Plan, to exercise such powers and to perform such
acts as are deemed necessary or expedient to promote the best interests of the
Corporation with respect to this Plan.
3.02 Compliance with Law and Regulations. All Options 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 may be exercised if
such exercise or issuance would be contrary to applicable laws and regulations.
3.03 Restrictions on Transfer. The Corporation may place a legend upon
any certificate representing shares acquired pursuant to an Option granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
<PAGE>
ARTICLE IV
ELIGIBILITY
Options shall be granted pursuant to the terms hereof to each director
of the Corporation who is not an employee of the Corporation or any subsidiary
of the Corporation ("non-employee director"). No honorary directors, advisory
directors or directors emeritus shall be entitled to receive Options hereunder.
ARTICLE V
COMMON STOCK COVERED BY THE PLAN
5.01 Option Shares. The aggregate number of shares of Common Stock of
the Corporation which may be issued pursuant to this Plan, subject to adjustment
as provided in Article VIII, shall be 40,000 shares of the Corporation's Common
Stock. 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 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 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.
5.02 Source of Shares. The shares of Common Stock issued under this
Plan shall be authorized but previously unissued shares.
ARTICLE VI
OPTION GRANTS
6.01 Option Grants. A compensatory stock option to purchase 1,250
shares of Common Stock shall be automatically granted to each non-employee
director of the Corporation as of December 31 of each year, beginning December
31, 1993 and ending December 31, 1998.
6.02 Allocation of Grants. If, on any date on which Options are to be
granted pursuant to this Plan, the number of shares of Common Stock remaining
available under this Plan (after taking into account both shares theretofore
sold or issued and shares subject to issuance upon exercise of outstanding
Options) is insufficient for the grant of Options to purchase the entire number
of shares specified above, then Options to purchase a proportionate amount of
such available number of shares (rounded down to the greatest number of whole
shares) shall be granted to each non-employee director entitled to receive an
Option on such date.
<PAGE>
ARTICLE VII
OPTION TERMS
Each Option granted hereunder shall be on the following terms and
conditions:
7.01 Option Agreement. The proper officers of the Corporation and each
optionee shall execute an Option Agreement which shall set forth the total
number of shares of Common Stock to which it pertains, the exercise price and
such other terms, conditions and provisions as are appropriate, provided that
they are not inconsistent with the terms, conditions and provisions of this
Plan. Each optionee shall receive a copy of his executed Option Agreement.
7.02 Option Exercise Price. The per share exercise price at which the
shares of Common Stock may be purchased upon exercise of an Option granted
pursuant to Section 6.01 hereof shall be equal to the fair market value of the
shares at the time of the grant of the Option. For purposes of this Plan, fair
market value shall be the mean of the high and low sales prices of a share of
Common Stock on the date in question (or, if such day is not a trading day in
the U.S. markets, on the nearest preceding trading day), as reported with
respect to the principal market (or the composite of the markets, if more than
one) or national quotation system in which such shares are then traded, or if no
such prices are reported, the mean between the closing high bid and low asked
prices of a share of Common Stock on that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Board of Directors of the Corporation.
7.03 Vesting of Options. Options shall be immediately vested on the
date of grant.
7.04 Exercise and Duration of Options.
(a) Each Option or portion thereof shall be exercisable at any time on
or after the date of grant until seven (7) years after the date of grant,
provided that no Option or portion thereof may be exercised until the
stockholders of the Corporation have approved this Plan by such vote as may be
required by applicable laws and regulations, and provided further that at least
six (6) months shall have elapsed from the date of grant of the Option to the
date of disposition of either the Option (other than upon exercise or
conversion) or the underlying Common Stock. With respect to any Options that may
be granted prior to the receipt of stockholder approval of the Plan, the
six-month period shall not commence until the date such stockholder approval is
obtained.
(b) Exception for Termination Due to Death, Disability, Retirement or
Resignation. If an Optionee dies while serving as a non-employee director of the
Corporation or terminates his service as a non-employee director as a result of
disability without having fully exercised his Options, the Optionee or the
executors, administrators, legatees or distributees of his estate shall have the
right to exercise such Options during the twelve-month period following such
death or disability, provided that no Option shall be exercisable more than
seven (7) years from the date it was granted. If an Optionee ceases to hold
office as a non-employee director
<PAGE>
of the Corporation for any reason other than death, disability or removal for
cause without having fully exercised his Options, the Optionee shall have the
right to exercise such Options during the three months following such cessation,
provided that no Option shall be exercisable more than seven (7) years from the
date it was granted.
(c) Options granted to a non-employee director who is removed for
cause pursuant to the Corporation's Bylaws shall terminate as of the effective
date of such removal.
7.05 Nonassignability. Options shall not be transferable by an
optionee except by will or the laws of descent and distribution, and during an
optionee's lifetime shall be exercisable only by such Optionee or the Optionee's
guardian or legal representative.
7.06 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 Option Agreement provided for in Section 7.01.
7.07 Payment for Shares. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of an Option shall be
made to the Corporation upon exercise of the Option. Payment for shares may be
made by the Optionee in cash or by delivering shares of Common Stock (including
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,
or any combination of the foregoing.
7.08 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.
ARTICLE VIII
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Option 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
this 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 recipient of an Option shall be entitled, subject to
the conditions herein stated, to purchase or acquire 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
<PAGE>
been entitled to purchase or acquire except for such action, and appropriate
adjustments shall be made to the per share exercise price of outstanding
Options.
ARTICLE IX
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate, amend or revise
this Plan with respect to any shares of Common Stock as to which Options have
not been granted, provided, however, that no amendment which (a) changes the
maximum number of shares that may be sold or issued under the Plan (other than
in accordance with the provisions of Article VIII) or (b) changes the class of
persons that may be granted Options shall become effective until it receives the
approval of the stockholders of the Corporation, and further provided that the
Board may determine that stockholder approval for any other amendment to this
Plan may be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing requirements. The Board
may not, without the consent of the holder of an Option, alter or impair any
Option previously granted under this Plan except as specifically authorized
herein. Notwithstanding anything contained in this Plan to the contrary, the
provisions of Articles IV, VI and VII of this Plan shall not be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code of 1986, as amended, the Employee Retirement Income Security Act,
as amended, or the rules promulgated under such statutes.
ARTICLE X
RIGHTS TO CONTINUE AS A DIRECTOR
Neither this Plan nor the grant of any Options hereunder nor any
action taken by the Board in connection with this Plan shall create any right on
the part of any non-employee director of the Corporation to continue as such.
ARTICLE XI
WITHHOLDING
The Corporation 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 to be withheld as
a condition to delivering the shares acquired pursuant to an Option.
<PAGE>
ARTICLE XII
EFFECTIVE DATE OF THE PLAN; TERM
12.01 Effective Date of the Plan. This Plan shall become effective
upon the date of its adoption by the Corporation's Board ("Effective Date"),
provided that no shares of Common Stock may be issued pursuant to this Plan
until this Plan is approved by the stockholders of the Corporation by such vote
as may be required by applicable laws and regulations.
12.02 Term of Plan. Unless sooner terminated, this Plan shall remain
in effect through December 31, 1998. No Options shall be granted under this Plan
after such date. Termination of this Plan shall not affect any Options
previously granted and such Options shall remain valid and in effect until they
(a) have been fully exercised, (b) are surrendered, or (c) expire or are
forfeited in accordance with their terms.
ARTICLE XIII
MISCELLANEOUS
13.01 Governing Law. This Plan shall be construed under the laws of
the Commonwealth of Pennsylvania.
13.02 Pronouns. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
EXHIBIT 4.3
Form of Stock Option Agreement Form
<PAGE>
INCENTIVE STOCK OPTION AGREEMENT
EMPLOYEE STOCK COMPENSATION PROGRAM
AN INCENTIVE STOCK OPTION ("Option") for a total of _____ shares of
Common Stock, par value $.01 per share, of Fidelity Bancorp, Inc. (the
"Corporation") is hereby granted to _________________ (the "Optionee") pursuant
to the Fidelity Bancorp, Inc. 1993 Employee Stock Compensation Program ("1993
Program"). The Option granted hereby is subject in all respects to the terms and
provisions of the 1993 Program and this Agreement.
The 1993 Program is hereby incorporated herein by reference.
1. Exercise Price. The exercise price shall be $ or each share of
Common Stock eligible to be exercised hereunder, which price is not less than
100% of the fair market value (110% of the fair market value if granted to a 10%
stockholder) of the Common Stock on the date of grant of this Option, as
determined by the Program Administrators in accordance with Section 4 of Plan I
of the 1993 Program.
2. Exercise of Option. This Option shall be exercisable pursuant to
the provisions of Section 6 of Plan I of the 1993 Program as follows:
(a) Schedule of rights of exercise.
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
------------------------------- ----------------------------
0 but less than 1 year 0%
1 but less than 2 years 50%
2 years and more 100%
The right to exercise pursuant to the above schedule shall be cumulative. If
Option is immediately exercisable, so state.
(b) Method of Exercise. This 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 registered, his or her address
and Social Security number (or if more than one, the names,
addresses and Social Security numbers of each 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 Corporation, of the right of
such person or persons to exercise the Option; and
<PAGE>
(iii) be in writing and delivered in person or by certified
mail to the Corporation at its main office.
Payment of the purchase price of any shares with respect to which the Option is
being exercised shall be by cash or by certified or cashier's check payable to
the Corporation, in shares of Common Stock (including shares acquired pursuant
to the exercise of this Option) with a fair market value equivalent to the
purchase price of the shares to be acquired pursuant to this Option, by
withholding some of the shares of Common Stock which are purchased upon the
exercise of this Option or by any combination of the foregoing.
(c) Restriction 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 law or other law or regulation. As a
condition to the exercise of this Option, the Corporation may require the person
exercising this Option to make any representative or warranty to the Corporation
as may be required by any applicable law or regulation.
3. Non-transferability of Option. This Option may not be transferred
in any manner otherwise than by will or the laws of descent and distribution,
and may be exercised during the lifetime of the Optionee only by the Optionee or
the Optionee's guardian or legal representative. The terms of this Option shall
be binding upon the executors, administrators, heirs, successors, guardians,
assigns or legal representatives of the Optionee.
4. Term of Option. This Option may be exercised after the earlier of
(i) ten years from the date of grant of this Option, (ii) the date on which the
Optionee ceases to be employed by the Corporation or any subsidiary for any
reason other than death or disability, (iii) in the event the Optionee dies
while employed by the Corporation or any subsidiary, one year after the date of
death unless by its term it expires sooner, (however, in order for this Option
to be treated as an incentive stock option under Section 422 of the Code, this
Option must be exercised no later than three months after the date of death).
and (iv) one year after the termination of employment due to disability, unless
by its term it expires sooner. This Option may be exercised during such term
only in accordance with the 1993 Program and the terms of this Agreement.
5. Notice of Disposition; Withholding. The 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 Internal Revenue Code of 1986, as amended) of any
shares of Common Stock acquired through exercise of this Option, within two (2)
years after the date of this Agreement or within one (1) 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.
<PAGE>
6. Optionees Subject to Section 16(b) of the Securities Exchange Act
of 1934 ("Exchange Act"). If the Optionee is subject to Section 16(h) of the
Exchange Act as of the date of this Agreement the Optionee agrees not to dispose
of either the Option (other than upon exercise or conversion) or the underlying
Common Stock until at least six (6) months shall have elapsed from the date of
grant of the Option. If the Option was granted prior to the receipt of
stockholder approval of the 1993 Program, the six-month period shall not
commence until the date of such stockholder approval is obtained.
ON BEHALF OF THE PROGRAM
ADMINISTRATORS OF THE FIDELITY
BANCORP, INC. 1993 EMPLOYEE STOCK
COMPENSATION PROGRAM
Date of Grant: , 1997 By:
------------- ---- -----------------------------
Attest:
-------------------------
Agreed to and accepted this day of , 199 :
--- ------------ --
- --------------------------------------
Optionee
<PAGE>
FIDELITY BANCORP, INC. EMPLOYEE STOCK COMPENSATION PROGRAM
INCENTIVE STOCK OPTION EXERCISE FORM
----------------
DATE
ATTN: Corporate Secretary
Fidelity Bancorp, Inc.
1009 Perry Highway
Pittsburgh, Pennsylvania 15237
Dear Sir or Madam:
The undersigned elects to exercise his/her Incentive Stock Option to purchase
______________ shares, par value $.01 per share, of Common Stock of Fidelity
Bancorp, Inc., under and pursuant to a Notice of Grant of Incentive Stock Option
dated __________ __, 1997.
Delivered herewith is cash, or a certified or cashier's check or Fidelity
Bancorp, Inc. Common Stock, or a combination thereof, in the amount of
$______________ in payment of the option price. If Common Stock is enclosed in
full or partial consideration of the purchase price, I am also attaching a
notification from the Program Administrators advising: (i) that such means of
payment has been authorized and (ii) as to the fair market value of the shares
proposed to be tendered by me as required by the provisions of the Program.
The name or names to be on the stock certificate or certificates and the address
and social security number or addresses and social security numbers of such
person or persons is as follows:
Name:
-------------------------------------------------------------------------
Address:
----------------------------------------------------------------------
----------------------------------------------------------------------
City State Zip Code
Social Security Number:
---------------------------
Very truly yours,
- ---------------------------------------------------------------
(Signature of Person or Persons Exercising the Option)
- ---------------------------------------------------------------
(Print Name and Address)
EXHIBIT 4.4
Form of Stock Award Tax Notice
<PAGE>
TAX ISSUES RELATED TO EXERCISE OF STOCK OPTIONS
This memorandum reviews the tax effects upon the exercise of
"Non-Incentive Stock Options" ("NSOs") (those options awarded to non-employee
directors and perhaps to some officers) and "Incentive Stock Options" ("ISOs")
(those options generally awarded to officers and employees).
A. Exercise of an NSO
------------------
Upon the exercise of an NSO, the amount by which the fair market value
of the shares on the date of exercise exceeds the exercise price will be taxed
to the optionee as ordinary income. The Company will be entitled to a deduction
in the same amount, provided it makes all required withholdings on the
compensation element of the exercise. In general, the optionee's tax basis in
the shares acquired by exercising an NSO is equal to the fair market value of
such shares on the date of exercise. Upon a subsequent sale of any such shares
in a taxable transaction, the optionee will realize capital gain or loss
(long-term or short-term, depending on whether the shares were held for more
than 12 months before the sale) in an amount equal to the difference between his
or her basis in the shares and the sale price.
Special rules apply if an optionee pays the exercise price upon
exercise of NSOs with previously acquired shares of stock. Except as described
below with respect to shares acquired pursuant to ISOs, such a transaction is
treated as a tax-free exchange of the old shares for the same number of new
shares. To that extent, the optionee's basis in the new shares is the same as
his or her basis in the old shares, i.e., there is a carryover of basis, and the
capital gain holding period runs without interruption from the date when the old
shares were acquired. The value of any new shares received by the optionee in
excess of the number of old shares surrendered less any cash the optionee pays
for the new shares will be taxed as ordinary income. The optionee's basis in the
additional shares is equal to the fair market value of such shares on the date
the shares were transferred, and the capital gain holding period commences on
the same date. The effect of these rules is to defer the date when any gain in
the old shares that are used to buy new shares must be recognized for tax
purposes. Stated differently, these rules allow an optionee to finance the
exercise of an NSO by using shares of stock that he or she already owns, without
paying current tax on any unrealized appreciation in the value of all or a
portion of those old shares.
B. Exercise of an ISO
------------------
The holder of an ISO will not be subject to federal income tax upon
the exercise of the ISO, and the Company will not be entitled to a tax deduction
by reason of such exercise, provided that the holder is still employed by the
Company (or terminated employment no longer than three months before the
exercise date). Additional exceptions to this exercise timing requirement apply
upon the death or disability of the optionee. A sale of the shares received upon
the exercise of an ISO which occurs both more than one year after the exercise
of the ISO and more than two years after the grant of the ISO will result in the
realization of long-term capital gain or loss in the amount of the difference
between the amount realized on the sale and the exercise price for such shares.
Generally, upon a sale or disposition of the shares prior to the foregoing
holding requirements (referred to as a "disqualifying disposition"), the
optionee will recognize ordinary income, and the Company will receive a
corresponding deduction equal
<PAGE>
to the lesser of (i) the excess of the fair market value of the shares on the
date of transfer to the optionee over the exercise price, or (ii) the excess of
the amount realized on the disposition over the exercise price for such shares.
Currently, ISO exercises are exempt from FICA and FUTA taxes and a disqualifying
disposition is exempt from employer withholding.
A special rule applies if an optionee pays all or part of the exercise
price of an ISO by surrendering shares of stock that he or she previously
acquired by exercising any other ISO. If the optionee has not held the old
shares for the full duration of the applicable holding periods before
surrendering them, then the surrender of such shares to exercise the new ISO
will be treated as a disqualifying disposition of the old shares. As described
above, the result of a disqualifying disposition is the loss of favorable tax
consequences with respect to the acquisition of the old shares pursuant to the
previously exercised ISO.
Where the applicable holding period requirements have been met, the
use of previously acquired shares of stock to pay all or a portion of the
exercise price of an ISO may offer significant tax advantages, particularly a
deferral of the recognition of any appreciation in the surrendered shares in the
same manner as discussed above with respect to NSOs.
C. Alternative Minimum Tax
-----------------------
The "alternative minimum tax" is paid when such tax exceeds a
taxpayer's regular federal income tax. The alternative minimum tax is calculated
based on alternative minimum taxable income, which is taxable income for federal
income tax purposes, modified by certain adjustments and increased by tax
preference items.
The spread under an ISO - i.e., the difference between (a) the fair
market value of the shares at exercise and (b) the exercise price - is
classified as alternative minimum taxable income for the year of exercise.
Alternative minimum taxable income may be subject to the alternative minimum
tax. However, a disqualifying disposition of the shares subject to the ISO
during the same year in which the ISO was exercised will generally cancel the
alternative minimum taxable income generated upon exercise of the ISO.
When a taxpayer sells stock acquired through the exercise of an ISO,
generally only the difference between the fair market value of the shares on the
date of exercise and the date of sale is used in computing the alternative
minimum tax. The portion of a taxpayer's minimum tax attributable to certain
items of tax preference (including the spread upon the exercise of an ISO) can
be credited against the taxpayer's regular liability in later years to the
extent that liability exceeds the alternative minimum tax.
EXHIBIT 5.1
Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to
the validity of the Common Stock being registered
<PAGE>
MALIZIA, SPIDI, SLOANE & FISCH, P.C.
One Franklin Square
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
Telephone: (202) 434-4660
Telecopier: (202) 434-4661
April 30, 1997
Board of Directors
Fidelity Bancorp, Inc.
1009 Perry Highway
Pittsburgh, Pennsylvania 15237
RE: Registration Statement on Form S-8:
----------------------------------
Fidelity Bancorp, Inc. 1993 Employee Stock Compensation Program
Fidelity Bancorp, Inc. 1993 Directors Stock Option Plan
Fidelity Savings Association Employees Stock Compensation Program
Gentlemen:
We have acted as special counsel to Fidelity Bancorp, Inc., a State of
Pennsylvania corporation (the "Company"), in connection with the preparation of
the Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to 147,538 shares of common stock, par value $.01 per share
(the "Common Stock") of the Company which may be issued under the Fidelity
Bancorp, Inc. 1993 Employee Stock Compensation Program, the Fidelity Bancorp,
Inc. 1993 Directors Stock Option Plan and the Fidelity Savings Association
Employee Stock Compensation Program (collectively, the "Plan"), as more fully
described in the Registration Statement. You have requested the opinion of this
firm with respect to certain legal aspects of the proposed offering.
We have examined such documents, records, and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to the stock awards granted
under and in accordance with the terms of the Plan will be duly and validly
issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included under
the caption "Legal Opinion" in the Prospectus which is a part of the
Registration Statement.
Sincerely,
/s/ Malizia, Spidi, Sloane & Fisch, P.C.
Malizia, Spidi, Sloane & Fisch, P.C.
Washington, D.C.
EXHIBIT 23.1
Consent of Malizia, Spidi, Sloane & Fisch, P.C.
(appears in their opinion filed as Exhibit 5.1)
EXHIBIT 23.2
Consent of Independent Accountants
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Fidelity Bancorp, Inc. of our report dated November 8, 1996, with
respect to the consolidated financial statements of Fidelity Bancorp, Inc. and
subsidiaries as of September 30, 1996 and 1995, and for each of the years in the
three-year period ended September 30, 1996, which report is incorporated by
reference in the Annual Report on Form 10-KSB filed by Fidelity Bancorp, Inc.
for the year ended September 30, 1996, as amended.
Our report refers to a change in the method of accounting for income taxes and
accounting for certain investments in debt and equity securities as of October
1, 1993 and 1994, respectively.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Pittsburgh, Pennsylvania
April 30, 1997
