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Registration No.33-
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Filed August 5, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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First Keystone Financial, Inc.
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(Exact Name of Registrant as specified in its Articles of Incorporation)
Pennsylvania 23-0469351
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(State of incorporation) (IRS Employer Identification No.)
22 West State Street
Media, Pennsylvania 19063
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(Address of principal executive offices, including zip code)
First Keystone Financial, Inc. 1995 Stock Option Plan
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(Full Title of the Plan)
Donald S. Guthrie Copies to:
President and Chief Raymond A. Tiernan, Esq.
Executive Officer Philip Ross Bevan, Esq.
First Keystone Financial, Inc. Elias, Matz, Tiernan & Herrick L.L.P.
22 West State Street 734 15th Street, N.W.
Media, Pennsylvania 19063 Washington, D.C. 20005
(610) 565-6210 (202) 347-0300
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(Name, address and telephone number of
agent for service)
Page 1 of 25 pages
Index to Exhibits is located on page 6
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CALCULATION OF REGISTRATION FEE
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Title of
Securities Amount Proposed Maximum Proposed Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered(1) Per Share(3) Offering Price(3) Fee
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Common Stock,
par value
$.01 125,800 $ 15.00(2) $1,887,000(2) $650.69
Common Stock,
par value $.01 10,200 $ 16.75(4) 170,850(4) 58.91
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Total $2,057,850 $709.60
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136,000(3)
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(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to First
Keystone Financial, Inc. (the "Company" or "Registrant") 1995 Stock Option Plan
("Option Plan") as a result of a stock split, stock dividend or similar
adjustment of the outstanding Common Stock, $.01 par value per share ("Common
Stock"), of the Company.
(2) Estimated solely for the purpose of calculating the registration fee, which
has been calculated pursuant to Rule 457(h) promulgated under the Securities Act
of 1933, as amended ("Securities Act"). The Proposed Maximum Offering Price Per
Share is equal to the weighted average exercise price for options to purchase
125,800 shares of Common Stock which are outstanding under the Option Plan as of
the date hereof.
(3) Represents total number of shares currently reserved for issuance pursuant
to the Option Plan.
(4) Estimated solely for the purposes of calculating the registration fee in
accordance with Rule 457(c) promulgated under the Securities Act. The Proposed
Maximum Offering Price Per Share for 10,200 shares for which stock options have
not been granted under the Option Plan is equal to the average of the bid and
ask prices of the Common Stock of the Company on August 1, 1996 on the Nasdaq
National Market System.
------------------------
This Registration Statement shall become effective automatically upon the
date of filing in accordance with Section 8(a) of the Securities Act of 1933, as
amended, and 17 C.F.R. Section 230.462.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-KSB for the year ended
September 30, 1995.
(b) All reports filed by the Company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), since the end of the fiscal year covered by
the Form 10-KSB referred to in clause (a) above.
(c) The description of the Common Stock of the Company contained in
the Company's Registration Statement on Form 8-A (Commission File
No. 0-25328) filed with the Commission on December 29, 1994.
(d) All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and
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.
Any statement contained in this Registration Statement, or in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein, or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable since the Company's Common Stock is registered under Section
12 of the Exchange Act.
ITEM. 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the Business Corporation Law of the Commonwealth of
Pennsylvania, Article 8 of the Registrant's Amended and Restated Articles of
Incorporation provide as follows:
ARTICLE 8. INDEMNIFICATION, ETC. OF OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS.
A. PERSONAL LIABILITY OF DIRECTORS. A director of the Corporation
shall not be personally liable for monetary damages for any action taken,
or any failure to take any action, as a director except to the extent that
by law a director's liability for monetary damages may not be limited.
B. INDEMNIFICATION. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, including actions by or in
the right of the Corporation, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding to the full extent
permissible under Pennsylvania law.
C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by an
officer, director, employee or agent of the Corporation in defending a
civil or criminal action, suit or proceeding described in Section B of this
Article 8 may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that the person is not entitled to be indemnified
by the Corporation.
D. OTHER RIGHTS. The indemnification and advancement of expenses
provided by or pursuant to this Article 8 shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any insurance or other agreement, vote of
stockholders or directors or otherwise, both as to actions in their
official capacity and as to actions in another capacity while holding an
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
E. INSURANCE. The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer,
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employee or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability
under the provisions of this Article 8.
F. SECURITY FUND; INDEMNITY AGREEMENTS. By action of the Board of
Directors (notwithstanding their interest in the transaction), the
Corporation may create and fund a trust fund or fund of any nature, and may
enter into agreements with its officers, directors, employees and agents
for the purpose of securing or insuring in any manner its obligation to
indemnify or advance expenses provided for in this Article 8.
G. MODIFICATION. The duties of the Corporation to indemnify and to
advance expenses to any person as provided in this Article 8 shall be in
the nature of a contract between the Corporation and each such person, and
no amendment or repeal of any provision of this Article 8, and no amendment
or termination of any trust or other fund created pursuant to Section F of
this Article 8, shall alter to the detriment of such person the right of
such person to the advance of expenses or indemnification related to a
claim based on an act or failure to act which took place prior to such
amendment, repeal or termination.
H. PROCEEDINGS INITIATED BY INDEMNIFIED PERSONS. Notwithstanding
any other provision of this Article 8, the Corporation shall not indemnify
a director, officer, employee or agent for any liability incurred in an
action, suit or proceeding initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an intervenor
or amicus curiae by the person seeking indemnification unless such
initiation of or participation in the action, suit or proceeding is
authorized, either before or after its commencement, by the affirmative
vote of a majority of the directors in office.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable since no restricted securities will be reoffered or resold
pursuant to this Registration Statement.
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ITEM 8. EXHIBITS
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8 (numbering corresponds to Exhibit Table
in Item 601 of Regulation S-B):
NO. EXHIBIT PAGE
--- ------- ----
4 Common Stock Certificate. *
5 Opinion of Elias, Matz, Tiernan & Herrick E-1
L.L.P. as to the legality of the securities
23.1 Consent of Elais, Matz, Tiernan & Herrick --
L.L.P. (contained in the opinion included
as Exhibit 5)
23 Consent of Deloitte & Touche LLP E-4
24 Power of attorney for any subsequent amendments
(located in the signature pages of this
Registration Statement). --
99.1 1995 Stock Option Plan E-6
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* Incorporated by reference from the Company's Registration
Statement on Form 8-A (File No. 0-25328) filed with the Commission on
December 29, 1994.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933, (ii)
to reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement, and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change in such
information in the
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Registration Statement; provided, however, that clauses (i) and (ii) do not
apply if the information required to be included in a post-effective amendment
by those clauses is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act 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. That, for the 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 Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Media, Commonwealth of Pennsylvania, on this 26th day
of July 1996.
FIRST KEYSTONE FINANCIAL, INC.
By:/s/Donald S. Gutherie
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Donald S. Guthrie, President, Chief
Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Donald S. Guthrie his or her true
and lawful attorney, with full power to sign for such person and in such
person's name and capacity indicated below, and with full power of substitution
any and all amendments to this Registration Statement, hereby ratifying and
confirming such person's signature as it may be signed by said attorney to any
and all amendments.
/s/Donald S. Gutherie August 5, 1996
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Donald S. Guthrie
President, Chief Executive Officer
and Director
(principal executive officer)
/s/Thomas M. Kelly August 5, 1996
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Thomas M. Kelly
Executive Vice President, Treasurer
and Chief Financial Officer
(principal financial and
accounting officer)
/s/Donald A. Purdy August 5, 1996
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Donald A. Purdy
Chairman of the Board
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/s/Charles E. Rankin August 5, 1996
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Charles E. Rankin
Vice Chairman of the Board
/s/William K. Betts August 5, 1996
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William K. Betts
Director
/s/Edward Calderoni August 5, 1996
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Edward Calderoni
Director
/s/Silvio F. D'Ignazio August 5, 1996
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Silvio F. D'Ignazio
Director
/s/Oliver J. Faulkner August 5, 1996
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Oliver J. Faulkner
Director
/s/Edmund Jones August 5, 1996
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Edmund Jones
Director
/s/William F. Letts August 5, 1996
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William F. Letts
Director
/s/Walter J. Lewicki August 5, 1996
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Walter J. Lewicki
Director
/s/Joan G. Taylor August 5, 1996
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Joan G. Taylor
Director
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EXHIBIT 5
OPINION OF ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
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[LETTERHEAD OF ELIAS, MATZ, TIERNAN & HERRICK L.L.P.]
August 5, 1996
Board of Directors
First Keystone Financial, Inc.
22 West State Street
Media, Pennsylvania 19063
Re: Registration Statement on Form S-8
136,000 Shares of Common Stock
Gentlemen:
We are special counsel to First Keystone Financial, Inc., a Pennsylvania
corporation (the "Corporation"), in connection with the preparation and filing
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, of a Registration Statement on Form S-8 (the "Registration
Statement"), relating to the registration of up to 136,000 shares of common
stock, par value $.01 per share ("Common Stock"), to be issued pursuant to the
Corporation's 1995 Stock Option Plan (the "Plan") upon the exercise of stock
options and/or appreciation rights (referred to as "Option Rights"). The
Registration Statement also registers an indeterminate number of additional
shares which may be necessary under the Plan to adjust the number of shares
reserved thereby for issuance as the result of a stock split, stock dividend or
similar adjustment of the outstanding Common Stock of the Corporation. We have
been requested by the Corporation to furnish an opinion to be included as an
exhibit to the Registration Statement.
For this purpose, we have reviewed the Registration Statement and related
Prospectus, the Amended and Restated Articles of Incorporation and Amended and
Restated Bylaws of the Corporation, the Plan, a specimen stock certificate
evidencing the Common Stock of the Corporation and such other corporate records
and documents as we have deemed appropriate. We are relying upon the originals,
or copies certified or otherwise identified to our satisfaction, of the
corporate records of the Corporation and such other instruments, certificates
and representations of public officials, officers and representatives of the
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Page 2
Corporation as we have deemed relevant as a basis for this opinion. In
addition, we have assumed, without independent verification, the genuineness of
all signatures and the authenticity of all documents furnished to us and the
conformance in all respects of copies to originals. Furthermore, we have made
such factual inquiries and reviewed such laws as we determined to be relevant
for this opinion.
For purposes of this opinion, we have also assumed that (i) the shares of
Common Stock issuable pursuant to Option Rights granted under the terms of the
Plan will continue to be validly authorized on the dates the Common Stock is
issued pursuant to the Option Rights; (ii) on the dates the Option Rights are
exercised, the Option Rights granted under the terms of the Plan will constitute
valid, legal and binding obligations of the Corporation and will (subject to
applicable bankruptcy, moratorium, insolvency, reorganization and other laws and
legal principles affecting the enforceability of creditors' rights generally) be
enforceable as to the Corporation in accordance with their terms; (iii) the
Option Rights are exercised in accordance with their terms and the exercise
price therefor is paid in accordance with the terms thereof; (iv) no change
occurs in applicable law or the pertinent facts; and (v) the provisions of "blue
sky" and other securities laws as may be applicable will have been complied with
to the extent required.
Based on the foregoing, and subject to the assumptions set forth herein,
we are of the opinion as of the date hereof that the shares of Common Stock to
be issued pursuant to the Plan, when issued and sold pursuant to the Plan and
upon receipt of the consideration required thereby, will be legally issued,
fully paid and non-assessable shares of Common Stock of the Corporation.
We hereby consent to the reference to this firm under the caption "Legal
Opinion" in the Prospectus of the Plan and to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ Philip R. Bevan
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Philip R. Bevan, a Partner
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EXHIBIT 23
CONSENT OF DELOITTE & TOUCHE LLP
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of First Keystone Financial, Inc. on Form S-8 of our report dated December 1,
1995, appearing in the Annual Report on Form 10-K of First Keystone
Financial, Inc. for the year ended September 30, 1995.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
July 30, 1996
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EXHIBIT 99.1
1995 STOCK OPTION PLAN
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FIRST KEYSTONE FINANCIAL, INC.
1995 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
First Keystone Financial, Inc. (the "Corporation") hereby establishes this
1995 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 and its Subsidiary Companies by providing Employees and Non-Employee
Directors with a proprietary interest in the Corporation as an incentive to
contribute to the success of the Corporation and its Subsidiary Companies, and
rewarding those Employees for outstanding performance and the attainment of
targeted goals. All Incentive Stock Options issued under this Plan are intended
to comply with the requirements of Section 422 of the Code, and the regulations
thereunder, and all provisions hereunder shall be read, interpreted and applied
with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.
3.02 "Bank" means First Keystone Federal Savings Bank, the wholly owned
subsidiary of the Corporation.
3.03 "Board" means the Board of Directors of the Corporation.
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, none of whom shall be an Officer or
Employee of the Corporation, and each of whom shall be a "disinterested person"
within the meaning of Rule 16b-3 under the Exchange Act, or any successor
thereto.
3.06 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or a Subsidiary Company, or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.
3.08 "Effective Date" means the day upon which the Board approves this
Plan.
3.09 "Employee" means any person who is employed by the Corporation or a
Subsidiary Company, or is an Officer of the Corporation or a Subsidiary Company,
but not including directors who are not also Officers of or otherwise employed
by the Corporation or a Subsidiary Company.
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3.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.11 "Fair Market Value" shall be equal to the fair market value per share
of the Corporation's Common Stock on the date an Award is granted. For purposes
hereof, the Fair Market Value of a share of Common Stock shall be the closing
sale price 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 closing prices are reported, the mean between the
high bid and low asked prices 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 Committee.
3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.13 "Non-Employee Director" means a member of the Board who is not an
Officer or Employee of the Corporation or any Subsidiary Company.
3.14 "Non-Qualified Option" means any Option granted under this Plan which
is not an Incentive Stock Option.
3.15 "Offering" means the offering of Common Stock to the public pursuant
to the conversion of the Bank from the mutual to the stock form and the
organization of the Bank as a subsidiary of the Corporation.
3.16 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.17 "Option" means a right granted under this Plan to purchase Common
Stock.
3.18 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.
3.19 "Retirement" means a termination of employment upon or after
attainment of age sixty-five (65) or such earlier age as may be specified in any
applicable qualified pension benefit plan maintained by the Corporation or a
Subsidiary Company.
3.20 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.10.
3.21 "Subsidiary Companies" means those subsidiaries of the Corporation,
including First Keystone Federal Savings Bank, which meet the definition of
"subsidiary corporations" set forth in Section 425(f) of the Code, at the time
of granting of the Option in question.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its
absolute discretion to adopt, amend and rescind such rules, regulations and
procedures as, in its opinion,
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may be advisable in the administration of the Plan, including, without
limitation, rules, regulations and procedures which (i) deal with satisfaction
of an Optionee's tax withholding obligation pursuant to Section 12.02 hereof,
(ii) include arrangements to facilitate the Optionee's ability to borrow funds
for payment of the exercise or purchase price of an Award, if applicable, from
securities brokers and dealers, and (iii) include arrangements which provide for
the payment of some or all of such exercise or purchase price by delivery of
previously-owned shares of Common Stock or other property and/or by withholding
some of the shares of Common Stock which are being acquired. The interpretation
and construction by the Committee of any provisions of the Plan, any rule,
regulation or procedure adopted by it pursuant thereto or of any Award shall be
final and binding.
4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, none of whom shall be an Officer or Employee of the
Corporation, and each of whom shall be a "disinterested person" within the
meaning of Rule 16b-3 under the Exchange Act. The Committee shall act by vote
or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. It may appoint one of its members to be chairman and any person,
whether or not a member, to be its secretary or agent. The Committee shall
report its actions and decisions to the Board at appropriate times but in no
event less than one time per calendar year.
4.03 REVOCATION FOR MISCONDUCT. The Committee may by resolution
immediately revoke, rescind and terminate any Option, or portion thereof, to the
extent not yet vested, or any Stock Appreciation Right, to the extent not yet
exercised, previously granted or awarded under this Plan to an Employee who is
discharged from the employ of the Corporation or a Subsidiary Company for cause,
which, for purposes hereof, shall mean termination because of the Employee's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order. Options granted to a Non-
Employee Director who is removed for cause pursuant to the Corporation's
Articles of Incorporation shall terminate as of the effective date of such
removal.
4.04 LIMITATION ON LIABILITY. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan, any
rule, regulation or procedure adopted by it pursuant thereto or any Awards
granted under it. If a member of the Committee is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of anything done or not done by him in such capacity under or with respect to
the Plan, the Corporation shall, subject to the requirements of applicable laws
and regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Corporation and its Subsidiary Companies and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Corporation shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of or obtaining of consents or approvals with respect to such
shares under any Federal or state law or any rule or regulation of any
government body, which the Corporation shall, in its sole discretion, determine
to be necessary or advisable. Moreover, no Option or Stock Appreciation Right
may be exercised if such exercise would be contrary to applicable laws and
regulations.
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4.06 RESTRICTIONS ON TRANSFER. The Corporation may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.
ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees or Non-Employee Directors of the
Corporation and its Subsidiary Companies as may be designated from time to time
by the Committee. Awards may not be granted to individuals who are not
Employees or Non-Employee Directors of either the Corporation or its Subsidiary
Companies. Non-Employee Directors shall be eligible to receive only
Non-Qualified Options pursuant to Section 8.02 of the Plan.
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 OPTION SHARES. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 136,000, which is equal to 10.0% of the number of shares of
Common Stock issued in the Offering. None of such shares shall be the subject
of more than one Award 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 Awards had been previously granted with respect to such
shares. Notwithstanding the foregoing, if an Option is surrendered in
connection with the exercise of a Stock Appreciation Right, the number of shares
covered thereby shall not be available for grant under the Plan.
6.02 SOURCE OF SHARES. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market or from private sources for use under the
Plan.
ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Committee shall, in its discretion, determine from time to time which
Employees will be granted Awards under the Plan, the number of shares of Common
Stock subject to each Award, whether each Option will be an Incentive Stock
Option or a Non-Qualified Stock Option and the exercise price of an Option. In
making all such determinations there shall be taken into account the duties,
responsibilities and performance of each respective Employee, his present and
potential contributions to the growth and success of the Corporation, his salary
and such other factors as the Committee shall deem relevant to accomplishing the
purposes of the Plan. Non-Employee Directors shall be eligible to receive only
Non-Qualified Options pursuant to Section 8.02 of the Plan.
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ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which shall
set forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified Option or an Incentive Stock
Option, and such other terms, conditions, restrictions and privileges as the
Committee in each instance shall deem appropriate, provided they are not
inconsistent with the terms, conditions and provisions of this Plan. Each
Optionee shall receive a copy of his executed Stock Option Agreement.
8.02 (a) INITIAL GRANTS TO NON-EMPLOYEE DIRECTORS. Non-Qualified
Options to purchase 2,720 shares of Common Stock shall be initially granted to
each Non-Employee Director as of the day that the Plan is approved by
stockholders of the Corporation (except that each Non-Employee Director who has
served as a director of the Bank for more than 30 years shall be awarded a
Non-Qualified Option to purchase 5,440 shares of Common Stock), effective at
such time and with a per share exercise price equal to the Fair Market Value of
a share of Common Stock on such date.
(b) SUBSEQUENT GRANTS. Each Non-Employee Director of the Corporation
shall receive a Non-Qualified Option to purchase 340 shares of Common Stock
(except that each Non-Employee Director who has served as a director of the Bank
for more than 30 years shall be awarded a Non-Qualified Option to purchase 680
shares of Common Stock) on each anniversary date for two years after the initial
grants pursuant to Section 8.02(a), or such lesser number as may then be
available for grant under this Plan, at the per share exercise price equal to
the Fair Market Value of a share of Common Stock on such date.
(c) VESTING AND EXERCISE OF OPTIONS. Non-Qualified Options granted
to Non-Employee Directors shall be vested and exercisable over five years at the
rate of twenty percent per year commencing one year following the date of grant.
8.03 OPTION EXERCISE PRICE.
(a) INCENTIVE STOCK OPTIONS. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option shall
be no less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock at the time such Incentive Stock Option is granted, except as
provided in Section 8.10(b).
(b) NON-QUALIFIED OPTIONS. The per share price at which the subject
Common Stock may be purchased upon exercise of a Non-Qualified Option shall be
established by the Committee at the time of grant, but in no event shall be less
than the greater of (i) the par value or (ii) one hundred percent (100%) of the
Fair Market Value of a share of Common Stock at the time such Non-Qualified
Option is granted.
8.04 VESTING AND EXERCISE OF OPTIONS.
(a) GENERAL RULES. Incentive Stock Options and Non-Qualified Options
granted to Employees shall become vested and exercisable at the rate, to the
extent and subject to such limitations as may be specified by the Committee,
provided, however, that in the case of any Option exercisable within the first
six months following the date the Option is granted, the shares of Common Stock
received upon the exercise of such Option may not be sold or disposed of by the
Optionee for the first six months following the date of grant. Notwithstanding
the foregoing, no vesting shall occur on or after an Optionee's employment or
service with the Corporation and all Subsidiary Companies is terminated for any
reason other than his death or Disability. In determining the number of shares
of Common Stock with respect to which Options are vested and/or
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exercisable, fractional shares will be rounded up to the nearest whole number if
the fraction is 0.5 or higher, and down if it is less.
(b) ACCELERATED VESTING UPON DEATH OR DISABILITY. Unless the
Committee shall specifically state otherwise at the time an Option is granted,
all Options granted under this Plan shall become vested and exercisable in full
on the date an Optionee terminates his employment or service with the
Corporation or a Subsidiary Company because of his death or Disability.
(c) ACCELERATED VESTING FOR CHANGES IN CONTROL. Notwithstanding the
general rule described in Section 8.04(a), all outstanding Options shall become
immediately vested and exercisable in the event there is a change in control of
the Corporation. A "change in control of the Corporation" for this purpose
shall mean a change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act, or any successor thereto, whether or not the Corporation in fact
is required to comply with Regulation 14A thereunder.
8.05 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Sections 8.05(b) and 8.10,
each Option or portion thereof granted to Employees shall be exercisable at any
time on or after it vests and becomes exercisable until the earlier of (i) ten
(10) years after its date of grant or (ii) three (3) months after the date on
which the Optionee ceases to be employed by the Corporation and all Subsidiary
Companies, unless the Committee in its discretion decides at the time of grant
or thereafter to extend such period of exercise upon termination of employment
or service from three (3) months to a period not exceeding five (5) years. Each
Option or portion thereof granted to Non-Employee Directors shall be exercisable
at any time on or after it vests until ten (10) years after the date of grant.
(b) EXCEPTION FOR TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT.
If an Employee dies while in the employ or service of the Corporation or a
Subsidiary Company or terminates employment or service with the Corporation or a
Subsidiary Company as a result of Disability or Retirement without having fully
exercised his Options, the Optionee or the executors, administrators, legatees
or distributees of his estate shall have the right, during the twelve-month
period following the earlier of his death, Disability or Retirement, to exercise
such Options to the extent vested on the date of such death, Disability or
Retirement. If a Non-Employee Director dies while serving as a Non-Employee
Director or within three (3) years following the termination of service as a
Non-Employee Director as a result of Disability, Retirement or resignation
without fully exercising his Options, the Non-Employee Director's executors,
administrators, legatees or distributees of his estate shall have the right,
during the twelve-month period following such death, to exercise such Options.
In no event, however, shall any Option be exercisable more than ten (10) years
from the date it was granted.
8.06 NONASSIGNABILITY. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative.
8.07 MANNER OF EXERCISE. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.
8.08 PAYMENT FOR SHARES. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of any Option shall be made
to the Corporation upon exercise of the Option. All shares sold under the Plan
shall be fully paid and nonassessable. Payment for shares may be made by the
Optionee in cash or, at the discretion of the Committee, by delivering shares of
Common Stock (including shares acquired pursuant to the exercise of an Option)
or other property equal in Fair Market Value to the purchase price of
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the shares to be acquired pursuant to the Option, by withholding some of the
shares of Common Stock which are being purchased upon exercise of an Option, or
any combination of the foregoing.
8.09 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.
8.10 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.09 above, to those contained in this
Section 8.10.
(a) Notwithstanding any contrary provisions contained elsewhere in
this Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Corporation (or any parent or
Subsidiary Company), shall not exceed $100,000.
(b) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which
shares of Common Stock may be purchased upon exercise of an Incentive Stock
Option granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option shall by its
terms not be exercisable after the earlier of the date determined under Section
8.04 or the expiration of five (5) years from the date such Incentive Stock
Option is granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (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. The Committee may,
in its discretion, require shares of Common Stock acquired by an Optionee upon
exercise of an Incentive Stock Option to be held in an escrow arrangement for
the purpose of enabling compliance with the provisions of this Section 8.10(c).
8.11 STOCK APPRECIATION RIGHTS.
(a) GENERAL TERMS AND CONDITIONS. The Committee may, but shall not
be obligated to, authorize the Corporation, on such terms and conditions as it
deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment by
the Corporation of an amount equal to the excess of the Fair Market Value of the
shares of Common Stock subject to the Option, or portion thereof, surrendered
over the exercise price of the Option with respect to such shares (any such
authorized surrender and payment being hereinafter referred to as a "Stock
Appreciation Right"). Such payment, at the discretion of the Committee, may be
made in shares of Common Stock valued at the then Fair Market Value thereof, or
in cash, or partly in cash and partly in shares of Common Stock.
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The terms and conditions set with respect to a Stock Appreciation Right may
include (without limitation), subject to other provisions of this Section 8.11
and the Plan, the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised; the method for valuing shares of
Common Stock for purposes of this Section 8.11; a ceiling on the amount of
consideration which the Corporation may pay in connection with exercise and
cancellation of the Stock Appreciation Right; and arrangements for income tax
withholding. The Committee shall have complete discretion to determine whether,
when and to whom Stock Appreciation Rights may be granted. Notwithstanding the
foregoing, the Corporation may not permit the exercise of a Stock Appreciation
Right issued pursuant to this Plan until the Corporation has been subject to the
reporting requirements of Section 13 of the Exchange Act for a period of at
least one year prior to the exercise of any such Stock Appreciation Right and
until a Stock Appreciation Right issued pursuant to this Plan has been
outstanding for at least six months from the date of grant.
(b) TIME LIMITATIONS. If a holder of a Stock Appreciation Right
terminates service with the Corporation as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within which
the Option to which it relates may be exercised. Notwithstanding the foregoing,
any election by an Optionee to exercise the Stock Appreciation Rights provided
in this 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.
(c) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR OPTIONS. Upon the
exercise of a Stock Appreciation Right, the number of shares of Common Stock
available under the Option to which it relates shall decrease by a number equal
to the number of shares for which the Stock Appreciation Right was exercised.
Upon the exercise of an Option, any related Stock Appreciation Right shall
terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.
(d) TIME OF GRANT. A Stock Appreciation Right may be granted concurrently
with the Option to which it relates or at any time thereafter prior to the
exercise or expiration of such Option.
(e) NON-TRANSFERABLE. The holder of a Stock Appreciation Right may not
transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.
ARTICLE IX
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 Award 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 Award 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
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would have 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 X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock as to which Awards have not been granted,
subject to any required stockholder approval or any stockholder approval which
the Board may deem to 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 Award,
alter or impair any Award previously granted or awarded under this Plan as
specifically authorized herein. Notwithstanding anything contained in this Plan
to the contrary, the provisions of Articles V, VII and VIII of this Plan
relating to Awards granted to Non-Employee Directors shall not be amended more
than once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules and
regulations promulgated under such statutes.
ARTICLE XI
EMPLOYMENT RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action taken
by the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee or Non-Employee Director of the Corporation or a
Subsidiary Company to continue in such capacity.
ARTICLE XII
WITHHOLDING
12.01 TAX 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
required to be withheld as a condition to delivering the shares acquired
pursuant to an Award. The Corporation also may withhold or collect amounts with
respect to a disqualifying disposition of shares of Common Stock acquired
pursuant to exercise of an Incentive Stock Option, as provided in Section
8.10(c).
12.02 METHODS OF TAX WITHHOLDING. The Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Optionee's tax withholding obligation by the retention of shares of Common Stock
to which the Employee would otherwise be entitled pursuant to an Award and/or by
the Optionee's delivery of previously-owned shares of Common Stock or other
property.
ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on the
Effective Date; however, no Awards may be granted hereunder unless this Plan is
approved by the requisite vote of the holders of the outstanding voting shares
of the Corporation at a meeting of stockholders of the Corporation held within
twelve (12) months of the Effective Date.
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13.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
ARTICLE XIV
MISCELLANEOUS
14.01 GOVERNING LAW. To the extent not governed by Federal law, this Plan
shall be construed under the laws of the Commonwealth of Pennsylvania.
14.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall include
the feminine pronoun, and the singular shall include the plural.
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