As filed with the Securities and Exchange Commission on July 2, 1997
Registration No. 333-__________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MONOCACY BANCSHARES, INC.
(Exact Name of Registrant As Specified In Its Charter)
Maryland 52-1824297
--------- -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
222 East Baltimore Street,
Taneytown, Maryland 21787-0491
- -------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
MONOCACY BANCSHARES, INC. 1997 INDEPENDENT DIRECTORS' STOCK
OPTION PLAN
----------------------------------------------
(Full title of the plan)
Frank W. Neubauer, President Copies To:
MONOCACY BANCSHARES, INC. Nicholas Bybel, Jr., Esquire
222 East Baltimore Street SHUMAKER WILLIAMS, P.C.
P.O. Box 491 Post Office Box 88
Taneytown, Maryland 21787-0491 (717) 763-1121
(410) 756-2655
- ------------------------------
(Name, address, including
zip code, and telephone
number, including area code,
of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Class Amount Proposed Maximum
of Securities to to be Offering Price
be Registered Registered <F1> Per Share <F2>
- ----------------- ------------- ----------------
<S> <C> <C>
Common Stock 110,000 $22.00
$5.00 Par Value
<CAPTION>
Title of Each Class Proposed Maximum Amount of
of Securities to Aggregate Registration
Registered Offering Price<F2> Fee
- -------------------- ----------------- ------------
<S> <C> <C>
Common Stock $2,420,000 $733.33
$5.00 Par Value
<FN>
<F1> Based on the maximum number of shares of Monocacy
Bancshares, Inc. common stock, par value $5.00 per share
("Common Stock") authorized for issuance under the plan set
forth above. There are also registered hereby such
indeterminate number of shares of Common Stock as may
become issuable by reason of the anti-dilution provisions
of this plan.
<F2> Estimated pursuant to Rule 457(c) and (h)(1) solely for the
purpose of calculating the amount of the registration fee
based upon the average of the closing bid and asked prices
of the Common Stock on July 1, 1997, with respect to the
110,000 shares of Common Stock issuable under the plan.
</FN>
</TABLE>
<PAGE>
TO PARTICIPANTS IN THE MONOCACY BANCSHARES, INC.
1997 INDEPENDENT DIRECTORS' STOCK OPTION PLAN
Monocacy Bancshares, Inc. (the "Company") has filed a
registration statement concerning its shares of common stock,
$5.00 par value ("Common Stock") that may, from time to time, be
issued pursuant to the Company's 1997 Independent Directors'
Stock Option Plan (the "Plan"). The Prospectus deemed to form a
part of the registration statement consists of certain documents
and explanatory memoranda regarding the Plan. Also deemed to
comprise part of the Prospectus are the following documents, each
of which is specifically incorporated by reference into the
registration statement and each of which is on file with the
United States Securities and Exchange Commission ("SEC"):
(a) Annual report on Form 10-KSB for the year ended
December 31, 1996, (File No. 0-22536);
(b) The Company's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1997, (File No. 0-
22536); and
(c) The description of the Company's Common Stock,
contained on pages 40 to 45 of the Company's
Registration Statement No. 33-65758 on Form S-4,
filed on July 8, 1993, and amended on July 26,
1993.
All documents filed with the SEC by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 after the date of the Prospectus and prior to the
termination of the offering made hereby shall be deemed to be
incorporated by reference in the Prospectus and to be a part
thereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for purposes of the Prospectus to the extent that a statement
contained herein or in any other subsequently filed document
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 the Prospectus.
The Company will provide without charge to each participant
in the Plan who requests, a copy of any or all of the documents
mentioned above as well as all documentation relating to the Plan
required to be delivered to participants pursuant to the rules
adopted under the Securities Act of 1933. Requests for such
copies should be addressed orally or in writing to:
Attention: Corporate Secretary
MONOCACY BANCSHARES, INC.
222 East Baltimore Street
P.O. Box 491
Taneytown, Maryland 21787-0491
(410) 756-2655
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
There are hereby incorporated by reference in this
registration statement the following documents filed by the
Company with the Commission:
(a) Annual report on Form 10-KSB for the year ended
December 31, 1996, (File No. 0-22536);
(b) The Company's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1997, (File No. 0-
22536); and
(c) The description of the Company's Common Stock,
contained on pages 40 to 45 of the Company's
Registration Statement No. 33-65758 on Form S-4,
filed on July 8, 1993.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, and prior to the
termination of the offering made hereby shall be deemed to be
incorporated by reference in this registration statement and to
be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of the Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document 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.
Information Required in the Section 10(a) Prospectus
The document(s) containing the information specified in
Items 1 and 2 of Part I of Form S-8 will be sent or given to plan
participants as specified in Rule 428(b)(1) and, in accordance
with the instructions to Part I of Form S-8, are not filed with
the Securities and Exchange Commission as part of this
registration statement.
Item 4. Description of Securities
Inapplicable.
II-1
<PAGE>
Item 5. Interests of Named Experts and Counsel
Inapplicable.
Item 6. Indemnification of Directors and Officers
The General Corporation Laws of the State of Maryland,
as applicable to the Company, together with the Company's
Articles of Incorporation, provide the Company's officers and
directors with a broad range of limitation from liability and
indemnification for actions and inactions in connection with the
performance of their duties. A corporation may indemnify any
director or officer made a party to any proceeding by reason of
service in that capacity unless it is established that: (1) the
act or omission of the director was material to the matter giving
rise to the proceeding and was either committed in bad faith or
was the result of active and deliberate dishonesty; (2) the
director or officer actually received an improper personal
benefit in money, property or services; or (3) in the case of any
criminal proceeding, the director or officer had reasonable cause
to believe that the act or omission was unlawful. The Company's
officers and directors are entitled to be indemnified if they are
named as a party or threatened to be named as a party to any type
of proceeding as a result of actions or inactions taken by reason
of service in that capacity and that such action or inaction was
in good faith and in a manner reasonably believed to be in, or
not opposed to, the best interests of the Company. Officers and
directors of the Company will be presumed to be entitled to this
indemnification absent breaches of fiduciary duty, lack of good
faith or self-dealing and will be entitled to be indemnified
unless their conduct is determined by a court to have constituted
willful misconduct or recklessness.
The directors and officers of the Company are also
insured against certain liabilities for their actions, as such,
by an insurance policy obtained by the Company.
Insofar as indemnification for liabilities arising
under the Securities 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 Securities Act and is
therefore unenforceable.
Item 7. Exemption From Registration Claimed
Inapplicable.
II-2
<PAGE>
Items 8. Exhibits and Exhibit Index
Exhibit No.
3(i) Articles of Incorporation of Monocacy Bancshares,
Inc.
3(ii) Bylaws of Monocacy Bancshares, Inc.
4.1 Articles of Incorporation of Monocacy Bancshares,
Inc.(included at Exhibit 3(i)).
4.2 Bylaws of Monocacy Bancshares, Inc.
(included at Exhibit 3(ii)).
4.3 Monocacy Bancshares, Inc. 1997 Independent Directors'
Stock Option Plan.
5 Opinion of Shumaker Williams, P.C.
23.1 Consent of Stegman & Company.
23.2 Consent of Shumaker Williams, P.C.
(included in Exhibit 5).
24 Power of Attorney of Directors and Officers
(included on Signature Pages).
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(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
II-3
<PAGE>
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) shall
not apply if 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 Section 15(d)
of the Securities Exchange Act of 1934
that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933,
each post-effective amendment shall be deemed
to be a new registration statement relating to
the securities offered therein, and the
offering of such securities at the time shall
be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes
that, for purposes of determining any liability
under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, and, where applicable, each
filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the
Securities Exchange Act of 1934 that is
incorporated by reference in the registration
statement shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling
persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion
of the Securities and Exchange Commission such
indemnification is against public policy as
expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a
claim for indemnification against such
liabilities, other than the payment of the
Registrant of expenses incurred or paid by a
director, officer or controlling person of the
Registrant in the successful defense of any
action suit or proceeding as asserted by such
director, officer or controlling person
II-4
<PAGE>
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.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized in
the City of Taneytown, State of Maryland on July 2, 1997.
MONOCACY BANCSHARES, INC.
By: /s/ Frank W. Neubauer
-------------------------------
Frank W. Neubauer, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Frank W.
Neubauer and Michael K. Walsch, and each of them, his true and
law attorney-in-fact, as agent with full power of substitution
and resubstitution for him and in his name, place and stead, in
any and all capacity, to sign any or all amendments to this
registration statement and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done
in and about the premises, as fully and to all intents and
purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or
their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the date indicated.
Capacity Date
-------- -----
/s/ Frank W. Neubauer
- ----------------------- President and Chief July 2, 1997
Frank W. Neubauer Executive Officer and
Director (Principal
Executive Officer)
/s/ Michael K. Walsch
- ----------------------- Senior Vice President July 2, 1997
Michael K. Walsch and Treasurer (Principal
Financial and Accounting
Officer)
/s/ Donald R. Hull
- ----------------------- Chairman of the Board July 2, 1997
Donald R. Hull and Director
<PAGE>
/s/ Eric E. Glass
- ----------------------- Vice Chairman of the July 2, 1997
Eric E. Glass Board and Director
/s/ David M. Abramson
- ----------------------- Director July 2, 1997
David M. Abramson
/s/ E. Wayne Baumgardner
- ----------------------- Director July 2, 1997
E. Wayne Baumgardner
/s/ George B. Crouse
- ----------------------- Director July 2, 1997
George B. Crouse
/s/ Glenn E. Eaves
- ----------------------- Director July 2, 1997
Glenn E. Eaves
/s/ Jacob M. Yingling
- ----------------------- Director July 2, 1997
Jacob M. Yingling
<PAGE>
INDEX TO EXHIBITS
Page No.
In Sequentially
Numbered
Exhibit No. Original
- ----------- --------------
3(i) Articles of Incorporation 12
of Monocacy Bancshares, Inc.
3(ii) Bylaws of Monocacy Bancshares, Inc. 23
4.1 Articles of Incorporation of Monocacy
Bancshares, Inc.
(included at Exhibit 3(i)).
4.2 Bylaws of Monocacy Bancshares, Inc.
(included at Exhibit 3(ii)).
4.3 Monocacy Bancshares, Inc. 36
1997 Independent Directors' Stock
Option Plan.
5 Opinion of Shumaker Williams, P.C. 42
23.1 Consent of Stegman & Company. 45
23.2 Consent of Shumaker Williams, P.C.
(included in Exhibit 5).
24 Power of Attorney of Directors and
Officers (included on Signature
Pages).
EXHIBIT 3(i)
ARTICLES OF INCORPORATION OF
MONOCACY BANCSHARES, INC.
<PAGE>
MONOCACY BANCSHARES, INC.
ARTICLES OF INCORPORATION
FIRST: THE UNDERSIGNED, Carroll D. Myers, whose address is
222 East Baltimore Street, Taneytown, Carroll County, Maryland
21787, being at least 18 years of age, acting as incorporator,
does hereby form a corporation under the General Laws of the
State of Maryland.
SECOND: The name of the corporation (which is hereinafter
called the "Corporation") is:
Monocacy Bancshares, Inc.
THIRD: (a) The purposes for which, and any of which, the
Corporation is formed and the business and objects to be carried
on and promoted by it are:
(1) To act as a bank holding company.
(2) To acquire by purchase, subscription or
otherwise, and to receive, hold, own,
guarantee, sell, assign, exchange, transfer,
mortgage, pledge or otherwise dispose of or
deal in and with any and all securities, as
such term is hereinafter defined, issued or
created by any corporation, firm,
organization, association or other entity,
public or private, whether formed under the
laws of the United States of America or of
any state, commonwealth, dependency or
possession thereof, or of any foreign country
or of any political subdivision or territory
thereof, or issued or created by the United
States of America or any state or
commonwealth thereof or any foreign country,
or by any agency, subdivision, territory,
dependency, possession or municipality of any
of the foregoing, and as owner thereof to
possess and exercise all the rights, powers
and privileges of ownership, including the
right to execute consents and vote thereon,
and to do any and all acts and things
necessary or advisable for the preservation,
protection, improvement and enhancement in
value thereof.
(3) To engage in any one or more businesses or
transactions, or to acquire all or any
portion of any entity engaged in any one or
more businesses or transactions which the
Board of Directors may from time to time
authorize or approve, whether or not related
to the business described elsewhere in this
Article or to any other business at the time
or theretofore engaged in by the Corporation.
(b) The foregoing enumerated purposes and objects
shall be in no way limited or restricted by reference to, or
inference from, the terms of any other clause of this or any
other Article of the Charter of the Corporation, and each shall
be regarded as independent; and they are intended to be and shall
be construed as powers as well as purposes and objects of the
Corporation and shall be in addition to and not in limitation of
the general powers of corporations under the General Laws of the
State of Maryland.
(c) The term "securities" as used in this Article
shall mean any and all notes, stocks, treasury stocks, bonds,
debentures, evidences of indebtedness, certificates of interest
or participation in any profit-sharing agreement, collateral-trust certificates,
preorganization certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, certificates of deposit for a security,
fractional undivided interests in oil, gas, or other mineral
rights, or, in general, any interests or instruments commonly
known as "securities", or any and all certificates of interest or
participation in, temporary or interim certificates for, receipts
for, guaranties of, or warrants or rights to subscribe to or
purchase, any of the foregoing.
FOURTH: The address of the principal office of the
Corporation in this State is 222 East Baltimore Street,
Taneytown, Carroll County, Maryland 21787.
FIFTH: The name and address of the resident agent of the
Corporation in this State is David M. Abramson, c/o Levan,
Schimel, Belman and Abramson, P.A., Suite 400, Woodmere I, 9881
Broken Land Parkway, Columbia, Maryland 21046. Said resident
agent is a citizen of the State of Maryland who resides there.
SIXTH: The total number of shares of stock of all classes
which the Corporation has authority to issue is four million
(4,000,000) shares of Common Stock, par value Five Dollars
($5.00) per share, amounting in aggregate par value to Twenty
Million Dollars ($20,000,000).
SEVENTH: (a) The number of directors of the Corporation
shall be ten (10), which number may be increased or decreased
pursuant to the By-Laws of the Corporation, but shall never be
less than the minimum number permitted by the General Laws of the
State of Maryland now or hereafter in force.
(b) Newly created directorships resulting from
any increase in the authorized number of directors or any
vacancies on the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office,
or other cause shall be filled by a majority vote of the
stockholders or the directors then in office. A director so
chosen by the stockholders shall hold office for the balance of
the term then remaining. A director so chosen by the remaining
directors shall hold office until the next annual meeting of
stockholders, at which time the stockholders shall elect a
director to hold office for the balance of the term then
remaining. No decrease in the number of directors constituting
the Board of Directors shall affect the tenure of office of any
director.
(c) Any director, or the entire Board of
Directors, may be removed from office at any time, but only for
cause and then only by the affirmative vote of the holders of at
least
2
<PAGE>
seventy-five percent (75%) of the aggregate number of votes
entitled to be cast in the election for directors.
(d) The following persons shall serve as
directors until the 1994 annual meeting of stockholders:
1. Carroll D. Myers
2. David M. Abramson
3. Glenn E. Eaves
4. Jacob M. Yingling
The following persons shall serve as directors until the 1995
annual meeting of stockholders:
5. George B. Crouse
6. E. Wayne Baumgardner
7. George A. Fream
The following persons shall serve as directors until the 1996
annual meeting of stockholders:
8. Harry B. Dougherty
9. Donald R. Hull
10. Eric E. Glass
At each annual meeting of stockholders beginning in 1994,
successors to the class of directors whose term expires at that
annual meeting shall be elected for a term of three years.
EIGHTH: (a) The following provisions are hereby adopted
for the purpose of defining, limiting, and regulating the powers
of the Corporation and of the directors and stockholders:
(1) The Board of Directors is hereby empowered to
authorize the issuance from time to time of
shares of its stock of any class, whether now
or hereafter authorized, or securities
convertible into shares of its stock of any
class or classes, whether now or hereafter
authorized, for such consideration as may be
deemed advisable by the Board of Directors
and without any action by the stockholders.
(2) No holder of any stock or any other
securities of the Corporation, whether now or
hereafter authorized, shall have any
preemptive right to subscribe for or purchase
any stock or any other securities of the
Corporation other than such, if any, as the
Board of Directors, in its sole discretion,
may determine and at such price or prices and
upon such other terms as the Board of
Directors, in its sole discretion, may fix;
and any stock or other securities which the
Board of Directors may determine to offer for
subscription may, as the Board of
3
<PAGE>
Directors in its sole discretion shall
determine, be offered to the holders of any
class, series or type of stock or other
securities at the time outstanding to the
exclusion of the holders of any or all other
classes, series or types of stock or other
securities at the time outstanding.
(3) The Board of Directors shall have power from
time to time and in its sole discretion to
determine in accordance with sound accounting
practice, what constitutes annual or other
net profits, earnings, surplus, or net assets
in excess of capital; to fix and vary from
time to time the amount to be reserved as
working capital, or to determine that
retained earnings or surplus shall remain in
the hands of the Corporation; to set apart
out of any funds of the Corporation such
reserve or reserves in such amount or amounts
and for such proper purpose or purposes as it
shall determine and to abolish any such
reserve or any part thereof; to distribute
and pay distributions or dividends in stock,
cash or other securities or property, out of
surplus or any other funds or amounts legally
available therefor, at such times and to the
stockholders of record on such dates as it
may, from time to time, determine; and to
determine whether and to what extent and at
what times and places and under what
conditions and regulations the books,
accounts and documents of the Corporation, or
any of them, shall be open to the inspection
of stockholders, except as otherwise provided
by statute or by the By-Laws, and, except as
so provided, no stockholder shall have any
right to inspect any book, account or
document of the Corporation unless authorized
to do so by resolution of the Board of
Directors.
(4) A contract or other transaction between the
Corporation and any of its directors or
between the Corporation and any other
corporation, firm or other entity in which
any of its directors is a director or has a
material financial interest is not void or
voidable solely because of any one or more of
the following: the common directorship or
interest; the presence of the director at the
meeting of the Board of Directors which
authorizes, approves or ratifies the contract
or transaction; or the counting of the vote
of the director for the authorization,
approval or ratification of the contract or
transaction. This Paragraph (4) applies if:
(A) the fact of the common directorship or
interest is disclosed or known to: the
Board of Directors and the Board authorizes,
approves or ratifies the contract or
transaction by the affirmative vote of a
majority of disinterested directors, even if
the disinterested directors constitute less
than a quorum; or the stockholders entitled
to vote, other than the votes of shares owned
of record or
4
<PAGE>
beneficially by the interested director or
corporation, firm, or other entity
authorizes, approves, or ratifies by a
majority of the votes cast the contract or
transaction; or
(B) the contract or transaction is fair and
reasonable to the Corporation.
Common or interested directors or the stock owned by
them or by an interested corporation, firm, or other entity may
be counted in determining the presence of a quorum at a meeting
of the Board of Directors or at a meeting of the stockholders, as
the case may be, at which the contract or transaction is
authorized, approved or ratified. If a contract or transaction is
not authorized, approved or ratified in one of the ways provided
for in clause (A) of the second sentence of this Paragraph (4),
the person asserting the validity of the contract or transaction
bears the burden of proving that the contract or transaction was
fair and reasonable to the Corporation at the time it was
authorized, approved, or ratified. The procedures in this
Paragraph (4) do not apply to the fixing by the Board of
Directors of reasonable compensation for a director, whether as a
director or in any other capacity.
(5) The Corporation shall indemnify (A) its
directors and officers, whether serving the
Corporation or at its request any other
entity, to the full extent required or
permitted by the General Laws of the State of
Maryland now or hereafter in force, including
the advance of expenses under the procedures
required, and to the full extent permitted,
by law and (B) other employees and agents to
such extent as shall be authorized by the
Board of Directors or the Corporation's By-
Laws and be permitted by law. The foregoing
rights of indemnification shall not be
exclusive of any other rights to which those
seeking indemnification may be entitled. The
Board of Directors may take such action as is
necessary to carry out these indemnification
provisions and is expressly empowered to
adopt, approve and amend from time to time
such By-Laws, resolutions or contracts
implementing such provisions or such further
indemnification arrangements as may be
permitted by law. No amendment of the
Charter of the Corporation shall limit or
eliminate the right to indemnification
provided under this Paragraph (5) with
respect to acts or omissions occurring prior
to such amendment or repeal.
(6) To the fullest extent permitted by Maryland
statutory or decisional law, as amended or
interpreted, no director or officer of the
Corporation shall be personally liable to the
Corporation or its stockholders for monetary
damages. No amendment of the Charter of the
Corporation or repeal of any of its
provisions shall limit or eliminate the
benefits provided to directors or officers
under this Paragraph (6)
5
<PAGE>
with respect to any act or omission which
occurred prior to such amendment or repeal.
(7) The Board of Directors shall, in connection
with the exercise of its business judgment
involving any actual or proposed transaction
which would or may involve a change in
control of the Corporation (whether by
purchases of shares of stock or any other
securities of the Corporation in the open
market, or otherwise, tender offer, merger,
consolidation, dissolution, liquidation, sale
of all or substantially all of the assets of
the Corporation, proxy solicitation or
otherwise), in determining what is in the
best interests of the Corporation and its
stockholders and in making any recommendation
to its stockholders, give due consideration
to all relevant factors, including, but not
limited to (A) the economic effect, both
immediate and long-term, upon the
Corporation's stockholders, including
stockholders, if any, not to participate in
the transaction; (B) the social and economic
effect on the employees, depositors and
customers of, and others dealing with, the
Corporation and its subsidiaries and on the
communities in which the Corporation and its
subsidiaries operate or are located; (C)
whether the proposal is acceptable based on
historical and current operating results or
financial condition of the Corporation; (D)
whether a more favorable price could be
obtained for the Corporation's stock or other
securities in the future; (E) the reputation
and business practices of the offeror and its
management and affiliates as they would
affect the employees of the Corporation and
its subsidiaries; (F) the future value of the
stock or any other securities of the
Corporation; and (G) any antitrust or other
legal and regulatory issues that are raised
by the proposal. If the Board of Directors
determines that any actual or proposed
transaction which would or may involve a
change in control of the Corporation should
be rejected, it may take any lawful action to
defeat such transaction, including, but not
limited to, any or all of the following:
advising stockholders not to accept the
proposal; instituting litigation against the
party making the proposal; filing complaints
with governmental and regulatory authorities;
acquiring the stock or any of the securities
of the Corporation; selling or otherwise
issuing authorized but unissued stock, other
securities or treasury stock or granting
options with respect thereto; acquiring a
company to create an antitrust or other
regulatory problem for the party making the
proposal; and obtaining a more favorable
offer from another individual or entity.
(8) (A) Nominations for the election of directors
and proposals for any new business to be taken
up at any annual or special meeting of
stockholders may be made by the Board of
Directors of the Corporation or by any
stockholder of the Corporation entitled to
vote generally in the election of directors.
In order for a stockholder of
6
<PAGE>
the Corporation to make any such nominations
and/or proposals, he or she shall give notice
thereof in writing, delivered or mailed by
first class United States mail, postage
prepaid, to the secretary of the Corporation
not less than 30 days nor more than 60 days
prior to any such meeting; provided, however,
that if less than 31 days' notice of the
meeting is given to stockholders, such
written notice shall be delivered or mailed,
as prescribed, to the secretary of the
Corporation not later than the close of the
tenth day following the day on which notice
of the meeting was mailed to stockholders.
Each such notice given by a stockholder with
respect to nominations for the election of
directors shall set forth (i) the name, age,
business address and, if known, residence
address of each nominee proposed in such
notice, (ii) the principal occupation or
employment of each such nominee, (iii) the
number of shares of stock of the Corporation
which are beneficially owned by each such
nominee, (iv) such other information as would
be required to be included in a proxy
statement soliciting proxies for the election
of the proposed nominee pursuant to
Regulation 14A of the Securities Exchange Act
of 1934, as amended, including, without
limitation, such person's written consent to
being named in the proxy statement as a
nominee and to serving as a director, if
elected, and (v) as to the stockholder giving
such notice, his name and address as they
appear on the Corporation's books and the
class and number of shares of the Corporation
which are beneficially owned by such
stockholder. In addition, the stockholder
making such nomination shall promptly provide
any other information reasonably requested by
the Corporation.
(B) Each such notice given by a stockholder to
the secretary with respect to business
proposals to bring before a meeting shall set
forth in writing as to each matter: (i) a
brief description of the business desired to
be brought before the meeting and the reasons
for conducting such business at the meeting;
(ii) the name and address, as they appear on
the Corporation's books, of the stockholder
proposing such business; (iii) the class and
number of shares of the Corporation which are
beneficially owned by the stockholder; and
(iv) any material interest of the stockholder
in such business. Notwithstanding anything
in this charter to the contrary, no business
shall be conducted at the meeting except in
accordance with the procedures set forth in
this Paragraph (8).
(C) The chairman of the annual or special meeting
of stockholders may, if the facts warrant,
determine and declare to such meeting that a
nomination or proposal was not made in
accordance with the foregoing procedure, and,
if he should so determine, he shall so
if he should so determine, he shall so
ive
nomination or proposal shall be disregarded
and laid over for action at the next
succeeding adjourned,
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special or annual meeting of the stockholders
taking place 30 days or more thereafter.
This provision shall not require the holding
of any adjourned or special meeting of
stockholders for the purpose of considering
such defective nomination or proposal.
(9) No merger, consolidation, liquidation or
dissolution of the Corporation, nor any
action that would result in the sale or other
disposition of all or substantially all of
the assets of the Corporation shall be valid
unless first approved by the affirmative vote
of:
(A) the holders of at least eighty percent (80%)
of the outstanding shares of Common Stock of the
Corporation; or
(B) the holders of at least sixty-six and two-
thirds percent (66 2/3%) of the outstanding share
of Common Stock of the Corporation, provided that
such transaction has received the prior approval
of at least eighty percent (80%) of all of the
members of the Board of Directors.
(10) In furtherance and not in limitation of the
powers conferred by statute, the Board of
Directors of the Corporation is expressly
authorized to make, repeal, alter, amend and
rescind the By-Laws of the Corporation.
Notwithstanding any other provision of this
Charter or the By-Laws of the Corporation
(and notwithstanding the fact that some
lesser percentage may be specified by law),
the By-Laws shall not be made, repealed,
altered, amended or rescinded by the
stockholders of the Corporation except by the
vote of the holders of not less than seventy-
five percent (75%) of the outstanding shares
of capital stock of the Corporation entitled
to vote generally in the election of
directors (considered for this purpose as one
class cast at a meeting of the stockholders
called for that purpose; provided that notice
of such proposed adoption, repeal,
alteration, amendment or rescission is
included in the notice of such meeting), or,
as set forth above, by the Board of
Directors.
(11) The Board of Directors reserves the right
from time to time to make any amendments of
the Charter which may now or hereafter be
authorized by law, including any amendments
changing the terms or contract rights, as
expressly set forth in the Charter, of any of
its outstanding stock by classification,
reclassification or otherwise, but no such
amendment which changes such terms or
contract rights of any of its outstanding
stock shall be valid unless such amendment
shall have been authorized by not less than a
majority of the aggregate number of the votes
entitled to be cast thereon, by a vote at a
meeting or in writing with or without a
meeting; provided, however, that any
amendment to, repeal of or adoption of any
provision inconsistent with Article
8
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SEVENTH or Paragraph (5), (6), (7), (8), (9),
(10) or (11) of Article EIGHTH (a) shall have
been authorized by not less than seventy-five
percent (75%) of the aggregate votes entitled
to be cast thereon (considered for this
purpose as a single class), by vote at a
meeting or in writing with or without a
meeting.
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<PAGE>
(b) The enumeration and definition of particular
powers of the Board of Directors included in the foregoing shall
in no way be limited or restricted by reference to or inference
from the terms of any other clause of this or any other Article
of the Charter of the Corporation, or construed as or deemed by
inference or otherwise in any manner to exclude or limit any
powers conferred upon the Board of Directors under the General
Laws of the State of Maryland now or hereafter in force.
NINTH: The duration of the Corporation shall be perpetual.
10
EXHIBIT 3(ii)
BYLAWS OF
MONOCACY BANCSHARES, INC.
<PAGE>
MONOCACY BANCSHARES, INC.
BY-LAWS
In accordance with convention, the masculine gender
is used throughout these By-Laws but should be read to
include the feminine (or neuter) where appropriate.
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. Annual Meeting. The Corporation shall hold
an annual meeting of its stockholders to elect directors and
transact any other business within its powers, either at 10:00
o'clock a.m. on the second Monday of April in each year if not a
legal holiday, or at such other time in the month of April as
shall be set by the Board of Directors. Except as the Charter or
statute provides otherwise, any business may be considered at an
annual meeting without the purpose of the meeting having been
specified in the notice. Failure to hold an annual meeting does
not invalidate the Corporation's existence or affect any
otherwise valid corporate acts.
SECTION 1.02. Special Meeting. At any time in the interval
between annual meetings, a special meeting of the stockholders
may be called by the Chairman of the Board or the Vice-Chairman
of the Board or the President or by a majority of the Board of
Directors by vote at a meeting or in writing (addressed to the
Secretary of the Corporation) with or without a meeting. A
special meeting of the stockholders may be called upon the
submission to the Secretary of the Corporation a written request
therefore by stockholders entitled to cast not less than 25% of
all the votes entitled to be cast at the meeting. The request
for the meeting shall state the purpose of and the matters
proposed to be acted upon at such meeting. The Secretary shall
inform the stockholders making the request of the reasonably
estimated costs of preparing and mailing a notice for such
meeting and, upon payment of such costs to the Corporation,
notify each stockholder entitled to notice of such meeting in
accordance with Section 1.04. Unless requested by stockholders
entitled to cast a majority of all the votes entitled to be cast
at the meeting, a special meeting need not be called to consider
any matter which is substantially the same as a matter voted on
at any special meeting of the stockholders held during the
preceding 12 months.
SECTION 1.03. Place of Meetings. Meetings of stockholders
shall be held at such place in the United States as is set from
time to time by the Board of Directors.
SECTION 1.04. Notice of Meetings: Waiver of Notice. Not
less than 10 nor more than 90 days before each stockholders'
meeting, the Secretary shall give written notice of the meeting
to each stockholder entitled to vote at the meeting and each
other stockholder entitled to notice of the meeting. The notice
shall state the time and place of the meeting and, if the meeting
is a special
<PAGE>
meeting or notice of the purpose is required by statute, the
purpose of the meeting. Notice is given to a stockholder when it
is personally delivered to him, left at his residence or usual
place of business, or mailed to him at his address as it appears
on the records of the Corporation. Notwithstanding the foregoing
provisions, each person who is entitled to notice waives notice
if he before or after the meeting signs a waiver of the notice
which is filed with the records of stockholders' meetings, or is
present at the meeting in person or by proxy.
SECTION 1.05. Quorum: Voting. Unless statute or the
Charter provides otherwise, at a meeting of stockholders the
presence in person or by proxy of stockholders entitled to cast a
majority of all the votes entitled to be cast at the meeting
constitutes a quorum, and a majority of all the votes cast at a
meeting at which a quorum is present is sufficient to approve any
matter which properly comes before the meeting, except that a
plurality of all the votes cast at a meeting at which a quorum is
present is sufficient to elect a director. In the absence of a
quorum, the stockholders present in person or by proxy, by
majority vote and without notice other than by announcement, may
adjourn the meeting from time to time until a quorum shall
attend. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been
transacted at the meeting as originally notified. In the event
that at any meeting a quorum exists for the transaction of some
business but does not exist for the transaction of other
business, the business as to which a quorum is present may be
transacted by the holders of stock present in person or by proxy
who are entitled to vote thereon.
SECTION 1.06. Adjournments. Whether or not a quorum is
present, a meeting of stockholders convened on the date for which
it was called may be adjourned from time to time by the
stockholders present in person or by proxy by a majority vote.
Any business which might have been transacted at the meeting as
originally notified may be deferred and transacted at any such
adjourned meeting at which a quorum shall be present. No further
notice of an adjourned meeting other than by announcement shall
be necessary if held on a date not more than 120 days after the
original record date.
SECTION 1.07. General Right to Vote: Proxies. Unless the
Charter provides for a greater or lesser number of votes per
share or limits or denies voting rights, each outstanding share
of stock, regardless of class, is entitled to one vote on each
matter submitted to a vote at a meeting of stockholders. In all
elections for directors, each share of stock may be voted for as
many individuals as there are directors to be elected and for
whose election the share is entitled to be voted. A stockholder
may vote the stock he owns of record either in person or by
written proxy signed by the stockholder or by his duly authorized
attorney in fact. Unless a proxy provides otherwise, it is not
valid more than 11 months after its date.
SECTION 1.08. List of Stockholders. At each meeting of
stockholders, a full, true and complete list of all stockholders
entitled to vote at such meeting, showing the number and class of
shares held by each and certified by the transfer agent for such
class or by the Secretary, shall be furnished by the Secretary.
SECTION 1.09. Conduct of Voting. At all meetings of
stockholders, unless the voting is conducted by inspectors, the
proxies and ballots shall be received, and all questions touching
the
2
<PAGE>
qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided, by the
chairman of the meeting. If demanded by stockholders, present in
person or by proxy, entitled to cast 10% in number of votes
entitled to be cast, or if ordered by the chairman, the vote upon
any election or question shall be taken by ballot and, upon like
demand or order, the voting shall be conducted by two inspectors,
in which event the proxies and ballots shall be received, and all
questions touching the qualification of voters and the validity
of proxies and the acceptance or rejection of votes shall be
decided, by such inspectors. Unless so demanded or ordered, no
vote need be by ballot and voting need not be conducted by
inspectors. The stockholders at any meeting may choose an
inspector or inspectors to act at such meeting, and in default of
such election the chairman of the meeting may appoint an
inspector or inspectors. No candidate for election as a director
at a meeting shall serve as an inspector thereat.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. Function of Directors. The business and
affairs of the Corporation shall be managed under the direction
of its Board of Directors. All powers of the Corporation may be
exercised by or under authority of the Board of Directors, except
as conferred on or reserved to the stockholders by statute or by
the Charter or By-Laws.
SECTION 2.02. Number of Directors. The Corporation shall
have not less than five (5) nor more than twenty-four (24)
directors (exclusive of directors, if any, to be elected by
holders of Preferred Stock of the Corporation, voting separately
as a class). The Corporation shall have the number of directors
provided in the Charter until changed as herein provided. Two-thirds of the
entire Board of Directors may alter the number of directors set by the
Charter, but the action may not affect the tenure of office of any director.
No person who is seventy (70) years of age or older shall serve as a director,
except Carroll D. Myers, David M. Abramson, Glenn E. Eaves, Jacob M. Yingling,
George B. Crouse, E. Wayne Baumgardner, George A. Fream, Harry B.
Dougherty, Donald R. Hull and Eric E. Glass, each of whom may
serve until they retire, resign or are replaced as provided by
these By-Laws.
SECTION 2.03. Election and Tenure of Directors. The Board
of Directors shall be divided into three classes as nearly equal
in number as possible. The members of each class shall be
elected for a term of three years and until their successors are
elected and qualified.
SECTION 2.04. Removal of Director. Any director or the
entire Board of Directors may be removed only in accordance with
the provisions of the Charter.
SECTION 2.05. Vacancy on Board. Subject to the rights of
the holders of any class of Preferred Stock then outstanding,
newly created directorships resulting from any increase in the
authorized number of directors or any vacancies on the Board of
Directors resulting from death, resignation, retirement,
disqualification, removal from office, or other cause shall be
filled by a majority vote of the stockholders or the directors
then in office. A director so chosen by the
3
<PAGE>
stockholders shall hold office for the balance of the term then
remaining and until his successor is elected and qualifies. A
director so chosen by the remaining directors shall hold office
until the next annual meeting of stockholders, at which time the
stockholders shall elect a director to hold office for the
balance of the term then remaining and until his successor is
elected and qualifies. No decrease in the number of directors
constituting the Board of Directors shall affect the tenure of
office of any director.
SECTION 2.06. Regular Meetings. After each meeting of
stockholders at which a Board of Directors shall have been
elected, the Board of Directors so elected shall meet as soon as
practicable for the purpose of organization and the transaction
of other business; and in the event that no other time is
designated by the stockholders, the Board of Directors shall meet
one hour after the time for such stockholders' meeting or
immediately following the close of such meeting, whichever is
later, on the day of such meeting. Such first regular meeting
shall be held at any place as may be designated by the
stockholders, or in default of such designation at the place
designated by the Board of Directors for such first regular
meeting, or in default of such designation at the place of the
holding of the immediately preceding meeting of stockholders.
Any other regular meeting of the Board of Directors shall be held
on such date and at any place as may be designated from time to
time by the Board of Directors. No notice of such first meeting
or any other regular meeting shall be necessary if held as
hereinabove provided.
SECTION 2.07. Special Meetings. Special meetings of the
Board of Directors may be called at any time by the Chairman of
the Board or the Vice-Chairman of the Board or the President or
by one-third of the Board of Directors by vote at a meeting, or
in writing with or without a meeting. A special meeting of the
Board of Directors shall be held on such date and at any place as
may be designated from time to time by the Board of Directors.
In the absence of designation such meeting shall be held at such
place as may be designated in the call.
SECTION 2.08. Notice of Meeting. Except as provided in
Section 2.06, the Secretary shall give notice to each director of
each regular and special meeting of the Board of Directors.
Written notice of any regular or special meeting shall be give to
each director at least two days previous thereto delivered
personally or by telegram or at least seven days previous thereto
delivered by mail at the address at which the director is most
likely to be reached. Such notice shall be deemed to be
delivered when deposited in the United States mail so addressed,
with postage thereon prepaid if mailed or when delivered to the
telegraph company if sent by telegram. Neither the business to
be transacted at, nor the purpose of, any meeting of the Board of
Directors need be specified in the notice or waiver of notice of
such meeting. No notice of any meeting of the Board of Directors
need be given to any director who attends except where a director
attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully
called or convened, or to any director who, in writing executed
and filed with the records of the meeting either before or after
the holding thereof, waives such notice. Any meeting of the
Board of Directors, regular or special, may adjourn from time to
time to reconvene at the same or some other place, and no notice
need be given of any such adjourned meeting other than by
announcement.
SECTION 2.09. Action by Directors. Unless statute or the
Charter or By-Laws requires a greater proportion, the action of a
majority of the directors present at a meeting at which
4
<PAGE>
a quorum is present is action of the Board of Directors. A
majority of the entire Board of Directors shall constitute a
quorum for the transaction of business. In the absence of a
quorum, the directors present by majority vote and without notice
other than by announcement may adjourn the meeting from time to
time until a quorum shall attend. At any such adjourned meeting
at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as
originally notified. Any action required or permitted to be
taken at a meeting of the Board of Directors may be taken without
a meeting, if a unanimous written consent which sets forth the
action is signed by each member of the Board and filed with the
minutes of proceedings of the Board.
SECTION 2.10. Meeting by Conference Telephone. Members of
the Board of Directors may participate in a meeting by means of a
conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the
same time. Participation in a meeting by these means constitutes
presence in person at a meeting, but shall not constitute
attendance for the purpose of compensation pursuant to Section
2.11 of this Article.
SECTION 2.11. Compensation. By resolution of the Board of
Directors a fixed sum and expenses, if any, for attendance at
each regular or special meeting of the Board of Directors or of
committees thereof, and other compensation for their services as
such or on committees of the Board of Directors, may be paid to
directors. A director who serves the Corporation in any other
capacity also may receive compensation for such other services,
pursuant to a resolution of the directors.
SECTION 2.12. Resignation. Any director may resign at any
time by sending a written notice of such resignation to the home
office of the Corporation addressed to the Chairman of the Board,
the Vice Chairman of the Board or the President. Unless
otherwise specified herein such resignation shall take effect
upon receipt thereof by the Chairman of the Board, the Vice
Chairman of the Board or the President.
SECTION 2.13. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of Directors
at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent
or abstention shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered
mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not
apply to a director who votes in favor of such action.
SECTION 2.14. Advisory Directors. The Board of Directors
may by resolution appoint advisory directors to the Board, who
may also serve as directors emeriti, and shall have such
authority and receive such compensation and reimbursement as the
Board of Directors shall provide. Advisory directors or
directors emeriti shall not have the authority to participate by
vote in the transaction of business.
5
<PAGE>
ARTICLE III.
COMMITTEES
SECTION 3.01. Committees. The Board of Directors may
appoint from among its members an Executive Committee and other
committees composed of two or more directors and delegate to
these committees any of the powers of the Board of Directors,
except the power to declare dividends or other distributions on
stock, elect directors, issue stock other than as provided in the
next sentence, recommend to the stockholders any action which
requires stockholder approval, amend the By-Laws, or approve any
merger or share exchange which does not require stockholder
approval. If the Board of Directors has given general
authorization for the issuance of stock, a committee of the
Board, in accordance with a general formula or method specified
by the Board by resolution or by adoption of a stock option or
other plan, may fix the terms of stock subject to classification
or reclassification and the terms on which any stock may be
issued, including all terms and conditions required or permitted
to be established or authorized by the Board of Directors. Any
vacancies in the Executive Committee may be filled by a two-thirds (2/3) vote
of the entire Board of Directors.
SECTION 3.02. Committee Procedure. Each committee may fix
rules of procedure for its business. A majority of the members
of a committee shall constitute a quorum for the transaction of
business and the act of a majority of those present at a meeting
at which a quorum is present shall be the act of the committee.
The members of a committee present at any meeting, whether or not
they constitute a quorum, may appoint a director to act in the
place of an absent member. Any action required or permitted to
be taken at a meeting of a committee may be taken without a
meeting, if a unanimous written consent which sets forth the
action is signed by each member of the committee and filed with
the minutes of the committee. The members of a committee may
conduct any meeting thereof by conference telephone in accordance
with the provisions of Section 2.10.
SECTION 3.03. Emergency. In the event of a state of
disaster of sufficient severity to prevent the conduct and
management of the affairs and business of the Corporation by its
directors and officers as contemplated by the Charter and the By-Laws, any two
or more available members of the then incumbent
Executive Committee shall constitute a quorum of that Committee
for the full conduct and management of the affairs and business
of the Corporation in accordance with the provisions of Section
3.01. In the event of the unavailability, at such time, of a
minimum of two members of the then incumbent Executive Committee,
the available directors shall elect an Executive Committee
consisting of any two members of the Board of Directors, whether
or not they be officers of the Corporation, which two members
shall constitute the Executive Committee for the full conduct and
management of the affairs of the Corporation in accordance with
the foregoing provisions of this Section. This Section shall be
subject to implementation by resolution of the Board of Directors
passed from time to time for that purpose, and any provisions of
the By-Laws (other than this Section) and any resolutions which
are contrary to the provisions of this Section or to the
provisions of any such implementary resolutions shall be
suspended until it shall be determined by any interim Executive
Committee acting under this Section that it shall be to the
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<PAGE>
advantage of the Corporation to resume the conduct and management
of its affairs and business under all the other provisions of the
By-Laws.
ARTICLE IV.
OFFICERS
SECTION 4.01. Executive and Other Officers. The
Corporation shall have a President, a Secretary, and a Treasurer
who shall be the executive officers of the Corporation. It may
also have a Chairman of the Board and a Vice-Chairman of the
Board; the Chairman of the Board or the Vice-Chairman of the
Board shall be an executive officer if he is designated as the
chief executive officer of the Corporation. The Board of
Directors may designate who shall serve as chief executive
officer, having general supervision of the business and affairs
of the Corporation, or as chief operating officer, having
supervision of the operations of the Corporation; in the absence
of designation the President shall serve as chief executive
officer and chief operating officer. It may also have one or
more Vice-Presidents, assistant officers, and subordinate
officers as may be established by the Board of Directors. A
person may hold more than one office in the Corporation but may
not serve concurrently as both President and Vice-President of
the Corporation. The Chairman of the Board and the Vice-Chairman
of the Board shall be directors; the other officers may be
directors.
SECTION 4.02. Chairman of the Board. The Chairman of the
Board, if one be elected, shall preside at all meetings of the
Board of Directors and of the stockholders at which he shall be
present; and, in general, he shall perform all such duties as are
from time to time assigned to him by the Board of Directors.
SECTION 4.03. Vice Chairman of the Board. The Vice
Chairman of the Board, if one be elected, in the absence of the
Chairman of the Board, shall preside at all meetings of the Board
of Directors and of the stockholders at which he shall be
present; and, in general, he shall perform all such duties as are
from time to time assigned to him by the Board of Directors.
SECTION 4.04. President. The President, in the absence of
the Chairman of the Board and the Vice Chairman of the Board,
shall preside at all meetings of the Board of Directors and of
the stockholders at which he shall be present; he may sign and
execute, in the name of the Corporation, all authorized deeds,
mortgages, bonds, contracts or other instruments, except in cases
in which the signing and execution thereof shall have been
expressly delegated to some other officer or agent of a
Corporation; and, in general, he shall perform all duties usually
performed by a president of the corporation and such other duties
as are from time to time assigned to him by the Board of
Directors or the chief executive officer of the Corporation.
SECTION 4.05. Vice-Presidents. The Vice-President or
Vice-Presidents, at the request of the chief executive officer or
the President, or in the President's absence or during his
inability to act, shall perform the duties and exercise the
functions of the President, and when so acting shall have the
powers of the President. If there be more than one Vice-President, the Board
of Directors may determine which one or more
of the Vice-Presidents shall perform any of such duties or
exercise
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any of such functions, or if such determination is not made by
the Board of Directors, the chief executive officer, or the
President may make such determination; otherwise any of the Vice-Presidents may
perform any of such duties or exercise any of such
functions. The Vice-President or Vice-Presidents shall have such
other powers and perform such other duties, and have such
additional descriptive designations in their titles (if any), as
are from time to time assigned to them by the Board of Directors,
the chief executive officer, or the President.
SECTION 4.06. Secretary. The Secretary shall keep the
minutes of the meetings of the stockholders, of the Board of
Directors and of any committees, in books provided for the
purpose; he shall see that all notices are duly given in
accordance with the provisions of the By-Laws or as required by
law; he shall be custodian of the records of the Corporation; he
may witness any document on behalf of the Corporation, the
execution of which is duly authorized, see that the corporate
seal is affixed where such document is required or desired to be
under its seal, and, when so affixed, may attest the same; and,
in general, he shall perform all duties incident to the office of
a secretary of a corporation, and such other duties as are from
time to time assigned to him by the Board of Directors, the chief
executive officer, or the President.
SECTION 4.07. Treasurer. The Treasurer shall have charge
of and be responsible for all funds, securities, receipts and
disbursements of the Corporation, and shall deposit, or cause to
be deposited, in the name of the Corporation, all moneys or other
valuable effects in such banks, trust companies or other
depositories as shall, from time to time, be selected by the
Board of Directors; he shall render to the chief executive
officer and to the Board of Directors, whenever requested, an
account of the financial condition of the Corporation; and, in
general, he shall perform all the duties incident to the office
of a treasurer of a corporation, and such other duties as are
from time to time assigned to him by the Board of Directors, the
chief executive officer, or the President.
SECTION 4.08. Assistant and Subordinate Officers. The
assistant and subordinate officers of the Corporation are all
officers below the office of Vice-President, Secretary, or
Treasurer. The assistant or subordinate officers shall have such
duties as are from time to time assigned to them by the Board of
Directors, the chief executive officer, or the President.
SECTION 4.09. Election, Tenure and Removal of Officers.
The Board of Directors shall elect the officers. The Board of
Directors may from time to time authorize any committee or
officer to appoint assistant and subordinate officers. Election
or appointment of an officer, employee or agent shall not of
itself create contract rights. All officers shall be appointed
to hold their offices, respectively, during the pleasure of the
Board. The Board of Directors (or, as to any assistant or
subordinate officer, any committee or officer authorized by the
Board) may remove an officer at any time. The removal of an
officer does not prejudice any of his contract rights. The Board
of Directors (or, as to any assistant or subordinate officer, any
committee or officer authorized by the Board) may fill a vacancy
which occurs in any office for the unexpired portion of the term.
SECTION 4.10. Compensation. The Board of Directors shall
have power to fix the salaries and other compensation and
remuneration, of whatever kind, of all officers of the
Corporation. No officer shall be prevented from receiving such
salary by reason of the fact that he is also a director of the
Corporation. The Board of Directors may authorize any committee
or
8
<PAGE>
officer, upon whom the power of appointing assistant and
subordinate officers may have been conferred, to fix the
salaries, compensation and remuneration of such assistant and
subordinate officers.
ARTICLE V.
STOCK
SECTION 5.01. Certificates for Stock. Each stockholder is
entitled to certificates which represent and certify the shares
of stock he holds in the Corporation. Each stock certificate
shall include on its face the name of the corporation that issues
it, the name of the stockholder or other person to whom it is
issued, and the class of stock and number of shares it
represents. It shall be in such form, not inconsistent with law
or with the Charter, as shall be approved by the Board of
Directors or any officer or officers designated for such purpose
by resolution of the Board of Directors. Each stock certificate
shall be signed by the Chairman of the Board, the Vice-Chairman
of the Board, the President, or a Vice-President, and
countersigned by the Secretary, an Assistant Secretary, the
Treasurer, or an Assistant Treasurer. Each certificate may be
sealed with the actual corporate seal or a facsimile of it or in
any other form and the signatures may be either manual or
facsimile signatures. A certificate is valid and may be issued
whether or not an officer who signed it is still an officer when
it is issued.
SECTION 5.02. Transfers. The Board of Directors shall have
power and authority to make such rules and regulations as it may
deem expedient concerning the issue, transfer and registration of
certificates of stock; and may appoint transfer agents and
registrars thereof. The duties of transfer agent and registrar
may be combined.
SECTION 5.03. Record Date and Closing of Transfer Books.
The Board of Directors may set a record date or direct that the
stock transfer books be closed for a stated period for the
purpose of making any proper determination with respect to
stockholders, including which stockholders are entitled to notice
of a meeting, vote at a meeting, receive a dividend, or be
allotted other rights. The record date may not be more than 90
days before the date on which the action requiring the
determination will be taken; the transfer books may not be closed
for a period longer than 30 days; and, in the case of a meeting
of stockholders, the record date or the closing of the transfer
books shall be at least 10 days before the date of the meeting.
SECTION 5.04. Stock Ledger. The Corporation shall maintain
a stock ledger which contains the name and address of each
stockholder and the number of shares of stock of each class which
the stockholder holds. The stock ledger may be in written form
or in any other form which can be converted within a reasonable
time into written form for visual inspection. The original or a
duplicate of the stock ledger shall be kept at the offices of a
transfer agent for the particular class of stock, or, if none, at
the principal office in the State of Maryland or the principal
executive offices of the Corporation.
9
<PAGE>
SECTION 5.05. Certification of Beneficial Owners. The
Board of Directors may adopt by resolution a procedure by which a
stockholder of the Corporation may certify in writing to the
Corporation that any shares of stock registered in the name of
the stockholder are held for the account of a specified person
other than the stockholder. The resolution shall set forth the
class of stockholders who may certify; the purpose for which the
certification may be made; the form of certification and the
information to be contained in it; if the certification is with
respect to a record date or closing of the stock transfer books,
the time after the record date or closing of the stock transfer
books within which the certification must be received by the
Corporation; and any other provisions with respect to the
procedure which the Board considers necessary or desirable. On
receipt of a certification which complies with the procedure
adopted by the Board in accordance with this Section, the person
specified in the certification is, for the purpose set forth in
the certification, the holder of record of the specified stock in
place of the stockholder who makes the certification.
SECTION 5.06. Lost Stock Certificates. The Board of
Directors of the Corporation may determine the conditions for
issuing a new stock certificate in place of one which is alleged
to have been lost, stolen, or destroyed, or the Board of
Directors may delegate such power to any officer or officers of
the Corporation. In their discretion, the Board of Directors or
such officer or officers may refuse to issue such new certificate
save upon the order of some court having jurisdiction in the
premises.
ARTICLE VI.
FINANCE
SECTION 6.01. Checks, Drafts, Etc. All checks, drafts and
orders for the payment of money, notes and other evidences of
indebtedness, issued in the name of the Corporation, shall,
unless otherwise provided by resolution of the Board of
Directors, be signed by the Chairman of the Board, the President,
a Vice-President or an Assistant Vice-President and countersigned
by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary. In the case of dividend checks, a facsimile
signature is permitted.
SECTION 6.02. Annual Statement of Affairs. The President
shall prepare annually a full and correct statement of the
affairs of the Corporation, to include a balance sheet and a
financial statement of operations for the preceding fiscal year.
The statement of affairs shall be submitted at the annual meeting
of the stockholders and, within 20 days after the meeting, placed
on file at the Corporation's principal office.
SECTION 6.03. Fiscal Year. The fiscal year of the
Corporation shall be the 12 calendar months period ending
December 31 in each year, unless otherwise provided by the Board
of Directors.
SECTION 6.04. Dividends. If declared by the Board of
Directors at any meeting thereof, the Corporation may pay
dividends on its shares in cash, property, or in shares of the
capital stock of the Corporation, unless such dividend is
contrary to law or to a restriction contained in the Charter.
10
<PAGE>
SECTION 6.05. Contracts. To the extent permitted by
applicable law, and except as otherwise prescribed by the Charter
or these By-Laws with respect to certificates for shares, the
Board of Directors may authorize any officer, employee, or agent
of the Corporation to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the
Corporation. Such authority may be general or confined to
specific instances.
SECTION 6.06. Loans. No loans shall be contracted on
behalf of the Corporation and no evidence of indebtedness shall
be issued in its name unless authorized by the Board of
Directors. Such authority may be general or confined to specific
instances.
SECTION 6.07. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in any of its duly authorized
depositories as the Board of Directors may select.
ARTICLE VII.
SUNDRY PROVISIONS
SECTION 7.01. Books and Records. The Corporation shall
keep correct and complete books and records of its accounts and
transactions and minutes of the proceedings of its stockholders
and Board of Directors and of any executive or other committee
when exercising any of the powers of the Board of Directors. The
books and records of a Corporation may be in written form or in
any other form which can be converted within a reasonable time
into written form for visual inspection. Minutes shall be
recorded in written form but may be maintained in the form of a
reproduction. The original or a certified copy of the By-Laws
shall be kept at the principal office of the Corporation.
SECTION 7.02. Corporate Seal. The Board of Directors shall
provide a suitable seal, bearing the name of the Corporation,
which shall be in the charge of the Secretary. The Board of
Directors may authorize one or more duplicate seals and provide
for the custody thereof. If the Corporation is required to place
its corporate seal to a document, it is sufficient to meet the
requirement of any law, rule, or regulation relating to a
corporate seal to place the word "Seal" adjacent to the signature
of the person authorized to sign the document on behalf of the
Corporation.
SECTION 7.03. Bonds. The Board of Directors may require
any officer, agent or employee of the Corporation to give a bond
to the Corporation, conditioned upon the faithful discharge of
his duties, with one or more sureties and in such amount as may
be satisfactory to the Board of Directors.
SECTION 7.04. Voting Upon Shares in Other Corporations.
Stock of other corporations or associations, registered in the
name of the Corporation, may be voted by the Chairman of the
Board, the Vice-Chairman of the Board, the President, a Vice-President, or a
proxy appointed by either of them. The Board of Directors, however, may by
resolution appoint some other person to vote such shares, in which case such
person shall be entitled to vote such shares upon the production of a certified
copy of such resolution.
11
<PAGE>
SECTION 7.05 Mail. Any notice or other document which is
required by these By-Laws to be mailed shall be deposited in the
United States mail, postage prepaid.
SECTION 7.06. Execution of Documents. A person who holds
more than one office in the Corporation may not act in more than
one capacity to execute, acknowledge, or verify an instrument
required by law to be executed, acknowledged, or verified by more
than one officer.
SECTION 7.07. Amendments. In accordance with the Charter,
these By-Laws may be repealed, altered, amended or rescinded by
the stockholders of the Corporation only by vote of not less than
seventy-five percent (75%) of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose
(provided that notice of such proposed repeal, alteration,
amendment or rescission is included in the notice of such
meeting). In addition, the Board of Directors may repeal, alter,
amend or rescind these By-Laws by vote of two-thirds (2/3) of the
Board of Directors at a legal meeting held in accordance with the
provisions of these By-Laws.
12
EXHIBIT 4.1
Articles of Incorporation of Monocacy Bancshares, Inc.
(included at Exhibit 3(i))
EXHIBIT 4.2
Bylaws of Monocacy Bancshares, Inc.
(included at Exhibit 3(ii))
EXHIBIT 4.3
1997 INDEPENDENT DIRECTORS' STOCK OPTION PLAN
<PAGE>
MONOCACY BANCSHARES, INC.
1997 INDEPENDENT DIRECTORS' STOCK OPTION PLAN
1. Purpose. The purpose of this Stock Option Plan (the "Plan")
is to advance the development, growth and financial
condition of Monocacy Bancshares, Inc. and its subsidiaries
(the "Corporation"), by providing incentives through
participation in the appreciation of capital stock of the
Corporation so as to secure, retain and motivate members of
the Corporation's Board of Directors (the "Board") who are
not officers and employees of the Corporation or any
subsidiary thereof ("non-employee directors"). This Plan
shall be interpreted and implemented in a manner so that
non-employee directors will not fail, by reason of this Plan
or their participation in it, to be "disinterested persons"
within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("Exchange Act") as to any
employee benefit plan of the Corporation or its affiliates.
2. Term. The Plan shall become effective as of the date the
Corporation's stockholders duly approve the Plan (the
"Effective Date"). If the Plan is so approved, it shall
continue in effect until any stock options granted under the
Plan either have lapsed or been exercised, satisfied or
canceled according to their terms under the Plan.
3. Stock. The shares of stock that may be issued under the
Plan shall not exceed, in the aggregate, sixty thousand
(60,000) shares of the Corporation's common stock, par value
$5.00 per share (the "Stock"). The aggregate amount of
Stock under the Plan may be adjusted pursuant to paragraph
10. Such shares of Stock may be either authorized and
unissued shares of Stock, or authorized shares of Stock
issued by the Corporation and subsequently reacquired by it
as treasury stock. Under no circumstances shall any
fractional shares of Stock be issued under the Plan. The
Corporation shall reserve and keep available, and shall duly
apply for any requisite governmental authority to grant the
stock options under this Plan, and issue or sell the number
of shares of Stock needed to satisfy the requirements of the
Plan while in effect. The Corporation's failure to obtain
any such governmental authority deemed necessary by the
Corporation's legal counsel for the proper grant of the
stock options under this Plan and/or the issuance and sale
of Stock under the Plan shall relieve the Corporation of any
duty, or liability for the failure to grant the stock
options under this Plan and/or issue or sell the Stock as to
which such authority has not been obtained.
4. Stock Options. Stock options shall be granted under the
Plan to all current non-employee directors of the
Corporation, and any non-employee director, other than
current or prior members of the Board, who become a member
of the Board at any time within a five (5) year period after
the Effective Date (such directors shall be referred to
under this Plan as a "Director"). Every stock option
granted to a Director shall be exercisable during his or her
lifetime only by the Director, and shall not be salable,
transferable or assignable by the Director except by his or
her Will or pursuant to applicable laws of descent and
distribution. Commencing on the Effective Date, or in the
case of a Director who becomes a member of the Board at any
time within a five (5) year period after the Effective Date,
commencing on the date he or she is elected or appointed to
the Board, a Director shall be granted a stock option to
purchase five thousand (5,000) shares of Stock (the "Stock
Option") under the following terms and conditions:
(a) The time period during which any Stock Option is
exercisable shall be ten (10) years after the date the
Stock Option is granted to the Director. However, no
option may be exercised after the expiration of its
term or after the date set forth in subsections (b),
(c) or (d) below, if earlier. Options are exercisable
only to the extent they are vested.
(b) If the Optionee ceases to be a Director after attaining
mandatory retirement age (as defined in the
Corporation's By-Laws) or on account of death or
disability, all outstanding options granted to such
Optionee shall vest and the Optionee (or the Optionee's
legatees or distributees or the personal representative
of the Director's estate, in the event of the
Optionee's death) may exercise the Optionee's
outstanding options at any time until the first of the
following to occur (1) that date that is two years
after the date on which the Optionee ceases to be a
Director or (2) the date on which such outstanding
options expire according to their terms.
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<PAGE>
(c) If an Optionee ceases to be a Director for any reason
other than described in subsection (b) above, the
Director may exercise his or her outstanding options to
the extent vested at any time (subject to the
limitations of subsection (f) below) until the first of
the following to occur (1) the date that is three
months after the date on which the Optionee ceases to
be a Director or (2) the date on which such outstanding
options expire according to their terms.
(d) If a Optionee dies after the Optionee ceases to be a
Director, but within the time period during which his
or her outstanding Options are still exercisable, the
Optionee's outstanding Options may be exercised by his
or her legatees or distributees or the personal
representative of his or her estate. Such outstanding
Options may be exercised at any time (subject to the
limitations of subsection (f) below) until the first of
the following to occur (1) the date that is two years
after the date on which the Optionee ceases to be a
Director or (2) the date on which such outstanding
Options expire according to their terms.
(e) The purchase price of a share of Stock subject to a
Stock Option shall be the fair market value of the
Stock as determined under paragraph 6 hereof.
(f) Options are exercisable only to the extent they are
vested, and no option may be exercised during the first
six months after the Option Grant Date, unless the
Optionee dies or becomes disabled (as determined under
Title II of the Social Security Act, 42 U.S.C. Sections
301 et seq.) before the expiration of the six-month
period. The Stock Option shall be made by a written
agreement attached hereto as Exhibit "1", which written
agreement contains the vesting schedule of the Stock
Option, as follows:
Period From
Option Grant Vested Number of
Date Percentage Shares Vested
------------ ---------- -------------
Less Than 1 Year 25% 1,250
1 Year But Less Than 2 Years 50% 2,500
2 Years But Less Than 3 Years 75% 3,750
3 Or More Years 100% 5,000
5. Exercise. Except as otherwise provided in the Plan, the
Stock Option may be exercised in whole or in part by giving
written notice thereof to the Secretary of the Corporation,
or his or her designee, identifying the Stock Option being
exercised, the number of shares of Stock with respect
thereto, and other information pertinent to the exercise of
the Stock Option. The purchase price of the shares of Stock
with respect to which a Stock Option is exercised shall be
paid with the written notice of exercise, either in cash or
in Stock which has been held by the Director for at least
six (6) months at its then current fair market value, or in
any combination thereof. Funds received by the Corporation
from the exercise of any Stock Option shall be used for its
general corporate purposes. The number of shares of Stock
subject to a Stock Option shall be reduced by the number of
shares of Stock with respect to which the Director has
exercised rights under the Stock Option.
If the Corporation or its stockholders execute an agreement
to dispose of all or substantially all of the Corporation's
assets or capital stock by means of sale, merger,
consolidation, reorganization, liquidation or otherwise, as
a result of which the Corporation's stockholders as of
immediately before such transaction will not own at least
fifty percent (50%) of the total combined voting power of
all classes of voting capital stock of the surviving entity
(be it the Corporation or otherwise) immediately after the
consummation of such transaction, thereupon any and all
Stock Options which the Director would be entitled to
receive under the Plan shall be immediately granted to the
Director until the consummation of such transaction, or if
not consummated, until the agreement therefor expires or is
terminated, in which case thereafter all Stock Options shall
be treated as if said agreement never had been executed. If
during any period of two (2) consecutive years, the
individuals who at the beginning of such period constituted
the Board, cease for any reason to
2
<PAGE>
constitute at least a majority of the Board, unless the
election of each director of the Board, who was not a
director of the Board at the beginning of such period, was
approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of
such period, thereupon any and all Stock Options which the
Director would be entitled to receive under the Plan shall
be immediately granted to the Director. If there is an
actual, attempted or threatened change in the ownership of
at least twenty-five percent (25%) of any classes of voting
capital stock of the Corporation through the acquisition of,
or an offer to acquire such percentage of the Corporation's
voting capital stock by any person or entity, or persons or
entities acting in concert or as a group, and such
acquisition or offer has not been duly approved by the
Board, thereupon any and all Stock Options which the
Director would be entitled to receive under the Plan shall
be immediately granted.
6. Value. Where used in the Plan, the "fair market value" of
Stock shall mean and be determined as follows: (i) in the
event that the Stock is listed on an established exchange,
the closing price of the Stock on the date when the Stock
Option is granted to the Director (the "Relevant Date") or,
if no trade did occur on that day, on the next preceding day
on which a trade occurred; or (ii) in the event that the
Stock is not listed on an established exchange, but is then
quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the average of the
average of the closing bid and asked quotations of the Stock
for the five (5) trading days immediately preceding the
Relevant Date. In either case, in the event that no closing
bid or asked quotation is available on one (1) or more of
such trading days, the fair market value shall be determined
by reference to the five (5) trading days immediately
preceding the Relevant Date on which closing bid and asked
quotations are available.
7. Continued Relationship. Nothing in the Plan or any Stock
Option shall confer upon any Director or any right to
continue his or her relationship with the Corporation as a
director, or limit or affect any rights, powers or
privileges that the Corporation or its affiliates may have
to supervise, discipline and terminate such Director, and
the relationships thereof.
8. General Restrictions. Each Stock Option shall be subject to
the requirement and provision that if at any time the Board
determines it necessary or desirable as a condition of or in
consideration of making such Stock Option, or the purchase
or issuance or Stock thereunder, (a) the listing,
registration or qualification of the Stock subject to the
Stock Option, or the Stock Option itself, upon any
securities exchange or under any federal or state securities
or other laws, (b) the approval of any governmental
authority, or (c) an agreement by the Director with respect
to disposition of any Stock (including without limitation
that at the time of the Director's exercise of the Stock
Option, any Stock thereby acquired is being and will be
acquired solely for investment purposes and without any
intention to sell or distribute such Stock), then such Stock
Option shall not be consummated in whole or in part unless
such listing, registration, qualification, approval or
agreement shall have been appropriately effected or obtained
to the satisfaction of the Board and legal counsel for the
Corporation. Notwithstanding anything to the contrary
herein, a Director shall not sell, transfer or otherwise
dispose of any shares of Stock acquired pursuant to a Stock
Option unless at least six (6) months have elapsed from the
date the Stock Option was granted, the election of such
transaction is made at least six months following the date
of the Director's most recent "opposite-way election" under
any plan of the Corporation or the transaction is otherwise
made in accordance with Section 16 of the Exchange Act, as
the same my be amended, if at the time of such disposition
the Director is subject to Section 16 of the Exchange Act.
9. Rights. Except as otherwise provided in the Plan, the
Director shall have no rights as a holder of the Stock
subject thereto unless and until one or more certificates
for the shares of such Stock are issued and delivered to the
Director. No adjustments shall be made for dividends,
either ordinary or extraordinary, or any other distributions
with respect to Stock, whether made in cash, securities or
other property, or any rights with respect thereto, for
which the record date is prior to the date that any
certificates for Stock subject to a Stock Option are issued
to the Director pursuant to his or her exercise thereof. No
Stock Option, or the grant thereof, shall limit or affect
the right or power of the Corporation or its affiliates to
adjust, reclassify, recapitalize, reorganize or otherwise
change its or their capital or business structure, or to
merge, consolidate, dissolve, liquidate or sell any or all
of its or their business, property or assets.
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<PAGE>
10. Adjustments. In the event that the shares of Common Stock
of the Corporation, as presently constituted, shall be
changed into or exchanged for a different number or kind of
shares of stock or other securities of the Corporation or of
other securities of the Corporation or of another
corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of
shares or otherwise) or if the number of such shares of
stock shall be increased through the payment of a stock
dividend, then, there shall be substituted for or added to
each share of stock of the Corporation which was theretofore
appropriated, or which thereafter may become subject to an
option under the Plan, the number and kind of shares of
stock or other securities into which each outstanding share
of the stock of the Corporation shall be so changed or for
which each such share shall be exchanged or to which each
such shares shall be entitled, as the case may be.
Outstanding Options shall also be appropriately amended as
to price and other terms, as may be necessary to reflect the
foregoing events.
If there shall be any other change in the number or kind of
the outstanding shares of the stock of the Corporation, or
of any stock or other securities in which such stock shall
have been changed, or for which it shall have been
exchanged, and if a majority of the disinterested members of
the Board shall, in its sole discretion, determine that such
change equitably requires an adjustment in any Option which
was theretofore granted or which may thereafter be granted
under the Plan, then such adjustment shall be made in
accordance with such determination.
The grant of an Option pursuant to the Plan shall not affect
in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge, to
consolidate, to dissolve, to liquidate or to sell or
transfer all or any part of its business or assets.
A dissolution or liquidation of the Corporation, or a merger
or consolidation in which the Corporation is not the
surviving Corporation, shall cause each outstanding Option
to terminate, except to the extent that another corporation
may and does in the transaction assume and continue to the
Option or substitute its own options.
Fractional shares resulting from any adjustment in Options
pursuant to this Article 10 may be settled as a majority of
the disinterested members of the Board or the Committee (as
the case may be) shall determine.
To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be
made by a majority of the disinterested members of the
Board, whose determination in that respect shall be final,
binding and conclusive. Notice of any adjustment shall be
given by the Corporation to each holder of an Option which
shall been so adjusted.
11. Forfeiture. Notwithstanding anything to the contrary in
this Plan, if the involved Director has been engaged in
fraud, embezzlement, theft, commission of a felony, or
dishonesty in the course of his or her relationship with the
Corporation or its affiliates that has damaged them, or that
the Director has disclosed trade secrets of the Corporation
or its affiliates, the Director shall forfeit all rights
under and to all unexercised Stock Options, and all
exercised Stock Options under which the Corporation has not
yet delivered certificates for shares of Stock (as the case
may be), and all rights to receive Stock Options shall be
automatically canceled.
12. Miscellaneous. Any reference contained in this Plan to a
particular section or provision of law, rule or regulation,
including but not limited to the Internal Revenue Code of
1986 and the Exchange Act, both as amended, shall include
any subsequently enacted or promulgated section or provision
of law, rule or regulation, as the case may be, of similar
import. With respect to persons subject to Section 16 of
the Exchange Act, transactions under this Plan are intended
to comply with all applicable conditions of Rule 16b-3 or
any successor rule that may be promulgated by the Securities
and Exchange Commission. To the extent any provision of
this Plan fails to so comply, it shall be deemed null and
void, to the extent permitted by applicable law, subject to
the provisions of paragraph 13 below. Where used in this
Plan: the plural shall include the singular, and unless the
context otherwise clearly requires, the singular shall
include the plural; and, the term "affiliates" shall mean
each and every subsidiary of the Corporation. The captions
of the numbered paragraphs contained in this Plan are for
convenience only, and shall not limit or affect the meaning,
interpretation or construction of any of the provisions of
the Plan.
13. Amendment. The Plan may not be amended, suspended or
terminated except as may be provided for herein, or as may
be required under the provisions of the Internal Revenue
Code of 1986, as amended, and Section
4
<PAGE>
16 of the Exchange Act, and the rules regulations
thereunder. If any provision of the Plan would cause a non-
employee director not to be a "disinterested person" within
the meaning of Rule 16b-3 under the Exchange Act as then
applicable to any employee benefit plan of the Corporation,
such provision shall be construed or deemed amended to the
extent necessary to preserve such non-employee director's
status as a "disinterested person".
14. Taxes. The issuance of shares of Stock under the Plan shall
be subject to any applicable taxes or other laws or
regulations of the United States of America and any state or
local authority having jurisdiction thereover.
- - - - - - -
END
- - - - - - -
EXHIBIT 5
Opinion of Shumaker Williams, P.C.
<PAGE>
SHUMAKER WILLIAM, P.C.
P. O. Box 88
Harrisburg, Pennsylvania 17108
(717) 763-1121
July 1, 1997
Frank W. Neubauer, President and CEO
MONOCACY BANCSHARES, INC.
222 East Baltimore Street
P.O. Box 491
Baltimore, MD 21787-0491
RE: Monocacy Bancshares, Inc. (the "Corporation")
Registration Statement Form S-8
Our File No. 637-97
Dear Mr. Neubauer:
We have acted as Special Corporate Counsel to the
Corporation in connection with preparation of the Corporation's
Registration Statement on Form S-8 relating to the Corporation's
1997 Independent Directors' Stock Option Plan (the "Plan").
In connection with this matter, we, as counsel to the
Corporation, have reviewed the following:
1. the Pennsylvania Business Corporation Law of 1988, as
amended;
2. the Corporation's Articles of Incorporation;
3. the Corporation's By-Laws;
4. Resolutions adopted by the Corporation's Board of
Directors on April 28, 1997 and May 27, 1997; and
5. the Plan.
Based upon such review, it is our opinion that the
Corporation's common stock, $5.00 par value, (the "Common Stock")
issuable under the Plan, when and as issued in accordance with
the provisions of the Plan, will be duly and validly issued,
fully paid and nonassessable. In giving the foregoing opinion,
we have assumed that the Corporation will have, at the time of
the issuance of Common Stock under the Plan, a sufficient number
of authorized shares available for issue.
<PAGE>
Frank W. Neubauer, President and CEO
MONOCACY BANCSHARES, INC.
July 1, 1997
Page 2
We hereby consent to the use of this opinion as an exhibit
to the Corporation's Registration Statement on Form S-8.
Very truly yours,
By /s/ Nicholas Bybel, Jr.
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Nicholas Bybel, Jr.
NB/tb:72863
EXHIBIT 23.1
Consent of Stegman & Company
<PAGE>
STEGMAN
& COMPANY
- ----------------------
Certified Public Accountants and
Management Consultants Since 1915
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 relating to the Monocacy Bancshares, Inc.
1997 Independent Directors' Stock Option Plan of our report dated
January 31, 1997, with respect to the consolidated financial
statements of Monocacy Bancshares, Inc. incorporated by reference
in its Annual Report on Form 10-KSB for the year ended December
31, 1996, filed with the Securities and Exchange Commission.
/s/ Stegman & Company
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Towson, Maryland Stegman & Company
June 30, 1997
Suite 200, 405 East Joppa Road, Baltimore, Maryland 21286 - 410-823-8000 -
1-800-686-3883 - Fax: 410-296-4815
EXHIBIT 23.2
Consent of Shumaker Williams, P.C.
(included in Exhibit 5)
EXHIBIT 24
Power of Attorney of Directors and Officers
(included on Signature Pages)
