As filed with the Securities and Exchange Commission on July 27, 1999
Registration No. 333-_________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------
HARBOR FEDERAL BANCORP, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 52-1860591
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
705 YORK ROAD
BALTIMORE, MARYLAND 21204
-------------------------
(Address of Principal Executive Offices)
HARBOR FEDERAL BANCORP, INC. 1999 STOCK INCENTIVE PLAN
------------------------------------------------------
(Full title of the Plan)
ROBERT A. WILLIAMS, PRESIDENT
HARBOR FEDERAL BANCORP, INC.
705 YORK ROAD
BALTIMORE, MARYLAND 21204
-------------------------
(Name and Address of Agent For Service)
(410) 321-7041
--------------
(Telephone Number, Including Area Code, of Agent for Service)
COPIES TO:
J. MARK POERIO, ESQUIRE
KUTAK ROCK
1101 CONNECTICUT AVENUE, N.W., SUITE 1000
WASHINGTON, D.C. 20036-4374
(202) 828-2400
--------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================
Title Of Amount Proposed Maximum Proposed Maximum Amount of
Securities To Be Offering Price Aggregate Offering Registration
To Be Registered Registered Per Share Price Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 170,000 (1) (2) $2,677,500(2) $744.35
=====================================================================================================
(1) Maximum number of shares issuable under the Harbor Federal Bancorp, Inc. 1999 Stock Incentive
Plan (170,000 shares), as such amount may be increased in accordance with said plan in the event
of a merger, consolidation, recapitalization, stock dividend, stock split, or similar event
involving the Registrant.
(2) Under Rule 457(h) the registration fee may be calculated, inter alia, based upon the price at
which the options may be exercised. 170,000 shares are being registered hereby, of which none are
currently under option. Consequently, all of the shares are being registered based upon the
average of the high and low selling prices of the common stock of the Registrant as reported on
the National Association of Securities Dealers Automated Quotation, National Market System ("NMS")
on July 22, 1999 of $15.75 per share ($2,677,500 in the aggregate).
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION
10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
*Documents containing the information required by Part I of this
Registration Statement will be sent or given to participants in the Harbor
Federal Bancorp, Inc. 1999 Stock Incentive Plan in accordance with Rule
428(b)(1). In accordance with Note to Part I of Form S-8, such documents are not
filed with the Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or prospectus
supplements.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Harbor Federal Bancorp, Inc. (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "1934 Act") and, accordingly, files periodic reports and other information
with the Commission. Reports, proxy statements and other information concerning
the Company filed with the Commission may be inspected and copies may be
obtained (at prescribed rates) at the Commission's Public Reference Section,
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company. The address for the Commission's Web site is
"http://www.sec.gov".
The following documents are incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1999 (Commission File No. 000-24194);
(b) The description of the Company's securities contained in this Company's
Registration Statement on Form 8-A dated May 5, 1994.
ALL DOCUMENTS FILED BY THE COMPANY PURSUANT TO SECTIONS 13(A), 13(C), 14
AND 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, PRIOR TO THE
FILING OF A POST-EFFECTIVE AMENDMENT WHICH INDICATES THAT ALL SECURITIES OFFERED
HAVE BEEN SOLD OR WHICH DEREGISTERS ALL SECURITIES THEN REMAINING UNSOLD, SHALL
BE DEEMED TO BE INCORPORATED BY REFERENCE IN THIS REGISTRATION STATEMENT, AND TO
BE A PART HEREOF FROM THE DATE OF FILING OF SUCH DOCUMENTS.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable, as the Common Stock is registered under Section 12 of the
Securities Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Federal Regulations define areas for indemnity coverage by Harbor Federal
Savings Bank (the "Savings Bank"), as follows:
(a) Any person against whom any action is brought by reason of the fact
that such person is or was a director or officer of the Savings Bank shall be
indemnified by the Savings Bank for:
(i) Reasonable costs and expenses, including reasonable
attorney's fees, actually paid or incurred by such person in
connection with proceedings related to the defense or
settlement of such action;
(ii) Any amount for which such person becomes liable by reason
of any judgment in such action;
(iii) Reasonable costs and expenses, including reasonable
attorney's fees, actually paid or incurred in any action to
enforce his rights under this section, if the person attains a
final judgment in favor of such person in such enforcement
action.
(b) Indemnification provided for in subparagraph (a) shall be made to such
officer or director only if the requirements of this subparagraph are met:
(i) The Savings Bank shall make the indemnification provided
by subparagraph (a) in connection with any such action which
results in a final judgment on the merits in favor of such
officer or director.
(ii) The Savings Bank shall make the indemnification provided
by subparagraph (a) in case of settlement of such action,
final judgment against such director or officer or final
judgment in favor of such director or officer other than on
the merits except in relation to matters as to which he shall
be adjudged to be liable for negligence or misconduct in the
performance of his duty, only if a majority of the directors
of the Savings Bank determines that such a director or officer
was acting in good faith within what he was reasonably
entitled to believe under the circumstances was the scope of
his employment or authority and for a purpose which he was
reasonably entitled to believe under the circumstances was in
the best interest of the Savings Bank or their members or
stockholders.
(c) As used in this paragraph:
(i) "Action" means any action, suit or other judicial or
administrative proceeding, or threatened proceeding, whether
civil, criminal, or otherwise, including any appeal or other
proceeding for review;
(ii) "Final Judgment" means a judgment, decree, or order which
is appealable and as to which the period for appeal has
expired and no appeal has been taken;
(iii) "Settlement" includes the entry of a judgment by consent
or by confession or upon a plea of guilty or of nolo
contendere.
The Savings Bank has a directors and officers liability policy providing
for insurance against certain liabilities incurred by its directors and officers
while serving in their capacities as such.
2
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
Article XVII of the Company's Articles of Incorporation sets forth the
circumstances under which directors, officers, employees, and agents may be
insured or indemnified against liability which they may incur in their
capacities as follows:
The Company shall indemnify, to the fullest extent permissible under
the Maryland General Company Law, any individual who is or was a director,
officer, employee or agent of the Company, and any individual who serves or
served at the Company's request as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture,
trust, other enterprise or employee benefit plan, in any proceeding in
which the individual is made a party as a result of his service in such
capacity.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Company shall not adversely affect any right or
protection of a director of the Company existing at the time of such repeal
or modification.
In accordance with Section 2-418 of the Maryland General Corporation Law,
directors of the Company generally shall be indemnified in the defense of a
proceeding if they are successful, on the merits or otherwise, and in other
circumstances unless it is established that (i) the act or omission was material
to the matter giving rise to the proceeding and either was committed in bad
faith or was the result of active and deliberate dishonesty; (ii) the director
received an improper personal benefit in money, property or services; or, (iii)
in the case of a criminal proceeding, the director had reasonable cause to
believe that the act or omission was unlawful.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
For a list of all exhibits filed or included as part of this Registration
Statement, see "Index to Exhibits" at the end of this Registration Statement.
ITEM 9. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
3
<PAGE>
(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)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby undertakes 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 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.
3. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Baltimore, State of Maryland, on this 23rd day of
July, 1999.
HARBOR FEDERAL BANCORP, INC.
By:/s/ Robert A. Williams
-----------------------------------------
Robert A. Williams
President and Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/ Robert A. Williams Director, President and July 23, 1999
- ----------------------------- Chief Executive Officer
Robert A. Williams (Principal Executive Officer)
/s/ Norbert J. Luken Vice President and July 23, 1999
- ----------------------------- Chief Financial Officer
Norbert J. Luken (Principal Financial and
Accounting Officer)
/s/ Joseph J. Lacy
- ----------------------------- Director July 23, 1999
Joseph J. Lacy
/s/ John H. Riehl, III
- ----------------------------- Director July 23, 1999
John H. Riehl, III
/s/ J. Kemp Roche
- ----------------------------- Director July 23, 1999
J. Kemp Roche
/s/ Gideon N. Stieff, Jr.
- ----------------------------- Director July 23, 1999
Gideon N. Stieff, Jr.
/s/ Lawrence W. Williams
- ----------------------------- Director and July 23, 1999
Lawrence W. Williams Vice President
5
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
------- -----------
5 Opinion of Kutak Rock as to the legality of the Common Stock being
registered
23.1 Consent of Kutak Rock (appears in their opinion filed as Exhibit 5)
23.2 Consent of KPMG LLP
99.1 Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan
99.2 Form of Stock Option Agreement to be entered into with Optionees
with respect to Incentive Stock Options granted under the Harbor
Federal Bancorp, Inc. 1999 Stock Incentive Plan
99.3 Form of Stock Option Agreement to be entered into with Optionees
with respect to Non-Incentive Stock Options granted under the
Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan
99.4 Stock Appreciation Rights Agreement
99.5 Notice of Deferred Share Award
6
EXHIBIT 5
<PAGE>
July 26, 1999
Board of Directors
Harbor Federal Bancorp, Inc.
705 York Road
Baltimore, Maryland 21204
Re: Harbor Federal Bancorp, Inc.
1999 Stock Incentive Plan
Registration Statement on Form S-8
Dear Board Members:
We have acted as special counsel to Harbor Federal Bancorp, Inc., a
Maryland corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to 170,000 shares of common stock, par value $.01 per share
(the "Common Stock") of the Company which may be issued pursuant to the Harbor
Federal Bancorp, Inc. 1999 Stock Incentive Plan (the "Plan"), all as more fully
described in the Registration Statement. You have requested the opinion of this
firm with respect to certain legal aspects of the proposed offering.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to and in accordance with the
terms of the Plan will be legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included under
the caption "Legal Opinion" in the Prospectus which is part of the Registration
Statement.
Very truly yours,
/s/ KUTAK ROCK
KUTAK ROCK
EXHIBIT 23.2
<PAGE>
[KPMG Letterhead]
ACCOUNTANTS' CONSENT
The Board of Directors
Harbor Federal Bancorp, Inc.
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the Prospectus which is
part of the Registration Statement.
/s/ KPMG LLP
KPMG LLP
Baltimore, Maryland
July 14, 1999
EXHIBIT 99.1
<PAGE>
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Plan is to advance the interests of the Company through
providing select key Employees and Directors of the Bank, the Company, and their
Affiliates with the opportunity to receive Options, SARs, and Deferred Shares.
By encouraging stock ownership through these awards, the Company seeks to
attract, retain and motivate the best available personnel for positions of
substantial responsibility and to provide additional incentives to Directors and
key Employees of the Company or any Affiliate to promote the success of the
business. It is intended that options issued pursuant to this Plan may
constitute either ISOs or Non-ISOs as defined below.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of the Company, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
(b) "Agreement" shall mean a written agreement entered into in accordance
with Paragraph 5(c).
(c) "Awards" shall mean, collectively, Options, SARs, and Deferred Shares.
(d) "Bank" shall mean Harbor Federal Savings Bank.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Change in Control" shall mean any one of the following events: (1) the
acquisition of ownership, holding or power to vote more than 25% of the Bank's
or the Company's voting stock, (2) the acquisition of the ability to control the
election of a majority of the Bank's or the Company's directors, (3) the
acquisition of a controlling influence over the management or policies of the
Bank or the Company by any person or by persons acting as a "group" (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934), or (4) during
any period of two consecutive years, individuals (the "Continuing Directors")
who at the beginning of such period constitute the Board of Directors of the
Company or the Bank (the "Existing Board") cease for any reason to constitute at
least two-thirds thereof, provided that any individual whose election or
nomination for election as a member of the Existing Board was approved by a vote
of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. In the case of subsections (1), (2), and (3)
above, ownership or control of the Bank by the Company itself shall not
constitute a "Change in Control." For purposes of defining Change in Control,
the term "person" refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship,
<PAGE>
unincorporated organization or any other form of entity not specifically listed
herein. The decision of the Committee as to whether a Change in Control has
occurred shall be conclusive and binding.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with Paragraph 5(a) hereof; provided that the Board may act
in lieu of the Committee with respect to any matter as to which the Committee
may act.
(i) "Common Stock" shall mean the common stock of the Company.
(j) "Company" shall mean Harbor Federal Bancorp, Inc.
(k) "Continuous Service" shall mean the absence of any interruption or
termination of service as an Employee or Director of the Company or an
Affiliate. Continuous Service shall not be considered interrupted in the case of
sick leave, military leave or any other leave of absence approved by the
Company, in the case of transfers between payroll locations of the Company or
between the Company, an Affiliate or a successor, or in the case of a Director's
performance of services in an emeritus or advisory capacity.
(l) "Deferred Shares" shall mean Shares that the Company has credited,
pursuant to Paragraph 10 hereof, to a deferred compensation account in the name
of a Participant.
(m) "Director" shall mean any member of the Board, and any member of the
board of directors of any Affiliate that the Board has by resolution designated
as being eligible for participation in this Plan.
(n) "Disability" shall mean a physical or mental condition, which in the
sole and absolute discretion of the Committee, is reasonably expected to be of
indefinite duration and to substantially prevent a Participant from fulfilling
his or her duties or responsibilities to the Company or an Affiliate.
(o) "Effective Date" shall mean the date specified in Paragraph 14 hereof.
(p) "Employee" shall mean any person employed by the Company, the Bank, or
an Affiliate.
(q) "Exercise Price" shall mean the price per Optioned Share at which an
Option may be exercised.
(r) "ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan, and which is intended to be and is
identified as an "incentive stock option" within the meaning of Section 422 of
the Code.
(s) "Market Value" shall mean the fair market value of the Common Stock, as
determined under Paragraph 7(b) hereof.
2
<PAGE>
(t) "Non-Employee Director" shall have the meaning provided in Rule 16b-3.
(u) "Non-ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan but which is not intended to be and is not
identified as an ISO.
(v) "Option" means an ISO and/or a Non-ISO.
(w) "Optioned Shares" shall mean Shares subject to an Award granted
pursuant to this Plan.
(x) "Participant" shall mean any person who receives an Option, SAR, or
Deferred Shares pursuant to the Plan.
(y) "Plan" shall mean The Peoples BancTrust Company, Inc. 1999 Stock Option
Plan.
(z) "Rule 16b-3" shall mean Rule 16b-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
(aa) "Share" shall mean one share of Common Stock.
(bb) "SAR" (or "Stock Appreciation Right") shall mean a right to receive
the appreciation in value, or a portion of the appreciation in value, of a
specified number of shares of Common Stock.
3. TERM OF THE PLAN AND AWARDS.
(a) Term of the Plan. The Plan shall continue in effect for a term of ten
years from the Effective Date, unless sooner terminated pursuant to Paragraph 16
hereof. No Option shall be granted under the Plan after ten years from the
Effective Date.
(b) Term of Options. The term of each Option granted under the Plan shall
be established by the Committee, but shall not exceed 10 years; provided,
however, that in the case of an Employee who owns Shares representing more than
10% of the outstanding Common Stock at the time an ISO is granted, the term of
such ISO shall not exceed five years.
4. SHARES SUBJECT TO THE PLAN.
Except as otherwise required under Paragraph 11, the aggregate number of
Shares deliverable pursuant to the Plan shall not exceed 170,000 Shares. Such
Shares may either be authorized but unissued Shares, Shares held in treasury, or
Shares held in a grantor trust created by the Company. If any Awards should
expire, become unexercisable, or be forfeited for any reason without having
resulted in the issuance of Shares to Participants, the Optioned Shares shall,
unless the Plan shall have been terminated, be available for the grant of
additional Awards under the Plan.
3
<PAGE>
5. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be administered by the
Committee, appointed by the Board, consisting of at least two members of the
Board who are Non-Employee Directors. Members of the Committee shall serve at
the pleasure of the Board. In the absence at any time of a duly appointed
Committee, the Plan shall be administered by those members of the Board who are
Non-Employee Directors.
(b) Powers of the Committee. Except as limited by the express provisions of
the Plan or by resolutions adopted by the Board, the Committee shall have sole
and complete authority and discretion (i) to select Participants and grant
Awards, (ii) to determine the form and content of Awards to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan, (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan, and (v)
to make other determinations necessary or advisable for the administration of
the Plan. The Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to time. A majority
of the entire Committee shall constitute a quorum and the action of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee without a meeting, shall be
deemed the action of the Committee.
(c) Agreement. Each Award shall be evidenced by a written agreement
containing such provisions as may be approved by the Committee. Each such
Agreement shall constitute a binding contract between the Company and the
Participant, and every Participant, upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such Agreement. The terms
of each such Agreement shall be in accordance with the Plan, but each Agreement
may include such additional provisions and restrictions determined by the
Committee, in its discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan. In particular, the
Committee shall set forth in each Agreement (i) the Exercise Price of each
Option or SAR, (ii) the number of Shares subject to, and the expiration date of,
each Award, (iii) the manner, time and rate (cumulative or otherwise) of
exercise or vesting of such Award, and (iv) the restrictions, if any, to be
placed upon such Award, or upon Shares which may be issued pursuant to such
Award.
The Chairman of the Committee and such other Directors and officers as
shall be designated by the Committee are hereby authorized to execute Agreements
on behalf of the Company and to cause them to be delivered to the recipients of
Awards.
(d) Effect of the Committee's Decisions. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
(e) Indemnification. In addition to such other rights of indemnification as
they may have, the members of the Committee shall be indemnified by the Company
in connection with any claim, action, suit or proceeding relating to any action
taken or failure to act under or in connection with the Plan or any Award
granted hereunder to the full extent provided for under the Company's governing
instruments with respect to the indemnification of Directors.
4
<PAGE>
6. GRANT OF AWARDS.
(a) General Rule. The Committee shall have the discretion to make
discretionary grants of Awards to Employees and Directors, including members of
the Committee.
(b) Special Rules for ISOs. The aggregate Market Value, as of the date the
Option is granted, of the Shares with respect to which ISOs are exercisable for
the first time by an Employee during any calendar year (under all incentive
stock option plans, as defined in Section 422 of the Code, of the Company or any
present or future Affiliate of the Company) shall not exceed $100,000.
Notwithstanding the foregoing, the Committee may grant Options in excess of the
foregoing limitations, in which case such Options granted in excess of such
limitation shall be Options which are Non-ISOs.
7. EXERCISE PRICE FOR OPTIONS.
(a) Limits on Committee Discretion. The Exercise Price as to any particular
Option shall not be less than 100% of the Market Value of the Optioned Shares on
the date of grant. In the case of an Employee who owns Shares representing more
than 10% of the Company's outstanding Shares of Common Stock at the time an ISO
is granted, the Exercise Price shall not be less than 110% of the Market Value
of the Optioned Shares at the time the ISO is granted.
(b) Standards for Determining Exercise Price. If the Common Stock is listed
on a national securities exchange, including the Nasdaq National Market System,
on the date in question, then the Market Value per Share shall be the average of
the highest and lowest selling price on such exchange on such date, or if there
were no sales on such date, then the Exercise Price shall be the mean between
the bid and asked price on such date. If the Common Stock is traded otherwise
than on a national securities exchange on the date in question, then the Market
Value per Share shall be the mean between the bid and asked price on such date,
or, if there is no bid and asked price on such date, then on the next prior
business day on which there was a bid and asked price. If no such bid and asked
price is available, then the Market Value per Share shall be its fair market
value as determined by the Committee, in its sole and absolute discretion.
8. EXERCISE OF OPTIONS.
(a) Conditions for Exercise. Any Option granted hereunder shall be
exercisable at such times and under such conditions as the Committee shall
specify in the Agreement granting the Option to the Optionee.
(b) Procedure for Exercise. A Participant may exercise an Option, subject
to provisions relative to its termination and limitations on its exercise, only
by (1) written notice of intent to exercise the Option with respect to a
specified number of Shares, and (2) payment to the Company (contemporaneously
with delivery of such notice) in cash, in Common Stock, or a combination of cash
and Common Stock, of the amount of the Exercise Price for the number of Shares
with respect to which the Option is then being exercised. Each such notice, and
payment where required, shall be delivered, or mailed by prepaid registered or
certified mail, addressed to
5
<PAGE>
the Treasurer of the Company at its executive offices. Common Stock utilized in
full or partial payment of the Exercise Price for Options shall be valued at its
Market Value at the date of exercise and have been held for at least six months.
An Option may not be exercised for a fractional Share.
(c) Period of Exercisability. Except to the extent otherwise provided in
the terms of an Agreement, an Option may be exercised by a Participant only
during his Continuous Service, or within one year after termination of such
Continuous Service (but not later than the date on which the Option would
otherwise expire), except if the Participant's Continuous Service terminates by
reason of -
(1) "Just Cause" which for purposes hereof shall have the meaning set
forth in any unexpired employment or severance agreement between the
Participant and the Bank and/or the Company (and, in the absence of any
such agreement, shall mean termination because of the Participant's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease-and-desist order),
then the Participant's rights to exercise such Option shall expire on the
date of such termination;
(2) death, then to the extent that the Participant would have been
entitled to exercise the Option immediately prior to his death, such Option
of the deceased Participant may be exercised within two years from the date
of his death, but not later than the date on which the Option would
otherwise expire, by the personal representatives of his estate or person
or persons to whom his rights under such Option shall have passed by will
or by laws of descent and distribution.
(d) Effect of the Committee's Decisions. The Committee's determination
whether a Participant's Continuous Service has ceased, and the effective date
thereof, shall be final and conclusive on all persons affected thereby.
(e) Mandatory Six-Month Holding Period. Notwithstanding any other provision
of this Plan to the contrary, Common Stock that is purchased upon exercise of an
Option may not be sold within the six-month period following the grant date of
that Option, except in the event of the Participant's death or Disability, or
such other event as the Board may specifically deem appropriate.
9. SARS (STOCK APPRECIATION RIGHTS).
(a) Granting of SARs. In its sole discretion, the Committee may from time
to time grant SARs to Employees or Directors either in conjunction with, or
independently of, any Options granted under the Plan. An SAR granted in
conjunction with an Option may be an alternative right wherein the exercise of
the Option terminates the SAR to the extent of the number of shares purchased
upon exercise of the Option and, correspondingly, the exercise of the SAR
terminates the Option to the extent of the number of Shares with respect to
which the
6
<PAGE>
SAR is exercised. Alternatively, an SAR granted in conjunction with an Option
may be an additional right wherein both the SAR and the Option may be exercised.
An SAR may not be granted in conjunction with an ISO under circumstances in
which the exercise of the SAR affects the right to exercise the ISO or vice
versa, unless the SAR, by its terms, meets all of the following requirements:
(1) the SAR will expire no later than the ISO; (2) the SAR may be for no more
than the difference between the Exercise Price of the ISO and the Market Value
of the Shares subject to the ISO at the time the SAR is exercised; (3) the SAR
is transferable only when the ISO is transferable, and under the same
conditions; (4) the SAR may be exercised only when the ISO may be exercised; and
(5) the SAR may be exercised only when the Market Value of the Shares subject to
the ISO exceeds the Exercise Price of the ISO.
(b) Exercise Price. The Exercise Price as to any particular SAR shall not
be less than the Market Value of the Optioned Shares on the date of grant.
(c) Timing of Exercise. The provisions of Paragraph 8(b) regarding the
period of exercisability of Options are incorporated by reference herein, and
shall determine the period of exercisability of SARs.
(d) Exercise of SARs. An SAR granted hereunder shall be exercisable at such
times and under such conditions as shall be permissible under the terms of the
Plan and of the Agreement granted to a Participant, provided that an SAR may not
be exercised for a fractional Share. Upon exercise of an SAR, the Participant
shall be entitled to receive, without payment to the Company except for
applicable withholding taxes, an amount equal to the excess of (or, in the
discretion of the Committee if provided in the Agreement, a portion of) the
excess of the then aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the aggregate Exercise
Price of such number of Optioned Shares. This amount shall be payable by the
Company, at the discretion of the Committee, in cash or in Shares valued at the
then Market Value thereof, or any combination thereof.
(e) Procedure for Exercising SARs. To the extent not inconsistent herewith,
the provisions of Paragraph 8(a) as to the procedure for exercising Options are
incorporated by reference, and shall determine the procedure for exercising
SARs.
10. DEFERRED SHARE CREDITS.
(a) Annual Awards. The Committee shall have the discretion to make
discretionary awards of Deferred Shares to the accounts of Employees and
Directors (including members of the Committee). On the last day of each fiscal
year of the Company, the Committee shall credit 300 Deferred Shares to the
account of each Director who has not accrued benefits during the fiscal year
under either the Harbor Federal Savings Bank Retirement Plan for Non-Employee
Directors or the Harbor Federal Savings Bank Supplemental Executive Retirement
Agreement.
(b) Credit for Benefits under Certain Plans. Each Employee or Director who
has accrued benefits under the Bank's Retirement Plan for Non-Employee
Directors, or the Supplemental Executive Retirement Agreement may elect, at any
time, to cancel his rights to all or a whole percentage of those benefits, and
in consideration to receive a credit under this Plan
7
<PAGE>
for a number of Deferred Shares that have a value on that date equal to the
benefits being cancelled.
(c) Elections to Defer. The Committee may permit any Participant who is a
member of a select group of management or highly compensated employees, within
the meaning of the Employees' Retirement Income Security Act of 1973, to
irrevocably elect to forego the receipt of cash compensation and in lieu thereof
to have the Company credit an equal value of Deferred Shares to an account
payable to the Participant.
(d) Vesting. All Deferred Shares shall be 100% vested, unless an Agreement
specifically provides to the contrary.
(e) Cash Earnings on Deferred Shares. On the last day of each fiscal year
of the Company, the Committee shall credit each Participant's account with
Deferred Shares having a value equal to the product of (i) the number of
Deferred Shares credited to the Participant's account at the end of the prior
fiscal year and (ii) the total cash dividends per Share that the Company paid
during the current fiscal year. The Trustees shall hold each Participant's
Deferred Shares and deferred earnings until distribution is required pursuant to
subparagraph (f) hereof.
(f) Distributions of Deferred Shares and Earnings. The Trustee shall
distribute a Participant's Deferred Shares and deferred earnings in five
substantially equal annual installments that are paid before the last day of
each of the five fiscal years of the Company that end after the date on which
the Participant's Continuous Service terminates, unless the Committee has
accepted the form attached hereto as Exhibit "A" (the "Distribution Election
Form"), in which case distributions shall be made in accordance with the method
selected on the form. Acceptance by the Committee shall be presumed to occur on
delivery of a Distribution Election Form to the Committee, unless (i) the
Committee returns it within five business days, with a written notice that sets
forth the reasons for its rejection, or (ii) the Participant delivers the
Distribution Election Form to the Committee either within 90 days of a Change in
Control or within one year of the date on which the Participant's Continuous
Service terminates prior to a Change in Control for any reason other than the
Participant's death.
(g) Hardship Withdrawals. Notwithstanding any other provision of the Plan
or a Participant's Distribution Election Form, in the event the Participant
suffers an unforeseeable hardship within the contemplation of this paragraph,
the Participant may apply to the Committee for an immediate distribution of all
or a portion of his Deferred Shares. The hardship must result from a sudden and
unexpected illness or accident of the Participant or a dependent of the
Participant, casualty loss of property, or other similar conditions beyond the
control of the Participant. Examples of purposes which are not considered
hardships include post-secondary school expenses or the desire to purchase a
residence. In no event will a distribution be made to the extent the hardship
could be relieved through reimbursement or compensation by insurance or
otherwise, or by liquidation of the Participant's nonessential assets to the
extent such liquidation would not itself cause a severe financial hardship. The
amount of any distribution hereunder shall be limited to the amount necessary to
relieve the Participant's financial hardship. The determination of whether a
Participant has a qualifying hardship and the amount which qualifies for
distribution, if any, shall be made by the Committee in its sole discretion. The
8
<PAGE>
Committee may require evidence of the purpose and amount of the need, and may
establish such application or other procedures as it deems appropriate.
(h) Rights to Deferred Shares and Earnings. A Participant may not assign
his or her claim to Deferred Shares and associated earnings during his or her
lifetime. A Participant's right to Deferred Shares and associated earnings shall
at all times constitute an unsecured promise of the Company to pay benefits as
they come due. The right of the Participant or his or her beneficiary to receive
benefits hereunder shall be solely an unsecured claim against the general assets
of the Company. Neither the Participant nor his or her beneficiary shall have
any claim against or rights in any specific assets or other fund of the Company.
11. CHANGE IN CONTROL; EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE
PLAN.
(a) Change in Control. Upon a Change in Control (or, if earlier, the
execution of an agreement to effect a Change in Control), all Options and SARs
shall become fully exercisable, notwithstanding any other provision of the Plan
or any Agreement.
(b) Recapitalizations; Stock Splits, Etc. The number and kind of Shares
reserved for issuance under the Plan, and the number and kind of Shares subject
to outstanding Awards, and the Exercise Price for Options and SARs, shall be
proportionately adjusted for any increase, decrease, change or exchange of
Shares for a different number or kind of shares or other securities of the
Company which results from a merger, consolidation, recapitalization,
reorganization, reclassification, stock dividend, split-up, combination of
shares, or similar event in which the number or kind of shares is changed
without the receipt or payment of consideration by the Company.
(c) Transactions in which the Company is Not the Surviving Entity. In the
event of (i) the liquidation or dissolution of the Company, (ii) a merger or
consolidation in which the Company is not the surviving entity, or (iii) the
sale or disposition of all or substantially all of the Company's assets (any of
the foregoing to be referred to herein as a "Transaction"), all Deferred Shares
and all outstanding Options and SARs, together with the Exercise Prices thereof,
shall be equitably adjusted for any change or exchange of Shares for a different
number or kind of shares or other securities which results from the Transaction.
(d) Special Rule for ISOs. Any adjustment made pursuant to subparagraphs
(a) or (b) hereof shall be made in such a manner as not to constitute a
modification, within the meaning of Section 424(h) of the Code, of outstanding
ISOs, unless a Participant has consented in writing to the change.
(e) Conditions and Restrictions on New, Additional, or Different Shares or
Securities. If, by reason of any adjustment made pursuant to this Paragraph, a
Participant becomes entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Deferred Shares and Optioned Shares before the adjustment was
made.
9
<PAGE>
(f) Other Issuances. Except as expressly provided in this Paragraph, the
issuance by the Company or an Affiliate of shares of stock of any class, or of
securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect, and no adjustment
shall be made with respect to, the number, class, or Exercise Price of Shares
then subject to Awards or reserved for issuance under the Plan.
12. NON-TRANSFERABILITY.
Awards may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution. Notwithstanding the foregoing, or any other provision of this
Plan, a Participant who holds SARs or Options may transfer such SARs or Options
(but not ISOs) to his or her spouse, lineal ascendants, lineal descendants, or
to a duly established trust for the benefit of one or more of these individuals.
SARs and Options so transferred may thereafter be transferred only to the
Participant who originally received the grant or to an individual or trust to
whom the Participant could have initially transferred the SARs or Options
pursuant to this Paragraph. SARs and Options which are transferred pursuant to
this Paragraph shall be exercisable by the transferee according to the same
terms and conditions as applied to the Participant.
13. TIME OF GRANTING OPTIONS.
The date of grant of an Option or SAR shall, for all purposes, be the date
on which the Committee makes the determination of granting such Option. Notice
of the determination shall be given to each Participant to whom an Option is so
granted within a reasonable time after the date of such grant.
14. EFFECTIVE DATE.
The Plan shall become effective May 24, 1999, but its effectiveness and the
effectiveness of any Awards shall be contingent upon the Plan's approval by a
favorable vote of stockholders owning at least a majority of the total votes
cast at a duly called meeting of the Company's stockholders held in accordance
with applicable laws.
15. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may authorize the Committee
to direct execution of an instrument providing for the modification of any
outstanding Award, provided no such modification shall confer on the holder of
said Award any right or benefit which could not be conferred on him by the grant
of a new Award at such time, or impair the Award without the consent of the
holder of the Award.
16. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend the terms of the Plan and, with
respect to any Shares at the time not subject to outstanding Awards, suspend or
terminate the Plan. No
10
<PAGE>
amendment, suspension or termination of the Plan shall, without the consent of
any affected holders of an Award, alter or impair any rights or obligations
under any Award theretofore granted.
17. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common Stock shall not be
issued pursuant to any provision of this Plan unless the issuance and delivery
of such Shares shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the rules and
regulations promulgated thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then be listed.
(b) Special Circumstances. The inability of the Company to obtain approval
from any regulatory body or authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of such
Shares. As a condition to the exercise of an Option or SAR, the Company may
require the person exercising the Option or SAR to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the discretionary
authority to impose in Agreements such restrictions on Shares as it may deem
appropriate or desirable, including but not limited to the authority to impose a
right of first refusal, or to establish repurchase rights, or to pay a
Participant the in-the-money value of his Award in consideration for its
cancellation, or all of these restrictions.
18. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and keep available a
number of Shares sufficient to satisfy the requirements of the Plan.
19. WITHHOLDING TAX.
The Company's obligation to deliver Shares pursuant to the Plan shall be
subject to the Participant's satisfaction of all applicable federal, state and
local income and employment tax withholding obligations. The Committee, in its
discretion, may permit the Participant to satisfy the obligation, in whole or in
part, by irrevocably electing to have the Company withhold Shares, or to deliver
to the Company Shares that he already owns, having a value equal to the amount
required to be withheld. The value of the Shares to be withheld, or delivered to
the Company, shall be based on the Market Value of the Shares on the date the
amount of tax to be withheld is to be determined. As an alternative, the Company
may retain, or sell without notice, a number of such Shares sufficient to cover
the amount required to be withheld.
11
<PAGE>
20. NO EMPLOYMENT OR OTHER RIGHTS.
In no event shall an Employee's or Director's eligibility to participate or
participation in the Plan create or be deemed to create any legal or equitable
right of the Employee, Director, or any other party to continue service with the
Company, the Bank, or any Affiliate of such corporations. No Employee or
Director shall have a right to be granted an Award or, having received an Award,
the right to again be granted an Award. However, an Employee or Director who has
been granted an Award may, if otherwise eligible, be granted an additional Award
or Awards.
21. GOVERNING LAW.
The Plan shall be governed by and construed in accordance with the laws of
the State of Maryland, except to the extent that federal law shall be deemed to
apply.
12
<PAGE>
EXHIBIT "A"
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
-------------------------------
DEFERRAL ELECTION FORM
-------------------------------
AGREEMENT, made this __ day of _____________, _____, by and between
_____________ (the "Participant"), and Harbor Federal Bancorp, Inc. (the
"Company").
WHEREAS, the Company has established the Harbor Federal Bancorp, Inc. 1999
Stock Incentive Plan (the "Plan"), and the Participant is eligible to
participate in said Plan.
NOW THEREFORE, it is mutually agreed as follows:
1. The Participant, by the execution hereof, agrees to participate in the
Plan upon the terms and conditions set forth therein, and, in accordance
therewith, elects to defer the receipt of:
[ ] ____% of the Participant's base salary, director's fees, and/or retainers.
[ ] ____% of any additional cash compensation that the Participant may receive.
2. This election will take effect --
[ ] on the January 1st that next follows execution of this election.
[ ] immediately, but only with respect to annual retainers, director fees,
salary, and/or cash bonuses that the Participant may earn in the future and
as to which the Participant currently has no legal right or claim.
3. This election shall be irrevocable.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the
day and year first above-written.
PARTICIPANT
Witnessed by:
- ------------------------------- ------------------------------------------
HARBOR FEDERAL BANCORP, INC.
Witnessed by:
_______________________________ By _______________________________________
A duly authorized Administrator of the Plan
EXHIBIT 99.2
<PAGE>
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
------------------------------------
Agreement for Incentive Stock Options
------------------------------------
THIS STOCK OPTION (the "Option") grants ___________________________ (the
Optionee) the right to purchase a total of _______ shares of Common Stock, par
value $.01 per share, of Harbor Federal Bancorp, Inc. (the "Company"), at the
price set forth herein, in all respects subject to the terms, definitions and
provisions of the Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan (the
"Plan") which is incorporated by reference herein. This Option is intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). The Optionee acknowledges, through
signing below, the receipt of the prospectus associated with the Plan.
1. Option Price. The Option price per share is $_______, which equals 100%*
of the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this Option.
2. Vesting and Exercise of Option. This Option shall be exercisable in
accordance with the Plan as follows:
Schedule of rights to exercise:
------------------------------
Years of Continuous Percentage of Total Shares
Employment After Subject to Option
Date of Grant of Option Which May Be Exercised
----------------------- ----------------------
Upon Grant ____%
1 year but less than 2 years ____%
2 years but less than 3 years ____%
3 years or more ____%
3. Method of Exercise. This Option shall be exercisable by a written notice
by the Optionee which shall:
(a) state the election to exercise the Option, the number of shares
with respect to which it is being exercised, the person in whose name the
stock certificate or certificates for such shares of Common Stock is to be
registered, his address and Social Security Number (or if more than one,
the names, addresses and Social Security Numbers of such persons);
- -------------------
* 110% in the case of an Optionee who owns shares representing more than 10% of
the outstanding common stock of the Company on the date of grant of this Option.
<PAGE>
ISO Agreement
Page 2
(b) contain such representations and agreements as to the holder's
investment intent with respect to such shares of Common Stock as may be
satisfactory to the Company's counsel;
(c) be signed by the person or persons entitled to exercise the Option
and, if the Option is being exercised by any person or persons other than
the Optionee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Option; and
(d) be in writing and delivered in person or by certified mail to the
Treasurer of the Company.
Payment of the purchase price of any shares with respect to which the
Option is being exercised shall be by cash, Common Stock, or such
combination of cash and Common Stock as the Optionee elects. In addition,
the Optionee may elect to pay for all or part of the exercise price of the
shares by having the Company withhold a number of shares that are both
subject to this Option and have a fair market value equal to the exercise
price. The certificate or certificates for shares of Common Stock as to
which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.
4. Restrictions on Exercise. This Option may not be exercised if the
issuance of the shares upon such exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As a
condition to the Optionee's exercise of this Option, the Company may require the
person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
5. Withholding. The Optionee hereby agrees that the exercise of the Option
or any installment thereof will not be effective, and no shares will become
transferable to the Optionee, until the Optionee makes appropriate arrangements
with the Company for such tax withholding as may be required of the Company
under federal, state, or local law on account of such exercise.
6. Non-transferability of Option. This Option may not be transferred in any
manner otherwise than by will or the laws of descent or distribution. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
<PAGE>
ISO Agreement
Page 3
7. Term of Option. This Option may not be exercisable for more than ten**
years from the date of grant of this Option, as stated below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
__________________________ HARBOR FEDERAL BANCORP, INC.
Date of Grant 1999 STOCK INCENTIVE PLAN COMMITTEE
By _____________________________________
An Authorized Member of the Committee
Witness:________________________________
- ---------------------------
** Five years in the case of an Optionee who owns shares representing more than
10% of the outstanding common stock of the Company on the date of grant of this
Option.
<PAGE>
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
----------------------------------
Form for Exercise of
Incentive Stock Options
----------------------------------
Treasurer
Harbor Federal Bancorp, Inc.
705 York Road
Baltimore, Maryland 21202-2562
Re: Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to purchase
_______ shares, par value $.01, of Common Stock of Harbor Federal Bancorp, Inc.
(the "Company") under and pursuant to a Stock Option Agreement dated
_____________, ____.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$____ of cash or check
$____ in the form of ______ shares of Common Stock, valued at $_______
per share
$ TOTAL
====
The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name ___________________________________________________________________________
Address ________________________________________________________________________
Social Security Number _________________________________________________________
___________________
Date
Very truly yours,
_____________________________
Exhibit 99.3
<PAGE>
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
------------------------------------------
Agreement for Non-Incentive Stock Options
------------------------------------------
THIS STOCK OPTION (the "Option") grants _________________________ (the
"Optionee") the right to purchase a total of ________________ shares of Common
Stock, par value $.01 per share, of Harbor Federal Bancorp, Inc. (the "Company")
at the price set forth herein, in all respects subject to the terms, definitions
and provisions of the Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan
(the "Plan") which is incorporated by reference herein. This Option is intended
not to qualify as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Optionee acknowledges,
through signing below, the receipt of the prospectus associated with the Plan.
1. Option Price. The Option price is $________ for each share, being 100%
of the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this Option.
2. Vesting and Exercise of Option. This Option shall be exercisable in
accordance with the Plan as follows:
Schedule of rights to exercise:
------------------------------
Years of Continuous Percentage of Total Shares
Employment After Subject to Option
Date of Grant of Option Which May Be Exercised
----------------------- ----------------------
Upon Grant ____%
1 year but less than 2 years ____%
2 years but less than 3 years ____%
3 years or more ____%
3. Method of Exercise. This Option shall be exercisable by a written notice
by the Optionee which shall:
(a) state the election to exercise the Option, the number of shares
with respect to which it is being exercised, the person in whose name the
stock certificate or certificates for such shares of Common Stock is to be
registered, his address and Social Security Number (or if more than one,
the names, addresses and Social Security Numbers of such persons);
(b) contain such representations and agreements as to the holder's
investment intent with respect to such shares of Common Stock as may be
satisfactory to the Company's counsel;
<PAGE>
Non-ISO Agreement
Page 2
(c) be signed by the person or persons entitled to exercise the Option
and, if the Option is being exercised by any person or persons other than
the Optionee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Option; and
(d) be in writing and delivered in person or by certified mail to the
Treasurer of the Company.
Payment of the purchase price of any shares with respect to which the
Option is being exercised shall be by cash, Common Stock, or such
combination of cash and Common Stock as the Optionee elects. In addition,
the Optionee may elect to pay for all or part of the exercise price of the
shares by having the Company withhold a number of shares that are both
subject to this Option and have a fair market value equal to the exercise
price. The certificate or certificates for shares of Common Stock as to
which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.
4. Restrictions on exercise. This Option may not be exercised if the
issuance of the shares upon such exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As a
condition to the Optionee's exercise of this Option, the Company may require the
person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
5. Withholding. The Optionee hereby agrees that the exercise of the Option
or any installment thereof will not be effective, and no shares will become
transferable to the Optionee, until the Optionee makes appropriate arrangements
with the Company for such tax withholding as may be required of the Company
under federal, state, or local law on account of such exercise.
6. Non-transferability of Option. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee. The Optionee may transfer this Option to the Optionee's spouse, lineal
ascendants, lineal discendents, or to a duly established trust for their
benefit, provided that such transferee shall be permitted to exercise this
Option subject to the same terms and conditions applicable to the Optionee. This
Option may not be transferred in any other manner otherwise than by will or the
laws of descent or distribution.
<PAGE>
Non-ISO Agreement
Page 3
7. Term of Option. This Option may not be exercisable for more than ten
years from the date of grant of this Option, as stated below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
_________________________ HARBOR FEDERAL BANCORP, INC.
Date of Grant 1999 STOCK INCENTIVE PLAN COMMITTEE
By ___________________________________________
An Authorized Member of the Committee
Witness:_______________________________________
<PAGE>
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
--------------------------------
Form for Exercise of
Non-Incentive Stock Options
--------------------------------
Treasurer
Harbor Federal Bancorp, Inc.
705 York Road
Baltimore, Maryland 21204-2562
Re: Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan
Dear Sir:
The undersigned elects to exercise the Non-Incentive Stock Option to
purchase _______ shares, par value $.01, of Common Stock of Harbor Federal
Bancorp, Inc. (the "Company") under and pursuant to a Stock Option Agreement
dated _____________, 199_.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$____ of cash or check
$____ in the form of ______ shares of Common Stock, valued at $_______
per share
$ TOTAL
====
The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name ___________________________________________________________________________
Address ________________________________________________________________________
Social Security Number _________________________________________________________
___________________
Date
Very truly yours,
_____________________________
EXHIBIT 99.4
<PAGE>
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
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Stock Appreciation Rights Agreement
Not In Tandem with Stock Option
-----------------------------------
On the date of grant specified below, the Stock Option Committee of Harbor
Federal Bancorp, Inc. (the "Company") hereby grants to ________________ (the
"Optionee") a total of _______ Stock Appreciation Rights (SARs), subject to the
terms and conditions set forth in the (the "Plan") (a copy of which is available
to the Optionee upon request). The terms and conditions of the Plan are
incorporated herein by reference.
(a) The exercise price is $____ for each share, such price being 100% of
the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this option.
(b) The SAR shall be exercisable to the extent permitted in the Plan.
(c) The SAR shall be accepted for surrender by the Optionee in
consideration for the payment by the Company of an amount equal to the excess of
the fair market value on the date of exercise of the Shares of Common Stock
subject to such SAR over the exercise price specified in Paragraph (a) hereof.
(d) Payment hereunder shall be made in shares of Common Stock or in cash as
provided in the Plan.
(e) The SAR is nontransferable, except in accordance with Section 12 of the
Plan.
(f) The SAR may be exercised only in accordance with Sections 8, 9, and 12
of the Plan, and only when there is a positive spread, i.e., when the market
price of the Common Stock subject to the SAR exceeds the exercise price of the
SAR.
(g) In the event of any inconsistency or conflict between this Agreement
and the Plan, the Plan shall be controlling and supercede any conflicting or
inconsistent provision of the Agreement.
HARBOR FEDERAL BANCORP, INC. 1999 STOCK
INCENTIVE PLAN COMMITTEE
By:____________________________________
Date of Grant: ATTEST:
__________________ _______________________________________
EXHIBIT 99.5
<PAGE>
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
------------------------------
Notice of Deferred Share Award
------------------------------
WHEREAS, the Board of Directors of Harbor Federal Bancorp, Inc. (the
"Company") has previously adopted the Harbor Federal Bancorp, Inc. 1999 Stock
Incentive Plan (the "Plan"); and
WHEREAS, the Board of Directors of the Company has previously appointed the
undersigned directors to serve as the 1999 Stock Incentive Plan Committee (the
"Committee") pursuant to the terms of the Plan, and the Committee is making this
award pursuant to the Plan.
PLEASE TAKE NOTICE, that the following individual be granted a deferred
share award that will be distributed in accordance with Section 10 of the Plan
("Deferred Share Award") and any election made thereunder:
Number of Shares Subject
Recipient to Deferred Share Award
--------- -----------------------
-------------------- -----
AND BE IT FURTHER RESOLVED, that the Deferred Share Award specified herein
shall be subject to the restrictions and other provisions of Section 10 of the
Plan.
Date of Notice:
- ---------, ----
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
------------------------------------------------
______________, a duly authorized Committee member
------------------------------------------------
______________, a duly authorized Committee member
------------------------------------------------
______________, a duly authorized Committee member
