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As filed with the Securities and Exchange Commission on
October 29, 1998
Registration No.33-81374
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________
POST-EFFECTIVE AMENDMENT NO. 1
UNDER COVER OF FORM S-8 TO FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_________________________________________
CECIL BANCORP, INC.
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(Exact name of Registrant as Specified in Its Charter)
Maryland 52-1883546
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
127 North Street
Elkton, Maryland 21921-5547
(410) 398-1650
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(Address of Principal Executive Offices)
Columbian Bank, A Federal Savings Bank 1994
Stock Option and Incentive Plan
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(Full Title of the Plan)
Mary B. Halsey, President and Chief Executive Officer
Cecil Bancorp, Inc.
127 North Street
Elkton, Maryland 21921-5547
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(Name and Address of Agent For Service)
(410) 398-1650
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(Telephone number, including area code, of agent for service)
COPIES TO:
J. MARK POERIO, ESQUIRE
HOWARD S. PARRIS, ESQUIRE
HOUSLEY KANTARIAN & BRONSTEIN, P.C.
1220 19TH STREET, N.W., SUITE 700
WASHINGTON, D.C. 20036
(202) 822-9611
Note. This Post-Effective Amendment No. 1 on Form S-8 to
the Registrant's Registration Statement on Form S-4 relates to
9,702 previously registered shares of the Registrant's common
stock (the "Common Stock"), par value $.01 per share, reserved
for issuance pursuant to the Columbian Bank, A Federal Savings
Bank 1994 Stock Option and Incentive Plan which the Registrant
assumed upon consummation of its acquisition of Columbian Bank,
A Federal Savings Bank ("Columbian") pursuant to the
Reorganization and Merger Agreement, dated May 29, 1998.<PAGE>
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PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
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ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
- ------ INFORMATION*
*Documents containing the information required by Part I
of this Registration Statement will be sent or given to
participants in the Columbian Bank, A Federal Savings Bank 1994
Stock Option and Incentive Plan (the "Plan") in accordance with
Rule 428(b)(1). In accordance with Rule 424 and in reliance on
Rule 428, 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. Cecil Bancorp, Inc. (the "Company") will maintain
a file of such documents for a period of five years after the
date on which such documents are last used as part of the
prospectus used to offer or sell shares of the Company's common
stock, par value $.01 per share (the "Common Stock") pursuant to
the Plan. Upon request, the Company will furnish the Commission
or its staff a copy of any or all documents included in this
file.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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The Company is subject to the informational requirements
of the Securities Exchange Act of 1934 (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 December 31, 1997 as filed with the Commission
on March 23, 1998 (Commission File No. 000-24926).
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 as filed with the Commission on May
14, 1998 (Commission File No. 000-24926).
(c) The Company's Amended Quarterly Report on Form 10-
Q/A for the quarter ended March 31, 1998, as filed with the
Commission on June 30, 1998 (Commission File No. 000-24926).
(d) The Company's Quarterly Report on Form 10-QSB for
the quarter ended June 30, 1998 as filed with the Commission on
August 7, 1998 (Commission File No. 000-24926).
(e) The Company's Amended Quarterly Report on Form 10-
QSB/A for the quarter ended June 30, 1998, as filed with the
Commission on August 14, 1998 (Commission File No. 000-24926).
(f) The Company's Current Report on Form 8-K dated
September 30, 1998, as filed with the Commission.
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(g) The Company's Current Report on Form 8-K dated May
29, 1998, as filed with the Commission.
ALL DOCUMENTS SUBSEQUENTLY FILED BY THE COMPANY PURSUANT
TO SECTIONS 13(A), 13(C), 14, AND 15(D) OF THE 1934 ACT AFTER
THE DATE HEREOF AND PRIOR TO THE FILING OF A POST-EFFECTIVE
AMENDMENT WHICH INDICATES THAT ALL SHARES OF COMMON STOCK
OFFERED HAVE BEEN SOLD OR WHICH DEREGISTER ALL SUCH COMMON STOCK
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
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Not applicable, as the Common Stock is registered under
Section 12 of the Securities and Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
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Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
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Indemnification of directors and officers of the Company
is provided under Article VI of the Articles of Incorporation of
the Company for judgments, fines, settlements, and expenses,
including attorney fees incurred in connection with any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative if
such director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
Article VI of the Company's Articles of Incorporation
provides that an outside director shall not be personally liable
to the Company or its stockholders for monetary damages for
breach of his fiduciary duty as a director and authorizes the
Company to indemnify such outside director against monetary
damages for such breach to the full extent permitted by law.
This provision applies to acts or omissions occurring after the
effective date of the amendment, and does not limit liability
for (i) any act or omission not in good faith which involves
intentional misconduct or a knowing violation of law, (ii) any
transaction from which the outside director derived an improper
direct or indirect financial benefit, (iii) paying a dividend or
approving a stock repurchase in violation of the Maryland
Business Corporation Act or (iv) any act or omission which
violates a declaratory or injunctive order obtained by the
Company or its stockholders. For purposes of Article VI,
"outside director" is defined as any member of the Board of
Directors who is not an officer or a person who may control the
conduct of the Company through management agreements, voting
trusts, directorships in related corporations or any other
device or relationship.
The Company has purchased director and officer liability
insurance that insures directors and officers against certain
liabilities in connection with the performance of their duties
as directors and officers, including liabilities under the
Securities Act of 1933, as amended, and provides for payment to
the Company of costs incurred by it in indemnifying its
directors and officers.
Under Maryland law, indemnification of directors and
officers may be provided for judgments, fines, settlements, and
expenses, including attorney's fees, incurred in connection with
any threatened, pending, or completed action, suit, or
proceeding other than an action by or in the right of the
Company. This applies to any civil, criminal, investigative or
administrative action provided that the director or officer
involved acted in good faith, in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Indemnification of directors and officers may be also
provided for judgments, fines, settlements, and expenses,
including attorney's fees, incurred in connection with any
threatened, pending, or completed action, or suit by or in the
right of the corporation if such director or officer acted in
good faith and in a manner he reasonably believed to be in
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or not opposed to the best interests of the corporation.
However, no indemnification shall be made in respect of any
claim, issue or matter in which such person is adjudged to be
liable for negligence or misconduct in the performance of his
duties to the corporation unless the court in which the action
is brought deems indemnity proper.
The grant of indemnification to a director or officer
shall be determined by a majority of a quorum of disinterested
directors, by a written opinion from independent legal counsel,
or by the stockholders.
Indemnification shall be provided to any directors and
officers for expenses, including attorney's fees, actually and
reasonably incurred in the defense of any action, suit or
proceeding to the extent that he or she has been successful on
the merits.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
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Not Applicable.
ITEM 8. EXHIBITS
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For a list of all exhibits filed or included as part of
this Registration Statement, see "Index to Exhibits" at the end
of this Registration Statement.
ITEM 9. UNDERTAKINGS
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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 20 percent
change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table
in the effective 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)(i) and (a)(ii) do not
apply if the registration statement is on Form S-3 or 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 the 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.
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(d) If the registrant is a foreign private issuer,
to file a post-effective amendment to the registration statement
to include any financial statements required by Rule 3-19 of
this chapter at the start of any delayed offering or throughout
a continuous offering. Financial statements and information
otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the
prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph and other
information necessary to ensure that all other information in
the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with
respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act or Rule 3-19
of this chapter if such financial statements and information are
contained in periodic reports filed with or furnished to the
Commission 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 Form F-3.
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 are 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.
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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 Elkton,
State of Maryland, on October 29, 1998.
CECIL BANCORP, INC.
By: /s/ Mary B. Halsey
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Mary B. Halsey
President
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and as of the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
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<S> <C> <C>
/s/ Mary B. Halsey Principal Executive Officer October 20, 1998
- ------------------------- Principal Accounting and
Mary B. Halsey Financial Officer and a Director
President, Chief Executive
Officer and
Chief Financial and
Accounting Officer
* Director
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Bernard L. Siegel
Chairman of the Board
* Director
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Thomas L. Foard
* Director
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William F. Burkley
* Director
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Howard J. Neff
* Director
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Michael J. Scibinico
* Director
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Doris P. Scott
* Director
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Howard B. Tome
*By: /s/ Mary B. Halsey Director October 20, 1998
--------------------
Mary B. Halsey
Attorney-in-Fact
/TABLE
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INDEX TO EXHIBITS
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Exhibit Description
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5.1 Opinion of Housley Kantarian & Bronstein, P.C. as to
the validity of the Common Stock being registered
23.1 Consent of Independent Auditors
23.2 Consent of Housley Kantarian & Bronstein, P.C.
(appears in their opinion filed as Exhibit 5.1)
24.1 Power of Attorney (contained in the signature page
to the Registration Statement on Form S-4 as filed
with the Commission on July 1, 1998)
99.1 Columbian Bank, A Federal Savings Bank 1994 Stock
Option and Incentive Plan (the "Plan")
99.2 Form of Stock Option Agreement previously entered
into with Optionees with respect to Options granted
under the Plan.
99.3 Form of 1998 Amendment to Stock Option Agreement
October 29, 1998
Board of Directors
Cecil Bancorp, Inc.
127 North Street
Elkton, Maryland 21921-5547
Re: Cecil Bancorp, Inc.
Columbian Bank, A Federal Savings Bank 1994 Stock
Option and Incentive Plan
Post-Effective Amendment
No.1 on Form S-8 to the Company's Registration
Statement on Form S-4
Dear Board Members:
We have acted as special counsel to Cecil Bancorp, Inc., a
Maryland corporation (the "Company"), in connection with the
preparation of Post-Effective Amendment No.1 on Form S-8 to the
Company's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission (the "Registration
Statement") under the Securities Act of 1933, as amended,
relating to 9,702 shares of common stock (the "Common Stock"),
par value $.01 per share, of the Company which may be issued
pursuant to the exercise of stock options granted under the
Columbian Bank, A Federal Savings Bank 1994 Stock Option and
Incentive Plan (the "Plan"), all as more fully described in the
Registration Statement. You have requested the opinion of this
firm with respect to issuance of the Common Stock pursuant to
the Plan.
We have examined such documents, records and matters of
law as we have deemed necessary for purposes of this opinion and
based thereon, we are of the opinion that the Common Stock when
issued pursuant to the exercise of stock options granted under
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,
Housley Kantarian & Bronstein, P.C.
By: /s/ J. Mark Poerio
----------------------------
J. Mark Poerio, Esquire
[LETTERHEAD OF SIMON, MASTER & SIDLOW, P.A.]
INDEPENDENT AUDITORS' CONSENT
Board of Directors
Cecil Bancorp, Inc.
117 North Street
Elkton, Maryland 21921-5547
Re: Cecil Bancorp, Inc.
Columbian Bank, A Federal Savings Bank 1994 Stock
-------------------------------------------------
Option and Incentive Plan
-------------------------
Post-Effective Amendment No. 1 on Form S-8 to the
Company's Registration Statement on Form S-4
Gentlemen:
We consent to the incorporation by reference in this
Post-Effective Amendment No. 1 to Registration Statement No.
33-81374 of Cecil Bancorp Form S-4 filed on Form S-8 of our
report dated January 21, 1998, appearing in the Annual Report on
Form 10-KSB of Cecil Bancorp, Inc. for the year ended December
31, 1997 and to the reference to us under the heading "Experts"
in the Prospectus, which is part of Registration Statement No.
33-81374.
/s/ Simon Master & Sidlow, P.A.
Wilmington, Delaware
October 29, 1998
/TEXT
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
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COLUMBIAN BANK, A FEDERAL SAVINGS BANK
1994 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Columbian Bank, a Federal Savings Bank
1994 Stock Option and Incentive Plan (the "Plan") is to advance
the interests of the Company through providing select key
Employees and Directors with the opportunity to acquire Shares.
By encouraging such stock ownership, the Company seeks to
attract, retain and motivate the best available personnel for
positions of substantial responsibility and to provide
additional incentive to Directors and key Employees of the
Company or any Affiliate to promote the success of the Company's
business.
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 Restricted Stock, unless the context clearly indicates a
different meaning.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Change in Control" shall mean the acquisition of
"beneficial ownership" (within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended) of 25% of the Company's voting securities
by any person or by persons acting as a group within the meaning
of Section 13(d) of the Securities Exchange Act of 1934;
provided that no Change in Control shall occur as the result of
a transaction in which the Company forms a holding company. For
purposes of this subparagraph only, the term "person" refers to
an individual or a corporation, partnership, trust, association,
joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to
whether a change in control has occurred shall be conclusive and
binding.
(f) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
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(g) "Committee" shall mean the Stock Option Committee
appointed by the Board in accordance with Paragraph 5(a) hereof.
(h) "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Company.
(c) "Company" shall mean Columbian Bank, a Federal
Savings Bank.
(j) "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 or in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a successor.
(k) "Director" shall mean any member of the Board or of
the Board of Directors of an Affiliate.
(l) "Disinterested Person" shall mean any member of the
Board who, at the time discretion under the Plan is exercised,
is a "disinterested person" within the meaning of Rule 16b-3.
(m) "Effective Date" shall mean the date specified in
Paragraph 16 hereof.
(n) "Employee" shall mean any person employed on a full-
time basis by the Company or an Affiliate.
(o) "Exercise Price" shall mean the price per Optioned
Share at which an Option or SAR may be exercised.
(p) "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.
(q) "Market Value" shall mean the fair market value of
the Common Stock, as determined under Paragraph 7(b) hereof.
(r) "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.
(s) "Option" means an ISO and/or a Non-ISO.
(t) "Optioned Shares" shall mean Shares subject to an
Option granted pursuant to this Plan.
(u) "Participant" shall mean any person who receives an
Award pursuant to the Plan.
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(v) "Plan" shall mean the Columbian Bank, a Federal
Savings Bank 1994 Stock Option and Incentive Plan.
(w) "Restricted Stock" means Common Stock which is
subject to restrictions against transfer and forfeiture and such
other terms and conditions determined by the Committee, as
provided in Paragraph 11.
(x) "Rule 16b-3" shall mean Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended.
(y) "Share" shall mean one share of Common Stock.
(z) "SAR" (or "Stock Appreciation Right") means 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 19 hereof. No Award shall be
granted under the Plan after ten years from the Effective Date.
(b) Term of Awards. The term of each Award 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.
(a) General Rule. Except as otherwise required by the
provisions of Paragraph 13 hereof, the aggregate number of
Shares deliverable pursuant to Awards shall not exceed 13,828
Shares. Such Shares may either be authorized but unissued
Shares or Shares held in treasury. If Awards should expire,
become unexercisable or be forfeited for any reason without
having been exercised or become vested in full, the Optioned
Shares shall, unless the Plan shall have been terminated, be
available for the grant of additional Awards under the Plan.
(b) Special Rule for SARs. The number of Shares with
respect to which an SAR is granted, but not the number of Shares
which the Company delivers or could deliver to an Employee or
individual upon exercise of an SAR, shall be charged against the
aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in
conjunction with an Option, under circumstances in which the
exercise of the SAR results in
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termination of the Option and vice versa, only the number of
Shares subject to the Option shall be charged against the
aggregate number of Shares remaining available under the Plan.
The Shares involved in an Option as to which option rights have
terminated by reason of the exercise of a related SAR, as
provided in Paragraph 10 hereof, shall not be available for the
grant of further Options under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be
administered by the Committee, which shall consist of not less
than three (3) members of the Board who are Disinterested
Persons. 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 Disinterested Persons.
(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 an Option or SAR, (ii)
the number of Shares subject to, and the expiration date of, the
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 upon exercise of such Award.
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The President of the Company and such other 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 Charter or Bylaws with respect to the
indemnification of Directors.
6. GRANTS OF OPTIONS.
(a) General Rule. In its sole discretion, the Committee
may grant Options to key Employees of the Company or its
Affiliates. Non-Employee Directors shall be granted Options
only in accordance with Paragraph 9 hereof.
(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 Parent or Subsidiary of the Company) shall
not exceed $100,000. Notwithstanding the prior provisions of
this paragraph, 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. Except as provided
in Paragraph 9 hereof, the Exercise Price as to any particular
Option granted under the Plan shall not be less than the Market
Value of the Optioned Shares on the date of grant; provided that
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 not less than
the average of the
- 5 -<PAGE>
<PAGE>
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 not less than 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 not less than 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) Generally. Any Option 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. An Option may not be exercised for a
fractional Share.
(b) Procedure for Exercise. A Participant may exercise
Options, 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 the Treasurer of the
Company at the Company's 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.
(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 while he is an Employee or
within three months thereafter, and shall terminate
automatically three months after termination of such Continuous
Service (but not later than the date on which the Option would
otherwise expire), and provided further that, except as
otherwise provided by the Committee, if the Employee'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
Company (and, in the absence of any such agreement, shall
mean termination because of the Employee's personal
dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful
- 6 -<PAGE>
<PAGE>
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 12 months
from the date of his death (but not later than the date on
which the ISO 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;
(3) Permanent and Total Disability (as such term
is defined in Section 22(e)(3) of the Code), then to the
extent that the Participant would have been entitled to
exercise the ISO immediately prior to his Permanent and
Total Disability, such Option may be exercised within one
year from the date of such Permanent and Total Disability,
but not later than the date on which the Option would
otherwise expire.
Notwithstanding the provisions of any Option which provides for
its exercise in installments as designated by the Committee,
such Option shall become immediately exercisable upon the
Participant's death or Permanent and Total Disability.
(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.
9. GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS
(a) Annual Formula Grants. Notwithstanding any other
provisions of this Plan, each Director who is not an Employee
but is a Director on the Effective Date shall receive, on said
date, Non-ISOs to purchase 450 Shares at an Exercise Price per
Share equal to its then Market Value; provided that said grant
shall be made only if the Director first executes a cancellation
agreement, in a form acceptable to and approved by the
Committee, that relates to any stock options previously granted
to the Director pursuant to Paragraph 5 of the Company's 1988
Stock Option and Incentive Plan. On each December 31st
following the Effective Date, each Director who is then serving
on the Board and is not then an Employee shall receive Non-ISOs
to purchase 150 Shares, at an Exercise Price per Share equal to
its Market Value on the date of grant.
(b) Grants in lieu of Fees. Notwithstanding any other
provisions of this Plan, for a period of 30 days prior to
January 1 of each year (May 1 for 1994), each Director may make
an election
- 7 -<PAGE>
<PAGE>
to receive, on that January 1 (May 1 for 1994), Non-ISOs in lieu
of between 10% and 100% of the fees or salary which the Director
would otherwise be entitled to receive in cash for service on
the Board of Directors of the Company, as well as for employment
with the Company, during the twelve-month period commencing on
that January 1 (May 1 for 1994). The number of Shares subject
to such a Non-ISO shall equal the quotient obtained by dividing
the total amount of the Director's fees expected to be deferred
for the applicable 12-month period by an amount equal to 25% of
the Market Value of the Optioned Shares on the date of grant.
Notwithstanding the foregoing: (i) if for any calendar year a
Director receives Non-ISOs having an aggregate discounted
exercise price not equal to the Directors fee deferrals for the
calendar year, the Company and the Director shall make an
appropriate adjustment to the fees payable to the Director in
the succeeding calendar year, and (ii) if the aggregate number
of Shares as to which Non-ISOs would be granted hereunder for
any calendar year would exceed 2,000 Shares, then the number of
Shares as to which Non-ISOs are granted pursuant to this
Paragraph shall be proportionately reduced based on the relative
amount of each Director's fee deferrals for such calendar year,
and cash shall be payable to such Directors to the extent
necessary to compensate them for the reduced number of Shares
subject to their Non-ISOs. The Exercise Price of any Optioned
Shares subject to Non-ISOs granted hereunder shall equal 75% of
the Market Value of the Optioned Shares on the date of grant.
(c) Effectiveness of Elections. Any elections made
pursuant to this Paragraph shall be prospective only, shall not
apply to fees already earned by a Director, and shall be renewed
automatically on January 1 of each succeeding year, unless the
Director files a new election on or before such date. No
Director shall be required to make a deferral election.
(d) Exercisability. Non-ISOs granted in accordance with
Paragraph (a) hereof shall be immediately exercisable. On the
other hand, Non-ISOs granted in accordance with Paragraph (b)
hereof shall become exercisable according to the following
schedule, provided the Director has not terminated Continuous
Service prior thereto: 25% upon the end of each calendar quarter
following the date of the grant (up to a maximum vested
percentage of 100%). For those grants of Non-ISOs that occur on
May 1, 1994 in accordance with Paragraph (b) hereof, said Non-
ISOs shall become exercisable according to the following
schedule, provided the Director has not terminated Continuous
Service prior thereto: 33-1/3% upon each of June 30, 1994,
September 30, 1994, and December 31, 1994. If a Director's
Continuous Service terminates after his Non-ISOs are granted
pursuant to Paragraph (b), but before they have become 100%
exercisable, then the Company shall refund to the Director those
fee deferrals that did not result in the grant of an exercisable
Non-ISO.
- 8 -<PAGE>
<PAGE>
(e) Manner of Exercise. A Non-ISO that has become
exercisable may thereafter be exercised at any time and from
time to time, by (i) written notice of intent to exercise the
Non-ISO with respect to all or a specified number of the
Optioned Shares, and (ii) payment to the Company
(contemporaneously with the 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 the Optioned
Shares with respect to which the Option is then being exercised.
Each such notice and payment shall be delivered, or mailed by
prepaid registered or certified mail, addressed to the Treasurer
of the Company at the Company's executive offices. A Director
who exercises Options pursuant to this Paragraph may satisfy all
applicable federal, state and local income and employment tax
withholding obligations, in whole or in part, by irrevocably
electing to have the Company withhold shares of Common Stock, or
to deliver to the Company shares of Common Stock that he already
owns, having a value equal to the amount required to be
withheld; provided that to the extent not inconsistent herewith,
such election otherwise complies with those requirements of
Paragraphs 8 and 22 hereof.
(f) Exercise Period. Non-ISOs granted under this
Paragraph shall expire three months after a Director terminates
Continuous Service for a reason other than death (24 months
after death), but in no event more than ten years after the date
of their grant. Said Non-ISOs may be exercised during the
lifetime of a Director only by the Director, and in the event of
the Director's death may be exercised by the personal
representatives of his estate or person or persons to whom his
rights under such Non-ISO shall have passed by will or by laws
of descent and distribution. Unless otherwise inapplicable or
inconsistent with the provisions of this Paragraph, the Non-ISOs
to be granted to Directors under this Paragraph shall be subject
to all other provisions of this Plan.
10. SARS (STOCK APPRECIATION RIGHTS)
(a) Granting of SARs. In its sole discretion, the
Committee may from time to time grant SARs to key Employees
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 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
- 9 -<PAGE>
<PAGE>
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. Any election by a Participant
to exercise SARs shall be made during the period beginning on
the 3rd business day following the release for publication of
quarterly or annual financial information and ending on the 12th
business day following such release.
(a) Restriction Period. At the time of each award of
Restricted Stock, there shall be established for the Restricted
Stock a restriction period, which shall be no less than 6 months
and no greater than five years (the "Restriction Period"). Such
Restriction Period may differ between Participants and may have
different expiration dates with respect to portions of shares of
Restricted Stock covered by the same award.
(b) Vesting Restrictions. The Committee shall determine
the restrictions applicable to the award of Restricted Stock,
including, but not limited to, requirements of Continuous
Service for a specified term, or the attainment of specific
corporate, divisional or individual performance standards or
goals, which restrictions may differ with respect to each
Participant. The Agreement shall provide for forfeiture of
Shares covered thereby if the specified restrictions are not met
during the Restriction Period, and may provide for early
termination of any Restriction Period in the event of
satisfaction of the specified restrictions prior to expiration
of the Restricted Period.
(c) Vesting upon Death, Disability, or Retirement. The
Committee shall set forth in the Agreement the percentage of the
- 10 -<PAGE>
<PAGE>
award of Restricted Stock which shall vest in the Participant in
the event of death, disability or retirement prior to the
expiration of the Restriction Period or the satisfaction of the
restrictions applicable to an award of Restricted Stock.
(d) Acceleration of Vesting. Notwithstanding the
Restriction Period and the restrictions imposed on the
Restricted Stock, as set forth in any Agreement, the Committee
may shorten the Restriction Period or waive any restrictions, if
the Committee concludes that it is in the best interests of the
Company to do so.
(e) Ownership; Voting. Stock certificates shall be
issued in respect of Restricted Stock awarded hereunder and
shall be registered in the name of the Participant, whereupon
the Participant shall become a stockholder of the Company with
respect to such Restricted Stock and shall, to the extent not
inconsistent with express provisions of the Plan, have all the
rights of a stockholder, including but not limited to the right
to receive all dividends paid on such Shares and the right to
vote such Shares. Said stock certificates shall be deposited
with the Company or its designee, together with a stock power
endorsed in blank, and the following legend shall be placed upon
such certificates reflecting that the shares represented thereby
are subject to restrictions against transfer and forfeiture:
"The transferability of this certificate and the
shares of stock represented thereby are subject to the
terms and conditions (including forfeiture) contained in
the Columbian Bank, a Federal Savings Bank 1994 Stock
Option and Incentive Plan, and an agreement entered into
between the registered owner and Columbian Bank, a Federal
Savings Bank. Copies of such Plan and Agreement are on
file in the offices of the Secretary of Columbian Bank, a
Federal Savings Bank, 303-307 St. John Street, Havre de
Grace, Maryland 21078."
(f) Lapse of Restrictions. At the expiration of the
Restricted Period applicable to the Restricted Stock, the
Company shall deliver to the Participant, or the legal
representative of the Participant's estate, or if the personal
representative of the Participant's estate shall have assigned
the estate's interest in the Restricted Stock, to the person or
persons to whom his rights under such Stock shall have passed by
assignment pursuant to his will or to the laws of descent and
distribution, the stock certificates deposited with it or its
designee and as to which the Restricted Period has expired and
the requirements of the restrictions have been met. If a legend
has been placed on such certificates, the Company shall cause
such certificates to be reissued without the legend.
(g) Forfeiture of Restricted Stock. The Agreement shall
provide for forfeiture of any Restricted Stock which is not
vested
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<PAGE>
in the Participant or for which the restrictions have not
been satisfied during the Restriction Period.
12. CHANGE IN CONTROL; OTHER ACCELERATION OF VESTING
(a) General Rule. Notwithstanding the provisions of any
Award which provides for its exercise or vesting in
installments, all Shares of Restricted Stock shall become fully
vested upon a Change in Control, and for a period of 60 days
beginning on the date of such Change in Control, all Options and
SARs shall be immediately exercisable and fully vested. With
respect to Options, at the time of a Change in Control, the
Participant shall, at the discretion of the Committee, be
entitled to receive cash in an amount equal to the excess of the
Market Value of the Common Stock subject to such Option over the
Exercise Price of such Shares, in exchange for the cancellation
of such Options by the Participant.
(b) Acceleration of Vesting. The Committee shall at all
times have the power to accelerate the exercise date of Options
and SARs.
13. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE PLAN.
(a) 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 thereof in the case of 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, reclassifi-
cation, 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.
(b) Transactions in which the Company is Not the
Surviving Entity. Subject to Paragraph 11 hereof, 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, other than a transaction in which the Company
solely forms a holding company, 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
outstanding Awards shall be surrendered. With respect to each
Award so surrendered, the Committee shall in its sole and
absolute discretion determine whether the holder of the
surrendered Award shall receive --
(1) for each Share then subject to an outstanding
Award the number and kind of shares into which each
outstanding Share (other than Shares held by dissenting
stockholders) is
- 12 -<PAGE>
<PAGE>
changed or exchanged, together with an appropriate
adjustment to the Exercise Price in the case of Options and
SARs; or
(2) a cash payment (from the Company or the
successor corporation), in an amount equal to the Market
Value of the Shares subject to the Award on the date of
the Transaction, less the Exercise Price of the Award in
the case of Options and SARs.
(c) Special Rule for ISOs. Any adjustment made pursuant
to subparagraphs (a) or (b)(1) 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.
(d) 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 Shares pursuant to the
Award before the adjustment was made.
(e) 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.
14. NON-TRANSFERABILITY OF AWARDS.
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, or pursuant to the
terms of a "qualified domestic relations order" (within the
meaning of Section 414(p) of the Code and the regulations and
rulings thereunder).
15. TIME OF GRANTING AWARDS.
The date of grant of an Award shall, be the date
designated as the date of grant in the resolutions by which the
Committee makes the Award.
16. EFFECTIVE DATE.
The Plan shall become effective on March 29, 1994. Awards
may be made prior to approval of the Plan by the stockholders of
the Company if the exercise of Awards in the form of Options
and/or
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<PAGE>
SARs, and the vesting of Awards in the form of Restricted Stock,
are conditioned upon stockholder approval of the Plan.
17. APPROVAL BY STOCKHOLDERS.
The Plan shall be approved by stockholders of the Company
within twelve (12) months before or after the Effective Date.
18. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may autho-
rize 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 materially decrease
a Participant's benefits under the Award without the
Participant's consent.<PAGE>
<PAGE>
19. 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
Awards, suspend or terminate the Plan; provided that the
provisions of Paragraph 9 may not be amended more than once
every six months (other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder); and provided further that any
amendment of the Plan shall be approved by stockholders to the
extent that such stockholder approval is necessary to comply
with applicable provisions of the Code, rules promulgated
pursuant to Section 16 of the Securities Exchange Act of 1934,
applicable state law, or NASD or exchange listing requirements.
No 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.
20. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common
Stock shall not be issued with respect to any Award 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. The Plan is intended to comply with Rule 16b-3,
and any provision of the Plan which the Committee determines in
its sole and absolute discretion to be inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative
and null and void, and shall not affect the validity of the
remaining provisions of the Plan.
(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 both of these
restrictions.
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<PAGE>
21. 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.
22. WITHHOLDING TAX.
The Company's obligation to deliver dividends on
Restricted Stock, or to deliver Shares upon exercise of Options
and/or SARs or upon the vesting of Restricted Stock (or such
earlier time that the Participant makes an election under
Section 83(b) of the Code) 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 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.
23. 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 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,
except to the extent provided in Paragraph 9. However, an
Employee or Director who has been granted an Award may, if
otherwise eligible, be granted an additional Award or Awards.
24. UNSECURED OBLIGATION.
No Participant shall have any interest in any fund or
special asset of the Company or its Affiliates by reason of the
Plan or the grant of any Award. No trust fund shall be created
in connection with the Plan or any Award, and there shall be no
required funding of amounts which may become payable to any
Participant.
25. GOVERNING LAW.
The Plan shall be governed by and construed in accordance
with the laws of the Commonwealth of Maryland, except to the
extent that federal law shall be deemed to apply.
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<PAGE>
STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
COLUMBIAN BANK, A FEDERAL SAVINGS BANK
1994 STOCK OPTION AND INCENTIVE PLAN
STOCK OPTION for a total of _________ shares of common
stock, par value $1.00 per share, of Columbian Bank, a Federal
Savings Bank (the "Bank"), which Option is intended to qualify
as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), is hereby granted
to _______________ (the "Optionee") at the price set forth
herein, and in all respects subject to the terms, definitions
and provisions of the Columbian Bank, a Federal Savings Bank
1994 Stock Option and Incentive Plan (the "Plan") which was
adopted by the Bank and which is incorporated by reference
herein, receipt of which is hereby acknowledged.
1. Option Price. The option price is $______ for
each share, being 100% 1/ of the fair market value, as
determined by the Committee, of the common stock on the date of
grant of this Option.
2. Exercise of Option. This Option shall be exercisable
in accordance with provisions of the Plan as follows:
(i) Schedule of rights to exercise.
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
- ------------------------------ ----------------------------
Upon Grant _________%
1 year but less than 2 years _________%
2 years but less than 3 years _________%
3 years but less than 4 years _________%
4 years but less than 5 years _________%
5 years or more _________%
__________
1/ 110% in the case of an Optionee who owns shares representing
more than 10% of the outstanding common stock of the Bank on
the date of grant of this Option.
<PAGE>
<PAGE>
ISO Agreement
Page 2
(ii) 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 Bank'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
Bank, 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 Bank.
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. 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.
(iii) 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 Bank may require the
person exercising this Option to make any representation and
warranty to the Bank as may be required by any applicable law or
regulation.
3. 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 Bank for such tax withholding as may be required of the Bank
under federal, state, or local law on account of such exercise.
4. Non-transferability of Option. This Option may not
be transferred in any manner otherwise than by will or the laws
of descent or distribution, or pursuant to a "qualified domestic
relations order" (within the meaning of Section 414(p) of the
Code and the regulations and rulings thereunder). The terms of
this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
<PAGE>
<PAGE>
ISO Agreement
Page 3
5. 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.
COLUMBIAN BANK, A FEDERAL
SAVINGS BANK 1994 STOCK OPTION
AND INCENTIVE PLAN COMMITTEE
By ___________________________
___________________
Date of Grant Attest: _______________ (Seal)
__________
**/ Five years in the case of an Optionee who owns shares
representing more than 10% of the outstanding common
stock of the Bank on the date of grant of this Option.
<PAGE>
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
COLUMBIAN BANK, A FEDERAL SAVINGS BANK
1994 STOCK OPTION AND INCENTIVE PLAN
__________________
Date
Treasurer
Columbian Bank, a Federal Savings Bank
303-307 St. John Street
Havre de Grace, Maryland 21078
Re: Columbian Bank, a Federal Savings Bank 1994 Stock
Option and Incentive Plan
-------------------------------------------------
Dear Sir:
The undersigned elects to exercise his/her Incentive Stock
Option to purchase ________ shares, par value $1.00 per share,
of common stock of Columbian Bank, a Federal Savings Bank 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
______ ____ 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 _____________________________
Very truly yours,
___________________________<PAGE>
<PAGE>
STOCK OPTION AGREEMENT
FOR NON-INCENTIVE STOCK OPTIONS PURSUANT TO THE
COLUMBIAN BANK, A FEDERAL SAVINGS BANK
1994 STOCK OPTION AND INCENTIVE PLAN
STOCK OPTION for a total of _________ shares of common
stock, par value $1.00 per share, of Columbian Bank, a Federal
Savings Bank (the "Bank") is hereby granted to ________________
(the "Optionee") at the price set forth herein, and in all
respects subject to the terms, definitions and provisions
of the Columbian Bank, a Federal Savings Bank 1994 Stock Option
and Incentive Plan (the "Plan") which has been adopted by the
Bank and which is incorporated by reference herein, receipt of
which is hereby acknowledged. Such stock options do not comply
with Options granted under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
1. Option Price. The option price is $__________ for
each share, being _______% of the fair market value, as
determined by the Committee, of the common stock on the date of
grant of this Option.
2. Exercise of Option. This Option shall be exercisable
in accordance with provisions of the Plan as follows:
(i) Schedule of rights to exercise.
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
- ------------------------------ ----------------------------
Upon Grant _________%
1 year but less than 2 years _________%
2 years but less than 3 years _________%
3 years but less than 4 years _________%
4 years but less than 5 years _________%
5 years or more _________%
(ii) Method of Exercise. This Option shall be exercisable
by a written notice which shall:
<PAGE>
<PAGE>
Non-ISO Agreement
Page 2
(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
holders' investment intent with respect to such shares of
common stock as may be satisfactory to the Bank'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
Bank, 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 Bank.
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. 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.
(iii) Restrictions on exercise. The 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
his exercise of this Option, the Bank may require the person
exercising this Option to make any representation and warranty
to the Bank as may be required by any applicable law or
regulation.
3. 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 Bank for such tax withholding as may be required of the
Bank under federal, state, or local law on account of such
exercise.
4. Non-transferability of Option. This Option may not be
transferred in any manner otherwise than by will or the laws of
descent or distribution, or pursuant to a "qualified domestic
relations order" (within the meaning of Section 414(p) of the
Code and the regulations and rulings thereunder). The terms of
this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
<PAGE>
<PAGE>
Non-ISO Agreement
Page 3
5. Term of Option. This Option may not be exercisable for
more than ten years from the date of grant of this Option, as
set forth below, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
COLUMBIAN BANK, A FEDERAL SAVINGS
BANK 1994 STOCK OPTION AND INCENTIVE
PLAN COMMITTEE
___________________ By __________________________
Date of Grant
Attest _______________ (Seal)
<PAGE>
<PAGE>
NON-INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
COLUMBIAN BANK, A FEDERAL SAVINGS BANK
1994 STOCK OPTION AND INCENTIVE PLAN
_________________
Date
Treasurer
Columbian Bank, a Federal Savings Bank
303-307 St. John Street
Havre de Grace, Maryland 21078
Re: Columbian Bank, a Federal Savings Bank 1994 Stock
Option and Incentive Plan
-------------------------------------------------
Dear Sir:
The undersigned elects to exercise his/her Non-Incentive
Stock Option to purchase ________ shares, par value $1.00 per
share, of common stock of Columbian Bank, a Federal Savings Bank
under and pursuant to a Stock Option Agreement dated
___________, 199__.
Delivered herewith is a certified or bank cashier's or
tellers 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
______ ____ 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 is as follows:
Name _______________________________________________
Address ____________________________________________
Social Security Number _____________________________
Very truly yours,
___________________________
CECIL BANCORP, INC.
COLUMBIAN BANK, A FEDERAL SAVINGS BANK
1994 STOCK OPTION AND INCENTIVE PLAN
_____________________________________
1998 Amendment to Stock Option Agreement
_____________________________________
WHEREAS, Columbian Bank, A Federal Savings Bank
("Columbian") merged into Cecil Bancorp, Inc. ("Cecil") on May
29, 1998 pursuant to a reorganization and merger agreement (the
"Merger Agreement");
WHEREAS, Section 1.5(c) of the Merger Agreement provides
that each stock option outstanding under the Columbian Bank, A
Federal Savings Bank 1994 Stock Option and Incentive Plan (the
"Plan") shall continue outstanding as an option to purchase
shares of Cecil's common stock ("Common Stock") and under the
same terms and conditions as were applicable immediately prior
to the closing of the merger (the "Closing"), except that the
exercise price of each outstanding stock option (and associated
number of shares of Common Stock covered by the option) shall be
proportionately adjusted in accordance with the Exchange Ratio
set forth in Section 1.5(a)(i) of the Merger Agreement; and
WHEREAS, Columbian previously entered into a Stock Option
Agreement dated ________________ ___, 19__ (the "Option Agree-
ment") with (the "Optionee"), and the Optionee received the
following grants of incentive stock options ("ISOs") and/or
non-incentive stock options ("Non-ISOs"):
Shares of
Perpetual's
ISO or Common Stock
Grant Date Non-ISO Subject to the Option Exercise Price
- ---------- ------- --------------------- --------------
WHEREAS, Cecil assumed the Plan and all obligations
thereunder upon the closing of the merger.
<PAGE>
<PAGE>
Columbian Bank's 1994 Stock Option and Incentive Plan
1998 Amendment to Stock Option Agreement
Page 2
NOW, THEREFORE, BE IT RESOLVED that the Optionee shall
receive shares of Common Stock upon exercise of the stock
options granted to him or her under the Plan; and be
it
RESOLVED FURTHER, that the provisions of the Option
Agreement that specify the number of shares of common stock
covered by the option and the option exercise price for
each share shall be amended pursuant to the terms of the Merger
Agreement to provide as follows:
Shares of Cecil's
ISO or Common Stock Adjusted
Grant Date Non-ISO Subject to the Option Exercise Price
- ---------- ------- --------------------- --------------
Nothing contained herein shall be held to alter, vary or
affect any of the terms, provisions, or conditions of the Plan
or the Option Agreement other than as stated above.
CECIL BANCORP, INC.
By ______________________________
Its __________________________
______________________
Date Attest: __________________ (Seal)
