<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.__)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
</TABLE>
USABANC.COM, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
5) Total fee paid:
________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
[GRAPHIC OMITTED]
One Lincoln Plaza
1535 Locust Street
Philadelphia, Pennsylvania 19102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 15, 1999
June 10, 1999
DEAR FELLOW SHAREHOLDER:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Annual Meeting") of USABanc.com, Inc. (the "Company") will be held at the
Union League, 140 South Broad Street, Philadelphia, Pennsylvania 19102, on July
15, 1999, at 11:00 a.m. for the purpose of considering and voting upon the
following matters:
1. To elect nine directors to hold office until the 2000 Annual Meeting of
Shareholders.
2. To approve the appointment of Grant Thornton, LLP as the Company's
independent auditors for the 1999 fiscal year.
3. To approve an amendment to the Company's Stock Option Plan increasing the
number of shares of the Company's common stock issuable thereunder by
250,000 shares.
4. To transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on June 1, 1999
as the record date for the Annual Meeting. Only shareholders of record at the
close of business at that time are entitled to notice of and to vote at the
Annual Meeting or any adjournment or postponement thereof.
The enclosed proxy is solicited by the Board of Directors. Reference is
made to the attached proxy statement for further information with respect to
the business to be transacted at the Annual Meeting.
You are cordially invited to attend the Annual Meeting in person. The
proxy promptly. The return of the enclosed proxy will not affect your right to
vote in person if you do attend the Annual Meeting.
By Order of the Board of Directors,
/s/ Kenneth L. Tepper
-------------------------------------
Kenneth L. Tepper
President & Chief Executive Officer
IMPORTANT -- PLEASE MAIL YOUR PROXY PROMPTLY
<PAGE>
[GRAPHIC OMITTED]
One Lincoln Plaza
1535 Locust Street
Philadelphia, Pennsylvania 19102
--------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
July 15, 1999
--------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of USABanc.com, Inc. (the "Company") for use
at the Annual Meeting of Shareholders of the Company (the "Annual Meeting"),
which will be held July 15, 1999, at 11:00 a.m. at the Union League, 140 South
Broad Street, Philadelphia, Pennsylvania 19102, for the purposes set forth in
the foregoing notice, or at any adjournment or postponement thereof. This Proxy
Statement, the foregoing notice and the enclosed proxy are first being sent to
shareholders of the Company on or about June 10, 1999.
OUTSTANDING SECURITIES AND VOTING RIGHTS
The record date for determining shareholders entitled to notice of and to
vote at the Annual Meeting was June 1, 1999. Only shareholders of record as of
that date are entitled to notice of, and to vote at, the Annual Meeting.
On the record date, 2,007,392 shares of the Company's Class A common
stock, $1.00 per share par value ("Common Stock"), were outstanding and
eligible to be voted at the Annual Meeting. The Common Stock was held by
approximately 214 holders of record as of the record date. On the record date,
10,000 shares of Class B Common Stock, $.01 per share par value ("Class B
Common Stock" and, collectively with the Common Stock, the "Common Shares"),
were outstanding and eligible to be voted at the Annual Meeting. On June 15,
1999, the Company will pay to the shareholders of record as of June 1, 1999 a
100% stock dividend (the "1999 Stock Dividend") which will have the effect of
increasing the number of issued and outstanding shares of Common Stock by a
multiple of two. Under the Company's Articles of Incorporation, each Common
Share is entitled to one vote. The voting rights of the Common Stock and the
Class B Common Stock are
-1-
<PAGE>
identical except with respect to the election of Directors. Holders of Common
Stock are entitled to elect two-thirds (66.67%) of the total number of
Directors constituting the Board of Directors and the holders of the Class B
Common Stock are entitled to elect one-third (33.33%) of the total number of
Directors constituting the Board of Directors of the Company. Kenneth L.
Tepper, President and Chief Executive Officer of the Company, the holder of all
of the issued and outstanding Class B Common Stock, has waived, solely with
respect to this Annual Meeting, his right to elect such Directors. Accordingly,
each Common Share is entitled to one vote, voting as a single class on all
matters submitted to the shareholders of the Company at this Annual Meeting,
including the election of Directors.
Unless contrary instructions are received, all Common Shares represented
by valid proxies received pursuant to this solicitation will be voted FOR the
election of the nine nominees for Director, FOR the approval of Grant Thornton,
LLP, as the Company's outside auditors and FOR the approval of an amendment to
the Company's Stock Option Plan to increase the number of shares of Common
Stock issuable thereunder by 250,000 shares.
Shareholders may revoke the proxy prior to the time it is exercised by
providing written notice to the Secretary of the Company. As of the date
hereof, the Board of Directors knows of no business that will be presented for
consideration at the Annual Meeting other than the proposals referred to above.
Should any other matters properly come before the Annual Meeting, the persons
named as proxies will vote upon such matters according to the instruction of
the Board of Directors. In the election of Directors, shareholders entitled to
vote will not have cumulative voting rights.
The presence at the Annual Meeting, in person or by proxy, of persons
entitled to cast a majority of the votes which shareholders of Common Shares
are entitled to cast on each matter will constitute a quorum as to such matter.
In the event that the Annual Meeting is adjourned for one or more periods
aggregating at least 15 days due to the absence of a quorum, those shareholders
entitled to vote who attend the adjourned Annual Meeting, although less than a
quorum as described in the preceding sentence, shall constitute a quorum for
the purpose of acting upon any matter set forth in the foregoing notice.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting, whether in person or by proxy. Other than the election of Directors,
each matter to be submitted to the shareholders requires the affirmative vote
of a majority of the votes cast at the Annual Meeting. For purposes of
determining the number of votes cast with respect to any voting matter, only
those cast "for" or "against" are included. Abstentions and broker non-votes
are counted only for purposes of determining whether a quorum is present at the
Annual Meeting.
-2-
<PAGE>
STOCK OWNERSHIP OF
MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Company's shares of Common Stock as of June 1, 1999, by each
director, the executive officers named in the Summary Compensation Table, all
directors and officers as a group, and each person known to the Company to
beneficially own 5% or more of the Company's issued and outstanding Common
Stock. Based on information filed with the Securities and Exchange Commission
(the "Commission") on Schedule 13D and Schedule 13G pursuant to Rule 13d-3 of
the Securities Exchange Act of 1934 (the "Exchange Act") by persons who
beneficially own 5% or more of the Company's Common Stock, the Company does not
believe that any shareholder other than Mr. Tepper beneficially owns in excess
of 5% of the Company's Common Stock. Mr. Tepper also owns all 10,000 shares of
the issued and outstanding Class B Common Stock. The address for each person
listed in the following table is 1535 Locust Street, Philadelphia, Pennsylvania
19102. All share information set forth gives effect to 33% stock dividends
which the Company paid on July 18, 1997 and August 17, 1998, but does not give
effect to the 1999 Stock Dividend payable on June 15, 1999 to shareholders of
record as of June 1, 1999.
<TABLE>
<CAPTION>
Shares of Class A Percentage of Shares of
Common Stock Class A Common Stock
Name of Beneficial Owner Beneficially Owned (1) Beneficially Owned (1)
- --------------------------------- ------------------------ ------------------------
<S> <C> <C>
George M. Laughlin 62,043(2)(3) 3.1
Zeev Shenkman 55,700(4) 2.7
Clarence L. Rader 17,689(2) *
Kenneth L. Tepper 271,322(5) 12.3
Jeffrey A. D'Ambrosio 42,867(2) 2.1
George C. Fogwell, III 44,753(2)(6) 2.2
John A. Gambone 56,401(2)(7) 2.8
Carol J. Kauffman 61,337(8)(9) 3.0
Wayne O. Leevy 10,613(2) *
Brian M. Hartline 40,000 2.0
Directors and Executive Officers
(10 persons) 662,725 28.3%
========= ====
</TABLE>
- ---------------
* Less than 1 percent (1%)
(1) Based upon 2,007,392 shares of Common Stock outstanding as of June 1, 1999
(which does not include the shares of Class B common stock which are
convertible into shares of Common Stock). Calculated in accordance with
Rule 13d-3 promulgated under the Exchange Act. Also includes shares owned
by (i) a spouse, minor children
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<PAGE>
or by relatives sharing the same home, (ii) entities owned or controlled by
the named person and (iii) other persons if the named person has the right
to acquire such shares within 60 days by the exercise of any right or
option. Unless otherwise noted, shares are owned of record and beneficially
by the named person.
(2) Includes options to purchase 8,845 shares which are exercisable at $5.65
per share.
(3) Includes 17,689 shares held by Mr. Laughlin's wife and 884 shares held by
his daughter.
(4) Includes options to purchase 33,250 shares of Common Stock which are
exercisable at $11.28 per share.
(5) Includes 177 shares of Common Stock held by Mr. Tepper as custodian for his
minor son. Also includes options to purchase 168,090 shares of Common
Stock which are exercisable at $5.65 per share and options to purchase
23,940 shares of Common Stock which are exercisable at $7.52 per share.
Does not include 10,000 shares of the Company's Class B Common Stock which
are beneficially owned by Mr. Tepper and which are convertible in 2001
into 108,230 shares of Common Stock.
(6) Includes 531 shares of Common Stock held by Mr. Fogwell's children.
(7) Mr. Gambone's shares of Common Stock are held in the name of a trust, of
which Mr. Gambone is trustee (26,533 shares), and in the name of a
corporation (18,944 shares), of which Mr. Gambone is president. Includes
310 shares of Common Stock (as to which Mr. Gambone disclaims beneficial
ownership), owned by family members who reside in Mr. Gambone's home.
(8) Includes 1,620 shares of Common Stock owned by Mrs. Kauffman's husband,
options to purchase 53,067 shares of Common Stock held by Mrs. Kauffman's
husband, which are exercisable at $5.65 per share, and options to purchase
1,330 shares of Common Stock presently exercisable at $7.52.
(9) Includes options to purchase 6,650 shares of Common Stock which are
exercisable at $11.28 per share.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
certain of its officers and persons who own more than 10 percent of the
Company's Common Stock (collectively the "Reporting Persons") to file reports
of ownership and changes in beneficial ownership with the Commission and to
furnish the Company with copies of these reports.
-4-
<PAGE>
Based on the Company's review of the copies of these reports received by
it, and representations received from Reporting Persons, the Company believes
that all filings required to be made by the Reporting Persons for the period
January 1, 1998 through December 31, 1998 were made on a timely basis.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Annual Meeting, nine directors will be elected to hold office until
the 2000 Annual Meeting of Shareholders and until their respective successors
have been duly elected and qualified. The Board of Directors has nominated each
of the persons set forth below to serve as members of the Board of Directors.
Each of the nominees is currently serving as a Director, and each has indicated
a willingness to continue serving as a Director. Should any nominee become
unavailable to accept election as a Director, the persons named in the enclosed
proxy will vote the shares which they represent for the election of such other
person as the Board of Directors may recommend, unless the Board of Directors
otherwise reduces the number of Directors.
Certain information concerning the nominees for election as Director is
set forth below.
Nominees for 1999 Annual Meeting
<TABLE>
<CAPTION>
Name Position with Company Age Director Since
- ------------------------ ------------------------------ ----- ---------------
<S> <C> <C> <C>
George M. Laughlin Chairman 78 1995
Zeev Shenkman Vice-Chairman 47 1998
Kenneth L. Tepper President & CEO/Director 37 1995
Clarence L. Rader Director/Chairman of Bank(1) 68 1995
Jeffrey A. D'Ambrosio Director 44 1995
George C. Fogwell, III Director 52 1995
John A. Gambone Director 60 1995
Carol J. Kauffman Director 52 1997
Wayne O. Leevy Director 55 1996
</TABLE>
- ---------------
(1) BankPhiladelphia, the Company's wholly-owned FDIC banking subsidiary.
Following is a brief summary of each Director's occupation over the last
five years:
George M. ("Dewey") Laughlin is a real estate investor and insurance
broker and the founder/owner of Best Auto Tags and Abat's Auto Tags, one of the
first companies to originate 24-hour licensed messenger service in
Pennsylvania. Mr. Laughlin owns and
-5-
<PAGE>
manages a total of 24 branch locations throughout the Commonwealth of
Pennsylvania. He is a veteran of the United States Navy, having served on the
aircraft carrier U.S.S. Independence in every major South Pacific campaign of
World War II.
Zeev Shenkman has been the Chief Executive Officer of Shen Management
Corporation since September 1995. From 1996 through 1997, Mr. Shenkman was
Chief Financial Officer of Global Sports, Inc. Prior thereto, from May 1984
through March 1995, Mr. Shenkman was the Chief Financial Officer of Today's
Man, Inc. In 1996, Today's Man filed a voluntary petition under Chapter 11 of
the United States Bankruptcy Code and emerged under a plan approved in 1998.
Kenneth L. Tepper has been a Director and President and Chief Executive
Officer of the Company and of BankPhiladelphia, the Company's wholly-owned
Federal Deposit Insurance Corporation ("FDIC") banking subsidiary (the "Bank")
since 1995. Prior thereto, Mr. Tepper served as an agent of the FDIC assigned
to the Resolution Trust Company from 1990 through 1991. Thereafter, Mr. Tepper
was Director of Merchant Banking at Tucker Federal SLA, and from 1994 through
1995 was Managing Director of Merchant*BancShares, Inc., an investment banking
firm specializing in community bank mergers and loan portfolio acquisitions. He
was Finance Chairman of the Pennsylvania Republican State Committee during the
1994 gubernatorial campaign, a principal of the 1995 Congressional Medal of
Honor Society Convention, and in March 1999 was appointed to the Pennsylvania
Industrial Development Authority. He serves on the Board of Directors of TRM
Corporation, a public company in the self-service photocopy business in which
the Company maintains a $500,000 investment in debt securities.
Clarence L. Rader has served as Chairman of the Bank since November 1995.
Prior thereto, he served as President and Chief Executive Officer of the Bank
from 1986 to 1995. Mr. Rader was President of the Norristown School Board and
Chairman of the Central Montgomery County Chamber of Commerce from 1991 to
1992. He is a senior appraiser with the American Society of Appraisers.
Jeffrey A. D'Ambrosio has been the owner and is Chief Executive Officer of
D'Ambrosio Dodge in Downingtown, Pennsylvania, since 1985. Mr. D'Ambrosio
presently owns and manages 11 auto franchises in Chester County, Pennsylvania.
Mr. D'Ambrosio is a member of the Dodge Dealers National Advertising Council
and serves on the Pennsylvania Board of Vehicle Manufacturers, Dealers and
Salespersons.
George C. Fogwell, III is a Senior Captain with Delta Airlines, where he
also serves as a flight instructor.
John A. Gambone is the Chairman, President and Chief Executive Officer of
Gambone Bros. Organization, Inc., a real estate development concern founded in
1958 and headquartered in Fairview Village, Pennsylvania. He is a member of the
Pennsylvania Horse Breeders Association as well as numerous professional
organizations related to the building industry.
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<PAGE>
Carol J. Kauffman has served as the Director of Business Development for
Lawyers' Travel Service Division of the World Travel Specialists Group since
1996. Prior to Lawyers' Travel, Ms. Kauffman was Senior Account Executive,
Account Services, for Reimel Carter Public Relations firm. In the mid-1980s,
she founded the successful firm, Lawlor Jackson, Inc., which she later sold.
Wayne O. Leevy is the Managing Partner of Mitchell & Titus, LLP, a public
accounting firm. Prior to Mitchell & Titus, Mr. Leevy was Managing Officer of
Leevy, Redcross and Co., which merged with Mitchell & Titus in 1990.
No family relationship exists among the Directors or Executive Officers of
the Company.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" EACH OF THE NOMINEES FOR
DIRECTOR.
Meetings of the Board of Directors, Committees of the Board of Directors
The Board of Directors of the Company held eleven regular meetings during
1998. Each of the nominees for election as a Director attended at least 75% of
the meetings of the Board of Directors which were held after each Director's
election during 1998.
The Board of Directors has, among others, an Audit Committee, a
Compensation Committee, an Options Committee and an Asset/Liability Committee.
The Board of Directors does not have a Nominating Committee.
The Audit Committee arranges for the annual audit of the financial
statements of the Company and the Bank through its independent auditors,
evaluates and implements the recommendations of the annual and interim audits,
receives all reports of examination of the Bank by banking regulatory agencies,
analyzes such regulatory reports, and reports to the Board of Directors the
results of its analysis of the regulatory reports. The Audit Committee consists
of Mr. Fogwell, Ms. Kauffman, Mr. Leevy, Mr. Rader and Mr. Shenkman. The Audit
Committee held one meeting during 1998.
The Compensation Committee reviews and makes recommendations to the Board
of Directors as to the Company's and the Bank's staffing levels, performance
evaluations, compensation levels and benefits. The Compensation Committee
consists of Mr. Fogwell (Chairman), Mr. Laughlin, Mr. Rader and Mr. Tepper (who
removes himself from any decisions regarding his own compensation). The
Compensation Committee held one meeting during 1998.
The Options Committee reviews and takes recommendations from the
Compensation Committee and the Board of Directors regarding the awarding of
long-term incentive
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<PAGE>
stock options to employees and Directors of the Company and its subsidiaries.
The Options Committee consists of Mr. Fogwell (Chairman), Mr. Laughlin and Mr.
Rader. The Options Committee held two meetings during 1998.
The Asset/Liability Committee reviews and makes recommendations to the
Board of Directors regarding the Company's Investment and Asset/Liability
policies which guide overall risk tolerance, liquidity levels, interest rate
risk exposure and credit quality. The Asset/Liability Committee consists of Mr.
Fogwell (Chairman), Ms. Kauffman, Mr. Leevy, Mr. Rader and Mr. Shenkman. The
Asset/Liability Committee held four meetings during 1998.
Compensation of Directors
Directors of the Company receive a fee of $200 for each meeting of the
Board of Directors attended and $100 for each committee meeting attended. Mr.
Laughlin receives $1,000 per month, plus reimbursement of reasonable
out-of-pocket expenses not to exceed $12,000 per year. Mr. Shenkman receives
$25,000 per year pursuant to his election as Vice-Chairman of the Company.
During 1998, an aggregate of $58,800 was paid to Directors for their services.
No Director received more than $14,200 in 1998.
During 1998, Ms. Kauffman was awarded options to purchase 1,330 shares of
Common Stock at an exercise price of $7.52 per share and options to purchase
6,650 shares of Common Stock at an exercise price of $11.28 per share. Mr.
Shenkman was awarded options to purchase 33,250 shares of Common Stock at an
exercise price of $11.28 per share. Also, Mark A. Kearney was awarded options
to purchase 6,650 shares of Common Stock at an exercise price of $11.28 per
share. Such options were subsequently forfeited in connection with Mr.
Kearney's resignation from the Board of Directors.
Executive Officers
The Executive Officers of the Company are Kenneth L. Tepper, President and
Chief Executive Officer, and Brian M. Hartline, Chief Financial Officer of the
Company and Chief Operating Officer of the Bank. For Mr. Tepper's biographical
information, see Nominees for 1999 Annual Meeting. Following is a brief summary
of Mr. Hartline's occupations for the last five years.
Brian M. Hartline, age 34, is currently Chief Financial Officer of the
Company and Chief Operating Officer of the Bank, where he has been employed
since December 1998. Prior to joining the Company, Mr. Hartline served from
1994 through 1998 in a number of positions, including Executive Vice President
and Chief Financial Officer, at ML Bancorp, Inc. in Villanova, Pennsylvania,
and from 1990 to 1994 as Vice President and Controller of PNC Bank (Central
Region), formerly United Federal Bank, in State College, Pennsylvania. Mr.
Hartline is a licensed certified public accountant.
-8-
<PAGE>
Compensation of Executive Officers
The following table sets forth compensation paid in fiscal 1998 for
services performed in all capacities for the Company and the Bank with respect
to the Chief Executive Officer and Chief Financial Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Fiscal Annual Other No. of Securities
Name and Principal Position Year Salary Compensation Underlying Options
- -------------------------------------- -------- ----------------- ----------------------- -------------------
<S> <C> <C> <C> <C>
Kenneth L. Tepper, President and
Chief Executive Officer ............ 1998 $245,000(1) $162,000(2)(3) --
1997 $120,000 $ 12,000(3) --
1996 $120,000 $ 12,000(3) 100,000
Brian M. Hartline, Chief Financial
Officer ............................ 1998 $160,000(4) -- 20,000
</TABLE>
- ---------------
(1) Mr. Tepper's annual base salary was increased to $245,000 effective March
1, 1998.
(2) Mr. Tepper received a payment of $150,000 in connection with his agreement
to cap the anti-dilutive feature of the Class B Common Stock. See "Certain
Relationships and Related Transactions."
(3) In addition to his base salary, Mr. Tepper received $12,000 in additional
compensation which was used to purchase a deferred compensation life
insurance policy.
(4) Mr. Hartline was employed by the Company on December 1, 1998 at an annual
base salary of $160,000.
-9-
<PAGE>
Stock Options
The following table sets forth certain information concerning options to
purchase Common Stock of the Company granted to the executive officer named in
the Summary Compensation Table in the fiscal year ended December 31, 1998.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------------
Number of % of Total Options
Securities Underlying Granted in Exercise Expiration
Name Options Granted(1) Fiscal Year("FY") Price(1) Date
- --------------------------- ----------------------- ------------------- ------------- -----------
<S> <C> <C> <C> <C>
Kenneth L. Tepper ......... 35,378 23.3% $7.52/sh 2/11/03
Kenneth L. Tepper ......... 17,689 11.6% $7.52/sh 2/11/03
Brian M. Hartline ......... 20,000 13.2% $7.50/sh 12/01/09
</TABLE>
- ---------------
(1) All information set forth gives effect to 33% stock dividends which the
Company paid on July 18, 1997 and August 17, 1998, but does not give
effect to the 1999 Stock Dividend payable on June 15, 1999 to shareholders
of record as of June 1, 1999.
The following table sets forth certain information concerning the exercise
in the fiscal year ended December 31, 1998 of options to purchase Common Stock
by Mr. Tepper and the unexercised options to purchase Common Stock held by Mr.
Tepper at December 31, 1998. Year-end values are based upon the closing market
price of a share of the Company's Common Stock on December 31, 1998 of $9.00.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
FY-End(#) at FY-End ($)(1)
------------------------------- ------------------------------
Shares
Acquired on Value
Name Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- ------------------- ------------- -------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth L. Tepper 8,800 $24,595 179,980 27,930 $562,834 0
</TABLE>
- ---------------
(1) Values are calculated by subtracting the exercise price from the fair
market value as of the exercise date or fiscal year end, as appropriate.
Values are reported before any taxes associated with exercise or
subsequent sale of the underlying stock.
-10-
<PAGE>
Employment Agreements
On November 30, 1995, the Company entered into a five-year employment
agreement with Mr. Tepper pursuant to which he received an annual base salary
of $120,000 and may receive an annual cash bonus and grant of stock options as
determined by the Board of Directors. Mr. Tepper has not received any cash
bonuses. Pursuant to the agreement, Mr. Tepper was granted options to purchase
176,890 shares of Common Stock (as adjusted for stock dividends) at an exercise
price of $5.65 per share (as adjusted for stock dividends). All of the options
are currently exercisable and expire in November 2005. The agreement provides
that in the event the Company discharges Mr. Tepper other than for "cause" (as
defined in the employment agreement), disability or incapacity, or Mr. Tepper
terminates his employment with the Company upon the occurrence of certain
specified events or occurrences, including "a change of control" (as defined in
employment agreement) of the Company, Mr. Tepper will receive severance
payments equal to his accrued but unpaid base compensation and incentive
compensation plus a lump sum equal to no more than 2.99 times the average of
his total annual compensation over the previous five years. Effective March 1,
1998, the Company extended Mr. Tepper's agreement through February 12, 2001 at
an annual base salary of $245,000 and an annual cash bonus and grants of stock
options as may be determined by the Board of Directors. Pursuant to the
agreement, Mr. Tepper was granted options to purchase 35,378 shares of Common
Stock (as adjusted for stock dividends) at $7.52 per share (as adjusted for
stock dividends), and options to purchase 17,689 shares of Common Stock (as
adjusted for stock dividends) at $11.31 per share (as adjusted for stock
dividends). Of the 35,378 options, 15,920 vested on August 13, 1998, 15,920
vested on February 13, 1999, and 3,538 will vest on February 13, 2000. Of the
17,689 options granted, 6,898 will vest on February 13, 2000, 8,844 will vest
on February 13, 2001 and 1,945 will vest on February 13, 2002.
On December 1, 1998, the Company and the Bank entered into a three-year
employment agreement with Mr. Hartline pursuant to which Mr. Hartline serves as
Chief Financial Officer of the Company and Chief Operating Officer of the Bank.
Mr. Hartline receives an annual base salary of $160,000 and will receive
incentive compensation in the amount of $40,000 if the Company earns in excess
of $1.00 per share (as adjusted for stock splits, stock dividends, etc.) in any
fiscal year. Pursuant to the agreement, Mr. Hartline was granted or will be
granted options to purchase 20,000 shares of Common Stock on November 30 of
each of 1998, 1999 and 2000, for a total of 60,000 options. The options vest
over a three-year period according to the following vesting schedule: 10,000 in
year one, 5,000 in year two and 5,000 in year three. The exercise price of the
options will be the last reported sale price on the Nasdaq SmallCap Market of
the Company's Common Stock for the business day preceding the date of grant. If
Mr. Hartline's employment is terminated by the Company without "cause" (as
defined in the employment agreement), Mr. Hartline will receive, until the
earlier of the remaining term
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<PAGE>
of the employment agreement or obtaining employment elsewhere, his current
salary, medical benefits, use of an automobile and any earned bonuses. In the
event of a "change in control" (as defined in the Company's Stock Option Plan),
Mr. Hartline shall receive his current salary, medical benefits and the use of
an automobile for 24 months, if he is not offered continued employment with the
same job title, responsibilities and compensation following the change in
control.
Certain Relationships and Related Transactions
The Bank has engaged in, and expects in the future to engage in, banking
transactions in the ordinary course of business with its directors, executive
officers and principal shareholders (or their affiliate organizations) on
substantially the same terms as those prevailing for comparable transactions
with others. All loans by the Bank to such persons (i) were made in the
ordinary course of business, (ii) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and (iii) did not involve more than
the normal risk of collectability or present other unfavorable features. As of
December 31, 1998, certain executive officers and directors of the Company or
the Bank had outstanding indebtedness in amounts exceeding $60,000 to the Bank
as follows: As of December 31, 1998, two companies in which Mr. Gambone owns a
minority interest had outstanding indebtedness totaling $431,093. Of this
amount, $278,523 is secured by real estate and $152,570 is secured by titles to
motor vehicles, with all loans personally guaranteed by Mr. Gambone. Mr. Tepper
had outstanding loan commitments totaling $695,770, of which $645,770 is
secured by a residential mortgage and $50,000 is an unsecured line of credit.
Mr. Shenkman has two outstanding loan commitments totaling $1.2 million. Both
loans are secured by marketable securities and a second mortgage on residential
real estate. Additionally, Mr. Laughlin had outstanding loan commitments
totaling $190,000, of which $140,000 is secured by commercial real estate and
$50,000 is an unsecured line of credit. The aggregate amount of loans
outstanding to executive officers and directors of the Bank as of December 31,
1998 equaled 21.7% of shareholder's equity.
Mr. Tepper, the Company's President and Chief Executive Officer, is the
sole holder of the Company's Class B common stock. The terms of the Class B
common stock provide that on January 1, 2001, all of the authorized shares of
Class B common stock will automatically convert into 10% of the then issued
shares of common stock, rounded up to the nearest whole share. In connection
with a private placement of the Company's Common Stock in February 1998, the
Company and Mr. Tepper entered into an agreement pursuant to which the Company
has an option to pay Mr. Tepper $150,000 per year for each of the three years
beginning in 1998 in exchange for Mr. Tepper agreeing to cap the non-dilutive
feature of the Class B common stock to 10% of the common stock outstanding
prior to the February 1998 private placement of common stock, or 108,230
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shares, and waive any future exercise of the non-dilutive feature of the Class
B common stock. The first payment was made upon the closing of the February
1998 private placement. The second payment was made in January 1999. The third
optional payment is anticipated to be made on January 2, 2000.
In March 1999, the Company's USA Capital Trust I subsidiary completed an
offering of $10,000,000 aggregate principal amount of Series A 9.50% Capital
Securities (the "Trust Preferred Securities"). Royal Bancshares of
Pennsylvania, Inc. ("Royal") purchased $3,000,000 of the Trust Preferred
Securities. Daniel M. Tabas, the Chairman of the Board of Royal, is the
father-in-law of Mr. Tepper.
PROPOSAL TWO
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Subject to shareholder ratification, the Board of Directors has
reappointed Grant Thornton, LLP, which served as the Company's independent
auditors for the Company's most recent audit, to serve as the Company's
independent auditors for the current fiscal year. If the shareholders do not
ratify this appointment by the affirmative vote of a majority of the Common
Shares voting at the Annual Meeting, other independent auditors will be
considered by the Board of Directors upon recommendation of the Audit
Committee.
Grant Thornton has no interest in or relationship with the Company except
in the capacity of independent auditors, nor has the firm had any other
interest or relationship with the Company in the past.
The Company's financial statements for the year ended December 31, 1998
were examined by Grant Thornton, independent public accountants, and the Audit
Committee of the Company's Board of Directors meets with representatives of
Grant Thornton periodically to review the nature and scope of services provided
to the Company by Grant Thornton, LLP.
A representative of Grant Thornton, LLP is expected to be present at the
Annual Meeting. Such representative will have the opportunity to make a
statement if he desires to do so and is also expected to be available to
respond to appropriate questions of shareholders.
THE BOARD OF DIRECTORS RECOMMENDS VOTING
"FOR" RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON, LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL 1999.
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PROPOSAL THREE
APPROVAL OF AN AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
ISSUABLE THEREUNDER BY 250,000 SHARES.
At the Annual Meeting, there will be presented to the shareholders a
proposal increasing the number of shares covered by the Company's Stock Option
Plan by 250,000 shares. Previously, shareholders of the Company approved the
issuance of 530,670 shares of Common Stock under the Stock Option Plan, after
taking into account the 33% stock dividends which the Company paid on July 18,
1997 and August 17, 1998. Following the 1999 Stock Dividend payable on June 15,
1999 to shareholders of record as of June 1, 1999, approval of this proposal
will have the effect of authorizing an additional 500,000 shares of Common
Stock for awards under the Stock Option Plan.
The Company has experienced significant growth in infrastructure since its
inception. In 1995, at the time of the adoption of the Stock Option Plan, the
Company had only six full-time employees. As of March 31, 1999, the Company had
in excess of 47 full-time employees and expects to continue to add employees to
support the Company's growth. The Company currently has only approximately
22,942 shares of Common Stock available for awards under the Stock Option Plan.
While a modest number of shares of Common Stock may become available due to
forfeiture, the Board of Directors believes that the number of existing shares
of Common Stock available for awards under the Stock Option Plan is
insufficient to meet the corporate goals of the Company.
The Stock Option Plan, as currently in effect, permits the Board of
Directors to grant Stock Options to "key" employees and non-employee members of
the Board of Directors. The Board of Directors has approved a resolution,
subject to shareholder approval, amending the Stock Option Plan to provide that
persons eligible for participation in the Stock Option Plan may include
officers and other employees of the Company or any subsidiary of the Company,
non-employee members of the Board of Directors, and independent contractors and
consultants to the Company. This broader eligibility standard for participation
in the Company's Stock Option Plan will provide the Company's Board of
Directors with greater flexibility to meet the needs of an expanding and
evolving business. The Board of Directors has determined that it is in the
Company's best interest to grant Stock Options to all employees so that the
interests of all employees are aligned with the interests of the Company's
shareholders.
This amendment will not be effective unless and until it is approved by
the Company's shareholders. The Stock Option Plan will not change except as
stated above.
Summary Description of the Stock Option Plan, as it applies to Proposal III.
On November 8, 1995, the Board adopted and the shareholders of the Company
approved the Company's Stock Option Plan. As in effect, the Stock Option Plan
provides
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for the granting of options intended to qualify as incentive stock options
("ISOs") as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonqualified stock options ("NQSOs") (ISOs and NQSOs,
collectively, the "Stock Options"). Effective May 19, 1999, the Board of
Directors adopted a further amendment and restatement to the Stock Option Plan,
subject to receipt of shareholder approval at the Annual Meeting. The Stock
Option Plan as adopted by the Board of Directors is set forth as Annex A to
this Proxy Statement. The description of the Stock Option Plan contained herein
is qualified in its entirety by reference to such Annex A.
General. Persons eligible for participation in the Stock Option Plan
include key employees and non-employee members of the Board of Directors.
Approval of the proposed revisions to the Stock Option Plan would broaden the
eligibility for participation in the Stock Option Plan to include officers and
other employees of the Company or any subsidiary of the Company, non-employee
members of the Board of Directors and independent contractors and consultants
to the Company. The Stock Option Plan currently provides for the issuance of
options to purchase 521,870 shares of Common Stock. Approval of the proposed
revisions to the Stock Option Plan would increase the maximum number of shares
of Common Stock that would be issuable under the Stock Option Plan by an
additional 500,000 shares, following the payment on June 15, 1999 of the 100%
stock dividend to shareholders of record as of June 1, 1999.
Administration. The Stock Option Plan is administered by a committee (the
"Committee") of the Board of Directors consisting of not less than two persons
who are "disinterested directors" under Rule 16b-3 of the Exchange Act. The
Committee has full power to administer and interpret the Stock Option Plan. The
Company's Options Committee currently serves as the "Committee" for the Stock
Option Plan. The Committee has not yet granted any Stock Options which it would
be permitted to grant if shareholders approve this Proposal 3.
The Shares. Each of the Stock Options will be granted for a term of 10
years from the date of grant, subject to earlier termination on the optionee's
death, disability or termination of employment or other relationship with the
Company. The Stock Options are subject to vesting, which commences on the date
of grant and ends on the date or dates determined by the Committee. In the
event of a change of control, as defined in the Stock Option Plan, all options
granted become immediately vested and exercisable. The Stock Options are not
assignable or otherwise transferrable except by will or the laws of descent and
distribution and pursuant to a qualified domestic relations order as defined
under the Code or Title I of ERISA. The Committee has the discretion to provide
that a recipient of Stock Options may transfer the Stock Options to his or her
children, grandchildren or to one or more trusts for the benefit of such family
members or to partnerships in which such family members are the only partners.
The exercise price of the Stock Options is payable in cash, certified or
cashier's check payable to the order of
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the Company, through a broker in accordance with the procedures permitted by
Regulation T of the Federal Reserve Board, or, with the consent of the
Committee, by delivering shares of Common Stock already owned by the optionee.
Amendments. The Committee has the full authority to amend the Stock Option
Plan, except that shareholder approval is required to (i) increase the number
of shares available for the Stock Option Plan, or (ii) change the class of
individuals eligible to receive an ISO. The Stock Option Plan shall be deemed
effective as of May 19, 1999, subject to shareholder approval and will
terminate on May 19, 2009, the tenth anniversary of its effective date.
Federal Income Tax Consequences. The federal income tax consequences of an
optionee's participation in the Stock Option Plan are complex and subject to
change. The following discussion is only a summary of the general rules
applicable to Stock Options.
The tax consequences of a Stock Option depend on whether the Stock Option
is an ISO or a NQSO. An optionee will not recognize income at the time of a
grant or exercise of an ISO and the Company may not deduct the related expense
at those times. However, for purposes of the alternative minimum tax, the
difference between the exercise price and the fair market value of the stock
will be included in alternative minimum tax income. If, however, an optionee
sells stock acquired pursuant to the exercise of an ISO in the year in which
the option is exercised, the maximum amount that will be included as
alternative minimum tax income is the gain on the disposition of the ISO stock.
The optionee has a taxable event only upon a later sale or disposition of the
stock acquired pursuant to the exercise of the ISO. The tax treatment of the
disposition of the stock will depend on when the optionee disposes of the
stock. An optionee who sells stock acquired pursuant to the exercise of an ISO
within one year from the date of exercise or within two years of the date of
grant will recognize ordinary income equal to the difference between the ISO's
exercise price and the lesser of the fair market value of the stock on the date
of exercise or the date of disposition and capital gain to the extent that the
amount received on disposition exceeds such fair market value on the date of
exercise. To the extent that an optionee recognizes ordinary income pursuant to
the preceding sentence, the Company is allowed a deduction for federal income
tax purposes in like amount in the year of disposition. The Company is not
allowed a deduction regarding the portion of the optionee's income taxed as a
capital gain. An optionee who disposes of stock after a date that is both two
years after the grant and one year after its exercise will recognize capital
gain equal to the difference between the amount received on disposition and the
adjusted basis in the stock. The capital gain will be long term as the
optionee's holding period in the stock begins at the exercise of the option.
A different set of rules govern NQSOs. There are no federal income tax
consequences to the optionee or the Company upon the grant of NQSOs. Upon
exercise
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of a NQSO, the optionee will recognize ordinary income in the amount by which
the fair market value of the Stock Option exceeds the exercise price of the
Stock Option. The Company is allowed a deduction for federal income tax
purposes equal to the amount of ordinary income recognized by the optionee at
the time of exercise of NQSOs. The optionee's holding period for purposes of
determining whether any subsequently realized gain or loss will be long-term or
short-term will begin at the time the optionee recognizes ordinary income. If,
at the time of issuance of the option shares, the optionee is subject to the
restrictions of Section 16(b) of the Exchange Act, then the optionee generally
will recognize ordinary income as of the later of (i) the date of exercise, or
(ii) the expiration of six months from the date of option grant, based upon the
difference between the fair market value of the option shares at such time and
the exercise price.
Section 162(m). Under Section 162(m) of the Code, the Company may be
precluded from claiming a federal income tax deduction for total remuneration
in excess of $1,000,000 paid to the chief executive officer or to any of the
other four most highly compensated officers in any one year. An exception does
exist, however, for "performance-based" remuneration, including amounts
received upon the exercise of Stock Options pursuant to a plan approved by
shareholders that meets certain requirements contained in Section 162(m) of the
Code. This deduction limitation is not applicable to ISOs unless the optionee
exercises the ISO more than three months after he or she terminates employment
or disposes of the shares before the specified holding periods have expired.
The Option Plan is intended to make option grants thereunder meet the
requirements of "performance-based" remuneration.
Vote Required for Approval
The proposal to approve the issuance and grants of up to 250,000
additional shares of Common Stock under the Stock Option Plan requires the
affirmative vote of a majority of the votes cast at the Annual Meeting.
The Board of Directors unanimously recommends a vote for Proposal Three.
OTHER MATTERS
The Board of Directors does not know of any other matters which may be
brought before the Annual Meeting. However, if any such other matters are
properly presented for such action, it is the intention of the persons named in
the accompanying form of proxy to vote the shares represented thereby in
accordance with the direction of the Board of Directors.
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MISCELLANEOUS
Solicitation of Proxies
This Proxy Solicitation is being made by the Board of Directors and the
cost of the solicitation will be borne by the Company. In addition to the use
of the mails, proxies may be solicited personally or by telephone or telegraph
by Executive Officers, Directors and employees of the Company who will not be
specially compensated for such solicitation activities. Arrangements may be
made with brokerage houses and other custodians, nominees and fiduciaries for
forwarding solicitation materials to the beneficial owners of shares held of
record by such persons and the Company will reimburse such persons for their
reasonable expenses incurred in such activity.
It is important that proxies be returned promptly. Shareholders who do not
expect to attend the Annual Meeting in person are urged to mark, sign and date
the accompanying proxy and mail it in the enclosed return envelope, which
requires no postage if mailed in the United States, so that their votes can be
recorded.
Shareholder Proposals
Shareholder proposals intended to be presented at the next Annual Meeting
of Shareholders of the Company, including recommendations for nominees for
Directors, must be received by the Company by February 10, 2000 in order to be
considered for inclusion in the Company's proxy statement relating to such
Annual Meeting. Reference is made to Rule 14a-8 under the Exchange Act, for
information concerning the content and form of such proposal and the manner in
which such proposal must be made.
Annual Report on Form 10-KSB
A copy of the Company's Annual Report on Form 10-KSB and Form 10-KSB/A for
the fiscal year ended December 31, 1998 accompanies this Proxy Statement. An
additional copy of the Company's Annual Report on Form 10-KSB and Form 10-KSB/A
for the fiscal year ended December 31, 1998 will be sent without charge to
shareholders to whom this Proxy Statement is mailed upon written request to the
Secretary, USABanc.com, Inc., One Lincoln Plaza, 1535 Locust Street,
Philadelphia, Pennsylvania 19102.
By Order of the Board Directors
June 10, 1999 /s/ Kenneth L. Tepper
-------------------------------------
Kenneth L. Tepper
President and Chief Executive Officer
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Annex A
USABanc.com, Inc.
STOCK OPTION PLAN
Approved by the Board of Directors May 19, 1999, subject to shareholder
approval
1. Purpose. USABanc.com, Inc. (the "Company") hereby adopts the amended
and restated USABanc.com, Inc. Stock Option Plan (the "Plan"). The Plan is
intended to recognize the contributions made to the Company by officers and
other employees of the Company or any Affiliate (as defined below),
non-employee members of the Board of Directors (as defined below) and
independent contractors and other consultants of the Company and its
Affiliates, to provide such persons with additional incentive to devote
themselves to the future success of the Company or an Affiliate, and to improve
the ability of the Company or an Affiliate to attract, retain, and motivate
individuals upon whom the Company's sustained growth and financial success
depend, by providing such persons with an opportunity to acquire or increase
their proprietary interest in the Company through receipt of rights to acquire
the Company's Class A Common Stock, par value $1.00 per Share (the "Common
Stock").
2. Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Affiliate" means a corporation which is a parent corporation or a
subsidiary corporation with respect to the Company within the meaning of Section
424(e) or (f) of the Code.
"Award Limit" means 125,000 shares of Common Stock.
"Board of Directors" means the Board of Directors of the Company.
"Change of Control" shall have the meaning as set forth in Section 10 of
the Plan.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" shall have the meaning set forth in Section 3 of the Plan.
"Company" means USABanc.com, Inc., a Pennsylvania business corporation.
"Disability" shall have the meaning set forth in Section 22(e)(3) of the
Code.
"Disinterested Director" shall mean a member of the Board of Directors
of the Company who is "disinterested" within the meaning of Rule 16b-3.
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"Fair Market Value" shall have the meaning set forth in Subsection 8(b)
of the Plan.
"Family Transfer" shall mean a transfer described in Subsection 8(f) of
the Plan.
"Grantee" shall mean a person to whom an Option has been granted
pursuant to the Plan.
"ISO" means an Option granted under the Plan which is intended to
qualify as an "incentive stock option" within the meaning of Section 422(b) of
the Code.
"Non-qualified Stock Option" means an Option granted under the Plan
which is not intended to qualify, or otherwise does not qualify, as an
"incentive stock option" within the meaning of Section 422(b) of the Code.
"Option" means either an ISO or a Non-qualified Stock Option granted
under the Plan.
"Optionee" means a person to whom an option has been granted under the
Plan, which Option has not been exercised and has not expired or terminated.
"Option Document" means the document described in Section 8 or Section 9
of the Plan, as applicable, which sets forth the terms and conditions of each
grant of Options.
"Option Price" means the price at which Shares may be purchased upon
exercise of an Option, as calculated pursuant to Subsection 8(b) or Subsection
9(a) of the Plan.
"Plan" means the Amended and Restated USABanc.com, Inc. Stock Option
Plan, as amended from time to time.
"Rule 16b-3 means Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended.
"Section 16 Officer" means any person who is an "officer" within the
meaning of Rule 16a-l (f) promulgated under the Securities Exchange Act of 1934,
as amended, or any successor rule.
"Shares" means the shares of Common Stock of the Company which are the
subject of Options under the Plan.
3. Administration of the Plan. The Plan shall be administered by the Board
of Directors of the Company if all members of the Board of Directors are
Disinterested Directors; provided, however, that if all members of the Board of
Directors are Disinterested Directors, the Board of Directors may designate a
committee or committee(s) of the Board of Directors composed of two or more
directors to administer the Plan with respect to the Section 16 Officers,
directors, and/or key employees. If any of
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the members of the Board of Directors are not Disinterested Directors, the
Board of Directors shall (i) designate a committee composed of two or more of
directors, each of whom is a Disinterested Director (the "Disinterested
Director Committee"), to operate and administer the Plan in its stead, or (ii)
designate two committees to operate and administer the Plan in its stead, a
Disinterested Director Committee to operate and administer the Plan with
respect to the Company's Section 16 Officers and the directors who are not
members of the Disinterested Director Committee, and another committee composed
of two or more directors (which may include directors who are not Disinterested
Directors) to operate and administer the Plan with respect to persons other
than Section 16 Officers or directors or (iii) designate a Disinterested
Director Committee to operate and administer the Plan with respect to the
Company's Section 16 Officers and directors (other than those directors serving
on the Disinterested Director Committee) and itself operate and administer the
Plan with respect to persons other than Section 16 Officers or directors. Any
of such committees designated by the Board of Directors, and the Board of
Directors itself in its administrative capacity with respect to the Plan, is
referred to as the "Committee." With the exception of the timing of grants of
Options, the price at which Shares may be purchased and the number of Shares
covered by Options granted to each member of the Disinterested Director
Committee, all of which shall be determined pursuant to Section 9, the other
provisions set forth herein, as it pertains to members of the Disinterested
Director Committee, shall be administered by the Board of Directors.
Notwithstanding the foregoing, in the event the Board of Directors does not
have at least two Disinterested Directors, the Plan shall be administered by a
committee consisting of those members of the Board of Directors who are
designated by the Board of Directors to serve in that capacity.
(a) Meetings. The Committee shall hold meetings at such times and places
as it may determine, shall keep minutes of its meetings, and shall adopt, amend
and revoke such rules or procedures as it may deem proper; provided, however,
that it may take action only upon the agreement of a majority of the whole
Committee. Any action which the Committee shall take through a written
instrument signed by a majority of its members shall be as effective as though
it had been taken at a meeting duly called and held. The Committee shall report
all actions taken by it to the Board of Directors.
(b) Grants. Except with respect to options granted to non-employee
members of the Board of Directors pursuant to Section 9, the Committee shall
from time to time at its discretion direct the Company to grant Options
pursuant to the terms of the Plan. The Committee shall have plenary authority
to (i) determine the persons to whom, the times at which, and the price at
which Options shall be granted, (ii) determine the type of Option to be granted
and the number of Shares subject thereto and (iii) approve the form and terms
and conditions of the Option Documents; all subject, however, to the express
provisions of the Plan. In making such determinations, the Committee may take
into
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account the nature of the Grantee's services and responsibilities, the
Grantee's present and potential contribution to the Company's success and such
other factors as it may deem relevant. Notwithstanding the foregoing, grants of
Options to non-employee members of the Board of Directors under Section 9 shall
be made exclusively in accordance with the provisions of Section 9. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Option granted under it shall be final, binding and conclusive.
(c) Exculpation. No member of the Committee shall be personally liable
for monetary damages as such for any action taken or any failure to take any
action in connection with the administration of the Plan or the granting of
Options thereunder unless (i) the member of the Committee has breached or
failed to perform the duties of his office under Subchapter B of Chapter 17 of
the Pennsylvania Business Corporation Law of 1988, as amended, and (ii) the
breach or failure to perform constitutes self-dealing, willful misconduct or
recklessness; provided, however, that the provisions of this Subsection 3(c)
shall not apply to the responsibility or liability of a member of the Committee
pursuant to any criminal statute or to the liability of a member of the
Committee for the payment of taxes pursuant to local, state or federal law.
(d) Indemnification. Service on the Committee shall constitute service
as a member of the Board of Directors of the Company. Each member of the
Committee shall be entitled, without further action on his part, to
indemnification from the Company and limitation of liability to the fullest
extent provided by applicable law and by the Company's Articles of
Incorporation and/or By-laws in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Options thereunder in which he or she may be involved by reason of
his or her being or having been a member of the Committee, whether or not he or
she continues to be such member of the Committee at the time of the action,
suit or proceeding.
4. Options under the Plan. Options under the Plan may be in the form of a
Non-qualified Stock Option, an ISO, or a combination thereof, at the discretion
of the Committee, except as provided in Section 9.
5. Eligibility. All officers, other employees, members of the Board of
Directors, independent contractors and consultants of the Company or an
Affiliate shall be eligible to receive Non-qualified Stock Options hereunder.
Only employees (as determined in accordance with the withholding tax rules of
Section 3401(c) of the Code) are eligible to receive ISOs.
6. Shares Subject to Plan. The aggregate maximum number of Shares for
which Options may be granted pursuant to the Plan is 771,870, subject to
adjustment as provided in Section 11 of the Plan. The Shares shall be issued
from authorized and
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unissued Common Stock or Common Stock held in or hereafter acquired for the
treasury of the Company. If an Option terminates or expires without having been
fully exercised for any reason, the Shares for which the Option was not
exercised may again be the subject of one or more Options granted pursuant to
the Plan. The maximum number of shares which may be subject to Options granted
under the Plan to any individual in any fiscal year shall not exceed the Award
Limit. To the extent required by Section 162(m) of the Code, shares subject to
options which are canceled continue to be counted against the Award Limit and
if, after the grant of an Option, the price of shares subject to such Option is
reduced, the transaction is treated as a cancellation of the Option and a grant
of a new Option, and both the Option deemed to be canceled and the Option
deemed to be granted are counted against the Award Limit.
7. Term of the Plan. The Plan, as amended and restated, is effective as of
May 19, 1999, the date on which it was adopted by the Board of Directors,
subject to the approval (within twelve (12) months before or after the date the
Plan is adopted) by a majority of the votes cast at a duly called meeting of
the shareholders at which a quorum representing a majority of all outstanding
voting stock of the Company is, either in person or by proxy, present and
voting, by the unanimous consent in writing of the shareholders or by a method
and in a degree that would be treated as adequate under applicable state law in
the case of an action requiring shareholder approval within twelve months of
the date the Plan is adopted. No Option may be granted under the Plan after the
earlier of May 18, 2009 or ten (10) years from the date the Plan is approved by
the shareholders.
8. Option Documents and Terms. Each Option granted under the Plan shall be
a Non-qualified Stock Option unless the option shall be specifically designated
at the time of grant to be an ISO for federal income tax purposes. To the
extent any Option designated an ISO is determined for any reason not to qualify
as an incentive stock option within the meaning of Section 422 of the Code,
such Option shall be treated as a Non-qualified Stock Option for all purposes
under the provisions of the Plan. Options granted pursuant to the Plan shall be
evidenced by the Option Documents in such form as the Committee shall from time
to time approve, which Option Documents shall comply with and be subject to the
following terms and conditions and such other terms and conditions as the
Committee shall from time to time require which are not inconsistent with the
terms of the Plan. However, the provisions of this Section 8 shall not be
applicable to Options granted to non-employee members of the Board of Directors
under Section 9, except as otherwise provided in Subsection 9(c).
(a) Number of Option Shares. Each Option Document shall state the number
of Shares to which it pertains. An Optionee may receive more than one option,
which may include Options which are intended to be ISO's and Options which are
not intended to be ISO's, but only on the terms and subject to the conditions
and restrictions of the Plan.
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(b) Option Price. Each Option Document shall state the Option Price
which shall in all events be at least 100%; of the Fair Market Value of the
Shares on the date the Option is granted as determined by the Committee in
accordance with this Subsection 8(b); provided, however, that if an ISO is
granted to an Optionee who then owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or an Affiliate,
then the Option Price shall be at least 110% of the Fair Market Value of the
Shares on the date the Option is granted. If the Common Stock is traded in a
public market, then the Fair Market Value per share shall be, if the Common
Stock is listed on a national securities exchange or included in the NASDAQ
National Market System, the last reported sale price thereof on the relevant
date, or, if the Common Stock is not so listed or included, the mean between the
last reported "bid" and "asked" prices thereof on the relevant date, as reported
on NASDAQ or, if not so reported, as reported by the National Daily Quotation
Bureau, Inc. or as reported in a customary financial reporting service, as
applicable and as the Committee determines acting in good faith.
(c) Exercise. No Option shall be deemed to have been exercised prior to
the receipt by the Company of written notice of such exercise and of payment in
full of the Option Price for the Shares to be purchased. Each such notice shall
specify the number of Shares to be purchased and shall (unless the Shares are
covered by a then current registration statement or a Notification under
Regulation A under the Act), contain the Optionee's acknowledgment in form and
substance satisfactory to the Company that (a) such Shares are being purchased
for investment and not for distribution or resale (other than a distribution or
resale which, in the opinion of counsel satisfactory to the Company, may be made
without violating the registration provisions of the Act) , (b) the Optionee has
been advised and understands that (i) the Shares have not been registered under
the Act and are "restricted securities" within the meaning of Rule 144 under the
Act and are subject to restrictions on transfer and (ii) the Company is under no
obligation to register the Shares under the Act or to take any action which
would make available to the Optionee any exemption from such registration, (c)
such Shares may not be transferred without compliance with all applicable
federal and state securities laws, and (d) an appropriate legend referring to
the foregoing restrictions on transfer and any other restrictions imposed under
the Option Documents may be endorsed on the certificates. Notwithstanding the
foregoing, if the Company determines that issuance of Shares should be delayed
pending (A) registration under federal or state securities laws, (B) the receipt
of an opinion of counsel satisfactory to the Company that an appropriate
exemption from such registration is available, (C) the listing or inclusion of
the Shares on any securities exchange or an automated quotation system or (D)
the consent or approval of any governmental regulatory body whose consent or
approval is necessary in connection with the issuance of such Shares, the
Company may defer exercise of any option granted hereunder until any of the
events described in this sentence has occurred.
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<PAGE>
(d) Medium of Payment. An Optionee shall pay for Shares (i) in cash,
(ii) by certified or cashier's check payable to the order of the Company, or
(iii) by such other mode of payment as the Committee may approve, including
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. Furthermore, the Committee may provide in an
Option Document that payment may be made in whole or in part in shares of the
Company's Common Stock held by the Optionee. If payment is made in whole or in
part in shares of the Company's Common Stock, then the Optionee shall deliver to
the Company certificates registered in the name of such Optionee representing
the shares owned by such Optionee, free of all liens, claims and encumbrances of
every kind and having an aggregate Fair Market Value on the date of delivery
that is at least as great as the Option Price of the Shares (or relevant portion
thereof) with respect to which such Option is to be exercised by the payment in
shares of Common Stock, endorsed in blank or accompanied by stock powers duly
endorsed in blank by the Optionee. In the event that certificates for shares of
the Company's Common Stock delivered to the Company represent a number of shares
of Common Stock in excess of the number of shares of Common Stock required to
make payment for the Option Price of the Shares (or relevant portion thereof)
with respect to which such Option is to be exercised by payment in shares of
Common Stock, the stock certificate issued to the Optionee shall represent (i)
the Shares in respect of which payment is made, and (ii) such excess number of
shares of Common Stock. Notwithstanding the foregoing, the Committee may impose
from time to time such limitations and prohibitions on the use of shares of the
Common Stock to exercise an option as it deems appropriate.
(e) Termination of Options.
(i) No Option shall be exercisable after the first to occur of the
following:
(A) Expiration of the Option term specified in the Option
Document;
(B) Ten (10) years from the date of grant, or five years from
the date of grant of an ISO if the Optionee on the date of grant owns, directly
or by attribution under Section 424(d) of the Code, shares possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of an Affiliate;
(C) Expiration of three months from the date the Optionee's
employment or service with the Company or its Affiliates terminates for any
reason;
(D) Except to the extent otherwise provided in an Optionee's
Option Document, a finding by the Committee, after full consideration of the
facts presented on behalf of both the Company and the Optionee, that the
Optionee has breached his or her employment or service contract with the Company
or an Affiliate, or has been engaged in disloyalty to the Company or an
Affiliate, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his or
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<PAGE>
her employment or service, or has disclosed trade secrets or confidential
information of the Company or an Affiliate. In such event, in addition to
immediate termination of the Option, the Optionee shall automatically forfeit
all Shares for which the Company has not yet delivered the share certificates
upon refund by the Company of the Option Price. Notwithstanding anything herein
to the contrary, the Company may withhold delivery of share certificates
pending the resolution of any inquiry that could lead to a finding resulting in
a forfeiture;
(E) The date, if any, set by the Board of Directors as an
accelerated expiration date in the event of the liquidation or dissolution of
the Company; or
(F) The occurrence of such other event or events as may be set
forth in the Option Document as causing an accelerated expiration of the Option.
(ii) Notwithstanding the foregoing, the Committee may extend the
period during which all or any portion of an Option may be exercised to a date
no later than the option term specified in the Option Document pursuant to
Subsection 8(e)(i)(A), or to a date that is no later than five years from the
date the Option would have otherwise terminated, whichever date occurs first,
provided that any change pursuant to this Subsection 8(e)(ii) which would cause
an ISO to become a Non-qualified Stock Option may be made only with the consent
of the Optionee.
(iii) Notwithstanding anything to the contrary contained in the Plan
or an Option Document, an ISO shall be treated as a Non-qualified Stock Option
to the extent such ISO is exercised at any time after the expiration of the time
period permitted under the Code for the exercise of an ISO.
(f) Transfers. No Option granted under the Plan may be transferred,
except by will or by the laws of descent and distribution. During the lifetime
of the person to whom an option is granted, such Option may be exercised only by
such person. Notwithstanding the foregoing, a Non-qualified Stock option may be
transferred pursuant to the terms of a (i) "qualified domestic relations order,"
within the meaning of Sections 401(a)(13) and 414(p) of the Code or within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, as
amended, and (ii) the Committee may provide, in an Option Document, that an
Optionee may transfer Options to his or her children, grandchildren or spouse or
to one or more trusts for the benefit of such family members or to partnerships
in which such family members are the only partners (a "Family Transfer"),
provided that the Optionee receives no consideration for a Family Transfer and
the Option Documents relating to Options transferred in a Family Transfer
continue to be subject to the same terms and conditions that were applicable to
such options immediately prior to the Family Transfer.
(g) Holding Period. No Option granted under the Plan may be exercised
before the later of (i) the expiration of six months from the date of grant or
(ii) the expiration of such greater period of time as may be specified in the
Option Documents.
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<PAGE>
(h) Limitation on ISO Grants. To the extent that the aggregate Fair
Market Value of stock with respect to which ISOs issued under the Plan and
incentive stock options issued under any other incentive stock option plan of
the Company or its Affiliates are exercisable for the first time by any
individual during any calendar year exceeds $100,000, such ISOs shall be treated
as Non-qualified Stock Options issued under the Plan. For purposes of this
subsection 8(h), the Fair Market Value of stock shall be determined as of the
date of grant of the ISO or other incentive stock option.
(i) Other Provisions. Subject to the provisions of the Plan, the Option
Documents shall contain such other provisions including, without limitation,
provisions authorizing the Committee to accelerate the exercisability of all or
any portion of an Option granted pursuant to the Plan, additional restrictions
upon the exercise of the option or additional limitations upon the term of the
Option, as the Committee shall deem advisable.
(j) Amendment. Subject to the provisions of the Plan, the Committee
shall have the right to amend option Documents issued to an Optionee, subject to
the Optionee's consent if such amendment is not favorable to the Optionee,
except that the consent of the Optionee shall not be required for any amendment
made pursuant to Subsection 8(e)(i)(E) or Section 10 of the Plan, as applicable.
9. Special Provisions Relating to Grants of Options to non-employee
members of the Board of Directors. Options granted pursuant to the Plan to
non-employee members of the Board of Directors shall be granted in accordance
with the terms and conditions set forth in this Section 9. Options granted
pursuant to this Section 9 shall be evidenced by Option Documents in such form
as the Committee shall from time to time approve, which Option Documents shall
comply with and be subject to the following terms and conditions and such other
terms and conditions as the Committee shall from time to time require which are
not inconsistent with the terms of the Plan.
(a) Timing of Grants; Number of Shares Subject of Options;
Exercisability of Options; Option Price. Each non-employee member of the Board
of Directors may be granted options to purchase Shares at such time and in such
amount as the Committee determines in its complete discretion; provided,
however, that grants to members of the Committee shall be made, if at all,
pursuant to a determination of a majority of the members of the entire Board of
Directors. Each such Option shall be a Non-qualified Stock Option. The Option
Price shall be at Fair Market Value with respect to all other Options granted
under this Section 9.
(b) Termination of Options Granted Pursuant to Section 9. All Options
granted pursuant to this Section 9 shall be exercisable until the first to occur
of the following:
(i) Expiration of ten (10) years from the date of grant;
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<PAGE>
(ii) Expiration of three (3) months from the date the Optionee's
service as a member of the Board of Directors terminates for any reason other
than Disability or death; provided, however that if the Optionee dies within
three years following the date the Optionee's service as a member of the Board
of Directors terminates as a result of disability, retirement or resignation
without having fully exercised the option, the Optionee's executors,
administrators, legatees or distributees of his or her estate shall have the
right to exercise the Option during the twelve month period following Optionee's
death, but only to the extent such Option could have been exercised by the
Optionee had the optionee continued to serve as a non-employee member of the
Board of Directors during such period; or
(iii) Expiration of one (1) year from the date the Optionee's
service as a director terminates due to the Optionee's Disability or death.
(c) Applicability of Provisions of Section 8 to Options Granted Pursuant
to Section 9. The following provisions of Section 8 shall be applicable to
options granted pursuant to this Section 9: Subsection 8(a)(provided that all
Options granted pursuant to this Section 9 shall be Non-qualified Stock
Options); the last sentence of Subsection 8(b); Subsection 8(c); Subsection 8(d)
(provided that Option Documents relating to Options granted pursuant to this
Section 9 shall provide that payment may be made in whole or in part in shares
of Company Common Stock); Subsection 8(f); and Subsection 8(i).
(d) Election to Waive Grant. Any person who would otherwise be granted
an Option under this Section 9 shall be permitted to elect not to receive such
Option (in which case such person will receive nothing in lieu thereof) and may
also revoke any previous election not to receive such Option at any time prior
to the date on which such Option would, but for an election under this
Subsection 9(d), be granted. In either case, the election or the revocation of
the election will be effective only for Options under this Section 9 that
otherwise were scheduled to be made after the date of the election.
10. Change of Control. In the event of a Change of Control, the Committee
may take whatever action it deems necessary or desirable with respect to the
Options outstanding (other than Options granted pursuant to Section 9),
including, without limitation, accelerating the expiration or termination date
in the respective Option Documents to a date no earlier than thirty (30) days
after notice of such acceleration is given to the Optionees. In addition to the
foregoing, in the event of a Change of Control, Options granted pursuant to the
Plan and held by Optionees at the time of a Change of Control shall become
immediately exercisable in full. Any amendment to this Section 10 which
diminishes the rights of Optionees, other than the acceleration of the
expiration or termination date to a date no earlier than thirty (30) days after
notice of such acceleration, shall not be effective with respect to Options
outstanding at the time of adoption of such amendment, whether or not such
outstanding Options are then exercisable.
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<PAGE>
A "Change of Control" shall be deemed to have occurred upon the earliest
to occur of the following events: (i) the date the shareholders of the Company
(or the Board of Directors, if shareholder action is not required) approve a
plan or other arrangement pursuant to which the Company will be dissolved or
liquidated, or (ii) the date the shareholders of the Company (or the Board of
Directors, if shareholder action is not required) approve a definitive
agreement to sell or otherwise dispose of substantially all of the assets of
the Company, or (iii) the date the shareholders of the Company (or the Board of
Directors, if shareholder action is not required) and the shareholders of the
other constituent corporation (or its board of directors if shareholder action
is not required) have approved a definitive agreement to merge or consolidate
the Company with or into such other corporation, other than, in either case, a
merger or consolidation of the Company in which holders of shares of the
Company's Common Stock immediately prior to the merger or consolidation will
have at least a majority of the ownership of common stock of the surviving
corporation (and, if one class of common stock is not the only class of voting
securities entitled to vote on the election of directors of the surviving
corporation, a majority of the voting power of the surviving corporation's
voting securities) immediately after the merger or consolidation, which common
stock (and, if applicable, voting securities) is to be held in the same
proportion as such holders, ownership of Common Stock of the Company
immediately before the merger or consolidation, or (iv) the date any entity,
person or group, within the meaning of Section 13 (d) (3) or Section 14 (d) (2)
of the Securities Exchange Act of 1934, as amended, other than the Company or
any of its subsidiaries or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its subsidiaries shall have
become the beneficial owner of, or shall have obtained voting control over,
more than fifty percent (50%) of the outstanding Shares of the Company's Common
Stock, or (v) the first day after the date this Plan is effective when
individuals who are Incumbent Directors (as defined below) cease to constitute
a majority of the members of the Board of Directors ("Incumbent Directors" for
this purpose being the members of the Board of Directors on the date of the
adoption of the Plan, provided that any persons becoming a member of the Board
of Directors subsequent to such date whose election or nomination for election
was supported by two-thirds of the members of the Board of Directors who then
comprised the Incumbent Directors shall be considered to be an Incumbent
Director).
11. Adjustments on Changes in Capitalization.
(a) In the event that the outstanding Shares are changed by reason of a
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination or exchange of shares and the like (not including the
issuance of Common Stock on the conversion of other securities of the Company
which are outstanding on the date of grant and which are convertible into Common
Stock) or dividends payable in Shares, an equitable adjustment shall be made by
the Committee in the aggregate number
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<PAGE>
of shares available under the Plan and in the number of Shares and price per
Share subject to outstanding Options. Unless the Committee makes other
provisions for the equitable settlement of outstanding Options, if the Company
shall be reorganized, consolidated, or merged with another corporation, or if
all or substantially all of the assets of the Company shall be sold or
exchanged, an Optionee shall at the time of issuance of the stock under such
corporate event be entitled to receive upon the exercise of his or her Option
the same number and kind of shares of stock or the same amount of property,
cash or securities as he or she would have been entitled to receive upon the
occurrence of any such corporate event as if he or she had been, immediately
prior to such event, the holder of the number of shares covered by his or her
Option.
(b) Any adjustment under this Section 11 in the number of Shares
subject to Options shall apply proportionately to only the unexercised portion
of any Option granted hereunder. If fractions of a Share would result from any
such adjustment, the adjustment shall be revised to the next lower whole number
of Shares.
(c) The Committee shall have authority to determine the adjustments to
be made under this Section, and any such determination by the Committee shall be
final, binding and conclusive.
12. Amendment of the Plan. The Board of Directors of the Company may amend
the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Directors of the Company may not change the class of
individuals eligible to receive an ISO or increase the maximum number of shares
as to which Options may be granted without obtaining approval, within twelve
months before or after such action, by vote of a majority of the votes cast at
a duly called meeting of the shareholders at which a quorum representing a
majority of all outstanding voting stock of the Company is, either in person or
by proxy, present and voting on the matter, by the unanimous consent in writing
of the shareholders, or by a method and in a degree that would be treated as
adequate under applicable state law in the case of an action requiring
shareholder approval. In addition, the provisions of Section 9 that determine
(i) which directors shall be granted Options pursuant to Section 9; (ii) the
amount of Shares subject to Options granted pursuant to Section 9; (iii) the
price at which shares subject to Options granted pursuant to Section 9 may be
purchased and (iv) the timing of grants of Options pursuant to Section 9 shall
not be amended more than once every six months, other than to comport with
changes in the Code or the Employee Retirement Income Security Act of 1974, as
amended. No amendment to the Plan shall adversely affect any outstanding
Option, however, without the consent of the Grantee.
13. No Commitment to Retain. The grant of an Option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
express or implied,
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<PAGE>
on the part of the Company or any Affiliate to retain the Grantee in the employ
of the Company or an Affiliate and/or as a member of the Company's Board of
Directors or in any other capacity.
14. Withholding of Taxes. Whenever the Company proposes or is required to
deliver or transfer Shares in connection with the exercise of an Option, the
Company shall have the right to (a) require the recipient to remit or otherwise
make available to the Company an amount sufficient to satisfy any federal,
state and/or local withholding tax requirements prior to the delivery or
transfer of any certificate or certificates for such Shares or (b) take
whatever other action it deems necessary to protect its interests with respect
to tax liabilities. The Company's obligation to make any delivery or transfer
of Shares shall be conditioned on the Grantee's compliance, to the Company's
satisfaction, with any withholding requirement.
15. Interpretation. The Plan is intended to enable transactions under the
Plan with respect to directors and officers (within the meaning of Section
16(a) under the Securities Exchange Act of 1934, as amended) to satisfy the
conditions of Rule 16b-3; to the extent that any provision of the Plan would
cause a conflict with such conditions or would cause the administration of the
Plan as provided in Section 3 to fail to satisfy the conditions of Rule 16b-3,
such provision shall be deemed null and void to the extent permitted by
applicable law. This section shall not be applicable if no class of the
Company's equity securities is then registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
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<PAGE>
PLEASE MARK VOTES REVOCABLE PROXY
[X] AS IN THIS EXAMPLE USABanc.com, Inc.
This Proxy is Solicited on Behalf of the Board of Directors. The
undersigned hereby appoints Maureen P. Steady and Brian M. Hartline, and each of
them, as proxies, each with the full power of substitution, and hereby
authorizes them to vote as designated below, all the shares of Common Stock of
USABanc.com, Inc. held of record by the undersigned on June 1, 1999, or to
otherwise act, at the Annual Meeting of Shareholders to be held on July 15,
1999, or any adjournment or postponement thereof
With- For All
For hold Except
1. ELECTION OF DIRECTORS [ ] [ ] [ ]
George M. Laughlin
Kenneth L. Tepper
Clarence L. Rader
Jeffrey A. D'Ambrosio
George C. Fogwell, III
John A. Gambone
Wayne O. Leevy
Zeev Shenkman
Carol J. Kauffman
INSTRUCTION: To withhold authority to vote for any individual nominee,
mark "For All Except" and write that nominee's name in the
following space:_____________________________________________
2. Proposal to ratify the appointment
of Grant Thornton, LLP as the independent
auditors of USABanc.com, Inc. for fiscal year 1999. For Against Abstain
[ ] [ ] [ ]
3. Proposal to approve an amendment to the
USABanc.com, Inc. Stock Option Plan to increase
the number of shares of Common Stock issuable
thereunder by 250,000 shares For Against Abstain
[ ] [ ] [ ]
4. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before this Annual Meeting.
Please sign exactly as your name appears above. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign full corporate name by President or other authorized
person.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
PLEASE VOTE, SIGN, DATE, AND MAIL THE PROXY CARD TODAY
Please be sure to sign and date Date
this Proxy in the box below.
Shareholder sign above Co-holder (if any) sign above
- --------------------------------------------------------------------------------
Detach above card, sign, date, and mail in postage paid envelope provided.
USABanc.com, Inc.
PLEASE ACT PROMPTLY
SIGN, DATE, & MAIL YOUR PROXY CARD TODAY
