APPENDIX A
USBANCORP, INC.
1991 STOCK OPTION PLAN
August 23, 1991
USBANCORP, INC.
1991 STOCK OPTION PLAN
The purposes of the 1991 Stock Option Plan (the "Plan") are
to encourage eligible employees of USBANCORP, INC. (the
"Corporation") and its Subsidiaries, including Directors and
officers of the Corporation who are employees, to increase their
efforts to make the Corporation and each Subsidiary more
successful, to provide an additional inducement for such
employees to remain with the Corporation or a Subsidiary, to
reward such employees by providing an opportunity to acquire the
Common Stock, par value $2.50 per share, of the Corporation (the
"Common Stock") on favorable terms and to provide a means through
which the Corporation may attract able persons to enter the
employment of the Corporation or one of its Subsidiaries. For
purposes of the Plan, the term "Subsidiary" means any corporation
in an unbroken chain of corporations beginning with the
Corporation if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing at least
fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in the
chain.
SECTION 1
Administration
The Plan shall be administered by a Committee (the
"Committee") appointed from time to time by the Board of
Directors of the Corporation (the "Board") and consisting of no
fewer than three members of the Board, none of whom is, or was
within one year prior to becoming a member of the Committee,
eligible for selection as a person to whom stock options may be
granted pursuant to the Plan or any other plan of the Corporation
or any of its affiliates (as "affiliates" is defined in
regulations of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
entitling the participants therein to acquire stock or stock
options of the Corporation or any of its affiliates. If at any
time a member of the Committee would not be eligible for initial
appointment to the Committee, said member shall be deemed to have
resigned from the Committee. The Board may at any time, without
cause, remove any person from the Committee by written notice to
such person. Any member of the Committee may resign by written
notice to the Board.
The Committee shall interpret the Plan and prescribe such
rules, regulations and procedures in connection with the
operations of the Plan as it shall deem to be necessary and
advisable for the administration of the Plan consistent with the
purposes of the Plan.
The Committee shall keep records of any action taken at its
meetings. A majority of the Committee shall constitute a quorum
at any meeting and the acts 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, shall be the acts of the
Committee.
SECTION 2
Eligibility
Those salaried employees of the Corporation or any
Subsidiary with executive, managerial, technical or professional
responsibility, who may or may not be an officer or a member of
the Board of Directors, shall be eligible to receive stock
options as described herein.
Subject to the provisions of the Plan, the Committee shall
have full and final authority, in its discretion, to grant stock
options as described herein and to determine the employees to
whom stock options shall be granted and the number of shares to
be covered by each stock option. In determining the eligibility
of any employee, as well as in determining the number of shares
which may be acquired pursuant to each stock option, the
Committee shall consider the positions and the responsibilities
of the employee being considered, the nature and value to the
Corporation or a Subsidiary of his or her services, his or her
present and/or potential contribution to the success of the
Corporation or a Subsidiary and such other factors as the
Committee may deem relevant.
SECTION 3
Shares Available under the Plan
The aggregate number of shares of the Common Stock which may
be issued or delivered and as to which stock options may be
granted under the Plan is 128,000 shares. All of such shares are
subject to adjustment and substitution as set forth in Section 6.
If any stock option granted under the Plan is cancelled by
mutual consent or terminates or expires for any reason without
having been exercised in full, the number of shares subject to
such stock option shall again be available for purposes of the
Plan.
The shares which may be issued or delivered under the Plan
may be either authorized but unissued shares or treasury shares
or partly each, as shall be determined from time to time by the
Board.
SECTION 4
Grant of Stock Options
The Committee shall have authority, in its discretion, to
grant "incentive stock options" pursuant to Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), to grant
"non-statutory stock options" (stock options which do not qualify
under such Section 422 of the Code) or to grant both types of
stock options, provided that the exercise of one type of option
shall not affect the other type.
To the extent that the aggregate fair market value of stock
with respect to which incentive stock options are exercisable for
the first time by any individual during any calendar year (under
all plans of the individual's employer corporation and its parent
and subsidiary corporations) exceeds $100,000, such stock options
shall be treated as options which are non-statutory stock
options. The preceding sentence shall be applied by taking
options into account in the order in which they are granted.
Also, for this purpose, the fair market value of any stock shall
be determined as of the date the option with respect to such
stock was granted.
SECTION 5
Terms and Conditions of Stock Options
Stock options granted under the Plan shall be subject to the
following terms and conditions:
(A) The purchase price at which each stock option may
be exercised (the "option price") shall be such price as the
Committee, in its discretion, shall determine but shall not
be less than one hundred percent (100%) of the fair market
value per share of Common Stock which may be acquired
pursuant to the stock option on the date of grant, except
that in the case of an incentive stock option granted to an
employee who, immediately prior to such grant, owns stock
possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or
any Subsidiary (a "Ten Percent Employee"), the option price
shall not be less than 110% of such fair market value on the
date of grant. For purposes of this Section 5(A), the fair
market value of the Common Stock shall be determined as
provided in Section 5(H) below. Also, for purposes of this
Section 5(A), an individual (i) shall be considered as
owning not only shares of the Common Stock owned
individually, but also all shares that are at the time
owned, directly or indirectly, by or for the spouse,
ancestors, lineal descendants and brothers and sisters
(whether by the whole or half blood) of such individual and
(ii) shall be considered as owning proportionately any
shares owned, directly or indirectly, by or for any
corporation, partnership, estate or trust in which such
individual shall be a stockholder, partner or beneficiary.
(B) The option price shall be payable in full in any
one or more of the following ways:
(i) in cash; and/or
(ii) in shares of the Common Stock (which are
owned by the optionee free and clear of all liens and
other encumbrances and which are not subject to the
restrictions set forth in Section 7 below) having a
fair market value on the date of exercise of the stock
option, determined as provided in Section 5(H), equal
to the option price for the shares being purchased.
If the option price is paid in whole or in part in shares of
Common Stock, any portion of the option price representing a
fraction of a share shall be paid in cash. The date of exercise
of a stock option shall be determined under procedures
established by the Committee, and the option price shall be
payable at such time or times as the Committee, in its
discretion, shall determine. No shares shall be issued or
delivered upon exercise of a stock option until full payment of
the option price has been made. When full payment of the option
price has been made and subject to the restrictions set forth in
Section 7, the optionee shall be considered for all purposes to
be the owner of the shares with respect to which payment has been
made. Payment of the option price with shares shall not increase
the number of shares of Common Stock which may be issued or
delivered under the Plan as provided in Section 3.
(C) Subject to Section 8 hereof, stock options may be
exercised at the following rate. On or after the first
anniversary of the date on which the options were granted
(the "Grant Date"), one-third of such options may be
exercised (rounded upward to the nearest whole share). On
or after the second anniversary of the Grant Date two-thirds
of such options may be exercised (rounded upward to the
nearest whole share) minus the aggregate number of such
options previously exercised. On or after the third
anniversary of the Grant Date, the remainder of the options
may be exercised. No incentive stock option shall be
exercisable after the expiration of ten years (five years in
the case of a Ten Percent Employee) from the date of grant.
No non-statutory stock option shall be exercisable after the
expiration of ten years and six months from the date of
grant. Subject to this Section 5(C) and Sections 5(F), 5(G)
and 5(H) below, stock options may be exercised at such
times, in such amounts and subject to such restrictions as
shall be determined, in its discretion, by the Committee.
(D) No stock option rights shall be transferrable by
an optionee other than by will, or if an optionee dies
intestate, by the laws of descent and distribution of the
state of domicile of the optionee at the time of death, and
all stock options shall be exercisable during the lifetime
of an optionee only by the optionee.
(E) Unless otherwise determined by the Committee and
set forth in the stock option agreement referred to in
Section 5(G) or an amendment thereto:
(i) If the employment of an optionee who is not a
Disabled Optionee (as defined in Section 5(F) below) is
voluntarily terminated with the consent of the
Corporation or Subsidiary, any then outstanding stock
option held by such an optionee shall be exercisable
(to the extent exercisable on the date of termination
of employment) by such an optionee at any time prior to
the earlier of the expiration date of such stock option
or the date which is three months after the date of
termination of employment;
(ii) If an optionee retires under any retirement
plan of the Corporation or a Subsidiary, any then
outstanding stock option held by such an optionee shall
be exercisable in full (whether or not so exercisable
on the date of termination of employment) by such an
optionee at any time prior to the earlier of the
expiration date of such stock option or the date which
is three months after the date of termination of
employment;
(iii) If the employment of an optionee who is a
Disabled Optionee is terminated, any then outstanding
stock option held by such optionee shall be exercisable
in full (whether or not so exercisable on the date of
termination of employment) by the optionee at any time
prior to the earlier of the expiration date of such
stock option or the date which is one year after the
date of termination of employment;
(iv) The following transfers of employees will
not be treated as a termination of employment:
(a) A transfer of an employee between
Subsidiaries of the Corporation;
(b) A transfer of an employee from the
Corporation to one of its Subsidiaries;
or
(c) A transfer of an employee to the
Corporation from one of its
Subsidiaries.
(v) Following the death of an optionee during
employment, any outstanding stock option held by the
optionee at the time of death shall be exercisable in
full (whether or not so exercisable on the date of the
death of the optionee) by the person or persons
entitled to do so under the will of the optionee, or,
if the optionee shall fail to make testamentary
disposition of the stock option or shall die intestate,
by the legal representative of the optionee, at any
time prior to the expiration date of such stock option
or within one year after the date of death, whichever
is the shorter period. Following the death of an
optionee after termination of employment during a
period when a stock option is exercisable as provided
in clauses (i), (ii) and (iii) above, any outstanding
stock option held by the optionee at the time of death
shall, to the extent the stock option was exercisable
by such person or persons as would have been so
entitled had the employee died prior to the termination
of employment, so long as such exercise occurs prior to
the earlier of the expiration date of such stock option
or the date which is one year after the date of death.
(F) If the employment of an optionee terminates for
any reason other than voluntary termination with the consent
of the Corporation or a Subsidiary, disability, retirement
under any retirement plan of the Corporation or a
Subsidiary, or death, the rights of such optionee under any
then outstanding stock option shall terminate at the time of
such termination of employment. In addition, the Committee
may in its discretion immediately terminate all stock
options held by the optionee if an optionee (i) engages in
the operation or management of a business, whether as owner,
partner, officer, director, employee or otherwise and
whether during or after termination of employment, which is
in competition with the Corporation or any of its
Subsidiaries; (ii) uses for his own benefit or discloses to
a third party information pertaining to the Corporation or
any of its Subsidiaries which the Corporation or its
Subsidiaries consider to be confidential; or (iii)
interferes with the relationship between the Corporation or
a Subsidiary and its employees, suppliers or customers.
"Disabled Optionee" shall mean an individual who is
unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous
period of not less than 12 months.
Whether termination of employment is a voluntary
termination with the consent of the Corporation or a
Subsidiary; whether an optionee is a Disabled Optionee;
whether an optionee has engaged in the operation or
management of a business which is in competition with the
Corporation or any of its Subsidiaries; whether an optionee
uses for his own benefit or discloses to a third party
information pertaining to the Corporation or any of its
Subsidiaries which is confidential; and whether an optionee
has interfered with the relationship between the Corporation
or a Subsidiary and its employees, suppliers or customers
shall be determined in each case by the Committee, whose
determination shall be final and binding unless such
determination is demonstrably arbitrary and capricious.
(G) All stock options shall be confirmed by a stock
option agreement, or an amendment thereto, which shall be
executed by the Chief Executive Officer, the President (if
other than the Chief Executive Officer) or any Executive
Vice President on behalf of the Corporation and by the
employee to whom such stock options are granted.
(H) Fair market value of the Common Stock, so long as
the Common Stock trades in the over-the-counter market or on
a stock exchange, shall be computed by taking a weighted
average of the mean between the highest and lowest selling
prices per share of the Common Stock as quoted in such
reliable publication as the Committee, in its discretion,
may choose to rely upon, on the nearest date before and the
nearest date after the date as of which fair market value is
to be determined on which there are sales.
If at any time the Common Stock does not trade in the
over-the-counter market or on a stock exchange, the fair
market value of the Common Stock shall be determined by an
independent and experienced appraiser which is selected by
the Committee. Fair market value shall be determined
without regard to any restriction applicable to the Common
Stock other than a restriction which, by its terms, will
never lapse.
(I) The obligation of the Corporation to issue or
deliver shares of the Common Stock under the Plan shall be
subject to (i) the effectiveness of a registration statement
under the Securities Act of 1933, as amended, with respect
to such shares, if deemed necessary or appropriate by
counsel for the Corporation, (ii) the condition that the
shares shall have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange
on which such shares may then be listed and (iii) all other
applicable laws, regulations, rules and orders which may
then be in effect; provided, however, that if the Company
Stock shall be delisted from all national stock exchanges
and/or deregistered in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, the Corporation
shall have the obligation to issue and deliver shares of
Common Stock under the Plan upon the exercise of any then
outstanding stock option.
Subject to the foregoing provisions of this Section 5 and
the other provisions of the Plan, any stock option granted under
the plan shall be subject to such other terms and conditions as
the Committee shall deem advisable.
SECTION 6
Adjustment and Substitution of Shares
If a dividend or other distribution shall be declared upon
the Common Stock payable in shares of Common Stock, the number of
shares of Common Stock then subject to any outstanding stock
option and the number of shares which may be issued or delivered
under the Plan but are not then subject to an outstanding stock
option shall be adjusted by adding thereto the number of shares
which would have been distributable thereon if such shares had
been outstanding on the date fixed for determining the
stockholders entitled to receive such stock dividend or
distribution.
If the outstanding shares of Common Stock shall be changed
into or exchangeable for a different number or kind of shares of
stock or other securities of the Corporation or another
corporation, whether through reorganization, reclassification,
recapitalization, stock split-up, combination of shares, merger
or consolidation, then there shall be substituted for each share
of Common Stock subject to any then outstanding stock option and
for each share of Common Stock which may be issued or delivered
under the Plan but is not then subject to an outstanding stock
option, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock
shall be so changed or for which each such share shall be
exchangeable.
In the case of any adjustment or substitution as provided
for in this Section 6, the aggregate option price for all shares
subject to each then outstanding stock option prior to such
adjustment or substitution shall be the aggregate option price
for all shares of stock or other securities (including any
fraction) to which such shares shall have been adjusted or which
shall have been substituted for such shares. Any new option
price per share shall be carried to at least three decimal places
with the last decimal place rounded upwards to the nearest whole
number.
No adjustment or substitution provided for in this Section 6
shall require the Corporation to issue or sell a fraction of a
share or other security. Accordingly, all fractional shares or
other securities which result from any such adjustment or
substitution shall be eliminated and not carried forward to any
subsequent adjustment or substitution.
If any such adjustment or substitution provided for in this
Section 6 requires the approval of stockholders in order to
enable the Corporation to grant incentive stock options, then no
such adjustment or substitution shall be made without prior
stockholder approval. Notwithstanding the foregoing, in the case
of incentive stock options, if the effect of any such adjustment
or substitution would be to cause the stock option to fail to
continue to qualify as an incentive stock option or to cause a
modification, extension or renewal of such stock option within
the meaning of Section 424 of the Code, the Committee may elect
that such adjustment or substitution not be made but rather shall
use reasonable efforts to effect such other adjustment of each
then outstanding stock option as the Committee in its sole
discretion shall deem equitable and which will not result in any
disqualification, modification, extension or renewal (within the
meaning of Section 424 of the Code) of such incentive stock
option.
SECTION 7
Restrictions on Transfer of Certain Shares
Shares of Common Stock acquired under exercise of an option
pursuant to Section 5(B) (ii) by a person then subject to the
provision of Section 16 of the Exchange Act shall not be sold or
otherwise transferred prior to the expiration of six months after
the date of the grant of the option. The Corporation is
authorized to (i) retain the certificate(s) representing such
shares or place such certificates in the custody of its transfer
agent, (ii) place a restrictive legend on such shares, and/or
(iii) issue a stop transfer order to the transfer agent with
respect to such shares in order to enforce the transfer
restrictions of this Section.
SECTION 8
Acceleration of the Exercise Date of Stock Options
Notwithstanding any other provision of this Plan, all stock
options shall become exercisable upon the occurrence of any of
the events listed below whether or not such options are then
exercisable under the provisions of the applicable agreements
relating thereto:
(A) Stock option rights shall be exercisable during
any one or more of the following periods:
(i) for a period of 60 days beginning on the date
on which shares of Common Stock are first purchased
pursuant to a tender offer or exchange offer (other
than such an offer by the Corporation or a Subsidiary),
whether or not such offer is approved or opposed by the
Corporation or a Subsidiary and regardless of the
number of shares of Common Stock purchased pursuant to
such offer;
(ii) for a period of 60 days beginning on the
date the Corporation acquires knowledge that any person
or group deemed a person under Section 13(d) (3) of the
Exchange Act (other than any director of the
Corporation on August 23, 1991, any Affiliate or
Associate of any such director (with such terms having
the respective meanings set forth in Rule 12b-2 under
the Exchange Act as in effect on August 23, 1991), any
member of the family of any such director, any trust
(including the trustees thereof) established by or for
the benefit of any such persons, or any charitable
foundation, whether a trust or a corporation (including
the trustees and directors thereof) established by any
of such persons), in a transaction or series of
transactions shall become the beneficial owner,
directly or indirectly (with beneficial ownership
determined as provided in Rule 13d-3, or any successor
rule, under the Exchange Act), of securities of the
Corporation entitling the person or group to 20% or
more of all votes (without consideration of the rights
of any class of stock to elect directors by a separate
class vote) to which all shareholders of the
Corporation would be entitled if the election of
Directors were an election held on such date;
(iii) for a period of 60 days beginning on the
date of filing under the Exchange Act of a Statement on
Schedule 13D, or any amendment thereto, by any person
or group deemed a person under Section 13(d) (3) of the
Exchange Act, disclosing an intention or possible
intention to acquire or change control of the
Corporation;
(iv) for a period of 60 days beginning on the
date, during any period of two consecutive years, when
individuals who at the beginning of such period
constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for
election by the shareholders of the Corporation, of
each new Director was approved by a vote of at least
two-thirds of the Directors then still in office who
were directors at the beginning of such period; and
(v) for a period of 60 days beginning on the date
of approval by the shareholders of the Corporation of
an agreement (a "reorganization agreement") providing
for (a) the merger or consolidation of the Corporation
with another corporation where the shareholders of the
Corporation, immediately prior to the merger or
consolidation, will not beneficially own, immediately
after the merger or consolidation, shares of the
corporation issuing cash or securities in the merger or
consolidation entitling such shareholders to 40% or
more of all votes (without consideration of the rights
of any class of stock to elect directors by a separate
class vote) to which all shareholders of such
corporation would be entitled in the election of
Directors or where the members of the Board of
Directors of the Corporation, immediately prior to the
merger or consolidation, do not, immediately after the
merger or consolidation, constitute a majority of the
Board of Directors of the corporation issuing cash or
securities in the merger or consolidation or (b) the
sale or other disposition of all or substantially all
the assets of the Corporation.
SECTION 9
Effect of the Plan on the Rights of Employees and Employer
Neither the adoption of the Plan nor any action of the Board
or the Committee pursuant to the Plan shall be deemed to give any
employee any right to be granted a stock option under the Plan
and nothing in the Plan, in any stock option granted under the
Plan or in any stock option agreement shall confer any right upon
any employee to continue in the employment of the Corporation or
any Subsidiary or diminish in any way the right of the
Corporation or any Subsidiary to terminate the employment of any
employee any time. The granting of a stock option shall impose
no obligation upon the Optionee to exercise such option.
SECTION 10
Amendment
The right to alter and amend the Plan at any time and from
time to time and the right to revoke or terminate the Plan are
hereby specifically reserved to the Board; provided always that
no such revocation or termination shall terminate any outstanding
stock option theretofore granted under the Plan; and provided
further that no such alteration or amendment of the Plan shall,
without prior stockholder approval, (a) increase the total number
of shares which may be issued under the Plan, (b) increase the
total number of shares issuable pursuant to any stock option
granted to any one optionee, (c) make any changes in the class of
eligible employees or (d) extend the period set forth in the Plan
during which stock options may be granted. No alteration,
amendment, revocation or termination of the Plan shall, without
the written consent of the holder of a stock option theretofore
granted under the Plan, adversely affect the rights of such
holder with respect to such stock option.
SECTION 11
Effective Date and Duration of Plan
The effective date and date of adoption of the Plan shall be
August 23, 1991 (the "Effective Date"), the date of adoption of
the Plan by the Board, provided that such adoption of the Plan by
the Board is approved by the affirmative vote of the holders of
at least a majority of the outstanding shares of Common Stock at
a meeting of such holders duly called, convened and held within
one year of the Effective Date. Notwithstanding any provision of
the Plan to the contrary, no stock option granted under the Plan
prior to such shareholder approval may be exercised until after
such approval. No stock option may be granted under the Plan
subsequent to the date which is ten (10) years following the
effective date of the Plan.
SECTION 12
Application of Funds
The proceeds received by the Corporation for the sale of the
Common Stock pursuant to exercise of stock options shall be used
for general corporate purposes.
SECTION 13
Reservation of the Stock
The Corporation shall be under no obligation to purchase or
reserve Common Stock to satisfy the exercise of stock options.
The grant of stock options to employees hereunder shall not be
construed to constitute the establishment of a trust of the
Common Stock issuable pursuant to such stock options, and no
particular Common Stock shall be identified as optioned and
reserved for employees hereunder. The Corporation shall be
deemed to have complied with the terms of the Plan if, at the
time of issuance and delivery pursuant to the exercise of a stock
option, it has a sufficient number of shares of the Common Stock
authorized and unissued or in its treasury which may then be
appropriated and issued for purposes of the Plan, irrespective of
the date when such Common Stock was authorized.
SECTION 14
Governing Law
The Plan and all determinations and actions taken pursuant
thereto shall be governed by the laws of the Commonwealth of
Pennsylvania and construed in accordance therewith.
This Plan has been prepared, negotiated and delivered in,
and shall be construed and enforced in accordance with, the laws
of the Commonwealth of Pennsylvania.
USBANCORP, INC.
By: CLIFFORD A. BARTON
Title: Chairman, President & CEO
ATTEST:
TERRY K. DUNKLE
Secretary