EXHIBIT 99B
QNB Corp. Employee Stock Purchase Plan
QNB CORP.
STOCK PURCHASE PLAN
1. Purpose. The purpose of the QNB Corp. Stock Purchase Plan
(Plan) is to provide an incentive for Eligible Employees to
remain in the employ of the Corporation and to devote their best
efforts to its success by affording such employees an opportunity
to acquire the Corporation's Common Stock in a convenient and
advantageous manner and to maintain a proprietary interest in the
Corporation. The Plan is intended to be an "employee stock
purchase plan" within the meaning of Section 423 of the Code.
2. Definitions. Whenever used in the Plan:
(a) "Alternative Offering Price" means 95 percent of the
Fair Market Value of Common Stock on the last day of the Offering
Period (November 30 or May 31) next following the beginning of
the Offering Period.
(b) "Beneficiary" means the person designated by an
Eligible Employee, in accordance with Section 11(e), to make the
elections prescribed in Section 11(d) in the event of such
Eligible Employee's death.
(c) "Board" means the Board of Directors of QNB Corp.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means the Committee of officers appointed
by the Corporation's Board of Directors. The initial members of
the Committee shall be Thomas J. Bisko, President and Chief
Executive Officer, Robert C. Werner, Vice President, and Bret H.
Krevolin, Chief Accounting Officer.
(f) "Common Stock" means the Common Stock, par value
$1.25 per share, of QNB Corp.
(g) "Compensation" means the Eligible Employee's wages,
salaries, fees for professional services and other amounts
received for professional services actually rendered in the
course of employment with the Corporation to the extent that the
amounts are includible in gross income (including but not limited
to, commissions paid salesman, compensation for services on the
basis of percentage of the profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as
described in Regulation 1.62-2(c) for a Plan Year).
(h) "Corporation" means QNB Corp. and such of its
Subsidiaries existing as of the effective date of the adoption of
the Plan, or thereafter acquired, as may be designated from time
to time by the Board.
(i) "Disability" means total disability as defined in the
long term disability plan of the Corporation.
(j) "Effective Date" shall mean June 1, 1996, the date
the initial offering will commence.
(k) "Eligible Employee" means any employee of the
Corporation and such additional Subsidiary or Subsidiaries as
shall be determined by the Board to participate in the Plan who
has been continuously employed by the Corporation or Subsidiary
for at least the one year preceding the Offering Date. Employees
who are scheduled to regularly work 20 hours or less a week are
not considered eligible to participate in the Plan.
(l) "Fair Market Value" means the average of the highest
and lowest selling prices of Common Stock as reported by a
national securities exchange on which the shares of the Common
Stock are traded on such date, including the NASDAQ National
Market, or the bid price as reported by one of the QNB Corp.
market makers.
Notwithstanding any provision of the Plan to the contrary,
no determination made with respect to the Fair Market Value of
Common Stock subject to an option shall be inconsistent with
Section 423 of the Code or regulations thereunder.
(m) "Offering Date" means June 1 or December 1, the days
designated by the Board for any offering made under the Plan.
(n) "Offer Period" means the period of six (6) months for
each offering made under the Plan during which payroll deductions
shall be made from the Compensation of Eligible Employees granted
an option under the offering.
(o) "Offering Price" means 95 percent (95%) of the Fair
Market Value of Common Stock on an Offering Date (June 1 or
December 1) of each year during the term of the Plan.
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(p) "Plan" means the QNB Corp. Stock Purchase Plan, as
amended from time to time.
(q) "Plan Administrator" means the person appointed by
the Board to administer the Plan in accordance with Section 3.
(r) "Plan Custodian" means the Corporation or a successor
Plan Custodian selected by the Committee.
(s) "Purchase Date" means the date on which the Plan
Custodian credits the Eligible Employee's account (customarily
the last day of each Offer Period) for shares purchased under the
Plan.
(t) "Retirement" means retirement under the Quakertown
National Bank Retirement Plan or any pension plan of a
Subsidiary.
(u) "Subsidiary" means a subsidiary corporation of QNB
Corp. as defined in Section 424(f) of the Code.
3. Administration.
(a) The Board shall appoint a Committee to serve as
Plan Administrator. Except where the Plan specifically reserves
the determination of matters to the Board, the Plan shall be
administered by the Plan Administrator. In addition to the Plan
Administrator's duties with respect to the Plan stated elsewhere
in the Plan, the Plan Administrator shall have full authority,
consistently with the Plan, to interpret the Plan, to promulgate
such rules and regulations with respect to the Plan as is deemed
desirable and to make all other determinations necessary or
desirable for the administration of the Plan. Except as provided
in paragraph (b), all decisions, determinations and
interpretations of the Plan Administrator shall be binding upon
all persons participating in the Plan.
(b) If a claim for benefits under the Plan is wholly
or partially denied by the Plan Administrator, the claimant may
request the Committee to review the denial of his or her claim.
The Committee shall make a decision and furnish such decision to
the claimant and the Plan Administrator within a reasonable
period of time after the request for review is made. All
decisions of the Committee shall be final and binding upon all
persons participating in the Plan.
(c) It is intended that the Plan shall constitute an
"Employee Stock Purchase Plan" within the meaning of Section 423
of the Code. The Plan Administrator shall administer the Plan in
such a manner as to carry out this intention.
4. Shares Subject to the Plan. The aggregate number of
shares of Common Stock which may be purchased pursuant to options
granted under the Plan is 25,000 shares, subject to adjustment
pursuant to Section 17. All options granted pursuant to the Plan
shall be subject to the same rights and privileges. The shares
of Common Stock delivered by the Corporation pursuant to the Plan
may be previously issued shares reacquired by the Corporation or
authorized but unissued shares. If any option expires or
terminates for any reason without having been exercised in full,
the shares covered by the unexercised portion of such option
shall again be available for options within the limit specified
above.
5. Offerings. Subject to the provisions of the Plan, the
Board shall from time to time in its discretion make offerings to
Eligible Employees to purchase Common Stock under the Plan. The
terms and conditions for each such offering shall specify the
Offering Date, the Offering Price, the Offer Period and the
number of shares of Common Stock that may be purchased under the
offering. It is anticipated, but not required, that additional
offerings of six months each will be made under the Plan
commencing on December 1 and June 1 of each year during the term
of the Plan. The initial offering will commence on June 1, 1996.
6. Number of Shares Employee May Purchase.
(a) Pursuant to any offering made under the Plan, and
subject to the provisions of the Plan, no Eligible Employee may
be granted an option to purchase shares of Common Stock under the
Plan which would permit him or her to purchase shares of Common
Stock which exceeds $15,000 of Fair Market Value of such stock
(determined at the time such option was granted) for each
calendar year for which such option was outstanding. The Board
may change from
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time to time the total dollar limit of shares that may be
purchased by an Eligible Employee for each calendar year for
which such option was outstanding.
(b) No Eligible Employee may be granted an option to
purchase shares of Common Stock under the Plan if such Eligible
Employee, immediately after the option is granted, would own
stock possessing five (5) percent or more of the total combined
voting power or value of all classes of stock of the Corporation
or its Subsidiaries. For purposes of determining stock ownership
under this paragraph, the rules of Section 424(d) of the Code
shall apply and stock which the Fair Market Value may purchase
under outstanding stock options shall be treated as stock owned
by such Eligible Employee.
7. Method of Participation.
(a) The Plan Administrator shall give notice to
Eligible Employees of each offering of options to purchase shares
of Common Stock pursuant to the Plan and the terms and conditions
for each offering.
(b) Each Eligible Employee who desires to accept all
or any part of the option to purchase shares of Common Stock
under an offering shall signify his or her election to do so by
authorizing the Corporation, in the form and manner prescribed by
the Plan Administrator, to make payroll deductions in any whole
percentage of Compensation of at least 1 percent (1%) and not
more than 5 percent (5%). Such election and authorization must
be made at least 15 days prior to an Offering Period and shall
continue in effect unless and until such Eligible Employee
changes his or her payroll deductions or terminates his or her
employment with the Corporation, as provided in Section 8 and 11
respectively.
(c) The Board may change from time to time the
minimum and maximum percentage limits of payroll deductions set
forth in Section 7(b) of the Plan.
8. Payroll Deductions.
(a) The percentage of Compensation elected by each
Eligible Employee for the purchase of shares of Common Stock
covered by the option granted to such Eligible Employee in any
offering shall be deducted during the Offer Period specified in
the offering through regular payroll deductions, and shall be
credited to an account maintained in his or her name. The
percentage of Compensation so deducted may not be increased or
decreased by the Eligible Employee at any time during the Offer
Period except as provided in Sections 7(b) and 8(b) of the Plan.
(b) At any time during the Offer Period for any
offering, an Eligible Employee granted an option to purchase
shares of Common Stock under such offering may direct the
Corporation to suspend further payroll deductions with respect to
such option, in which case all payroll deductions with respect to
such option shall cease as soon as administratively practical.
In that event, any amounts already credited to his or her account
during the Offer Period in which such suspension occurs shall be
retained by the Corporation until the end of such Offer Period,
at which time such amounts shall be used to purchase shares under
the option in accordance with Section 9. An Eligible Employee
who has suspended further payroll deductions may direct the
Corporation to reinstate deductions at the next Offer Period. An
Eligible Employee's election to suspend payroll deductions, or to
reinstate deductions, shall be made by the filing of a notice
with the Plan Administrator in the form and manner and within the
time period prescribed by the Plan Administrator, and such
changes shall be effective as soon as administratively practical.
9. Exercise of Options and Purchase of Shares.
(a) Unless an Eligible Employee granted an option
under any offering has subsequently suspended payroll deductions
pursuant to Section 8, such option shall be deemed to have been
exercised as of the last day of the Offer Period for such
offering and shall become on each date an irrevocable obligation
to purchase Common Stock in accordance with the provisions of the
Plan. The number of shares of Common Stock purchased each Offer
Period by each such Eligible Employee shall be determined by
dividing (i) the amount (including all payroll deductions and any
dividends paid by the Corporation on shares credited to such
Eligible Employee's account) accumulated in his or her account
during such Offer Period by (ii) the lower or the Offering Price
or the Alternative Offering Price, but in no event shall the
aggregate number of
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shares purchased in any Offer Period exceed the maximum number of
shares of such Eligible Employee was entitled to purchase
pursuant to the limitations provided in Section 6. The shares of
Common Stock purchased by each such Eligible Employee pursuant to
this Section 9 shall be credited to such Eligible Employee's
account, and shall be held in such account until withdrawn,
distributed or sold pursuant to Section 10, 11 or 19, whichever
is applicable.
(b) If, with respect to any offering made under the
Plan, the Eligible Employees participating in the offering
becoming entitled at the end of any Offer Period during the Offer
Period for such offering to purchase more than the aggregate
number of shares of Common Stock specified by the number of
shares, and any amounts remaining in the accounts of Eligible
Employees shall be refunded in each as soon as practicable
thereafter.
10. Withdrawal and Sale of Shares.
(a) An Eligible Employee may, at any time, elect to
withdraw part or all of the shares of Common Stock, except
fractional shares, held in his or her account pursuant to Section
9. As soon as practicable thereafter, a certificate for the
number of whole shares which such Eligible Employee has elected
to withdraw shall be issued to him or her. No certificate for
fractional shares shall be issued and the value of any such
fractional shares, as determined by the Plan Custodian, shall be
paid in cash.
(b) An Eligible Employee's election to withdraw or
sell shares of Common Stock pursuant to paragraphs (a) and (b),
respectively, shall be made by the filing of a notice with the
Plan Administrator in the form and manner prescribed by the Plan
Administrator.
11. Rights Upon Death or Other Termination of Employment.
(a) If the employment of an Eligible Employee granted
an option to purchase shares of Common Stock under any offering
terminates during the Offer Period for such offering because of
death, disability or retirement, the Eligible Employee or, if
applicable, such Eligible Employee's estate, may elect to (i)
cancel the option, in which event the Corporation shall
distribute the balance in such Eligible Employee's account as
soon as practicable thereafter, or (ii) exercise the semi-annual
installment of the option for the Offer Period during which such
termination of employment occurs, in which event any amounts
already credited to such Eligible Employee's account during such
Offer Period shall be retained by the Corporation until the end
of such Offer Period, at which time such amounts shall be used to
purchase shares under the option in accordance with Section 9,
and as soon as practicable thereafter the Corporation shall
distribute the balance of such account.
(b) If the employment of an Eligible Employee granted
an option under any offering terminates for any reason other than
death, disability or retirement, the Corporation shall distribute
such Eligible Employee's account as soon as practicable
thereafter.
(c) If shares of Common Stock represent any portion
of the balance in an Eligible Employee's account which is
required to be distributed pursuant to paragraph (a) or (b) of
this section, the Eligible Employee or if applicable, such
Eligible Employee's estate, may elect to receive a distribution
of such shares, in which event a certificate for such shares
shall be issued, provided that no certificate for fractional
shares shall be issued and the value of any remaining amounts, as
determined by the Plan Custodian, shall be distributed in cash.
(d) An election pursuant to paragraph (a) or (b) of
this section shall be made by the filing of a notice with the
Plan Administrator in the form and manner and within the time
period prescribed by the Plan Administrator. If no such notice
is filed within the time period prescribed by the Plan
Administrator, (i) in the case of the election provided in
paragraph (a), the Corporation shall treat the option as canceled
in accordance with subdivision (ii) of that paragraph, and (ii)
in the case of the election provided in paragraph (c), the Plan
Custodian shall distribute certificates for the shares in
accordance with subdivision (ii) of that paragraph.
(e) Each Eligible Employee may designate a
Beneficiary, in the form and manner prescribed by the Plan
Administrator, to make the elections prescribed in paragraph (d)
of the section in the event of such Eligible Employee's death.
Such Beneficiary designation may be changed by the Eligible
Employee at any time. If there is no valid Beneficiary
designation at the time
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of the Eligible Employee's death (because the designated
Beneficiary predeceased the Eligible Employee for any other
reason), the election shall be made by the executor or
administrator of the Eligible Employee's estate.
12. Shareholder Rights. An Eligible Employee granted an
option to purchase shares of Common Stock under the Plan shall
not be entitled to any rights as a shareholder with respect to
any shares covered by such option until such shares shall have
been registered on the transfer books of QNB Corp. in the name of
such person.
13. Rights Not Transferable. An Eligible Employee's rights
under the Plan are exercisable, during his or her lifetime, only
by such employee and may not be sold, pledged, assigned or
transferred in any manner other than by will or the laws of
descent and distribution. Any attempt to sell, pledge, assign or
transfer such rights shall be void and shall automatically cause
the option held by the Eligible Employee to be terminated. In
such event, any cash remaining in the account of such Eligible
Employee shall be refunded to him or her.
14. Notice Premature Disposition. If within two years after
the date of grant of an option to an Eligible Employee under the
Plan or within one year after the transfer of shares of Common
Stock to such Eligible Employee on any exercise of the option,
the Eligible Employee makes a disposition (as defined in Section
424 (c) of the Code) of shares of such Common Stock, such
Eligible Employee shall notify the Plan Administrator within 10
days after such disposition.
15. Use of Proceeds. The proceeds received by the
Corporation from the sale by it of shares of Common Stock to
persons exercising options pursuant to the Plan will be used for
the general purposes of the Corporation.
16. Laws, Regulations and Listings. All rights granted or to
be granted to Eligible Employees under the Plan are express
subject to all applicable laws and regulations and to the
approval of all governmental authorities required in connection
with the authorization, issuance, sale or transfer of the shares
of Common Stock reserved for the Plan including without
limitation, there being a current registration statement covering
the offer of shares of Common Stock purchasable under options on
the last day of the Offer Period applicable to such options. If
a registration statement shall not then be effective, the term of
such options and the Offer Period shall be extended until the
first business day after the effective date of such registration
statement, or post-effective amendment thereto, but in no event
later than 27 months after the date such options were granted.
In addition, all rights are subject to the due listing of such
shares of Common Stock on any stock exchanges where the Common
Stock is listed.
17. Adjustment Upon Changes in Capitalization. If there is a
change in the number or kind of outstanding shares of Common
Stock of QNB Corp., by reason of a stock dividend, stock split,
recapitalization, merger, consolidation, combination or other
similar event, appropriate adjustments shall be made by the Board
to the number and kind of shares subject to the Plan, the number
and kind of shares under options then outstanding, the maximum
number of shares available for options, the Offering Price and
Alternative Offering Price, and other relevant provisions, to the
extent that the Board, in its sole discretion, determines that
such change makes such adjustments necessary or equitable.
18. No Employment Rights. Nothing in the Plan shall confer
upon any employee of the Corporation any right to continued
employment, or interfere with the right of the Corporation to
terminate his or her employment at any time.
19. Termination: Amendments.
(a) The Board may, at any time, terminate the Plan.
Unless the Plan shall previously have been terminated by the
Board, it shall terminate on June 1, 2001. No option may be
granted after such termination. Upon termination of the Plan,
shares of Common Stock held in the accounts of Eligible Employees
shall be issued to them, and cash, if any, remaining in such
accounts
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shall be refunded to them, unless such shares and cash are
transferred to a successor plan, if any, at the election of the
Eligible Employee.
(b) The Board may, at any time or times, amend the
Plan or amend any outstanding options or options for the purpose
of satisfying the requirements of any changes in applicable laws
or regulations or for any other purpose which at the time may be
permitted by law.
(c) Except as provided in Section 17, no such
amendment of the Plan shall, without the approval of the
shareholders of QNB Corp. (which shall not occur more frequently
than once every six months): (i) increase the maximum number of
shares which may be purchased pursuant to options granted under
the Plan; (ii) reduce the price at which shares of Common Stock
subject to options granted under the Plan may be purchased; (iii)
change the definition of Subsidiaries eligible to participate in
the Plan; or (iv) materially increase the benefits accruing to
participants in the Plan.
(d) No termination or amendment of the Plan shall,
without the consent of an Eligible Employee, adversely affect the
Eligible Employee's rights under any option previously granted
under the Plan.
20. Effective Date. The Plan shall become effective upon
approval by the Board; provided, however, that the Plan shall be
submitted to the shareholders of QNB Corp. for approval in
accordance with corporate law of the Commonwealth of
Pennsylvania, and if not approved by the shareholders shall be of
no force and effect.
IN WITNESS WHEREOF, the Corporation has caused the Plan to
be duly executed by its officers as of the 12th day of March,
1996.
(SEAL)
Attest: QNB CORP.
/s/ Tara E. Zuck /s/ Thomas J. Bisko
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Tara E. Zuck Thomas J. Bisko
Assistant Secretary President/CEO
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