EXHIBIT 4.4
AMENDED AND RESTATED
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
OUTSIDE DIRECTORS' STOCK OPTION PLAN
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
AMENDED AND RESTATED
OUTSIDE DIRECTORS' STOCK OPTION PLAN
Table of Contents
Section Page #
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1. Purpose 1
2. Definitions 1
3. Administration 2
4. Stock Subject to the Plan 2
5. Eligibility to Receive Awards 2
6. Amount of Awards 2
7. Stock Options 2
8. General Restrictions 4
9. Single or Multiple Agreements 4
10. Rights of a Shareholder 4
11. Withholding 5
12. Non-Assignability 5
13. Participants Not Obligated 5
14. Effect of Changes in Stock Subject to the Plan 5
15. Reservation of Shares of Stock 6
16. Amendment 6
17. Effect on Other Plans 6
18. Effective Date and Duration of the Plan 6
19. Miscellaneous Provisions 6
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
OUTSIDE DIRECTORS' STOCK OPTION PLAN
Section 1. Purpose.
1.1 The purpose of the Royal Bancshares of Pennsylvania,
Inc. Outside Directors' Stock Option Plan (the "Plan") is to
advance the interest of Royal Bancshares of Pennsylvania, Inc.
(the "Corporation") by providing incentives to attract, retain,
and motivate the non-employee members of the Board of Directors
of the Corporation ("Outside Directors"). The Corporation hopes
to achieve these purposes through the grant of options to
purchase shares of the Corporation's Class "A" Common Stock.
Section 2. Definitions.
2.1 Unless otherwise required by the context, the following
terms shall have the meaning set forth below:
(a) "Board" shall mean the Corporation's Board of
Directors.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Corporation" shall mean Royal Bancshares of
Pennsylvania, Inc., a Pennsylvania Business Corporation.
(d) "Outside Director" shall mean (i) an individual duly
elected to serve as a member of the Board and who is not an
employee of the Corporation or any of its subsidiaries and (ii)
an individual who formerly served as a member of the Board and
who was not an employee of the Corporation or any of its
subsidiaries.
(e) "Option Price" shall mean the purchase price for Stock
under a Stock Option, as determined in Section 7(a) below.
(f) "Participant" shall mean an Outside Director to whom a
Stock Option is granted under the Plan.
(g) "Plan" shall mean this Royal Bancshares of
Pennsylvania, Inc. Outside Directors' Stock Option Plan.
(h) "Stock" shall mean the Class "A" Common Stock of the
Corporation, par value $2.00.
(i) "Stock Option" shall mean a right to purchase Stock,
granted pursuant to Section 7 below.
(j) "Subsidiary" shall mean a subsidiary corporation of the
Corporation, as defined in Sections 425(f) and 425(g) of the
Code.
Section 3. Administration.
3.1 The Plan shall be administered by the Board. A simple
majority of the members of the Board shall constitute a quorum
for the transaction of business. Except as provided in Section
16 below, the interpretation and construction of any provision of
the Plan by the Board shall be final. No member of the Board
shall be liable for any action or determination made by the
member in good faith. Except as provided in Section 16 below,
the Board shall have full and final authority in its discretion
to interpret the provisions of the Plan, to decide all questions
of fact arising in its application, and to make all other
determinations necessary or advisable for the administration of
the Plan. The Board may authorize one or more directors, the
Corporation's Secretary or any other Corporation Officers to
execute and deliver documents on behalf of the Board.
Section 4. Stock Subject to the Plan.
4.1 Subject to the provisions of Section 14 below and the
next sentence of this Section, the maximum number of shares of
Stock that may be optioned or sold under the Plan is One Hundred
Fifty Thousand (150,000) shares. However, at no time shall the
maximum number of shares of Stock that may be optioned or sold
under the Plan exceed ten percent (10%) of the shares of Stock
outstanding. Such shares may be treasury, or authorized, but
unissued, shares of Stock. Except as otherwise provided herein,
any shares subject to a Stock Option which for any reason expires
or is terminated unexercised, shall again be available under the
Plan.
Section 5. Eligibility to Receive Awards.
5.1 Persons eligible to receive awards under the Plan shall
be limited to Outside Directors. Directors of the Corporation
who are officers or employees of the Corporation or any of its
subsidiaries shall not be eligible to participate in this Plan.
Section 6. Amount of Awards.
6.1 Each year, as of the date of the Annual Meeting of
Stockholders of the Corporation, each Outside Director who has
been elected or re-elected or who is continuing as a member of
the Board as of the adjournment of the Annual Meeting shall
automatically receive an Option for 1500 shares of Stock,
provided, however, that the number of shares awarded may be
adjusted downward by the Board or upward by the shareholders.
Section 7. Stock Options.
7.1 Stock Options for the purchase of Stock shall be
evidenced by written agreements in such form not inconsistent
with the Plan as the Board shall approve from time to time, which
agreements shall contain in substance the following terms and
conditions:
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(a) Option Price.
The purchase price of Stock subject to a Stock Option shall
be the "fair market value" at the time of grant. The "fair
market value" shall be the average of the high and low sales
prices reported in the NASDAQ NATIONAL MARKET ISSUES for shares
of Stock traded on the date of the grant or the last preceding
date on which any sales took place. In the event that the shares
of Stock are traded on a stock exchange, then the reported sales
prices on such exchange shall be used in lieu of the sales prices
reported in the NASDAQ NATIONAL MARKET ISSUES.
(b) Exercise Term.
Subject to the rights granted in subsection (e) below and
the limitations of the final sentence of this Section, the Stock
Option may be exercised only after the Outside Director has
served a one year term as a member of the Board after the date on
which the Option was granted. At that time, one hundred percent
(100%) of the total number of shares of Stock covered by the
Option shall become exercisable. However, no Stock Option shall
be exercised after ten (10) years from the date of the grant
thereof.
(c) Payment for Shares.
The purchase price of the shares of Stock with respect to
which a Stock Option is exercised shall be payable in full at the
time of exercise in cash.
(d) Number of Shares.
Each Stock Option shall state the total number of shares of
Stock to which it pertains. No Stock Option may be exercised for
a fractional share of Stock.
(e) Rights Upon Termination of Board Membership.
In the event that a Participant ceases to be a member of the
Board of Directors of the Corporation for any cause other than
retirement, death, or disability, subject to the limitations of
the final sentence in Subsection 7(b) above, the remaining
portion of a Participant's unexercised Stock Options shall
terminate one year after the date of termination as a Board
member. In the event that a Participant retires, dies, or
becomes disabled prior to the expiration of the Participants'
Stock Option and without having fully exercised the Participant's
Stock Option, to the extent that the Stock Option is exercisable
at the time of such retirement, death, or disability, the
Participant or the Participant's attorney in fact, personal
representative, heirs or next of kin shall have the right to
exercise the Stock Option during its term within a period of
three (3) years after termination of Board membership due to
retirement, death, or disability.
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(f) Non-transferability.
Each Stock Option agreement shall state that the Stock
Option is not transferable other than pursuant to Subsection 7(e)
above by will or the laws of descent and distribution; and that
during the lifetime of the Participant, the Stock Option is
exercisable only by the Participant or in the event of the
Participant's disability by the Participant's attorney in fact.
(g) Non-Qualified Stock Option.
It is not intended that this Stock Option qualify as an
Incentive Stock Option under Section 422A of the Code.
Section 8. General Restrictions.
8.1 Each award under the Plan shall be subject to the
requirement that if at any time the Board shall determine that
(i) the listing, registration or qualification of the shares of
Stock upon any securities exchange or under any state or federal
law, or (ii) the consent or approval of any government regulatory
body, or (iii) an agreement by the recipient of an award with
respect to the disposition of shares of Stock is necessary or
desirable as a condition of or in connection with the granting of
such award or the issuance or purchase of shares of Stock; such
award shall not be consummated in whole or in part unless such
listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any
conditions not acceptable to the Board. Moreover, as a condition
to the exercise of any portion of a Stock Option, the Corporation
may require the person exercising such Stock Option to represent
and warrant at the time of such exercise that any shares of Stock
acquired at exercise are being acquired only for investment and
without any present intention to sell or distribute such shares,
if, in the opinion of the Corporation's counsel, such a
representation is required under the Securities Act of 1933 or
any other applicable law, regulation, or rule of any governmental
agency.
Section 9. Single or Multiple Agreements.
9.1 Multiple forms of awards or combinations thereof may be
evidenced by a single agreement or multiple agreements, as
determined by the Board.
Section 10. Rights of a Shareholder.
10.1 The recipient of any award under the Plan, unless
otherwise provided by the Plan, shall have no rights as a
shareholder with respect thereto unless and until certificates
for shares of Stock are issued to the recipient. Promptly after
the exercise of a Stock Option and the payment of the full Option
Price, the Participant shall be entitled to the issuance of a
stock certificate evidencing the Participant's ownership of such
Stock. No adjustment will be made for dividends or other rights
for which the record date is prior to the date such stock
certificate is issued.
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Section 11. Withholding.
11.1 Whenever the Corporation proposes or is required to
issue or transfer shares of Stock under the Plan, the Corporation
shall have the right to require the recipient to remit to the
Corporation an amount sufficient to satisfy any federal, state or
local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares.
Section 12. Non-Assignability.
12.1 Except by will or by the laws of descent and
distribution, no award under the Plan shall be assignable or
transferable by the recipient thereof. Except as provided in
Subsection 7(e) above, during the life of the recipient, such
award shall be exercisable only by such person or by such
person's guardian or legal representative.
Section 13. Participants Not Obligated.
13.1 The granting of an Award of a Stock Option shall
impose no obligation upon the Participant to exercise such Stock
Option.
Section 14. Effect of Changes in Stock Subject to the Plan.
14.1 The aggregate number of shares of Stock available for
Stock Options under the Plan, the shares subject to any Stock
Option, and the price per share, shall all be proportionately
adjusted for any increase or decrease in the number of issued
shares of Stock subsequent to the effective date of the Plan
resulting from (i) a subdivision or consolidation of shares or
any other capital adjustment, (ii) the payment of a stock
dividend, or (iii) other increase or decrease in such shares
effected without receipt of consideration by the Corporation.
The aforesaid adjustment shall be made in such a manner so that
the aggregate amount payable under the Stock Option after the
increase or decrease equals the aggregate amount payable prior to
such increase or decrease. If the Corporation shall be the
surviving corporation in any merger or consolidation, any Stock
Option shall pertain, apply, and relate to the securities to
which a holder of the number of shares of Stock subject to the
Stock Option would have been entitled after the merger or
consolidation. Upon dissolution or liquidation of the
Corporation, or upon a merger or consolidation in which the
Corporation is not the surviving corporation, all Stock Options
outstanding under the Plan shall terminate; provided, however,
that each Participant (and each other person entitled under
Subsection 7(e) above to exercise a Stock Option) shall have the
right, immediately prior to such dissolution or liquidation, or
such merger or consolidation, to exercise such Participant's
Stock Option in whole to the extent that such Stock Option is
otherwise exercisable under the terms of the Plan.
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Section 15. Reservation of Shares of Stock.
15.1 The Corporation, during the term of this Plan, shall
at all times reserve and keep available, and shall seek or obtain
from any regulatory body having jurisdiction any requisite
authority necessary to issue and to sell, the number of shares of
Stock that shall be sufficient to satisfy the requirements of
this Plan. The inability of the Corporation to obtain from any
regulatory body having jurisdiction the authority deemed
necessary by the Corporation's counsel for the lawful issuance
and sale of its Stock hereunder shall relieve the Corporation of
any liability in respect of the failure to issue or sell Stock as
to which the requisite authority has not been obtained.
Section 16. Amendment
16.1 Except as provided in the next sentence, the
Corporation may terminate or amend the Plan at any time.
However, only with shareholder approval, may the Corporation
increase the maximum number of shares of Stock which may be
issued under the Plan (other than increases pursuant to Section
14 above), increase the number of shares of Stock subject to an
Option, change the class of persons eligible to receive Options
under this Plan, extend the period during which any award may be
exercised, extend the term of the Plan or change the minimum
Option Price. The termination, any modification, or amendment of
the Plan shall not, without the consent of a Participant, affect
a Participant's rights under an award previously granted.
Section 17. Effect on Other Plans.
17.1 Participation in this Plan shall not affect a Board
member's eligibility to participate in any other benefit or
incentive plan of the Corporation. Unless specifically provided,
any awards made pursuant to this Plan shall not be used in
determining the benefits provided under any other plan of the
Corporation.
Section 18. Effective Date and Duration of the Plan.
18.1 The Plan shall be effective from the date that the
Plan is approved by the Corporation's Board, subject to the
ratification of the Board's action by the Corporation's
shareholders and shall remain in effect until all awards under
the Plan have been satisfied by the issuance of shares of Stock
or the payment of cash, but no award shall be granted more than
ten years after the earlier of the date the Plan is adopted by
the Corporation or is approved by the Corporation's shareholder.
Section 19. Miscellaneous Provisions.
19.1 Except as expressly provided for in this Plan, no
Outside Director or any other person shall have any claim or
right to be granted an Option under this Plan. Neither this Plan
nor any action taken under this Plan shall be construed as giving
any Outside Director any right to be retained in the service of
the Corporation in any capacity whatsoever.
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19.2 The expenses of this Plan shall be paid by the
Corporation.
19.3 This Plan shall be unfunded. The Corporation shall
not be required to establish any special or separate fund or to
make any other segregation of assets to assure the issuance of
shares of Stock upon exercise of any Option under this Plan and
issuance of shares of Stock upon exercise of Options shall be
subordinate to the claims of the Corporation's general creditors.
19.4 By accepting any Option or other benefit under this
Plan, each Participant and any person claiming under or through
such Participant shall be conclusively deemed to have indicated
acceptance and ratification of, and consent to, any action taken
under this Plan by the Corporation or the Board.
As amended and restated, July 17, 1997
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