EXHIBIT 99.2
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
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Agreement for Incentive Stock Options
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THIS STOCK OPTION (the "Option") grants ___________________________ (the
Optionee) the right to purchase a total of _______ shares of Common Stock, par
value $.01 per share, of Harbor Federal Bancorp, Inc. (the "Company"), at the
price set forth herein, in all respects subject to the terms, definitions and
provisions of the Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan (the
"Plan") which is incorporated by reference herein. This Option is intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). The Optionee acknowledges, through
signing below, the receipt of the prospectus associated with the Plan.
1. Option Price. The Option price per share is $_______, which equals 100%*
of the fair market value, as determined by the Committee, of the Common Stock on
the date of grant of this Option.
2. Vesting and Exercise of Option. This Option shall be exercisable in
accordance with the Plan as follows:
Schedule of rights to exercise:
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Years of Continuous Percentage of Total Shares
Employment After Subject to Option
Date of Grant of Option Which May Be Exercised
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Upon Grant ____%
1 year but less than 2 years ____%
2 years but less than 3 years ____%
3 years or more ____%
3. Method of Exercise. This Option shall be exercisable by a written notice
by the Optionee which shall:
(a) state the election to exercise the Option, the number of shares
with respect to which it is being exercised, the person in whose name the
stock certificate or certificates for such shares of Common Stock is to be
registered, his address and Social Security Number (or if more than one,
the names, addresses and Social Security Numbers of such persons);
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* 110% in the case of an Optionee who owns shares representing more than 10% of
the outstanding common stock of the Company on the date of grant of this Option.
ISO Agreement
Page 2
(b) contain such representations and agreements as to the holder's
investment intent with respect to such shares of Common Stock as may be
satisfactory to the Company's counsel;
(c) be signed by the person or persons entitled to exercise the Option
and, if the Option is being exercised by any person or persons other than
the Optionee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Option; and
(d) be in writing and delivered in person or by certified mail to the
Treasurer of the Company.
Payment of the purchase price of any shares with respect to which the
Option is being exercised shall be by cash, Common Stock, or such
combination of cash and Common Stock as the Optionee elects. In addition,
the Optionee may elect to pay for all or part of the exercise price of the
shares by having the Company withhold a number of shares that are both
subject to this Option and have a fair market value equal to the exercise
price. The certificate or certificates for shares of Common Stock as to
which the Option shall be exercised shall be registered in the name of the
person or persons exercising the Option.
4. Restrictions on Exercise. This Option may not be exercised if the
issuance of the shares upon such exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As a
condition to the Optionee's exercise of this Option, the Company may require the
person exercising this Option to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
5. Withholding. The Optionee hereby agrees that the exercise of the Option
or any installment thereof will not be effective, and no shares will become
transferable to the Optionee, until the Optionee makes appropriate arrangements
with the Company for such tax withholding as may be required of the Company
under federal, state, or local law on account of such exercise.
6. Non-transferability of Option. This Option may not be transferred in any
manner otherwise than by will or the laws of descent or distribution. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
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7. Term of Option. This Option may not be exercisable for more than ten**
years from the date of grant of this Option, as stated below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
__________________________ HARBOR FEDERAL BANCORP, INC.
Date of Grant 1999 STOCK INCENTIVE PLAN COMMITTEE
By _____________________________________
An Authorized Member of the Committee
Witness:________________________________
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** Five years in the case of an Optionee who owns shares representing more than
10% of the outstanding common stock of the Company on the date of grant of this
Option.
HARBOR FEDERAL BANCORP, INC.
1999 STOCK INCENTIVE PLAN
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Form for Exercise of
Incentive Stock Options
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Treasurer
Harbor Federal Bancorp, Inc.
705 York Road
Baltimore, Maryland 21202-2562
Re: Harbor Federal Bancorp, Inc. 1999 Stock Incentive Plan
Dear Sir:
The undersigned elects to exercise the Incentive Stock Option to purchase
_______ shares, par value $.01, of Common Stock of Harbor Federal Bancorp, Inc.
(the "Company") under and pursuant to a Stock Option Agreement dated
_____________, ____.
Delivered herewith is a certified or bank cashier's or teller's check
and/or shares of Common Stock, valued at the fair market value of the stock on
the date of exercise, as set forth below.
$____ of cash or check
$____ in the form of ______ shares of Common Stock, valued at $_______
per share
$ TOTAL
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The name or names to be on the stock certificate or certificates and the
address and Social Security Number of such person(s) is as follows:
Name ___________________________________________________________________________
Address ________________________________________________________________________
Social Security Number _________________________________________________________
___________________
Date
Very truly yours,
_____________________________