-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R2gen/bKImvcfHWnGbnWjsPhWlzqHf2edhaiwCscr19c0+l7iBfT2tY3R5v+cQHt P+buq+88X5hvxh+oPkF4/w== 0000891554-98-001543.txt : 19981209 0000891554-98-001543.hdr.sgml : 19981209 ACCESSION NUMBER: 0000891554-98-001543 CONFORMED SUBMISSION TYPE: DEFS14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990120 FILED AS OF DATE: 19981208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WYMAN PARK BANCORPORATION INC CENTRAL INDEX KEY: 0001046354 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 522068893 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 000-23345 FILM NUMBER: 98765326 BUSINESS ADDRESS: STREET 1: 11 WEST RIDGELY RD CITY: LUTHERVILLE STATE: MD ZIP: 21094 BUSINESS PHONE: 4102526450 MAIL ADDRESS: STREET 1: 11 WEST RIDGELY RD CITY: LUTHERVILLE STATE: MD ZIP: 21094 DEFS14A 1 DEFINITIVE PROXY STATEMENT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [_] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, For Use of the [X] Definitive Proxy Statement Commission Only (as permitted [_] Definitive Additional Materials by Rule 14a-6(e)(2)) [_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 WYMAN PARK BANCORPORATION, 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): [X] 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: (SC14A-07/98) [WYMAN PARK BANCORPORATION, INC. LETTERHEAD] December 8, 1998 Dear Fellow Stockholder: On behalf of the Board of Directors and management of Wyman Park Bancorporation, Inc. (the "Company"), I cordially invite you to attend the Special Meeting of Stockholders. The meeting will be held at 3:00 p.m., Lutherville, Maryland time on January 20, 1999 at the main office located at 11 West Ridgely Road, Lutherville, Maryland. An important aspect of the meeting process is the stockholder vote on corporate business items. I urge you to exercise your rights as a stockholder to vote and participate in this process. Stockholders are being asked to consider and vote upon proposals to ratify the adoption of the 1999 Stock Option and Incentive Plan and the Recognition and Retention Plan. The Board has carefully considered both of these proposals and believes that their approval will enhance the ability of the Company to recruit and retain quality directors and management. Accordingly, your Board of Directors unanimously recommends that you vote FOR both of the proposals. I encourage you to attend the meeting in person. Whether or not you attend the meeting, I hope that you will read the enclosed Proxy Statement and then complete, sign and date the enclosed proxy card and return it in the postage prepaid envelope provided. This will save the Company additional expense in soliciting proxies and will ensure that your shares are represented. Please note that you may vote in person at the meeting even if you have previously returned the proxy card. Thank you for your attention to this important matter. Sincerely, /s/ ERNEST A. MORETTI ERNEST A. MORETTI President and Chief Executive Officer WYMAN PARK BANCORPORATION, INC. 11 West Ridgely Road Lutherville, Maryland 21093 (410) 252-6450 NOTICE OF SPECIAL MEETING OF STOCKHOLDERS To be Held on January 20, 1999 Notice is hereby given that the Special Meeting of Stockholders (the "Meeting") of Wyman Park Bancorporation, Inc. (the "Company") will be held at the Company's main office located at 11 West Ridgely Road, Lutherville, Maryland at 3:00 p.m., Lutherville, Maryland time, on January 20, 1999. A Proxy Card and a Proxy Statement for the Meeting are enclosed. The Meeting is for the purpose of considering and acting upon: 1. The ratification of the adoption of the Company's 1999 Stock Option and Incentive Plan; 2. The ratification of the adoption of the Company's Recognition and Retention Plan; and such other matters as may properly come before the Meeting, or any adjournments thereof. The Board of Directors is not aware of any other business to come before the Meeting. Any action may be taken on the foregoing proposals at the Meeting on the date specified above, or on any date or dates to which the Meeting may be adjourned. Stockholders of record at the close of business on December 1, 1998 are the stockholders entitled to vote at the Meeting and any adjournments thereof. You are requested to complete and sign the enclosed proxy card, which is solicited on behalf of the Board of Directors, and to mail it promptly in the enclosed envelope. The proxy will not be used if you attend and vote at the Meeting in person. BY ORDER OF THE BOARD OF DIRECTORS /s/ ERNEST A. MORETTI Ernest A. Moretti President and Chief Executive Officer Lutherville, Maryland December 8, 1998 - -------------------------------------------------------------------------------- IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF- ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES. - -------------------------------------------------------------------------------- PROXY STATEMENT WYMAN PARK BANCORPORATION, INC. 11 West Ridgely Road Lutherville, Maryland 21093 (410) 252-6450 SPECIAL MEETING OF STOCKHOLDERS January 20, 1999 This Proxy Statement is furnished in connection with the solicitation on behalf of the Board of Directors of Wyman Park Bancorporation, Inc. (the "Company"), the parent company of Wyman Park Federal Savings & Loan Association (the "Association"), of proxies to be used at the Special Meeting of Stockholders of the Company (the "Meeting") which will be held at the Company's main office located at 11 West Ridgely Road, Lutherville, Maryland on January 20, 1999, at 3:00 p.m., Lutherville, Maryland time, and all adjournments of the Meeting. The accompanying Notice of Annual Meeting and this Proxy Statement are first being mailed to stockholders on or about December 8, 1998. At the Meeting, stockholders of the Company are being asked to consider and vote upon proposals to ratify the adoption of the Wyman Park Bancorporation, Inc. 1999 Stock Option and Incentive Plan (the "Stock Option Plan") and the Wyman Park Bancorporation, Inc. Recognition and Retention Plan (the "RRP"). Vote Required and Proxy Information All shares of the Company's Common Stock, par value $.01 per share (the "Common Stock"), represented at the Meeting by properly executed proxies received prior to or at the Meeting, and not revoked, will be voted at the Meeting in accordance with the instructions thereon. If no instructions are indicated, properly executed proxies will be voted for the proposals set forth in this Proxy Statement. The Company does not know of any matters, other than as described in the Notice of Special Meeting, that are to come before the Meeting. If any other matters are properly presented at the Meeting for action, the persons named in the enclosed proxy card and acting thereunder will have the discretion to vote on such matters in accordance with their best judgment. The affirmative vote by the holders of a majority of the votes cast at the meeting shall be the act of the stockholders. Proxies marked to abstain with respect to a proposal have the same effect as votes against the proposal. Broker non-votes have no effect on the vote. One-third of the shares of the Common Stock, present in person or represented by proxy, shall constitute a quorum for purposes of the Meeting. Abstentions and broker non-votes are counted for purposes of determining a quorum. A proxy given pursuant to this solicitation may be revoked at any time before it is voted. Proxies may be revoked by: (i) filing with the Secretary of the Company at or before the Meeting a written notice of revocation bearing a later date than the proxy, (ii) duly executing a subsequent proxy relating to the same shares and delivering it to the Secretary of the Company at or before the Meeting, or (iii) attending the Meeting and voting in person (although attendance at the Meeting will not in and of itself constitute revocation of a proxy). Any written notice revoking a proxy should be delivered to Secretary, Wyman Park Bancorporation, Inc., 11 West Ridgely Road, Lutherville, Maryland 21093. Voting Securities and Certain Holders Thereof Stockholders of record as of the close of business on December 1, 1998 will be entitled to one vote for each share of Common Stock then held. As of that date, the Company had 966,313 shares of Common Stock issued and outstanding. The following table sets forth information regarding share ownership of those persons or entities known by management to beneficially own more than five percent of the Common Stock and all directors and executive officers of the Company and the Association as a group. Shares Beneficially Owned at December Percent Beneficial Owner 1, 1998 of Class - -------------------------------------------------------------------------------- Jeffrey L. Gendell, 95,200 9.85% Tontine Financial Partners, L.P. and Tontine Management, L.L.C. 200 Park Avenue, Suite 3900 New York, New York 10166(1) Terry Maltese, 90,000 9.31 Sandler O'Neill Asset Management LLC, SOAM Holdings, LLC, Malta Partners, L.P., Malta Hedge Fund, L.P., Malta Partners II, L.P., and Malta Hedge Fund II, L.P. 712 Fifth Avenue, 22nd Floor New York, New York 10019(2) Wyman Park Bancorporation, Inc.'s 80,937 8.38 Employee Stock Ownership Plan(3) Allan B. Heaver, Chairman of the Board 9,000 0.93 H. Douglas Huether, Director 10,000 1.03 Jay H. Salkin, Director 10,200 1.06 Ernest A. Moretti, Director, President and CEO 10,199 1.06 John K. White, Director 5,000 0.52 G. Scott Barhight, Director 350 0.03 John R. Beever, Director 10,000 1.03 Albert M. Copp, Director 1,160 0.12 Gilbert D. Marsiglia, Sr., Director 4,500 0.47 Directors and executive officers of the Company 65,663 6.80 and the Association, as a group (11 persons)(4) - ---------- (1) As reported on Amendment No. 2 to a Schedule 13D under the Exchange Act of 1934 (the "Exchange Act), dated June 22, 1998. (2) As reported by Sandler O'Neill Asset Management LLC ("SOAM"); SOAM Holdings, LLC ("Holdings"); Malta Partners, L.P. ("MP"); Malta Hedge Fund, L.P. ("MHF"); Malta Partners II, L.P. ("MPII"); Malta Hedge Fund II, L.P. ("MHII") and Terry Maltese in a statement as of September 25, 1998 on Amendment No. Two to a Schedule 13D under the Exchange Act. MP beneficially owned 37,000 shares of Common Stock; MHF beneficially owned 24,800 shares of Common Stock; MPII beneficially owned 14,200 shares of Common 2 Stock; MHFII beneficially owned 14,000 shares of Common Stock; Holdings owned zero shares directly, but may be deemed to beneficially own 90,000 shares of Common Stock because of its position as general partner of MP, MHF, MPII and MHFII; SOAM owned zero shares directly, but may be deemed to beneficially own 90,000 shares of Common Stock by reason of its position as management company for MP, MHF, MPII and MHFII; and Mr. Maltese owns zero shares directly, but may be deemed to beneficially own 70,900 shares of Common Stock by reason of his position as President of Holdings and SOAM. Terry Maltese, SOAM and Holdings each reported shared voting and dispositive power with respect to all shares reported. MP reported shared voting and dispositive power with respect to 37,000 shares; MPII reported shared voting and dispositive power with respect to 14,200 shares; MHF reported shared voting and dispositive power with respect to 24,800 shares, and MHFII reported shared voting and dispositive power with respect to 14,000 shares. (3) The amount reported represents shares held by the Employee Stock Ownership Plan ("ESOP"), 8,928 of which have been allocated to accounts of participants. First Bankers Trust Co., N.A., the Trustee of the ESOP, may be deemed beneficially to own the shares held by the ESOP which have not been allocated to the participants. (4) Amount includes shares held directly, as well as shares held jointly with family members, shares held in retirement accounts, shares allocated to the ESOP accounts of the group members, held in a fiduciary capacity or by certain family members, with respect to which shares the group members may be deemed to have sole voting and/or investment power. Director Compensation Directors are currently not compensated for membership on the Board of Directors of the Company. Each director of the Association is currently paid a fee of $575 for each regular meeting attended. Non-employee directors receive committee fees of $175 for each meeting attended. Employee directors do not receive fees for participation on any committees. Executive Compensation The Company has not paid any compensation to its executive officers since its formation. The following table sets forth information concerning the compensation paid or granted to the Association's Chief Executive Officer for services rendered by the Association's Chief Executive Officer. No other executive officer of the Company has aggregate compensation (salary plus bonus) in excess of $100,000 in fiscal 1998.
Summary Compensation Table --------------------------------------------------------------------------------------------- Long-Term Compensation Annual Compensation Awards --------------------------------------- ------------------------ Restricted Name and Principal Other Annual Stock Options/ All Other Position Year(1) Salary($) Bonus($) Compensation($) Award($) SARs(#) Compensation($) - ---------------------------------------------------------------------------------------------------------------------------- Ernest A. Moretti 1998 $115,000 $24,700 $-- $-- --/-- $335,369(2) President, Chief Executive 1997 115,000 23,000 -- -- --/-- 10,550 Officer and Director
- ---------- (1) In accordance with the revised rules on executive officer and director compensation disclosure adopted by the Securities and Exchange Commission, Summary Compensation information is excluded for the year ended June 30, 1996, as the Association was not a public company during such period. (2) Includes $4,818 of life, health and disability premiums paid by the Association, $3,087 paid by the Association in discretionary contributions pursuant to the Association's 401(k) Plan, a one-time contribution of $271,941 plus accrued interest of $15,684 to fund the executive supplemental retirement plan for Mr. Moretti, the value of a car provided to Mr. Moretti of $1,435 and the value of 2,730 shares allocated to Mr. Moretti under the Company's ESOP at June 30, 1998. 3 Employment Agreement. The Association has an employment contract with President Moretti. The agreement provides for a salary of $115,000, contains bonus provisions tied to the Association's performance and has a term of three years (subject to an annual extension for an additional year following an annual performance review). The agreement provides that under certain circumstances, including a change in control, Mr. Moretti would be entitled, subject to certain limitations, to a severance payment in lieu of salary equal to a percentage of his base amount of compensation, as defined. The contract provides for termination upon the employee's death, for cause or in certain events specified by OTS regulations. The employment contract is terminable by the employee upon 90 days' notice to the Association. In the event there is a change in control of the Association, as defined in the agreement, if employment terminates involuntarily in connection with such change in control or within 12 months thereafter, the employment contract provides for a payment equal to 299% of Mr. Moretti's base amount of compensation as defined in the Internal Revenue Code. Assuming a change in control were to take place as of June 30, 1998, the aggregate amounts payable to Mr. Moretti pursuant to this change in control provision would be approximately $343,850. The contract provides, among other things, for participation in an equitable manner in employee benefits applicable to executive personnel. The employment contract may have an "anti-takeover" effect that could affect a proposed future acquisition of control of the Company. Executive Supplemental Retirement Plan. Effective fiscal 1998, the Association adopted the Wyman Park Federal Savings and Loan Association Executive Supplemental Retirement Plan (the "SERP") for the benefit of Mr. Moretti. The SERP provides for payment of a specified amount to Mr. Moretti, as President of the Association, upon the occurrence of the later of (i) Mr. Moretti's attainment of age 65 or (ii) the termination (other than for cause) of Mr. Moretti as President of the Association ("Payment Event"). Specifically, upon the occurrence of a Payment Event, Mr. Moretti shall be entitled to an annual amount, payable in twelve (12) monthly installments, over the greater of the life of Mr. Moretti or one hundred twenty (120) months, equal to the excess of (A) sixty-five percent of Mr. Moretti's highest five-year average annual compensation, as defined in the defined benefit retirement plan provided by the Association (the "Qualified Plan"), but without regard to the limitations imposed by Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, reduced by (B) Mr. Moretti's annualized monthly retirement benefit payable under the Qualified Plan under the normal form of benefit, as defined as of September 30, 1997, under the Qualified Plan, such form being a 10-year certain and continuous annuity. PROPOSAL I - RATIFICATION OF THE 1999 STOCK OPTION AND INCENTIVE PLAN General Establishment and implementation of the Stock Option Plan is subject to ratification by stockholders The Stock Option Plan has been adopted by the Board of Directors of the Company, subject to ratification by stockholders at the Meeting. Ratification by stockholders of the adoption of the Stock Option Plan will ratify the awards proposed thereunder and as described in "Awards Under the Stock Option Plan" below, and will ratify the granting of additional awards pursuant to the provisions of the Stock Option Plan. Pursuant to the Stock Option Plan, the Company will reserve for issuance thereunder either from authorized but unissued shares or from issued shares reacquired and held as treasury shares, 101,171 shares of the Common Stock (10.0% of the Company's shares issued in its initial public offering). Management currently intends, to the extent practicable and feasible, to fund the Stock Option Plan from issued shares reacquired by the Company in the open market. To the extent the Company utilizes authorized but unissued Common Stock to fund the Stock Option Plan, the exercise of stock options will have the effect of diluting the holdings of persons who own Common Stock. Assuming all options under the Stock Option Plan are awarded and exercised through the use of authorized but unissued Common Stock, current stockholders would be diluted by approximately 9.5%. Upon ratification of the Stock Option Plan by stockholders, options to purchase an aggregate of 85,990 shares of Common Stock will be awarded, which will leave available 15,181shares for future awards. 4 The Board of Directors believes that it is appropriate for the Company to adopt a flexible and comprehensive Stock Option Plan which permits the granting of a variety of long-term incentive awards to directors, advisory directors, officers and employees as a means of enhancing and encouraging the recruitment and retention of those individuals on whom the continued success of the Company most depends. However, because the awards are granted only to persons affiliated with the Company, the adoption of the Stock Option Plan could make it more difficult for a third party to acquire control of the Company and therefore could discourage offers for the Company's stock that may be viewed by the Company's stockholders to be in their best interest. In addition, certain provisions included in the Company's Certificate of Incorporation and Bylaws may discourage potential takeover attempts, particularly those that have not been negotiated directly with the Board of Directors of the Company. Included among these provisions are provisions (i) limiting the voting power of shares held by persons owning 10% or more of the Common Stock, (ii) requiring a supermajority vote of stockholders for approval of certain business combinations, (iii) establishing a staggered Board of Directors, (iv) permitting special meetings of stockholders to be called only by the Board of Directors and (v) authorizing a class of preferred stock with terms to be established by the Board of Directors. These provisions could prevent the sale or merger of the Company even where a majority of the stockholders approve of such transaction. In addition, federal regulations prohibit the beneficial ownership of more than 10% of the stock of a converted savings institution or its holding company without prior approval of the OTS. Federal law and regulations also require OTS approval prior to the acquisition of "control" (as defined in the OTS regulations) of an insured institution, including a holding company thereof. These regulations could have the effect of discouraging takeover attempts of the Company. Attached as Exhibit A to this Proxy Statement is the complete text of the Stock Option Plan. The principal features of the Stock Option Plan are summarized below. Principal Features of the Stock Option Plan The Stock Option Plan provides for awards in the form of stock options, stock appreciation rights ("SARs") and limited stock appreciation rights ("Limited SARs"). Each award shall be on such terms and conditions, consistent with the Stock Option Plan, as the committee administering the Stock Option Plan may determine. Subject to certain exceptions described herein, awards made under such plan vest at a rate of one-fifth of the initial award per year, subject to the participant maintaining continuous service since the date of grant. Shares may be either authorized but unissued shares or reacquired shares held by the Company in its treasury. Any shares subject to an award which expires or is terminated unexercised will again be available for issuance under the Stock Option Plan or any other plan of the Company or its subsidiaries. Generally, no award or any right or interest therein is assignable or transferable except under certain limited exceptions set forth in the Stock Option Plan. The Stock Option Plan is administered by the RRP and SOP Committee of the Board of Directors of the Company, which is comprised of non-employee directors of the Company. Directors, Heaver, Huether and Salkin have been appointed as the present members of the RRP and SOP Committee. Pursuant to the terms of the Stock Option Plan, any director, advisory director, emeritus director, officer or employee of the Company or its affiliates is eligible to participate in the Stock Option Plan, which currently includes approximately 24 persons. In granting awards under the Stock Option Plan, the RRP and SOP Committee considers, among other things, position and years of service, value of the participant's services to the Company and the Association, and the added responsibilities of such individuals as employees, directors and officers of a public company. Stock Options The term of stock options will not exceed ten years from the date of grant. The RRP and SOP Committee may grant either "incentive stock options" as defined under Section 422 of the Code or stock options not intended to qualify as such ("non-qualified stock options"). In general, stock options will not be exercisable after the expiration of their terms. Unless otherwise determined by the RRP and SOP Committee, in the event a participant ceases to maintain continuous service (as defined in the Stock Option Plan) with the Company or one of its affiliates, for any reason other than termination for cause, an 5 exercisable stock option will continue to be exercisable for three months thereafter but in no event after the expiration date of the option. Unless otherwise provided by the RRP and SOP Committee, if a participant to whom an option was granted ceases to maintain continuous service by reason of normal retirement, early retirement or disability, all options granted and not then exercisable shall become exercisable in full for a period of three months following such date. Unless otherwise provided by the RRP and SOP Committee, in the event of the death of a participant during such service or within the three-month period described above following termination of service, an exercisable option will continue to be exercisable for one year, to the extent exercisable by the participant immediately prior to his death, but in no event later than ten years after grant. Following the death of any participant, the RRP and SOP Committee may, as an alternative means of settlement of an option, elect to pay to the holder thereof an amount of cash equal to the amount by which the market value of the shares covered by the option on the date of exercise exceeds the exercise price. A stock option will automatically terminate and will no longer be exercisable as of the date a participant is notified of termination for cause. The exercise price for the purchase of shares subject to a stock option at the date of grant may not be less than 100% of the market value of the shares covered by the option on the date of grant of such stock options. The exercise price must be paid in full in cash or shares of Common Stock, or a combination of both. The Stock Option Plan provides for the grant of a non-qualified stock option to purchase 5,058 shares of Common Stock to each director who is not an employee of the Company, as of the date of stockholder ratification of the Stock Option Plan. Such options have a term of ten years, are not transferable and vest at the rate of 20% per year commencing from the date of grant of the stock option. The exercise price per share of the options shall be equal to the fair market value of the Common Stock on the date of grant of such stock option. Stock Appreciation Rights The RRP and SOP Committee may grant SARs at any time, whether or not the participant then holds stock options, granting the right to receive the excess of the market value of the shares represented by the SARs on the date exercised over the exercise price. SARs generally will be subject to the same terms and conditions and exercisable to the same extent as stock options, as described above. Upon the exercise of a SAR, the participant will receive the amount due in cash or shares, or a combination of both, as determined by the RRP and SOP Committee. SARs may be related to stock options ("tandem SARs"), in which case the exercise of one will reduce to that extent the number of shares represented by the other. Notwithstanding the foregoing, no SAR may be exercisable by a director, Senior Officer or Ten Percent Beneficial owner of the Company within six months of the date of its grant. "Senior Officer" means the Company's president, principal financial officer or principal accounting officer, any vice president of the Company in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Officers of the Company's affiliates shall be deemed Senior Officers of the Company if they perform such policy-making functions for the Company. "Ten Percent Beneficial Owner" means the beneficial owner of more than ten percent of any class of the Company's equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. SARs will require an expense accrual by the Company each year for the appreciation on the SARs which it is anticipated will be exercised. The amount of the accrual is dependent upon whether and the extent to which the SARs are granted and the amount, if any, by which the market value of the SARs exceeds the exercise price. Limited Stock Appreciation Rights Limited SARs will be exercisable only for a limited period in the event of a tender or exchange offer for shares of the Company's Common Stock, other than by the Company, where 25% or more of the outstanding shares are acquired in that offer or any other offer which expires within 60 days of that offer. The amount paid on exercise of a Limited SAR will be the excess of (a) the market value of the shares on the date of exercise, or (b) the highest price paid pursuant to the offer, over the exercise price. Payment upon exercise of a Limited SAR will be in cash. 6 Limited SARs may be granted at the time of, and must be related to, the grant of a stock option or SAR. The exercise of one will reduce to that extent the number of shares represented by the other. Subject to vesting, Limited SARs will be exercisable only for the 45 days following the expiration of the tender or exchange offer, during which period the related stock option or SAR will be exercisable. However, no Limited SAR will be exercisable by a director, Senior Officer or Ten Percent Beneficial Owner of the Company within six months of the date of its grant. Effect of Change in Control and Other Adjustments The restricted period with respect to options granted pursuant to the Stock Option Plan will lapse, and the stock options will be earned, in the event of a change in control, unless otherwise determined by the RRP and SOP Committee. A change in control will be deemed to occur when (i) any third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, shall become the beneficial owner of shares of the Company with respect to which 25% or more of the total number of votes for the election of the Board of Directors of the Company may be cast, (ii) as a result of, or in connection with, any cash tender offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Company shall cease to constitute a majority of the Board of Directors of the Company, or (iii) the stockholders of the Company shall approve an agreement providing either for a transaction in which the Company will cease to be an independent publicly-owned corporation or for a sale or other disposition of all or substantially all the assets of the Company. Shares as to which awards may be granted under the Stock Option Plan, and shares then subject to awards, will be adjusted appropriately by the RRP and SOP Committee in the event of any merger, consolidation, reorganization, recapitalization, stock dividend, stock split or other change in the corporate structure or Common Stock of the Company. In the event of any merger, consolidation or combination of the Company with or into another financial institution holding company or other entity, whereby either the Company is not the continuing entity or its outstanding shares of Common Stock are converted into or exchanged for different securities, cash or property, or any combination thereof, pursuant to a plan or agreement the terms of which are binding upon all stockholders, any participant to whom a stock option, SAR or Limited SAR has been granted will have the right upon exercise of the option, SAR or Limited SAR (subject to the terms of the Stock Option Plan and any other applicable limitation) to an amount equal to the excess of fair market value on the date of exercise of the consideration receivable in the merger, consolidation or combination with respect to the shares covered or represented by the stock option, SAR or Limited SAR over the exercise price of the option, SAR or Limited SAR multiplied by the number of shares with respect to which the option, SAR or Limited SAR has been exercised. Amendment and Termination The Board of Directors of the Company may at any time amend, suspend or terminate the Stock Option Plan or any portion thereof, but may not, without the prior ratification of the stockholders, make any amendment which shall (i) materially increase the aggregate number of securities which may be issued under the Stock Option Plan (except as specifically set forth under the Stock Option Plan), (ii) materially increase the aggregate number of securities which may be issued under the Stock Option Plan to directors who are not employees of the Company, or (iii) change the class of persons eligible to participate in the Stock Option Plan, provided, however, that no such amendment, suspension or termination shall impair the rights of any participant, without his consent, in any award made pursuant to the Stock Option Plan. Unless previously terminated, the Stock Option Plan shall continue in effect for a term of ten years, after which no further awards may be granted under the Stock Option Plan. Federal Income Tax Consequences Under present federal income tax laws, awards under the Stock Option Plan will have the following consequences: (1) The grant of an award will neither, by itself, result in the recognition of taxable income to the participant nor entitle the Company to a deduction at the time of such grant. (2) The exercise of a stock option which is an "Incentive Stock Option" within the meaning of Section 422 of the Code will generally not, by itself, result in the recognition of taxable income to the participant nor entitle the 7 Company to a deduction at the time of such exercise. However, the difference between the exercise price and the fair market value of the option shares on the date of exercise is an item of tax preference which may, in certain situations, trigger the alternative minimum tax. The alternative minimum tax is incurred only when it exceeds the regular income tax. The alternative minimum tax will be payable at the rate of 26% on the first $175,000 of "minimum taxable income" above the exemption amount ($33,750 for single individual and $45,000 for married individuals filing jointly), and 28% on minimum taxable income more than $175,000 above the exemption amounts. If a taxpayer has alternative minimum taxable income in excess of $150,000 (married individuals filing jointly) or $112,500 (single individual), the $45,000 or $33,750 exemptions are reduced by an amount equal to 25% of the amount by which the alternative minimum taxable income of the taxpayer exceeds $150,000 or $112,500, respectively. The participant will recognize long-term capital gain or loss upon resale of the shares received upon such exercise, provided that the participant holds the shares for more than one year following exercise. (3) The exercise of a stock option which is not an Incentive Stock Option will result in the recognition of ordinary income by the participant on the date of exercise in an amount equal to the difference between the exercise price and the fair market value on the date of exercise of the shares acquired pursuant to the stock option. (4) The exercise of a SAR will result in the recognition of ordinary income by the participant on the date of exercise in an amount of cash, and/or the fair market value on that date of the shares, acquired pursuant to the exercise. (5) The Company will be allowed a deduction at the time, and in the amount of, any ordinary income recognized by the participant under the various circumstances described above, provided that the Company meets its federal withholding tax obligations. Awards Under the Stock Option Plan The following table presents information at December 1, 1998, with respect to the number of awards of options which are intended to be granted under the Stock Option Plan, subject to stockholder ratification of the Stock Option Plan, to (i) the Named Officer, (ii) all executive officers of the Company and the Association as a group, (iii) directors who are not executive officers of the Company and the Association as a group, and (iv) all non-executive officer employees of the Company or the Association as a group. On December 1, 1998, the average of the closing bid and asked prices for the Common Stock as quoted on the OTC Electronic Bulletin Board was $11.50 per share.
=========================================================================================== 1998 STOCK OPTION AND INCENTIVE PLAN - ------------------------------------------------------------------------------------------- Name and Position Dollar Value(1) Number of Shares =========================================================================================== Ernest A. Moretti, Director, President and Chief Executive Officer............................... $ --- 25,292 Executive Officer Group (3 persons)..................... --- 35,408 Non-Executive Officer Director Group (8 persons)........ --- 40,464 Non-Executive Officer Employee Group (2 persons)........ --- 10,118 ===========================================================================================
(1) Any value realized will be the difference between the exercise price and the market value upon exercise. Since the options have not been granted, there is no current value. Subject to the conditions of the Stock Option Plan, the proposed awards described in the preceding table will vest in five equal annual installments with the first installment immediately vesting on the date of stockholder ratification of the Stock Option Plan and the additional installments vesting ratably on the four subsequent anniversaries of the date of stockholder ratification of the Stock Option Plan. All options are required to be granted with an exercise price equal to the fair market value of the shares on the date of grant of such stock option. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE ADOPTION OF THE 1999 STOCK OPTION AND INCENTIVE PLAN. 8 PROPOSAL II - RATIFICATION OF THE RECOGNITION AND RETENTION PLAN General Establishment and implementation of the Recognition and Retention Plan ("RRP") is subject to ratification by stockholders The RRP has been adopted by the Board of Directors of the Company, subject to stockholder ratification. The RRP is designed to provide directors, officers and employees with a proprietary interest in the Company in a manner designed to encourage such individuals to remain with the Company and the Association. Ratification by stockholders of the adoption of the RRP will ratify the awards proposed thereunder and as described in "Awards under the RRP" below, and will ratify the granting of additional restricted stock awards pursuant to the provisions of the RRP. Pursuant to the RRP, 40,468 shares of Common Stock (or 4.0% of the shares of the Company issued in its initial public offering), funded from either authorized but unissued shares or issued shares subsequently reacquired and held as treasury shares, will be available for awards. Management currently intends, to the extent practicable and feasible, to fund the RRP from issued shares reacquired by the Company in the open market. To the extent the Company utilizes authorized but unissued shares to fund the RRP the interests of current stockholders will be diluted. Assuming all RRP Shares are awarded through the use of authorized but unissued Common Stock, current stockholders would be diluted by approximately 4.0%. Upon ratification of the RRP by stockholders, an aggregate of 34,394 shares of Common Stock will be awarded to directors, officers and employees of the Company and the Association, which will leave 6,074 shares available for future awards. Attached as Exhibit B to this Proxy Statement is the complete text of the form of the RRP. The principal features of the RRP are summarized below. Principle Features of the RRP The RRP provides for the award of shares of Common Stock ("RRP Shares") subject to the restrictions described below. Each award under the RRP will be made on such terms and conditions, consistent with the RRP, as the RRP and SOP Committee shall determine. The RRP is administered by the Company's RRP and SOP Committee, which is comprised of directors Heaver, Huether and Salkin. The RRP and SOP Committee will select the recipients and terms of awards pursuant to the RRP. In determining to whom and in what amount to grant awards, the RRP and SOP Committee considers the position and responsibilities of eligible individuals, the value of their services to the Company and the Association, and other factors it deems relevant. Pursuant to the terms of the RRP, any director, advisory director, emeritus director, officer or employee of the Company or its affiliates may be selected by the RRP and SOP Committee to participate in the RRP, which currently includes eligible participants of approximately 24 persons. The RRP provides that RRP Shares used to fund awards under the RRP may be either authorized but unissued shares or reacquired shares held by the Company in its treasury. Any RRP Shares which are forfeited will again be available for issuance under the RRP or any other plan of the Company or its subsidiaries. RRP award recipients earn (i.e., become vested in) awards, over a period of time as determined by the RRP and SOP Committee, at the time of grant. RRP Shares to be awarded in 1999 to directors, officers and employees will vest in five equal annual installments, with the first installment vesting immediately upon the date of ratification of the RRP by the Company's stockholders, subject to the conditions described below. RRP Shares are subject to forfeiture if the recipient fails to remain in the continuous service (as defined in the RRP) as an employee, officer or director (including advisory and emeritus directors) of the Company or the Association for a stipulated period (the "restricted period"). Vested shares are distributed to recipients as soon as practicable following the date on which they are earned. The RRP and SOP Committee may, in its discretion, accelerate the time at which any or all restrictions will lapse, or may remove any or all of the restrictions. In the event a recipient ceases to maintain continuous service with the Company or the Association by reason of early retirement, normal retirement, death or disability, RRP Shares still subject to restrictions will be free of these restrictions and shall not be forfeited. In the event of termination for any other reason, all shares will be forfeited and returned to the Company. 9 Holders of RRP Shares may not sell, assign, transfer, pledge or otherwise encumber any of the RRP Shares during the restricted period. All dividends declared or paid on RRP shares, including those RRP shares still subject to restrictions, will be paid to the participant. Finally, the RRP provides for an award of 2,023 RRP Shares to each director who is not an employee of the Company, as of the date of stockholder ratification of the RRP. Adjustments Upon Changes in Capitalization The restricted period with respect to shares granted pursuant to the RRP will lapse, and the stock will be earned, in the event of a change in control, unless otherwise determined by the RRP and SOP Committee. A change in control will be deemed to occur when (i) any third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, shall become the beneficial owner of shares of the Company with respect to which 25% or more of the total number of votes for the election of the Board of Directors of the Company may be cast, (ii) as a result of, or in connection with, any cash tender offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Company shall cease to constitute a majority of the Board of Directors of the Company, or (iii) the stockholders of the Company shall approve an agreement providing either for a transaction in which the Company will cease to be an independent publicly-owned corporation or for a sale or other disposition of all or substantially all of the assets of the Company. RRP Shares awarded under the RRP will be adjusted by the RRP and SOP Committee in the event of a reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares, merger or other change in corporate structure or the Common Stock of the Company. Federal Income Tax Consequences Holders of RRP Shares will recognize ordinary income on the date that the RRP Shares are no longer subject to a substantial risk of forfeiture, in an amount equal to the fair market value of the shares on that date. In certain circumstances, a holder may elect to recognize ordinary income and determine such fair market value on the date of the grant of the restricted stock. Holders of RRP Shares will also recognize ordinary income equal to their dividend or dividend equivalent payments when such payments are received. Amendment to the RRP The Board of Directors of the Company may amend, suspend or terminate the RRP or any portion thereof at any time, provided however, that no such amendment, suspension or termination shall materially impair the rights of any participant, without his or her consent, in any award made pursuant to the RRP. Notwithstanding anything in the RRP to the contrary, such provisions may not be amended more than once every six months, other than to comport with changes in the Code, ERISA or the rules thereunder. 10 Awards Under the RRP The following table presents information at December 1, 1998, with respect to the number of shares of restricted stock which are intended to be granted under the RRP, subject to stockholder ratification of the RRP, to (i) the Named Officer (ii) all executive officers of the Company and the Association as a group, and (iii) directors who are not executive officers of the Company or the Association as a group, and (iv) all non-executive officer employees of the Company or the Association as a group.
==================================================================================================================== RECOGNITION AND RETENTION PLAN - -------------------------------------------------------------------------------------------------------------------- Name and Position Dollar value(1) Shares of Restricted Stock ==================================================================================================================== Ernest A. Moretti, Director, President and Chief Executive Officer... $116,346 10,117 Executive Officer Group (3 persons).................................. 172,190 14,973 Non-Executive Officer Director Group (8 persons)..................... 186,116 16,184 Non-Executive Officer Employee Group (2 persons)..................... 37,226 3,237 ====================================================================================================================
- ---------- (1) Assumes an aggregate market value of the shares of restricted stock based on the average of the closing bid and asked prices of the Common Stock of $11.50 as reported on the OTC Electronic Bulletin Board on December 1, 1998. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE ADOPTION OF THE RECOGNITION AND RETENTION PLAN. STOCKHOLDER PROPOSALS In order to be eligible for inclusion in the Company's proxy materials for the next annual meeting of stockholders, any stockholder proposal to take action at such meeting must be received at the Company's office located at 11 West Ridgely Road, Lutherville, Maryland 21093, no later than May 28, 1999. Any such proposal shall be subject to the requirements of the proxy rules adopted under the Exchange Act. If a proposal does not meet the above requirements for inclusion in the Company's proxy materials, but otherwise meets the Company's eligibility requirements to be presented at the next Annual Meeting of Stockholders, the persons named in the enclosed form of proxy and acting thereon will have the discretion to vote on any such proposal in accordance with their best judgment if the proposal is received at the Company's main office later than August 29, 1999. OTHER MATTERS The Board of Directors is not aware of any business to come before the Meeting other than those matters described above in this Proxy Statement. However, if any other matter should properly come before the Meeting, it is intended that holders of the proxies will act in accordance with their best judgment. The cost of solicitation of proxies will be borne by the Company. The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of Common Stock. The Company has retained Regan & Associates, Inc. to assist in the solicitation of proxies for a fee of $3,000, plus reasonable out-of-pocked expenses not to exceed $1,750. In addition to solicitation by mail, directors, officers and regular employees of the Company and/or the Bank may solicit proxies personally or by telegraph or telephone without additional compensation. Lutherville, Maryland December 8, 1998 11 EXHIBIT A WYMAN PARK BANCORPORATION, INC. 1999 STOCK OPTION AND INCENTIVE PLAN 1. Plan Purpose. The purpose of the Plan is to promote the long-term interests of the Corporation and its stockholders by providing a means for attracting and retaining directors, advisory directors, directors emeriti, officers and employees of the Corporation and its Affiliates. It is intended that designated Options granted pursuant to the provisions of this Plan to persons employed by the Corporation or its Affiliates will qualify as Incentive Stock Options. Options granted to persons who are not employees will be Non-Qualified Stock Options. 2. Definitions. The following definitions are applicable to the Plan: "Affiliate" - means any "parent corporation" or "subsidiary corporation" of the Corporation, as such terms are defined in Section 424(e) and (f), respectively, of the Code. "Association" - means Wyman Park Federal Savings & Loan Association and any successor entity. "Award" - means the grant of an Incentive Stock Option, a Non-Qualified Stock Option, a Stock Appreciation Right, a Limited Stock Appreciation Right or any combination thereof, as provided in the Plan. "Code" - means the Internal Revenue Code of 1986, as amended. "Committee" - means the Committee of the Board of Directors referred to in Section 3 hereof. "Continuous Service" - means the absence of any interruption or termination of service as a director, advisory director, director emeritus, officer or employee of the Corporation or an Affiliate, except that when used with respect to persons granted an Incentive Stock Option means the absence of any interruption or termination of service as an Employee of the Corporation or an Affiliate. Service shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Corporation or any Affiliate or in the case of transfers between payroll locations of the Corporation or between the Corporation, its Affiliates or its successor. With respect to any advisory director or director emeritus, continuous service shall mean the availability to perform such functions as may be required of such persons. "Corporation" - means Wyman Park Bancorporation, Inc. "Disability" - means any physical or mental impairment which qualifies a director, advisory director, director emeritus, officer or employee for disability benefits under any applicable long-term disability plan maintained by the Association or an Affiliate, or, if no such plan applies, which A-1 renders such employee or director, in the judgment of the Committee, unable to perform his customary duties and responsibilities. "Early Retirement" -- means retirement from employment with or as a director, advisory director, or emeritus director of the Corporation prior to the Participant either (i) having reached the age of 62 or (ii) having maintained Continuous Service for at least three years. "Employee" - means any person, including an officer or director, who is employed by the Corporation or any Affiliate. "ERISA" - means the Employee Retirement Income Security Act of 1974, as amended. "Exercise Price" - means (i) in the case of an Option, the price per Share at which the Shares subject to such Option may be purchased upon exercise of such Option and (ii) in the case of a Right, the price per Share (other than the Market Value per Share on the date of exercise and the Offer Price per Share as defined in Section 10 hereof) which, upon grant, the Committee determines shall be utilized in calculating the aggregate value which a Participant shall be entitled to receive pursuant to Sections 9, 10 or 12 hereof upon exercise of such Right. "Incentive Stock Option" - means an option to purchase Shares granted by the Committee pursuant to Section 6 hereof which is subject to the limitations and restrictions of Section 8 hereof and is intended to qualify under Section 422(b) of the Code. "Limited Stock Appreciation Right" - means a stock appreciation right with respect to Shares granted by the Committee pursuant to Sections 6 and 10 hereof. "Market Value" - means the average of the high and low quoted sales price on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) of a Share on the Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such date the Shares are not quoted on the Composite Tape, on the New York Stock Exchange, or, if the Shares are not listed or admitted to trading on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which the Shares are listed or admitted to trading, or, if the Shares are not listed or admitted to trading on any such exchange, the mean between the closing high bid and low asked quotations with respect to a Share on such date on the Nasdaq Stock Market, or any similar system then in use, or, if no such quotations are available, the fair market value on such date of a Share as the Committee shall determine. "Non-Employee Director" - means a director who (a) is not currently an officer or employee of the Corporation; (b) is not a former employee of the Corporation who receives compensation for prior services (other than from a tax-qualified retirement plan); (c) has not been an officer of the Corporation; (d) does not receive renumeration from the Corporation in any capacity other than as a director; and (e) does not possess an interest in any other transactions or is not engaged in a business relationship for which disclosure would be required under Item 404(a) or (b) of Regulation S-K. A-2 "Non-Qualified Stock Option" - means an option to purchase Shares granted by the Committee pursuant to Section 6 hereof, which is not intended to qualify under Section 422(b) of the Code. "Normal Retirement" -- means retirement from employment with or as a director, advisory director, or emeritus director of the Corporation after the Participant has (i) reached the age of 65 and (ii) maintained Continuous Service for at least three years. "Option" - means an Incentive Stock Option or a Non-Qualified Stock Option. "Participant" - means any director, advisory director, director emeritus, officer or employee of the Corporation or any Affiliate who is selected by the Committee to receive an Award or who is granted an Award. "Plan" - means the 1999 Stock Option and Incentive Plan of the Corporation. "Related" - means (i) in the case of a Right, a Right which is granted in connection with, and to the extent exercisable, in whole or in part, in lieu of, an Option or another Right and (ii) in the case of an Option, an Option with respect to which and to the extent a Right is exercisable, in whole or in part, in lieu thereof has been granted. "Right" - means a Limited Stock Appreciation Right or a Stock Appreciation Right. "Shares" - means the common stock, par value $0.01 per share, of the Corporation. "Stock Appreciation Right" - means a stock appreciation right with respect to Shares granted by the Committee pursuant to Sections 6 and 9 hereof. 3. Administration. The Plan shall be administered by a Committee consisting of two or more members, each of whom shall be a Non-Employee Director. The members of the Committee shall be appointed by the Board of Directors of the Corporation. Except as limited by the express provisions of the Plan, the Committee shall have sole and complete authority and discretion to (i) select Participants and grant Awards; (ii) determine the number of Shares to be subject to types of Awards generally, as well as to individual Awards granted under the Plan; (iii) determine the terms and conditions upon which Awards shall be granted under the Plan; (iv) prescribe the form and terms of instruments evidencing such grants; and (v) establish from time to time regulations for the administration of the Plan, interpret the Plan, and make all determinations deemed necessary or advisable for the administration of the Plan. A majority of the Committee shall constitute a quorum, 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 ma jority of the Committee without a meeting, shall be acts of the Committee. 4. Participation in Committee Awards. The Committee may select from time to time Participants in the Plan from those directors (including advisory directors and directors emeriti), A-3 officers and employees of the Corporation or its Affiliates who, in the opinion of the Committee, have the capacity for contributing to the successful performance of the Corporation or its Affiliates. 5. Shares Subject to Plan. Subject to adjustment by the operation of Section 11 hereof, the maximum number of Shares with respect to which Awards may be made under the Plan is 101,171 of the common shares of the Corporation. The Shares with respect to which Awards may be made under the Plan may be either authorized and unissued shares or issued shares heretofore or hereafter reacquired and held as treasury shares. Shares which are subject to Related Rights and Related Options shall be counted only once in determining whether the maximum number of Shares with respect to which Awards may be granted under the Plan has been exceeded. An Award shall not be considered to have been made under the Plan with respect to any Option or Right which terminates and new Awards may be granted under the Plan with respect to the number of Shares as to which such termination has occurred. 6. General Terms and Conditions of Options and Rights. The Committee shall have full and complete authority and discretion except as expressly limited by the Plan, to grant Options and/or Rights and to provide the terms and conditions (which need not be identical among Participants) thereof. In particular, the Committee shall prescribe the following terms and conditions: (i) the Exercise Price of any Option or Right, which shall not be less than the Market Value per Share at the date of grant of such Option or Right, (ii) the number of Shares subject to, and the expiration date of, any Option or Right, which expiration date shall not exceed ten years from the date of grant, (iii) the manner, time and rate (cumulative or otherwise) of exercise of such Option or Right, and (iv) the restrictions, if any, to be placed upon such Option or Right or upon Shares which may be issued upon exercise of such Option or Right. The Committee may, as a condition of granting any Option or Right, require that a Participant agree not to thereafter exercise one or more Options or Rights previously granted to such Participant. No individual shall be granted Awards in any calendar year with respect to more than 25,292 shares, subject to adjustment as provided in Section 11. At the time of any Award, the Participant shall enter into an agreement with the Corporation in a form specified by the Committee, agreeing to the terms and conditions of the Award and such other matters as the Committee, in its sole discretion, shall determine (the "Option Agreement"). 7. Exercise of Options or Rights. (a) Except as provided herein, an Option or Right granted under the Plan shall be exercisable during the lifetime of the Participant to whom such Option or Right was granted only by such Participant and, except as provided in paragraphs (c) and (d) of this Section 7, no such Option or Right may be exercised unless at the time such Participant exercises such Option or Right, such Participant has maintained Continuous Service since the date of grant of such Option or Right. (b) To exercise an Option or Right under the Plan, the Participant to whom such Option or Right was granted shall give written notice to the Corporation in form satisfactory to the Committee (and, if partial exercises have been permitted by the Committee, by specifying the number of Shares with respect to which such Participant elects to exercise such Option or Right) together A-4 with full payment of the Exercise Price, if any and to the extent required. The date of exercise shall be the date on which such notice is received by the Corporation. Payment, if any is required, shall be made either (i) in cash (including check, bank draft or money order) or (ii) by delivering (A) Shares already owned by the Participant and having a fair market value equal to the applicable Exercise Price, such fair market value to be determined in such appropriate manner as may be provided by the Committee or as may be required in order to comply with or to conform to requirements of any applicable laws or regulations, or (B) a combination of cash and such Shares. (c) If a Participant to whom an Option or Right was granted shall cease to maintain Continuous Service for any reason other than termination for cause, such Participant may, but only within the period of three months immediately succeeding such cessation of Continuous Service and in no event after the expiration date of such Option or Right, exercise such Option or Right to the extent that such Participant was entitled to exercise such Option or Right at the date of such cessation, provided, however, that such right of exercise after cessation of Continuous Service shall not be available to a Participant if the Committee otherwise determines and so provides in the applicable instrument or instruments evidencing the grant of such Option or Right. If a Participant to whom an Option or Right was granted shall cease to maintain Continuous Service by reason of death, Normal Retirement, Early Retirement, or Disability then, unless the Committee shall have otherwise provided in the instrument evidencing the grant of an Option or Right, all Options and Rights granted and not fully exercisable shall become exercisable in full upon the happening of such event and shall remain so exercisable (i) in the event of death for the period described in paragraph (d) of this Section 7 and (ii) in the event of Normal Retirement, Early Retirement or Disability, for a period of three months following such date. If the Continuous Service of a Participant to whom an Option or Right was granted by the Corporation is terminated for cause, all rights under any Option or Right of such Participant shall expire immediately upon the giving to the Participant of notice of such termination. (d) In the event of the death of a Participant while in the Continuous Service of the Corporation or an Affiliate or within the three-month period referred to in paragraph (c) of this Section 7, the person to whom any Option or Right held by the Participant at the time of his death is transferred by will or the laws of descent and distribution, or in the case of an Award other than an Incentive Stock Option, pursuant to a qualified domestic relations order, as defined in the Code or Title I of ERISA or the rules thereunder may, but only to the extent such Participant was entitled to exercise such Option or Right as set forth in paragraph (c) of this Section 7, exercise such Option or Right at any time within a period of one year succeeding the date of death of such Participant, but in no event later than ten years from the date of grant of such Option or Right. Following the death of any Participant to whom an Option was granted under the Plan, irrespective of whether any Related Right shall have theretofore been granted to the Participant or whether the person entitled to exercise such Related Right desires to do so, the Committee may, as an alternative means of settlement of such Option, elect to pay to the person to whom such Option is transferred by will or by the laws of descent and distribution, or in the case of an Option other than an Incentive Stock Option, pursuant to a qualified domestic relations order, as defined in the Code or Title I of ERISA or the rules A-5 thereunder, the amount by which the Market Value per Share on the date of exercise of such Option shall exceed the Exercise Price of such Option, multiplied by the number of Shares with respect to which such Option is properly exercised. Any such settlement of an Option shall be considered an exercise of such Option for all purposes of the Plan. 8. Incentive Stock Options. Incentive Stock Options may be granted only to Participants who are Employees. Any provision of the Plan to the contrary notwithstanding, (i) no Incentive Stock Option shall be granted more than ten years from the date the Plan is adopted by the Board of Di rectors of the Corporation and no Incentive Stock Option shall be exercisable more than ten years from the date such Incentive Stock Option is granted, (ii) the Exercise Price of any Incentive Stock Option shall not be less than the Market Value per Share on the date of grant of such Incentive Stock Option, (iii) any Incentive Stock Option shall not be transferable by the Participant to whom such Incentive Stock Option is granted other than by will or the laws of descent and distribution, and shall be exercisable during such Participant's lifetime only by such Participant, (iv) no Incentive Stock Option shall be granted to any individual who, at the time such Incentive Stock Option is granted, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Corporation or any Affiliate unless the Exercise Price of such Incentive Stock Option is at least 110 percent of the Market Value per Share at the date of grant and such Incentive Stock Option is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted, and (v) the aggregate Market Value (determined as of the time any Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant in any calendar year shall not exceed $100,000. 9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon its exercise, entitle the Participant to whom such Stock Appreciation Right was granted to receive a number of Shares or cash or combination thereof, as the Committee in its discretion shall determine, the aggregate value of which (i.e., the sum of the amount of cash and/or Market Value of such Shares on date of exercise) shall equal (as nearly as possible, it being understood that the Corporation shall not issue any fractional shares) the amount by which the Market Value per Share on the date of such exercise shall exceed the Exercise Price of such Stock Appreciation Right, multiplied by the number of Shares with respect of which such Stock Appreciation Right shall have been exercised. A Stock Appreciation Right may be Related to an Option or may be granted independently of any Option as the Committee shall from time to time in each case determine. At the time of grant of an Option the Committee shall determine whether and to what extent a Related Stock Appreciation Right shall be granted with respect thereto; provided, however, and notwithstanding any other provision of the Plan, that if the Related Option is an Incentive Stock Option, the Related Stock Appreciation Right shall satisfy all the restrictions and limitations of Section 8 hereof as if such Related Stock Appreciation Right were an Incentive Stock Option and as if other rights which are Related to In centive Stock Options were Incentive Stock Options. In the case of a Related Option, such Related Option shall cease to be exercisable to the extent of the Shares with respect to which the Related Stock Appreciation Right was exercised. Upon the exercise or termination of a Related Option, any Related Stock Appreciation Right shall terminate to the extent of the Shares with respect to which the Related Option was exercised or terminated. A-6 10. Limited Stock Appreciation Rights. At the time of grant of an Option or Stock Appreciation Right to any Participant, the Committee shall have full and complete authority and discretion to also grant to such Participant a Limited Stock Appreciation Right which is Related to such Option or Stock Appreciation Right; provided, however and notwithstanding any other provision of the Plan, that if the Related Option is an Incentive Stock Option, the Related Limited Stock Appreciation Right shall satisfy all the restrictions and limitations of Section 8 hereof as if such Related Limited Stock Appreciation Right were an Incentive Stock Option and as if all other Rights which are Related to Incentive Stock Options were Incentive Stock Options. Notwithstanding any other provision of the Plan, a Limited Stock Appreciation Right shall be exercisable only during the period beginning on the first day following the date of expiration of any "offer" (as such term is hereinafter defined) and ending on the forty-fifth day following such date. A Limited Stock Appreciation Right shall, upon its exercise, entitle the Participant to whom such Limited Stock Appreciation Right was granted to receive an amount of cash equal to the amount by which the "Offer Price per Share" (as such term is hereinafter defined) or the Market Value on the date of such exercise, as shall have been provided by the Committee in its discretion at the time of grant, shall exceed the Exercise Price of such Limited Stock Appreciation Right, multiplied by the number of Shares with respect to which such Limited Stock Appreciation Right shall have been exercised. Upon the exercise of a Limited Stock Appreciation Right, any Related Option and/or Related Stock Appreciation Right shall cease to be exercisable to the extent of the Shares with respect to which such Limited Stock Appreciation Right was exercised. Upon the exercise or termination of a Related Option or Related Stock Appreciation Right, any Related Li mited Stock Appreciation Right shall terminate to the extent of the Shares with respect to which such Related Option or Related Stock Appreciation Right was exercised or terminated. For the purposes of this Section 10, the term "Offer" shall mean any tender offer or exchange offer for Shares other than one made by the Corporation, provided that the corporation, person or other entity making the offer acquires pursuant to such offer either (i) 25% of the Shares outstanding immediately prior to the commencement of such offer or (ii) a number of Shares which, together with all other Shares acquired in any tender offer or exchange offer (other than one made by the Corporation) which expired within sixty days of the expiration date of the offer in question, equals 25% of the Shares outstanding immediately prior to the commencement of the offer in question. The term "Offer Price per Share" as used in this Section 10 shall mean the highest price per Share paid in any Offer which Offer is in effect any time during the period beginning on the sixtieth day prior to the date on which a Limited Stock Appreciation Right is exercised and ending on the date on which such Limited Stock Appreciation Right is exercised. Any securities or property which are part or all of the consideration paid for Shares in the Offer shall be valued in determining the Offer Price per Share at the higher of (A) the valuation placed on such securities or property by the corporation, person or other entity making such Offer or (B) the valuation placed on such securities or property by the Committee. 11. Adjustments Upon Changes in Capitalization. In the event of any change in the outstanding Shares subsequent to the effective date of the Plan by reason of any reorganization, re capitalization, stock split, stock dividend, cash distribution in excess of normal dividend levels, combination or exchange of Shares, merger, consolidation or any change in the corporate structure A-7 or Shares of the Corporation, the maximum aggregate number, class and Exercise Price of shares as to which Awards may be granted under the Plan and the number and class of Shares with respect to which Awards theretofore have been granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. 12. Effect of Merger. In the event of any merger, consolidation or combination of the Corporation (other than a merger, consolidation or combination in which the Corporation is the continuing entity and which does not result in the outstanding Shares being converted into or exchanged for different securities, cash or other property, or any combination thereof) pursuant to a plan or agreement the terms of which are binding upon all stockholders of the Corporation (except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings), any Participant to whom an Option or Right has been granted shall have the right (subject to the pro visions of the Plan and any limitation applicable to such Option or Right), thereafter and during the term of each such Option or Right, to receive upon exercise of any such Option or Right an amount equal to the excess of the fair market value on the date of such exercise of the securities, cash or other property, or combination thereof, receivable upon such merger, consolidation or combination in respect of a Share over the Exercise Price of such Right or Option, multiplied by the number of Shares with respect to which such Option or Right shall have been exercised. Such amount may be payable fully in cash, fully in one or more of the kind or kinds of property payable in such merger, consolidation or combination, or partly in cash and partly in one or more of such kind or kinds of property, all in the discretion of the Committee. 13. Effect of Change in Control. Each of the events specified in the following clauses (i) through (iii) of this Section 13 shall be deemed a "change of control": (i) any third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, shall become the beneficial owner of shares of the Corporation with respect to which 25% or more of the total number of votes for the election of the Board of Directors of the Corporation may be cast, (ii) as a result of, or in connection with, any cash tender offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Corporation shall cease to constitute a majority of the Board of Directors of the Corporation, or (iii) the stockholders of the Corporation shall approve an agreement providing either for a transaction in which the Corporation will cease to be an independent publicly-owned corporation or for a sale or other disposition of all or substantially all the assets of the Corporation. Upon a change in control, unless the Committee shall have otherwise provided in the applicable Option Agreement, all Options and Stock Appreciation rights theretofore granted and not fully exercisable shall become exercisable in accordance with their terms; provided, however, that no Option or Stock Appreciation Right which has previously been exercised or otherwise terminated shall become exercisable. 14. Assignments and Transfers. No Award nor any right or interest of a Participant under the Plan in any instrument evidencing any Award under the Plan may be assigned, encumbered or transferred except, in the event of the death of a Participant, by will or the laws of descent and distribution or in the case of Awards other than Incentive Stock Options pursuant to a qualified domestic relations order, as defined in the Code or Title I of ERISA or the rules thereunder. A-8 15. Employee Rights Under the Plan. No director, advisory director, director emeritus, officer or employee shall have a right to be selected as a Participant nor, having been so selected, to be selected again as a Participant and no director, advisory director, director emeritus, officer, employee or other person shall have any claim or right to be granted an Award under the Plan or under any other incentive or similar plan of the Corporation or any Affiliate. Neither the Plan nor any action taken thereunder shall be construed as giving any Employee any right to be retained in the employ of the Corporation or any Affiliate. 16. Delivery and Registration of Stock. The Corporation's obligation to deliver Shares with respect to an Award shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the Participant to whom such Shares are to be delivered, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of the Securities Act of 1933 or any other Federal, state or local securities legislation or regulation. It may be provided that any representation requirement shall become inoperative upon a registration of the Shares or other action eliminating the necessity of such representation under such Securities Act or other securities legislation. The Corporation shall not be required to deliver any Shares under the Plan prior to (i) the admission of such Shares to listing on any stock exchange on which Shares may then be listed, and (ii) the completion of such regis tration or other qualification of such Shares under any state or Federal law, rule or regulation, as the Committee shall determine to be necessary or advisable. This Plan is intended to comply with Rule 16b-3 under the Securities Exchange Act of 1934. Any provision of the Plan which is inconsistent with said Rule shall, to the extent of such inconsistency, be inoperative and shall not affect the validity of the remaining provisions of the Plan. 17. Withholding Tax. The Corporation shall have the right to deduct from all amounts paid in cash with respect to the exercise of a Right under the Plan any taxes required by law to be withheld with respect to such cash payments. Where a Participant or other person is entitled to receive Shares pursuant to the exercise of an Option or Right pursuant to the Plan, the Corporation shall have the right to require the Participant or such other person to pay the Corporation the amount of any taxes which the Corporation is required to withhold with respect to such Shares, and may, in its sole discretion, withhold sufficient Shares to cover the amount of taxes which the Corporation is required to withhold. No discretion or choice shall be conferred upon any Participant with respect to the form, timing or method of any such tax withholding. 18. Amendment or Termination. The Board of Directors of the Corporation may amend, suspend or terminate the Plan or any portion thereof at any time, but no amendment shall be made without approval of the stockholders of the Corporation which shall (i) materially increase the aggregate number of Shares with respect to which Awards may be made under the Plan, (ii) materially increase the aggregate number of Shares which may be subject to Awards to Participants who are not Employees, or (iii) change the class of persons eligible to participate in the Plan; provided, however, that no such amendment, suspension or termination shall impair the rights of any Participant, without his consent, in any Award theretofore made pursuant to the Plan. A-9 19. Effective Date and Term of Plan. The Plan shall become effective upon its ratification by stockholders of the Corporation. It shall continue in effect for a term of ten years unless sooner terminated under Section 18 hereof. 20. Initial Grants. By, and simultaneously with, ratification of this Plan by the Corporation's stockholders, each member of the Board of Directors of the Corporation at the time of the stockholders ratification of the Plan who is not an Employee, is hereby granted a ten year, NonQualified Stock Option to purchase 5,058 Shares of the Corporation's common stock at an Exercise Price per Share equal to the Market Value of the Corporation's common stock on the date of grant of the Option. Each such Option shall be evidenced by a Non-Qualified Stock Option agreement in a form approved by the Board of Directors of the Corporation and shall be subject in all respects to the terms and conditions of this Plan, which are controlling. A-10 EXHIBIT B WYMAN PARK BANCORPORATION, INC. RECOGNITION AND RETENTION PLAN 1. Plan Purpose. The purpose of the Plan is to promote the long-term interests of the Corporation and its stockholders by providing a means for attracting and retaining directors, officers and employees of the Corporation and its Affiliates. 2. Definitions. The following definitions are applicable to the Plan: "Affiliate" - means any "parent corporation" or "subsidiary corporation" of the Corporation, as such terms are defined in Section 424(e) and (f), respectively, of the Code. "Association" - means Wyman Park Federal Savings & Loan Association, a savings institution and its successors. "Award" - means the grant of Restricted Stock pursuant to the terms of Section 13 of the Plan or by the Committee, as provided in the Plan. "Beneficiary" - means the person or persons designated by a Participant to receive any benefits payable under the Plan in the event of such Participant's death. Such person or persons shall be designated in writing on forms provided for this purpose by the Committee and may be changed from time to time by similar written notice to the Committee. In the absence of a written designation, the Beneficiary shall be the Participant's surviving spouse, if any, or if none, his estate. "Code" - means the Internal Revenue Code of 1986, as amended. "Committee" - means the Committee of the Board of Directors of the Corporation referred to in Section 7 hereof. "Continuous Service" - means the absence of any interruption or termination of service as a director, advisory director, director emeritus, officer or employee of the Corporation or any Affiliate. Service shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Corporation or any Affiliate or in the case of transfers between payroll locations of the Corporation or between the Corporation, its Affiliates or its successor. With respect to any advisory director or director emeritus, continuous service shall mean the availability to perform such functions as may be required of such individuals. "Corporation" - means Wyman Park Bancorporation, Inc. "Disability" - means any physical or mental impairment which qualifies a director, advisory director, director emeritus, officer or employee for disability benefits under any B-1 applicable long-term disability plan maintained by the Association or an Affiliate, or, if no such plan applies, which renders such employee or director, in the judgment of the Committee, unable to perform his customary duties and responsibilities. "Early Retirement" -- means retirement from employment with or as a director, advisory director, or emeritus director of the Corporation prior to the Participant either (i) having reached the age of 62 or (ii) having maintained Continuous Service for at least three years. "ERISA" - means the Employee Retirement Income Security Act of 1974, as amended. "Non-Employee Director" - means a director who (a) is not currently an officer or employee of the Corporation; (b) is not a former employee of the Corporation who receives compensation for prior services (other than from a tax-qualified retirement plan); (c) has not been an officer of the Corporation; (d) does not receive renumeration rom the Corporation in any capacity other than as a director; and (e) does not possess an interest in any other transactions or is not engaged in a business relationship for which disclosure would be required under Item 404(a) or (b) of Regulation S-K. "Normal Retirement" -- means retirement from employment with or as a director, advisory director, or emeritus director of the Corporation after the Participant has (i) reached the age of 65 and (ii) maintained Continuous Service for at least three years. "Participant" - means any director, advisory director, director emeritus, officer or employee of the Corporation or any Affiliate who is selected by the Committee to receive an Award or is granted an Award. "Plan" - means the Recognition and Retention Plan of the Corporation. "Restricted Period" - means the period of time selected by the Committee for the purpose of determining when restrictions are in effect under Section 3 hereof with respect to Restricted Stock awarded under the Plan. "Restricted Stock" - means Shares which have been contingently awarded to a Participant by the Committee subject to the restrictions referred to in Section 3 hereof, so long as such restrictions are in effect. "Shares" - means the common stock, par value $0.01 per share, of the Corporation. 3. Terms and Conditions of Restricted Stock. The Committee referred to in Section 7 hereof shall have full and complete authority, subject to the limitations of the Plan, to grant Awards and, in addition to the terms and conditions contained in paragraphs (a) through (f) of this Section 3, to provide such other terms and conditions (which need not be identical among Participants) in respect of such Awards, and the vesting thereof, as the Committee shall determine. B-2 (a) At the time of an Award, the Committee shall establish for each Participant a Restricted Period during which or at the expiration of which, as the Committee shall determine and provide in the agreement referred to in paragraph (d) of this Section 3, the Shares awarded as Restricted Stock shall vest, and subject to any such other terms and conditions as the Committee shall provide, Shares of Restricted Stock may not be sold, assigned, transferred, pledged, voted or otherwise encumbered by the Participant, except as hereinafter provided, during the Restricted Period. Except for such restrictions, and subject to paragraphs (d) and (e) of this Section 3 and Section 4 hereof, the Participant as owner of such Shares shall have all the rights of a stockholder. The Committee shall have the authority, in its discretion, to accelerate the time at which any or all of the restrictions shall lapse with respect to an Award, or to remove any or all of such restrictions, whenever it may determine that such action is appropriate by reason of changes in applicable tax or other laws or other changes in circumstances occurring after the commencement of such Restricted Period. (b) Except as provided in Section 5 hereof, if a Participant ceases to maintain Continuous Service for any reason (other than death, Disability, Normal Retirement, or Early Retirement), unless the Committee shall otherwise determine, all Shares of Restricted Stock theretofore awarded to such Participant and which at the time of such termination of Continuous Service are subject to the restrictions imposed by paragraph (a) of this Section 3 shall upon such termination of Continuous Service be forfeited and returned to the Corporation. If a Participant ceases to maintain Continuous Service by reason of death, Disability, Normal Retirement, or Early Retirement, Restricted Stock then still subject to restrictions imposed by paragraph (a) of this Section 3 will be free of those restrictions as of the day prior to such death, Disability, Normal Retirement, or Early Retirement. (c) Each certificate in respect of Shares of Restricted Stock awarded under the Plan shall be registered in the name of the Participant and deposited by the Participant, together with a stock power endorsed in blank, with the Corporation and shall bear the following (or a similar) legend: The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in the Recognition and Retention Plan of Wyman Park Bancorporation, Inc. Copies of such Plan are on file in the offices of the Secretary of Wyman Park Bancorporation, Inc., 11 West Ridgely Road, Lutherville, Maryland 21093. (d) At the time of the granting of any Award, the Participant shall enter into an Agreement with the Corporation in a form specified by the Committee, agreeing to the terms and conditions of the Award and such other matters as the Committee, in its sole discretion, shall determine (the "Restricted Stock Agreement"). (e) At the time of an Award, the Committee may, in its discretion, determine that the payment to the Participant of dividends declared or paid by the Corporation on any Restricted Stock shall be deferred until the earlier to occur of (i) the lapsing of the restrictions imposed B-3 under paragraph (a) of this Section 3 or (ii) the forfeiture of such Shares under paragraph (b) of this Section 3, and shall instead be held by the Corporation for the account of the Participant until such time. In the event of such deferral, there shall be credited at the end of each year (or portion thereof) interest on the amount of the Participant's account at the beginning of the year at a rate per annum as the Committee, in its discretion, may determine. Payment of deferred dividends to the Participant, together with interest accrued thereon, shall be made upon the earlier to occur of the events specified in (i) and (ii) of the immediately preceding sentence. (f) At the lapsing of the restrictions imposed by paragraph (a) of this Section 3, the Corporation shall redeliver to the Participant (or where the relevant provision of paragraph (b) of this Section 3 applies in the case of a deceased Participant, to his legal representative, Beneficiary or heir) the certificate(s) and stock power deposited with it pursuant to paragraph (c) of this Section 3 and the Shares represented by such certificate(s) shall be free of the restrictions referred to in paragraph (a) of this Section 3. 4. Adjustments Upon Changes in Capitalization. In the event of any change in the outstanding Shares subsequent to the effective date of the Plan by reason of any reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation or any change in the corporate structure or shares of the Corporation, the maximum aggregate number and class of Shares as to which Awards may be granted under the Plan and the number and class of Shares with respect to which Awards theretofore have been granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities received, as a result of any of the foregoing, by a Participant with respect to Restricted Stock shall be subject to the same restrictions and the certificate(s) or other instruments representing or evidencing such shares or securities shall be legended and deposited with the Corporation in the manner provided in Section 3 hereof. 5. Effect of Change in Control. Each of the events specified in the following clauses (i) through (iii) of this Section 5 shall be deemed a "change of control": (i) any third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, shall become the beneficial owner of shares of the Corporation with respect to which 25% or more of the total number of votes for the election of the Board of Directors of the Corporation may be cast, (ii) as a result of, or in connection with, any cash tender offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Corporation shall cease to constitute a majority of the Board of Directors of the Corporation, or (iii) the stockholders of the Corporation shall approve an agreement providing either for a transaction in which the Corporation will cease to be an independent publicly-owned corporation or for a sale or other disposition of all or substantially all of the assets of the Corporation. Upon a change in control, unless the Committee shall have otherwise provided in the applicable Restricted Stock Agreement, any Restricted Period with respect to Restricted Stock theretofore awarded to such participant shall lapse upon the happening of such event and all Shares awarded as Restricted Stock shall become fully vested in the Participant to whom such Shares were awarded. B-4 6. Assignments and Transfers. During the Restricted Period, no Award nor any right or interest of a Participant under the Plan in any instrument evidencing any Award under the Plan may be assigned, encumbered or transferred except (i) in the event of the death of a Participant, by will or the laws of descent and distribution, or (ii) pursuant to a qualified domestic relations order as defined in the Code or Title I of ERISA or the rules thereunder. 7. Administration. The Plan shall be administered by a Committee consisting of two or more members, each of whom shall be a Non-Employee Director. The members of the Committee shall be appointed by the Board of Directors of the Corporation. Except as limited by the express provisions of the Plan, the Committee shall have sole and complete authority and discretion to: (i) select Participants and grant Awards; (ii) determine the number of Shares to be subject to types of Awards generally, as well as individual Awards granted under the Plan; (iii) determine the terms and conditions upon which Awards shall be granted under the Plan; (iv) prescribe the form and terms of instruments evidencing such grants; and (v) establish from time to time regulations for the administration of the Plan, interpret the Plan, and make all determinations deemed necessary or advisable for the administration of the Plan. A majority of the Committee shall constitute a quorum, 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 without a meeting, shall be acts of the Committee. 8. Shares Subject to Plan and Delivery and Registration of Stock. Subject to adjustment by the operation of Section 4 hereof, the maximum number of Shares with respect to which Awards may be made under the Plan is 40,468 Shares of the Corporation. The Shares with respect to which Awards may be made under the Plan may be either authorized and unissued Shares or issued Shares heretofore or hereafter reacquired and held as treasury Shares. An Award shall not be considered to have been made under the Plan with respect to Restricted Stock which is forfeited and new Awards may be granted under the Plan with respect to the number of Shares as to which such forfeiture has occurred. The Corporation's obligation to deliver Shares with respect to an Award shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the Participant to whom such Shares are to be delivered, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of the Securities Act of 1933 or any other Federal, state or local securities legislation or regulation. It may be provided that any representation requirement shall become inoperative upon a registration of the Shares or other action eliminating the necessity of such representation under such Securities Act or other securities legislation. The Corporation shall not be required to deliver any Shares under the Plan prior to (i) the admission of such shares to listing on any stock exchange on which Shares may then be listed, and (ii) the completion of such registration or other qualification of such Shares under any state or Federal law, rule or regulation, as the Committee shall determine to be necessary or advisable. B-5 This Plan is intended to comply with Rule 16b-3 under the Securities Exchange Act of 1934. Any provision of the Plan which is inconsistent with said Rule shall, to the extent of such inconsistency, be inoperative and shall not affect the validity of the remaining provisions of the Plan. 9. Employee Rights Under the Plan. No director, advisory director, director emeritus, officer or employee shall have a right to be selected as a Participant nor, having been so selected, to be selected again as a Participant and no director, advisory director, director emeritus officer, employee or other person shall have any claim or right to be granted an Award under the Plan or under any other incentive or similar plan of the Corporation or any Affiliate. Neither the Plan nor any action taken thereunder shall be construed as giving any officer or employee any right to be retained in the employ of the Corporation, the Association or any Affiliate. 10. Withholding Tax. Upon the termination of the Restricted Period with respect to any shares of Restricted Stock (or at any such earlier time, if any, that an election is made by the Participant under Section 83(b) of the Code, or any successor provision thereto, to include the value of such Shares in taxable income), the Corporation may withhold from any payment or distribution made under this Plan sufficient Shares or may withhold or cause to be paid by the Participant sufficient cash to cover any applicable withholding and employment taxes. The Corporation shall have the right to deduct from all dividends paid with respect to Shares of Restricted Stock the amount of any taxes which the Corporation is required to withhold with respect to such dividend payments. No discretion or choice shall be conferred upon any Participant with respect to the form, timing or method of any such tax withholding. 11. Amendment or Termination. The Board of Directors of the Corporation may amend, suspend or terminate the Plan or any portion thereof at any time; provided, however, that no such amendment, suspension or termination shall impair the rights of any Participant, without his consent, in any Award theretofore made pursuant to the Plan. 12. Effective Date and Term of Plan. The Plan shall become effective upon its ratification by the stockholders of the Corporation. It shall continue in effect for a term of ten years unless sooner terminated under Section 10 hereof. 13. Initial Grants. By, and simultaneously with, the ratification of the Plan by the Corporation's stockholders, each member of the Board of Directors of the Corporation who is not a full-time Employee, is hereby granted an Award equal to 2,023 Shares of the Corporation's common stock. Each such Award shall be evidenced by a Restricted Stock Agreement in a form approved by the Committee administering this Plan and shall be subject in all respects to the terms and conditions of this Plan, which are controlling. The Awards will vest in five equal installments, with the first installment vesting immediately upon the ratification of the Plan by the Corporation's stockholders and each additional installment vesting after the end of the subsequent calendar years, as long as the director maintains Continuous Service with the Corporation or its Affiliates. B-6 REVOCABLE PROXY REVOCABLE PROXY Wyman Park Bancorporation, Inc. SPECIAL MEETING OF STOCKHOLDERS January 20, 1999 The undersigned hereby appoints the Board of Directors of Wyman Park Bancorporation, Inc. (the "Company"), with full powers of substitution, to act as attorneys and proxies for the undersigned to vote all shares of capital stock of the Company which the undersigned is entitled to vote at the Special Meeting of Stockholders (the "Meeting") to be held at the main office of the Company located at 11 West Ridgely Road, Lutherville, Maryland on January 20, 1999 at 3:00pm and at any and all adjournments and postponements thereof. 1. The ratification of the adoption of the Company's 1999 Stock Option and Incentive Plan. [_] FOR [_] AGAINST [_] ABSTAIN II. The ratification of the adoption of the Company's Recognition and Retention Plan. [_] FOR [_] AGAINST [_] ABSTAIN In their discretion, the proxies are authorized to vote on any other business that may properly come before the Meeting or any adjournment or postponement thereof. - -------------------------------------------------------------------------------- THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. - -------------------------------------------------------------------------------- The Board of Directors recommends a vote "FOR" each of the proposals listed above. (Continued and to be SIGNED on Reverse Side) THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS Should the undersigned be present and choose to vote at the Meeting or at any adjournment or postponements thereof, and after notification to the Secretary of the Company at the Meeting of the stockholder's decision to terminate this proxy, the power of such attorneys or proxies shall be deemed terminated and of no further force and effect. This proxy may also be revoked by filing a written notice of revocation with the Secretary of the Company or by duly executing a proxy bearing a later date. The undersigned acknowledges receipt from the Company, prior to the execution of this proxy, of notice of the Meeting and a proxy statement. Dated:__________________________ ___________________________________ Signature of Stockholder ___________________________________ Signature of Stockholder Please sign exactly as your name(s) appear(s) on this card. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If shares are held jointly, each holder should sign. - -------------------------------------------------------------------------------- PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----