As filed with the Securities and Exchange Commission on April 25, 2013.
Registration No. 333-186159
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
ON FORM S-3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
F.N.B. CORPORATION
(Exact name of registrant as specified in its charter)
Florida | 25-1255406 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
One F.N.B. Boulevard
Hermitage, Pennsylvania 16148
(724) 981-6000
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
Vincent J. Delie, Jr.
President and Chief Executive Officer
F.N.B. Corporation
One F.N.B. Boulevard
Hermitage, Pennsylvania 16148
(724) 981-6000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copy to:
Gary R. Walker, Esquire
Reed Smith LLP
Reed Smith Centre
225 Fifth Avenue
Pittsburgh, PA 15222
(412) 288-3131
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ¨
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered |
Amount to be Registered(1) |
Proposed Maximum Offering Price per Unit(2) |
Proposed Maximum Offering Price(2) |
Amount of Registration Fee(2) | ||||
Common stock, $0.01 par value |
10,158 | N/A | N/A | N/A | ||||
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(1) | Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the Securities Act), this registration statement shall also be deemed to cover any additional securities to be offered or issued in connection with the provisions of the Annapolis National Bancorp, Inc. 2000 Stock Incentive Plan (the Plan), which provides for adjustments in the amount of securities to be offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(2) | This Post-Effective Amendment No. 2 covers securities that were originally registered on F.N.B. Corporations Registration Statement on Form S-4 (Registration No. 333-186159), as amended, filed on February 25, 2013. All filing fees payable in connection with the issuance of these securities were previously paid in connection with the initial filing of F.N.B. Corporations Registration Statement on Form S-4 (Registration No. 333-186159) with the Securities and Exchange Commission on January 23, 2013. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
F.N.B. Corporation, a Florida corporation, hereby amends its Registration Statement on Form S-4 (Registration No. 333-186159), as amended by pre-effective amendment no. 1 and by post-effective amendment no. 1 on Form S-8, by filing this post-effective amendment no. 2 on Form S-3.
The Form S-4 related to 4,716,000 shares of F.N.B. common stock to be issued by F.N.B. in connection with its acquisition of Annapolis Bancorp, Inc., a Maryland corporation. In the acquisition, Annapolis Bancorp was merged with and into F.N.B., with F.N.B. being the surviving corporation. The merger consideration paid by F.N.B. for each share of Annapolis Bancorp common stock cancelled in the merger (excepting shares held by F.N.B., Annapolis Bancorp and their subsidiaries) was 1.143 shares of F.N.B. common stock, par value $0.01 per share, and $0.15 in cash. The shares registered on the Form S-4 consisted of: (A) shares to be distributed at the time of the merger in exchange for cancellation of the outstanding shares of Annapolis Bancorp common stock; and (B) shares reserved for issuance under various equity-based compensation plans. Those equity-based compensation plans were assumed by F.N.B. upon completion of the merger. All outstanding Annapolis Bancorp stock options and share awards outstanding at the effective time of the merger then became stock options and share awards with respect to shares of F.N.B. common stock, based on a formula described in the Form S-4.
The acquisition was completed on April 6, 2013.
This post-effective amendment no. 2 on Form S-3 relates to 10,158 shares of F.N.B.s common stock in the aggregate, which are reserved for issuance by F.N.B. upon the exercise or settlement of stock options issued under the Annapolis National Bancorp, Inc. 2000 Stock Incentive Plan, all of which stock options are held by a former director of Annapolis Bancorp. All such shares of common stock were originally registered on the Form S-4.
The information in this prospectus is not complete and may be changed. F.N.B. Corporation may not issue these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 25, 2013
PROSPECTUS
F.N.B. CORPORATION
10,158 Shares
Common Stock, $0.01 Par Value
Annapolis National Bancorp, Inc. 2000 Stock Incentive Plan
This prospectus relates to 10,158 shares of our common stock, par value $0.01 per share, which may be offered and sold pursuant to outstanding stock options awarded under the Annapolis National Bancorp, Inc. 2000 Stock Incentive Plan. We assumed the obligations of Annapolis Bancorp, Inc. under that plan upon completion of our acquisition of Annapolis Bancorp on April 6, 2013. As a result, those stock options relate to our common stock; and shares of our common stock will be issued to the award holders upon exercise or settlement of their awards, instead of shares of Annapolis Bancorp, Inc. common stock. We will receive the exercise price of the options (as adjusted to give effect to the merger) if and when the options are exercised.
Our common stock is listed on the New York Stock Exchange under the symbol FNB.
Investing in our common stock involves risks. See RISK FACTORS on page 1, and under similar headings in other documents that are incorporated by reference into this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this Prospectus is [ ], 2013.
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Investing in our common stock involves a number of different risks. We urge you to read and consider the risk factors and other disclosures relating to an investment in our securities described in any prospectus supplement or free writing prospectus that we may use in the future for this offering, and in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our subsequent filings under the Securities Exchange Act of 1934 and the other reports and documents we file with the Securities and Exchange Commission after the date of this prospectus, which are incorporated by reference in this prospectus. You should consider carefully those risks as well as other information that is contained in this prospectus, any prospectus supplement, the documents incorporated by reference in this prospectus and any prospectus supplement, and any free writing prospectuses that we have authorized for use, before deciding whether to purchase any of our common stock. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our common stock, and you may lose all or part of your investment.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other information with the SEC. Our SEC filings are available to the public over the Internet at the SECs website at www.sec.gov and on the shareholder and investor relations page of our corporate website at www.fnbcorporation.com. Except for those SEC filings incorporated by reference in this prospectus, none of the other information on those websites is part of this prospectus. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.
INFORMATION INCORPORATED BY REFERENCE
We incorporate by reference into this prospectus the information in documents we file with the SEC, which means we can disclose important information to you through those documents. The information incorporated by reference is an important part of this prospectus. Some information contained in this prospectus has updated the information incorporated by reference and some information filed subsequently with the SEC will automatically update this prospectus. We incorporate by reference:
| our Annual Report on Form 10-K for the year ended December 31, 2012; |
| the portions of our definitive proxy statement on Schedule 14A filed on April 3, 2013 that are incorporated by reference in our annual report on Form 10-K for the year ended December 31, 2012; |
| our Current Reports on Form 8-K filed on January 23, 2013, January 24, 2013, February 1, 2013, February 19, 2013, February 20, 2013, February 26, 2013, February 27, 2013 (two filings), March 26, 2013, April 8, 2013 and April 23, 2013 (in each case, except to the extent furnished but not filed); and |
| the description of F.N.B. common stock contained in our registration statement filed pursuant to Section 12 of the Exchange Act, and any amendment or report filed for the purpose of updating such description. |
In addition, all documents filed by F.N.B. pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall also be deemed to be incorporated by reference into this Registration Statement and to be a part hereof commencing on the date of the filing of such documents; provided, however, that we are not incorporating by reference any information furnished under either Item 2.02 or Item 7.01 of any Current Report on Form 8-K.
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Any statement contained herein or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or amended, to constitute a part of this Registration Statement.
You may request, either orally or in writing, a copy of any or all of the documents that are incorporated in this prospectus by reference and we will provide a copy of those filings, including any exhibits that are specifically incorporated by reference into such documents, at no cost, by contacting David B. Mogle, our Corporate Secretary, at F.N.B. Corporation, One F.N.B. Boulevard, Hermitage, Pennsylvania 16148, or by calling (724) 981-6000.
You should rely only on the information contained in or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in or incorporated by reference in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front cover of the applicable document.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, earnings outlook, business and prospects of F.N.B. You can find many of these statements by looking for words such as plan, believe, expect, intend, anticipate, estimate, project, potential, possible or other similar expressions.
These forward-looking statements involve certain risks, uncertainties and assumptions. The ability of F.N.B. to predict results or the actual effects of its plans and strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under the heading Risk Factors in our most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q and elsewhere, which are incorporated by reference in this prospectus, as well as the factors identified below.
| F.N.B.s businesses, financial results and balance sheet values are affected by business and economic conditions, including the following: |
| Changes in interest rates and valuations in debt, equity and other financial markets. |
| Disruptions in the liquidity and other functioning of U.S. and global financial markets. |
| Actions by the Federal Reserve Board, U.S. Department of the Treasury and other government agencies, including those that impact money supply and market interest rates. |
| Changes in customers, suppliers and other counterparties performance and creditworthiness which adversely affect loan utilization rates, delinquencies, defaults and counterparty ability to meet credit and other obligations. |
| Slowing or failure of the current moderate economic recovery and persistence or worsening levels of unemployment. |
| Changes in customer preferences and behavior, whether due to changing business and economic conditions, legislative and regulatory initiatives, or other factors. |
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| Legal and regulatory developments could affect F.N.B.s ability to operate its businesses, financial condition, results of operations, competitive position, reputation, or pursuit of attractive acquisition opportunities. Reputational impacts could affect matters such as business generation and retention, liquidity, funding, and ability to attract and retain management. These developments could include: |
| Changes resulting from legislative and regulatory reforms, including broad-based restructuring of financial industry regulation; changes to laws and regulations involving tax, pension, bankruptcy, consumer protection, and other industry aspects; and changes in accounting policies and principles. F.N.B. will continue to be impacted by extensive reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and otherwise growing out of the recent financial crisis, the precise nature, extent and timing of which, and their impact on F.N.B., remains uncertain. |
| Changes to regulations governing bank capital and liquidity standards, including due to the Dodd-Frank Act and to Basel III initiatives. |
| Impact on business and operating results of any costs associated with obtaining rights in intellectual property, the adequacy of F.N.B.s intellectual property protection in general and rapid technological developments and changes. F.N.B.s ability to anticipate and respond to technological changes can also impact its ability to respond to customer needs and meet competitive demands. |
| Business and operating results are affected by F.N.B.s ability to identify and effectively manage risks inherent in its businesses, including, where appropriate, through effective use of third-party insurance, derivatives, swaps, and capital management techniques, and to meet evolving regulatory capital standards. |
| Increased competition, whether due to consolidation among financial institutions; realignments or consolidation of branch offices, legal and regulatory developments, industry restructuring or other causes, can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can affect market share, deposits and revenues. |
| F.N.B. seeks to grow its business in part by acquiring other financial services companies, financial services assets and related deposits. These acquisitions often present risks and uncertainties, including, the possibility that the transaction cannot be consummated; regulatory issues; cost, or difficulties, involved in integration and conversion of the acquired businesses after closing; inability to realize expected cost savings, efficiencies and strategic advantages; the extent of credit losses in acquired loan portfolios and extent of deposit attrition; and the potential dilutive effect to current shareholders. Some of the risks and uncertainties involved in F.N.B.s most recent acquisitions are as follows: |
| The Annapolis, Maryland market is a new market area for F.N.B., and F.N.B. may experience difficulties in expanding into this more competitive market, such as failure to retain customers and key personnel of Annapolis Bancorp and its subsidiary, BankAnnapolis. |
| F.N.B.s pending acquisition of PVF Capital Corp., the parent company of Park View Federal Savings Bank, is anticipated to close within six months of the closing of its acquisition of Annapolis Bancorp. F.N.B. may experience difficulties, whether due to a shortage of management and personnel resources or other factors, in integrating the businesses of PVF Capital within a short time period after commencement of the integration process for the businesses of Annapolis Bancorp. |
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| Competition can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can affect market share, deposits and revenues. Industry restructuring in the current environment could also impact F.N.B.s business and financial performance through changes in counterparty creditworthiness and performance and the competitive and regulatory landscape. F.N.B.s ability to anticipate and respond to technological changes can also impact its ability to respond to customer needs and meet competitive demands. |
| Business and operating results can also be affected by widespread disasters, dislocations, cyber attacks, terrorist activities or international hostilities through their impacts on the economy and financial markets. |
Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed in or implied by these forward-looking statements. You should not place undue reliance on these statements, which speak only as of the date of this prospectus or as of the date of any document incorporated by reference in this prospectus.
All forward-looking statements concerning the merger or other matters addressed in this prospectus and attributable to F.N.B. or any person acting on F.N.B.s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Unless required by applicable law or regulation, F.N.B. undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.
F.N.B. Corporation is a diversified financial services holding company headquartered in Hermitage, Pennsylvania that had $12.0 billion in assets as of December 31, 2012. F.N.B. provides a broad range of financial services to its customers through its principal operating subsidiary, First National Bank of Pennsylvania, and its insurance agency, consumer finance, trust company, wealth management and merchant banking subsidiaries.
As of December 31, 2012, F.N.B. had 247 community banking offices in Pennsylvania, eastern Ohio and northern West Virginia, a leasing company and an insurance agency. First National Bank of Pennsylvania offers the services traditionally offered by full-service commercial banks, including commercial and individual demand and time deposit accounts and commercial, mortgage and individual installment loans. First National Bank of Pennsylvania also offers various alternative investment products, including mutual funds and annuities. As of December 31, 2012, First National Bank of Pennsylvania had total assets, total liabilities and total shareholders equity of approximately $11.8 billion, $10.3 billion and $1.6 billion, respectively.
The completion of F.N.B.s acquisition of Annapolis Bancorp on April 6, 2013 provided F.N.B. with an additional $435 million in total assets and eight banking offices in Anne Arundel and Queen Annes Counties, Maryland.
Regency Finance, F.N.B.s consumer finance subsidiary, has 20 offices in Pennsylvania, 19 offices in Tennessee, 17 offices in Ohio, and 15 offices in Kentucky. Regency Finance principally makes personal installment loans to individuals and purchases installment sales finance contracts from retail merchants.
Another F.N.B. subsidiary, First National Trust Company, provides a broad range of personal and corporate fiduciary services, including the administration of decedent and trust estates. First National Trust Company had approximately $2.8 billion of assets under management as of December 31, 2012.
First National Investment Services Company, LLC offers a broad array of investment products and services for wealth management customers through a networking relationship with a brokerage firm. F.N.B. Investment Advisors, Inc., an investment advisor registered with the SEC, offers wealth management customers objective investment programs featuring mutual funds, annuities, stocks and bonds.
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F.N.B.s insurance segment operates principally through First National Insurance Agency, LLC, or FNIA. FNIA is a full-service insurance agency offering a broad line of commercial and personal insurance through major carriers to businesses and individuals primarily within F.N.B.s geographic markets.
F.N.B.s insurance segment also includes a reinsurance subsidiary, Penn-Ohio Life Insurance Company, which underwrites, as a reinsurer, credit life and accident and health insurance sold by F.N.B.s lending subsidiaries. In addition, F.N.B. Bank has a direct subsidiary, First National Corporation, a Pennsylvania corporation, which offers title insurance products.
F.N.B. Capital Corporation, F.N.B.s merchant banking subsidiary, offers subordinated debt and other types of financing options for small- to medium-sized commercial enterprises that need financial assistance beyond the parameters of typical commercial bank lending products.
F.N.B.s principal corporate offices are located at One F.N.B. Boulevard, Hermitage, Pennsylvania 16148, and its telephone number at these offices is (724) 981-6000.
This prospectus covers the shares of F.N.B. common stock that are reserved for issuance upon exercise of stock options which were awarded to a former director of Annapolis Bancorp under the Annapolis National Bancorp, Inc. 2000 Stock Incentive Plan (the Plan) and assumed by F.N.B. in connection with its acquisition of Annapolis Bancorp. F.N.B. is offering those shares of its common stock directly to the holder of the stock options according to the terms of the award agreement governing his stock options. F.N.B. is not using an underwriter in connection with this offering.
Upon the exercise of options granted under the Plan, F.N.B. will receive the adjusted exercise price of these options, as described below. F.N.B. intends to use the proceeds from the option exercises for working capital and general corporate purposes.
Effect of the Merger on the Awards
On October 22, 2012, Annapolis Bancorp and F.N.B. entered into an Agreement and Plan of Merger, which provided for Annapolis Bancorp to be merged with and into F.N.B., with F.N.B. being the surviving corporation. The merger agreement contains the terms and conditions for the merger, including the treatment of Annapolis Bancorp stock options and other equity-based compensation awards in the merger. The merger of Annapolis Bancorp into F.N.B. became effective on April 6, 2013, and caused the following to occur at the time the merger became effective:
| Each outstanding share of Annapolis Bancorp common stock (other than shares owned by F.N.B. or Annapolis Bancorp or their subsidiaries) was converted into the right to receive shares of F.N.B. common stock, par value $0.01 per share, plus $0.15 in cash. We used a fixed exchange ratio of 1.143 shares of F.N.B. common stock for each share of Annapolis Bancorp common stock to determine the amount of F.N.B. common stock to be exchanged in the merger. |
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| The outstanding options issued under the equity-based compensation plans of Annapolis Bancorp no longer can be exercised for shares of Annapolis Bancorp common stock. Each of these options was converted into an option to acquire shares of F.N.B. common stock under the same terms and conditions that were in effect immediately before the merger, except for the following adjustments made to reflect the exchange ratio: |
| The number of shares of F.N.B. common stock purchasable under the option will be equal to the number of shares of Annapolis Bancorp common stock for which the option was previously exercisable multiplied by 1.143 (and rounded down to the nearest whole number of shares of F.N.B. common stock). |
| The exercise price will be equal to the exercise price per share in effect immediately before the merger divided by 1.143 (and rounded up to the nearest whole cent). |
| Each share award relating to Annapolis Bancorp common stock, including those designated as performance share awards, was converted into the right to receive a number of shares of F.N.B. common stock equal to 1.143 multiplied by the number of shares of Annapolis Bancorp common stock underlying the award, subject to any tax withholding requirements. Each share award otherwise will remain subject to the same restrictions, vesting and other terms and conditions that applied to the award before the merger. |
Pursuant to the merger agreement, the Plan is continuing in existence after the merger. F.N.B. assumed Annapolis Bancorps obligations under the Plan and will continue to administer the Plan until all outstanding awards under the Plan are exercised or expire. No new options or other awards will be granted under the Plan. This prospectus is being sent to all holders of awards under the Plan who did not become employees or directors of F.N.B. at the time of the merger. The following section of this prospectus is a summary of the terms on which you may acquire shares of F.N.B. common stock under the Plan following the merger. The following summary is subject to, and qualified in its entirety by reference to, the full text of the Plan, which is incorporated by reference into this prospectus. See Information Incorporated by Reference for information on how to obtain a copy of the Plan.
Administration of the Plans
Since the merger, the Plan is being administered by the Compensation Committee of F.N.B.s Board of Directors. Subject to the terms of the Plan, the Compensation Committee has the authority to construe and interpret the terms of the Plan and any award agreements under the Plan, adjust or modify award agreements for changes in applicable law and take any other action that the Compensation Committee considers to be necessary or advisable to administer the Plan. The members of the Compensation Committee are recommended by the Nominating and Corporate Governance Committee of Board of Directors in consultation with the Chairman of the Board of Directors, and approved by the full Board of Directors. The Compensation Committee is comprised of at least three members of F.N.B.s Board of Directors who are not currently employees of F.N.B. The members of the Compensation Committee serve for such terms as the Board of Directors may determine and until their successors are duly qualified and appointed. The Compensation Committee is constituted to satisfy the disinterested administration standard set forth in Rule 16b-3 promulgated under the Securities and Exchange Act of 1934. However, the Compensation Committee may have one member who does not qualify as an outside director under Section 162(m) of the Internal Revenue Code, so long as such person does not vote on compensation-related matters.
Types of Awards
The only award currently outstanding under the Plan is a non-qualified stock option. This award is governed by the award agreement entered into by the award holder and Annapolis Bancorp and the terms of the Plan under which the award was issued.
The shares of F.N.B. common stock issuable upon exercise of the option under the Plan may be authorized but unissued shares.
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Stock Options
Change in Control; Vesting; Exercise Period. The outstanding option under the Plan became immediately exercisable upon the signing of the merger agreement between F.N.B. and Annapolis Bancorp. The option may be exercised for 90 days following the date of termination of the holders service with Annapolis Bancorp.
Exercise Price. The exercise price of the non-qualified stock option under the Plan was set at the fair market value of a share of Annapolis Bancorp common stock at the date of grant, and is subject to adjustment to give effect to the merger with F.N.B. as described above.
How to Exercise Your Option. To exercise your stock option, you will need to give F.N.B. written notice of your intent to exercise your option, specifying the number of shares that you wish to purchase. Your notice must be accompanied by your payment of the exercise price. You may pay the exercise price by any one or several of the following methods:
| You may deliver cash. |
| You may deliver shares of F.N.B. common stock that you already own, as long as the fair market value of those shares on the date of delivery, together with any cash you deliver, is equal to the exercise price of the option. For this method of payment, you are permitted to deliver shares that you acquired pursuant to the exercise of an option. |
| You may choose to use a cashless exercise method, as follows: When you deliver your exercise notice to F.N.B., you must simultaneously deliver irrevocable instructions to a broker-dealer that direct the broker-dealer (A) to sell the shares that youre going to acquire by exercising your option, and (B) to pay the exercise price to F.N.B. by remitting to F.N.B. an amount of the sale proceeds that is equal to the aggregate exercise price, plus applicable withholding taxes. You will receive the balance of the sale proceeds (less commission and brokerage fees) or any shares resulting from the option exercise that did not need to be sold to cover the exercise price. |
However, the Plan also provides that F.N.B. may require the exercise price to be paid entirely in cash, and refuse to recognize any other method of exercising the option.
Withholding
Under the Plan, the holder of a non-qualified option may choose to satisfy the withholding tax obligations that result from the exercise of the option by having F.N.B. withhold, out of the shares of F.N.B. common stock that are deliverable to him in connection with the option exercise, a sufficient number of the shares to pay the withholding tax. The holder must make this election at or prior to the time he delivers his exercise notice to F.N.B. The number of shares of F.N.B. common stock to be withheld will be determined based on the fair market value of a share of F.N.B. common stock on the date of the exercise notice. As an alternative, the holder may deliver previously owned shares of F.N.B. common stock to F.N.B. at the time he exercises the option to satisfy his withholding tax obligations. In general, the maximum number of shares that the option holder may elect to have withheld will be equal to the minimum federal and state withholding. However, the Plan permits the Compensation Committee or Board of Directors to limit or eliminate entirely the holders ability to pay his withholding tax obligation with shares of common stock by including a provision to that effect in the holders award agreement. Even if such a provision is not included in an award agreement, at or prior to the exercise of the option, the Compensation Committee or the Board of Directors may limit or eliminate the holders ability to pay his withholding tax obligation with shares of common stock if, in the opinion of the Compensation Committee or Board of Directors, it would have an adverse tax or accounting effect to F.N.B.
Adjustments Upon Changes in Capitalization, Etc.
If there is any change in our common stock by reason of any stock dividend, stock split or any other capital adjustment, or upon a combination, consolidation, reorganization or similar transaction, the Compensation Committee will make adjustments in the number and kind of shares reserved for purchase pursuant to the Plans,
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and in the number, kind and price of shares covered by the awards that are then outstanding, as the Compensation Committee may determine to be equitable and appropriate, if at all, in order to reflect any increase or decrease in the number of issued shares of F.N.B. common stock resulting from that change.
Transferability of Awards
In general, the options and the restricted share units are not transferable except by will or the laws of descent or distribution, but there are some exceptions to this general rule. A non-qualified stock option granted under the Plan may be transferred by the option holder to a member of his or her immediate family (i.e., spouse, children, stepchildren, parents, grandchildren and great grandchildren) or to a trust established for the benefit of one or more of these individuals.
Amendment or Termination of Plans
The term of the Plan ended in 2010. As a result, new awards cannot be granted under the Plan. The Board of Directors of F.N.B. has the right to amend the terms of the Plan, unless the amendment would (A) revoke or alter an existing option, (B) increase the number of shares of F.N.B. common stock to be reserved for options, (C) decrease the exercise price, or (D) permit the exercise of options more than 10 years after the date of grant.
Non-Qualified and Unfunded
The Plan is unfunded and does not give you any rights that are superior to those of F.N.B.s general creditors. The Plan is not subject to the provisions of the Employment Retirement Income Security Act of 1974 and is not qualified under Section 401(a) of the Internal Revenue Code of 1986.
General. F.N.B. is authorized to issue 500 million shares of common stock, par value $0.01 per share, of which 139,929,242 shares were outstanding as of December 31, 2012. In connection with the completion of the merger of Annapolis Bancorp with and into F.N.B. on April 6, 2013, F.N.B. issued an additional 4,641,412 shares of its common stock.
As of December 31, 2012, F.N.B. had reserved approximately 4,633,090 shares of its common stock for issuance under employee stock plans and warrants issued to the U.S. Treasury in connection with the Capital Purchase Program of the Troubled Asset Relief Program. F.N.B. has also reserved approximately 8,828,216 shares of its common stock for issuance in connection with the pending merger between PVF Capital Corp. and F.N.B., which is anticipated to close in October 2013. After taking into account these issued and reserved shares, F.N.B. will have approximately 341,968,040 shares of authorized but unissued common stock available for issuance for other corporate purposes.
F.N.B. common stock trades on the New York Stock Exchange under the symbol FNB. The transfer agent and registrar for F.N.B. common stock is Registrar and Transfer Company.
Voting and Other Rights. The holders of F.N.B. common stock have one vote per share, and in general a majority of the votes cast with respect to a matter is sufficient to authorize action upon routine matters. Directors are elected by a plurality of votes cast, and each shareholder entitled to vote in an election of directors is entitled to vote each share of stock for each of the candidates for election as directors. However, shareholders do not have the right to cumulate their votes in elections of directors.
In the event of a liquidation, holders of F.N.B. common stock are entitled to receive pro rata any assets legally available for distribution to shareholders with respect to the F.N.B. shares they hold, subject to any prior rights of the holders of any F.N.B. preferred stock then outstanding.
F.N.B. common stock does not carry any preemptive rights, redemption privileges, sinking fund privileges or conversion rights. All outstanding shares of F.N.B. common stock are validly issued, fully paid and nonassessable.
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Distributions. The holders of F.N.B. common stock are entitled to receive such dividends or distributions as the F.N.B. board of directors may declare out of funds legally available for such payments. The payment of distributions by F.N.B. is subject to the restrictions under the Florida Business Corporation Act applicable to the declaration of distributions by a business corporation. A corporation generally may not authorize and make distributions if, after giving effect thereto, it would be unable to meet its debts as they become due in the usual course of business or if the corporations total assets would be less than the sum of its total liabilities plus the amount that would be needed, if it were to be dissolved at the time of distribution, to satisfy the claims upon dissolution of those shareholders who have preferential rights superior to the rights of the holders of its common stock. In addition, the payment of distributions to shareholders is subject to any prior rights of any then-outstanding F.N.B. preferred stock. Stock dividends, if any are declared, may be paid from authorized but unissued shares.
The ability of F.N.B. to pay distributions is affected by the ability of its subsidiaries to pay dividends to F.N.B. The ability of F.N.B.s subsidiaries, as well as of F.N.B., to pay dividends in the future is influenced by bank regulatory requirements and capital guidelines.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary of the general U.S. income tax laws that apply to the outstanding stock option and the sale of any shares acquired through that award. This summary applies only to U.S. taxpayers. Different tax consequences may result from different circumstances. For example, if you are not a U.S. taxpayer, the taxing jurisdiction or jurisdictions that apply to you will determine the tax effects that apply to you. This summary is based on U.S. federal income tax laws in effect as of the date of this prospectus.
Tax laws are complex and subject to change. State and local taxes also may apply, and the rules governing such taxes may vary from federal income tax rules. Your actual income tax consequences depend upon your individual circumstances. Accordingly, F.N.B. strongly urges you to seek the advice of a qualified tax adviser regarding your own particular situation.
The following discussion assumes that the per share exercise price of an option is less than the fair market value of a share on the date of exercise.
Non-Qualified Stock Options
A participant in the Plan should not recognize income at the time of grant of a nonqualified stock option, and F.N.B. should not be entitled to a deduction at that time. When the nonqualified stock option is exercised, the participant should recognize ordinary income equal to the excess of the fair market value of the shares on the date of exercise over the exercise price, if any. The participants tax basis in these shares should equal the exercise price paid plus the amount recognized by the participant as ordinary income. F.N.B. should generally be entitled to a federal income tax deduction in F.N.B.s tax year in which the nonqualified stock option is exercised, which is equal to the ordinary income recognized by the participant as described above. If the participant holds the shares acquired pursuant to the exercise of a nonqualified stock option for more than one year after the exercise of the option, the capital gain or loss realized upon the sale of these shares should be a long-term capital gain or loss. The participants holding period for the shares acquired upon the exercise of a nonqualified stock option should begin on the date of exercise.
Payment with Shares
When shares subject to an award are used to satisfy any minimum required tax withholding, the participant will generally recognize gain or loss with respect to those shares. In this situation, the participant will recognize a short-term capital gain or loss, as the case may be, equal to the difference between the amount of the minimum required tax withholding satisfied by the shares over the participants tax basis, if any, in those shares.
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If the participant uses shares he or she owns to pay, in whole or part, the exercise price of an option, no gain or loss will be recognized with respect to these shares. In this situation, however, the tax basis of the shares received upon exercise will be the tax basis of the shares delivered as payment, share for share, to the extent the number of shares received equals the number of shares delivered as payment. The tax basis of the balance of shares received in excess of the number of shares delivered by the participant will be equal to the sum of the amount of the exercise price paid in cash, if any, plus any amount the participant is required to recognize as income as a result of the exercise.
The consolidated financial statements of F.N.B. and its subsidiaries appearing in F.N.B.s Annual Report (Form 10-K) for the year ended December 31, 2012 and the effectiveness of F.N.B.s internal control over financial reporting as of December 31, 2012 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein and incorporated herein by reference. Such consolidated financial statements and F.N.B. managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2012 are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The validity of the securities offered hereby was passed on for us by Reed Smith LLP, Reed Smith Centre, 225 Fifth Avenue, Pittsburgh, Pennsylvania 15222.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. | Other Expenses of Issuance and Distribution. |
The following is an estimate, subject to future contingencies, of the expenses to be incurred by the Registrant in connection with the issuance and distribution of the securities being registered. All amounts shown are estimates, except for the registration fee.
Registration fee |
$ | | ||
Legal fees and expenses |
5,000 | |||
Accounting fees and expenses |
3,500 | |||
Printing and miscellaneous expenses |
2,000 | |||
|
|
|||
Total |
$ | 10,500 |
Item 15. | Indemnification of Directors and Officers. |
The Florida Business Corporations Act, as amended (the FBCA), provides that, in general, a business corporation may indemnify any person who is or was a party to any proceeding, other than an action by, or in the right of, the corporation, by reason of the fact that he or she is or was a director or officer of the corporation, against liability incurred in connection with such proceeding, including any appeal thereof, provided certain standards are met, including that such officer or director acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and provided further that, with respect to any criminal action or proceeding, the officer or director had no reasonable cause to believe his or her conduct was unlawful. In the case of proceedings by or in the right of the corporation, the FBCA provides that, in general, a corporation may indemnify any person who was or is a party to any such proceeding by reason of the fact that he or she is or was a director or officer of the corporation against expenses and amounts paid in settlement actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof, provided that such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made with respect to any claim as to which such person is adjudged liable, unless a court of competent jurisdiction determines upon application that such person is fairly and reasonably entitled to indemnity. To the extent that any officer or director is successful on the merits or otherwise in the defense of any of such proceedings, the FBCA requires that the corporation indemnify such officer or director against expenses actually and reasonably incurred in connection therewith. However, the FBCA further provides that, in general, indemnification or advancement of expenses shall not be made to or on behalf of any officer or director if a judgment or other final adjudication establishes that his or her actions, or omissions to act, were material to the cause of action so adjudicated and constitute: (i) a violation of the criminal law, unless the director or officer had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe it was unlawful; (ii) a transaction from which the director or officer derived an improper personal benefit; (iii) in the case of a director, a circumstance under which the director has voted for or assented to a distribution made in violation of the FBCA or the corporations articles of incorporation; or (iv) willful misconduct or a conscious disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder.
The Registrants articles of incorporation provide that the Registrant shall indemnify its directors and officers to the fullest extent permitted by law in connection with any actual or threatened action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Registrant or otherwise, arising out of the service to the Registrant or to another organization at the Registrants request, or because of their positions with the Registrant. The Registrants articles of incorporation further provide that the Registrant may purchase and maintain insurance to protect itself and any such director or officer against any liability, cost or expense asserted against or incurred by him or her with respect to such service, whether or not the Registrant would have the power to indemnify him or her against such liability by law or under the provisions of this paragraph.
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The Registrants bylaws provide that, to the fullest extent permitted by law, no director of the Registrant shall be personally liable for monetary damages for any action taken or any failure to take any action.
Item 16. | Exhibits. |
The exhibits to this registration statement are listed in the Exhibit Index to this registration statement, which is incorporated herein by reference.
Item 17. | Undertakings. |
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
Provided, however, that Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act to any purchaser:
(i) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
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(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned Registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrants annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plans annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hermitage, Commonwealth of Pennsylvania, on April 25, 2013.
F.N.B. CORPORATION | ||
By: | /s/ Vincent J. Delie, Jr. | |
Vincent J. Delie, Jr. | ||
President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, the registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date | ||
/s/ Vincent J. Delie, Jr. Vincent J. Delie, Jr. |
President and Chief Executive Officer and a Director (principal executive officer) | April 25, 2013 | ||
/s/ Vincent J. Calabrese, Jr. Vincent J. Calabrese, Jr. |
Chief Financial Officer (principal financial officer) |
April 25, 2013 | ||
Timothy G. Rubritz |
Corporate Controller and Senior Vice President (principal accounting officer) |
April 25, 2013 | ||
* William B. Campbell |
Director | April 25, 2013 | ||
* James D. Chiafullo |
Director | April 25, 2013 | ||
Laura E. Ellsworth |
Director | |||
* Philip E. Gingerich |
Director | April 25, 2013 | ||
* Robert B. Goldstein |
Director | April 25, 2013 | ||
* Stephen J. Gurgovits |
Chairman of the Board and a Director | April 25, 2013 | ||
Signature |
Title |
Date | ||
* |
Director | April 25, 2013 | ||
David J. Malone | ||||
* |
Director | April 25, 2013 | ||
D. Stephen Martz | ||||
* |
Director | April 25, 2013 | ||
Robert J. McCarthy, Jr. | ||||
* |
Director | April 25, 2013 | ||
Harry F. Radcliffe | ||||
* |
Director | April 25, 2013 | ||
Arthur J. Rooney, II | ||||
* |
Director | April 25, 2013 | ||
John W. Rose | ||||
* |
Director | April 25, 2013 | ||
Stanton R. Sheetz | ||||
|
Director | |||
John S. Stanik | ||||
* |
Director | April 25, 2013 | ||
William J. Strimbu | ||||
* |
Director | April 25, 2013 | ||
Earl K. Wahl, Jr. |
* | Vincent J. Delie, Jr., by signing his name hereto, does hereby sign this document on behalf of each of the above-noted directors of the Registrant pursuant to powers of attorney duly executed by such persons. |
By: | /s/ Vincent J. Delie, Jr. | |
Vincent J. Delie, Jr. | ||
Attorney-in-fact |
EXHIBIT INDEX
Exhibit |
Description | |
2.1 | Agreement and Plan of Merger, dated as of October 22, 2012, between F.N.B. Corporation and Annapolis Bancorp, Inc. (previously filed with the SEC on October 24, 2012 as Exhibit 2.1 to the Registrants Current Report on Form 8-K and incorporated herein by reference) | |
5.1 | Opinion of Reed Smith LLP (previously filed with the SEC on January 23, 2013 as Exhibit 5.1 to the Registrants Registration Statement on Form S-4 (Registration No. 333-186159)) | |
23.1 | Consent of Reed Smith LLP (included in Exhibit 5.1 to the Registrants Registration Statement on Form S-4 (Registration No. 333-186159) previously filed with the SEC on January 23, 2013) | |
23.2 | Consent of Ernst & Young LLP, filed herewith | |
24.1 | Powers of attorney (previously filed with the SEC on January 23, 2013 as Exhibit 24.1 to the Registrants Registration Statement on Form S-4 (Registration No. 333-186159)) | |
99.1 | Annapolis National Bancorp, Inc. 2000 Stock Incentive Plan, filed herewith |
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption Experts in the Registration Statement (Post-Effective Amendment No. 2 on Form S-3 to Form S-4, No. 333-186159) and related Prospectus of F.N.B. Corporation for the registration of 10,158 shares of its common stock and to the incorporation by reference therein of our reports dated February 28, 2013, with respect to the consolidated financial statements of F.N.B. Corporation and subsidiaries, and the effectiveness of internal control over financial reporting of F.N.B. Corporation and subsidiaries, included in its Annual Report (Form 10-K) for the year ended December 31, 2012, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
April 24, 2013
Exhibit 99.1
ANNAPOLIS NATIONAL BANCORP, INC.
2000 STOCK INCENTIVE PLAN
1. | Purpose |
The proper execution of the duties and responsibilities of the directors, executives, and employees of Annapolis National Bancorp, Inc. (the Corporation) and its subsidiaries is a vital factor in the continued growth and success of the Corporation. Toward this end, it is necessary to attract and retain effective and capable individuals to assume positions that contribute materially to the successful operation of the business of the Corporation and its subsidiaries. It will benefit the Corporation, therefore, to bind the interests of these persons more closely to its own interests by offering them an attractive opportunity to acquire a proprietary interest in the Corporation and thereby provide them with added incentive to remain in the service of the Corporation and its subsidiaries and to increase the prosperity, growth, and earnings of the Corporation. This stock option plan is intended to serve these purposes.
2. | Definitions |
The following terms wherever used herein shall have the meanings set forth below:
(a) The term Awards shall mean Options, Deferred Shares, and Restricted Share Awards, collectively.
(b) The term Board of Directors shall mean the Board of Directors of the Corporation.
(c) The term Change in Control of the Corporation shall mean a change in control of a nature that would be required to be reported in response to Item 6(c) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or not the Corporation is in fact required to comply therewith, provided that, without limitation, such a change in control shall be deemed to have occurred if (A) any person (as such term is used in Section 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its subsidiaries or a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as the ownership of Common Stock of the Corporation, and other than Lawrence E. Lerner or any member or members of this family, is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporations then outstanding securities; (B) during any period of two consecutive years (not including any period prior to the adoption of the Plan) individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Corporation to affect a transaction described in clauses (A) or (D) of this definition) whose election by the Board or nomination for election by the Corporations stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; (C) the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control of the Corporation; (D) the stockholders of the Corporation approve a merger, share exchange or consolidation of the Corporation with any other corporation, other than a merger, share exchange or consolidation that would result in the voting securities of the Corporation outstanding immediately prior thereto held by Lawrence E. Lerner or any member or members of his family continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the
combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger, share exchange or consolidation, or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or any agreements for the sale or disposition by the Corporation of all or substantially all the Corporations assets.
(d) The term Code shall mean the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.
(e) The term Committee shall mean a sub-committee of the Compensation Committee to be appointed by the Board of Directors to consist of three or more members, all of whom are members of the Board of Directors and are non-employee directors within the meaning of Rule 16-3 under the Exchange Act.
(f) The term Common Stock shall mean the shares of common stock, par value $0.01 per share, of the Corporation.
(g) The term Corporation shall mean Annapolis National Bancorp, Inc., a Maryland corporation.
(h) The term Deferred Shares shall mean shares that the Corporation has credited, pursuant to Paragraph 9 hereof, to a deferred compensation account in the name of a Participant.
(i) The term Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
(j) The term Fair Market Value shall mean the then current fair market value of Common Stock, as determined in good faith by the Committee and in a manner consistent with the rules set forth in Treas. Reg. §20.2031-2.
(k) The term Incentive Stock Option shall mean an Option granted pursuant to the Plan that is designated as an Incentive Stock Option and which satisfies the requirements of Section 422(b) of the Code.
(l) The term Nonqualified Stock Option shall mean an Option granted pursuant to the Plan that is not an Incentive Stock Option.
(m) The term Option or Stock Option shall mean a right granted pursuant to the Plan to purchase shares of Common Stock, and shall include the terms Incentive Stock Option and Nonqualified Stock Option.
(n) The term Option Agreement shall mean the written agreement representing Options granted pursuant to the Plan as contemplated by Paragraph 7 of the Plan.
(o) The term Participant shall mean any person holding an Award outstanding under the Plan.
(p) The term Plan shall mean the Annapolis National Bancorp, Inc. 2000 Stock Incentive Plan as approved by the Board of Directors on March 24, 2000, as the same may be amended from time to time.
(q) The term Restricted Share Award shall mean a right granted under Section 10 of this Plan to receive shares.
(r) The term subsidiary or subsidiaries shall mean a corporation of which capital stock possessing 50% or more of the total combined voting power of all classes of its capital stock entitled to vote generally in the election of directors is owned in the aggregate by the Corporation directly or indirectly through one or more subsidiaries.
3. | Effective Date of the Plan |
The Plan shall become effective upon stockholder approval, provided that such approval is received before March 24, 2001, and provided further that the Board of Directors may grant Options pursuant to the Plan prior to stockholder approval if such Options by their terms are contingent upon subsequent stockholder approval of the Plan.
4. | Administration |
(a) The Plan shall be administered by the Committee, provided that the Board may act in lieu of the Committee on any matter within the Committees discretion or authority.
(b) The Committee may establish, from time to time and at any time subject to the limitations of the Plan as set forth herein, such rules and regulations and amendments and supplements thereto as it deems necessary to comply with applicable law and regulation and for the proper administration of the Plan. A majority of the members of the Committee shall constitute a quorum. The vote of a majority of a quorum shall constitute action by the Committee.
(c) The Committee shall from time to time submit to the Board of Directors for its approval the names of those directors, executives, and employees who, in its opinion, should receive Options, and shall recommend the numbers of shares on which Options should be granted to each such person and the nature of the Options to be granted.
(d) Options shall be granted by the Committee and shall become effective only after execution of an Option Agreement between the Corporation and the Option holder.
(e) The Committees interpretation and construction of the provisions of the Plan and the rules and regulations adopted by the Committee shall be final, unless otherwise determined by the Board of Directors. No member of the Committee or the Board of Directors shall be liable for any action or determination made, in respect of the Plan, in good faith.
5. | Participation in the Plan |
(a) Participation in the Plan shall be limited to the employees and directors of the Corporation and its subsidiaries who shall be designated by the Committee.
(b) No member of the Board of Directors who is also an officer of the Corporation shall be eligible to serve on the Committee.
6. | Stock Subject to the Plan |
(a) There shall be reserved for the granting of Awards pursuant to the Plan and for issuance and sale pursuant to such Awards 200,000 shares of Common Stock. To determine the number of shares of Common Stock available at any time for the granting of Awards, there shall be deducted from the total number of reserved shares of Common Stock, the number of shares of Common Stock in respect of which Awards have been granted pursuant to the Plan that are still outstanding or have been exercised. The shares of Common Stock to be issued upon the exercise or vesting of Awards shall be made available from the authorized and unissued shares of Common Stock. If for any reason shares of Common Stock as to which an Award has been granted cease to be subject to purchase or delivery to Award holders thereunder, then such shares of Common Stock again shall be available for issuance pursuant to new Awards.
(b) Proceeds from the purchase of shares of Common Stock upon the exercise of Options granted pursuant to the Plan shall be used for the general business purposes of the Corporation.
(c) In the event of the reorganization, recapitalization, stock split, stock dividend, combination of shares of Common Stock, merger, consolidation, share exchange acquisition of property or stock, or any change in the capital structure of the Corporation, the Committee shall make such adjustments as may be equitable and appropriate in the number and kind of shares reserved for purchases by directors, executives or other employees, in the number, kind and price of shares covered by Awards granted pursuant to the Plan and then outstanding.
7. | Terms and Conditions of Options |
(a) Each Option granted pursuant to the Plan shall be evidenced by an Option agreement in such form as the Committee from time to time may determine.
(b) The exercise price per share for Options shall be established by the Board of Directors upon the recommendation of the Committee at the time of the grant of Options pursuant to the Plan and shall not be less than the Fair Market Value of a share of Common Stock on the date on which the Option is granted. If the Board of Directors does not establish a specific exercise price per share at the time of grant, the exercise price per share shall be equal to the Fair Market Value of a share of Common Stock on the date of grant of the Options.
(c) Each Option, subject to the other limitations set forth in the Plan, may extend for a period of up to 10 years from the date on which it is granted. The term of each Option shall be determined by the Board of Directors at the time of grant of the Option, provided that if no term is established by the Board of Directors the term of the Option shall be 10 years from the date on which it is granted.
(d) The Board of Directors upon recommendation of the Committee, may provide in the Option Agreement that the right to exercise each Option for the number of shares subject to each Option shall vest, in the Option holder over such period of time as the Committee, in its discretion, shall determine for each Option holder. Notwithstanding the foregoing, each Option Agreement shall provide that, upon the occurrence of a Change in Control of the Corporation, all Options then outstanding shall become immediately exercisable.
(e) Options shall be nontransferable and nonassignable, except that Options may be transferred by testamentary instrument or by the laws of descent and distribution, and Nonqualified Stock Options may be transferred to family members or family trusts, subject to the original terms of the Option.
(f) Unless the Committee specifies otherwise in an Option agreement, upon voluntary or involuntary termination of an Option holders service with the Corporation, his Options and all rights thereunder shall terminate effective at the close of business on the date the Option holder ceases to be a Director or regular, full-time employee of the Corporation or any of its subsidiaries, except (i) to the extent previously exercised and (ii) as provided in subparagraphs (g), (h) and (i) of this Paragraph 7.
(g) In the event an Option holder (i) takes a leave of absence from the Corporation or any of its subsidiaries for personal reasons or as a result of entry into the armed forces of the United States, or any of the departments or agencies of the United States government, or (ii) terminates his employment, or ceases providing services to the Corporation or any of its subsidiaries, by reason of death, disability, voluntary termination with the consent of the Committee, or other special circumstances, the Committee may consider his case and may take such action in respect of the related Option Agreement as it may deem appropriate under the circumstances, including accelerating the time previously granted for Options to be exercised and extending the time following the Option holders termination of active employment or service during which the Option holder is entitled to purchase the shares of Common Stock subject to such Options, provided that in no event may any Option be exercised after the expiration of the time of the Option.
(h) If an Option holder dies during the term of his Option without having fully exercised this Option, the executor or administrator of his estate or the person who inherits the right to exercise the Option by bequest or inheritance shall have the right within two years of the Option holders death to purchase the number of shares of Common Stock that the deceased Option holder was entitled to purchase at the date of his death, after which the Option shall lapse, provided that in no event may any Option be exercised after the expiration of the term of the Option.
(i) If an Option holder terminates employment without his having fully exercised his Option due to his retirement with the consent of the Corporation, then such Option holder shall have the right within ninety (90) days of the Option holders termination of employment or service to purchase the number of shares of Common Stock that the Option holder was entitled to purchase at the date of his termination, after which the Option shall lapse, provided that in no event may any Option be exercised after the expiration of the term of the Option. The Committee may cancel the Option during the ninety-day period referred to in this paragraph, if the Participant engages in employment or activities, which, in the opinion of the Committee, are contrary to the best interests of the Corporation. The Committee shall determine in each case whether a termination of employment or service shall be considered a retirement with the consent of the Corporation, and, subject to applicable law, whether a leave of absence shall constitute a termination of employment. Any such determination of the Committee shall be final and conclusive, unless overruled by the Board.
(j) The granting of an Option pursuant to the Plan shall not constitute or be evidence of any agreement or understanding, express or implied, on the part of the Corporation or any of its subsidiaries to retain or employ the Option holder for any specified period.
(k) In addition to the general terms and conditions set forth in this Paragraph 7 in respect of Options granted pursuant to the Plan, Incentive Stock Options granted pursuant to the Plan shall be subject to the following additional terms and conditions:
(i) Incentive Stock Options shall be granted only to individuals who, at the date of grant of the Option, are employees of the Corporation or any of its subsidiaries;
(ii) No employee who owns beneficially more than 10% of the total combined voting power of all classes of stock of the Corporation shall be eligible to be granted an Incentive Stock Option;
(iii) The aggregate fair market value (determined at the time the Incentive Stock Option is granted) of the shares of Common Stock in respect of which Incentive Stock Options are exercisable for the first time by the Option holder during any calendar year (under all such plans of the Corporation and its subsidiaries) shall not exceed $100,000; and
(iv) Any other terms and conditions specified by the Board of Directors that are not inconsistent with the Plan, except that such terms and conditions must be consistent with the requirements for Incentive Stock Options under Section 422 of the Code.
8. | Methods of Exercise of Options |
(a) An Option holder (or other person or person, if any, entitled to exercise an Option hereunder) desiring to exercise an Option granted pursuant to the Plan as to all or part of the shares of Common Stock covered by the Option shall (i) notify the Corporation in writing at its principal office at 180 Admiral Cochrane Drive, Annapolis, Maryland 21401-7394, to that effect, specifying the number of shares of Common Stock to be purchased and the method of payment therefor, and (ii) make payment or provision for payment for the shares of Common Stock as purchased in accordance with this Paragraph 8. Such written notice may be given by means of a facsimile transmission. If a facsimile transmission is used, the Option holder should mail the original executed copy of the written notice to the Corporation promptly thereafter.
(b) Payment or provision for payment shall be made as follows:
(i) The Option holder shall deliver to the Corporation at the address set forth in subparagraph 8(a) United States currency in an amount equal to the aggregate purchase price of the shares of Common Stock as to which such exercise relates; or
(ii) The Option holder shall tender to the Corporation shares of Common Stock already owned by the Option holder that, together with any cash tendered therewith, have an aggregate fair market value (determined based on the Fair Market Value of a share of Common Stock on the date the notice set forth in subparagraph 8(a) is received by the Corporation) equal to the aggregate purchase price of the shares of Common Stock as to which such exercise relates; or
(iii) The Option holder shall deliver to the Corporation an exercise notice together with irrevocable instructions to a broker to deliver promptly to the Corporation the amount of sale or loan proceeds necessary to pay the aggregate purchase price of the shares of Common Stock as to which such exercise relates and to sell the shares of Common Stock to be issued upon exercise of the Option and deliver the cash proceeds, less commission and brokerage fees to the Option holder or to deliver the remaining shares of Common Stock to the Option holder.
Notwithstanding the foregoing provisions, the Committee and the Board of Directors, in granting Options pursuant to the Plan, may limit the methods in which an Option may be exercised by any person and, in processing any purported exercise of an Option granted pursuant to the Plan, may refuse to recognize the method of exercise selected by the Option holder (other than the method of exercise set forth in subparagraph 8(b)(i)).
(c) In addition to the alternative methods of exercise set forth in paragraph 8(b), holders of Nonqualified Stock Options shall be entitled, at or prior to the time the written notice provided for in subparagraph 8(a) is delivered to the Corporation, to elect to have the Corporation withhold from the shares of Common Stock to be delivered upon exercise of the Nonqualified Stock Option that number of shares of Common Stock (determined based on the Fair Market Value of a share of Common Stock on the date the notice set forth in subparagraph 8(a) is received by the Corporation) necessary to satisfy any withholding taxes attributable to the exercise of the Nonqualified Stock Option. Alternatively, such holder of a Nonqualified Stock Option may elect to deliver previously owned shares of Common Stock upon exercise of the Nonqualified Stock Option to satisfy any withholding taxes attributable to the exercise of the Nonqualified Stock Option. If the Board of Directors does not include any provisions relating to this withholding feature in its resolutions granting the Nonqualified Stock Option or in the Option Agreement, the maximum amount that an Option holder may elect to have withheld from the shares of Common Stock otherwise deliverable upon exercise or the maximum number of previously owned shares an Option holder may deliver shall be equal to the minimum federal and state withholding. Notwithstanding the foregoing provisions, the Committee or the Board of Directors may include in the Option Agreement relating to any such Nonqualified Stock Option provisions limiting or eliminating the Option holders ability to pay his withholding tax obligation with shares of Common Stock; or if no such provisions are included in the Option Agreement, but in the opinion of the Committee or the Board of Directors such withholding would have an adverse tax or accounting effect to the Corporation, at or prior to exercise of the Nonqualified Stock Option the Committee or the Board of Directors may limit or eliminate the Option holders ability to pay his withholding tax obligation with shares of Common Stock. Notwithstanding the foregoing provisions, a holder of a Nonqualified Stock Option may not elect any of the methods of satisfying his withholding tax obligation in respect of any exercise if, in the opinion of counsel to the Corporation, there is a substantial likelihood that the election or timing of the election would subject the holder to a substantial risk of liability under Section 16 of the Exchange Act.
(d) An Option holder at any time may elect in writing to abandon an Option in respect of all or part of the number of shares of Common Stock as to which the Option shall not have been exercised.
(e) An Option holder shall have none of the rights of a stockholder of the Corporation until the shares of Common Stock covered by the Option are issued to him upon exercise of the Option.
9. | Deferred Shares |
(a) Elections to Defer. The Committee may at any time allow any Participant (or Participants) who is a member of the Board of Directors, or a member of a select group of management or highly compensated employees (within the meaning of the Employees Retirement Income Security Act of 1973, with each such individual being referred to herein as a Participant) to irrevocably elect, on the form approved by the Committee (the Election Form), to forego the receipt of cash compensation and in lieu thereof to have the Corporation credit Deferred Shares to the Participants account with a Fair Market Value equal to the compensation deferred. Each Election Form shall take effect five business days after its delivery to the Committee, unless in the meantime the Committee sends the Participant a written notice explaining why the Election Form is invalid. Notwithstanding the foregoing sentence, Election Forms shall be ineffective with respect to any compensation that a Participant earns before the date on which the Committee receives the Election Form.
(b) Vesting. Deferred Shares shall be 100% vested at all times.
(c) Recordkeeping; Cash Earnings on Deferred Shares. The Committee shall establish and maintain an individual account (the Cash Account) in the name of each Participant who files an Election Form. On the last day of each fiscal quarter, the Corporation shall credit to the Participants Cash Account any cash dividends paid on the balance of Deferred Shares credited to the Participants Account. On the last day of each fiscal year of the Corporation, the Committee shall credit to the Participants Account Deferred Shares with a Market Value equal to the balance of the Participants Cash Account (without regard to fractional shares), and the balance of the Participants Cash Account shall be reduced to zero. The Trustees shall hold each Participants Deferred Shares until distribution is required pursuant to subsection (d) hereof.
(d) Distributions of Deferred Shares and Earnings. The Trustees shall distribute a Participants Deferred Shares in five substantially equal annual installments that are paid before the last day of each of the five fiscal years of the Corporation that end after the date on which the Participants Continuous Service terminates, unless the Participant has properly elected a different form of distribution, on the form (the Distribution Election Form) approved by the Committee, and the Committee has received the Participants Distribution Election Form either more than 90 days before a Change in Control or more than one year before the date on which the Participants Continuous Service terminates for any reason. Fractional Shares shall not be distributed.
(e) Hardship Withdrawals. Notwithstanding any other provision of the Plan or a Participants Election Form, in the event the Participant suffers an unforeseeable hardship within the contemplation of this Section, the Participant may apply to the Committee for an immediate distribution of all or a portion of his Deferred Shares. The hardship must result from a sudden and unexpected illness or accident of the Participant or a dependent of the Participant, casualty loss of property, or other similar conditions beyond the control of the Participant. Examples of purposes, which are not considered hardships, include post-secondary school expenses or the desire to purchase a residence. In no event will a distribution be made to the extent the hardship could be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of the Participants nonessential assets to the extent such liquidation would not itself cause a severe financial hardship. The amount of any distribution hereunder shall be limited to the amount necessary to relieve the Participants financial hardship. The determination of whether a Participant has a qualifying hardship and the amount, which qualifies for distribution, if any shall be made by the Committee in its sole discretion. The Committee may require evidence of the purpose and amount of the need, and may establish such application or other procedures as it deems appropriate.
(f) Rights to Deferred Shares. A Participant may not assign his or her claim to Deferred Shares during his or her lifetime. A Participants right to Deferred Shares shall at all times constitute an unsecured promise of the Corporation to pay benefits as they come due. The right of the Participant or his or her beneficiary to receive benefits hereunder shall be solely an unsecured claim against the general assets of the Corporation. Neither the Participant nor his or her beneficiary shall have any claim against or rights in any specific assets, shares, or other funds of the Corporation.
10. | Restricted Share Awards |
(a) Grants. The Committee shall have the discretion to grant Restricted Share Awards to Employees and members of the Board of Directors. As promptly as practicable after a determination is made that a Restricted Share Award is to be made, the Committee shall notify the Participant in writing of the grant of the Award, the number of shares covered by the Award, and the terms upon which the shares subject to the Award may be earned. The date on which the Committee so notifies the Participant shall be considered the date of grant of the Restricted Share Awards. The Committee shall maintain records as to all grants of Restricted Share Awards under the Plan.
(b) Earning Shares. Unless the Committee specifically eliminates any vesting schedule in an Agreement granting a Restricted Share Award, shares subject to Restricted Share Awards shall be earned and become non-forfeitable by a Participant according to the following schedule, provided the Participant is an Employee or Director on the scheduled vesting date:
Years Since Award | Vested Percentage (applied to Restricted Shares) |
|||
Less than 1 | 0 | % | ||
1 | 25 | % | ||
2 | 50 | % | ||
3 | 75 | % | ||
4 or More | 100 | % |
Notwithstanding the foregoing and unless otherwise provided in a Participants Restricted Stock Award, each Participant shall become (100%) vested immediately (i) upon termination of the Participants service due to the Participants disability or death, or (ii) upon a Change in Control of the Corporation.
(c) Accrual of Dividends. Whenever shares are paid to a Participant or beneficiary under Section 11(d), such Participant or beneficiary shall also be entitled to receive, with respect to each share paid, an amount equal to any cash dividends (including special large and nonrecurring dividends, including one that has the effect of a return of capital to the Corporations stockholders) and a number of shares of Common Stock equal to any stock dividends, declared and paid with respect to a share of Common Stock between the date the relevant Restricted Share Award was initially granted to such Participant and the date the shares are being distributed. There shall also be distributed an appropriate amount of net earnings, if any, with respect to any cash dividends so paid out.
(d) Distribution of Shares.
(i) Timing of Distributions: General Rule. Except as otherwise expressly stated in this Plan, the Committee shall distribute shares and accumulated cash from dividends and interest to the Participant or his Beneficiary, as the case may be, as soon as practicable after they have been earned. No fractional shares shall be distributed.
(ii) Form of Distribution. The Committee shall distribute all shares, together with any shares representing stock dividends, in the form of Common Stock. One share of Common Stock shall be given for each share earned. Payments representing cash dividends (and earnings thereon) shall be made in cash.
(iii) Withholding. The Committee shall withhold from any cash payment made under this Plan sufficient amounts to cover any applicable withholding and employment taxes, and if the amount of such cash payment is not sufficient, the Committee shall require the Participant or beneficiary to pay to the Committee the amount required to be withheld as a condition of delivering the shares. The Committee shall pay over to the Corporation or Affiliate which employs or employed such Participant any such amount withheld from or paid by the Participant or beneficiary.
(iv) Regulatory Exceptions. No Restricted Shares shall be distributed unless and until all of the requirements of all applicable law and regulations shall have been fully complied with, including the receipt of approval of the Plan by the stockholders of the Corporation by such vote, if any, as may be required by applicable law and regulations.
(e) Voting of Plan Shares. All shares of Common Stock subject to Awards (whether or not subject to a Restricted Share Award) shall be voted by the Board of Directors in the manner directed by the Board of Directors.
(f) Deferral Elections. At any time 12 months prior to the date on which a Participant becomes vested in any shares subject to his or her Restricted Share Award, a Participant who is a member of a select group of management or highly compensated employees (within the meaning of the Employees Retirement Income Security Act of 1973) may irrevocably elect, on the form (the Election Form) approved by the Committee, to defer the receipt of all or a percentage of the shares that would otherwise be transferred to the Participant upon the vesting of such Award. If such an election is made, the shares shall be credited to the Participants Account as Deferred Shares on the date such shares would otherwise have been distributed to the Participant.
11. | Amendments and Discontinuance of the Plan |
The Board of Directors shall have the right at any time and from time to time to amend, modify, or discontinue the Plan provided that, except as provided in subparagraph 6(c), no such amendment, modification, or discontinuance of the Plan shall (i) revoke or alter the terms of any valid Option previously granted pursuant to the Plan, (ii) increase the number of shares of Common Stock to be reserved for issuance and sale pursuant to Options granted pursuant to the Plan, (iii) decrease the exercise price determined pursuant to the provisions of subparagraph 7(b), or (iv) provide for Options exercisable more than 10 years after the date granted.
12. | Plan Subject to Governmental Laws and Regulations |
The Plan and the grant of Awards pursuant to the Plan shall be subject to all applicable governmental laws and regulations. Notwithstanding any other provision of the Plan to the contrary, the Board of Directors may in its sole and absolute discretion make such changes in the Plan as may be required to conform the Plan to such laws and regulations.
13. | Duration of the Plan |
No Option shall be granted pursuant to the Plan after the close of business on March 23, 2010.
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