-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HO3rp7+RSieavzNGGz6EBV41q3v1aZlMRjfIDStCJtWSdJOH8hgms/3JDtfopJRO WIXTciutJQQ2AvkPfmr+KQ== 0000950165-97-000065.txt : 19970428 0000950165-97-000065.hdr.sgml : 19970428 ACCESSION NUMBER: 0000950165-97-000065 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19970425 EFFECTIVENESS DATE: 19970425 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROYAL BANCSHARES OF PENNSYLVANIA INC CENTRAL INDEX KEY: 0000922487 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 231627866 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-25855 FILM NUMBER: 97587568 BUSINESS ADDRESS: STREET 1: 732 MONTGOMERY AVE CITY: NARBERTH STATE: PA ZIP: 19072 BUSINESS PHONE: 6106684700 MAIL ADDRESS: STREET 1: 732 MONGTOMERY AVENUE CITY: NARBERTH STATE: PA ZIP: 19072 S-8 1 ROYAL FORM S-8 As filed with the Securities and Exchange Commission on April 25, 1997 Registration No. 33-__________ - ----------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ROYAL BANCSHARES OF PENNSYLVANIA, INC. (Exact Name of Registration As Specified In Its Charter) Pennsylvania 23-2812193 ------------------------------ ---------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 732 Montgomery Avenue, Narberth, Pennsylvania 19072-2090 - ------------------------------ --------------- (Address of principal executive (Zip Code) offices) ROYAL BANCSHARES OF PENNSYLVANIA, INC. STOCK OPTION AND APPRECIATION RIGHT PLAN ROYAL BANCSHARES OF PENNSYLVANIA, INC. OUTSIDE DIRECTORS' STOCK OPTION PLAN (Full title of the plans) Lee E. Tabas, President and Copies To: Chief Executive Officer B. Tyler Lincoln,Esquire ROYAL BANCSHARES OF PENNSYLVANIA, INC. SHUMAKER WILLIAMS, P.C. 732 Montgomery Avenue Post Office Box 88 Narberth, Pennsylvania 19072-2090 Harrisburg, Pennsylvania (610) 668-4700 17108 - ------------------------------------ ------------------------- (Name, address, including zip code, 717-763-1121 and telephone number, including area code, of agent for service) -------------------- CALCULATION OF REGISTRATION FEE
Title of Each Class Amount Proposed Maximum of Securities to to be Offering Price be Registered Registered Per Share - ------------------- ---------------- ----------------- Class A Common Stock $2.00 Par Value 1,150,000 $13.44 Title of Each Class Proposed Maximum Amount of of Securities to Aggregate Offering Registration be Registered Price Fee - ------------------- ---------------- --------------- Class A Common Stock $2.00 Par Value $15,456,000.00 $4,683.66 Based on the maximum number of shares of Royal Bancshares of Pennsylvania, Inc. ("Royal") Class A Common Stock, par value $2.00 per share, ("Common Stock") authorized for issuance under the plans set forth above. Includes 1,000,000 shares of Common Stock authorized for issuance under the Royal Stock Option and Stock Appreciation Right Plan and 150,000 shares of Common Stock authorized for issuance under the Royal Outside Directors' Stock Option Plan. There are also registered hereby such indeterminate number of shares of Common Stock as may become issuable by reason of the anti-dilution provisions of these plans. Estimated pursuant to Rule 457(c) and (h)(1) solely for the purpose of calculating the amount of the registration fee based upon the average of the closing bid and asked prices of the Common Stock on April 23, 1997, with respect to the 1,150,000 shares of Common Stock issuable under the plans.
Page 1 of 39 Sequentially Numbered Pages Index to Exhibits Found on Page TO PARTICIPANTS IN THE ROYAL BANCSHARES OF PENNSYLVANIA, INC. STOCK OPTION AND APPRECIATION RIGHT PLAN AND THE ROYAL BANCSHARES OF PENNSYLVANIA, INC. OUTSIDE DIRECTORS' STOCK OPTION PLAN Royal Bancshares of Pennsylvania, Inc. (the "Company") has filed a Registration Statement, concerning shares of its Class A Common Stock, $2.00 par value ("Common Stock") that may, from time to time, be issued pursuant to the Royal Bancshares of Pennsylvania, Inc. Stock Option and Appreciation Right Plan (the "Stock Option Plan") and the Royal Bancshares of Pennsylvania, Inc. Outside Directors' Stock Option Plan (the "Outside Directors' Option Plan"). Collectively, the Stock Option Plan and the Outside Directors' Option Plan are referred to herein as the "Plans." The Prospectus deemed to form a part of the Registration Statement consists of certain documents and explanatory memoranda regarding the Plans. Also deemed to comprise part of the Prospectus, are the following documents, each of which is specifically incorporated by reference into the Registration Statement and each of which is on file with the SEC (Periodic Report File No. 0-26366): (a) the Company's annual report on Form 10-K for the year ended December 31, 1996; and (b) the description of the Company's Common Stock which appears on page 44 of the Company's prospectus filed on June 15, 1994, which forms a part of the Company's Registration Statement on Form S-4 (Registration No. 33-80616). All documents filed with the SEC by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of the Prospectus and prior to the termination of the offering made hereby shall be deemed to be incorporated by reference in the Prospectus and to be a part thereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of the Prospectus 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 superseded, to constitute a part of the Prospectus. The Company will provide without charge to each participant in the Plans who requests, a copy of any or all of the documents mentioned above as well as all documentation relating to the Plans required to be delivered to participants pursuant to the rules adopted under the Securities Act of 1933. Requests for such copies should be addressed orally or in writing to: Attention: Corporate Secretary ROYAL BANCSHARES OF PENNSYLVANIA, INC. 732 Montgomery Avenue Narberth, Pennsylvania 19072-2090 (610) 668-4700 April 24, 1997 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. There are hereby incorporated by reference in this Registration Statement the following documents filed by the Company with the Commission: (a) Annual report on Form 10-K for the year ended December 31, 1996, (Periodic Report File No. 0-26366); and (b) the description of the Company's Common Stock which appears on page 44 of the Company's prospectus filed on June 15, 1994, which forms a part of the Company's Registration Statement on Form S-4 (Registration No. 33-80616). All documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Any statements contained in a document 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 that 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 superseded, to constitute a part of this Registration Statement. The document(s) containing the information specified in Items 1 and 2 of Part I of this Form S-8 that will be sent or given to the respective plan participants, as specified in Rule 428(b)(1) and in accordance with the instructions to Part I of Form S-8, are not filed with the Securities and Exchange Commission as a part of this Registration Statement. Item 4. Description of Securities Not applicable. Item 5. Interests of Named Experts and Counsel Not applicable. II-1 Item 6. Indemnification of Directors and Officers The general corporate law of the Commonwealth of Pennsylvania, as applicable to the Company, together with the Company's By-laws, provides the Company's officers and directors with a broad range of limitation from liability and indemnification for actions and inactions in connection with the performance of their duties. Aside from matters involving criminal statutes or tax laws, directors are not personally liable for monetary damages for any action or inaction taken unless the director has breached or failed to perform his or her duties of office and such breach or failure constitutes willful misconduct or recklessness. The Company's officers and directors are entitled to be indemnified if they are named as a party or threatened to be named as a party to any type of proceeding as a result of actions or inactions taken while in the course of their association with the Company provided that such action or inaction was in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the Company. Officers and directors of the Company will be presumed to be entitled to this indemnification absent breaches of fiduciary duty, lack of good faith or self-dealing and will be entitled to be indemnified unless their conduct is determined by a court to have constituted willful misconduct or recklessness. To the extent that a director or officer of the Company has been successful on the merits or otherwise in defense of any action or proceeding relating to third party actions or relating to derivative actions or in defense of any, claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonable incurred in connection therewith. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. Item 7. Exemption From Registration Claimed Not applicable. II-2 Item 8. Exhibits Exhibit No. - ----------- 4.1 Articles of Incorporation of Royal Bancshares of Pennsylvania, Inc. (Incorporated by reference to Exhibit 3(i) to Registrant's Registration Statement No. 0-26366 on Form S-4.) 4.2 Bylaws of Royal Bancshares of Pennsylvania, Inc. (Incorporated by reference to Exhibit 3(ii) to Registrant's Registration Statement No. 0-26366 on Form S-4.) 4.3 Royal Bancshares of Pennsylvania, Inc. Stock Option andAppreciation Right Plan. 4.4 Royal Bancshares of Pennsylvania, Inc. Outside Directors' Stock Option Plan. 5 Opinion of Shumaker Williams, P.C. 23.1 Consent of Grant Thornton, LLP. 23.2 Consent of Shumaker Williams, P.C. (contained at Exhibit 5 of this Registration Statement). 24 Power of Attorney of Directors and Officers (included on Signature Pages). Item 9. 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 of 1933; (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 II-3 or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (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) and (a)(1)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each 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 the 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 whichremain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 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. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment of 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 as asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless II-4 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 of 1933 and will be governed by the final adjudication of such issue. II-5 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-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Narberth, Commonwealth of Pennsylvania, on April 24, 1997. ROYAL BANCSHARES OF PENNSYLVANIA, INC. By: /s/ Lee E. Tabas ------------------------------------- Lee E. Tabas, President and Chief Executive Officer POWER OF ATTORNEY KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Lee E. Tabas and James J. McSwiggan, and each of them, his true and lawful attorney-in-fact, as agent with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacity, to sign any or all amendments to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following person in the capacities and on the dates indicated. Capacity Date -------- ---- President and Chief April 24, 1997 /s/ Lee E. Tabas Executive Officer and - ------------------ Director (Principal Lee E. Tabas Executive Officer) Vice President and Chief April 24, 1997 /s/ James J. McSwiggan Financial Officer - ---------------------- (Principal Financial James J. McSwiggan and Accounting Officer) Chairman of the Board April 24, 1997 /s/ Daniel M. Tabas and Director - --------------------- Daniel M. Tabas /s/ Charles W. Burhans Director April 24, 1997 - ---------------------- Charles W. Burhans /s/ Joseph P. Campbell Director April 24, 1997 - ---------------------- Joseph P. Campbell /s/ Carl M. Cousins Director April 24, 1997 - ---------------------- Carl M. Cousins Director - ---------------------- Jack R. Loew /s/ Albert Ominsky Director April 24, 1997 - ---------------------- Albert Ominsky /s/ Katharine B. L. Director April 24, 1997 Platt Director - ---------------------- Katherine B. L. Platt /s/ Robert R. Tabas Vice President and April 24, 1997 - --------------------- and Director Robert R. Tabas /s/ Susan K. Tabas Tepper Director April 24, 1997 - --------------------- Susan K. Tabas Tepper /s/ Edward B. Tepper Director April 24, 1997 - -------------------- Edward B. Tepper Director - -------------------- Charles Willner /s/ Howard Wurzak Director April 24, 1997 - ------------------- Howard Wurzak Exhibit Index Page Numer In Sequential Numbering Exhibit No. System - ------------- -------------- 4.1 Articles of Incorporation of Royal Bancshares of Pennsylvania, Inc. (Incorporated by reference to Exhibit 3(i) to Registrant's Registration Statement No. 0-26366 on Form S-4.) 4.2 Bylaws of Royal Bancshares of Pennsylvania, Inc. (Incorporated by reference to Exhibit 3(ii) to Registrant's Registration Statement No. 0-26366 on Form S-4.) 4.3 Royal Bancshares of Pennsylvania, 12 Inc. Stock Option and Appreciation Right Plan. 4.4 Royal Bancshares of Pennsylvania, Inc. 25 Outside Directors' Stock Option Plan. 5 Opinion of Shumaker Williams, P.C. 35 23.1 Consent of Grant Thornton, LLP. 38 23.2 Consent of Shumaker Williams, P.C. (contained at Exhibit 5 of this Registration Statement). 24 Power of Attorney of Directors and Officers (included on Signature Pages). EX-4 2 EX. 4.1 ARTICLES OF INCORPORATION (INC BY REF) EXHIBIT 4.1 ARTICLES OF INCORPORATION OF ROYAL BANCSHARES OF PENNSYLVANIA, INC. (INCORPORATED BY REFERENCE TO EXHIBIT 3(i) TO REGISTRANT'S REGISTRATION STATEMENT NO. 0-26366 ON FORM S-4). EX-4 3 EX. 4.2 BYLAWS (INC. BY REF) EXHIBIT 4.2 BYLAWS OF ROYAL BANCSHARES OF PENNSYLVANIA, INC. (INCORPORATED BY REFERENCD TO EXHIBIT 3(ii) TO REGISTRANT'S REGISTRATION STATEMENT NO. 0-26366 ON FORM S-4) EX-4 4 EX. 4.3 STOCK OPTION AND APPREC. RIGHT PLAN EXHIBIT 4.3 ROYAL BANCSHARES OF PENNSYLVANIA, INC. STOCK OPTION AND APPRECIATION RIGHT PLAN ROYAL BANCSHARES OF PENNSYLVANIA, INC. STOCK OPTION AND APPRECIATION RIGHT PLAN Table of Contents Section Page # - ------- ------ 1. Purpose 1 2. Definitions 1 3. Administration 2 4. Stock Subject to the Plan 2 5. Eligibility to Receive Awards 3 6. Form of Awards 3 7. Stock Options 3 8. Stock Appreciation Right 5 9. General Restrictions 7 10. Single or Multiple Agreements 7 11. Rights of a Shareholder 7 12. Termination of Employment 8 13. Rights in Event of Death or Disability 8 14. Withholding 8 15. Non-Assignability 9 16. Non-Uniform Determinations 9 17. Participants Not Obligated 9 18. Effect of Changes in Stock Subject to the Plan 9 19. Reservation of Shares of Stock 10 20. Amendment 10 21. Effect on Other Plans 10 22. Effective Date and Duration of the Plan 10 ROYAL BANCSHARES OF PENNSYLVANIA, INC. STOCK OPTION AND APPRECIATION RIGHT PLAN Section 1. Purpose. 1.1 The purpose of the Royal Bancshares of Pennsylvania, Inc. Stock Option and Appreciation Right Plan (the "Plan") is to further the long-term growth of Royal Bancshares of Pennsylvania, Inc. (the "Corporation") by offering incentive compensation related to long-term performance goals of those officers and other key employees who will be responsible for planning for and directing such growth. The Plan is also intended to be a means of reinforcing the commonality of interest between the Corporation and its officers and key employees and to be an aid in attracting and retaining officers and other key employees of outstanding abilities and specialized skills. The Corporation hopes to achieve these purposes through the grant of options to purchase shares of the Corporation's Class "A" Common Stock and the grant of stock appreciation rights. Section 2. Definitions. 2.1 Unless otherwise required by the context, the following terms shall have the meaning set forth below: (a) "Board" shall mean the Corporation's Board of Directors. (b) "Committee" shall mean a minimum of three individuals and a maximum of five individuals appointed by the Board. The Board of Directors may appoint any individual, whether or not a director, to serve as a Committee member, provided that such individual is ineligible and has been ineligible for a one year period prior to appointment to the Committee for selection as a person to whom a Stock Option or Stock Appreciation Right may be granted pursuant to this Plan or any other similar plan of the Board. The Committee shall be called the "Royal Bancshares of Pennsylvania, Inc. Stock Option and Appreciation Right Plan Committee" and shall have the rights and duties set forth in Section 3 below. (c) "Code" shall mean the Internal Revenue Code of 1986, as amended. (d) "Corporation" shall mean Royal Bancshares of Pennsylvania, Inc., a Pennsylvania business corporation, or any subsidiary thereof that adopts the Plan. (e) "Option Price" shall mean the purchase price for Stock under a Stock Option, as determined in Section 7(b) below. (f) "Participant" shall mean an officer or other key employee of the Corporation to whom a Stock Option or Stock Appreciation Right is granted under the Plan. 1 (g) "Plan" shall mean this Royal Bancshares of Pennsylvania, Inc. Stock Option and Appreciation Right Plan. (h) "Stock" shall mean the Class "A" Common Stock of the Corporation, par value $2.00. (i) "Stock Option" shall mean a right to purchase Stock, granted pursuant to Section 7 below. (j) "Stock Appreciation Right" shall mean a right to receive cash granted pursuant to Section 8 below. (k) "Subsidiary" shall mean a subsidiary of the Corporation. Section 3. Administration. 3.1 The Plan shall be administered by the committee. A simple majority of the members of the Committee shall constitute a quorum for the transaction of business. Unless otherwise determined by the Board, the interpretation and construction of any provision of the Plan by the Committee shall be final. No member of the Board or the committee shall be liable for any action or determination made by the member in good faith. The Committee shall have full and final authority in its discretion to interpret the provisions of the Plan; to decide all questions of fact arising in its application; to determine the employees to whom awards shall be made under the Plan; to determine the type of awards to be made and the amount, size and terms of each such award; to determine the time when awards shall be granted; and to make all other determinations necessary or advisable for the administration of the Plan. Section 4. Stock Subject to the Plan. 4.1 Subject to the provisions of Section 18 below and the next sentence of this Section, the maximum number of shares of Stock that may be optioned or sold under the Plan is one million (1,000,000) shares. However, at no time shall the maximum number of shares of Stock that may be optioned or sold under the Plan exceed fifteen percent (15%) of the shares of Stock outstanding. Such shares may be treasury, or authorized, but unissued, shares of Stock. Except as otherwise provided herein, any shares subject to a Stock Option which for any reason expires or is terminated unexercised, shall again be available under the Plan. 2 Section 5. Eligibility to Receive Awards. 5.1 Persons eligible to receive awards under the Plan shall be limited to those officers and other key employees of the Corporation who are in positions in which their decisions, actions and counsel will have a significant impact upon the profitability and success of the Corporation. Directors of the Corporation who are not otherwise officers or employees of the Corporation shall not be eligible to participate in the Plan. Section 6. Form of Awards. 6.1 Awards may be made from time to time by the Committee in the form of Stock Options to purchase a number of shares of Stock of the Corporation and an equal number of Stock Appreciation Rights. Section 7. Stock Options. 7.1 Stock Options for the purchase of Stock of the Corporation shall be evidenced by written agreements in such form not inconsistent with the Plan as the Committee shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) Employment Agreement The Committee may, in its discretion, include in any Stock Option granted under the Plan a condition that the Participant shall agree to remain in the employ of, and to render services to, the Corporation for a period of time (specified in the agreement) following the date the Stock Option is granted. No such agreement shall impose upon the Corporation, however, any obligation to employ the participant for any period of time or to maintain the Participant's employment duties or responsibilities. (b) Option Price. The purchase price of Stock subject to a Stock Option shall be the fair market value at the time of grant, as determined by the Committee. (c) Exercise Term. Subject to the limitations of this Section, the Committee shall determine the period of time within which the Stock Option may be exercised. Each Stock Option agreement shall state such period of time. However, not more than twenty percent (20%) of a Stock Option shall be exercisable for each year of satisfactory employment completed after the award of the Stock Option. Further, no Stock Option shall be exercised after ten (10) years from the date of the grant thereof. 3 (d) Payment for Shares. Subject to such payment terms and conditions as may be prescribed by the Committee for such purpose, the purchase price of the shares of Stock with respect to which a Stock Option is exercised shall be payable in full at the time of exercise in cash. (e) Number of Shares. Each Stock Option shall state the total number of shares of Stock to which it pertains. The number of shares to which a Participant is entitled under a Stock Option shall be reduced by the number of shares related to the Stock Option that have been previously exercised, by the Participant. No Stock Option may be exercised for a fractional share of Stock. (f) Rights Upon Termination of Employment. In the event that a Participant ceases to be an officer or key employee of the Corporation for any cause other than retirement with the Corporation's consent, death, or disability, the Participant's Stock Option shall terminate at the time of termination of employment or upon the transfer to a lesser position of employment so that the employee is no longer deemed to be a key employee. In the event that a Participant retires with the Corporation's consent, dies, or becomes disabled prior to the expiration of the Participant's Stock Option and without having fully exercised the Participant's Stock Option, to the extent that the Stock Option is exercisable at the time of such retirement with the Corporation's consent, death, or disability, the Participant or the Participant's successor shall have the right to exercise the Stock Option during its term within a period of three (3) months after termination of employment due to retirement with the Corporation's consent, death, or disability. (g) Nontransferability. Each Stock Option agreement shall state that the Stock Option is not transferable other than pursuant to subsection 7(f) above by will or the laws of descent and distribution, and that during the lifetime of the Participant the Stock Option is exercisable only by the Participant. (h) Non-Qualified Stock Option. It is not intended that this Stock Option qualify as an Incentive Stock Option under Section 422A of the Code. 4 Section 8. Stock Appreciation Right. 8.1 A Stock Appreciation Right shall be evidenced by a written agreement in such form not inconsistent with the Plan as the Committee shall approve from time to time, which agreement shall contain in substance the following terms and conditions: (a) Employment Agreement. The Committee may, in its discretion, include in any Stock Appreciation Right granted under the Plan a condition that the Participant shall agree to remain in the employ of, and to render services to, the Corporation for a period of time (specified in the agreement) from the date the Stock Appreciation Right is granted. No such agreement shall impose upon the Corporation, however, any obligation to employ the Participant for any period of time or to maintain the Participant's employment duties or responsibilities. (b) Right Value. A Stock Appreciation Right shall entitle the Participant, subject to such terms and conditions determined by the Committee, to receive upon exercise thereof all or a portion of the excess of (i) the fair market value, as determined by the Committee, of a specified number of shares of Stock at the time of exercise, over (ii) a specified price which shall not be less than one hundred (100%) percent of the fair market value, as determined by the Committee, of the specified number of shares of Stock at the time the right is granted, as adjusted pursuant to Section 18 below. (c) Coordination with Stock Option. A Stock Appreciation Right shall be granted only in connection with a contemporaneously granted Stock Option for an identical number of shares of Stock for which the Stock Option has been granted. A Stock Appreciation Right shall be exercised for the identical number of shares to be purchased by the Participant through the exercise of a Stock Option. (d) Exercise Term. Subject to the limitation of this Section, the Committee shall determine the period of time within which the Stock Appreciation Right may be exercised. Each Stock Appreciation Right agreement shall state such period of time. However, not more than twenty percent (20%) of a Stock Appreciation Right shall be exercisable for each year of satisfactory employment completed after the award of the Stock Appreciation Right. Further, no Stock Appreciation Right shall be exercisable after ten (10) years from the date of the award thereof. 5 (e) Number of Shares. Each Stock Appreciation Right shall state the total number of shares of Stock to which it pertains. The number of shares to which a Participant is entitled under a Stock Appreciation Right shall be equal to the number of shares in the contemporaneously granted Stock Option, (described in Section 7 above). (f) Rights Upon Termination of Employment. In the event that a participant ceases to be an officer or key employee of the Corporation for any cause other than retirement with the Corporation's consent, death, or disability, the Participant's Stock Appreciation Right shall terminate at the time of termination of employment or upon the transfer to a lesser position of employment so that the employee is no longer deemed to be a key employee. In the event that a Participant retires with the Corporation's consent, dies, or becomes disabled prior to the expiration of the Participant's Stock Appreciation Right and without having fully exercised the Participant's Stock Appreciation Right; to the extent that the Stock Appreciation Right is exercisable at the time of such retirement with the Corporation's consent, death, or disability by the Participant, such Participant or such Participant's successor shall have the right to exercise the Stock Appreciation Right during its term within a period of three (3) months after termination of employment due to retirement with the Corporation's consent, death or disability. (g) Nontransferability. Each Stock Appreciation Right agreement shall state that the Stock Appreciation Right is not transferable other than pursuant to subsection 8(f) above by will or the laws of descent and distribution; and that during the lifetime of the Participant, the Stock Appreciation Right is exercisable only by the Participant. (h) Payment. Upon exercise of a Stock Appreciation Right, payment shall be made in cash, at the same time and subject to the same terms and conditions as the payment for the matching Stock Option. (i) Manner of Exercise. A Participant shall exercise a Stock Appreciation Right by giving the Corporation written notice of such exercise accompanying the Participant's notice of the exercise of a Stock Option for an identical number of shares of Stock. The date upon which such written notice is received by the Corporation shall be the exercise date for the Stock Appreciation Right. 6 (j) Other Terms. A Stock Appreciation Right shall be granted in such manner and such form, and subject to such additional terms and conditions as the committee in its sole discretion deems necessary or desirable, including without limitation, any form or manner in order to avoid any insider-trading liability in connection with a Stock Appreciation Right under Section 16(b) of the Securities Exchange Act of 1934. Section 9. General Restrictions. 9.1 Each award under the Plan shall be subject to the requirement that if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of Stock upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement by the recipient of an award with respect to the disposition of shares of Stock is necessary or desirable as a condition of or in connection with the granting of such award or the issuance or purchase of shares of Stock; such award shall not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee. Moreover, as a condition to the exercise of any portion of a Stock Option, or of any Stock Appreciation Right, the Corporation may require the person exercising such Stock Option or Stock Appreciation Right to represent and warrant at the time of such exercise that any shares of Stock acquired at exercise are being acquired only for investment and without any present intention to sell or distribute such shares, if, in the opinion of the Corporation's counsel, such a representation is required under the Securities Act of 1933 or any other applicable law, regulation, or rule of any governmental agency. Section 10. Single or Multiple Agreements. 10.1 Multiple forms of awards or combinations thereof may be evidenced by a single agreement or multiple agreements, as determine by the Committee. Section 11. Rights of a Shareholder. 11.1 The recipient of any award under the Plan, unless otherwise provided by the Plan, shall have no rights as a shareholder with respect thereto unless and until certificates for shares of Stock are issued to the recipient. Promptly after the exercise of a Stock Option and the payment of the full Option Price, the Participant shall be entitled to the issuance of a stock certificate evidencing the Participant's ownership of such Stock. No adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 7 Section 12. Termination of Employment. 12.1 Except as provided in this Section 12 and in Section 13 below, if a Participant ceases to be employed by the Corporation as an officer or key employee, the Participant's Stock Option and Stock Appreciation Right shall terminate immediately upon such termination of employment or transfer to a lesser position so that the employee is no longer deemed to be a key employee. However, if a Participant's cessation of employment with the Corporation is due to the Participant's retirement with the Corporation's consent, the Participant may, within three months after such cessation of employment, exercise the Participant's Stock Option and Stock Appreciation Right to the extent that the Participant is entitled to exercise them on the date of cessation of employment. However, in no event shall any Option or Stock Appreciation Right be exercisable more than ten (10) years from the date it was granted. If the Participant engages in employment or activities contrary, in the opinion of the Committee, to the Corporation's best interests, the Committee may cancel an Option or Stock Appreciation Right during the three month period referred to in this paragraph. The Committee shall determine in each case whether a termination of employment shall be considered a retirement with the Corporation's consent. Unless overruled by the Board, any such determination of the Committee shall be final and conclusive. Section 13. Rights in Event of Death or Disability. 13.1 If a Participant dies or becomes disabled (as determined by the Committee pursuant to the provisions of Section 3 above) while employed by the Corporation, or within three months after having retired with the Corporation's consent, and without having fully exercised the Participant's Stock Option and Stock Appreciation Right; the Participant, the Participant's personal representative, the executor or administrator, or the legatee or heir of the Participant's estate shall have the right within three (3) months thereafter to exercise such Stock Option and Stock Appreciation Right to the extent that such disabled or deceased Participant is entitled to exercise the Stock Option and Stock Appreciation Right on the date of the Participant's disability or death. However, in no event shall any Stock Option or Stock Appreciation Right be exercisable more than ten (10) years from the date it was granted. Section 14. Withholding. 14.1 Whenever the Corporation proposes or is required to issue or transfer shares of Stock under the Plan, the Corporation shall have the right to require the recipient to remit to the Corporation an amount sufficient to satisfy any federal, state or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares. 8 Section 15. Non-Assignability. 15.1 Except by will or by the laws of descent and distribution, no award under the Plan shall be assignable or transferable by the recipient thereof. Except as provided in Section 13 above, during the life of the recipient, such award shall be exercisable only by such person or by such person's guardian or legal representative. Section 16. Non-Uniform Determinations. 16.1 The Committee's determinations under the Plan (including without limitation determinations of the persons to receive awards, the form, amount, and timing of such awards, the terms and provisions of such awards and the agreements evidencing same, and the establishment of values) need not be uniform and may be made selectively among persons who receive, or are eligible to receive, awards under the Plan, whether or not such persons are similarly situated. Section 17. Participants Not Obligated. 17.1 The granting of an Award of a Stock Option or Stock Appreciation Right shall impose no obligation upon the Participant to exercise such stock Option or Stock Appreciation Right. Section 18. Effect of Changes in Stock Subject to the Plan. 18.1 The aggregate number of shares of Stock available for Stock Options under the Plan, the shares subject to any Stock Option, the price per share, and the number of Stock Appreciation Rights shall all be proportionately adjusted for any increase or decrease in the number of issued shares of Stock subsequent to the effective date of the Plan resulting from (1) a subdivision or consolidation of shares or any other capital adjustment, (2) the payment of a stock dividend, or (3) other increase or decrease in such shares effected without receipt of consideration by the Corporation. The aforesaid adjustment shall be made in such a manner so that the aggregate amount payable under the Stock Option and the Stock Appreciation Right after the increase or decrease equals the aggregate amount payable prior to such increase or decrease. If the Corporation shall be the surviving corporation in any merger or consolidation, any Stock Option or Stock Appreciation Right shall pertain, apply, and relate to the securities to which a holder of the number of shares of Stock subject to the Stock Option and Stock Appreciation Right would have been entitled after the merger or consolidation. Upon dissolution or liquidation of the Corporation, or upon a merger or consolidation in which the Corporation is not the surviving corporation, all Stock Options and Stock Appreciation Rights outstanding under the Plan shall terminate; provided, however, that each Participant (and each other person entitled under Section 13 above to exercise a Stock Option or Stock appreciation Right) shall have the right, immediately prior to such dissolution or liquidation, or such merger or consolidation, to exercise such Participant's Stock Option and Stock Appreciation Right in whole or in part to the extent that such Stock Option and Stock Appreciation Right are otherwise exercisable under the terms of the Plan, without regard to the twenty percent (20%) limitation of Sub-section 5(c) above. 9 Section 19. Reservation of Shares of Stock. 19.1 The Corporation, during the term of this Plan, shall at all times reserve and keep available, and shall seek or obtain from any regulatory body having jurisdiction any requisite authority necessary to issue and to sell, the number of shares of Stock that shall be sufficient to satisfy the requirements of this Plan. The inability of the Corporation to obtain from any regulatory body having jurisdiction the authority deemed necessary by the Corporation's counsel for the lawful issuance and sale of its Stock hereunder shall relieve the Corporation of any liability in respect of the failure to issue or sell Stock as to which the requisite authority has not been obtained. Section 20. Amendment. 20.1 Except as provided in the next sentence, the Corporation may terminate or amend the Plan at any time. However, only with shareholder approval, may the Corporation increase the maximum number of shares which may be issued under the Plan (other than increases pursuant to Section 18 above), extend the period during which any award may be exercised, extend the term of the Plan or change the minimum Option Price. The termination, any modification, or amendment of the Plan shall not, without the consent of a Participant, affect a Participant's rights under an award previously granted. Section 21. Effect on Other Plans. 21.1 Participation in this Plan shall not affect an employee's eligibility to participate in any other benefit or incentive plan of the Corporation. Unless specifically provided, any awards made pursuant to this Plan shall not be used in determining the benefits provided under any other plan of the Corporation. Section 22. Effective Date and Duration of the Plan. 22.1 The Plan shall be effective from the date that the Plan is approved by the Corporation's Board, subject to the ratification of the Board's actions by the Shareholders and shall remain in effect until all awards under the Plan have been satisfied by the issuance of shares of Stock or the payment of cash, but no award shall be granted more than ten years after the earlier of the date the Plan is adopted by the Corporation or is approved by the Corporation's shareholders. 10 EX-4 5 EX. 4.4 OUTSIDE DIRECTORS' STOCK OPTION PLAN EXHIBIT 4.4 ROYAL BANCSHARES OF PENNSYLVANIA, INC. OUTSIDE DIRECTORS' STOCK OPTION PLAN ROYAL BANCSHARES OF PENNSYLVANIA, INC. OUTSIDE DIRECTORS' STOCK OPTION PLAN Table of Contents Section Page # - ------- ------- 1. Purpose 1 2. Definitions 1 3. Administration 2 4. Stock Subject to the Plan 2 5. Eligibility to Receive Awards 2 6. Amount of Awards 2 7. Stock Options 3 8. General Restrictions 4 9. Single or Multiple Agreements 5 10. Rights of a Shareholder 5 11. Withholding 5 12. Non-Assignability 5 13. Participants Not Obligated 5 14. Effect of Changes in Stock Subject to the Plan 6 15. Reservation of Shares of Stock 6 16. Amendment 6 17. Effect on Other Plans 7 18. Effective Date and Duration of the Plan 7 19. Miscellaneous Provisions 7 ROYAL BANCSHARES OF PENNSYLVANIA, INC. OUTSIDE DIRECTORS' STOCK OPTION PLAN Section 1. Purpose. 1.1 The purpose of the Royal Bancshares of Pennsylvania, Inc. Outside Directors' Stock Option Plan (the "Plan") is to advance the interest of Royal Bancshares of Pennsylvania, Inc. (the "Corporation") by providing incentives to attract, retain, and motivate the non-employee members of the Board of Directors of the Corporation ("Outside Directors"). The Corporation hopes to achieve these purposes through the grant of options to purchase shares of the Corporation's Class "A" Common Stock. Section 2. Definitions. 2.1 Unless otherwise required by the context, the following terms shall have the meaning set forth below: (a) "Board" shall mean the Corporation's Board of Directors. (b) "Code" shall mean the Internal Revenue Code of 1986, as amended. (c) "Corporation" shall mean Royal Bancshares of Pennsylvania, Inc., a Pennsylvania Business Corporation. (d) "Outside Director" shall mean an individual duly elected to serve as a member of the Board and who is not an employee of the Corporation or any of its subsidiaries. (e) "Option Price" shall mean the purchase price for Stock under a Stock Option, as determined in Section 7(a) below. (f) "Participant" shall mean an Outside Director to whom a Stock Option is granted under the Plan. (g) "Plan" shall mean this Royal Bancshares of Pennsylvania, Inc. Outside Directors' Stock Option Plan. (h) "Stock" shall mean the Class "A" Common Stock of the Corporation, par value $2.00. 1 (i) "Stock Option" shall mean a right to purchase Stock, granted pursuant to Section 7 below. (j) "Subsidiary" shall mean a subsidiary corporation of the Corporation, as defined in Sections 425(f) and 425(g) of the Code. Section 3. Administration. 3.1 The Plan shall be administered by the Board. A simple majority of the members of the Board shall constitute a quorum for the transaction of business. Except as provided in Section 16 below, the interpretation and construction of any provision of the Plan by the Board shall be final. No member of the Board shall be liable for any action or determination made by the member in good faith. Except as provided in Section 16 below, the Board shall have full and final authority in its discretion to interpret the provisions of the Plan, to decide all questions of fact arising in its application, and to make all other determinations necessary or advisable for the administration of the Plan. The Board may authorize one or more directors, the Corporation's Secretary or any other Corporation Officers to execute and deliver documents on behalf of the Board. Section 4. Stock Subject to the Plan. 4.1 Subject to the provisions of Section 14 below and the next sentence of this Section, the maximum number of shares of Stock that may be optioned or sold under the Plan is One Hundred Fifty Thousand (150,000) shares. However, at no time shall the maximum number of shares of Stock that may be optioned or sold under the Plan exceed ten percent (10%) of the shares of Stock outstanding. Such shares may be treasury, or authorized, but unissued, shares of Stock. Except as otherwise provided herein, any shares subject to a Stock Option which for any reason expires or is terminated unexercised, shall again be available under the Plan. Section 5. Eligibility to Receive Awards. 5.1 Persons eligible to receive awards under the Plan shall be limited to Outside Directors. Directors of the Corporation who are officers or employees of the Corporation or any of its subsidiaries shall not be eligible to participate in this Plan. Section 6. Amount of Awards. 6.1 Each year, as of the date of the Annual Meeting of Stockholders of the Corporation, each Outside Director who has been elected or re-elected or who is continuing as a member of the Board as of the adjournment of the Annual Meeting shall automatically receive an Option for 1500 shares of Stock. 2 Section 7. Stock Options. 7.1 Stock Options for the purchase of Stock shall be evidenced by written agreements in such form not inconsistent with the Plan as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) Option Price. The purchase price of Stock subject to a Stock Option shall be the "fair market value" at the time of grant. The "fair market value" shall be the average of the high and low sales prices reported in the NASDAQ NATIONAL MARKET ISSUES for shares of Stock traded on the date of the grant or the last preceding date on which any sales took place. In the event that the shares of Stock are traded on a stock exchange, then the reported sales prices on such exchange shall be used in lieu of the sales prices reported in the NASDAQ NATIONAL MARKET ISSUES. (b) Exercise Term. Subject to the rights granted in subsection (e) below and the limitations of the final sentence of this Section, the Stock Option may be exercised only after the Outside Director has served a one year term as a member of the Board after the date on which the Option was granted. At that time, one hundred percent (100%) of the total number of shares of Stock covered by the Option shall become exercisable. However, no Stock Option shall be exercised after ten (10) years from the date of the grant thereof. (c) Payment for Shares. The purchase price of the shares of Stock with respect to which a Stock Option is exercised shall be payable in full at the time of exercise in cash. (d) Number of Shares. Each Stock Option shall state the total number of shares of Stock to which it pertains. No Stock Option may be exercised for a fractional share of Stock. 3 (e) Rights Upon Termination of Board Membership. In the event that a Participant ceases to be a member of the Board of Directors of the Corporation for any cause other than retirement, death, or disability, subject to the limitations of the final sentence in Subsection 7(b) above, the remaining portion of a Participant's unexercised Stock Options shall terminate one year after the date of termination as a Board member. In the event that a Participant retires, dies, or becomes disabled prior to the expiration of the Participants' Stock Option and without having fully exercised the Participant's Stock Option, to the extent that the Stock Option is exercisable at the time of such retirement, death, or disability, the Participant or the Participant's attorney in fact, personal representative, heirs or next of kin shall have the right to exercise the Stock Option during its term within a period of three (3) years after termination of Board membership due to retirement, death, or disability. (f) Non-transferability. Each Stock Option agreement shall state that the Stock Option is not transferable other than pursuant to Subsection 7(e) above by will or the laws of descent and distribution; and that during the lifetime of the Participant, the Stock Option is exercisable only by the Participant or in the event of the Participant's disability by the Participant's attorney in fact. (g) Non-Qualified Stock Option. It is not intended that this Stock Option qualify as an Incentive Stock Option under Section 422A of the Code. Section 8. General Restrictions. 8.1 Each award under the Plan shall be subject to the requirement that if at any time the Board shall determine that (i) the listing, registration or qualification of the shares of Stock upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement by the recipient of an award with respect to the disposition of shares of Stock is necessary or desirable as a condition of or in connection with the granting of such award or the issuance or purchase of shares of Stock; such award shall not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Board. Moreover, as a condition to the exercise of any portion of a Stock Option, the Corporation may require the person exercising such Stock Option to represent and warrant at the time of such exercise that any shares of Stock acquired at exercise are being acquired only for investment and without any present intention to sell or distribute such shares, if, in the opinion of the Corporation's counsel, such a representation is required under the Securities Act of 1933 or any other applicable law, regulation, or rule of any governmental agency. 4 Section 9. Single or Multiple Agreements. 9.1 Multiple forms of awards or combinations thereof may be evidenced by a single agreement or multiple agreements, as determined by the Board. Section 10. Rights of a Shareholder. 10.1 The recipient of any award under the Plan, unless otherwise provided by the Plan, shall have no rights as a shareholder with respect thereto unless and until certificates for shares of Stock are issued to the recipient. Promptly after the exercise of a Stock Option and the payment of the full Option Price, the Participant shall be entitled to the issuance of a stock certificate evidencing the Participant's ownership of such Stock. No adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. Section 11. Withholding. 11.1 Whenever the Corporation proposes or is required to issue or transfer shares of Stock under the Plan, the Corporation shall have the right to require the recipient to remit to the Corporation an amount sufficient to satisfy any federal, state or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares. Section 12. Non-Assignability. 12.1 Except by will or by the laws of descent and distribution, no award under the Plan shall be assignable or transferable by the recipient thereof. Except as provided in Subsection 7(e) above, during the life of the recipient, such award shall be exercisable only by such person or by such person's guardian or legal representative. Section 13. Participants Not Obligated. 13.1 The granting of an Award of a Stock Option shall impose no obligation upon the Participant to exercise such Stock Option. 5 Section 14. Effect of Changes in Stock Subject to the Plan. 14.1 The aggregate number of shares of Stock available for Stock Options under the Plan, the shares subject to any Stock Option, and the price per share, shall all be proportionately adjusted for any increase or decrease in the number of issued shares of Stock subsequent to the effective date of the Plan resulting from (i) a subdivision or consolidation of shares or any other capital adjustment, (ii) the payment of a stock dividend, or (iii) other increase or decrease in such shares effected without receipt of consideration by the Corporation. The aforesaid adjustment shall be made in such a manner so that the aggregate amount payable under the Stock Option after the increase or decrease equals the aggregate amount payable prior to such increase or decrease. If the Corporation shall be the surviving corporation in any merger or consolidation, any Stock Option shall pertain, apply, and relate to the securities to which a holder of the number of shares of Stock subject to the Stock Option would have been entitled after the merger or consolidation. Upon dissolution or liquidation of the Corporation, or upon a merger or consolidation in which the Corporation is not the surviving corporation, all Stock Options outstanding under the Plan shall terminate; provided, however, that each Participant (and each other person entitled under Subsection 7(e) above to exercise a Stock Option) shall have the right, immediately prior to such dissolution or liquidation, or such merger or consolidation, to exercise such Participant's Stock Option in whole to the extent that such Stock Option is otherwise exercisable under the terms of the Plan. Section 15. Reservation of Shares of Stock. 15.1 The Corporation, during the term of this Plan, shall at all times reserve and keep available, and shall seek or obtain from any regulatory body having jurisdiction any requisite authority necessary to issue and to sell, the number of shares of Stock that shall be sufficient to satisfy the requirements of this Plan. The inability of the Corporation to obtain from any regulatory body having jurisdiction the authority deemed necessary by the Corporation's counsel for the lawful issuance and sale of its Stock hereunder shall relieve the Corporation of any liability in respect of the failure to issue or sell Stock as to which the requisite authority has not been obtained. Section 16. Amendment 16.1 Except as provided in the next sentence, the Corporation may terminate or amend the Plan at any time. However, only with shareholder approval, may the Corporation increase the maximum number of shares of Stock which may be issued under the Plan (other than increases pursuant to Section 14 above), increase the number of shares of Stock subject to an Option, change the class of persons eligible to receive Options under this Plan, extend the period during which any award may be exercised, extend the term of the Plan or change the minimum Option Price. The termination, any modification, or amendment of the Plan shall not, without the consent of a Participant, affect a Participant's rights under an award previously granted. 6 Section 17. Effect on Other Plans. 17.1 Participation in this Plan shall not affect a Board member's eligibility to participate in any other benefit or incentive plan of the Corporation. Unless specifically provided, any awards made pursuant to this Plan shall not be used in determining the benefits provided under any other plan of the Corporation. Section 18. Effective Date and Duration of the Plan. 18.1 The Plan shall be effective from the date that the Plan is approved by the Corporation's Board, subject to the ratification of the Board's action by the Corporation's shareholders and shall remain in effect until all awards under the Plan have been satisfied by the issuance of shares of Stock or the payment of cash, but no award shall be granted more than ten years after the earlier of the date the Plan is adopted by the Corporation or is approved by the Corporation's shareholder. Section 19. Miscellaneous Provisions. 19.1 Except as expressly provided for in this Plan, no Outside Director or any other person shall have any claim or right to be granted an Option under this Plan. Neither this Plan nor any action taken under this Plan shall be construed as giving any Outside Director any right to be retained in the service of the Corporation in any capacity whatsoever. 19.2 The expenses of this Plan shall be born by the Corporation. 19.3 This Plan shall be unfunded. The Corporation shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares of Stock upon exercise of any Option under this Plan and issuance of shares of Stock upon exercise of Options shall be subordinate to the claims of the Corporation's general creditors. 19.4 By accepting any Option or other benefit under this Plan, each Participant and any person claiming under or through such Participant shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under this Plan by the Corporation or the Board. 7 EX-5 6 OPINION OF SHUMAKER WILLIAMS, P.C. EXHIBIT 5 OPINION OF SHUMAKER WILLIAMS, P.C. SHUMAKER WILLIAMS, P.C. P. O. BOX 88 HARRISBURG, PENNSYLVANIA 17108 (717) 763-1121 April 25, 1997 Lee E. Tabas, President and CEO ROYAL BANCSHARES OF PENNSYLVANIA, INC. 732 Montgomery Avenue Narberth, PA 19072-2090 RE: Royal Bancshares of Pennsylvania, Inc. (the "Corporation") Registration Statement Form S-8 Our File No.: 697-96 Dear Mr. Tabas: We have acted as Special Corporate Counsel to the Corporation in connection with preparation of the Corporation's Registration Statement on Form S-8 relating to the Corporation's Stock Option and Appreciation Right Plan and the Corporation's Outside Directors' Stock Option Plan, (collectively the "Plans"). In connection with this matter, we, as counsel to the Corporation, have reviewed the following: 1. the Pennsylvania Business Corporation Law of 1988, as amended; 2. the Corporation's Articles of Incorporation; 3. the Corporation's By-Laws; 4. Resolutions adopted by the Corporation's Board of Directors on March 14, 1996; and 5. the Plans. Based upon such review, it is our opinion that the Corporation's Class A common stock, $2.00 par value, (the "Common Stock") issuable upon under the Plans, when and as issued in accordance with the provisions of the Plans, will be duly and validly issued, fully paid and nonassessable. In giving the foregoing opinion, we have assumed that the Corporation will have, at the time of the issuance of Common Stock under the Plans, a sufficient number of authorized shares available for issue. We hereby consent to the use of this opinion as an exhibit to the Registration Statement on Form S-8, filed by the Corporation, relating to the Plans. Very truly yours, SHUMAKER WILLIAMS, P.C. By B. Tyler Lincoln BTL\ksn:70319 cc: Nicholas Bybel, Jr., Esquire EX-23 7 EX. 23.1 CONSENT OF GRANT THORNTON EXHIBIT 23.1 CONSENT OF GRANT THORNTON, LLP Consent of Independent Certified Public Accountants We have issued our report dated January 24, 1997 accompanying the consolidated financial statements of Royal Bancshares of Pennsylvania, Inc. appearing in the 1996 Annual Report of the Company to its shareholders included in the Annual Report on Form 10-K for the year ended December 31, 1996 which are incorporated by reference in this Registration Statement. We consent to the incorporation by reference in the Registration Statement of the aforementioned reports on Form S-8. /s/ Grant Thornton LLP - ---------------------- GRANT THORNTON, LLP Philadelphia, Pennsylvania April 21, 1997 EX-23 8 EX. 23.2 CONS OF S/W (CONTAINED IN EX 5) EXHIBIT 23.2 CONSENT OF SHUMAKER WILLIAMS, P.C. (contained at Exhibit 5 of this Registration Statement) EX-24 9 POWER OF ATTORNEY OF DIRECTORS EXHIBIT 24 POWER OF ATTORNEY OF DIRECTORS AND OFFICERS (INCLUDED ON SIGNATURE PAGES) -----END PRIVACY-ENHANCED MESSAGE-----