EXHIBIT 99.1
1999 EQUITABLE RESOURCES, INC.
LONG-TERM INCENTIVE PLAN
(As amended May 26, 1999)
SECTION 1. PURPOSES
1.01 The purpose of the 1999 Equitable Resources, Inc. Long-Term
Incentive Plan (the "Plan") is to assist the Company in attracting, retaining
and motivating employees of outstanding ability and to align their interests
with those of the shareholders of the Company.
SECTION 2. DEFINITIONS; CONSTRUCTION
2.01 Definitions. In addition to the terms defined elsewhere in the
Plan, the following terms as used in the Plan shall have the following meanings
when used with initial capital letters:
2.01.1 "Award" means any Option, Restricted Stock,
Performance Award or Other Stock-Based Award, or any other right or
interest relating to Shares or cash granted under the Plan.
2.01.2 "Award Agreement" means any written agreement,
contract or other instrument or document evidencing an Award.
2.01.3 "Board" means the Company's Board of Directors.
2.02.4 "Cause," when used with respect to the
termination of employment of a Participant, means:
(a) the willful and continued failure by the
Participant to substantially perform his duties with the
Company or a Subsidiary (other than any such failure
resulting from the Participant's disability), after a
written demand for substantial performance is delivered
to the Participant by the Board which specifically
identifies the manner in which the Board believes that
the Participant has not substantially performed his
duties, and which failure has not been cured within 30
days after such written demand; or
(b) the willful and continued engaging by
the Participant in conduct which is demonstrably and
materially injurious to the Company or a Subsidiary,
monetarily or otherwise, or
(c) the breach by the Participant of any
obligation of confidentiality owed to the Company or a Subsidiary.
For purposes of this Section 2.02.4, no act, or failure
to act, on the Participant's part shall be considered "willful"
unless done, or omitted to be done, by the Participant in bad faith
and without reasonable belief that such action or omission was in
the best interest of the Company. Notwithstanding the foregoing, the
Participant shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of
the Board called and held for that purpose (after reasonable notice
to the Participant and an opportunity for the Participant, together
with his counsel, to be heard before the Board) finding that in the
good faith opinion of the Board the Participant is guilty of the
conduct set forth above in clauses (a), (b) or (c) of this Section
2.02.4 and specifying the particulars thereof in detail.
2.01.5 "Code" means the Internal Revenue Code of 1986,
as amended from time to time, together with rules, regulations and
interpretations promulgated thereunder. References to particular
sections of the Code shall include any successor provisions.
2.01.6 "Change of Control" has the meaning provided in
Section 9.03.
2.01.7 "Committee" means the Compensation Committee or
such other Committee of the Board as may be designated by the Board
to administer the Plan, as referred to in Section 3.01 hereof;
provided however, that any member of the Committee participating in
the taking of any action under the Plan shall qualify as a
"non-employee director" as then defined under Rule 16b-3 and an
"outside director" as then defined under Section 162(m) of the Code.
2.01.8 "Common Stock" means shares of the common stock,
without par value, and such other securities of the Company as may
be substituted for Shares pursuant to Section 8.01 hereof.
2.01.9 "Covered Employee" shall have the meaning
provided in Section 162(m)(3) of the Code.
2.01.10 "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
2.01.11 "Fair Market Value" of shares of any stock,
including but not limited to Common Stock, or units of any other
securities (herein "shares"), shall be the closing price for the
date as of which Fair Market Value is to be determined in the
principal market in which such shares are traded, as quoted in The
Wall Street Journal (or in such other reliable publication as the
Committee, in its discretion, may determine to rely upon). If the
Fair Market Value of shares on any date cannot be determined on the
basis set forth in the preceding sentence, or if a determination is
required as to the Fair Market Value on any date of property other
than shares, the Committee shall in good faith determine the Fair
Market Value of such shares or other property on such date. Fair
Market Value shall be determined without regard to any restriction
other than a restriction which, by its terms, will never lapse.
2.01.12 "Incentive Stock Option" means an Option that is
intended to meet the requirements of Section 422 of the Code and is
designated as such in the Award Agreement relating thereto.
2.01.13 "Option" means a right, granted under Section
6.02 hereof, to purchase Shares at a specified price during
specified time periods. An Option may be either an Incentive Stock
Option or a nonstatutory stock option, which is an Option not
intended to be an Incentive Stock Option.
2.01.14 "Other Stock-Based Award" means an Award,
granted under Section 6.05 hereof, that is denominated or payable
in, valued in whole or in part by reference to, or otherwise based
on, or related to, Shares.
2.01.15 "Participant" means an employee of the Company
or any Subsidiary, including, but not limited to, Covered Employees,
who is granted an Award under the Plan.
2.01.16 "Performance Award," "Performance Goal" and
"Performance Period" shall have the meanings provided in Section
6.04.
2.01.17 "Reload Option Rights" and "Reload Option" have
the meanings provided in Section 6.02(v).
2.01.18 "Restricted Stock" means Shares, granted under
Section 6.03 hereof, that are subject to certain restrictions.
2.01.19 "Rule 16b-3" means Rule 16b-3 under the Exchange
Act, as amended from time to time, or any successor to such Rule
promulgated by the Securities and Exchange Commission under Section
16 of the Exchange Act.
2.01.20 "Shares" means the common stock of the Company,
without par value, and such other securities of the Company as may
be substituted for Shares pursuant to Section 8.01 hereof.
2.01.21 "Subsidiary" means any corporation in an
unbroken chain of corporations beginning with the Company, if each
of the corporations other than the last corporation in the chain
owns stock possessing at least 50% of the total combined voting
power of all classes of stock in one of the other corporations in
the chain.
2.02 Construction. For purposes of the Plan, the
following rules of construction shall apply:
2.02.1 The word "or" is disjunctive but not necessarily
exclusive.
2.02.2 Words in the singular include the plural; words
in the plural include the singular; words in the neuter gender
include the masculine and feminine genders, and words in the
masculine or feminine gender include the other and neuter genders.
SECTION 3. ADMINISTRATION
3.01 The Plan shall be administered by the Committee.
The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the
provisions of the Plan:
(i) to designate Participants;
(ii) to determine the type or types of Awards to be
granted to each Participant;
(iii) to determine the number of Awards to be granted,
the number of Shares or amount of cash or other property to which an
Award will relate, the terms and conditions of any Award (including,
but not limited to, any exercise price, grant price or purchase
price, any limitation or restriction, any schedule for lapse of
limitations, forfeiture restrictions or restrictions on
exercisability or transferability, and accelerations or waivers
thereof, based in each case on such considerations as the Committee
shall determine), and all other matters to be determined in
connection with an Award;
(iv) to determine whether, to what extent and under what
circumstances an Award may be settled in, or the exercise price of
an Award may be paid in cash, Shares, other Awards or other
property, or an Award may be accelerated, vested, canceled,
forfeited, exchanged or surrendered;
(v) to determine whether, to what extent and under what
circumstances cash, Shares, other Awards, other property and other
amounts payable with respect to an Award shall be deferred, whether
automatically or at the election of the Committee or at the election
of the Participant;
(vi) to interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan;
(vii) to prescribe the form of each Award Agreement,
which need not be identical for each Participant;
(viii) to adopt, amend, suspend, waive and rescind such
rules and regulations as the Committee may deem necessary or
advisable to administer the Plan;
(ix) to correct any defect or supply any omission or
reconcile any inconsistency, and to construe and interpret the Plan,
the rules and regulations, any Award Agreement or other instrument
entered into or Award made under the Plan;
(x) to make all other decisions and determinations as
may be required under the terms of the Plan or as the Committee may
deem necessary or advisable for the administration of the Plan; and
(xi) to make such filings and take such actions as may
be required from time to time by appropriate state, regulatory and
governmental agencies.
Any action of the Committee with respect to the Plan shall be final,
conclusive and binding on all Persons, including the Company, Subsidiaries,
Participants, any Person claiming any rights under the Plan from or through any
Participant, employees and shareholders. The express grant of any specific power
to the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to officers or managers of the Company or any Subsidiary the authority,
subject to such terms as the Committee shall determine, to perform
administrative functions under the Plan and, with respect to Participants who
are not subject to Section 16 of the Exchange Act, to take such actions and
perform such functions under the Plan as the Committee may specify. Each member
of the Committee shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him by an officer, manager or other
employee of the Company or a Subsidiary, the Company's independent certified
public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.
SECTION 4. SHARES SUBJECT TO THE PLAN
4.01 The maximum net number of Shares which may be issued and in
respect of which Awards may be granted under the Plan shall be limited to
3,000,000 shares of Common Stock, subject to adjustment as provided in Section
8.01.
For purposes of this Section 4.01, the number of Shares to which an
Award relates shall be counted against the number of Shares available under the
Plan at the time of grant of the Award, unless such number of Shares cannot be
determined at that time, in which case the number of Shares actually distributed
pursuant to the Award shall be counted against the number of Shares available
under the Plan at the time of distribution; provided, however, that Awards
related to or retroactively added to, or granted in tandem with, substituted for
or converted into, other Awards shall be counted or not counted against the
number of Shares reserved and available under the Plan in accordance with
procedures adopted by the Committee so as to ensure appropriate counting but
avoid double counting.
If any Shares to which an Award relates are forfeited, or payment is
made to the Participant in the form of cash, cash equivalents or other property
other than Shares, or the Award otherwise terminates without payment being made
to the Participant in the form of Shares, any Shares counted against the number
of Shares available under the Plan with respect to such Award shall, to the
extent of any such forfeiture, alternative payment or termination, again be
available for Awards under the Plan. If the exercise price of an Award is paid
by delivering to the Company Shares previously owned by the Participant, the
Shares covered by the Award equal to the number of Shares so delivered shall
again be available for Awards under the Plan. Any Shares distributed pursuant to
an Award may consist, in whole or part, of authorized and unissued Shares or of
treasury Shares, including Shares repurchased by the Company for purposes of the
Plan.
SECTION 5. ELIGIBILITY
5.01 Awards may be granted only to individuals who are full-time
employees (including, without limitation, employees who also are directors or
officers and Covered Employees) of the Company or any Subsidiary; provided,
however, that no Award shall be granted to any member of the Committee.
SECTION 6. SPECIFIC TERMS OF AWARDS
6.01 General. Subject to the terms of the Plan and any applicable
Award Agreement, Awards may be granted as set forth in this Section 6. In
addition, the Committee may impose on any Award or the exercise thereof, at the
date of grant or thereafter (subject to the terms of Section 10.01), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including separate escrow provisions and
terms requiring forfeiture of Awards in the event of termination of employment
by the Participant. Except as provided in Section 7.01, or as required by
applicable law, Awards may be granted for no consideration other than prior
and/or future services.
6.02 Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per Share of an
Option shall not be less than 100% of the Fair Market Value of a
Share on the date of grant of such Option, except as otherwise
provided in Section 7.01.
(ii) Option Term. The term of each Option shall be
determined by the Committee, except that no Incentive Stock Option
shall be exercisable after the expiration of ten years from the date
of grant.
(iii) Times and Methods of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, the methods by which the exercise price may be
paid or deemed to be paid, and the form of such payment, including,
without limitation, cash (including notes or other contractual
obligations of Participants to make payment on a deferred basis, to
the extent permitted by law), Shares, other outstanding Awards or
other property or any combination thereof, having a Fair Market
Value on the date of exercise equal to the exercise price, provided,
however, that (1) in the case of a Participant who is at the time of
exercise subject to Section 16 of the Exchange Act, any portion of
the exercise price representing a fraction of a Share shall in any
event be paid in cash or in property other than any equity security
(as defined by the Exchange Act) of the Company and (2) except as
otherwise determined by the Committee, in its discretion, at the
time the Option is granted, no shares which have been held for less
than six months may be delivered in payment of the exercise price of
an Option.
Delivery of Shares in payment of the exercise price of
an Option, if authorized by the Committee, may be accomplished
through the effective transfer to the Company of Shares held by a
broker or other agent. Unless otherwise determined by the Committee,
the Company will also cooperate with any person exercising an Option
who participates in a cashless exercise program of a broker or other
agent under which all or part of the Shares received upon exercise
of the Option are sold through the broker or other agent, or under
which the broker or other agent makes a loan to such person, for the
purpose of paying the exercise price of an Option. Notwithstanding
the preceding sentence, unless the Committee, in its discretion,
shall otherwise determine, the exercise of the Option shall not be
deemed to occur, and no Shares will be issued by the Company upon
exercise of an Option, until the Company has received payment in
full of the exercise price.
Notwithstanding any other provision contained in the
Plan or in any Award Agreement, but subject to the possible exercise
of the Committee's discretion contemplated in the last sentence of
this Section 6.02(iii), the aggregate Fair Market Value, determined
as of the date of grant, of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year under all plans of the
corporation employing such employee, any parent or subsidiary
corporation of such corporation and any predecessor corporation of
any such corporation shall not exceed $100,000. If the date on which
one or more of such Incentive Stock Options could first be exercised
would be accelerated pursuant to any provision of the Plan or any
Award Agreement, and the acceleration of such exercise date would
result in a violation of the restriction set forth in the preceding
sentence, then, notwithstanding any such provision, but subject to
the provisions of the next succeeding sentence, the exercise dates
of such Incentive Stock Options shall be accelerated only to the
date or dates, if any, that do not result in a violation of such
restriction and, in such event, the exercise dates of the Incentive
Stock Options with the lowest option prices shall be accelerated to
the earliest such dates. The Committee may, in its discretion,
authorize the acceleration of the exercise date of one or more
Incentive Stock Options even if such acceleration would violate the
$100,000 restriction set forth in the first sentence of this
paragraph and even if such Incentive Stock Options are thereby
converted in whole or in part to nonstatutory stock options.
(iv) Termination of Employment. Unless otherwise
determined by the Committee and reflected in the Award Agreement:
(A) if a Participant shall die while
employed by the Company or a Subsidiary or during a
period following termination of employment during which
an Option otherwise remains exercisable under this
Section 6.02(iv), Options granted to the Participant, to
the extent exercisable at the time of the Participant's
death, may be exercised within one year after the date
of the Participant's death, but not later than the
expiration date of the Option, by the executor or
administrator of the Participant's estate or by the
Person or Persons to whom the Participant shall have
transferred such right by will, by the laws of descent
and distribution or, if permitted by the Committee, by
inter vivos transfer.
(B) if the employment of a Participant with
the Company or a Subsidiary shall be involuntarily
terminated under circumstances which would qualify the
Participant for benefits under the Company's Separation
Allowance Plan, or if a Participant shall retire under
the terms of any retirement plan of the Company or a
Subsidiary or shall terminate his or her employment with
the written consent of the Company or a Subsidiary
specifically permitting such exercise, Options granted
to the Participant, to the extent exercisable at the
date of the Participant's termination of employment, may
be exercised within 90 days after the date of
termination of employment, but not later than the
expiration date of the Option.
(C) except to the extent an Option remains
exercisable under paragraph (A) or (B) above or under
Section 9.02, any Option granted to a Participant shall
terminate immediately upon the termination of all
employment of the Participant with the Company or a
Subsidiary.
(v) Reload Option Rights. Reload Option Rights if
awarded with respect to an Option shall entitle the holder of the
Option, upon exercise of the Option or any portion thereof through
delivery of previously owned Shares, to automatically be granted on
the date of such exercise a new nonstatutory stock option (a "Reload
Option") (1) for a number of Shares not exceeding the number of full
Shares delivered in payment of the option price of the original
Option and any withholding taxes related thereto, (2) having an
option price not less than 100% of the Fair Market Value per Share
of the Common Stock on such date of grant, (3) having an expiration
date not later than the expiration date of the original Option so
exercised and (4) otherwise having terms permissible for the grant
of an Option under the Plan. Subject to the preceding sentence and
the other provisions of the Plan, Reload Option Rights and Reload
Options shall have such terms and be subject to such restrictions
and conditions, if any, as shall be determined, in its discretion,
by the Committee. In granting Reload Option Rights, the Committee,
may, in its discretion, provide for successive Reload Option grants
upon the exercise of Reload Options granted thereunder. Unless
otherwise determined, in its discretion, by the Committee, Reload
Option Rights shall entitle the holder of an Option to be granted a
Reload Option only if the underlying Option to which they relate is
exercised during employment with the Company or a Subsidiary of the
original grantee of the underlying Option. Except as otherwise
specifically provided herein or required by the context, the term
Option as used in this Plan shall include Reload Options granted
hereunder.
(vi) Individual Option Limit. The aggregate number of
Shares for which Options may be granted under the Plan to any single
Participant shall not exceed 750,000 Shares. The limitation in the
preceding sentence shall be interpreted and applied in a manner
consistent with Section 162(m) of the Code and, to the extent
consistent with Section 162(m) of the Code, in accordance with
Section 4.01 hereof. To the extent consistent with Section 162(m) of
the Code, in applying this limitation a Reload Option shall not be
deemed to increase the number of Shares covered by the original
underlying Option grant.
6.03 Restricted Stock. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability and other
restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the
right to receive dividends thereon), which restrictions may lapse
separately or in combination at such times, under such
circumstances, in such installments or otherwise, as the Committee
shall determine at the time of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the
Committee at the time of grant or thereafter, upon termination of
employment (as determined under criteria established by the
Committee) during the applicable restriction period, Restricted
Stock that is at that time subject to restrictions shall be
forfeited and reacquired by the Company; provided, however, that the
Committee may provide, by rule or regulation or in any Award
Agreement, that restrictions on Restricted Stock shall be waived in
whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in
whole or in part restrictions on Restricted Stock.
(iii) Certificates for Shares. Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee
shall determine, including, without limitation, issuance of
certificates representing Shares. Certificates representing Shares
of Restricted Stock shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such Restricted
Stock.
6.04 Performance Awards. The Committee is authorized to grant
Performance Awards to Participants on the following terms and conditions:
(i) Right to Payment. A Performance Award shall
represent a right to receive Shares, cash, other property or any
combination thereof based on the achievement, or the level of
achievement, during a specified Performance Period of one or more
Performance Goals established by the Committee at the time of the
Award.
(ii) Terms of Performance Awards. At the time a
Performance Award is granted, the Committee shall cause to be set
forth in the Award Agreement or otherwise in writing (1) the
Performance Goals applicable to the Award and the Performance Period
during which the achievement of the Performance Goals shall be
measured, (2) the amount which may be earned by the Participant
based on the achievement, or the level of achievement, of the
Performance Goals or the formula by which such amount shall be
determined and (3) such other terms and conditions applicable to the
Award as the Committee may, in its discretion, determine to include
therein. The terms so established by the Committee shall be
objective such that a third party having knowledge of the relevant
facts could determine whether or not any Performance Goal has been
achieved, or the extent of such achievement, and the amount, if any,
which has been earned by the Participant based on such performance.
The Committee may retain the discretion to reduce (but not to
increase) the amount of a Performance Award which will be earned
based on the achievement of Performance Goals.
(iii) Performance Goals. "Performance Goals" shall mean
one or more preestablished, objective measures of performance during
a specified Performance Period by the Company, a Subsidiary or
Subsidiaries, any branch, department or other portion thereof or the
Participant individually, selected by the Committee in its
discretion to determine whether Performance Award has been earned in
whole or in part. Performance Goals may be based on earnings per
share, net income, revenue growth, revenues, expenses, return on
equity, return on total capital or return on assets. Performance
Goals based on such performance measures may be based either on the
performance of the Company, Subsidiary or portion thereof under such
measure for the Performance Period and/or upon a comparison of such
performance with the performance of a peer group of corporations
selected or defined by the Committee at the time of making a
Performance Award. The Committee may in its discretion also
determine to use other objective performance measures as Performance
Goals.
(iv) Committee Certification. Following completion of
the applicable Performance Period, and prior to any payment of a
Performance Award to the Participant, the Committee shall determine
in accordance with the terms of the Performance Award and shall
certify in writing whether the applicable Performance Goal or Goals
were achieved, or the level of such achievement, and the amount, if
any, earned by the Participant based upon such performance. For this
purpose, approved minutes of the meeting of the Committee at which
certification is made shall be sufficient to satisfy the requirement
of a written certification.
(v) Maximum Individual Performance Award Payments. With
respect to all Performance Periods ending in any one calendar year,
the maximum amount which may be earned by any single Participant
under all Performance Awards granted under the Plan shall be limited
to $1,000,000. In applying this limit, the amount of any cash or the
Fair Market Value of any Shares or other property earned by a
Participant shall be measured as of the close of the applicable
Performance Period, regardless of the fact that certification by the
Committee and actual payment to the Participant may occur in a
subsequent calendar year or years.
6.05 Other Stock-Based Awards. The Committee is authorized, subject
to limitations under applicable law, to grant to Participants such other Awards
that are denominated or payable in, valued in whole or in part by reference to,
or otherwise based on, or related to, Shares, as deemed by the Committee to be
consistent with the purposes of the Plan, including, without limitation,
purchase rights, Shares awarded which are not subject to any restrictions or
conditions, convertible securities, exchangeable securities or other rights
convertible or exchangeable into Shares, as the Committee in its discretion may
determine. In the discretion of the Committee, such Other Stock-Based Awards,
including Shares, or other types of Awards authorized under the Plan, may be
used in connection with, or to satisfy obligations of the Company or a
Subsidiary under, other compensation or incentive plans, programs or
arrangements of the Company or any Subsidiary for eligible Participants,
including without limitation the Short-Term Incentive Compensation Plan, the
Deferred Compensation Plan and executive contracts.
The Committee shall determine the terms and conditions of Other
Stock-Based Awards. Except as provided in Section 7.01, Shares or securities
delivered pursuant to a purchase right granted under this Section 6.05 shall be
purchased for such consideration, paid for by such methods and in such forms,
including, without limitation, cash, Shares, outstanding Awards or other
property or any combination thereof, as the Committee shall determine, but the
value of such consideration shall not be less than the Fair Market Value of such
Shares or other securities on the date of grant of such purchase right. Delivery
of Shares or other securities in payment of a purchase right, if authorized by
the Committee, may be accomplished through the effective transfer to the Company
of Shares or other securities held by a broker or other agent. Unless otherwise
determined by the Committee, the Company will also cooperate with any person
exercising a purchase right who participates in a cashless exercise program of a
broker or other agent under which all or part of the Shares or securities
received upon exercise of a purchase right are sold through the broker or other
agent, or under which the broker or other agent makes a loan to such person, for
the purpose of paying the exercise price of a purchase right. Notwithstanding
the preceding sentence, unless the Committee, in its discretion, shall otherwise
determine, the exercise of the purchase right shall not be deemed to occur, and
no Shares or other securities will be issued by the Company upon exercise of a
purchase right, until the Company has received payment in full of the exercise
price.
6.06 Exchange Provisions. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Shares,
another Award or other property, based on such terms and conditions as the
Committee shall determine and communicate to the Participant at the time that
such offer is made.
SECTION 7. GENERAL TERMS OF AWARDS
7.01 Stand-Alone, Tandem and Substitute Awards. Awards granted under
the Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in substitution for, any other Award granted
under the Plan or any award granted under the Management Incentive Compensation
Plan, or any other plan, program or arrangement of the Company or any Subsidiary
(subject to the terms of Section 10.01) or any business entity acquired or to be
acquired by the Company or a Subsidiary, except that an Incentive Stock Option
may not be granted in tandem with other Awards or awards. If an Award is granted
in substitution for another Award or award, the Committee shall require the
surrender of such other Award or award in consideration for the grant of the new
Award. Awards granted in addition to or in tandem with other Awards or awards
may be granted either at the same time as or at a different time from the grant
of such other Awards or awards. The exercise price of any Option or the purchase
price of any other Award conferring a right to purchase Shares:
(i) granted in substitution for an outstanding Award or
award shall be not less than the Fair Market Value of Shares at the
date such substitute Award is granted; provided, however, that (1)
except in the case of (a) an Incentive Stock Option or (b) an Option
granted to a Covered Employee, the exercise, grant or purchase price
per share of the substituted Award may be reduced to reflect the
Fair Market Value of the Award or award required to be surrendered
by the Participant as a condition to receipt of such substitute
Award, and (2) in the case of any Participant, the Committee may, in
lieu of such price reduction, make an additional Award or payment to
the Participant reflecting the Fair Market Value of the Award or
award required to be surrendered; or
(ii) retroactively granted in tandem with an outstanding
Award or award shall be not less than the lesser of the Fair Market
Value of Shares at the date of grant of the later Award or the Fair
Market Value of Shares at the date of grant of the earlier Award.
7.02 Certain Restrictions Under Rule 16b-3. Upon the effectiveness
of any amendment to Rule 16b-3, this Plan and any Award Agreement for an
outstanding Award held by a Participant then subject to Section 16 of the
Exchange Act shall be deemed to be amended, without further action on the part
of the Committee, the Board or the Participant, to the extent necessary for
Awards under the Plan or such Award Agreement to qualify for the exemption
provided by Rule 16b-3, as so amended, except to the extent any such amendment
requires shareholder approval.
7.03 Decisions Required to be Made by the Committee. Other
provisions of the Plan and any Award Agreement notwithstanding, if any decision
regarding an Award or the exercise of any right by a Participant, at any time
such Participant is subject to Section 16 of the Exchange Act, is required to be
made or approved by the Committee in order that a transaction by such
Participant will be exempt under Rule 16b-3, then the Committee shall retain
full and exclusive power and authority to make such decision or to approve or
disapprove any such decision by the Participant.
7.04 Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided, however, that in no event shall
the term of any Incentive Stock Option exceed a period of ten years from the
date of its grant.
7.05 Form of Payment of Awards. Subject to the terms of the Plan and
any applicable Award Agreement, payments or substitutions to be made by the
Company upon the grant, exercise or other payment or distribution of an Award
may be made in such forms as the Committee shall determine at the time of grant
or thereafter (subject to the terms of Section 10.01), including, without
limitation, cash, Shares, other Awards or other property or any combination
thereof, and may be made in a single payment or substitution, in installments or
on a deferred basis, in each case in accordance with rules and procedures
established, or as otherwise determined, by the Committee. Such rules and
procedures or determinations may include, without limitation, provisions for the
payment or crediting of reasonable interest on installment or deferred payments
or the grant or crediting of dividend equivalents in respect of installment or
deferred payments.
7.06 Limits on Transfer of Awards; Beneficiaries. No right or
interest of a Participant in any Award shall be pledged, encumbered or
hypothecated to or in favor of any Person other than the Company, or shall be
subject to any lien, obligation or liability of such Participant to any Person
other than the Company or a Subsidiary. Except to the extent otherwise
determined by the Committee, no Award and no rights or interests therein shall
be assignable or transferable by a Participant otherwise than by will or the
laws of descent and distribution, and any Option or other right to purchase or
acquire Shares granted to a Participant under the Plan shall be exercisable
during the Participant's lifetime only by such Participant. A beneficiary,
guardian, legal representative or other Person claiming any rights under the
Plan from or through any Participant shall be subject to all the terms and
conditions of the Plan and any Award Agreement applicable to such Participant as
well as any additional restrictions or limitations deemed necessary or
appropriate by the Committee.
7.07 Registration and Listing Compliance. No Award shall be paid and
no Shares or other securities shall be distributed with respect to any Award in
a transaction subject to the registration requirements of the Securities Act of
1933, as amended, or any state securities law or subject to a listing
requirement under any listing agreement between the Company and any national
securities exchange, and no Award shall confer upon any Participant rights to
such payment or distribution until such laws and contractual obligations of the
Company have been complied with in all material respects. Except to the extent
required by the terms of an Award Agreement or another contract between the
Company and the Participant, neither the grant of any Award nor anything else
contained herein shall obligate the Company to take any action to comply with
any requirements of any such securities laws or contractual obligations relating
to the registration (or exemption therefrom) or listing of any Shares or other
securities, whether or not necessary in order to permit any such payment or
distribution.
7.08 Stock Certificates. All certificates for Shares delivered under
the terms of the Plan shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under federal or state
securities laws, rules and regulations thereunder, and the rules of any national
securities exchange or automated quotation system on which Shares are listed or
quoted. The Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions or any other
restrictions or limitations that may be applicable to Shares. In addition,
during any period in which Awards or Shares are subject to restrictions or
limitations under the terms of the Plan or any Award Agreement, or during any
period during which delivery or receipt of an Award or Shares has been deferred
by the Committee or a Participant, the Committee may require any Participant to
enter into an agreement providing that certificates representing Shares issuable
or issued pursuant to an Award shall remain in the physical custody of the
Company or such other Person as the Committee may designate.
SECTION 8. ADJUSTMENT PROVISIONS
8.01 In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, exchange of Shares or other securities of the Company, or other
similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of Participants' rights under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of Shares which may thereafter be issued in connection
with Awards; (ii) the number and kind of Shares issued or issuable in respect of
outstanding Awards; and (iii) the exercise price, grant price or purchase price
relating to any Award or, if deemed appropriate, make provision for a cash
payment with respect to any outstanding Award; provided, however, in each case,
that (1) with respect to Incentive Stock Options, no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code and (2) with respect to Options or Performance
Awards held by a Covered Employee, no such adjustment shall be authorized to the
extent that such authority would cause such Awards to fail to qualify as
"performance-based compensation" under Section 162(m)(4)(C) of the Code. In
addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria of, Awards in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or the financial statements of the
Company, or in response to changes in applicable laws, regulations or accounting
principles; provided, however, that (1) with respect to Incentive Stock Options,
no such adjustment shall be authorized to the extent that such authority would
cause the Plan to violate Section 422(b)(1) of the Code and (2) with respect to
Options or Performance Awards held by a Covered Employee, no such adjustment
shall be authorized to the extent that such authority would cause such Awards to
fail to qualify as "performance-based compensation" under Section 162(m)(4)(C)
of the Code.
SECTION 9. CHANGE OF CONTROL PROVISIONS
9.01 Acceleration of Exercisability and Lapse of Restrictions.
Unless otherwise determined by the Committee at the time of grant of an Award or
unless otherwise provided in the applicable Award Agreement, if the shareholders
of the Company shall approve a transaction which upon consummation would
constitute a Change of Control of the Company, or if any Change of Control of
the Company not subject to shareholder approval shall occur:
(i) all outstanding Awards pursuant to which the
Participant may have rights, the exercise of which is restricted or
limited, shall become fully exercisable;
(ii) all restrictions or limitations (including risks of
forfeiture and deferrals) on outstanding Awards subject to
restrictions or limitations under the Plan shall lapse unless prior
to such lapse the right to lapse of restrictions or limitations is
waived or deferred by the Participant; and
(iii) all performance criteria and other conditions to
payment of Awards under which payments of cash, Shares or other
property are subject to conditions shall be deemed to be achieved or
fulfilled and shall be waived by the Company.
9.02 Termination of Employment Following Change of Control. If
within three years following the date of any Change of Control the employment of
a Participant shall be terminated voluntarily or involuntarily for any reason
other than for Cause, then unless otherwise provided in the applicable Award
Agreement, and in addition to any other rights of post-termination exercise
which the Participant (or other holder of the Award) may have under the Plan or
the applicable Award Agreement, any Option or other Award granted to the
Participant and outstanding on the date of the Change of Control, the payment or
receipt of which is dependent upon exercise by the Participant (or other holder
of the Award) shall be exercisable for a period of 90 days following the date of
such termination of employment but not later than the expiration date of the
Award.
9.03 Definition of Change of Control. For purposes of this Section
9, a "Change of Control" of the Company shall mean any of the following events:
(a) The sale or other disposition by the Company of all
or substantially all of its assets to a single purchaser or to a
group of purchasers, other than to a corporation with respect to
which, following such sale or disposition, more than eighty percent
of, respectively, the then outstanding shares of Common Stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of the Board is then
owned beneficially, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively of the outstanding Common Stock and the combined voting
power of the then outstanding voting securities immediately prior to
such sale or disposition in substantially the same proportion as
their ownership of the outstanding Common Stock and voting power
immediately prior to such sale or disposition;
(b) The acquisition in one or more transactions by any
person or group, directly or indirectly, of beneficial ownership of
twenty percent or more of the outstanding shares of Common Stock or
the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of the
Board; provided, however, that any acquisition by (x) the Company or
any of its Subsidiaries, or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its
Subsidiaries or (y) any person that is eligible, pursuant to Rule
13d-1(b) under the Exchange Act (as in effect on the effective date
of the Plan) to file a statement on Schedule 13G with respect to its
beneficial ownership of Common Stock and other voting securities,
whether or not such person shall have filed a statement on Schedule
13G, unless such person shall have filed a statement on Schedule 13D
with respect to beneficial ownership of fifteen percent or more of
the Company's voting securities, shall not constitute a Change of
Control;
(c) The Company's termination of its business and
liquidation of its assets;
(d) There is consummated a merger, consolidation,
reorganization, share exchange, or similar transaction involving the
Company (including a triangular merger), in any case, unless
immediately following such transaction: (i) all or substantially all
of the persons who were the beneficial owners of the outstanding
Commons Stock and outstanding voting securities of the Company
immediately prior to the transaction beneficially own, directly or
indirectly, more than 60% of the outstanding shares of Commons Stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
of the corporation resulting from such transaction (including a
corporation or other person which as a result of such transaction
owns the Company or all or substantially all of the Company's assets
through one or more subsidiaries (a "Parent Company")) in
substantially the same proportion as their ownership of the Common
Stock and other voting securities of the Company immediately prior
to the consummation of the transaction, (ii) no person (other than
the Company, any employee benefit plan sponsored or maintained by
the Company or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (i) above
is satisfied in connection with the transaction, such Parent
Company) beneficially owns, directly or indirectly, 20% or more of
the outstanding shares of Common Stock or the combined voting power
of the voting securities entitled to vote generally in the election
of directors of the corporation resulting from such transaction and
(iii) individuals who were members of the Board immediately prior to
the consummation of the transaction constitute at least a majority
of the members of the board of directors resulting from such
transaction (or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (i) above
is satisfied in connection with the transaction, such Parent
Company); or
(e) The following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the entire Board and
any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by
the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors on the effective date of the Plan or whose
appointment, election or nomination for election was previously so
approved.
SECTION 10. AMENDMENTS TO AND TERMINATION OF THE PLAN
10.01 The Board may amend, alter, suspend, discontinue or terminate
the Plan without the consent of shareholders or Participants, except that,
without the approval of the shareholders of the Company, no amendment,
alteration, suspension, discontinuation or termination shall be made if
shareholder approval is required by any federal or state law or regulation or by
the rules of any stock exchange on which the Shares may then be listed, or if
the Board in its discretion determines that obtaining such shareholder approval
is for any reason advisable; provided, however, that except as provided in
Section 7.02, without the consent of the Participant, no amendment, alteration,
suspension, discontinuation or termination of the Plan may materially and
adversely affect the rights of such Participant under any Award theretofore
granted to him. The Committee may waive any conditions or rights under, amend
any terms of, or amend, alter, suspend, discontinue or terminate, any Award
theretofore granted, prospectively or retrospectively; provided, however, that
except as provided in Section 7.02, without the consent of a Participant, no
amendment, alteration, suspension, discontinuation or termination of any Award
may materially and adversely affect the rights of such Participant under any
Award theretofore granted to him; and provided further that, except as provided
in Section 8.01 of the Plan, the exercise price of any outstanding Option may
not be reduced, whether through amendment, cancellation or replacement, unless
such reduction is approved by the shareholders of the Company.
SECTION 11. GENERAL PROVISIONS
11.01 No Right to Awards; No Shareholder Rights. No Participant or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Participants and employees,
except as provided in any other compensation arrangement. No Award shall confer
on any Participant any of the rights of a shareholder of the Company unless and
until Shares are in fact issued to such Participant in connection with such
Award.
11.02 Withholding. To the extent required by applicable Federal,
state, local or foreign law, the Participant or his successor shall make
arrangements satisfactory to the Company, in its discretion, for the
satisfaction of any withholding tax obligations that arise in connection with an
Award. The Company shall not be required to issue any Shares or make any cash or
other payment under the Plan until such obligations are satisfied.
The Company is authorized to withhold from any Award granted or any
payment due under the Plan, including from a distribution of Shares, amounts of
withholding taxes due with respect to an Award, its exercise or any payment
thereunder, and to take such other action as the Committee may deem necessary or
advisable to enable the Company and Participants to satisfy obligations for the
payment of such taxes. This authority shall include authority to withhold or
receive Shares, Awards or other property and to make cash payments in respect
thereof in satisfaction of such tax obligations.
11.03 No Right to Employment. Nothing contained in the Plan or any
Award Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any Participant any right to continue in the employ of the
Company or to interfere in any way with the right of the Company to terminate
his employment at any time or increase or decrease his compensation from the
rate in existence at the time of granting of an Award, except as provided in any
Award Agreement or other compensation arrangement.
11.04 Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award Agreement shall
give any such Participant any rights that are greater than those of a general
unsecured creditor of the Company; provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, Shares or other property
pursuant to any Award, which trusts or other arrangements shall be consistent
with the "unfunded" status of the Plan unless the Committee otherwise
determines.
11.05 No Limit on Other Compensatory Arrangements. Nothing contained
in the Plan shall prevent the Company from adopting other or additional
compensation arrangements (which may include, without limitation, employment
agreements with executives and arrangements which relate to Awards under the
Plan), and such arrangements may be either generally applicable or applicable
only in specific cases. Notwithstanding anything in the Plan to the contrary,
the terms of each Award shall be construed so as to be consistent with such
other arrangements in effect at the time of the Award.
11.06 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.
11.07 Governing Law. The validity, interpretation, construction and
effect of the Plan and any rules and regulations relating to the Plan shall be
governed by the laws of the Commonwealth of Pennsylvania (without regard to the
conflicts of laws thereof), and applicable Federal law.
11.08 Severability. If any provision of the Plan or any Award is or
becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
Award, it shall be deleted and the remainder of the Plan or Award shall remain
in full force and effect; provided, however, that, unless otherwise determined
by the Committee, the provision shall not be construed or deemed amended or
deleted with respect to any Participant whose rights and obligations under the
Plan are not subject to the law of such jurisdiction or the law deemed
applicable by the Committee.
SECTION 12. EFFECTIVE DATE AND TERM OF THE PLAN
12.01 The effective date and date of adoption of the Plan shall be
March 17, 1999, the date of adoption of the Plan by the Board, provided that
such adoption of the Plan is approved by a majority of the votes cast at a duly
held meeting of shareholders held on or prior to March 16, 2000 at which a
quorum representing a majority of the outstanding voting stock of the Company
is, either in person or by proxy, present and voting. Notwithstanding anything
else contained in the Plan or in any Award Agreement, no Option or other
purchase right granted under the Plan may be exercised, and no Shares may be
distributed pursuant to any Award granted under the Plan, prior to such
shareholder approval or prior to any required approval or consent from those
governmental agencies having jurisdiction in these matters. In the event such
shareholder or regulatory approval is not obtained, all Awards granted under the
Plan shall automatically be deemed void and of no effect. Absent additional
shareholder approval, (1) no Performance Award may be granted under the Plan
subsequent to the Company's Annual Meeting of Shareholders in 2004, (2) no
Performance Period for any Performance Award granted under the Plan may end
later than December 31, 2007 and (3) no other Award may be granted under the
Plan subsequent to March 16, 2009, except that Reload Options may be granted
pursuant to Reload Option Rights then outstanding.