CSS INDUSTRIES, INC.
2004 EQUITY COMPENSATION PLAN
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The purpose of the CSS Industries, Inc. 2004 Equity Compensation Plan
(the "Plan") is to provide designated employees and officers of CSS Industries,
Inc. (the "Company") and its subsidiaries with the opportunity to receive grants
of incentive stock options, nonqualified stock options, restricted stock grants,
stock appreciation rights, and stock bonus awards. The Company believes that the
Plan will encourage the participants to contribute materially to the growth of
the Company, thereby benefitting the Company's stockholders, and will align the
economic interests of the participants with those of the stockholders.
1. Human Resources Committee
(a) Administration. The Plan shall be administered and interpreted by
the Human Resources Committee ("Committee") of members of the Board of Directors
of the Company (the "Board"), which shall consist of not less than three
persons, all of whom shall be "outside directors" as defined under section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and
related Treasury regulations, "non-employee directors" as defined under Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and "independent directors" in accordance with the governance rules of the New
York Stock Exchange ("NYSE").
(b) Authority. The Committee shall have the sole authority to (i)
determine the individuals to whom grants shall be made under the Plan; (ii)
determine the type, size, and terms of the grants to be made to each such
individual; (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability; (iv) amend
the terms of any previously issued grant; and (v) deal with any other matters
arising under the Plan.
(c) Determinations. The Committee shall have full power and authority
to administer and interpret the Plan, to make factual determinations and to
adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. Grants
Awards under the Plan may consist of grants of Incentive Stock Options
and Nonqualified Stock Options (as described in Section 5 and collectively
referred to as "Options"), Restricted Stock Grants (as defined in Section 6),
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and SARs (as defined in Section 7) (hereinafter collectively referred to as
"Grants"). All Grants shall be subject to the terms and conditions set forth
herein and to such other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the Committee to
the individual in a grant instrument or an amendment to the grant instrument
(the "Grant Instrument"). All Grants shall be made conditional upon the
Grantee's acknowledgement, in writing or by acceptance of the Grant, that all
decisions and determinations of the Committee shall be final and binding on the
Grantee, his or her beneficiaries, and any other person having or claiming an
interest under such Grant. The Committee shall approve the form and provisions
of each Grant Instrument or may delegate such authority to the executive
officers of the Company or to any of them acting singly. Grants under a
particular Section of the Plan need not be uniform as among the grantees.
3. Shares Subject to the Plan
(a) Shares Authorized. Subject to adjustment as described below, the
aggregate number of shares of common stock, par value $.10 ("Company Stock"), of
the Company that may be issued or transferred under the Plan is 2,000,000
shares. The maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any individual during any calendar year
shall be 300,000 shares, subject to adjustment as described below. The shares
may be authorized but unissued shares of Company Stock or reacquired shares of
Company Stock, including shares purchased by the Company on the open market for
purposes of the Plan. If, and to the extent, Options granted under the Plan
terminate, expire, or are canceled, forfeited, exchanged, or surrendered without
having been exercised or if any Restricted Stock Grants (including Restricted
Stock Grants received upon the exercise of Options) or SARs are forfeited, the
shares subject to such Grants shall again be available for purposes of the Plan.
(b) Adjustments. If there is any change in the number or kind of shares
of Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares; (ii) by
reason of a merger, reorganization, or consolidation; (iii) by reason of a
reclassification or change in par value; or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Company Stock as a
class without the Company's receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a
spinoff or the Company's payment of an extraordinary dividend or distribution,
the maximum number of shares of Company Stock available for Grants, the maximum
number of shares of Company Stock that any individual participating in the Plan
may be granted in any year, the number of shares covered by outstanding Grants,
the kind of shares issued under the Plan, and the price per share of such Grants
may be adjusted by the Committee in the exercise of its sole and absolute
discretion to reflect any increase or decrease in the number of, or change in
the kind or value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under such
Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding, and conclusive.
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4. Eligibility for Participation
(a) Eligible Persons. Employees of the Company and its subsidiaries
("Employees"), including Employees who are officers or members of the Board
shall be eligible to participate in the Plan.
(b) Selection of Grantees. The Committee shall select the Employees to
receive Grants and shall determine the number of shares of Company Stock subject
to a particular Grant in such manner as the Committee determines. Employees who
receive Grants under this Plan shall hereinafter be referred to as "Grantees."
5. Granting of Options
(a) Number of Shares. The Committee shall determine the number of
shares of Company Stock that will be subject to each Grant of Options to
Employees.
(b) Type of Option and Price.
(i) The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the meaning of section
422 of the Code ("Incentive Stock Options") or nonqualified stock options that
are not intended so to qualify ("Nonqualified Stock Options") or any combination
of Incentive Stock Options and Nonqualified Stock Options, all in accordance
with the terms and conditions set forth herein.
(ii) The purchase price (the "Exercise Price") of Company
Stock subject to an Option shall be determined by the Committee and may be equal
to, greater than, or less than the Fair Market Value (as defined below) of a
share of Company Stock on the date the Option is granted; provided, however,
that (x) the Exercise Price of an Incentive Stock Option shall be equal to, or
greater than, the Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (y) an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary of the Company, unless the Exercise
Price per share is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.
(iii) The Fair Market Value per share shall be the last
reported sale price prior to the date of grant.
(c) Option Term. The Committee shall determine the term of each Option.
The term of any Option shall not exceed ten years from the date of grant. An
Incentive Stock Option that is granted to an Employee who, at the time of grant,
owns stock possessing more than ten percent of the total combined voting power
of all classes of stock of the Company, or any subsidiary of the Company,
however, may not have a term that exceeds five years from the date of grant.
(d) Exercisability of Options.
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Options shall become exercisable in accordance with such terms
and conditions, consistent with the Plan, as may be determined by the Committee
and reflected in the Grant Instrument. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.
(e) Grants to Non-Exempt Employees. Notwithstanding the foregoing,
Options granted to persons who are non-exempt employees under the Fair Labor
Standards Act of 1938, as amended, shall have an Exercise Price not less than
85% of the Fair Market Value of the Company Stock on the date of grant, and may
not be exercisable for at least six months after the date of grant (except that
such Options may become exercisable, as determined by the Committee, upon the
Grantee's death or retirement, or upon a Change of Control or other
circumstances permitted by applicable regulations).
(f) Termination of Employment, Disability, or Death.
(i) Except as provided below, an Option may only be exercised
while the Grantee is employed by the Employer (as defined below) as an Employee.
In the event that a Grantee ceases to be employed by the Employer for any reason
other than death, termination for Cause, or the Employee's sole determination to
terminate his or her employment (other than by reason of retirement approved by
the Committee), any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within 90 days after the date on which the Grantee
ceases to be employed by the Employer (or within such other period of time as
may be specified by the Committee), but in any event no later than the date of
expiration of the Option term. Except as otherwise provided by the Committee,
any of the Grantee's Options that are not otherwise exercisable as of the date
on which the Grantee ceases to be employed by the Employer shall terminate as of
such date.
(ii) In the event the Grantee ceases to be employed by the
Employer on account of a termination for Cause by the Employer or the Grantee's
voluntary termination, any Option held by the Grantee shall terminate as of the
date the Grantee ceases to be employed by the Employer. In addition,
notwithstanding any other provisions of this Section 5, if the Committee
determines that the Grantee has engaged in conduct that constitutes Cause at any
time while the Grantee is employed by the Employer or after the Grantee's
termination of employment, any Option held by the Grantee shall immediately
terminate, and the Grantee shall automatically forfeit all shares underlying any
exercised portion of an Option for which the Company has not yet delivered the
share certificates, upon refund by the Company of the Exercise Price paid by the
Grantee for such shares. Upon any exercise of an Option, the Company may
withhold delivery of share certificates pending resolution of an inquiry that
could lead to a finding resulting in a forfeiture.
(iii) If the Grantee dies while employed by the Employer or
retires from such employment with the consent of the Committee, any Option that
is otherwise exercisable by the Grantee shall terminate unless exercised within
180 days after the date on which the Grantee ceases to be employed by the
Employer (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by the Employer shall terminate as of such date.
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(iv) For purposes of Sections 5(f), 6, and 7:
(A) The term "Employer" shall mean the Company and its
subsidiary corporations or other entities, as determined by the
Committee.
(B) "Employed by the Employer" shall mean employment as an
Employee (so that, for purposes of exercising Options and satisfying
conditions with respect to Restricted Stock Grants, a Grantee shall not
be considered to have terminated employment until the Grantee ceases to
be an Employee), unless the Committee determines otherwise.
(C) "Cause" shall mean, except to the extent specified
otherwise by the Committee, a finding by the Committee that the Grantee
(i) has breached his or her employment agreement with the Employer;
(ii) has engaged in disloyalty to the Company, including, without
limitation, fraud, embezzlement, theft, commission of a felony or
proven dishonesty; (iii) has disclosed trade secrets or confidential
information of the Employer to persons not entitled to receive such
information; (iv) has breached any written noncompetition or
nonsolicitation agreement between the Grantee and the Employer; or (v)
has engaged in such other behavior detrimental to the interests of the
Employer as the Committee determines.
(g) Exercise of Options. A Grantee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company. The Grantee shall pay the Exercise Price for an Option as specified
by the Committee (w) in cash; (x) by delivering shares of Company Stock owned by
the Grantee (including Company Stock acquired in connection with the exercise of
an Option), subject to such restrictions as the Committee deems appropriate and
having a Fair Market Value on the date of exercise equal to the Exercise Price;
(y) payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board; or (z) by such other method as the
Committee may approve. The Committee may authorize loans by the Company to
Grantees in connection with the exercise of an Option, upon such terms and
conditions as the Committee, in its sole discretion, deems appropriate, to the
extent permitted by applicable law. Shares of Company Stock used to exercise an
Option shall have been held by the Grantee for the requisite period of time to
avoid adverse accounting consequences to the Company with respect to the Option.
The Grantee shall pay the Exercise Price and the amount of any withholding tax
due (pursuant to Section 8) as specified by the Committee.
(h) Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that, if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the Option, as to the excess, shall be treated as a Nonqualified
Stock Option.
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6. Restricted Stock Grants
The Committee may issue or transfer shares of Company Stock to an
Employee under a Restricted Stock Grant, upon such terms as the Committee deems
appropriate. The following provisions are applicable to Restricted Stock Grants:
(a) General Requirements. Shares of Company Stock issued or transferred
pursuant to a Restricted Stock Grant may be issued or transferred for
consideration or for no consideration, and subject to restrictions or no
restrictions, as determined by the Committee. The Committee may establish
conditions under which restrictions on Restricted Stock Grants shall lapse over
a period of time or according to such other criteria as the Committee deems
appropriate. The period of time during which the Restricted Stock Grant shall
remain subject to restrictions will be designated in the Grant Instrument as the
"Restriction Period."
(b) Number of Shares. The Committee, in its sole discretion, shall
determine the number of shares of Company Stock to be issued or transferred
pursuant to a Restricted Stock Grant and the restrictions applicable to such
shares.
(c) Requirement of Employment. If the Grantee ceases to be employed by
the Employer (as defined in Section 5(f)) during the Restriction Period) or if
other specified conditions are not met, the Restricted Stock Grant shall
terminate as to all shares covered by the grant as to which the restrictions
have not lapsed, and those shares of Company Stock shall thereupon become
Treasury Stock. The Committee may, however, provide for complete or partial
exceptions to this requirement as it deems appropriate.
(d) Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Grantee may not sell, assign, transfer, pledge, or
otherwise dispose of the shares of the Restricted Stock Grant except to a
successor under Section 9(a). Each certificate for Restricted Stock Grants shall
contain a legend giving appropriate notice of the restrictions in the Grant. The
Grantee shall be entitled to have the legend removed from the stock certificate
covering the shares subject to restrictions and to delivery of such stock
certificate when all restrictions on such shares have lapsed. The Committee may
determine that the Company will not issue certificates for Restricted Stock
Grants until all restrictions on such shares have lapsed. If certificates are
issued, the Company will retain possession of such certificates for Restricted
Stock Grants until all restrictions on such shares have lapsed.
(e) No Right to Vote and to Receive Dividends. During the Restriction
Period, the Grantee shall not have the right to vote shares subject to
Restricted Stock Grants nor to receive any dividends or other distributions paid
on such shares.
(f) Lapse of Restrictions. All restrictions imposed upon Restricted
Stock Grants shall lapse upon the expiration of the applicable Restriction
Period and the satisfaction of all conditions imposed by the Committee. The
Committee may determine, as to any or all Restricted Stock Grants, that the
restrictions shall lapse without regard to any Restriction Period.
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7. Stock Appreciation Rights
(a) General Requirements. The Committee may grant stock appreciation
rights ("SARs") to an Employee separately or in tandem with any Option (for all
or a portion of the applicable Option). Tandem SARs may be granted either at the
time the Option is granted or at any time thereafter while the Option remains
outstanding; provided, however, that, in the case of an Incentive Stock Option,
SARs may be granted only at the time of the Grant of the Incentive Stock Option.
The Committee shall establish the base amount of the SAR at the time the SAR is
granted. Unless the Committee determines otherwise, the base amount of each SAR
shall be equal to the per share Exercise Price of the related Option or, if
there is no related Option, the Fair Market Value of a share of Company Stock as
of the date of Grant of the SAR.
(b) Tandem SARs. In the case of tandem SARs, the number of SARs granted
to a Grantee that shall be exercisable during a specified period shall not
exceed the number of shares of Company Stock that the Grantee may purchase upon
the exercise of the related Option during such period. Upon the exercise of an
Option, the SARs relating to the Company Stock covered by such Option shall
terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.
(c) Exercisability. An SAR shall be exercisable during the period
specified by the Committee in the Grant Instrument and shall be subject to such
vesting and other restrictions as may be specified in the Grant Instrument. The
Committee may accelerate the exercisability of any or all outstanding SARs at
any time for any reason. SARs may only be exercised while the Grantee is
employed by, or providing service to, the Employer or during the applicable
period after termination of employment or service as described in Section 5(f).
A tandem SAR shall be exercisable only during the period when the Option to
which it is related is also exercisable.
(d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, shall have a base amount not less than 85% of the Fair
Market Value of the Company Stock on the date of grant, and may not be
exercisable for at least six months after the date of grant (except that such
SARs may become exercisable, as determined by the Committee, upon the Grantee's
death, retirement, or upon a Change of Control or other circumstances permitted
by applicable regulations).
(e) Value of SARs. When a Grantee exercises SARs, the Grantee shall
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised, payable in cash, Company Stock,
or a combination thereof. The stock appreciation for an SAR is the amount by
which the Fair Market Value of the underlying Company Stock on the date of
exercise of the SAR exceeds the base amount of the SAR as described in
subsection (a).
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(f) Form of Payment. The Committee shall determine whether the
appreciation in an SAR shall be paid in the form of cash, shares of Company
Stock, or a combination of the two, in such proportion as the Committee deems
appropriate. For purposes of calculating the number of shares of Company Stock
to be received, shares of Company Stock shall be valued at their Fair Market
Value on the date of exercise of the SAR. If shares of Company Stock are to be
received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.
8. Stock Bonus Awards. The Committee may grant shares of Company Stock
as a bonus, or may grant other awards in lieu of obligations of the Company or
any of its subsidiaries to pay cash or deliver other property under this Plan or
under other plans or compensatory arrangements, subject to such terms as shall
be determined by the Committee.
9. Withholding of Taxes
(a) Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state, and local tax withholding
requirements. The Employer may require that the Grantee or other person
receiving or exercising Grants pay to the Company the amount of any federal,
state, or local taxes that the Employer is required to withhold with respect to
such Grants, or the Employer may deduct from other wages paid by the Employer
the amount of any withholding taxes due with respect to such Grants.
(b) Election to Withhold Shares. Unless the Committee prohibits the
same, a Grantee may elect to satisfy the Employer's tax withholding obligation
with respect to a Grant by having shares withheld up to an amount that does not
exceed the Grantee's minimum applicable withholding tax rate for federal
(including FICA), state, and local tax liabilities.
10. Transferability of Grants
(a) Nontransferability of Grants. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except (i) by will or by the laws of
descent and distribution or (ii) with respect to Grants other than Incentive
Stock Options, if permitted in any specific case by the Committee, pursuant to a
domestic relations order or otherwise as permitted by the Committee. When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee may exercise such rights. Any such successor must
furnish proof satisfactory to the Company of his or her right to receive the
Grant under the Grantee's will or under the applicable laws of descent and
distribution.
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(b) Transfer of Nonqualified Stock Options. Notwithstanding the
foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may
transfer Nonqualified Stock Options to family members, or one or more trusts or
other entities for the benefit of or owned by family members, consistent with
applicable securities laws, according to such terms as the Committee may
determine; provided that the Grantee receives no consideration for the transfer
of an Option and the transferred Option shall continue to be subject to the same
terms and conditions as were applicable to the Option immediately before the
transfer.
11. Change of Control of the Company
As used herein, a "Change of Control" shall be deemed to have occurred
if:
(a) Any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) (other than persons who are stockholders on the effective date
of the Plan) becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a
result of a change of ownership resulting from the death of a stockholder, and a
Change of Control shall not be deemed to occur as a result of a transaction in
which the Company becomes a subsidiary of another corporation and in which the
stockholders of the Company, immediately prior to the transaction, will
beneficially own, immediately after the transaction, shares entitling such
stockholders to more than 50% of all votes to which all stockholders of the
parent corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote); or
(b) The consummation of (i) a merger or consolidation of the Company
with another corporation where the stockholders of the Company, immediately
prior to the merger or consolidation, will not beneficially own, immediately
after the merger or consolidation, shares entitling such stockholders to more
than 50% of all votes to which all stockholders of the surviving corporation
would be entitled in the election of directors (without consideration of the
rights of any class of stock to elect directors by a separate class vote); (ii)
a sale or other disposition of all or substantially all of the assets of the
Company; or (iii) a liquidation or dissolution of the Company.
12. Consequences of a Change of Control
(a) Notice and Acceleration. Upon a Change of Control, unless the
Committee determines otherwise, (i) the Company shall provide each Grantee with
outstanding Grants not less than ten days' advance written notice of such Change
of Control; (ii) all outstanding Options and SARs shall automatically accelerate
and become fully exercisable; and (iii) the restrictions and conditions on all
outstanding Restricted Stock Grants shall immediately lapse.
(b) Assumption of Grants. Upon a Change of Control where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
and SARs that are not exercised shall be assumed by, or replaced with comparable
options by, the surviving corporation (or a parent or subsidiary of the
surviving corporation), and other outstanding Grants shall be converted to
similar grants of the surviving corporation (or a parent or subsidiary of the
surviving corporation).
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(c) Other Alternatives. Notwithstanding the foregoing, in the event of
a Change of Control, the Committee may take one or both of the following actions
with respect to any or all outstanding Options and SARs: the Committee may (i)
require that the Grantees surrender their outstanding Options and SARs in
exchange for a payment by the Company, in cash or Company Stock as determined by
the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options and SARs exceeds the Exercise Price of the Options or the base amount of
the SARs, as applicable; or (ii) after giving the Grantees an opportunity to
exercise their outstanding Options and SARs, terminate any or all unexercised
Options and SARs at such time as the Committee deems appropriate. Such surrender
or termination shall take place as of the date of the Change of Control or such
other date as the Committee may specify.
13. Requirements for Issuance or Transfer of Shares
(a) Stockholder's Agreement. The Committee may require that a Grantee
execute a stockholder's agreement, with such terms as the Committee deems
appropriate, with respect to any Company Stock issued or distributed pursuant to
this Plan.
(b) Limitations on Issuance or Transfer of Shares. No Company Stock
shall be issued or transferred in connection with any Grant hereunder unless and
until all legal requirements applicable to the issuance or transfer of such
Company Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.
(c) Lock-Up Period. If so requested by the Company or any
representative of the underwriters (the "Managing Underwriter") in connection
with any underwritten offering of securities of the Company under the Securities
Act of 1933, as amended (the "Securities Act"), a Grantee (including any
successor or assigns) shall not sell or otherwise transfer any shares or other
securities of the Company during the 30-day period preceding and the 180-day
period following the effective date of a registration statement of the Company
filed under the Securities Act for such underwriting (or such shorter period as
may be requested by the Managing Underwriter and agreed to by the Company) (the
"Market Standoff Period"). The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such Market Standoff Period.
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14. Amendment and Termination of the Plan
(a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without stockholder
approval if such approval is required to comply with the Code or other
applicable laws, or to comply with applicable stock exchange requirements.
(b) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the stockholders.
(c) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 19(b). The termination of the Plan shall not impair
the power and authority of the Committee with respect to an outstanding Grant.
Whether or not the Plan has terminated, an outstanding Grant may be terminated
or amended under Section 19(b) or may be amended by agreement of the Company and
the Grantee consistent with the Plan.
(d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials, or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
15. Funding of the Plan
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.
16. Rights of Participants
Nothing in this Plan shall entitle any Employee or other person to any
claim or right to be granted a Grant under this Plan. Neither this Plan nor any
action taken hereunder shall be construed as giving any individual any rights to
be retained by or in the employ of the Employer or any other employment rights.
17. No Fractional Shares
No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Grant. The Committee shall determine whether cash,
other awards, or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
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18. Headings
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
19. Effective Date of the Plan.
The effective date of this Plan shall be the date it is approved by the
stockholders of the Company.
20. Miscellaneous
(a) Grants in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation, or otherwise, of the business or assets
of any corporation, firm, or association, including Grants to employees thereof
who become Employees, or for other proper corporate purposes; or (ii) limit the
right of the Committee to grant stock options or make other awards outside of
this Plan. Without limiting the foregoing, the Committee may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization, or
liquidation involving the Company or any of its subsidiaries in substitution for
a stock option or restricted stock awards made by such corporation. The terms
and conditions of the substitute grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives. The
Committee shall prescribe the provisions of the substitute grants.
(b) Compliance with Law. The Plan, the exercise of Options, and the
obligations of the Company to issue or transfer shares of Company Stock under
Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. In addition,
it is the intent of the Company that the Plan and applicable Grants under the
Plan comply with the applicable provisions of section 162(m) and section 422 of
the Code. To the extent that any legal requirement of section 16 of the Exchange
Act or section 162(m) or 422 of the Code as set forth in the Plan ceases to be
required under section 16 of the Exchange Act or section 162(m) or 422 of the
Code, that Plan provision shall cease to apply. The Committee may revoke any
Grant if it is contrary to law or modify a Grant to bring it into compliance
with any valid and mandatory government regulation. The Committee may also adopt
rules regarding the withholding of taxes on payments to Grantees.
(c) Employees Subject to Taxation Outside the United States. With
respect to Grantees who are subject to taxation in countries other than the
United States, the Committee may make Grants on such terms and conditions as the
Committee deems appropriate to comply with the laws of the applicable countries,
and the Committee may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws.
(d) Governing Law. The validity, construction, interpretation, and
effect of the Plan and Grant Instruments issued under the Plan shall be governed
and construed by and determined in accordance with the laws of the Commonwealth
of Pennsylvania, without giving effect to the conflict of laws provisions
thereof.
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