EXHIBIT 10.31
TOLLGRADE COMMUNICATIONS, INC.
1995 Long-Term Incentive Compensation Plan
(AS AMENDED THROUGH JANUARY 24, 2002)
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Tollgrade Communications, Inc., a
Pennsylvania corporation (hereinafter referred to as the "Company"),
hereby establishes an incentive compensation plan to be known as the
"Tollgrade Communications, Inc. Long-Term Incentive Compensation Plan"
(hereinafter referred to as the "Plan"), as set forth in this document.
The Plan permits the grant of Nonqualified Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock, Performance
Shares and Performance Units. Subject to approval by the Company's
stockholders, the Plan shall become effective as of November 15, 1995
(the "Effective Date") and shall remain in effect as provided in
Section 1.3 hereof.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of the Company through incentives which are
consistent with the Company's goals and which link the personal
interests of Participants to those of the Company's stockholders; to
provide Participants with an incentive for excellence in individual
performance; and to promote teamwork among Participants. The Plan is
further intended to provide flexibility to the Company in its ability
to motivate, attract and retain the services of Participants who make
significant contributions to the Company's success and to allow
Participants to share in the success of the Company.
1.3 DURATION OF THE PLAN. The Plan was adopted by the Board of Directors on
October 16, 1995, subject to approval by the Company's stockholders,
and shall commence on the Effective Date, as described in Section 1.1
hereof, and shall remain in effect, subject to the right of the Board
of Directors to amend or terminate the Plan at any time pursuant to
Article 15 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in
no event may an Award be granted under the Plan on or after October 15,
2005.
ARTICLE 2. DEFINITIONS
WHENEVER USED IN THE PLAN, THE FOLLOWING TERMS SHALL HAVE THE MEANINGS SET FORTH
BELOW, AND WHEN THE MEANING IS INTENDED, THE INITIAL LETTER OF THE WORD SHALL BE
CAPITALIZED:
2.1 "APPROPRIATE ADMINISTRATOR" means, in the case of any Awards to
Employees, the Committee, and in the case of any Awards to Nonemployee
Directors, the Board.
2.2 "AWARD" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares or Performance Units.
2.3 "AWARD AGREEMENT" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to
Awards granted under this Plan.
2.4 "BENEFICIAL OWNER" OR "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
2.5 "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.6 "CAUSE" shall mean with respect to the termination of an Employee's
employment, unless otherwise determined by the Committee at the time of
the grant of the Award (i) in the case where there is no employment
agreement, change of control agreement or similar agreement in effect
between the Employee and the Company at the time of the grant of the
Award (or where there is such an agreement but it does not define
"cause" or words of like import), termination due to an Employee's
dishonesty, fraud, conviction of a felony, insubordination, willful
misconduct, refusal to perform services, or unsatisfactory performance
of his or her duties for the Company as determined by the Committee
in its sole discretion; or (ii) in the case where there is an
employment agreement, change in control agreement or
similar agreement in effect between the Employee and the Company at
the time of the grant of the Award that defines "cause" (or words of
like import), as defined under such agreement.
2.7 "CHANGE IN CONTROL" of the Company shall be deemed to have occurred (as
of a particular day, as specified by the Board) if the Board, by a
majority vote, agrees that a Change in Control has occurred, or is
about to occur. Such a change shall not include, however, a
restructuring, reorganization, merger, or other change in
capitalization in which the Persons who own an interest in the Company
on the Effective Date (the "Current Owners") (or any individual or
entity which receives from a Current Owner an interest in the Company
through will or the laws of descent and distribution) maintain more
than a fifty percent (50%) interest in the resultant entity. Regardless
of the Board's vote, a Change in Control will be deemed to have
occurred as of the first day any one (1) or more of the following
paragraphs shall have been satisfied:
(a) Any Person (other than the Person in control of the Company as
of the Effective Date of the Plan, or other than a trustee or
other fiduciary holding securities under an employee benefit
plan of the Company, or a corporation owned directly or
indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the
Company), becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the
Company's then outstanding securities; or
(b) The stockholders of the Company approve:
(i) A plan of complete liquidation of the Company; or
(ii) An agreement for the sale or disposition of all or
substantially all of the Company's assets (other than
one in which in the stockholders of the Company, as
determined immediately prior to such transaction,
hold, directly or indirectly, as determined
immediately following such transaction, a majority of
the voting power of each surviving, resulting or
acquiring corporation which, immediately following
such transaction, holds more than 10% of the
consolidated assets of the Company immediately prior
to the transaction); or
(iii) A merger, consolidation, or reorganization of the
Company with or involving any other corporation,
other than a merger, consolidation, or reorganization
that would result in the voting securities of the
Company outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity) at least fifty
percent (50%) of the combined voting power of the
voting securities of the Company (or such surviving
entity) outstanding immediately after such merger,
consolidation, or reorganization.
However, in no event shall a Change in Control be deemed to
have occurred, with respect to a Participant, if that Participant is
part of a purchasing group, which consummates the Change in Control
transaction. The Participant shall be deemed "part of a purchasing
group" for purposes of the preceding sentence if the Participant is an
equity participant or has agreed to become an equity participant in the
purchasing company or group (except for (i) passive ownership of less
than five percent (5%) of the voting equity securities of the
purchasing company; or (ii) ownership of equity participation in the
purchasing company or group which is otherwise deemed not to be
significant, as determined prior to the Change in Control by a majority
of the nonemployee continuing Directors).
2.8 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
2.9 "COMMITTEE" means the Compensation Committee of the Board, as specified
in Article 3 herein, or such other Committee appointed by the Board to
administer the Plan with respect to grants of Awards.
2.10 "COMPANY" means Tollgrade Communications, Inc., a Pennsylvania
corporation, and any successor thereto as provided in Article 18
herein.
2.11 "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company.
2.12 "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.13 "EMPLOYEE" means any full-time, active employee of the Company.
Directors who are not employed by the Company shall not be considered
Employees under this Plan.
2.14 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.15 "FAIR MARKET VALUE" shall be the mean between the following prices, as
applicable, for the date as of which fair market value is to be
determined as quoted in The Wall Street Journal (or in such other
reliable publication as the Committee, in its discretion, may determine
to rely upon): (i) if the Common Stock is listed on the New York Stock
Exchange, the highest and lowest sales prices per share of the Common
Stock as quoted in the NYSE Composite Transactions listing for such
date, (ii) if the Common Stock is not listed on such exchange, the
highest and lowest sales prices per share of Common Stock for such date
on (or on any composite index including) the principal United States
securities exchange registered under the 1934 Act on which the Common
Stock is listed or (iii) if the Common Stock is not listed on any such
exchange, the highest and lowest sales prices per share of the Common
Stock for such date on the National Association of Securities Dealers
Automated Quotations System or any successor system then in use
("NASDAQ"). If there are no such sale price quotations for the date as
of which fair market value is to be determined but there are such sale
price quotations within a reasonable period both before and after such
date, then fair market value shall be determined by taking a weighted
average of the means between the highest and lowest sales prices per
share of the Common Stock as so quoted on the nearest date before and
the nearest date after the date as of which fair market value is to be
determined. The average should be weighted inversely by the respective
numbers of trading days between the selling dates and the date as of
which fair market value is to be determined. If there are no such sale
price quotations on or within a reasonable period both before and after
the date as of which fair market value is to be determined, then fair
market value of the Common Stock shall be the mean between the bona
fide bid and asked prices per share of Common Stock as so quoted for
such date on NASDAQ, or if none, the weighted average of the means
between such bona fide bid and asked prices on the nearest trading date
before and the nearest trading date after the date as of which fair
market value is to be determined, if both such dates are within a
reasonable period. The average is to be determined in the manner
described above in this Section 2.15. If the fair market value of the
Common Stock cannot be determined on any basis previously set forth in
this Section 2.15 for the date as of which fair market value is to be
determined, the Committee shall in good faith determine the fair market
value of the Common Stock 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.
2.16 "FREESTANDING SAR" means an SAR that is granted independently of any
Options, as described in Article 7 herein.
2.17 "INCENTIVE STOCK OPTION" OR "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive
Stock Option and which is intended to meet the requirements of Code
Section 422.
2.18 "INSIDER" shall mean an individual who, immediately prior to the grant
of any Award, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company. For
purposes of this Section 2.18, an individual (i) shall be considered as
owning not only Shares of stock owned individually but also all Shares
of stock that are at the time owned, directly or indirectly, by or for
the spouse, ancestors, lineal descendants and brothers and sisters
(whether by whole or half blood) of such individual and (ii) shall be
considered as owning proportionately any Shares owned, directly or
indirectly, by or for any corporation, partnership, estate or trust in
which such individual is a stockholder, partner or beneficiary.
2.19 "NAMED EXECUTIVE OFFICER" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is one of the group
of "covered employees," as defined in the regulations promulgated under
Code Section 162(m), or any successor statute.
2.20 "NONEMPLOYEE DIRECTOR" means an individual who is a member of the Board
of Directors of the Company but who is not an Employee of the Company.
2.21 "NONQUALIFIED STOCK OPTION" OR "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet
the requirements of Code Section 422.
2.22 "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.
2.23 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.24 "PARTICIPANT" means an Employee or a Nonemployee Director who has
outstanding an Award granted under the Plan.
2.25 PERFORMANCE-BASED EXCEPTION" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).
2.26 "PERFORMANCE SHARE" means an Award granted to a Participant, as
described in Article 9 herein.
2.27 "PERFORMANCE UNIT" means an Award granted to a Participant, as
described in Article 9 herein.
2.28 "PERIOD OF RESTRICTION" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage
of time, the achievement of performance goals, or upon the occurrence
of other events as determined by the Appropriate Administrator, at its
discretion), and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 8 herein.
2.29 "PERSON" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d) thereof.
2.30 "RESTRICTED STOCK" means an Award granted to a Participant pursuant to
Article 8 herein.
2.31 "RETIREMENT" shall mean any voluntary termination of employment by an
Employee following the attainment of age 65.
2.32 "SHARES" means the shares of Common Stock of the Company.
2.33 "STOCK APPRECIATION RIGHT" OR "SAR" means an Award, granted alone or in
connection with a related Option, designated as an SAR, pursuant to the
terms of Article 7 herein.
2.34 "TANDEM SAR" means an SAR that is granted in connection with a related
Option pursuant to Article 7 herein, the exercise of which shall
require forfeiture of the right to purchase a Share under the related
Option (and when a share is purchased under the Option, the Tandem SAR
shall similarly be canceled).
Article 3. Administration
3.1 THE COMMITTEE. Except as set forth in Section 3.5 below, the Plan shall
be administered by the Compensation Committee of the Board, or by any
other Committee appointed by the Board consisting of not less than two
(2) Directors who (i) are "non-employee" directors and otherwise meet
the "disinterested administration" rules of Rule 16b-3 under the
Exchange Act and (ii) are "outside directors" under Section
162(m)(4)(C) of the Code, or any successor provision. The members of
the Committee shall be appointed from time to time by, and shall serve
at the discretion of, the Board of Directors.
3.2 AUTHORITY OF THE COMMITTEE. Except as set forth in Section 3.4 below,
except as limited by law or by the Articles of Incorporation or Bylaws
of the Company, and subject to the provisions herein, the Committee
shall have full power to grant Options (with or without SARs) and to
award Restricted Stock, Performance Shares and Performance Units as
described herein and to determine the Employees to whom any such Award
shall be made and the number of Shares to be covered thereby; determine
the sizes and types of Awards; determine the terms and conditions of
Awards in a manner consistent with the Plan; construe and interpret the
Plan and any agreement or instrument entered into under the Plan as
they apply to Employees; and establish, amend, or waive rules and
regulations for the Plan's administration as they apply to Employees;
and (subject to the provisions of Article 15 herein) amend the terms
and conditions of any outstanding Award except for Incentive Stock
Options to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations, which may be necessary
or advisable for the administration of the Plan, as the Plan applies to
Employees. As permitted by law the Committee may delegate its authority
as identified herein.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders
and resolutions of the Board shall be final, conclusive and binding on
all persons, including the Company, its stockholders, Employees,
Participants, and their estates and beneficiaries.
3.4 NON-COMPETITION. If a grantee of an Option, Restricted Stock,
Performance Units or Performance Shares (i) engages in the operation or
management of a business (whether as owner, partner, officer, director,
employee or otherwise and whether during or after termination of
employment) which is in competition with the Company, (ii) induces or
attempts to induce any customer, supplier, licensee or other
individual, corporation or other business organization having a
business relationship with the Company to cease doing business with the
Company or in any way interferes with the relationship between any such
customer, supplier, licensee or other person and the Company or (iii)
solicits any employee of the Company to leave the employment thereof or
in any way interferes with the relationship of such employee with the
Company, the Appropriate Administrator, in its discretion, may
immediately terminate all outstanding Options held by the grantee,
declare forfeited all Restricted Stock held by the grantee as to which
the restrictions have not yet lapsed and/or immediately cancel any
award of Performance Units or Performance Shares. Whether a grantee has
engaged in any of the activities referred to in the preceding sentence
which would cause the outstanding Options to be terminated, and/or the
Restricted Stock to be forfeited and/or any award of Performance Units
or Performance Shares to be cancelled shall be determined, in its
discretion, by the Appropriate Administrator, and any such
determination by the Appropriate Administrator shall be final and
binding.
3.5 GRANTS TO NONEMPLOYEE DIRECTORS. Notwithstanding the foregoing, unless
otherwise determined by the Board, the Board shall grant Nonqualified
Stock Options (with or without SARs) and award Restricted Stock,
Performance Shares and Performance Units, and otherwise exercise the
same authority as the Committee as described in Section 3.2 above, with
respect to Nonemployee Directors.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.3 herein, the number of Shares hereby reserved
for issuance to Participants under the Plan shall be 2,685,000;
provided however, that, of that total, the maximum number of Shares of
Restricted Stock granted pursuant to Article 8 herein, shall be
300,000.
The following rules shall apply to grants of such Awards under the
Plan:
(a) The maximum aggregate number of Shares that may be granted or that
may vest, as applicable, pursuant to any Award held by any one Named
Executive Officer shall be 200,000 during any calendar year of the term
of the Plan;
(b) The maximum aggregate cash payout received during any fiscal year
by any one Named Executive Officer with respect to Awards granted shall
be $1 million.
4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or
the termination of a related Option upon exercise of the corresponding
Tandem SAR), any Shares subject to such Award again shall be available
for the grant of an Award under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company,
any reorganization (whether or not such reorganization comes within the
definition of such term in Code Section 368) or any partial or complete
liquidation of the Company, such adjustment shall be made in the number
and class of Shares which may be delivered under Section 4.1 and as to
the number of Shares which may be awarded under the Plan to any Named
Executive Officer during the term of the Plan, and in the number and
class of and/or price of Shares subject to outstanding Awards granted
under the Plan, as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares
subject to any Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
Employees of the Company (including, but not limited to, Employees who
are members of the Board, covered employees as defined in Section
162(m)(3) of the Code, or any successor provision) and all Nonemployee
Directors of the Company.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees
those to whom Awards shall be granted and shall determine the nature
and amount of each Award
and the Board may, from time to time, select from all eligible
Nonemployee Directors those to whom Awards shall be granted and shall
determine the nature and amount of each Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, the
Committee may grant Incentive Stock Options or Nonqualified Stock
Options or both types of Options (but not in tandem) to Employees and
the Board may grant Nonqualified Stock Options to Nonemployee Directors
in such number, and upon such terms, and at any time and from time to
time as shall be determined by the Appropriate Administrator.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, and such
other provisions as the Appropriate Administrator shall determine. The
Award Agreement also shall specify whether the Option is intended to be
an ISO within the meaning of Code Section 422, or an NQSO whose grant
is intended not to fall under the provisions of Code Section 422.
6.3 OPTION PRICE. The Option Price at which each Option may be exercised
shall be no less than one hundred percent (100%) of the fair market
value per share of the Common Stock covered by the Option on the date
of grant, except that in the case of an Incentive Stock Option granted
to an Insider, the option price shall not be less than one hundred ten
percent (110%) of such fair market value on the date of grant. For
purposes of this Section 6.3, the fair market value of the Common Stock
shall be as determined in Section 2.15
6.4 DURATION OF OPTIONS. Each Option granted to a Participant shall expire
at such time as the Appropriate Administrator shall determine at the
time of grant; provided, however, that no Option shall be exercisable
after the expiration of ten years (five years in the case of an
Incentive Stock Option granted to an Insider) from the date of grant.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and
conditions as the Appropriate Administrator shall in each instance
approve, which need not be the same for each grant or for each
Participant. Notwithstanding any other provision contained in the Plan
or in any Award Agreement referred to in Section 2.3, but subject to
the possible exercise of the Committee's discretion contemplated in the
last sentence of this paragraph, the aggregate fair market value,
determined as provided in Section 2.15 on the date of grant, of the
Shares with respect to which Incentive Stock Options are exercisable
for the first time by an Employee 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 limitation 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
limitation 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 limitation
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
Nonqualified Stock Options.
6.6 PAYMENT. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth
the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable
to the Company in full either: (a) in cash in United States dollars
(including check, bank draft or money order), or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the
time of exercise equal to the total Option Price, or (c) by a
combination of (a) and (b).
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.
Notwithstanding the foregoing, unless the Appropriate Administrator, in
its discretion, shall otherwise determine at the time of grant in the
case of an Incentive Stock Option, or at any time in the case of a
Nonqualified Stock Option,
the exercise of the Option shall not be deemed to occur and no Shares
of Common Stock will be issued by the Company upon exercise of the
Option until the Company has received payment of the Option Price
in full.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Appropriate Administrator
may impose such restrictions on any Shares acquired pursuant to the
exercise of an Option granted under this Article 6 as it may deem
advisable, including, without limitation, restrictions under applicable
Federal securities laws, under the requirements of any stock exchange
or market upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.
6.8 TERMINATION OF EMPLOYMENT. Subject to the provisions of Section 6.5 in
the case of Incentive Stock Options, unless the Committee, in its
discretion, shall otherwise determine:
(i) If the employment of an Employee who is not disabled within
the meaning of Section 422(c)(6) of the Code (a "Disabled
Grantee") is voluntarily terminated with the consent of the
Company or an Employee retires under any retirement plan of
the Company, any outstanding Incentive Stock Option held by
such Employee shall be exercisable by the Employee (but only
to the extent exercisable by the Employee immediately prior to
the termination of employment) at any time prior to the
expiration date of such Incentive Stock Option or within three
months after the date of termination of employment, whichever
is the shorter period;
(ii) If the employment of an Employee who is not a Disabled Grantee
is voluntarily terminated with the consent of the Company or
an Employee retires under any retirement plan of the Company,
any outstanding Nonqualified Stock Option held by such
Employee shall be exercisable by the Employee (but only to the
extent exercisable by the Employee immediately prior to the
termination of employment) at any time prior to the expiration
date of such Nonqualified Stock Option or within one year
after the date of termination of employment, whichever is the
shorter period;
(iii)If the employment of an Employee who is a Disabled Grantee is
voluntarily terminated with the consent of the Company, any
outstanding Option held by such Employee shall be exercisable
by the Employee in full (whether or not so exercisable by the
Employee immediately prior to the termination of employment)
at any time prior to the expiration date of such Option or
within one year after the date of termination of employment,
whichever is the shorter period;
(iv) Following the death of an Employee during employment, any
outstanding Option held by the Employee at the time of death
shall be exercisable in full (whether or not so exercisable by
the Employee immediately prior to the death of the Employee)
by the person entitled to do so under the Will of the
Employee, or, if the Employee shall fail to make testamentary
disposition of the stock option or shall die intestate, by the
legal representative of the Employee at any time prior to the
expiration date of such stock option or within one year after
the date of death of the Employee, whichever is the shorter
period;
(v) Following the death of an Employee after termination of
employment during a period when an Option is exercisable, the
Option shall be exercisable by such person entitled to do so
under the Will of the Employee by such legal representative
(but only to the extent exercisable by the Employee
immediately prior to the termination of employment) at any
time prior to the expiration date of such Option or within one
year after the date of death, whichever is the shorter period;
(vi) Unless the exercise period of a stock option following
termination of employment has been extended as provided in
Section 14.1, if the employment of an Employee terminates for
any reason other than voluntary termination with the consent
of the Company, retirement under any retirement plan of the
Company or death, all outstanding Options held by the Employee
at the time of such termination of employment shall
automatically terminate. provided, however, that if the
employment of an Employee is involuntarily terminated by the
Company without Cause, any Option held by such Employee at the
time of such termination that was granted to Employee on or
after May 3, 2001, shall be exercisable by the Employee (but
only to the extent exercisable by the Employee immediately
prior to the termination of employment) at any time prior to
the expiration date of such Option or within one year after
the date of termination of employment, whichever is the
shorter period. Whether termination of employment is a
voluntary termination with the consent of the Company or an
involuntary termination with or without cause shall be
determined, in its discretion, by the Committee and any such
determination by the Committee shall be final and binding.
6.9 TERMINATION OF BOARD SERVICE. Unless the Board, in its discretion,
shall otherwise determine:
(i) If a Nonemployee Director ceases to be a Director of the
Company for any reason other than resignation, removal for
cause or death, any then outstanding stock option held by such
Nonemployee Director shall be exercisable by the Nonemployee
Director (but only to the extent exercisable by the
Nonemployee Director immediately prior to ceasing to be a
Director) at any time prior to the expiration date of such
stock option or within one year after the date the Nonemployee
Director ceases to be a Director, whichever is the shorter
period;
(ii) If during his or her term of office as a Director a
Nonemployee Director resigns from the Board (which shall not
include not standing for reelection at the end of his or her
then current term) or is removed from office for cause, any
then outstanding stock option held by such Nonemployee
Director shall be exercisable by the Nonemployee Director (but
only to the extent exercisable by the Nonemployee Director
immediately prior to ceasing to be a Director) at any time
prior to the expiration date of such stock option or within 90
days after the date of resignation or removal, whichever is
the shorter period;
(iii)Following the death of a Nonemployee Director during service
as a Director of the Company, any outstanding stock option
held by the Nonemployee Director at the time of death (whether
or not exercisable by the Nonemployee Director immediately
prior to death) shall be exercisable by the person entitled to
do so under the Will of the Nonemployee Director, or, if the
Nonemployee Director shall fail to make testamentary
disposition of the stock option or shall die intestate, by the
legal representative of the Nonemployee Director, at any time
prior to the expiration date of such stock option or within
one year after the date of death, whichever is the shorter
period;
(iv) Following the death of a Nonemployee Director after ceasing to
be a Director, any outstanding stock option held by such
Nonemployee Director at the time of death shall be exercisable
(but only to the extent exercisable by the Nonemployee
Director immediately prior to death) by such person entitled
to do so under the Will of the Nonemployee Director or by such
legal representative at any time prior to the expiration date
of such stock option or within one year after the date of
death, whichever is the shorter period.
Interpretation of the foregoing shall be done by the Board and
any determination by the Board shall be final and binding.
6.10 NONTRANSFERABILITY OF OPTIONS. No Option granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by Will or if the Participant dies intestate
by the laws of descent and distribution of the state of domicile of the
Participant at the time of death. Further, all Options granted to a
Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as
shall be determined by the Appropriate Administrator, provided however
that any SAR granted in conjunction with an Incentive Stock Option may
only be granted at the time the related Incentive Stock Option is
granted. The Appropriate Administrator may grant Freestanding SARs,
Tandem SARs, or any combination of these forms of SARs.
The Appropriate Administrator shall have complete discretion
in determining the number of SARs granted to each Participant (subject
to Article 4 herein) and, consistent with the provisions of the Plan,
in determining the terms and conditions pertaining to such SARs.
The grant price of a Freestanding SAR shall equal the Fair
Market Value of a Share on the date of grant of the SAR. The grant
price of Tandem SARs shall equal the Option Price of the related
Option, as provided in Section 6.3.
7.2 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A
Tandem SAR may be exercised only with respect to the Shares for which
its related Option is then exercisable.
Notwithstanding any other provision of this Plan to the
contrary, with respect to a Tandem SAR granted in connection with an
ISO: (i) the Tandem SAR will expire no later than the expiration of the
underlying ISO; (ii) the value of the payout with respect to the Tandem
SAR may be for no more than one hundred percent (100%) of the
difference between the Option Price of the underlying ISO and the Fair
Market Value of the Shares subject to the underlying ISO at the time
the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised
only when the Fair Market Value of the Shares subject to the ISO
exceeds the Option Price of the ISO.
7.3 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and conditions the Appropriate Administrator, in its
sole discretion, imposes upon them.
7.4 SAR AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Appropriate Administrator shall determine.
7.5 TERM OF SARS. Except as otherwise provided in Section 7.2 in the case
of a Tandem SAR granted in conjunction with an ISO, the term of an SAR
granted under the Plan shall be determined by the Appropriate
Administrator, in its sole discretion; provided, however, that such
term shall not exceed ten (10) years.
7.6 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the date
of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Appropriate Administrator, the payment upon
SAR exercise may be in cash, in Shares of equivalent value, or in some
combination thereof.
7.7 RULE 16b-3 REQUIREMENTS. Notwithstanding any other provision of the
Plan, the Appropriate Administrator may impose such conditions on
exercise of an SAR as may be required to satisfy the requirements of
Section 16 of the Exchange Act (or any successor rule).
7.8 TERMINATION OF EMPLOYMENT. Each SAR Award Agreement shall set forth the
extent to which the Participant shall have the right to exercise the
SAR following termination of the Participant's employment with the
Company and/or its Subsidiaries or the Participant's termination of
Board Service, as the case may be. Such provisions shall be determined
in the sole discretion of the Appropriate Administrator, shall be
included in the Award Agreement entered into with Participants, need
not be uniform among all SARs issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of such
employment or service.
7.9 NONTRANSFERABILITY OF SARS. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or, if the grantee dies intestate, by the laws of
descent and distribution of the state of domicile of the grantee at the
time of death. Further, all SARs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such
Participant.
ARTICLE 8. RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Appropriate Administrator, at any time and from time to time,
may grant Shares of Restricted Stock to Participants in such amounts as
the Appropriate Administrator shall determine.
8.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock
granted, and such other provisions as the Appropriate Administrator
shall determine.
8.3 TRANSFERABILITY. Except as provided in this Article 8, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the Appropriate
Administrator and specified in the Restricted Stock Award Agreement, or
upon earlier satisfaction of any other conditions, as specified by the
Appropriate Administrator in its sole discretion and set forth in the
Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be
available during his or her lifetime only to such Participant.
8.4 OTHER RESTRICTIONS. Subject to Article 11 herein, the Appropriate
Administrator shall impose such other conditions and/or restrictions on
any Shares of Restricted Stock granted pursuant to the Plan as it may
deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of
Restricted Stock, restrictions based upon the achievement of specific
performance goals (Company-wide, divisional, and/or individual),
time-based restrictions on vesting following the attainment of the
performance goals, and/or restrictions under applicable Federal or
state securities laws.
The Company shall retain the certificates representing Shares of
Restricted Stock in the Company's possession until such time as all
conditions and/or restrictions applicable to such Shares have been
satisfied.
Except as otherwise provided in this Article 8, Shares of
Restricted Stock covered by each Restricted Stock grant made under the
Plan shall become freely transferable by the Participant after the last
day of the applicable Period of Restriction.
8.5 VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares.
8.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may
be credited with regular cash dividends paid with respect to the
underlying Shares while they are so held. The Appropriate Administrator
may apply any restrictions to the dividends that the Appropriate
Administrator deems appropriate. Without limiting the generality of the
preceding sentence, if the grant or vesting of Restricted Shares
granted to a Named Executive Officer is designed to comply with the
requirements of the Performance-Based Exception, the Committee may
apply any restrictions it deems appropriate to the payment of dividends
declared with respect to such Restricted Shares, such that the
dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
In the event that any dividend constitutes a "derivative
security" or an "equity security" pursuant to Rule 16(a) under the
Exchange Act, such dividend shall be subject to a vesting period equal
to the remaining vesting period of the Shares of Restricted Stock with
respect to which the dividend is paid.
8.7 TERMINATION OF EMPLOYMENT. Each Restricted Stock Award Agreement shall
set forth the extent to which the Participant shall have the right to
receive unvested Restricted Shares following termination of the
Participant's employment with the Company or service on the Board, as
the case may be. Such provisions shall be determined in the sole
discretion of the Appropriate Administrator, shall be included in the
Award Agreement entered into with each Participant, need not be uniform
among all Shares of Restricted Stock issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of such
employment or service; provided, however that, except in the cases of
terminations connected with a Change in Control and terminations by
reason of death or disability the vesting of Shares of Restricted Stock
which qualify for the Performance-Based Exception and which are held by
Named Executive Officers shall occur at the time they otherwise would
have, but for the employment termination.
ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the Plan,
Performance Units and/or Performance Shares may be granted to
Participants in such amounts and upon such terms, and at any time and
from time to time, as shall be determined by the Appropriate
Administrator.
9.2 VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall have an
initial value that is established by the Appropriate Administrator at
the time of grant. Each Performance Share shall have an initial value
equal to the Fair Market Value of a Share on the date of grant. The
Appropriate Administrator shall set performance goals in its discretion
which, depending on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares that will be paid
out to the Participant. For purposes of this Article 9, the time period
during which the performance goals must be met shall be called a
"Performance Period."
9.3 EARNING OF PERFORMANCE UNITS/SHARES. Subject to the terms of this Plan,
after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the
number and value of Performance Units/Shares earned by the Participant
over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been achieved.
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES. Payment of
earned Performance Units/Shares shall be made in a single lump sum
within seventy-five (75) calendar days following the close of the
applicable Performance Period. Subject to the terms of this Plan,
the Appropriate Administrator, in its sole discretion, may pay
earned Performance Units/Shares in the form of cash or in Shares (or in
a combination thereof) which have an aggregate Fair Market Value equal
to the value of the earned Performance Units/Shares at the close of the
applicable Performance Period. Such Shares may be granted subject to
any restrictions deemed appropriate by the Appropriate Administrator.
At the discretion of the Appropriate Administrator,
Participants may be entitled to receive any dividends declared with
respect to Shares which have been earned in connection with grants of
Performance Units and/or Performance Shares which have been earned, but
not yet distributed to Participants (such dividends shall be subject to
the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set
forth in Section 8.6 herein). In addition, Participants may, at the
discretion of the Appropriate Administrator, be entitled to exercise
their voting rights with respect to such Shares.
9.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
Unless determined otherwise by the Appropriate Administrator and set
forth in the Participant's Award Agreement, in the event the employment
or the Board service of a Participant is terminated by reason of death,
disability, or Retirement during a Performance Period, the Participant
shall receive a payout of the Performance Units/Shares which is
prorated, as specified by the Appropriate Administrator in its
discretion.
Payment of earned Performance Units/Shares shall be made at a
time specified by the Appropriate Administrator in its sole discretion
and set forth in the Participant's Award Agreement. Notwithstanding the
foregoing, with respect to Named Executive Officers who retire during a
Performance Period, payments shall be made at the same time as payments
are made to Participants who did not terminate employment during the
applicable Performance Period.
9.6 TERMINATION OF EMPLOYMENT OR BOARD SERVICE FOR OTHER REASONS. In the
event that a Participant's employment or Board service terminates for
any reason other than those reasons set forth in Section 9.5 herein,
all Performance Units/Shares shall be forfeited by the Participant to
the Company unless determined otherwise by the Appropriate
Administrator, as set forth in the Participant's Award Agreement.
9.7 NONTRANSFERABILITY. Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or if the grantee dies intestate by the laws of
descent and distribution of the state of domicile of the grantee at the
time of death. Further, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant
or the Participant's legal representative.
ARTICLE 10. PERFORMANCE MEASURES
Unless and until the Appropriate Administrator proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 10, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Named Executive Officers which are
designed to qualify for the Performance Based Exception, the performance
measure(s) to be used for purposes of such grants shall be chosen from among the
following alternatives:
(a) Revenues of the Company or any specified division;
(b) Percentage increase over a specified period in revenues of the
Company or any specified division;
(c) Expenses or any designated category of expenses of the Company or
any specified division;
(d) Percentage decrease over a specified period in expenses or any
designated category of expenses of the Company or any specified
division;
(e) Pretax or after-tax income of the Company or any specified
division; and
(f) Percentage increase over a specified period in pretax or after-tax
income of the Company or any specified division.
The Appropriate Administrator shall have the discretion to adjust the
determinations of the degree of attainment of the preestablished performance
goals; provided, however, that Awards which are designed to qualify for the
Performance Based Exception, and which are held by Named Executive Officers, may
not be adjusted upward (the Committee shall retain the discretion to adjust such
Awards downward).
In the event that applicable tax and/or securities laws change to
permit the Appropriate Administrator discretion to alter the governing
performance measures without obtaining shareholder approval of such changes, the
Appropriate Administrator shall have sole discretion to make such changes
without obtaining shareholder approval. In addition, in the event that the
Appropriate Administrator determines that it is advisable to grant Awards, which
shall not qualify for the Performance-Based Exception, the Appropriate
Administrator may make such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.
ARTICLE 12. DEFERRALS
The Committee may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue of the exercise of an Option or SAR, the lapse
or waiver of restrictions with respect to Restricted Stock, or the satisfaction
of any requirements or goals with respect to Performance Units/Shares. If any
such deferral election is required or permitted, the Appropriate Administrator
shall, in its sole discretion, establish rules and procedures for such payment
deferrals.
ARTICLE 13. RIGHTS OF EMPLOYEES AND NONEMPLOYEE DIRECTORS
13.1 EMPLOYMENT AND BOARD SERVICE. Nothing in the Plan shall interfere with
or limit in any way the right of the Company to terminate any
Participant's employment at any time, nor confer upon any Participant
any right to continue in the employ of the Company, nor shall it confer
any right to a person to continue as a Director of the Company or
interfere in any way with the rights of shareholders of the Company or
the Board to elect and remove Directors.
13.2 PARTICIPATION. No Employee or Nonemployee Director shall have the right
to be selected to receive an Award under this Plan, or, having been so
selected, to be selected to receive a future Award.
ARTICLE 14. CHANGE IN CONTROL
14.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable
laws, or by the rules and regulations of any governing governmental
agencies or national securities exchanges:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable throughout their
entire term;
(b) Any restriction periods and restrictions imposed on Restricted
Shares shall lapse;
(c) The target payout opportunities attainable under all outstanding
Awards of Restricted Stock, Performance Units and Performance Shares
shall be deemed to have been fully earned for the entire Performance
Period(s) as of the effective date of the Change in Control. The
vesting of all Awards denominated in Shares shall be accelerated as of
the effective date of the Change in Control, and there shall be paid
out in cash to Participants within thirty (30) days following the
effective date of the Change in Control an amount equal to one hundred
percent (100%) of all targeted cash payout opportunities associated
with outstanding cash-based Awards; and
(d) Subject to Article 15 herein, the Appropriate Administrator shall
have the authority to make any modifications to the Awards as
determined by the Appropriate Administrator to be appropriate before
the effective date of the Change in Control.
14.2 ACCELERATION OF AWARD VESTING. Notwithstanding any provision of this
Plan or any Award Agreement provision to the contrary, the Appropriate
Administrator, in its sole and exclusive discretion, shall have the
power at any time to accelerate the vesting of any Award granted under
the Plan to a Participant, including without limitation acceleration to
such a date that would result in said Awards becoming immediately
vested, except that the Appropriate Administrator shall not have the
authority to accelerate any Award that would otherwise qualify for the
Performance-Based Exception in any manner that would cause the Award to
fail to qualify as such.
14.3 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE IN CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan or any
Award Agreement provision, the provisions of this Article 14 may not be
terminated, amended, or modified on or after the date of a Change in
Control to affect adversely any Award theretofore granted under the
Plan without the prior written consent of the Participant with respect
to said Participant's outstanding Awards; provided, however, the Board
of Directors, upon recommendation of the Committee, may terminate,
amend, or modify this Article 14 at any time and from time to time
prior to the date of a Change in Control.
ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time and
from time to time, alter, amend, suspend or terminate the Plan in whole
or in part; provided, however, that no amendment which requires
shareholder approval in order for the Plan to continue to comply with
Rule 16b-3 under the Exchange Act, including any successor to such
Rule, shall be effective unless such amendment shall be approved by the
requisite vote of shareholders of the Company entitled to vote thereon.
15.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms
and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the
events described in Section 4.3 hereof) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan; provided that no such adjustment
shall be authorized to the extent that such authority would be
inconsistent with the Plan's meeting the requirements of Section 162(m)
of the Code, as from time to time amended.
15.3 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.
15.4 COMPLIANCE WITH CODE SECTION 162(M). Compliance with Code Section
162(m). At all times when Code Section 162(m) is applicable, all Awards
granted under this Plan shall comply with the requirements of Code
Section 162(m); provided, however, that in the event the Committee
determines that such compliance is not desired with respect to any
Award or Awards available for grant under the Plan, then compliance
with Code Section 162(m) will not be required. In addition, in the
event that changes are made to Code Section 162(m) to permit greater
flexibility with respect to any Award or Awards available under the
Plan, the Committee may, subject to this Article 15, make any
adjustments it deems appropriate.
ARTICLE 16. WITHHOLDING
16.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require an Employee to remit to the Company, an
amount sufficient to satisfy Federal, state, and local taxes, domestic
or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of this Plan.
16.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on
Restricted Stock, or upon any other taxable event arising as a result
of Awards granted hereunder, Employees may elect, subject to the
approval of the Committee, to satisfy the withholding requirement, in
whole or in part, by having the Company withhold Shares having a Fair
Market Value on the date the tax is to be determined equal to the
minimum statutory total tax which could be imposed on the action. All
such elections shall be irrevocable, made in writing, signed by the
Employee, and shall be subject to any restrictions or limitations
that the Committee, in its sole discretion, deems appropriate.
ARTICLE 17. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 18. SUCCESSOR
All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 19. LEGAL CONSTRUCTION
19.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.
19.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not
been included.
ARTICLE 20. REQUIREMENTS OF LAW.
The granting of Awards and the issuance of Shares under the Plan shall be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.
ARTICLE 21. SECURITIES LAW COMPLIANCE.
With respect to (i) a Director of the Company, (ii) an executive officer of the
Company or other person who is required to file reports pursuant to the rules
promulgated under Section 16 of the Exchange Act and (iii) Insiders,
transactions under this Plan are intended to comply with all applicable
conditions or Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Appropriate Administrator fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Appropriate Administrator.
ARTICLE 22. GOVERNING LAW.
To the extent not preempted by Federal law, the Plan and all agreements
hereunder, shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.