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Exhibit 10(e)
DEFERRED COMPENSATION AND STOCK PLAN
FOR DIRECTORS
(AS AMENDED AS OF APRIL 26, 1995)
SECTION 1. INTRODUCTION
1.1 Establishment. Westinghouse Electric Corporation, a Pennsylvania
corporation (the "Company"), has established the Deferred Compensation and
Stock Plan for Directors as amended as of April 26, 1995 (the "Plan") for those
directors of the Company who are neither officers nor employees of the Company.
The Plan provides (i) for the grant of awards in the form of Common Stock
Equivalents to Directors prior to April 26, 1995 and in the form of Stock
Options to Directors beginning April 26, 1995, and (ii) the opportunity for the
Directors to defer receipt of all or a part of their cash compensation through
a tax effective investment mechanism. Unless otherwise provided for herein,
the term Company includes Westinghouse Electric Corporation and its
subsidiaries.
1.2 Purposes. The purposes of the Plan are to encourage the Directors to
own shares of the Company's stock and thereby to align their interests more
closely with the interests of the other shareholders of the Company, to
encourage the highest level of Director performance by providing the Directors
with a direct
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interest in the Company's attainment of its financial goals, and to provide a
financial incentive that will help attract and retain the most qualified
Directors.
1.3 Effective Date of Amendment. This Plan shall be effective on the
date on which the amendment to the Deferred Stock and Compensation Plan for
Directors is approved by the common shareholders of the Corporation. In the
event that this amendment is not so approved, the Deferred Stock and
Compensation Plan for Directors as in effect prior to the amendment shall
remain in full force and effect.
SECTION 2. DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
(a) "BOARD" means the Board of Directors of the Company.
(b) "CASH ACCOUNT" means the account established by the Company in
respect of each Director pursuant to Section 6.3 hereof and to which will be
credited annual retainer and/or fees and other amounts deferred pursuant to the
Plan.
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(c) "CAUSE" means any act of (a) fraud or intentional
misrepresentation, or (b) embezzlement, misappropriation or conversion of
assets or opportunities of the Company or any of its direct or indirect
majority-owned subsidiaries.
(d) "CHANGE IN CONTROL" shall have the meaning assigned to it in
Section 8.2 hereof.
(e) "COMMITTEE" means the Compensation Committee of the Board or any
successor established by the Board.
(f) "COMMON STOCK EQUIVALENT" means a hypothetical share of Stock
which shall have a value on any date equal to the mean of the high and low
prices of the Stock as reported by the composite tape of the New York Stock
Exchange on that date.
(g) "COMMON STOCK EQUIVALENT AWARD" means an award of Common Stock
Equivalents granted to a Director pursuant to Section 5 of the Plan.
(h) "DEBENTURE" means a hypothetical debenture of the Company that
has a face value of $100, bears interest at a rate equal to the seven year U.S.
Treasury Bond rate (beginning January 1, 1995, the ten year U.S. Treasury Bond
rate) in effect the week prior to the regular January meeting of the Board
(or, if no such meeting is held, the week prior to the first trading
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day of the New York Stock Exchange in February) in the year in respect
of which deferred amounts are earned, and is convertible into Stock at a
conversion rate determined by dividing $100 by the mean of the high and low
prices of the Stock as reported by the composite tape of the New York Stock
Exchange on the date the Debenture is credited to the Deferred Debenture
Account pursuant to Section 6.3 hereof.
(i) "DEFERRED DEBENTURE ACCOUNT" means the account established by the
Company in respect of each Director pursuant to Section 6.3 hereof and to which
will be credited Debentures and other amounts pursuant to the Plan.
(j) "DEFERRED STOCK ACCOUNT" means the account established by the
Company in respect of each Director pursuant to Section 5.2 hereof and to which
will be credited Common Stock Equivalents pursuant to the Plan.
(k) "DIRECTOR" means a member of the Board who is neither an officer
nor an employee of the Company. For purposes of the Plan, an employee is an
individual whose wages are subject to the withholding of federal income tax
under section 3401 of the Internal Revenue Code, and an officer is an
individual elected or appointed by the Board or chosen in such other manner as
may be prescribed in the By-laws of the Company to serve as such.
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(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.
(m) "FAIR MARKET VALUE" means the mean of the high and low prices of
the Stock as reported by the composite tape of the New York Stock Exchange (or
such successor reporting system as shall be selected by the Committee) on the
relevant date or, if no sale of the Stock shall have been reported for that
day, the average of such prices on the next preceding day and the next
following day for which there were reported sales.
(n) "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended from time to time.
(o) "STOCK" means the $1.00 par value Common Stock of the Company.
(p) "STOCK OPTION" means a non-statutory stock option to purchase
shares of Stock for a purchase price per share equal to the "Exercise Price"
(as defined in Section 7.2(a) below) in accordance with the provisions of the
Plan.
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2.2 Gender and Number. Except when otherwise indicated by the
context, the masculine gender shall also include the feminine gender, and the
definition of any term herein in the singular shall also include the plural.
SECTION 3. PLAN ADMINISTRATION
(a) The Plan shall be administered by the Committee. The members of
the Committee shall be members of the Board appointed by the Board,
and any vacancy on the Committee shall be filled by the Board.
The Committee shall keep minutes of its meetings and of any action taken
by it without a meeting. A majority of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present shall be the acts of the Committee. Any action that
may be taken at a meeting of the Committee may be taken without a meeting if a
consent or consents in writing setting forth the action so taken shall be
signed by all of the members of the Committee. The Committee shall make
appropriate reports to the Board concerning the operations of the Plan.
(b) Subject to the limitations of the Plan, the Committee shall
have the sole and complete authority: (i) to impose such limitations,
restrictions and conditions upon such awards as it shall deem appropriate, (ii)
to interpret the Plan
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and to adopt, amend and rescind administrative guidelines and other
rules and regulations relating to the Plan and (iii) to make all other
determinations and to take all other actions necessary or advisable for the
implementation and administration of the Plan. Notwithstanding the foregoing,
the Committee shall have no authority, discretion or power to select the
Directors who will receive awards pursuant to the Plan, determine the awards to
be granted pursuant to the Plan, the number of shares of Stock to be issued
thereunder or the price thereof or the time at which such awards are to be
granted, establish the duration and nature of awards or alter any other terms
or conditions specified in the Plan, except in the sense of administering the
Plan subject to the provisions of the Plan. The Committee's determinations on
matters within its authority shall be conclusive and binding upon the Company
and all other persons. The Plan shall be interpreted and implemented in a
manner so that Directors will not fail, by reason of the Plan or its
implementation, to be "disinterested persons" within the meaning of Rule 16b-3
under Section 16 of the Exchange Act, as such rule may be amended.
(c) The Committee shall act on behalf of the Company as sponsor
of the Plan. All expenses associated with the Plan shall be borne by the
Company.
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SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. 500,000 shares of Stock are authorized for
issuance under the Plan in accordance with the provisions of the Plan, subject
to adjustment and substitution as set forth in this Section 4. This
authorization may be increased from time to time by approval of the Board and
by the shareholders of the Company if such shareholder approval is required.
The Company shall at all times during the term of the Plan retain as authorized
and unissued Stock at least the number of shares from time to time required
under the provisions of the Plan, or otherwise assure itself of its ability to
perform its obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are subject
to a Common Stock Equivalent Award, a Stock Option Award or a Debenture and
which are forfeited, any shares of Stock that for any other reason are not
issued to a Director, and any shares of Stock tendered by a Director to pay the
Exercise Price of a Stock Option shall automatically become available again for
use under the Plan if Rule 16b-3 under the Exchange Act and interpretations of
the Securities and Exchange Commission or its Staff thereunder permit such share
replenishment.
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4.3 Adjustments Upon Changes in Stock. If there shall be any
change in the Stock of the Company, through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, spinoff, split
up, dividend in kind or other change in the corporate structure or
distribution to the shareholders, appropriate adjustments may be made by the
Committee (or if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) in the
aggregate number and kind of shares subject to the Plan, and the number and
kind of shares which may be issued under the Plan. Appropriate adjustments may
also be made by the Committee in the terms of any awards or Debentures under
the Plan to reflect such changes and to modify any other terms of outstanding
awards on an equitable basis as the Committee in its discretion determines.
SECTION 5. COMMON STOCK EQUIVALENT AWARDS
5.1 Grants of Common Stock Equivalent Awards. Common Stock
Equivalents equal to 400 shares of Stock shall be granted automatically each
year, immediately following the Annual Meeting (as described in the Company's
By-laws) up to but not including the Annual Meeting held in 1995, to each
Director elected at such meeting or then continuing to serve on the Board
subsequent to such meeting. In addition, if a person is elected to the Board
at any time other than at an Annual Meeting and prior to the Annual Meeting
held in 1995, whether by action of the shareholders of the Company or the
Board, such person upon
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becoming a Director shall be granted automatically (i) if such election
shall occur after the Annual Meeting and prior to July 1, Common Stock
Equivalents equal to 300 shares of Stock, (ii) if such election shall occur on
or after July 1 and prior to October 1, Common Stock Equivalents equal to 200
shares of Stock, and (iii) if such election shall occur on or after October 1
and prior to January 1 of the following year, Common Stock Equivalents equal to
100 shares of Stock. All Common Stock Equivalents granted pursuant to this
Section 5.1 shall be adjusted as provided in Section 4.3.
5.2 Deferred Stock Account. A Deferred Stock Account shall be
established for each Director elected prior to the Annual Meeting held in 1995.
The Deferred Stock Account shall consist of compensation in the form of Common
Stock Equivalents awarded to the Director hereunder by the Company plus Common
Stock Equivalents credited to the Deferred Stock Account in respect of
dividends and other distributions on the Stock pursuant to Sections 5.3 and 5.4.
5.3 Hypothetical Investment. Compensation awarded hereunder in the form
of Common Stock Equivalents is assumed to be a hypothetical investment in
shares of Stock, and will be adjusted to reflect stock dividends, splits and
reclassifications and as otherwise set forth in Section 4.3.
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5.4 Hypothetical Dividends. Dividends and other distributions on
Common Stock Equivalents shall be deemed to have been paid as if such Common
Stock Equivalents were actual shares of Stock issued and outstanding on the
respective record or distribution dates. Common Stock Equivalents shall be
credited to the Deferred Stock Account in respect of cash dividends and any
other securities or property issued on the Stock in connection with
reclassifications, spinoffs and the like on the basis of the value of the
dividend or other asset distributed and the value of the Common Stock
Equivalents on the date of the announcement of the dividend or asset
distribution, all at the same time and in the same amount as dividends or other
distributions are paid or issued on the Stock. Fractional shares shall be
credited to a Director's Deferred Stock Account cumulatively but the balance of
shares of Common Stock Equivalents in a Director's Deferred Stock Account shall
be rounded to the next highest whole share for any payment to such Director
pursuant to Section 5.6 hereof.
5.5 Statement of Account. A statement will be sent to each Director
as to the balance of his Deferred Stock Account at least once each
calendar year.
5.6 Payment of Deferred Stock. Upon termination of services as a
Director, the balance of the Director's Deferred
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Stock Account shall be paid to such director in Stock in January of the
year following the year of termination of services as a Director on the basis
of one share of Stock for each Common Stock Equivalent in such Director's
Deferred Stock Account.
5.7 Payments to a Deceased Director's Estate. In the event of a
Director's death before the balance of his Deferred Stock Account is fully paid
to him, payment of the balance of the Director's Deferred Stock Account shall
then be made to his estate in the time and manner selected by the Committee in
the absence of a designation of a beneficiary pursuant to Section 5.8 hereof.
The Committee may take into account the application of any duly appointed
administrator or executor of a Director's estate and direct that the balance of
the Director's Deferred Stock Account be paid to his estate in the manner
requested by such application.
5.8 Designation of Beneficiary. A Director may designate a
beneficiary in a form approved by the Committee.
SECTION 6. DEFERRAL OF COMPENSATION
6.1 Amount of Deferral. A Director may elect to defer receipt of
all or a specified portion of the cash annual retainers and/or cash meeting
fees otherwise payable to the Director for serving on the Board or any
committee thereof.
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6.2 Manner of Electing Deferral. A Director shall make elections
permitted hereunder by giving written notice to the Company in a form approved
by the Committee. The notice shall include: (i) the percentage of meeting fees
and/or annual retainer to be deferred which amount must be stated in whole
increments of 5 percent; and (ii) the time as of which deferral is to commence.
Notwithstanding the foregoing, the election by a Director to participate in the
Company's Deferral Program for Directors, which this Plan amends, shall
continue in full force and effect with respect to this Plan without any action
required to be taken by such Director and such election shall be deemed to be
an election by a Director to defer such Director's cash compensation paid by
the Company in respect of annual retainers and meeting fees.
6.3 Accounts. A Cash Account and a Deferred Debenture Account
shall be established for each Director electing to defer hereunder. Each Cash
Account shall be credited with the amounts deferred on the date such
compensation is otherwise payable. Such deferred amounts shall accrue interest
from time to time at a rate equal to the seven year U.S. Treasury Bond rate
(beginning January 1, 1995, the ten year U.S. Treasury Bond rate) in effect the
week prior to the regular January meeting of the Board (or, if no such meeting
is held, the week prior to the first trading day of the New York Stock Exchange
in February) in the year in
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respect of which such deferred amounts are earned until the last trading
day of the New York Stock Exchange prior to the regular January meeting
of the Board (or, if no such meeting is held, until the first trading day of
February) in the year following the year in respect of which deferred amounts
are earned, at which time such deferred amounts, including interest, shall be
invested in Debentures and credited to the Deferred Debenture Account.
Deferred amounts shall be credited to the Deferred Debenture Account only in
$100 amounts. Fractional amounts of $100 shall remain in the Cash Account and
continue to accrue interest.
6.4 Time for Electing Deferral. Any election to (i) defer cash
annual retainer and/or cash meeting fees, (ii) alter the portion of such
amounts deferred, or (iii) revoke an election to defer such amounts, must be
made no later than six months prior to the time such compensation is earned by
the Director or, if permitted by the rules under Section 16 of the Exchange
Act, no later than six months prior to the time such deferred compensation is
invested in Debentures and credited to the Deferred Debenture Account pursuant
to Section 6.3 hereof. An election to commence a deferral may be made at any
time in accordance with the procedures set forth in Section 6.2. Any election
so made shall remain in effect beginning six months from the date of election
until the Director ceases to be a Director
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or six months from the date the Director elects in writing to change
his election.
6.5 Payment of Deferred Amounts. Payments from a Deferred
Debenture Account shall be made in five consecutive annual installments
beginning in the January following the Director's termination of service.
Payments from a Deferred Debenture Account shall consist of accumulated
interest on the Debentures (which amount shall only be payable in cash) plus
the greater value of (i) the face value of the Debentures or (ii) the shares of
Stock into which the Debentures are convertible. In the event the value of
the payment is determined by the amount referred to in clause (i), payment
shall be made in cash. In the event such value is determined by clause (ii),
such payment shall be made in Stock, other than the value of fractional
shares which will be paid in cash.
6.6 Payments to a Deceased Director's Estate. In the event of a
Director's death before the balance of his Cash Account or Deferred Debenture
Account is fully paid to him, payment of the balance of the Cash Account or
Deferred Debenture Account shall then be made to his estate in the time and
manner selected by the Committee in the absence of a designation of a
beneficiary pursuant to Section 6.7 hereof. The Committee may take into
account the application of any duly appointed
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administrator or executor of a Director's estate and direct that the balance
of the Director's Cash Account or Deferred Debenture Account be paid to his
estate in the manner requested by such application.
6.7 Designation of Beneficiary. A Director may designate a
beneficiary in a form approved by the Committee.
SECTION 7. STOCK OPTION AWARDS
7.1 Grants of Stock Option Awards.
(a) Stock Options for 3,000 shares of Stock shall be granted
automatically each year, immediately following the Annual Meeting (as
described in the Company's By-laws), beginning with the Annual Meeting held in
1995, to each Director elected at such meeting or then continuing to serve on
the Board subsequent to such meeting. In addition, if a person is elected to
the Board at any time after the Annual Meeting held in 1995 and other than at
an Annual Meeting, whether by action of the shareholders of the Company or the
Board, such person upon becoming a Director shall be granted automatically (i)
if such election shall occur after the Annual Meeting and prior to July 1,
Stock Options for 2,250 shares of Stock, (ii) if such election shall occur on
or after July 1 and prior to October 1, Stock Options for 1,500 shares of
Stock, and (iii) if such election shall occur on or
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after October 1 and prior to January 1 of the following year, Stock
Options for 750 shares of Stock.
(b) Stock Options for 750 shares of Stock shall be granted
automatically each year, immediately following the Annual Meeting and
the organization meeting of the Board related to such Annual Meeting, beginning
with the Annual Meeting and related organization meeting held in 1995, to each
Director elected at such organization meeting to serve as Chair of a standing
Committee of the Board.
(c) All Stock Options granted pursuant to Section 7.1 shall be
adjusted as provided in Section 4.3.
7.2 Terms and Conditions of Stock Options. Stock Options granted
under the Plan shall be subject to the following terms and conditions:
(a) EXERCISE PRICE. The purchase price at which each Stock Option
may be exercised ("Exercise Price") shall be determined as follows:
on any date of grant pursuant to Section 7.1 above ("Grant Date"), (i)
Stock Options for two thirds of the option shares granted on the Grant Date
shall have an Exercise Price per share at 100% of Fair Market Value on the
Grant Date and (ii) Stock Options for the remaining one third of the option
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shares granted on the Grant Date shall have an Exercise Price per share at 125%
of Fair Market Value on the Grant Date.
(b) EXERCISABILITY. Subject to the terms and conditions of the Plan
and of the agreement referred to in Section 7.2(i), a Stock Option may be e
xercised in whole or in part upon written notice of exercise to the Company
commencing on the first day after the Grant Date and until it terminates.
During a Director's lifetime, a Stock Option may be exercised only by the
Director or the Director's guardian or legal representative.
(c) MANDATORY HOLDING OF STOCK. Except as otherwise provided in
Section 7.5, any Stock acquired on exercise of a Stock Option must be held
by the grantee for a minimum of (1) three years from the date of exercise,
(2) two years from the date the grantee ceases to be a director of the
Company, or (3) until the occurrence of a Change of Control, whichever
first occurs (the "Holding Period").
(d) OPTION TERM. The term of a Stock Option (the "Option Term")
shall be the period of ten years from its Grant Date or until the date
the Stock Option ceases to be exercisable as provided in Section 7.2(g),
whichever is earlier.
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(e) PAYMENT OF EXERCISE PRICE. Stock purchased on exercise of a Stock
Option must be paid for as follows: (1) in cash or by check (acceptable to
the Company in accordance with guidelines established for this purpose),
bank draft or money order payable to the order of the Company, (2) through
the delivery of shares of Stock which are then outstanding and which have
a Fair Market Value on the last business day preceding the date of
exercise equal to the Exercise Price, (3) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the Exercise Price, or (4) by a combination of the
permissible forms of payment; provided, that any portion of the Exercise Price
representing a fraction of a share must be paid in cash and no share of Stock
held for less than six months may be delivered in payment of the Exercise Price
of a Stock Option.
(f) RIGHTS AS A SHAREHOLDER. The holder of a Stock Option will not
have any of the rights of a shareholder with respect to any shares of Stock
subject to the Stock Option until such shares are issued by the Company
following the exercise of the Stock Option.
(g) TERMINATION OF ELIGIBILITY. If a grantee ceases to be a Director
for any reason, any outstanding Stock Options shall be exercisable according
to the following provisions:
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(1) If a grantee ceases to be a Director for any reason other
than removal for Cause or death, any outstanding Stock Options held by
such grantee shall be exercisable by the grantee at any time prior to
the expiration of the Option Term;
(2) If a grantee is removed from office as a director of the
Company for Cause, any outstanding Stock Options held by such grantee
shall be exercisable by the grantee at any time prior to the expiration
of the Option Term or on or before the date the grantee is so removed from
office, whichever first occurs; and
(3) Following the death of a grantee while a Director or after
the grantee ceased to be a Director for any reason other than removal
for Cause, any Stock Options that are outstanding and exercisable by
such grantee at the time of death shall be exercisable by the person or persons
entitled to do so under the grantee's will, by a properly designated
beneficiary in the event of death, or by the person or persons entitled to do
so under the applicable laws of descent and distribution at any time prior to
the earlier of (a) the expiration of the Option Term and (b) two years after
the date of death.
(h) TERMINATION OF STOCK OPTION. A Stock Option shall
terminate on the earlier of (1) exercise of the Stock
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Option in accordance with the terms of the Plan, and (2) the expiration of the
Option Term as specified in Sections 7.2(d) and 7.2(g).
(i) STOCK OPTION AGREEMENT. All Stock Options shall be confirmed by
an agreement, or an amendment thereto, which shall be executed on behalf
of the Company by the Chief Executive Officer, the President or any Vice
President and by the grantee.
(j) GENERAL RESTRICTION.
(1) The obligation of the Company to issue Stock pursuant to
Stock Options under the Plan shall be subject to the condition that, if at any
time the Committee shall determine that (a) the listing, registration or
qualification of shares of Stock upon any securities exchange or under any
state or federal law or (b) the consent or approval of any government or
regulatory body is necessary or desirable, then such Stock shall not be issued
unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free from any conditions not acceptable to the
Committee.
(2) Shares of Stock for use under the provisions of this
Section 7 shall not be issued until they have been duly listed, upon official
notice of issuance, upon the New York Stock Exchange and such other exchanges,
if any, as the Board of
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Directors of the Company shall determine, and a registration statement
under the Securities Act of 1933 with respect to such shares shall have become,
and be, effective.
Subject to the foregoing provisions of this Section 7.2 and the other
provisions of the Plan, any Stock Option granted under the Plan shall be
subject to such restrictions and other terms and conditions, if any, as shall
be determined, in its discretion, by the Committee and set forth in the
agreement referred to in Section 7.2(i), or an amendment thereto; provided,
that in no event shall the Committee or the Board have any power or authority
which would cause the Directors to cease to be "disinterested persons" or
transactions pursuant to the Plan to cease to be exempt from the provisions of
Section 16(b) of the Exchange Act under Rule 16b-3.
7.3 Annual Statement. A statement will be sent to each Director
as to the status of his Stock Options at least once each calendar year.
7.4 Designation of a Beneficiary. A Director may designate a
beneficiary to hold and exercise outstanding Stock Options in accordance with
the Plan in the event of the Director's death.
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7.5 Holding Period Applicable to a Deceased Grantee's Estate. As
long as at least six months have elapsed since the Grant Date, a properly
designated beneficiary or a person holding a Stock Option under a deceased
grantee's will or under the applicable laws of descent or distribution
exercising a Stock Option in accordance with Section 7.2(g) will not be
subject to the Holding Period with respect to shares of Stock received on
exercise of a Stock Option.
SECTION 8. CHANGE OF CONTROL
8.1 Settlement of Compensation. In the event of a Change in
Control of the Company as defined herein, (a) (i) to the extent not already
vested, all benefits hereunder shall be vested immediately, and (ii) awards as
to a period of time less than a full year may be made as the Committee may
determine as of the date of such Change in Control and then paid on such basis
and in such form as the Committee may prescribe; and (b) the value of all
unpaid benefits and deferred amounts shall be paid in cash to PNC Bank, N.A.
(formerly known as Pittsburgh National Bank), the trustee pursuant to a trust
agreement dated November 24, 1987, or any successor trustee, or otherwise on
such terms as the Committee may prescribe or permit. For purposes of this
paragraph, the value of deferred amounts shall be equal to the sum of (i) the
value of all Common Stock Equivalent Awards then held in such Director's
Deferred Stock Account (the value of
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which shall be based upon the highest price of the Stock as reported by
the composite tape of the New York Stock Exchange during the thirty days
immediately preceding the Change in Control) and (ii) the greater value of (x)
the cash amount equal to the face value of the Debentures plus cash equal to
accrued interest or (y) the number of shares of Stock into which the Debentures
are convertible (the value of which shall be based upon the highest price of
the Stock as reported by the composite tape of the New York Stock Exchange
during the thirty days immediately preceding the Change in Control), plus cash
equal to accrued interest.
8.2 Definition of Change in Control. A Change in Control shall mean
the occurrence of one or more of the following events:
(a) there shall be consummated (i) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Company's Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation
immediately after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the
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assets of the Company, or (b) the shareholders of the Company shall
approve of any plan or proposal for the liquidation or dissolution of the
Company, or (c) (i) any person (as such term is defined in Section 13(d) of the
Exchange Act), corporation or other entity shall purchase any Stock of the
Company (or securities convertible into the Company's Stock) for cash,
securities or any other consideration pursuant to a tender offer or exchange
offer, unless, prior to the making of such purchase of Stock (or securities
convertible into Stock), the Board shall determine that the making of such
purchase shall not constitute a Change in Control, or (ii) any person (as such
term is defined in Section 13(d) of the Exchange Act), corporation or other
entity (other than the Company or any benefit plan sponsored by the Company or
any of its subsidiaries) shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty percent or more of the combined
voting power of the Company's then outstanding securities ordinarily (and apart
from any rights accruing under special circumstances) having the right to vote
in the election of directors (calculated as provided in Rule 13d-3(d) in the
case of rights to acquire any such securities), unless, prior to such person so
becoming such beneficial owner, the Board shall determine that such person so
becoming such beneficial owner shall not constitute a Change in Control, or (d)
at any time during any period of two consecutive
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years individuals who at the beginning of such period constituted the entire
Board shall cease for any reason to constitute at least a majority thereof,
unless the election or nomination for election of each new director during such
two-year period is approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such two-year
period.
SECTION 9. ASSIGNABILITY
The right to receive payments or distributions hereunder (including
any "derivative security" issued pursuant to the Plan, as such term is
defined by the rules promulgated under Section 16 of the Exchange Act) and
any Stock Options granted hereunder shall not be transferable or assignable by
a Director other than by will, by the laws of descent and distribution, to a
properly designated beneficiary in the event of death, or pursuant to a
domestic relations order as defined by Section 414(p)(1)(B) of the Internal
Revenue Code or the rules thereunder that satisfies Section 414(p)(1)(A) of
that Code or the rules thereunder. In addition, Stock acquired on exercise of
a Stock Option shall not be transferable prior to the end of the applicable
Holding Period, if any, set forth in Sections 7.2(a) and 7.5, other than by
will, by transfer to a properly designated beneficiary in the event of death,
by the applicable laws of descent and distribution or pursuant to a domestic
relations
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order as defined by Section 414(p)(1)(B) of the Internal Revenue Code
or the rules thereunder that satisfies Section 414(p)(1)(A) of that Code or the
rules thereunder.
SECTION 10. PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or
modify the Plan, provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
shareholders if shareholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements and provided further, that
no amendment or modification shall be made more than once every six months that
would change the amount, price, or timing of the Common Stock Equivalent Awards
or Stock Option Awards hereunder, other than to comport with changes in the
Internal Revenue Code, the Employment Retirement Income Security Act, or the
rules promulgated thereunder.
SECTION 11. REQUIREMENTS OF LAW
11.1 Federal Securities Law Requirements. Transactions pursuant to
the Plan shall be subject to all conditions required under Rule 16b-3 to
qualify such transactions for any exemption from the provisions of Section
16(b) of the Exchange Act available under that Rule.
11.2 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania.
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