1
EXHIBIT 10.10
ALLEGHENY LUDLUM CORPORATION
STOCK ACQUISITION AND RETENTION PLAN
AS RESTATED EFFECTIVE AS OF AUGUST 15, 1996
ARTICLE I. PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the Allegheny Ludlum Corporation
Stock Acquisition and Retention Plan is to assist the Corporation (as
hereinafter defined) in retaining and motivating selected key
management employees who will contribute to the Corporation's success.
The Plan encourages eligible employees to hold a proprietary interest
in the Corporation by offering them an opportunity to receive grants
of restricted shares of Stock (as hereinafter defined) which, in
accordance with the terms and conditions set forth below, will vest
only if the employees retain, for a specified period of time,
ownership of (i) shares of Stock purchased pursuant to this Plan or
(ii) already-owned shares of Stock which such employees identify as
being subject to this Plan. Awards under the Plan will act as an
incentive to participating employees to achieve long-term objectives
which will inure to the benefit of all stockholders of the
Corporation.
1.02 ADOPTION AND EFFECTIVE DATE. The Plan was originally
approved by the Board of Directors of ALC subject to the approval of
ALC's shareholders at the 1994 annual meeting of shareholders. The
Plan became effective as of January 1, 1994. This restatement of the
Plan effective August 15, 1996 is intended to reflect the consummation
of the combination of ALC and Teledyne, Inc. on August 15, 1996.
ARTICLE II. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth below shall
have the following meanings:
2.01 ALC means Allegheny Ludlum Corporation, a Pennsylvania
corporation.
2.02 AWARD AGREEMENT means a written agreement between the
Corporation and a Participant or a written acknowledgement from the
Corporation specifically setting forth the terms and conditions of an
award of Restricted Stock granted to a Participant pursuant to Article
VII of the Plan.
2.03 BOARD means the Board of Directors of the Corporation.
2.04 BUSINESS DAY means any day on which the New York Stock
Exchange shall be open for trading.
2.05 CAUSE means a determination by the Committee that a
Participant has engaged in conduct that is dishonest or illegal,
involves moral turpitude or jeopardizes the Corporation's right to
operate its business in the manner in which it is now operated.
2
2.06 CHANGE IN CONTROL means any of the events set forth
below:
(a) The acquisition in one or more transactions,
other than from the Corporation, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of a number
of Corporation Voting Securities in excess of 30% of the
Corporation Voting Securities unless such acquisition has
been approved by the Board; or
(b) Any election has occurred of persons to the
Board that causes two-thirds of the Board to consist of
persons other than (i) persons who were members of the Board
on August 15, 1996 and (ii) persons who were nominated for
election as members of the Board at a time when two-thirds of
the Board consisted of persons who were members of the Board
on August 15, 1996; provided, however, that any person
nominated for election by the Board at a time when at least
two-thirds of the members of the Board were persons described
in clauses (i) and/or (ii) or by persons who were themselves
nominated by such Board shall, for this purpose, be deemed to
have been nominated by a Board composed of persons described
in clause (i); or
(c) Approval by the stockholders of the Corporation
of a reorganization, merger or consolidation, unless,
following such reorganization, merger or consolidation, all
or substantially all of the individuals and entities who were
the respective beneficial owners of the Outstanding Stock and
Corporation Voting Securities immediately prior to such
reorganization, merger or consolidation, following such
reorganization, merger or consolidation beneficially own,
directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from
such reorganization, merger or consolidation in substantially
the same proportion as their ownership of the Outstanding
Stock and Corporation Voting Securities immediately prior to
such reorganization, merger or consolidation, as the case may
be; or
(d) Approval by the stockholders of the Corporation
of (i) a complete liquidation or dissolution of the
Corporation or (ii) a sale or other disposition of all or
substantially all the assets of the Corporation.
2.07 COMMITTEE means the Personnel and Compensation Committee
of the Board.
2.08 CORPORATION means Allegheny Teledyne Incorporated, a
Delaware corporation, and its successors.
2.09 CORPORATION VOTING SECURITIES means the combined voting
power of all outstanding voting securities of the Corporation entitled
to vote generally in the election of the Board.
2.10 DATE OF GRANT means the date as of which an award of
Restricted Stock is granted in accordance with Article VII.
- 2 -
3
2.11 DESIGNATED STOCK means shares of Stock already owned by
a Participant that the Participant identifies as being subject to the
Plan, thereby triggering the grant of Restricted Stock to such
Participant pursuant to Article VII.
2.12 DESIGNATION NOTICE means a written notice, in a form
acceptable to the Committee, by which a Participant designates
previously-acquired shares of Stock as Designated Stock.
2.13 DISABILITY means any physical or mental injury or
disease of a permanent nature which renders a Participant incapable of
meeting the requirements of the employment performed by such
Participant immediately prior to the commencement of such disability.
The determination of whether a Participant is disabled shall be made
by the Committee in its sole and absolute discretion. Notwithstanding
the foregoing, if a Participant's employment by the Corporation or an
applicable subsidiary terminates by reason of a disability, as defined
in an Employment Agreement between such Participant and the
Corporation or an applicable subsidiary, such Participant shall be
deemed to be disabled for purposes of the Plan.
2.14 EFFECTIVE DATE means the date as of which the Plan shall
become effective, as determined in accordance with Section 1.02.
2.15 EXCHANGE ACT means the Securities Exchange Act of 1934,
as amended.
2.16 FAIR MARKET VALUE means, as of any given date, the
average of the high and low trading prices of the Stock on such date
as reported on the New York Stock Exchange or, if the Stock is not
then traded on the New York Stock Exchange, on such other national
securities exchange on which the Stock is admitted to trade, or, if
none, on the National Association of Securities Dealers Automated
Quotation System if the Stock is admitted for quotation thereon;
provided, however, if there were no sales reported as of such date,
Fair Market Value shall be computed as of the last date preceding such
date on which a sale was reported; provided, further, that if any such
exchange or quotation system is closed on any day on which Fair Market
Value is to be determined, Fair Market Value shall be determined as of
the first date immediately preceding such date on which such exchange
or quotation system was open for trading.
2.17 OUTSTANDING STOCK means, at any time, the issued and
outstanding Stock.
2.18 PARTICIPANT means any person selected by the Committee,
pursuant to Section 5.01, as eligible to participate under the Plan.
2.19 PERMITTED TRANSFEREE means a Participant's spouse, or
(by blood, adoption or marriage) parent, child, stepchild, descendant
or sibling, or the estate, any guardian, custodian, conservator or
committee of, or any trust for the benefit of, the Participant or any
of the foregoing persons.
2.20 PLAN means the Allegheny Ludlum Corporation Stock
Acquisition and Retention Plan, as the same may be amended from time
to time.
2.21 PLAN YEAR means each of the calendar years 1994 through
and including 1998.
- 3 -
4
2.22 PURCHASE AMOUNT means the dollar amount that a
Participant specifies in a Purchase Notice with respect to a
particular Purchase Date.
2.23 PURCHASE DATE means, with respect to any Window Period,
the Business Day immediately following the last day of the Window
Period.
2.24 PURCHASED STOCK means Stock purchased by a Participant
pursuant to Article VI, which triggers the grant of Restricted Stock
to such Participant pursuant to Article VII.
2.25 PURCHASE LOAN means a loan provided to a Participant by
the Corporation to facilitate the Participant's purchase of Stock
pursuant hereto.
2.26 PURCHASE NOTICE means a written notice, in a form
acceptable to the Committee, by which a Participant may elect to
purchase Stock as of a Purchase Date in accordance with Section 6.01.
2.27 RELATED STOCK means, with respect to any share of
Restricted Stock, the two shares of Purchased Stock or Designated
Stock, as the case may be, which entitle such Participant to receive
such share of Restricted Stock pursuant to Article VII.
2.28 RESTRICTED STOCK means shares of Stock awarded to a
Participant subject to restrictions as described in Article VII.
2.29 STOCK means the common stock, par value $0.10 per share,
of the Corporation.
2.30 WINDOW PERIOD means each of the four (4) periods in each
year consisting of the ten (10) consecutive Business Days beginning on
the third (3rd) Business Day following the release by the Corporation
of its quarterly or annual summary statements of sales and earnings
and ending on the twelfth (12th) Business Day following such date.
Notwithstanding the foregoing, for Plan Year 1994, the Plan will apply
only with respect to Window Periods that occur after the date of the
1994 annual meeting of shareholders.
ARTICLE III. ADMINISTRATION
The Plan shall be administered by the Committee, which shall have
exclusive and final authority and discretion in each determination,
interpretation or other action affecting the Plan and its Participants. The
Committee shall have the sole and absolute authority and discretion to
interpret the Plan, to establish and modify administrative rules for the Plan,
to select, in accordance with Section 5.01, the persons who will be
Participants hereunder, to impose such conditions and restrictions as it
determines appropriate and to take such other actions and make such other
determinations in connection with the Plan as it may deem necessary or
advisable.
ARTICLE IV. STOCK ISSUABLE UNDER THE PLAN
4.01 NUMBER OF SHARES OF STOCK ISSUABLE. Subject to
adjustments as provided in Section 8.03, the maximum number of shares
of Stock available for issuance under the Plan shall
- 4 -
5
be 1 million. The Stock to be offered under the Plan shall be
authorized and unissued Stock, or Stock which shall have been
reacquired by the Corporation and held in its treasury.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock
forfeited as provided in Section 7.02 may again be issued under the
Plan.
ARTICLE V. PARTICIPATION
5.01 DESIGNATION OF PARTICIPANTS. Participants in the Plan
shall be such officers of the Corporation at the level of Vice
President or higher as the Committee, in its sole discretion, may
designate as eligible to participate in the Plan. Prior to the
commencement of each Plan Year during the term of this Plan, the
Committee shall designate the Participants who are eligible to
participate in the Plan during such Plan Year; provided, however, that
with respect to the initial Plan Year of the Plan, such designations
shall be made no later than thirty (30) days following the Effective
Date. The Committee's designation of a Participant with respect to any
Plan Year shall not require the Committee to designate such person as
a Participant with respect to any other Plan Year. The Committee shall
consider such factors as it deems pertinent in selecting Participants.
The Committee shall promptly provide to each person selected as a
Participant written notice of such selection. The designation of a
person as a Participant with respect to a Plan Year shall permit such
person to elect to submit one or more Purchase Notices and/or
Designation Notices during such Plan Year irrespective of whether, in
the case of Purchase Notices, the applicable Purchase Date(s) fall
within such Plan Year.
5.02 PARTICIPANT ELECTIONS. A person who is designated as a
Participant in accordance with Section 5.01 shall be entitled to
purchase Stock by delivering one or more Purchase Notices in
accordance with Article VI, and such Stock purchases shall result in
the award of Restricted Stock to such Participant in accordance with
Article VII. In addition, a Participant shall be entitled to designate
as Designated Stock, in one or more Designation Notices delivered to
the Corporation at any time during a Plan Year, any even number of
shares of Stock then owned by the Participant, other than shares of
Purchased Stock, shares of Stock credited to the Participant's account
under the Allegheny Ludlum Corporation Retirement Savings Plan (RSP)
and shares of Stock subject to outstanding and as yet unexercised
stock options. Such designation of shares as Designated Stock shall
result in the award of Restricted Stock to the Participant in
accordance with Article VII. The sum of (i) the aggregate Purchase
Amounts elected by a Participant pursuant to one or more Purchase
Notices submitted within any one Plan Year and (ii) the Fair Market
Value of the Designated Stock designated by the Participant pursuant
to one or more Designation Notices submitted within such Plan Year
(such Fair Market Value being determined as of the date the applicable
Designation Notice is delivered), shall not exceed such Participant's
gross annual salary as in effect on the first day of such Plan Year.
ARTICLE VI. STOCK PURCHASES
6.01 STOCK PURCHASE ELECTIONS. A Participant shall have the
right to purchase Stock in accordance with the terms of this Article
VI. A Participant may elect to purchase Stock under this Plan by
delivering to the Corporation a Purchase Notice and cash and/or a
promissory note executed by the participant in an amount equal to the
purchase price designated in such Participant's Purchase Notice. Such
Purchase Notice shall set forth, among other things, the
- 5 -
6
Purchase Amount elected by the Participant. Such promissory note which
shall evidence such Participant's Purchase Loan in accordance with
Section 6.03, shall be in a principal amount equal to the Purchase
Amount designated in such Participant's Purchase Notice and shall by
its terms become effective as of the applicable Purchase Date. All
elections under this Section 6.01 shall be irrevocable. If an election
is submitted during a Window Period, such election shall take effect
as of the Purchase Date immediately following the close of such Window
Period. If an election is not submitted during a Window Period, such
election shall take effect as of the first Purchase Date which occurs
at least six (6) months after the date the election is submitted.
6.02 ISSUANCE OF AND PAYMENT FOR STOCK. As of each Purchase
Date, the Corporation shall credit to each Participant the number of
shares of Purchased Stock purchased pursuant to the Purchase Notice
submitted by such Participant. The number of shares of Purchased Stock
to be so credited shall be determined by dividing the Purchase Amount
designated by such Participant in his or her Purchase Notice by a
purchase price per share equal to the average Fair Market Value during
the Window Period. As of any Purchase Date, only an even number of
shares of Purchased Stock can be purchased by a Participant and in no
event shall the Corporation be required to issue fractional shares.
The Purchase Amount elected by a Participant, and the principal amount
of the related promissory note, shall be automatically reduced (and if
the entire Purchase Amount is paid in cash, cash shall be returned to
the Participant) to the minimum extent necessary in order that an even
number of whole shares of Purchased Stock is credited to such
Participant as of the Purchase Date. The purchase price for shares of
Purchased Stock credited to a Participant as of a Purchase Date shall
be paid in cash and/or by means of a Purchase Loan made by the
Corporation to the Participant in accordance with Section 6.03. The
Participant shall have all of the rights of a stockholder with respect
to the shares of Purchased Stock credited to him under this Section
6.02 including, but not limited to, the right to vote such shares and
the right to receive dividends (or dividend equivalents) paid with
respect to such shares.
6.03 TERMS OF PURCHASE LOAN.
(a) Purchase Loan. The promissory note delivered to
the Corporation by a Participant in accordance with Section
6.01 shall evidence a Purchase Loan in principal amount equal
to such Participant's Purchase Amount reduced by the amount
of cash paid, if any. Unless the Committee shall otherwise
determine prior to the applicable Purchase Date, each
Purchase Loan shall have a term not to exceed ten years, and
be secured by the shares of Purchased Stock acquired with
such Purchase Loan.
(b) Interest on Purchase Loan. Until the
Participant's Purchase Loan is paid in full, or otherwise
satisfied or discharged in full, interest on the outstanding
balance of the Purchase Loan shall accrue at a fixed rate per
annum equal to the lesser of the following rates, determined
as of the applicable Purchase Date, as certified by the
Treasurer of the Corporation: (i) the average annual
borrowing rate of the Corporation and (ii) the prime lending
rate of PNC Bank, National Association; provided, however,
that in no event shall such interest rate be less than the
minimum rate required to avoid imputed interest under the
applicable provisions of the Internal Revenue Code of 1986.
(c) Repayment of Purchase Loan. No principal or
interest payments with respect to a Purchase Loan shall be
required prior to the fifth anniversary of the date such
- 6 -
7
Purchase Loan is made; provided, however, that prior to such
fifth anniversary, cash dividends on shares of Purchased
Stock held as security for such Purchase Loan, and on the
related shares of Restricted Stock, shall be applied to pay
accrued interest on the Purchase Loan (any non-cash dividends
shall remain as part of the collateral securing such Purchase
Loan). After such fifth anniversary, level monthly payments
of principal and accrued interest with respect to a Purchase
Loan shall be required for the remaining term thereof. Unless
otherwise determined by the committee, all outstanding
principal and interest on a Participant's Purchase Loan shall
be immediately due and payable in full upon termination of
the Participant's employment with the Corporation and its
affiliates. All or any portion of the principal and/or
interest with respect to a Purchase Loan may, at the election
of the Participant, be paid by the delivery to the
Corporation of whole shares of Stock, other than (i) shares
of Stock credited to the Participant's account under the
Allegheny Ludlum Corporation Retirement Savings Plan (RSP),
(ii) shares of Stock subject to outstanding and as yet
unexercised stock options, and (iii) shares of Purchased
Stock and Designated Stock; provided, however, that shares of
Purchased Stock and Designated Stock can be used to pay
interest and/or principal with respect to a Purchase Loan if
at the time of such payment the Participant is an active
employee of the Corporation or a subsidiary, or the
Participant's employment terminated due to death, disability
or retirement pursuant to the retirement policy of the
Corporation. For purposes of the immediately preceding
sentence, shares of Stock shall be valued at the Fair Market
Value of such shares on the Business Day immediately
preceding the date such shares are delivered to the
Corporation.
(d) Other Terms. The promissory notes evidencing the
Purchase Loans shall contain such other terms and conditions
as the Committee may determine, including, without
limitation, any special terms relating to the retirement of a
Participant prior to the expiration of the term of one or
more Purchase Loans.
6.04 STOCK CERTIFICATES. As promptly as administratively
feasible after each Purchase Date, the Corporation shall deliver to
each Participant one or more stock certificates for the number of
shares of Stock purchased by such Participant as of such Purchase Date
in accordance with this Article VI. The Participant shall then deliver
certificates representing a number of shares with a value equal to the
principal amount of the Purchase Loan to the Corporation in pledge for
the related Purchase Loan along with an executed security agreement in
such form as the Committee shall specify. Upon satisfaction in full of
the Purchase Loan, the certificates shall be delivered to the
Participant free and clear of any restrictions except for any
restrictions that may be imposed by law.
ARTICLE VII. RESTRICTED STOCK
7.01 RESTRICTED STOCK AWARDS. As of each Purchase Date, there
shall automatically be granted to any Participant who purchases
Purchased Stock as of such Purchase Date pursuant to Article VI an
award of one share of Restricted Stock for each two shares of
Purchased Stock. The Purchase Date shall be the Date of Grant of such
Restricted Stock. As of any date that a Participant delivers a
Designation Notice to the Corporation, in accordance with Section
5.02, designating shares of Stock as Designated Stock, there shall
automatically be granted to such Participant an award of one share of
Restricted Stock for each two shares of Designated Stock.
- 7 -
8
The date of delivery of such Designation Notice shall be the Date of
Grant of such Restricted Stock. The terms of all such Restricted Stock
awards shall be set forth in an Award Agreement between the
Corporation and the Participant which shall contain such forfeiture
periods and conditions, restrictions and other provisions, not
inconsistent with this Plan, as shall be determined by the Committee.
(a) Issuance of Restricted Stock. As soon as
practicable after the Date of Grant of Restricted Stock, the
Corporation shall cause to be transferred on the books of the
Corporation shares of Stock, registered on behalf of the
Participant, evidencing such Restricted Stock, but subject to
forfeiture to the Corporation retroactive to the Date of
Grant if an Award Agreement delivered to the Participant by
the Corporation with respect to the Restricted Stock is not
duly executed by the Participant and timely returned to the
Corporation. Until the lapse or release of all restrictions
applicable to an award of Restricted Stock, the stock
certificates representing such Restricted Stock shall be held
in custody by the Corporation or its designee.
(b) Stockholder Rights. Beginning on the Date of
Grant of the Restricted Stock and subject to execution of the
Award Agreement as provided in Section 7.01(a), the
Participant shall become a stockholder of the Corporation
with respect to all Stock subject to the Award Agreement and
shall have all of the rights of a stockholder, including, but
not limited to, the right to vote such Stock and the right to
receive dividends (or dividend equivalents) paid with respect
to such Stock; provided, however, that any Stock distributed
as a dividend or otherwise with respect to any Restricted
Stock as to which the restrictions have not yet lapsed shall
be subject to the same restrictions as such Restricted Stock
and shall be held as prescribed in Section 7.01(a).
(c) Restriction on Transferability. None of the
Restricted Stock may be assigned, transferred (other than by
will or the laws of descent and distribution), pledged, sold
or otherwise disposed of prior to lapse or release of the
restrictions applicable thereto.
(d) Delivery of Stock Upon Release of Restrictions.
Upon expiration or earlier termination of the forfeiture
period without a forfeiture, the satisfaction of the Purchase
Loan, if any, for the Related Stock and the satisfaction of
or release from any other conditions prescribed by the
Committee, the restrictions applicable to the Restricted
Stock shall lapse. As promptly as administratively feasible
thereafter, subject to the requirements of Section 8.02, the
Corporation shall deliver to the Participant, or, in case of
the Participant's death, to the Participant's legal
representatives, one or more stock certificates for the
appropriate number of shares of Stock, free of all such
restrictions, except for any restrictions that may be imposed
by law.
7.02 TERMS OF RESTRICTED STOCK.
(a) Forfeiture of Restricted Stock. Subject to
Section 7.02(b), all Restricted Stock shall be forfeited and
returned to the Corporation and all rights of the Participant
with respect to such Restricted Stock shall cease and
terminate in their entirety if during the forfeiture period
(i) the Participant transfers, sells or otherwise disposes of
the Related Stock other than to a Permitted Transferee or in
a transaction constituting a Change in
- 8 -
9
Control or (ii) the employment of the Participant with the
Corporation and its affiliates terminates for any reason or
(iii) the Participant defaults on the Purchase Loan, if any,
for the Related Stock. Unless the Committee, in its sole
discretion, provides otherwise in the applicable Award
Agreement, the forfeiture period for any shares of Restricted
Stock shall be five years from the Date of Grant of such
Restricted Stock. Notwithstanding the foregoing, in the event
of the discharge by the Corporation and its subsidiaries of a
Participant without Cause or termination of a Participant's
employment by reason of death, Disability or retirement
pursuant to the retirement policy of the Corporation or its
applicable subsidiaries, all forfeiture restrictions imposed
on Restricted Stock shall immediately and fully lapse. In
addition, upon the occurrence of a Change in Control, all
forfeiture restrictions imposed on Restricted Stock shall
immediately and fully lapse.
(b) Waiver of Forfeiture Period. Notwithstanding
anything contained in this Article VII to the contrary, the
Committee may, in its sole discretion, waive the forfeiture
conditions set forth in any Award Agreement under appropriate
circumstances and subject to such terms and conditions
(including forfeiture of a proportionate number of the shares
of Restricted Stock) as the Committee may deem appropriate,
provided that the Participant shall at that time have
completed at least one year of employment after the Date of
Grant.
ARTICLE VIII. MISCELLANEOUS
8.01 LIMITATIONS ON TRANSFER. The rights and interest of a
Participant under the Plan may not be assigned or transferred other
than by will or the laws of descent and distribution. During the
lifetime of a Participant, only the Participant personally may
exercise rights under the Plan.
8.02 TAXES. The Corporation shall be entitled to withhold (or
secure payment from the Participant in lieu of withholding) the amount
of any withholding or other tax required by law to be withheld or paid
by the Corporation with respect to any Stock issuable under this Plan,
or with respect to any income recognized upon the lapse of
restrictions applicable to Restricted Stock, and the Corporation may
defer issuance of Stock hereunder until and unless indemnified to its
satisfaction against any liability for any such tax. The amount of
such withholding or tax payment shall be determined by the Committee
or its delegate and shall be payable by the Participant at such time
as the Committee determines. The Committee shall prescribe in each
Award Agreement one or more methods by which the Participant will be
permitted to satisfy his or her tax withholding obligation, which
methods may include, without limitation, the payment of cash by the
Participant to the Corporation and the withholding, at the appropriate
time, of shares of Stock otherwise issuable to the Participant in a
number sufficient, based upon the Fair Market Value of such Stock, to
satisfy such tax withholding requirements. The Committee shall be
authorized, in its sole discretion, to establish such rules and
procedures relating to any such withholding methods as it deems
necessary or appropriate, including, without limitation, rules and
procedures relating to elections by Participants who are subject to
the provisions of Section 16 of the Exchange Act to have Stock
withheld to meet such tax withholding obligations.
8.03 ADJUSTMENTS TO REFLECT CAPITAL CHANGES. The amount and
kind of Stock available for issuance under the Plan shall be
appropriately adjusted to reflect any stock dividend, stock
- 9 -
10
split, combination or exchange of shares, merger, consolidation or
other change in capitalization with a similar substantive effect upon
the Plan. The Committee shall have the power and sole discretion to
determine the nature and amount of the adjustment, if any, to be made
pursuant to this Section 8.02.
8.04 NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT. No employee
or other person shall have any claim of right to be permitted to
participate or be granted an award under this Plan. Neither the Plan
nor any action taken hereunder shall be construed as giving any
employee any right to be retained in the employ of the Corporation or
its subsidiaries.
8.05 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Income
recognized by a Participant pursuant to the provisions of the Plan
shall not be included in the determination of benefits under any
employee pension benefit plan (as such term is defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974) or group
insurance or other benefit plans applicable to the Participant which
are maintained by the Corporation, except as may be provided under the
terms of such plans or determined by resolution of the Board.
8.06 GOVERNING LAW. The Plan and all determinations made and
actions taken pursuant to the Plan shall be governed by the laws of
the Commonwealth of Pennsylvania other than the conflict of laws
provisions of such laws, and shall be construed in accordance
therewith.
8.07 NO STRICT CONSTRUCTION. No rule of strict construction
shall be implied against the Corporation, the Committee, or any other
person in the interpretation of any of the terms of the Plan, any
award granted under the Plan or any rule or procedure established by
the Committee.
8.08 CAPTIONS. The captions (i.e., all Section and subsection
headings) used in the Plan are for convenience only, do not constitute
a part of the Plan, and shall not be deemed to limit, characterize or
affect in any way any provisions of the Plan, and all provisions of
the Plan shall be construed as if no captions had been used in the
Plan.
8.09 SEVERABILITY. Whenever possible, each provision in the
Plan and every Award Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision
of the Plan or any Award Agreement shall be held to be prohibited by
or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as
originally written to the fullest extent permitted by law and (b) all
other provisions of the Plan and every Award Agreement shall remain in
full force and effect.
8.10 LEGENDS. All certificates for Stock delivered under the
Plan shall be subject to such transfer restrictions set forth in the
Plan and such other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Stock is
then listed and any applicable federal or state securities law, and
the Committee may cause a legend or legends to be endorsed on any such
certificates making appropriate references to such restrictions.
8.11 AMENDMENT AND TERMINATION.
(a) Amendment. The Board shall have complete power
and authority to amend
- 10 -
11
the Plan at any time it is deemed necessary or appropriate.
No termination or amendment of the Plan may, without the
consent of the Participant to whom any award shall
theretofore have been granted under the Plan, adversely
affect the right of such individual under such award;
provided, however, that the Committee may, in its sole
discretion, make such provision in the Award Agreement for
amendments which, in its sole discretion, it deems
appropriate.
(b) Termination. The Board shall have the right and
the power to terminate the Plan at any time. Unless sooner
terminated by action of the Board, the Plan shall
automatically terminate, without further action of the Board
or the Corporation's stockholders, on December 31, 1998. No
Designation Notice shall be effective, no Purchase Notice
shall be valid for a Purchase Date that will occur, and no
award shall be granted, under the Plan after the termination
of the Plan, but the termination of the Plan shall not have
any other effect and any award outstanding at the time of the
termination of the Plan may be exercised after termination of
the Plan at any time prior to the expiration date of such
award to the same extent such award would have been
exercisable had the Plan not terminated.
- 11 -