EXHIBIT 10.7
CITIZENS & NORTHERN CORPORATION
1995 STOCK INCENTIVE PLAN
1) Purpose. The purpose of this Stock Incentive Plan (the "Plan") is to
advance the development, growth and financial condition of Citizens &
Northern Corporation (the "Corporation") and each subsidiary thereof as
defined in Section 424 of the Internal Revenue Code of 1986, as amended
(the "Code"), by providing incentives through participation in the
appreciation of capital stock of the Corporation so as to secure, retain
and motivate personnel who may be responsible for the operation and
management of the affairs of the Corporation and any such subsidiary now or
hereafter existing ("Subsidiary").
2) Term. The Plan shall become effective as of the date it is adopted by the
Corporation's Board of Directors (the "Board"), so long as the
Corporation's stockholders duly approve the Plan within twelve (12) months
either before or after the date of the Board's adoption of the Plan. Any
and all options and rights awarded under the Plan ("Awards") before it is
so approved by the Corporation's stockholders shall be conditional upon and
may not be exercised before timely obtainment of such approval, and shall
lapse upon the failure thereof. If the Plan is so approved, it shall
continue in effect until all Awards either have lapsed or been exercised,
satisfied or cancelled according to their terms under the Plan.
3) Stock. The shares of stock that may be issued under the Plan shall not
exceed in the aggregate 60,000 shares of the Corporation's common stock,
par value $1.00 per share (the "Stock"), as may be adjusted pursuant to
paragraph 18 hereof. Such shares of Stock may be either authorized and
unissued shares of Stock, or authorized shares of Stock issued by the
Corporation and subsequently reacquired by it as treasury stock. Under no
circumstances shall any fractional shares of Stock be issued or sold under
the Plan or any Award. Except as may be otherwise provided in the Plan, any
Stock subject to an Award that for any reason lapses or terminates prior to
its exercise as to such Stock shall become and again be available under the
Plan. The Corporation shall reserve and keep available, and shall duly
apply for any requisite governmental authority to issue or sell the number
of shares of Stock needed to satisfy the requirements of the Plan while in
effect. The Corporation's failure to obtain any such governmental authority
deemed necessary by the Corporation's legal counsel for the lawful issuance
and sale of Stock under the Plan shall relieve the Corporation of any duty,
or liability for the failure to issue or sell such Stock as to which such
authority has not been obtained.
4) Administration. The Plan shall be administered by a committee (the
Committee") consisting of not fewer than two (2) directors from the Board
serving for such terms as determined, selected and appointed by the Board.
The Board shall fill all vacancies occurring in the Committee's membership,
and at any time and for any reason may add additional members to the
Committee or may remove members from the Committee and appoint their
successors. To serve on the Committee, a person must be a director of the
Corporation and during the year prior to commencing service on the
Committee, was not granted or awarded any Awards, allocations or other
options or rights of or with respect to Stock or any other capital stock of
the Corporation or its affiliates pursuant to the Plan or any other plan of
the Corporation or its affiliates which provides for discretionary grants
or awards. A majority of the Committee's membership shall constitute a
quorum for the transaction of all business of the Committee, and all
decisions and actions taken by the Committee shall be determined by a
majority of the members of the Committee attending a meeting at which a
quorum of the Committee is present.
The Committee shall be responsible for the management and operation of the
Plan and, subject to its provisions, shall have full, absolute and final
power and authority, exercisable in its sole discretion: to interpret and
construe the provisions of the Plan, adopt, revise and rescind rules and
regulations relating to the Plan and its administration, and decide all
questions of fact arising in the application thereof; to determine what, to
whom, when and under what facts and circumstances Awards shall be made, and
the form, number, terms, conditions and duration thereof, including but not
limited to when exercisable, the number of shares of Stock subject thereto,
and Stock option purchase prices; to adopt, revise and rescind procedural
rules for the transaction of the Committee's business, subject to any
directives of the Board not inconsistent with the provisions or intent of
the Plan or applicable provisions of law; and to make all other
determinations and decisions, take all actions and do all things necessary
or appropriate in and for the administration of the Plan. The Committee's
determinations, decisions and actions under the Plan, including but not
limited to those described above, need not be uniform or consistent, but
may be different and selectively made and applied, even in similar
circumstances and among similarly situated persons. Unless contrary to the
provisions of the Plan, all decisions, determinations and actions made or
taken by the Committee shall be final and binding upon the Corporation and
all interested persons, and their heirs, personal and legal
representatives, successors, assigns and beneficiaries. No member of the
Committee or of the Board shall be liable for any decision, determination
or action made or taken in good faith by such person under or with respect
to the Plan or its administration.
5) Awards. Awards may be made under the Plan in the form of: (a)"Qualified
Options" to purchase Stock that are intended to qualify for certain tax
treatment as incentive stock options under Sections 421 and 422 of the
Code, (b) "Non-Qualified Options" to purchase Stock that are not intended
to qualify under Sections 421-424 of the Code, (c) Stock appreciation
rights ("SARs"), or (d) "Restricted Stock". More than one Award may be
granted to an eligible person, and the grant of any Award shall not
prohibit the grant of any other Award, either to the same person or
otherwise, or impose any obligation upon the person to whom granted to
exercise the Award. All Awards and the terms and conditions thereof shall
be set forth in written agreements, in such form and content as approved by
the Committee from time to time, and shall be subject to the provisions of
the Plan whether or not contained in such agreements. Multiple Awards for a
particular person may be set forth in a single written agreement or in
multiple agreements, as determined by the Committee, but in all cases each
agreement for one or more Awards shall identify each of the Awards thereby
represented as a Qualified Option, Non-Qualified Option, SAR, or Restricted
Stock, as the case may be. Every Award made to a person (a "Recipient")
shall be exercisable during his or her lifetime only by the Recipient, and
shall not be salable, transferable or assignable by the Recipient except by
his or her Will or pursuant to applicable laws of descent and distribution.
6) Eligibility. Persons eligible to receive Awards shall be those key officers
and other employees of the Corporation and each Subsidiary as determined by
the Committee. In no case, however, shall any current member of the
Committee be eligible to receive any Awards. A person's eligibility to
receive Awards shall not confer upon him or her any right to receive any
Awards; rather, the Committee shall have the sole authority, exercisable in
its discretion consistent with the provisions of the Plan, to select when,
to whom and under what facts and circumstances Awards will be made. Except
as otherwise provided, a person's eligibility to receive, or actual receipt
of Awards under the Plan shall not limit or affect his or her benefits
under or eligibility to participate in any other incentive or benefit plan
or program of the Corporation or its affiliates.
7). Qualified Options. In addition to other applicable provisions of the Plan,
all Qualified Options and Awards thereof shall be under and subject to the
following terms and conditions:
a.) No Qualified Option shall be awarded more than ten (10) years after
the date the Plan is adopted by the Board or the date the Plan is
approved by the Corporation's stockholders, whichever date is earlier:
b.) The time period during which any Qualified Option is exercisable, as
determined by the Committee, shall not commence before the expiration
of six (6) months or continue beyond the expiration of ten (10) years
after the date such Option is awarded:
c.) If the Recipient of a Qualified Option ceases to be employed by the
Corporation or any Subsidiary for any reason other than his or her
death, the Committee may permit the Recipient thereafter to exercise
such Option during its remaining term for a period of not more than
three (3) months after such cessation of employment to the extent that
the Option was then and remains exercisable, unless such employment
cessation was due to the Recipient's disability as defined in Section
22(e)(3) of the Code, in which case such three (3) month period shall
be twelve (12) months; if the Recipient dies while employed by the
Corporation or a Subsidiary, the Committee may permit the Recipient's
qualified personal representatives, or any persons who acquire the
Qualified Option pursuant to his or her Will or laws of descent and
distribution, thereafter to exercise such Option during its remaining
term for a period of not more than twelve (12) months after the
Recipient's death to the extent that the Option was then and remains
exercisable; the Committee may impose terms and conditions upon and
for said exercise of such Qualified Option after such cessation of the
Recipient's employment or his or her death;
d.) The purchase price of a share of Stock subject to any Qualified
Option, as determined by the Committee, shall not be less than the
Stock's fair market value at the time such Option is awarded as
determined under paragraph 13 hereof, or less than the Stock's par
value.
8). Non-Qualified Options. In addition to other applicable provisions of the
Plan, all Non-Qualified Options and Awards thereof shall be under and
subject to the following terms and conditions:
a) The time period during which any Non-Qualified Option is exercisable,
as determined by the Committee, shall not commence before the
expiration of six (6) months or continue beyond the expiration of ten
(10) years after the date such Option is awarded;
b) If a Recipient of a Non-Qualified Option, before its lapse or full
exercise, ceases to be eligible under the Plan, the Committee may
permit the Recipient thereafter to exercise such Option during its
remaining term, to the extent that the Option was then and remains
exercisable, for such time period and under such terms and conditions
as may be prescribed by the Committee;
c) The purchase price of a share of Stock subject to any Non-Qualified
Option, as determined by the Committee, shall not be less than the
Stock's par value.
9) Stock Appreciation Rights. In addition to other applicable provisions of
the Plan, all SARs and Awards thereof shall be under and subject to the
following terms and conditions:
a) SARs may be granted either alone, or in connection with another
previously or contemporaneously granted Award (other than another SAR)
so as to operate in tandem therewith by having the exercise of one
affect the right to exercise the other, as and when the Committee may
determine; however, no SAR shall be awarded in connection with a
Qualified Option more than ten (10) years after the date the Plan is
adopted by the Board or the date the Plan is approved by the
Corporation's stockholders, whichever date is earlier;
b) Each SAR shall entitle its Recipient to receive upon exercise of the
SAR all or a portion of the excess of (i) the fair market value at the
time of such exercise of a specified number of shares of Stock as
determined by the Committee, over (ii) a specified price as determined
by the Committee of such number of shares of Stock that, on a per
share basis, is not less than the Stock's fair market value at the
time the SAR is awarded;
c) Upon exercise of any SAR, the Recipient shall be paid either in cash
or in Stock, or in any combination thereof, as the Committee shall
determine; if such payment is to be made in Stock. the number of
shares thereof to be issued pursuant to the exercise shall be
determined by dividing the amount payable upon exercise by the Stock's
fair market value at the time of exercise;
d) The time period during which any SAR is exercisable, as determined by
the Committee, shall not commence before the expiration of six (6)
months or continue beyond the expiration of ten (10) years after the
date such SAR is awarded; however, no SAR connected with another Award
shall be exercisable beyond the last date that such other connected
Award may be exercised;
e) If a Recipient of a SAR, before its lapse or full exercise, ceases to
be eligible under the Plan, the Committee may permit the Recipient
thereafter to exercise such SAR during its remaining term, to the
extent that the SAR was then and remains exercisable, for such time
period and under such terms and conditions as may be prescribed by the
Committee;
f) No SAR shall be awarded in connection with any Qualified Option unless
the SAR (i) lapses no later than the expiration date of such connected
Option, (ii) is for not more than the difference between the Stock
purchase price under such connected Option and the Stock's fair market
value at the time the SAR is exercised, (iii) is transferable only
when and as such connected Option is transferable and under the same
conditions, (iv) may be exercised only when such connected Option may
be exercised, and (v) may be exercised only when the Stock's fair
market value exceeds the Stock purchase price under such connected
Option.
10) Restricted Stock. In addition to other applicable provisions of the Plan,
all Restricted Stock and Awards thereof shall be under and subject to the
following terms and conditions:
a) Restricted Stock shall consist of shares of Stock that may be acquired
by and issued to a Recipient at such time, for such or no purchase
price, and under and subject to such transfer, forfeiture and other
restrictions, conditions or terms as shall be determined by the
Committee, including but not limited to prohibitions against transfer,
substantial risks of forfeiture within the meaning of Section 83 of
the Code, and attainment of performance or other goals, objectives or
standards, all for or applicable to such time periods as determined by
the Committee;
b) Except as otherwise provided in the Plan or the Restricted Stock
Award, a Recipient of shares of Restricted Stock shall have all the
rights as does a holder of Stock, including without limitation the
right to vote such shares and receive dividends with respect thereto;
however, during the time period of any restrictions, conditions or
terms applicable to such Restricted Stock, the shares thereof and the
right to vote the same and receive dividends thereon shall not be
sold, assigned, transferred, exchanged, pledged, hypothecated,
encumbered or otherwise disposed of except as permitted by the Plan or
the Restricted Stock Award;
c) Each certificate issued for shares of Restricted Stock shall be
deposited with the Secretary of the Corporation, or the office
thereof, and shall bear a legend in substantially the following form
and content:
This Certificate and the shares of Stock hereby represented are
subject to the provisions of the Corporation's Stock Incentive
Plan and a certain agreement entered into between the owner and
the Corporation pursuant to said Plan. The release of this
Certificate and the shares of Stock hereby
represented from such provisions shall occur only as provided by
said Plan and agreement, a copy of which are on file in the
office of the Secretary of the Corporation.
Upon the lapse or satisfaction of the restrictions, conditions
and terms applicable to such Restricted Stock, a certificate for
the shares of Stock free thereof without such legend shall be
issued to the Recipient;
d) If a Recipient's employment with the Corporation or a Subsidiary
ceases for any reason prior to the lapse of the restrictions,
conditions or terms applicable to his or her Restricted Stock, all of
the Recipient's Restricted Stock still subject to unexpired
restrictions, conditions or terms shall be forfeited absolutely by the
Recipient to the Corporation without payment or delivery of any
consideration or other thing of value by the Corporation or its
affiliates, and thereupon and thereafter neither the Recipient nor his
or her heirs, personal or legal representatives, successors, assigns,
beneficiaries, or any claimants under the Recipient's Last Will or
laws of descent and distribution, shall have any rights or claims to
or interests in the forfeited Restricted Stock or any certificates
representing shares thereof, or claims against the Corporation or its
affiliates with respect thereto.
11. Exercise. Except as otherwise provided in the Plan, Awards may be exercised
in whole or in part by giving written notice thereof to the Secretary of
the Corporation, or his or her designee, identifying the Award being
exercised, the number of shares of Stock with respect thereto, and other
information pertinent to exercise of the Award. The purchase price of the
shares of Stock with respect to which an Award is exercised shall be paid
with the written notice of exercise, either in cash or in Stock at its then
current fair market value, or in any combination thereof, as the Committee
shall determine. Funds received by the Corporation from the exercise of any
Award shall be used for its general corporate purposes.
The number of shares of Stock subject to an Award shall be
reduced by the number of shares of Stock with respect to which
the Recipient has exercised rights under the Award. If a SAR is
awarded in connection with another Award, the number of shares of
Stock that may be acquired by the Recipient under the other
connected Award shall be reduced by the number of shares of Stock
with respect to which the Recipient has exercised his or her SAR,
and the number of shares of Stock subject to the Recipient's SAR
shall be reduced by the number of shares of Stock acquired by the
Recipient pursuant to the other connected Award.
The Committee may permit an acceleration of previously
established exercise terms of any Awards as, when, under such
facts and circumstances, and subject to such other or further
requirements and conditions as the Committee may deem necessary
or appropriate. In addition: (a) if the Corporation or its
stockholders execute an agreement to dispose of all or
substantially all of the Corporation's assets or capital stock by
means of sale, merger, consolidation, reorganization, liquidation
or otherwise, as a result of which the Corporation's stockholders
as of immediately before such transaction will not own at least
fifty percent (50%) of the total combined voting power of all
classes of voting capital stock of the surviving entity (be it
the Corporation or otherwise) immediately after the consummation
of such transaction, thereupon any and all Awards immediately
shall become and remain exercisable with respect to the total
number of shares of Stock still subject thereto for the remainder
of their respective terms until the consummation of such
transaction, or if not consummated, until the agreement therefor
expires or is terminated, in which case thereafter all Awards
shall be treated as if said agreement never had been executed;
(b) if there is an actual, attempted or threatened change in the
ownership of at least twenty-five percent (25%) of all classes of
voting capital stock of the Corporation through the acquisition
of, or an offer to acquire such percentage of the Corporation's
voting capital stock by any person or entity, or persons or
entities acting in concert or as a group, and such acquisition or
offer has not been duly approved by the Board; or (c) if during
any period of two (2) consecutive years, the individuals who at
the beginning of such period constituted the Board, cease for any
reason to constitute at least a majority of the Board, unless the
election of each director of the Board, who was not a director of
the Board at the beginning of such period, was approved by a vote
of at least two-thirds of the directors then still in office who
were directors at the beginning of such period, thereupon any and
all Awards immediately shall become and remain exercisable with
respect to the total number of shares of Stock still subject
thereto for the remainder of their respective terms, thereupon
any and all Awards immediately shall become and remain
exercisable with respect to the total number of shares of Stock
still subject thereto for the remainder of their respective
terms.
12). Withholding. Whenever the Corporation is about to issue or transfer Stock
Pursuant to any Award, the Corporation may require the Recipient to remit
to the Corporation an amount sufficient to satisfy fully any federal, state
and other jurisdictions' income and other tax withholding requirements
prior to the delivery of any certificates for such shares of Stock.
Whenever payments are to be made in cash to any Recipient pursuant to his
or her exercise of an Award, such payments shall be made net after
deduction of all amounts sufficient to satisfy fully any federal, state and
other jurisdictions' income and other tax withholding requirements.
13). Value. Where used in the Plan, the "fair market value" of Stock or any
options or rights with respect thereto, including Awards, shall mean and be
determined by (a) the average of the highest and lowest reported sales
prices thereof on the principal established domestic securities exchange on
which listed, and if not listed, then (b) the average of the dealer "bid"
and "ask" prices thereof on the New York over-the-counter market as
reported by the National Association of Securities Dealers, Inc., in either
case as of the specified or otherwise required or relevant time, or if not
traded as of such specified, required or relevant time, then based upon
such reported sales or "bid" and "ask" prices before and/or after such time
in accordance with pertinent provisions of and principles under the Code
and the regulations promulgated thereunder.
14. Amendment. To the extent permitted by applicable law, the Board may amend,
suspend, or terminate the Plan at any time; provided, however, that: (a) no
amendment may be adopted that permits an Award to be granted to any member
of the Committee; (b) with respect to qualified options, except as
specified in paragraph 18 hereof, no amendment may be adopted that will
increase the number of shares reserved for Awards under the Plan, change
the option price, or change the provisions required for compliance with
Section 422 of the Code and regulations issued thereunder; and (c)
notwithstanding anything to the contrary herein, no amendment may be
adopted to increase the number of securities that may be issued under the
Plan, except as specified in paragraph 18 hereof, materially increase the
benefits accruing to recipients or materially modify the requirements for
eligibility to participate in the Plan, without the approval of the
shareholders of the Corporation, to the extent that shareholder approval is
required under Section 16 of the Securities Exchange Act of 1934, as
amended, and the regulations thereunder, as from time to time in effect.
The amendment or termination of this Plan shall not, without the consent of
the Recipients, alter or impair any rights or obligations under any Award
previously granted hereunder.
In addition and subject to the foregoing, the Committee may prescribe other
or additional terms, conditions and provisions with respect to the grant or
exercise of any or all Awards as the Committee may determine necessary or
appropriate for such Awards and the Stock subject thereto to qualify under
and comply with all applicable laws, rules and regulations, and changes
therein, including but not limited to the provisions of Sections 421 and
422 of the Code, Section 16 of the Securities Exchange Act of 1934, as
amended, and Rule 16b-3 promulgated by the Securities and Exchange
Commission. Without limiting the generality of the preceding sentence, each
Qualified Option, and any SAR awarded in connection therewith, shall be
subject to such other and additional terms, conditions and provisions as
the Committee may deem necessary or appropriate in order to qualify such
Option, or connected Option and incentive stock option under Section 422 of
the Code, including but not limited to the following Provisions:
(i) the aggregate fair market value, at the time such Option is
awarded, of the Stock subject thereto and of any Stock or other
capital stock with respect to which incentive stock options
qualifying under Sections 421 and 422 of the Code are exercisable
for the first time by the Recipient during any calendar year
under the Plan and any other plans of the $100,000.00; and
(ii) No Qualified Option, or any SAR in connection therewith,
shall be awarded to any person if at the time of such Award, such
person owns Stock possessing more than ten percent (10%) of the
total combined voting power of all classes of capital stock of
the Corporation or its affiliates, unless at the time such Option
or SAR is awarded the Stock purchase price under such Option is
at least one hundred and ten percent (110%) of the fair market
value of the Stock subject to such Option and the Option (and any
SAR connected therewith) by its terms is not exercisable after
the expiration of five (5) years from the date it is awarded.
From time to time, the Committee may rescind, revise and add to
any of such terms, conditions and provisions as may be necessary or
appropriate to have any Awards be or remain qualified and in
compliance with all applicable laws, rules and regulations, and may
delete, omit or waive any of such terms, conditions or provisions that
are no longer required by reason of changes in applicable laws, rules
or regulations.
15. Continued Employment. Nothing in the Plan or any Award shall confer upon
any Recipient or other persons any right to continue in the employment of,
or maintain any particular relationship with the Corporation or its
affiliates, or limit or affect any rights, powers or privileges that the
Corporation or its affiliates may have to supervise, discipline and
terminate such Recipient or other persons, and the employment and other
relationships thereof. However, the Committee may require as a condition of
making and/or exercising any Award that its Recipient agree to, and in fact
provide services, either as an employee or in another capacity, to or for
the Corporation or any Subsidiary for such time period following the date
the Award is made and/or exercised as the Committee may prescribe. The
immediately preceding sentence shall not apply to any Qualified Option to
the extent such application would result in disqualification of said Option
as an incentive stock option under Sections 421 and 422 of the Code.
16). General Restrictions. Each Award shall be subject to the requirement and
provision that if at any time the Committee determines it necessary or
desirable as a condition of or in consideration of making such Award, or
the purchase or issuance or Stock thereunder, (a) the listing, registration
or qualification of the Stock subject to the Award, or the Award itself,
upon any securities exchange or under any federal or state securities or
other laws, (b) the approval of any governmental authority, or (c) an
agreement by the Recipient with respect to disposition of any Stock
(including without limitation that at the time of the Recipient's exercise
of the Award, any Stock thereby acquired is being and will be acquired
solely for investment purposes and without any intention to sell or
distribute such Stock), then such Award shall not be consummated in whole
or in part unless such listing, registration, qualification, approval or
agreement shall have been appropriately effected or obtained to the
satisfaction of the Committee and legal counsel for the Corporation.
17. Rights. Except as otherwise provided in the Plan, the Recipient of any
Award shall have no rights as a holder of the Stock subject thereto unless
and until one or more certificates for the shares of such Stock are issued
and delivered to the Recipient. No adjustments shall be made for dividends,
either ordinary or extraordinary, or any other distributions with respect
to Stock, whether made in cash, securities or other property, or any rights
with respect thereto, for which the record date is prior to the date that
any certificates for Stock subject to an Award are issued to the Recipient
pursuant to his or her exercise thereof. No Award, or the grant thereof,
shall limit or affect the right or power of the Corporation or its
affiliates to adjust, reclassify, recapitalize, reorganize or otherwise
change its or their capital or business structure, or to merge,
consolidate, dissolve, liquidate or sell any or all of its or their
business, property or assets.
18. Adjustments. In the event of any change in the number of issued and
outstanding shares of Stock which results from a stock split, reverse stock
split, payment of a stock dividend or any other change in the capital
structure of the Corporation, the Committee shall proportionately adjust
the maximum number of shares subject to each outstanding Award, and (where
appropriate) the purchase price per share thereof (but not the total
purchase price under the Award), so that upon exercise or realization of
such Award, the Recipient shall receive the same number of shares he or she
would have received had he or she been the holder of all shares subject to
his or her outstanding Award and immediately before the effective date of
such change in the number of issued and outstanding shares of Stock. Such
adjustments shall not, however, result in the issuance of fractional
shares. Any adjustment under this paragraph shall be made by the Committee,
subject to approval by the Board. No adjustments shall be made that would
cause a Qualified Option to fail to continue to qualify as an incentive
stock option within the meaning of Section 422 of the Code.
In the event the Corporation is the party to any merger,
consolidation or other reorganization, any and all outstanding Awards
shall apply and relate to the securities to which a holder of Stock is
entitled after such merger, consolidation or other reorganization.
Upon any liquidation or dissolution of the Corporation, any and all
outstanding Awards shall terminate upon consummation of such
liquidation or dissolution, but prior to such consummation shall be
exercisable to the extent that the same otherwise are exercisable
under the Plan.
19. Forfeiture. Notwithstanding anything to the contrary in this Plan, if the
Committee finds after full consideration of the facts presented on behalf
of the Corporation and the involved Recipient, that he or she has been
engaged in fraud, embezzlement, theft, commission of a felony, or
dishonesty in the course of his or her employment by the Corporation or any
Subsidiary that has damaged it, or that the Recipient has disclosed trade
secrets of the Corporation or its affiliates, the Recipient shall forfeit
all rights under and to all unexercised Awards, and all exercised Awards
under which the Corporation has not yet delivered payment or certificates
for shares of Stock (as the case may be), all of which Awards and rights
shall be automatically cancelled. The decision of the Committee as to the
cause of the Recipients discharge from employment with the Corporation or
any Subsidiary and the damage thereby suffered shall be final for purposes
of the Plan, but shall not affect the finality of the Recipient's discharge
by the Corporation or Subsidiary for any other purposes. The preceding
provisions of this paragraph shall not apply to any Qualified Option to the
extent such application would result in disqualification of said Option as
an incentive stock option under Sections 421 and 422 of the Code.
20. Indemnification. In and with respect to the administration of the Plan, the
Corporation shall indemnify each present and future member of the Committee
and/or of the Board, who shall be entitled without further action on his or
her part to indemnity from the Corporation for all damages, losses,
judgments, settlement amounts, punitive damages, excise taxes, fines,
penalties, costs and expenses (including without limitation attorneys' fees
and disbursements) incurred by such member in connection with any
threatened, pending or completed action, suit or other proceedings of any
nature, whether civil, administrative, investigative or criminal, whether
formal or informal, and whether by or in the right or name of the
Corporation, any class of its security holders, or otherwise, in which such
member may be or have been involved, as a party or otherwise, by reason of
his or her being or having been a member of the Committee and/or of the
Board, whether or not he or she continues to be such a member. The
provisions, protection and benefits of this paragraph shall apply and exist
to the fullest extent permitted by
applicable law to and for the benefit of all present and future members of
the Committee and/or of the Board, and their respective heirs, personal and
legal representatives, successors and assigns, in addition to all other
rights that they may have as a matter of law, by contract, or otherwise,
except (a) as may not be allowed by applicable law, (b) to the extent there
is entitlement to insurance proceeds under insurance coverage provided by
the Corporation on account of the same matter or proceeding for which
indemnification hereunder is claimed, or (c) to the extent there is
entitlement to indemnification from the Corporation, other than under this
paragraph, on account of the same matter or proceeding for which
indemnification hereunder is claimed.
21. Miscellaneous. Any reference contained in this Plan or a particular section
or provision of law, rule or regulation, including but not limited to the
Internal Revenue Code of 1986 and the Securities Exchange Act of 1934, both
as amended, shall include any subsequently enacted or promulgated section
or provision of law, rule or regulation, as the case may be, of similar
import. With respect to persons subject to Section 16 of the Securities
Exchange Act of 1934, as amended, transactions under this Pan are intended
to comply with all applicable conditions of Rule 16b-3 or any successor
rule that may be promulgated by the Securities and Exchange Commission, and
to the extent any provision of this Plan or action by the Committee fails
to so comply, it shall be deemed null and void, to the extent permitted by
applicable law and deemed advisable by the Committee. Where used in this
Plan: the plural shall include the singular, and unless the context
otherwise clearly requires, the singular shall include the plural; and, the
term "affiliates" shall mean each and every Subsidiary and any parent of
the Corporation. The captions of the numbered paragraphs contained in this
Plan are for convenience only, and shall not limit or affect the meaning,
interpretation construction of any of the provisions of the Plan.
END