EXHIBIT 10.1
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NATIONAL PENN BANCSHARES, INC.
OFFICERS' AND KEY EMPLOYEES' STOCK COMPENSATION PLAN
(As amended through September 26, 2001)
1. PURPOSE
The purpose of the Officers' and Key Employees' Stock Compensation Plan
(the "Plan") is to advance the interests of National Penn Bancshares, Inc. (the
"Corporation") by enhancing the ability of the Corporation and its Subsidiaries
to attract and retain officers and other key employees, to reward such
individuals for their contributions, and to encourage them to take into account
the long-term interests of the Corporation through interests in the
Corporation's common stock (the "Stock").
This Plan provides for (i) the grant of options to acquire Stock
("Options"), which may be incentive stock options ("ISOs") within the meaning of
the Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified
stock options, and (ii) awards of Stock subject to certain restrictions and the
risk of forfeiture ("Restricted Stock"). Under this Plan, Restricted Stock
consists of (i) Stock subject to restrictions, including performance-based
restrictions intended to comply with the provisions of Code Section 162(m)
("Performance-Based Restricted Stock"), and (ii) Stock subject to restrictions,
not including performance-based restrictions. Grants of Options and awards of
Restricted Stock are referred to herein collectively as "Awards".
Any officer or key employee selected to receive an Award under this
Plan is sometimes referred to as a "participant" herein, and any officer or key
employee selected to receive an Option under this Plan is sometimes referred to
as an "optionee" herein.
2. ADMINISTRATION
This Plan shall be administered by a committee composed of three to six
members of the Corporation's Board of Directors (the "Board") who are (i)
"non-employee directors" of the Corporation within the meaning of Rule
16b-3(b)(3) under Section 16 of the Securities Exchange Act of 1934 (the "1934
Act"), and (ii) "outside directors" of the Corporation within the meaning of
Code Section 162(m) (the "Committee"). The Board may from time to time remove
members from, or add members to, the Committee. Vacancies on the Committee,
howsoever caused, shall be filled by the Board.
Subject to the terms, provisions and conditions of this Plan, the
Committee shall have exclusive jurisdiction to: (i) make Awards to such
participants as the Committee may select; (ii)
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determine the time or times when Awards shall be granted and the number of
shares of Stock subject to each Award; (iii) determine which Options are, and
which Options are not, intended to be ISOs; (iv) determine the terms and
conditions of each Award; (v) prescribe the form or forms of any instruments
evidencing Awards and any other instruments required under this Plan and to
change such forms from time to time; (vi) adopt, amend, and rescind rules and
regulations for the administration of this Plan; and (vii) interpret this Plan
and to decide any questions and settle all controversies and disputes that may
arise in connection with this Plan. Such determinations of the Committee shall
be conclusive and shall bind all parties.
No member of the Committee or of the Board shall be liable for any
determination, decision or action made in good faith, and the members shall be
entitled to indemnification and reimbursement in the manner provided in the
Corporation's Bylaws.
3. ELIGIBILITY
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Persons eligible to receive Awards under this Plan shall be those
officers and key employees who, in the opinion of the Committee, are in a
position to make a significant contribution to the success of the Corporation
and its Subsidiaries. No person who beneficially owns ten percent or more of the
outstanding Stock shall be eligible to participate in this Plan, to exercise an
Option previously granted to him, or to take full possession of Restricted Stock
previously issued to him. A "Subsidiary" of the Corporation shall mean a
corporation in which the Corporation shall own, directly or indirectly, a
majority of the capital stock entitled to vote for the election of directors.
4. STOCK SUBJECT TO AWARDS
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The Stock subject to Awards under this Plan shall be either authorized
but unissued shares or treasury shares. Subject to adjustment in accordance with
the provisions of Paragraph 5(G) and 6(F) hereof, the total number of shares of
such Stock shall be 2,378,125 shares.
If any outstanding Option or Restricted Stock Award under this Plan for
any reason expires, is forfeited or is terminated prior to the end of the period
during which Awards may be made under this Plan, the shares of Stock allocable
to the unexercised portion of such Option or the portion of such Restricted
Stock Award that has terminated or been forfeited may again be subject to award
under this Plan. Shares of Stock delivered to the Corporation to pay the
exercise price of any Option or to satisfy the tax withholding consequences of
an Option exercise or the grant or vesting of Restricted Stock shall again be
subject to award under this Plan.
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5. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS
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Options granted pursuant to this Plan shall be evidenced by agreements
in such form as the Committee shall, from time to time, approve, which
agreements shall in substance include and comply with and be subject to the
following terms and conditions:
A. MEDIUM AND TIME OF PAYMENT
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The exercise price of an Option shall be payable either (i) in United
States dollars in cash or by check, bank draft or money order payable to the
order of the Corporation, (ii) through the delivery of shares of Stock owned by
the optionee with a fair market value equal to the Option's exercise price, or
(iii) by a combination of (i) and (ii). Fair market value of Stock so delivered
shall be determined as of the date of exercise, as provided in Paragraph 5(C)
hereof. Unless the Committee otherwise determines, an optionee may engage in a
successive exchange (or series of exchanges) in which Stock such optionee is
entitled to receive upon exercise of an Option may be simultaneously utilized as
payment for the exercise of an additional Option or Options.
To the extent permitted by applicable law and regulations, the
Committee may permit payment of the Option exercise price through arrangements
with a brokerage firm under which such firm, on behalf of the optionee, will pay
to the Corporation the exercise price of the shares being purchased, and the
Corporation will promptly deliver to such firm the number of shares of Stock
subject to the Option so that the firm may sell such shares, or a portion
thereof, for the account of the optionee. In addition, the Committee may permit
payment of the Option exercise price by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Corporation
sufficient funds to pay the exercise price as soon as the shares subject to the
Option, or a portion thereof, are sold on behalf of the optionee.
B. NUMBERS OF SHARES
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The Option shall state the total number of shares to which it pertains.
Subject to adjustment as provided in Paragraph 5(G), in any fiscal year of the
Corporation, the aggregate number of shares of Stock as to which Options may be
granted to any one participant shall not exceed 60,000.
C. OPTION PRICE
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The exercise price of an Option shall not be less than the fair market
value of the shares of Stock covered by the Option on the date of grant.
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As used in this Plan, the "fair market value" of a share of Stock as of
any date shall be determined (i) based on the average of the closing sale prices
of a share of Stock for the ten (10) day trading period ending on the given
date, as reported on the National Association of Securities Dealers Automated
Quotation ("Nasdaq") National Market and published in The Wall Street Journal,
(ii) if no closing sale prices are reported during such ten (10) day trading
period, based on the average of the mean of the bid and asked prices per share
of Stock for such ten (10) day trading period, as reported on Nasdaq, (iii) if
the Stock is listed on a stock exchange, based on the average of the closing
sale prices of a share of Stock for the ten (10) day trading period ending on
the given date, as reported in The Wall Street Journal, or (iv) if the Stock is
not listed on Nasdaq or on a stock exchange, by the Committee in its sole
discretion.
D. EXPIRATION OF OPTIONS
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Each Option granted under this Plan shall expire on a date determined
by the Committee, which date, in the case of an ISO, may not be more than ten
years from the date the Option is granted, and in the case of a non-qualified
Option, may not be more than ten years and one month from the date the Option is
granted.
E. VESTING OF OPTIONS
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If and to the extent an Option has become vested, an Option may be
exercised in whole at any time, or in part from time to time, during its term.
Except as provided in Paragraph 5(F) hereof, an Option may only be exercised at
a time when the optionee is employed by the Corporation or one of its
Subsidiaries.
An optionee shall have a cumulative vested interest in the right to
exercise an Option, determined by reference to his continuous employment with
the Corporation and/or a Subsidiary following the date of grant of the Option,
as follows:
Period of Continuous Cumulative Vested
Employment Following Grant Percentage
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Less than 1 year -0-
1 year or more 20.0
2 years or more 40.0
3 years or more 60.0
4 years or more 80.0
5 years or more 100.0
To the extent the application of the above vesting schedule would at
any time result in the right to acquire a fractional share, the right to acquire
such fractional share shall be deferred to the next vesting period.
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F. TERMINATION OF SERVICE
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Except as otherwise provided in this Paragraph 5(F), upon the
termination of employment of an optionee for any reason, the unexercised vested
portion of any Option held by him shall lapse on the earlier of (i) the
expiration of the term of the Option, or (ii) three months from the date of such
termination of employment.
Upon the termination of employment of an optionee because of retirement
at age 60 or later or death, the unexercised vested portion of any Option held
by him (including any portion that became vested on account of such retirement
or death) shall lapse on the earlier of (i) the expiration of the term of the
Option, or (ii) three years from the date of such termination of employment. For
options granted after September 26, 2001, "five" shall be substituted for
"three" in the preceding sentence.
Upon the termination of employment of an optionee because of permanent
and total disability (as defined in Code Section 22(e)(3), referred to herein as
"disability"), the unexercised vested portion of any Option held by him
(including any portion that became vested on account of such disability) shall
lapse on the earlier of (i) the expiration of the term of the Option, or (ii)
three years from the date of such termination of employment. For options granted
after September 26, 2001, "five" shall be substituted for "three" in the
preceding sentence.
In the case of the discharge of an optionee for "cause", the
unexercised vested portion of any Option held by him shall lapse immediately. An
optionee will be deemed discharged for "cause" if he is discharged by his
employer and the ground for such discharge is the employer's good faith and
reasonable belief that (i) he has committed fraud or dishonesty toward his
employer (or any business affiliated with his employer, or any individual or
company doing business with any of them), or (ii) he has committed a felony, not
otherwise described in clause (i), which involves a crime of moral turpitude.
Any lapse occurring under provisions of this paragraph shall be final, whether
or not the optionee is convicted of or admits to the commission of the offense,
and no person or corporation shall be liable to the optionee therefor.
Upon termination of employment of an optionee for any reason other than
retirement at age 60 or later, disability, or death, the nonvested portion of
any Option held by him shall lapse immediately.
Upon termination of employment of an optionee because of retirement at
age 60 or later, disability, or death, the nonvested portion of any Option held
by him shall vest immediately.
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G. ADJUSTMENTS FOR CHANGES IN STOCK
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The aggregate number of shares of Stock as to which Options may be
granted to participants under this Plan, the aggregate number of shares of Stock
as to which Options may be granted to any one such participant, the number of
shares of Stock covered by each outstanding Option, and the exercise price per
share of each outstanding Option, shall be proportionately adjusted by the
Committee for any increase or decrease in the number of outstanding shares of
Stock resulting from the subdivision or consolidation of shares or other capital
adjustments, the payment of a Stock dividend, or any other increase or decrease
in such shares effected without receipt of consideration by the Corporation. Any
such determination by the Committee shall be conclusive.
H. TRANSFERABILITY
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Except as otherwise provided in this Paragraph 5(H), no Option may be
assigned or transferred except by will, by the laws of descent and distribution,
or pursuant to a qualified domestic relations order.
Unless the Committee determines otherwise in connection with the grant
of a non-qualified Option, non-qualified Options granted hereunder shall be
transferable, without payment of consideration, by an optionee to a member of
the optionee's immediate family, to a trust whose beneficiaries are all members
of the optionee's immediate family, or to a partnership whose partners are all
members of the optionee's immediate family. In any such case, the Option shall
be exercisable only by such transferee. For purposes of this provision, an
optionee's "immediate family" shall mean the optionee's spouse, children and
grandchildren.
So long as non-transferability of ISOs is a requirement of the Code, no
Option granted as an ISO may be assigned or transferred except by will, by the
laws of descent and distribution, or pursuant to a qualified domestic relations
order.
I. RIGHTS AS A SHAREHOLDER
-----------------------
An optionee shall have no rights as a shareholder with respect to
shares covered by an Option until the date the shares are issued and only after
such shares are fully paid. No adjustment will be made for dividends or other
rights the record date for which is prior to the date of such issuance.
J. NO RIGHTS AS AN EMPLOYEE
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Neither this Plan, the grant of any Option hereunder, nor the execution
of any agreement with respect to such an Option, shall confer upon any optionee
any right to remain in the employ of the Corporation
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or any Subsidiary or limit the right of the Corporation or any Subsidiary to
terminate the optionee's employment at any time for any reason.
K. TAX WITHHOLDING
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The Committee shall have the right to require that a participant
exercising an Option remit to the Corporation an amount sufficient to satisfy
any federal, state, or local withholding tax requirements (or make other
arrangements satisfactory to the Committee with regard to such taxes) prior to
the delivery of any Stock pursuant to the exercise of the Option. If permitted
by the Committee, either at the time of the grant of the Option or in connection
with its exercise, a participant may elect, at such time and in such manner as
the Committee may prescribe, to satisfy such withholding obligation by (i)
delivering Stock having a fair market value equal to such withholding
obligation, or (ii) requesting that the Corporation withhold from the shares of
Stock to be delivered upon the exercise a number of shares of Stock having a
fair market value equal to such withholding obligation.
In the case of an ISO, the Committee may require as a condition of
exercise that the participant exercising the Option agree to inform the
Corporation promptly of any disposition (within the meaning of Code Section
424(c) and the regulations thereunder) of Stock received upon exercise.
L. CHANGE IN CONTROL
-----------------
Notwithstanding Paragraph 5(E) or any other provision of this Plan, all
outstanding Options shall become immediately and fully exercisable, whether or
not otherwise exercisable by their terms, in the event of a "Change in Control".
For purposes of this Paragraph 5(L), a "Change in Control" shall mean
any of the following events: (i) the Corporation acquires actual knowledge that
any Person other than the Corporation, a Subsidiary or any employee benefit
plan(s) sponsored by the Corporation, has acquired the Beneficial Ownership,
directly or indirectly, of securities of the Corporation entitling such Person
to 25% or more of the Voting Power of the Corporation; (ii) a Tender Offer is
made to acquire securities of the Corporation entitling the holders thereof to
50% or more of the Voting Power of the Corporation; (iii) Voting Shares are
first purchased pursuant to any other Tender Offer; or (iv) at any time less
than 60% of the members of the Board shall be individuals who were either (A)
Directors on the effective date of this Plan or (B) individuals whose election,
or nomination for election, was approved by a vote (including a vote approving a
merger or other agreement providing for the membership of such individuals on
the Board) of at least two-thirds of the Directors then still in office who were
Directors on the effective date of this Plan or who were so approved.
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For purposes of this Paragraph 5(L), the following terms shall have the
following meanings:
(1) "Affiliate", "Associate", and "Parent" shall have the respective
meanings set forth in Rule 12b-2 under the 1934 Act as in effect on the
effective date of this Plan.
(2) The term "Person" shall be used as that term is used in Sections
13(d) and 14(d) of the 1934 Act.
(3) "Beneficial Ownership" shall be determined as provided in Rule
13d-3 under the 1934 Act as in effect on the effective date of this Plan.
(4) "Voting Shares" shall mean all securities of a company entitling
the holders thereof to vote in an annual election of directors (without
consideration of the rights of any class of stock other than common stock to
elect directors by a separate class vote); and a specified percentage of "Voting
Power" of a company shall mean such number of the Voting Shares as shall enable
the holders thereof to cast such percentage of all the votes which could be cast
in an annual election of directors (without consideration of the rights of any
class of stock other than common stock to elect directors by a separate class
vote).
(5) "Tender Offer" shall mean a tender offer or exchange offer to
acquire securities of the Corporation (other than such an offer made by the
Corporation or any Subsidiary), whether or not such offer is approved or opposed
by the Board.
(6) "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Corporation if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing at least
fifty percent (50%) or more of the total combined Voting Power of all classes of
stock in one of the other corporations in the chain.
M. ADDITIONAL RESTRICTIONS AND CONDITIONS
--------------------------------------
The Committee may impose such other restrictions and conditions (in
addition to those required by the provisions of this Plan) on any Award of
Options hereunder and may waive any such additional restrictions and conditions,
so long as (i) any such additional restrictions and conditions are consistent
with the terms of this Plan and (ii) such waiver does not waive any restriction
or condition required by the provisions of this Plan.
6. TERMS AND CONDITIONS APPLICABLE TO RESTRICTED STOCK AWARDS
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Awards of Restricted Stock may be Performance-Based Restricted
Stock, as described in Paragraph 6(K), or Restricted Stock without
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performance-based restrictions. The provisions of Paragraphs 6(A) through 6(J)
are applicable to all shares of Restricted Stock.
A. NUMBER OF SHARES
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The total number of shares of Restricted Stock that may be awarded
under this Plan on a cumulative basis shall not exceed one percent of the Stock
outstanding at the date of any such Award. In any fiscal year of the
Corporation, the aggregate number of shares of Stock as to which Restricted
Stock Awards may be made to any one participant shall not exceed 5,000.
Each Restricted Stock Award under this Plan shall be evidenced by a
stock certificate of the Corporation, registered in the name of the participant,
accompanied by an agreement in such form as the Committee shall prescribe from
time to time. Restricted Stock Awards shall comply with the terms and conditions
of this Plan and with such other terms and conditions not inconsistent with the
terms and conditions of this Plan as the Committee, in its discretion, shall
establish.
B. RESTRICTED PERIOD; RESTRICTIONS
-------------------------------
The Committee shall provide that shares of Stock issued to a
participant in connection with a Restricted Stock Award may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of, except by
will or the laws of descent and distribution, for such period as the Committee
shall determine, beginning on the date on which the Award is granted (the
"Restricted Period"), and that the Restricted Period applicable to such
Restricted Stock shall lapse (if at all) only at the end of the Restricted
Period if all other terms and conditions of the Restricted Stock Award are then
satisfied. Without limiting the generality of the foregoing, the other terms and
conditions of the Restricted Stock Award may include the requirement that the
participant be continuously employed by the Corporation or a Subsidiary during
the Restricted Period.
If all terms and conditions of the Restricted Stock Award are not
satisfied at the end of the Restricted Period, the Restricted Stock shall be
forfeited and transferred to, and reacquired by, the Corporation at no cost to
the Corporation.
C. STOCK LEGENDS; PROHIBITION ON DISPOSITION
-----------------------------------------
Certificates for shares of Restricted Stock shall bear an appropriate
legend referring to the restrictions to which they are subject, and any attempt
to dispose of any such shares of Stock in contravention of such restrictions
shall be null and void and without effect. The certificates representing shares
of Restricted Stock shall be held by the Corporation until the restrictions are
satisfied.
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D. TERMINATION OF SERVICE
----------------------
The Committee shall determine the extent to which the restrictions on
any Restricted Stock Award shall lapse upon the termination of the participant's
service to the Corporation and its Subsidiaries due to death, disability,
retirement or for any other reason. If the restrictions on all or any portion of
a Restricted Stock Award shall not lapse, the participant, or in the event of
his death, his personal representative, shall forthwith deliver to the Secretary
of the Corporation such instruments of transfer, if any, as may reasonably be
required to transfer the shares back to the Corporation.
E. CHANGE IN CONTROL
-----------------
Upon the occurrence of a Change in Control, as determined in Paragraph
5(L) of this Plan, all restrictions then outstanding with respect to shares of
Restricted Stock shall automatically expire and be of no further force and
effect, and all certificates representing such shares of Stock shall be
delivered to the respective participants.
F. ADJUSTMENT FOR CHANGES IN STOCK
-------------------------------
The Committee shall proportionately adjust the aggregate number of
shares of Stock as to which Restricted Stock Awards may be granted to
participants under this Plan and the aggregate number of shares of Stock as to
which Restricted Stock Awards may be granted to any one such participant for any
increase or decrease in the number of outstanding shares of Stock resulting from
the subdivision or consolidation of shares or other capital adjustments, the
payment of a Stock dividend, or any other increase or decrease in such shares
effected without receipt of consideration by the Corporation; provided that any
factional shares resulting from any such adjustment shall be eliminated. Any
such determination by the Committee shall be conclusive. Shares of Stock issued
with respect to any outstanding Awards as a result of any of the foregoing
events shall be subject to the same restrictions.
G. EFFECT OF ATTEMPTED TRANSFER
----------------------------
No benefit payable or interest in any Restricted Stock Award shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge and any such attempted action shall be void, and
no such interest in any Restricted Stock Award shall be in any manner liable for
or subject to debts, contracts, liabilities, engagements or torts of any
participant or his beneficiary. If any participant or beneficiary shall become
bankrupt or shall attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge any benefit payable under or interest in any
Restricted Stock Award, then the
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Committee, in its discretion, may hold or apply such benefit or interest or any
part thereof to or for the benefit of such participant or his beneficiary, his
spouse, children, blood relatives or other dependents, or any of them, in any
such manner and such proportions as the Committee may consider proper.
H. PAYMENT OF TAXES
----------------
The Corporation shall have the right to deduct from any Restricted
Stock Award or other payment hereunder any amount that federal, state, or local
tax law requires to be withheld with respect to such Award or payment or to
require that the participant, prior to or simultaneously with the Corporation
incurring any obligation to withhold any such amount, pay such amount to the
Corporation in cash or, at the option of the Corporation, shares of Stock (which
shall be valued at their fair market value on the date of payment). There is no
obligation under this Plan that any participant be advised of the existence of
the tax or the amount required to be withheld. Without limiting the generality
of the foregoing, in any case where it is determined that tax is required to be
withheld in connection with the issuance, transfer or delivery of shares of
Stock under this Plan, the Corporation may, pursuant to such rules as the
Committee may establish, reduce the number of shares so issued, transferred or
delivered by such number of shares as the Corporation may deem appropriate in
its sole discretion to comply with such withholding. Notwithstanding any other
provision of this Plan, the Committee may impose such conditions on the payment
of any withholding obligations as may be required to satisfy applicable
regulatory requirements.
I. RIGHTS AS A SHAREHOLDER
-----------------------
A participant shall have the right to receive dividends on shares of
Stock subject to the Restricted Stock Award during the applicable Restricted
Period, to vote the Stock subject to the Award and to enjoy all other
shareholder rights, except that the participant shall not be entitled to
delivery of the stock certificate until the applicable Restricted Period shall
have lapsed (if at all).
J. NO RIGHTS AS AN EMPLOYEE
------------------------
Neither this Plan, the award of any Restricted Stock hereunder, nor the
execution of any agreement with respect to such Restricted Stock, shall confer
upon any optionee any right to remain in the employ of the Corporation or any
Subsidiary or limit the right of the Corporation or any Subsidiary to terminate
the optionee's employment at any time for any reason.
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K. PERFORMANCE-BASED RESTRICTED STOCK
----------------------------------
Awards of Performance-Based Restricted Stock are intended to qualify as
"performance-based" for purposes of Code Section 162(m). The Committee shall
provide that shares of Stock issued to a participant in connection with an Award
of Performance-Based Restricted Stock may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution, during the Restricted Period, and that the Restricted
Period applicable to such Restricted Stock shall lapse (if at all) only if
certain pre-established objectives are attained. Performance goals may be based
on any of the following criteria: (i) earnings or earnings per share, (ii)
return on equity, (iii) return on assets, (iv) revenues, (v) expenses, (vi) one
or more operating ratios, (vii) stock price, (viii) shareholder return, (ix)
market share, (x) charge-offs, (xi) credit quality, (xii) reductions in
non-performing assets, (xiii) customer satisfaction measures, and (xiv) the
accomplishment of mergers, acquisitions, dispositions or similar extraordinary
business transactions. The Committee shall establish one or more objective
performance goals for each such Award of Performance-Based Restricted Stock on
the date of grant. The performance goals selected in any case need not be
applicable across the Corporation, but may be particular to an individual's
function or business unit. The Committee shall determine whether such
performance goals are attained and such determination shall be final and
conclusive. If the performance goals are not met, the Performance-Based
Restricted Stock shall be forfeited and transferred to, and reacquired by, the
Corporation at no cost to the Corporation.
The Committee may impose such other restrictions and conditions (in
addition to the performance-based restrictions described above) on any Award of
shares of Performance-Based Restricted Stock as the Committee deems appropriate
and may waive any such additional restrictions and conditions, so long as such
waiver does not waive any restriction described in the previous paragraph.
Nothing herein shall limit the Committee's ability to reduce the amount payable
under an Award upon the attainment of the performance goal(s), provided,
however, that the Committee shall have no right under any circumstance to
increase the amount payable under, or waive compliance with, any applicable
performance goal(s).
7. AMENDMENT
---------
The Committee may at any time amend or suspend this Plan or alter and
amend Awards granted hereunder; provided, however, that no such amendment may,
without the consent of any participant to whom an Option shall theretofore have
been granted or to whom a Restricted Stock Award shall theretofore have been
issued, adversely affect the right of such participant under such Award;
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and provided, further, that no amendment that requires shareholder approval in
order for (i) this Plan to continue to be eligible to satisfy the requirements
for exemption of the acquisition of securities under this Plan pursuant to Rule
16b-3 under Section 16 of the 1934 Act, or (ii) this Plan to continue to be
eligible to comply with Code Section 162(m), or any amendment of or substitute
for either of them, shall be effective unless the same shall be approved by the
requisite vote of the shareholders of the Corporation.
8. TERMINATION
-----------
The Board may terminate this Plan at any time, and no Awards shall be
made thereafter. Unless previously terminated by the Board, this Plan shall
terminate on, and no Awards shall be made after, December 17, 2006.
9. LEGALITY OF GRANT
-----------------
The granting of any Award under this Plan and the issuance or transfer
of Options and shares of Stock pursuant hereto are subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
regulatory or governmental agency (including, without limitation, no-action
positions of the Securities and Exchange Commission) which may, in the opinion
of counsel for the Corporation, be necessary or advisable in connection
therewith. Without limiting the generality of the foregoing, no Awards may be
granted under this Plan and no Options or shares shall be issued by the
Corporation, nor cash payments made by the Corporation pursuant to or in
connection with any such Award unless and until in any such case all legal
requirements applicable to the issuance or payment have, in the opinion of
counsel for the Corporation, been complied with. In connection with any Option
or Stock issuance or transfer, the person acquiring the Option or the shares of
Stock shall, if requested by the Corporation, give assurance satisfactory to
counsel to the Corporation with respect to such matters as the Corporation may
deem desirable to assure compliance with all applicable legal requirements.
10. CAPTIONS; PRONOUNS
------------------
The captions contained in this Plan are for convenience of reference
only, and shall not be considered part of this Plan in its interpretation and
construction.
The use of any masculine pronoun herein shall be construed to include
the corresponding feminine pronoun, as the context requires.
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11. EFFECTIVE DATE
--------------
This Plan was adopted by the Board on December 18, 1996, subject,
however, to approval of this Plan by the shareholders of the Corporation at its
1997 Annual Meeting. If so approved, this Plan shall be effective as of December
18, 1996.
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