Exhibit
10.9
MATTHEWS
INTERNATIONAL CORPORATION
1994
DIRECTOR FEE PLAN,
as
amended through November 13, 2007
SECTION
1
Purposes;
Reservation of Shares
(a) Purposes. The
purposes of the 1994 Director Fee Plan, as amended through November 13, 2007
(the "Plan") are:
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(1)
to provide for each Director of Matthews International Corporation
(the
"Corporation") who is not also an employee of the Corporation or
any of
its Subsidiaries ("Director") the payment of retainer fees and, in
the
case of a Director who is Chairperson (the “NE Chairperson”), an
additional retainer fee for future services to be performed by such
Director ("Director Fees") as a member of the Board of Directors
of the
Corporation (the "Board") in cash or in shares of Class A Common
Stock,
par value $1.00 per share, of the Corporation ("Common Stock") and,
in the
case of payment to the Directors of the Director Fees in shares of
Common
Stock, to increase the identification of interests between such Directors
and the shareholders of the
Corporation;
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(2)
to provide current payment in cash (or if a Director shall elect
to defer
receipt, future payment in shares of Common Stock) to each Director
(except the NE Chairperson) for:
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(a)
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fees
paid for attendance at meetings of the Board ("Board Meeting
Fees");
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(b)
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fees
paid to Directors for attendance at meetings of Committees of the
Board
("Committee Meeting Fees");
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(c)
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annual
retainer fees paid to the Chairperson of a Committee ("Committee
Chairperson Retainer Fees");
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(d)
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annual
retainer fees paid to the Lead Director of the Board of Directors
(“Lead
Director Fee”); and
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(e)
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fees
paid to a Director for attendance at the annual shareholders' meeting
of
the Corporation ("Shareholders' Meeting Fees") (subsections (a)-(e)
are
collectively referred to herein as "Meeting Fees");
and
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(3)
to increase the identification of interests between the Directors
and the
shareholders of the Corporation by permitting the Nominating and
Corporate
Governance Committee of the Board (the “Committee”) or a Stock
Compensation Subcommittee of the Committee (the “Subcommittee”) to award
restricted stock, nonstatutory stock options and/or stock appreciation
rights to each Director on the fifteenth (15th)
business
day after the annual shareholders’ meeting of the
Corporation.
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For
purposes of the Plan, the term "Subsidiary" means 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 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.
As
used
hereinafter, the term “Committee” shall mean either the Nominating and
Corporate
Governance
Committee or the Subcommittee, if the Subcommittee is authorized by the Board
to
act under this Plan.
(b) Reservation
of Shares. Except as otherwise provided in this Section 1(b), the
aggregate number of shares of Common Stock which may be issued under the Plan
or
credited to Deferred Stock Compensation Accounts for subsequent issuance under
the Plan is limited to 300,000 shares, subject to adjustment and substitution
as
set forth in Section 12 hereof. Shares issued under the Plan may be
authorized but unissued shares or shares previously issued and thereafter
acquired by the Corporation or partly each, as shall be determined from time
to
time by the Board. If any stock option or stock appreciation right
granted under the Plan is cancelled by mutual consent, forfeited, or terminates
or expires for any reason without having been exercised in full, or if any
restricted shares awarded under the Plan are forfeited, the number of shares
subject thereto, in the case of stock options or stock appreciation rights,
or
the number of shares forfeited, in the case of restricted shares, shall again
be
available for all purposes of the Plan. In addition to the number of
shares of Common Stock authorized for issuance or crediting by the first
sentence of this Section 1(b), the number of shares of Common Stock which are
surrendered (or to which ownership has been certified) in full or partial
payment to the Corporation of the option price of a stock option granted under
the Plan shall be available for all purposes of the Plan.
SECTION
2
Eligibility
Any
non-employee Director of the Corporation who is separately compensated in the
form of Director Fees or Meeting Fees for services on the Board shall be
eligible to participate in the Plan.
SECTION
3
Payment
of Director Fees in Cash or Common Stock
(a) Current
Payment. Subject to the provisions of Section 3(b) hereof, on the
fifteenth (15th) business day following the annual meeting of the shareholders
of the Corporation (each such date of payment referred to as a "Payment Date"),
each Director as of that date shall receive payment of Director Fees
by:
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(i)
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the
payment to the Director of cash of thirty thousand dollars ($30,000)
(eighteen thousand dollars ($18,000) for Payment Dates before January
1,
2005) and, in the case of the NE Chairperson, an additional forty-five
thousand dollars ($45,000) (or such other amount determined by the
Board
or by any committee of the Board which the Board authorizes to determine
such amount) (the “Retainer Fee Amount”);
or
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(ii)
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the
issuance to the Director of a number of whole shares of Common Stock
equal
to the Retainer Fee Amount divided by the Fair Market Value of one
share
of the Common Stock, as defined in Section 15 hereof, on such Payment
Date
(rounded upward to the next whole
share).
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The
Committee shall determine by November 30 of each year whether Director Fees
will
be paid in cash or in shares of Common Stock to the Directors in the following
calendar year. Unless the Committee otherwise determines and
communicates such determination to the Directors by November 30 of the year
immediately preceding the year of payment, the Directors Fees shall be paid
in
shares of Common Stock. Notwithstanding the foregoing, if the
Director Fees are to be paid in cash, a Director may elect to receive payment
of
the Director Fees in shares and shall receive a number of shares of Common
Stock
equal to the Retainer Fee Amount divided by the Fair Market Value of one share
of the Common Stock, as defined in Section 15 hereof, on the Payment Date
(rounded upward to the next whole share) (a “Current Stock
Election”). Such election shall be made by filing a Notice of
Election with the Secretary of the Corporation in the form prescribed by the
Corporation.
(b) Stock
Deferral Election. Regardless of whether Director Fees are to be
paid in either cash or shares of Common Stock, each Director may elect to defer
the receipt of Director Fees in shares of Common Stock for a calendar year
(a
"Stock Deferral Election") by filing a Notice of Election with the Secretary
of
the Corporation in the form prescribed by the Corporation.
(c) Election
Procedures. Both a Current Stock Election and a Stock Deferral
Election (collectively, “Director Fee Elections”) shall be effective on January
1 of the year following the date on which the Notice of Election is
filed. Director Fee Elections shall be effective on the date on which
the Notice of Election is filed with respect to Director Fees payable after
the
time of a person's initial election to the office of Director, or any subsequent
re-election if immediately prior thereto such person was not serving as a
Director, provided (i) the Director files such Notice of Election within ten
(10) business days subsequent to being elected or re-elected as a Director
and
(ii) a Stock Deferral Election shall only be effective for Director Fees payable
for services performed after the Notice of Election is
filed. Director Fee Elections shall apply to all Director Fees
otherwise payable while such Director Fee Election is effective. Each
Director may terminate a Current Stock Election and receive current payment
of
Director Fees in cash (where the Committee has elected to pay Director Fees
in
cash) and may terminate a Stock Deferral Election and receive current shares
of
Common Stock or cash (where the Committee has elected to pay Director Fees
in
cash) by filing a Notice of Termination with the Secretary of the Corporation
in
the form prescribed by the Corporation, which shall be effective on January
1 of
the year following the date on which a Notice of Termination is
filed. A Director Fee Election shall continue in effect until the
effective date of any Notice of Termination. Director Fee Elections
may be made by a Director even if such Director has not made a Meeting Fee
Deferral Election (as defined below).
(d) Share
Certificates. As of the date on which the Director Fees are
payable in shares of Common Stock pursuant to Section 3(a) hereof or, if a
Stock
Deferral Election was made, Sections 5 and 6 hereof, the Corporation shall
issue
share certificates to the Director for the shares of Common Stock received
under
the Plan and the Director shall be a shareholder of the Corporation with respect
to any such shares.
SECTION
4
Payment
of Meeting Fees
(a) Current
Cash Payment. Subject to the provisions of Sections 4(b) and 4(c)
hereof, except as set forth below effective on and after the date of the 2007
annual meeting of the shareholders of the Corporation (the “2007 Annual Meeting
Date”), each Director (other than the NE Chairperson) shall receive payment of
Meeting Fees in cash in the following amounts (or such other amounts determined
by the Board or by any committee of the Board which the Board authorizes to
determine such amounts):
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Board
Meeting Fees:
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$1,500
for attendance at each meeting
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Committee
Meeting Fees:
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$1,000
for attendance at each meeting
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Committee
Chairperson Retainer Fees:
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$5,000
(or $7,500 in the case of the Audit Committee Chairperson) for a
year of
service as a Committee Chairperson
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Lead
Director Fees (effective after 2006 Annual meeting):
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$5,000
for a year of service as the Lead Director.
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Shareholders'
Meeting Fees:
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$1,500
for attendance at each meeting
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(The
amount and payment of Meeting Fees for meetings prior to the 2007 Annual Meeting
Date shall be governed by the provisions of this Section 4(a) as in effect
prior
to 2007.) Except as set forth in Sections 4(b) and 4(c) hereof, each
Director shall receive payment of Meeting Fees (other than Committee Chairperson
Retainer Fees and Lead Director Fee) within ten (10) business days following
the
meeting with respect to which such fees are payable. Except as set
forth in Sections 4(b) and 4(c) hereof, each Committee Chairperson shall receive
payment of Committee Chairperson Retainer Fees and the Lead Director shall
receive payment of the Lead Director Fees on the fifteenth (15th) business
day
following the person’s annual election or re-election to such
position. The amount and time of payment of Meeting Fees may be
changed from time to time by the Board in its sole discretion.
(b) Deferred
Payment of Meeting Fees. Each Director may elect to receive all
Meeting Fees for a calendar year in shares of Common Stock rather than cash,
as
set forth in Section 4(c) hereof, provided the Director elects to defer the
receipt of such shares of Common Stock (a "Meeting Fee Deferral
Election"). A Meeting Fee Deferral Election may be made only by
filing a Notice of Election with the Secretary of the Corporation in the form
prescribed by the Corporation, and shall be effective for meetings, and, if
applicable, Committee Chairperson Retainer Fees or Lead Director Fees payable,
on and after January 1 of the year following the date on which the Notice of
Election is filed; provided, however, that (i) a Meeting Fee Deferral Election
made by a Notice of Election filed on or before the close of business on May
14,
1999 shall be effective with regard to meetings on or after May 15, 1999, and
(ii) a Meeting Fee Deferral Election shall be effective on the date on which
the
Notice of Election is filed after the time of a person's initial election,
or
any subsequent re-election, to the office of Director with respect to Meeting
Fees and, if applicable, Committee Chairperson Retainer Fees or Lead Director
Fees, payable for services performed after the Meeting Fee Deferral Election
is
filed if (A) immediately prior thereto such person was not serving as a
Director, and (B) such Notice of Election is filed within ten (10) business
days
subsequent to such person being elected or re-elected as a
Director. A Meeting Fee Deferral Election shall apply to all Meeting
Fees which would otherwise be payable for meetings held while such Meeting
Fee
Deferral Election is effective. A Director may terminate a Meeting
Fee Deferral Election only by filing a Notice of Termination with the Secretary
of the Corporation in the form prescribed by the Corporation, which Notice
of
Termination shall be effective for meetings and, if applicable, Committee
Chairperson Retainer Fees or Lead Director Fees payable on and after January
1
of the year following the date on which a Notice of Termination is
filed. A Meeting Fee Deferral Election shall continue in effect until
the effective date of any Notice of Termination, after which the Meeting Fees
shall be payable in accordance with Section 4(a) hereof. A Meeting
Fee Deferral Election may be made by a Director even if such Director has not
made a Current Stock Election or a Stock Deferral Election. A Meeting
Fee Deferral Election shall apply to all but not less than all Meeting
Fees.
(c) Deferred
Meeting Fees Credited in Shares of Common Stock. Each Director
who has made a Meeting Fee Deferral Election effective for Meeting Fees
otherwise payable in cash for a calendar year shall receive a credit to a
Deferred Stock Compensation Account (as defined in Section 5(a) hereof) in
the
name of such Director on the first Payment Date following such calendar
year. Such credit shall be a number of shares of Common Stock
(including fractional shares to at least two decimal places) equal to (i) the
aggregate amount of all Meeting Fees subject to such Meeting Fee Deferral
Election otherwise payable during such calendar year to such Director in cash
under Section 4(a) hereof if no Meeting Fee Deferral Election had been made,
divided by (ii) the Fair Market Value of one share of the Common Stock, as
defined in Section 15 hereof, on such Payment Date. No interest or
other amount shall be paid or credited to a Director notwithstanding that
Meeting Fees which otherwise would have been payable under Section 4(a) hereof
in cash are not reflected as a credit to such Deferred Stock Compensation
Account until the Payment Date.
(d) Share
Certificates. If a Meeting Fee Deferral Election was made, then
as of the date on which the Meeting Fees are payable in shares of Common Stock
pursuant to Sections 5 and 6 hereof, the Corporation shall issue share
certificates to the Director for the shares of Common Stock received under
the
Plan and the Director shall be a shareholder of the Corporation with respect
to
any such shares.
SECTION
5
Deferred
Stock Compensation Account
(a) General. The
amount of any Director Fees or Meeting Fees deferred in accordance with a Stock
Deferral Election or a Meeting Fee Deferral Election shall be credited to a
deferred stock compensation account maintained by the Corporation in the name
of
the Director (a "Deferred Stock Compensation Account"). A separate
Deferred Stock Compensation Account shall be maintained for each amount of
deferred Director Fees or Meeting Fees for which a Director has elected a
different number of payment installments or as otherwise determined by the
Committee. On each Payment Date that a Stock Deferral Election is
effective for a Director or on which a credit to a Deferred Stock Compensation
Account is to be made under Section 4(c) hereof pursuant to a Meeting Fee
Deferral Election, the Director's Deferred Stock Compensation Account(s) shall
be credited on the Payment Date with the number of shares of Common Stock
(including fractional shares to at least two decimal places) which (i) otherwise
would have been payable to the Director under Section 3(a) hereof on such
Payment Date if the Director Fees had been payable to the Director in shares
of
Common Stock, whether the Director Fees were payable in cash or in shares of
Common Stock, and/or (ii) are to be so credited in accordance with Section
4(c)
hereof. If a dividend or distribution is paid on the Common Stock in
cash or property other than Common Stock, on the date of payment of the dividend
or distribution to holders of the Common Stock, each Deferred Stock Compensation
Account shall be credited with a number of shares of Common Stock (including
fractional shares) equal to the number of shares of Common Stock that had been
credited to such Account on the date fixed for determining the shareholders
entitled to receive such dividend or distribution multiplied by the amount
of
the dividend or distribution paid per share of Common Stock divided by the
Fair
Market Value of one share of the Common Stock, as defined in Section 15 hereof,
on the date on which the dividend or distribution is paid. If the
dividend or distribution is paid in property other than Common Stock, the amount
of the dividend or distribution shall equal the fair market value of the
property on the date on which the dividend or distribution is
paid. Except as provided in Section 12 hereof, the immediately
preceding two sentences shall not apply to dividends or distributions paid
on
the Common Stock in cash or property other than Common Stock on or after March
14, 1997 with respect to Directors on such date or Directors elected
thereafter. Such dividends or distributions shall neither be credited
to the Director's Deferred Stock Compensation Account nor paid to the
Director. The Deferred Stock Compensation Account of a Director shall
be charged on the date of distribution with any distribution of shares of Common
Stock made to the Director from such Account pursuant to Section 5(b)
hereof.
(b) Manner
of Payment. The balance of a Director's Deferred Stock
Compensation Account will be paid in shares of Common Stock to the Director
or,
in the event of the Director's death, to the Director's Beneficiary as defined
in Section 5(c) hereof. A Director may elect at the time of filing
the Notice of Election for a Stock Deferral Election or a Meeting Fee Deferral
Election to receive payment of the shares of Common Stock credited to the
Director's Deferred Stock Compensation Account in annual installments rather
than a lump sum, provided that (i) the payment period for installment payments
shall not exceed ten (10) years following the Payment Commencement Date as
described in Section 6 hereof and (ii) payment shall not be made in installments
but rather in a lump sum if the Director made a Section 13 Event Election,
as
defined below, and Section 6(c) hereof applies. The number of shares
of Common Stock distributed in each installment shall be determined by
multiplying (i) the number of shares of Common Stock in the Deferred Stock
Compensation Account on the date of payment of such installment, by (ii) a
fraction, the numerator of which is one and the denominator of which is the
number of remaining unpaid installments, and by rounding such result down to
the
nearest whole number of shares. The balance of the number of shares
of Common Stock in the Deferred Stock Compensation Account shall be
appropriately reduced in accordance with Section 5(a) hereof to reflect the
installment payments made hereunder. Shares of Common Stock remaining
in a Deferred Stock Compensation Account pending distribution pursuant to this
Section 5(b) shall be subject to adjustment pursuant to Section 12 hereof and,
for former Directors who are not Directors on March 14, 1997 but were Directors
prior to that date, shall continue to be credited with respect to dividends
or
distributions paid on the Common Stock pursuant to Section 5(a)
hereof. If a lump sum payment or the final installment payment
hereunder would result in the issuance of a fractional share of Common Stock,
such fractional share shall not be issued and cash in lieu of such fractional
share shall be paid to the Director based on the Fair Market Value of a share
of
Common Stock, as defined in Section 15 hereof, on the date immediately
preceding the date of such payment. The Corporation shall issue share
certificates to the Director, or the Director's Beneficiary, for the shares
of
Common Stock distributed hereunder. As of the date on which the
Director is entitled to receive payment of shares of Common Stock pursuant
to
this Section 5(b) hereof, a Director or the Director's Beneficiary shall be
a
shareholder of the Corporation with respect to such shares.
(c) Director’s
Beneficiary. The Director’s Beneficiary means any beneficiary or
beneficiaries (who may be named contingently or successively) named by a
Director under the Plan to whom any benefit under the Plan is to be paid in
the
case of his or her death before he or she receives any or all of such
benefit. Each such designation shall revoke all prior designations by
the same Director, shall be in a form prescribed by the Committee, and will
be
effective only when filed by the Director in writing with the Secretary of
the
Corporation during the Director’s lifetime. In the absence of such a
designation, Director’s Beneficiary means the person designated by the Director
in the Director's Will, or, if the Director fails to make a testamentary
disposition of the shares or dies intestate, to the person entitled to receive
the shares pursuant to the laws of descent and distribution of the state of
domicile of the Director at the time of death.
SECTION
6
Payment
Commencement Date
(a) General. Except
as otherwise provided in Sections 6(b) and 6(c) hereof, payment of shares in
a
Deferred Stock Compensation Account shall commence on April 1 (or if April
1 is
not a business day, on the immediately preceding business day) of the calendar
year following the calendar year in which the Director first separates from
service with the Corporation under Section 409A of the Internal Revenue Code
of
1986, as amended (the “Code”), or any successor section, upon or after ceasing
to be a member of the Board for any reason, including by reason of death or
disability. If, in the case of a Meeting Fee Deferral Election, the
first amount credited to a particular Deferred Stock Compensation Account with
respect to such Director is credited after such April 1 or any amount is
credited to such a Deferred Stock Compensation Account after a lump sum payment
has been made pursuant to this Section 6(a) from such Deferred Stock
Compensation Account, payment of shares credited to such Deferred Stock
Compensation Account shall commence on the April 1 (or if April 1 is not a
business day, on the immediately preceding business day) following the date
on
which the shares are so credited.
(b) Delay
in Payment. Notwithstanding Section 6(a) hereof and except as
otherwise provided in Section 6(c) hereof, a Director may irrevocably elect,
by
filing a Notice of Election with the Secretary of the Corporation in the form
prescribed by the Corporation, to commence payment on a date later than the
date
specified in Section 6(a) hereof provided that:
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(i)
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Such
election must be made at least twelve (12) months prior to the date
on
which payments otherwise would have commenced pursuant to Section
6(a)
hereof; and
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(ii)
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The
payment commencement date specified in such election under this Section
6(b) must be not less than five (5) years from the date on which
payments
otherwise would have commenced pursuant to Section 6(a)
hereof.
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The
provisions of this Section 6(b) are intended to comply with Section 409A(4)(C)
of the Code, or any successor section, and shall be interpreted consistently
therewith.
(c) Section
6(c) Event. Notwithstanding Sections 6(a) and 6(b) hereof,
effective for Director Fees and Meeting Fees payable (but for any deferral
elections) on and after January 1 of the year following the date on which the
Notice of Election is filed (and on and after January 1, 2005), a
Director may irrevocably elect, by filing a Notice of Election with the
Secretary of the Corporation in a form prescribed by the Corporation, to receive
payment of all shares of Common Stock credited to the Director’s Deferred Stock
Compensation Account with respect to such Director Fees and Meeting Fees, upon
the earlier of when payment would be made pursuant to Sections 6(a) or 6(b)
hereof or in a lump sum immediately following the occurrence of any Section
6(c)
Event, as defined below (a “Section 6(c) Event Election”). A Section 6(c) Event
Election shall be effective on the date on which it is filed with respect to
Director Fees and Meeting Fees payable (but for any deferral elections) after
the time of a person’s initial election to the office of Director, or any
subsequent re-election if immediately prior thereto such person was not serving
as a Director, provided (i) the Director files such Section 6(c) Event Election
within ten (10) business days subsequent to being elected or re-elected as
a
Director and (ii) a Section 6(c) Event Election shall only be effective for
Director Fees and Meeting Fees payable for services performed after the Section
6(c) Event Election is filed. A Director may terminate a Section 6(c)
Event Election only by filing a Notice of Termination of Section 6(c) Event
Election with the Secretary of the Corporation in the form prescribed by the
Corporation, which shall be effective for Director Fees and Meeting Fees payable
(but for any deferral elections) on and after January 1 of the year following
the date on which such Notice of Termination of Section 6(c) Event Election
is
filed. If payments from a Director’s Deferred Stock Compensation
Account have previously commenced at the time of a Section 6(c) Event which
results in a permissible lump sum payment pursuant to this Section 6(c), for
purposes of applying this Section 6(c) shares previously paid from the
Director’s Deferred Stock Compensation Account shall be deemed to be from
Director Fees and Meeting Fees not subject to a Section 6(c) Event Election,
to
the extent thereof. A Section 6(c) Event shall mean the date upon
which any event occurs which constitutes a change in the ownership or effective
control of the Corporation or in the ownership of a substantial portion of
the
assets of the Corporation under Section 409A of the Code or any successor
section and Treasury Regulation §1. 409A-3(i)(5)(v)-(vii) thereunder or any
successor section, provided that:
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(i)
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The
percentage specified in Treasury Regulation §1.409A-3(i)(5)(v) (addressing
the percentage change in the ownership of the total fair market value
or
voting power of the Corporation’s stock) shall be 50 percent and not a
higher percentage;
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(ii)
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The
percentage specified in Treasury Regulation §1.409-3(i)(5)(vi)(A)(1)
(addressing the percentage change in the ownership of the voting
power of
the Corporation’s stock) shall be 30 percent and not a higher
percentage;
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(iii)For
purposes of Treasury Regulation §1.409A-3(i)(5)(vi)(A)(2) (addressing a
change in the effective control of the Corporation by virtue of a
change
in the composition of the Board), the words “a majority of the members of
the corporation’s board of directors” shall not be replaced by a higher
portion; and
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(iv)The
percentage specified in Treasury Regulation §1.409A-3(i)(5)(vii)(A)
(addressing the percentage change in the ownership of the Corporation’s
assets) shall be 40 percent and not a higher
percentage.
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SECTION
7
Non-Alienability
of Benefits
Neither
the Director nor the Director's Beneficiary shall have the right to, directly
or
indirectly, alienate, assign, transfer, pledge, anticipate or encumber (except
by reason of death) any amounts or shares of Common Stock that are or may be
payable hereunder nor shall any such amounts or shares be subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors of the Director or the Director's
Beneficiary or to the debts, contracts, liabilities, engagements, or torts
of
any Director or Director's Beneficiary, or transfer by operation of law in
the
event of bankruptcy or insolvency of the Director or the Director's Beneficiary,
or any legal process.
SECTION
8
Nature
of Deferred Stock Compensation Accounts
Any
Deferred Stock Compensation Account shall be established and maintained only
on
the books and records of the Corporation. No assets or funds of the
Corporation, a Subsidiary or the Plan shall be removed from the claims of the
Corporation's or a Subsidiary's general or judgment creditors or otherwise
made
available, and no shares of Common Stock of the Corporation to be issued
pursuant to a Deferred Stock Compensation Account shall be issued or
outstanding, until such amounts and shares are actually payable to a Director
or
a Director's Beneficiary as provided herein. The Plan constitutes a
mere promise by the Corporation to make payments in the future. Each
Director and Director's Beneficiary shall have the status of, and their rights
to receive a payment of shares of Common Stock under the Plan shall be no
greater than the rights of, general unsecured creditors of the
Corporation. No person shall be entitled to any voting rights with
respect to shares credited to a Deferred Stock Compensation Account and not
yet
payable to a Director or the Director's Beneficiary. The Corporation
shall not be obligated under any circumstances to fund any financial obligations
under the Plan and the Plan is intended to constitute an unfunded plan for
tax
purposes. However, the Corporation may, in its discretion, set aside
funds in a trust or other vehicle, subject to the claims of its creditors,
in
order to assist it in meeting its obligations under the Plan, if:
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(a) such
arrangement will not cause the Plan to be considered a funded deferred
compensation plan under the Code;
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(b) any
trust created by the Corporation, and any assets held by such trust
to
assist the Corporation in meeting its obligations under the Plan,
will
conform to the terms of the model trust, as described in Rev. Proc.
92-64,
1992-2 C.B. 422 or any successor;
and
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(c) such
set aside of funds is not described in Section 409A(b) of the Code,
or any
successor provision.
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SECTION
9
Grant
of Stock Options and Stock Appreciation Rights
And
Award of Restricted Shares
The
Committee shall have authority, in
its discretion, (a) to grant “nonstatutory stock options” (i.e., stock
options which do not qualify under Sections 422 and 423 of the Code), (b) to
grant stock appreciation rights, and (c) to award restricted
shares. All grants and awards pursuant to this Section 9 shall be
made on or to be effective on a Payment Date. On or as of each
Payment Date in 2007 and later years, the Committee shall grant or award to
each
Director on such Payment Date nonstatutory stock options, stock appreciation
rights and/or restricted shares with a total value of fifty thousand dollars
($50,000) (or such other amount determined by the Board or by any committee
of
the Board which the Board authorizes to determine such amount). The
Committee shall determine in its discretion the portion of each grant and/or
award to be comprised of nonstatutory stock options, stock appreciation rights
and restricted shares and the value of each.
SECTION
10
Terms
and Conditions of
Stock
Options and Stock Appreciation Rights
Stock
options and stock appreciation
rights granted under the Plan shall be subject to the following terms and
conditions:
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(A)
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The
purchase price at which each stock option may be exercised (the “option
price”) and the base price at which each stock appreciation right may be
granted (the “Base Price”) shall be such price as the Committee, in its
discretion, shall determine but shall not be less than one hundred
percent
(100%) of the Fair Market Value per share of the Common Stock covered
by
the stock option or stock appreciation right on the date of
grant. For purposes of this Section 10, the Fair Market Value
of the Common Stock shall be determined as provided in Section 15
hereof.
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(B)
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The
option price for each stock option shall be paid in full upon exercise
and
shall be payable in cash in United States dollars (including check,
bank
draft or money order), which may include cash forwarded through a
broker
or other agent-sponsored exercise or financing
program; provided, however, that in lieu of such cash the
person exercising the stock option may if authorized by the Committee
pay
the option price in whole or in part by delivering to the Corporation
shares of the Common Stock having a Fair Market Value on the date
of
exercise of the stock option, determined as provided in Section 15
hereof,
equal to the option price for the shares being purchased; except
that (i)
any portion of the option price representing a fraction of a share
shall
in any event be paid in cash and (ii) no shares of the Common Stock
which
have been held for less than one year may be delivered in payment
of the
option price of a stock option. If the person exercising a
stock option participates in a broker or other agent-sponsored exercise
or
financing program, the Corporation will cooperate with all reasonable
procedures of the broker or other agent to permit participation by
the
person exercising the stock option in the exercise or financing
program. Notwithstanding any procedure of the broker or other
agent-sponsored exercise or financing program, if the option price
is paid
in cash, the exercise of the stock option shall not be deemed to
occur and
no shares of the Common Stock will be issued until the Corporation
has
received full payment in cash (including check, bank draft or money
order)
for the option price from the broker or other agent. The date
of exercise of a stock option shall be determined under procedures
established by the Committee, and as of the date of exercise the
person
exercising the stock option shall be considered for all purposes
to be the
owner of the shares with respect to which the stock option has been
exercised.
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(C)
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Upon
the exercise of stock appreciation rights the Corporation shall pay
to the
person exercising the stock appreciation rights a number of shares
of the
Common Stock with a Fair Market Value, as defined in Section 15 hereof,
equal to the difference between the aggregate Fair Market Value,
as
defined in Section 15 hereof, of the Common Stock on the
date of exercise of the stock appreciation rights and the aggregate
Base
Prices for the stock appreciation rights which are exercised (the
“Spread”) (rounded down to the next whole number of shares). No
fractional shares of the Common Stock shall be issued nor shall cash
in
lieu of a fraction of a share of Common Stock be
paid. Notwithstanding the foregoing, at the discretion of the
Committee, the Corporation may pay to the person exercising the stock
appreciation rights an amount of cash, rather than shares of the
Common
Stock, equal to the Spread if and only if the payment of cash upon
exercise of the stock appreciation rights would not cause the stock
appreciation rights to provide for a deferral of compensation within
the
meaning of Section 409A of the Code. The date of exercise of a
stock appreciation right shall be determined under procedures established
by the Committee.
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(D)
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Unless
the Committee, in its discretion, shall otherwise determine and subject
to
the terms of Sections 10(F) and 10(G) hereof, stock options and stock
appreciation rights shall be exercisable by a Director commencing
on the
second anniversary of the date of grant. Subject to the terms
of Sections 10(F) and 10(G) hereof providing for earlier termination
of a
stock option or stock appreciation right, no stock option or stock
appreciation right shall be exercisable after the expiration of ten
years
from the date of grant. Unless the Committee, in its
discretion, shall otherwise determine, a stock option or stock
appreciation right to the extent exercisable at any time may be exercised
in whole or in part.
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(E)
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Unless
the Committee, in its discretion, shall otherwise
determine:
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(i) no
stock option or stock appreciation right shall be transferable or
assignable by the grantee otherwise
than:
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(b)if
the grantee dies intestate, by the laws of descent and distribution
of the
state of domicile of the grantee at the time of death;
or
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(c)to
the trustee of a trust that is revocable by the grantee alone, both
at the
time of the transfer or assignment and at all times thereafter prior
to
such grantee’s death; and
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(ii)
all stock options and stock appreciation rights shall be exercisable
during the lifetime of the grantee only by the grantee or by the
trustee
of a trust described in Section 10(E)(i)(c)
hereof.
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A
transfer or assignment of a stock option or a stock appreciation right by a
trustee of a trust described in Section 10(E)(i)(c) to any person other than
the
grantee shall be permitted only to the extent approved in advance by the
Committee in writing, in its discretion. Stock options or stock
appreciation rights held by such trustee also shall be subject to all of the
conditions and restrictions set forth in the Plan and in the applicable
agreement with the grantee as if such trustee were a party to such agreement
as
the grantee. In the event the grantee ceases to be a Director of the
Corporation, the provisions set forth in the Plan and in the applicable
agreement with the grantee shall continue to be applicable to the stock option
or stock appreciation right and shall limit the ability of such trustee to
exercise any such transferred stock options or stock appreciation rights to
the
same extent they would have limited the grantee. The Corporation
shall not have any obligation to notify such trustee of any termination of
a
stock option or stock appreciation right due to the termination of service
of
the grantee as a Director of the Corporation.
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(F)
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Unless
the Committee, in its discretion, shall otherwise determine, if a
grantee
ceases to be a Director of the Corporation, any outstanding stock
options
and stock appreciation rights held by the grantee shall vest and
be
exercisable and shall terminate, according to the following
provisions:
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(i) Notwithstanding
Section 10(D) hereof, if a grantee ceases to be a Director of the
Corporation for any reason other than those set forth in Section
10(F)(ii)
or (iii) hereof, any then outstanding stock option and stock appreciation
right held by such grantee (whether or not vested and exercisable
by the
grantee immediately prior to such time) shall vest and be exercisable
by
the grantee (or, in the event of the grantee’s death, by the person
entitled to do so under the Will of the grantee, or, if the grantee
shall
fail to make testamentary disposition of the stock option or stock
appreciation right or shall die intestate, by the legal representative
of
the grantee (the “Grantee’s Heir or Representative”)), at any time prior
to the second anniversary of the date on which the grantee ceases
to be a
Director of the Corporation or the expiration date of the stock option
or
stock appreciation right, whichever is the shorter
period;
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(ii)
Unless the exercise period of a stock option or stock appreciation
right
following termination of service as Director has been extended as
provided
in Section 13(c) hereof, if during his or her term of office as a
non-employee Director a grantee is removed from office for cause
or
resigns without the consent of the Board, any then outstanding stock
option and stock appreciation right held by such grantee shall terminate
as of the close of business on the last day on which the grantee
is a
Director of the Corporation; and
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(iii)
Notwithstanding Section 10(D) hereof, following the death of a grantee
during service as a Director of the Corporation, or upon the disability
of
a Director which requires his or her termination as a Director of
the
Corporation, any outstanding stock option and stock appreciation
right
held by the grantee at the time of death or termination as a Director
due
to disability (whether or not vested and exercisable by the grantee
immediately prior to such time) shall vest and be exercisable, in
the case
of death of the grantee, by the Grantee’s Heir or Representative, or, in
the case of disability of the grantee, by the grantee at any time
prior to
the second anniversary of the date on which the grantee ceases to
be a
Director of the Corporation or the expiration date of the stock option
or
stock appreciation right, whichever is the shorter
period.
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Whether
a
resignation of a Director is with or without the consent of the Board and
whether a grantee is disabled shall be determined in each case, in its
discretion, by the Committee and such determination by the Committee shall
be
final and binding.
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(G)
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If
a grantee of a stock option or stock appreciation right engages in
the
operation or management of a business (whether as owner, partner,
officer,
director, employee or otherwise and whether during or after service
as a
Director of the Corporation) which is in competition with the Corporation
or any of its Subsidiaries, or solicits any of the Corporation’s customers
or employees other than for the benefit of the Corporation, the Committee
may immediately terminate all outstanding stock options and stock
appreciation rights held by the grantee; provided, however, that
this
sentence shall not apply if the exercise period of a stock option
or stock
appreciation right following termination of service as a Director
of the
Corporation has been extended as provided in Section 13(c)
hereof. Whether a grantee has engaged in the operation or
management of a business which is in competition with the Corporation
or
any of its Subsidiaries, or solicits any of the Corporation’s customers or
employees other than for the benefit of the Corporation, shall be
determined, in its discretion, by the Committee, and any such
determination by the Committee shall be final and
binding.
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(H)
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All
stock options and stock appreciation rights shall be confirmed by
a
written agreement or an amendment thereto in a form prescribed by
the
Committee, in its discretion. Each agreement or amendment
thereto shall be executed on behalf of the Corporation by the Chief
Executive Officer (if other than the President), the President or
any Vice
President and by the grantee. The provisions of such agreements
need not be identical
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(I)
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In
the event of a Section 13 Event (as defined in Section 13 hereof)
in which
the Corporation’s stockholders receive consideration in exchange for their
shares of Common Stock, the Committee shall have the authority to
require
any outstanding stock option and stock appreciation right to be
surrendered for cancellation by the holder thereof in exchange for
a cash
payment equal to the difference between the Fair Market Value, as
defined
in Section 15 hereof, of the shares of Common Stock subject to the
stock
option or stock appreciation rights on the date of the Section 13
Event
and their option prices and Base Prices, respectively, provided,
however,
that this Section 10(I) shall not apply to the extent its application
would cause the stock options or stock appreciation rights to provide
for
a deferral of compensation within the meaning of Section 409A of
the
Code.
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Subject
to the foregoing provisions of this Section 10 and the other provisions of
the
Plan, any stock option or stock appreciation right granted under the Plan may
be
exercised at such times and in such amounts and be subject to such restrictions
and other terms and conditions, if any, as shall be determined, in its
discretion, by the Committee and set forth in the agreement referred to in
Section 10(H) hereof or an amendment thereto.
SECTION
11
Terms
and Conditions of Restricted Share Awards
(a) Restricted
Share Awards. Restricted share awards shall be evidenced by a
written agreement in a form prescribed by the Committee, in its discretion,
which shall set forth the number of shares of the Common Stock awarded, the
restrictions imposed thereon (including, without limitation, restrictions on
the
right of the awardee to sell, assign, transfer or encumber such shares while
such shares are subject to the other restrictions imposed under this Section
11), the duration of such restrictions, events (which may, in the discretion
of
the Committee, include performance-based events) the occurrence of which would
cause a forfeiture of the restricted shares and such other terms and conditions
as the Committee in its discretion deems appropriate. Restricted
share awards shall be effective only upon execution of the applicable restricted
share agreement on behalf of the Corporation by the Chief Executive Officer
(if
other than the President), the President or any Vice President, and by the
awardee. The provisions of such agreements need not be
identical.
(b) Transfers
to Trusts. Neither this Section 11 nor any other provision of the
Plan shall preclude an awardee from transferring or assigning restricted shares
to (i) the trustee of a trust that is revocable by such awardee alone, both
at
the time of the transfer or assignment and at all times thereafter prior to
such
awardee’s death or (ii) the trustee of any other trust to the extent approved in
advance by the Committee in writing. A transfer or assignment of
restricted shares from such trustee to any person other than such awardee shall
be permitted only to the extent approved in advance by the Committee in writing,
and restricted shares held by such trustee shall be subject to all of the
conditions and restrictions set forth in the Plan and in the applicable
agreement as if such trustee were a party to such agreement.
(c) Default
Vesting Restrictions. Unless otherwise determined by the
Committee, restricted shares awarded to a Director shall be forfeited if the
awardee terminates as a Director of the Corporation within two (2) years
following the grant of such restricted shares due to the voluntary resignation
of the Director without the consent of the Board or the removal of the Director
with cause. Any restricted shares which have not previously vested
shall vest and the restrictions related to service as a Director shall lapse
upon the death of a Director or the disability of a Director which requires
his
or her termination as a Director of the Corporation.
(d) Share
Certificates; Dividends. Following a restricted share award and
prior to the lapse or termination of the applicable restrictions, the share
certificates representing the restricted shares shall be held by the Corporation
in escrow together with related stock powers in blank signed by the
awardee. Except as provided in Section 12 hereof, the Committee, in
its discretion, may determine that dividends and other distributions on the
shares held in escrow shall not be paid to the awardee until the lapse or
termination of the applicable restrictions. Unless otherwise
provided, in its discretion, by the Committee, any such dividends or other
distributions shall not bear interest. Upon the lapse or termination
of the applicable restrictions (and not before such time), the share
certificates representing the restricted shares and unpaid dividends, if any,
shall be delivered to the awardee. From the date a restricted share
award is effective, the awardee shall be a shareholder with respect to all
of
the shares represented by the share certificates for the restricted shares
and
shall have all the rights of a shareholder with respect to the restricted
shares, including the right to vote the restricted shares and to receive all
dividends, and other distributions paid with respect to the restricted shares,
subject only to the preceding provisions of this Section 11(d) and the other
restrictions imposed by the Committee
(e) Competition. If
an awardee of restricted shares engages in the operation of management of a
business (whether as owner, partner, officer, director, employee or otherwise)
which is in competition with the Corporation or any of its Subsidiaries or
solicits any of the Corporation’s customers or employees other than for the
benefit of the Corporation, the Committee may immediately declare forfeited
all
restricted shares held by the awardee as to which the restrictions have not
yet
lapsed. Whether an awardee has engaged in the operation or management
of a business which is in competition with the Corporation or any of its
Subsidiaries or has solicited any of the Corporation’s customers or employees
other than for the benefit of Corporation, shall also be determined, in its
discretion, by the Committee, and any such determination by the Committee shall
be final and binding.
SECTION
12
Adjustment
and Substitution of Shares
(a) Dividends
or Distributions in Common Stock. If a dividend or other
distribution payable in shares of Common Stock shall be declared upon the Common
Stock, the number of shares of Common Stock (i) credited to any Deferred Stock
Compensation Account, (ii) then subject to any outstanding stock options and
stock appreciation rights and (iii) which may be issued or credited under
Section 1 hereof, on the date fixed for determining the stockholders entitled
to
receive such stock dividend or distribution, shall be adjusted by adding thereto
the number of shares of the Common Stock which would have been distributable
thereon if such shares had been outstanding on such date. Shares of
Common Stock so distributed with respect to any restricted shares held in escrow
shall also be held by the Corporation in escrow and shall be subject to the
same
restrictions as are applicable to the restricted shares on which they were
distributed.
(b) Exchanges. If
the outstanding shares of the Common Stock shall, in whole or in part, be
changed into or exchangeable for a different number, or different kind(s) or
class(es) of shares of stock or other securities of the Corporation or another
corporation, or cash or other property, whether through reorganization,
reclassification, recapitalization, stock split-up, combination of shares,
merger, consolidation or otherwise, then (i) there shall be substituted for
each
share of the Common Stock credited to any Deferred Stock Compensation Account,
subject to any then outstanding stock option and stock appreciation right,
and
which may be issued or credited under Section 1 hereof, the number and kind
of
shares of stock or other securities or the cash or property into which each
outstanding share of the Common Stock shall be so changed or for which each
such
share shall be exchangeable, and (ii) the Board shall adopt such amendments
to
the Plan as it deems necessary or desirable to carry out the purposes of the
Plan, including without limitation the continuing deferral of any shares,
securities, cash or other property then credited to any Deferred Stock
Compensation Accounts. Unless otherwise determined by the Committee,
in its discretion, any such stock or securities, as well as any cash or other
property, into or for which any restricted shares held in escrow shall be
changed or exchangeable in any such transaction, shall also be held by the
Corporation in escrow and shall be subject to the same restrictions as are
applicable to the restricted shares in respect of which such stock, securities,
cash or other property was issued or distributed.
(c) Option
Price and Base Price. In case of any adjustment or substitution
as provided for in this Section 12, the aggregate option price and Base Price
for all shares subject to each then outstanding stock option and stock
appreciation right, respectively, prior to such adjustment and substitution
shall be the aggregate option price and Base Price, respectively, for all shares
of stock or other securities (including any fraction) to which such shares
have
been adjusted or which shall have been substituted for such
shares. Any new option price or Base Price per share shall be carried
to at least three decimal places with the last decimal place rounded upwards
to
the nearest whole number.
(d) Other
Events. If the outstanding shares of Common Stock shall be
changed in value by reason of any spin-off, split-off, or dividend in partial
liquidation, dividend in property other than cash or extraordinary distribution
to holders of the Common Stock, (i) the Committee shall make any adjustments
to
the number of shares of Common Stock credited to any Deferred Stock Compensation
Account, and any outstanding stock option or stock appreciation right, which
it
determines are equitably required to prevent dilution or enlargement of the
rights of grantees or the value of those shares of Common Stock credited to
such
Deferred Stock Compensation Account which would otherwise result from any such
transaction, and (ii) unless otherwise determined by the Committee, in its
discretion, any stock, securities, cash or other property distributed with
respect to any restricted shares held in escrow or for which any restricted
shares held in escrow shall be exchanged in any such transaction shall also
be
held by the Corporation in escrow and shall be subject to the same restrictions
as are applicable to the restricted shares in respect of which such stock,
securities, cash or other property was distributed or exchanged.
(e) Fractional
Shares. No adjustment or substitution provided for in this
Section 12 shall require the Corporation to issue or sell a fraction of a share
or other security. Accordingly, all fractional shares or other
securities which result from any such adjustment or substitution shall be
eliminated and not carried forward to any subsequent adjustment or substitution.
Owners of restricted shares held in escrow shall be treated in the same manner
as owners of Common Stock not held in escrow with respect to fractional shares
created by an adjustment or substitution of shares, except that, unless
otherwise determined by the Committee, in its discretion, any cash or other
property paid in lieu of a fractional share shall be subject to restrictions
similar to those applicable to the restricted shares exchanged
therefor.
(f) Limited
Rights. Except as provided in this Section 12, a Director shall
have no rights by reason of any issue by the Corporation of stock of any class
or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend
or any other increase or decrease in the number of shares of stock of any
class.
SECTION
13
Additional
Rights in Certain Events
(a) Definitions. For
purposes of this Section 13, the following terms shall have the following
meaning:
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(1)
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The
term “Person” shall be used as that term is used in Sections 13(d) and
14(d) of the 1934 Act.
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(2)
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“Beneficial
Ownership” shall be determined as provided in Rule 13d-3 under the 1934
Act as in effect on the effective date of the
Plan.
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(3)
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“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 the 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 the Common Stock to elect
Directors by a separate class
vote).
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(4)
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“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.
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(5)
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“Section
13 Event” shall mean the date upon which any of the following events
occurs:
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(i)
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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 20% or
more of
the Voting Power of the
Corporation;
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(ii)
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(a)
A Tender Offer is made to acquire securities of the Corporation entitling
the holders thereof to 20% or more of the Voting Power of the Corporation;
or (b) Voting Shares are first purchased pursuant to any other Tender
Offer;
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(iii)
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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 the 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
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
the Plan or who were so approved;
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(iv)
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The
shareholders of the Corporation shall approve an agreement or plan
providing for the Corporation to be merged, consolidated or otherwise
combined with, or for all or substantially all its assets or stock
to be
acquired by, another corporation, as a consequence of which the former
shareholders of the Corporation will own, immediately after such
merger,
consolidation, combination or acquisition, less than a majority of
the
Voting Power of such surviving or acquiring corporation or the parent
thereof; or
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(v)
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The
shareholders of the Corporation shall approve any liquidation of
all or
substantially all of the assets of the Corporation or any distribution
to
security holders of assets of the Corporation having a value equal
to 10%
or more of the total value of all the assets of the
Corporation;
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provided,
however, that (A) if securities beneficially owned by a grantee are included
in
determining the Beneficial Ownership of a Person referred to in paragraph 5(i)
hereof or (B) a grantee is required to be named pursuant to Item 2 of the
Schedule 14D-1 (or any similar successor filing requirement) required to be
filed by the bidder making a Tender Offer referred to in paragraph 5(ii), then
no Section 13 Event with respect to such grantee shall be deemed to have
occurred by reason of such event.
(b) Acceleration
of the Exercise Date of Stock Options and Stock Appreciation
Rights. Unless the agreement referred to in Section 10(H) hereof,
or an amendment thereto, shall otherwise provide, notwithstanding any other
provision contained in the Plan, in case any Section 13 Event occurs all
outstanding stock options and stock appreciation rights shall become immediately
and fully exercisable whether or not otherwise exercisable by their
terms.
(c) Extension
of the Expiration Date of Stock Options and Stock Appreciation
Rights. Unless the agreement referred to in Section 10(H) hereof,
or an amendment thereto, shall otherwise provide, notwithstanding any other
provision contained in the Plan, all stock options and stock appreciation rights
held by a grantee whose service with the Corporation as a Director terminates
within one year of any Section 13 Event for any reason shall be exercisable
for
the longer of (i) a period of three months from the date of such termination
of
service or (ii) the period specified in Section 10(F) hereof, but in no event
after the expiration date of the stock option or stock appreciation
right.
(d) Lapse
of Restrictions on Restricted Share Awards. Unless the agreement
referred to in Section 11 hereof, or an amendment thereto, shall otherwise
provide, notwithstanding any other provision contained in the Plan, if any
Section 13 Event occurs prior to the scheduled lapse of all restrictions
applicable to restricted share awards under the Plan, all such restrictions
shall lapse upon the occurrence of any such Section 13 Event regardless of
the
scheduled lapse of such restrictions.
SECTION
14
Administration
of Plan; Hardship Withdrawal
Except
where the terms of the Plan specifically grant authority to the Committee of
the
Board or where the Board delegates authority to the Committee, full power and
authority to construe, interpret, and administer the Plan shall be vested in
the
Board. Decisions of the Committee and the Board shall be final,
conclusive, and binding upon all parties. Notwithstanding the terms
of a Stock Deferral Election or a Meeting Fee Deferral Election made by a
Director hereunder, the Committee may, in its sole discretion, permit the
withdrawal of shares credited to a Deferred Stock Compensation Account with
respect to Director Fees or Meeting Fees previously payable upon the request
of
a Director or the Director's representative, or following the death of a
Director upon the request of a Director's Beneficiary or such beneficiary's
representative, if the Board determines that the Director or the Director's
Beneficiary, as the case may be, is confronted with an unforeseeable
emergency. For this purpose, an unforeseeable emergency means a
severe financial hardship to the Director or the Director’s Beneficiary
resulting from an illness or accident of the Director or the Director’s
Beneficiary, the spouse, or a dependent (as defined in Section 152(a) of the
Code) of the Director or the Director’s Beneficiary, loss of the Director or the
Director’s Beneficiary’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Director or the Director’s Beneficiary. The
Director or the Director's Beneficiary shall provide to the Committee evidence
as the Committee, in its discretion, may require to demonstrate such emergency
exists and financial hardship would occur if the withdrawal were not
permitted. The withdrawal shall be limited to the amounts necessary
to satisfy such emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Director or
the
Director’s Beneficiary’s assets (to the extent the liquidation of such assets
would not itself cause severe financial hardship). Cash needs arising
from foreseeable events, such as the purchase or building of a house or
education expenses, will not be considered to be the result of an unforeseeable
financial emergency. Payment shall be made, as soon as practicable
after the Committee approves the payment and determines the number of shares
which shall be withdrawn, in a single lump sum from the portion of the Deferred
Stock Compensation Account with the longest number of installment payments
first. No Director shall participate in any decision of the Committee
regarding such Director's request for a withdrawal under this Section
14.
SECTION
15
Fair
Market Value
Fair
Market Value of the Common Stock shall be the mean between the following prices,
as applicable, for the date as of which Fair Market Value is to be determined
as
quoted in The Wall Street Journal (or in any other reliable publication
as the Board of the Corporation or its delegate, in its discretion, may
determine to rely upon):
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(a) if
the Common Stock is listed on the New York Stock Exchange, the highest
and
lowest sales prices per share of the Common Stock as quoted in the
NYSE-Composite Transactions listing for such
date;
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(b)
if the Common Stock is not listed on such exchange, the highest and
lowest
sales prices per share of Common Stock for such date on (or on any
composite index including) the principal United States securities
exchange
registered under the Securities Exchange Act of 1934, as amended
(the
"1934 Act") on which the Common Stock is listed;
or
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(c)
if the Common Stock is not listed on any such exchange, the highest
and
lowest sales prices per share of the Common Stock for such date on
the
National Association of Securities Dealers Automated Quotations System
or
any successor system then in use
("NASDAQ").
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If
there
are no such sale price quotations for the date as of which Fair Market Value
is
to be determined but there are such sale price quotations within a reasonable
period both before and after such date, then Fair Market Value shall be
determined by taking a weighted average of the means between the highest and
lowest sales prices per share of the Common Stock as so quoted on the nearest
date before and the nearest date after the date as of which Fair Market Value
is
to be determined. The average should be weighted inversely by the
respective numbers of trading days between the selling dates and the date as
of
which Fair Market Value is to be determined. If there are no such
sale price quotations on or within a reasonable period both before and after
the
date as of which Fair Market Value is to be determined, then Fair Market Value
of the Common Stock shall be the mean between the bona fide bid and asked prices
per share of Common Stock as so quoted for such date on NASDAQ, or if none,
the
weighted average of the means between such bona fide bid and asked prices on
the
nearest trading date before and the nearest trading date after the date as
of
which Fair Market Value is to be determined, if both such dates are within
a
reasonable period. The average is to be determined in the manner
described above in this Section 15. If the Fair Market Value of the
Common Stock cannot be determined on the basis previously set forth in this
Section 15 on the date as of which Fair Market Value is to be determined, the
Board or its delegate shall in good faith determine the Fair Market Value of
the
Common Stock on such date. Fair Market Value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
SECTION
16
Securities
Laws; Issuance of Shares
The
obligation of the Corporation to
issue or credit shares of Common Stock under the Plan shall be subject
to:
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(i)
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the
effectiveness of a registration statement under the Securities Act
of
1933, as amended, with respect to such shares, if deemed necessary
or
appropriate by counsel for the
Corporation;
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(ii)
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the
condition that the shares shall have been listed (or authorized for
listing upon official notice of issuance) upon each stock exchange,
if
any, on which the Common Stock shares may then be listed;
and
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(iii)
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all
other applicable laws, regulations, rules and orders which may then
be in
effect.
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If,
on
the date on which any shares of Common Stock would be issued pursuant to a
current stock payment under Section 3(a) hereof or credited to a Deferred Stock
Compensation Account and after consideration of any shares of Common Stock
subject to outstanding stock options and stock appreciation rights and awards
of
restricted shares, sufficient shares of Common Stock are not available under
the
Plan or the Corporation is not obligated to issue shares pursuant to this
Section 16, then no shares of Common Stock shall be issued or credited but
rather, in the case of a current stock payment under Section 3(a) hereof, cash
shall be paid in payment of the Director Fees payable, and in the case of a
Deferred Stock Compensation Account, Director Fees, Meeting Fees and dividends,
if applicable, which would otherwise have been credited in shares of Common
Stock, shall be credited in cash to a deferred cash compensation
account in the name of the Director. The Board shall adopt
appropriate rules and regulations to carry out the intent of the immediately
preceding sentence if the need for such rules and regulations
arises.
.
SECTION
17
Governing
Law; Integration
The
provisions of this Plan shall be interpreted and construed in accordance with
the laws of the Commonwealth of Pennsylvania. The Plan contains all
of the understandings and representations between the Corporation and any of
the
Directors and supersedes any prior understandings and agreements entered into
between them regarding the subject matter of the Plan. There are no
representations, agreements, arrangements or understandings, oral or written,
between the Corporation and any of the Directors relating to the subject matter
of the Plan which are not fully expressed in the Plan.
SECTION
18
Effect
of the Plan on the
Rights
of Corporation and Shareholders
Nothing
in the Plan or in any stock option, stock appreciation right or restricted
share
award under the Plan or in any agreement providing for any of the foregoing
or
any amendment thereto shall confer any right to any person to continue as a
Director of the Corporation or interfere in any way with the rights of the
shareholders of the Corporation or the Board to elect and remove
Directors.
SECTION
19
Amendment
and Termination
(a) General. The
right to amend the Plan at any time and from time to time and the right to
terminate the Plan at any time are hereby specifically reserved to the Board;
provided that no amendment of the Plan shall:
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(i)
be made without shareholder approval if shareholder approval of the
amendment is at the time required by the rules of the NASDAQ National
Market System or any stock exchange on which the Common Stock may
then be
listed; or
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(ii)
otherwise amend the Plan in any manner that would cause the shares
of
Common Stock issued or credited under the Plan not to qualify for
the
exemption from Section 16(b) of the 1934 Act provided by Rule
16b-3.
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No
amendment or termination of the Plan shall, without the written consent of the
holder of shares of Common Stock issued or credited under the Plan or the holder
of a stock option, stock appreciation right or restricted shares theretofore
granted or awarded under the Plan, adversely affect the rights of such holder
with respect thereto.
(b) Rule
16b-3. Notwithstanding anything contained in the preceding
paragraph or any other provision of the Plan, the Board shall have the power
to
amend the Plan in any manner deemed necessary or advisable for shares of Common
Stock issued or credited under the Plan to qualify for the exemption provided
by
Rule 16b-3 (or any successor rule relating to exemption from Section 16(b)
of
the 1934 Act), and any such amendment shall, to the extent deemed necessary
or
advisable by the Board, be applicable to any outstanding shares of Common Stock
theretofore issued or credited under the Plan.
(c) Termination
Date. Notwithstanding any other provision of the
Plan:
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(i)
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no
shares of Common Stock shall be issued or credited on a Payment Date
under
the Plan after November 15, 2014;
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(ii)
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no
shares of Common Stock shall be credited with respect to Meeting
Fees
payable under the Plan after November 15,
2014;
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(iii)no
stock option or stock appreciation right shall be granted under the
Plan
after November 15, 2014; and
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(iv)no
restricted shares shall be awarded under the Plan after November
15,
2014.
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SECTION
20
Effective
Date
The
effective date and date of adoption of the Plan shall be December 9, 1994,
the
date of adoption of the Plan by the Board.