Exhibit
10.1
MATTHEWS
INTERNATIONAL CORPORATION
1992
STOCK INCENTIVE PLAN
(as
amended through April 25, 2006)
The
purposes of the 1992 Stock Incentive Plan (as amended, the "Plan") are to
encourage eligible employees of Matthews International Corporation (the
"Corporation") and its Subsidiaries to increase their efforts to make the
Corporation and each Subsidiary more successful, to provide an additional
inducement for such employees to remain with the Corporation or a Subsidiary,
to
reward such employees by providing an opportunity to acquire shares of the
Class
A Common Stock, par value $1.00 per share, of the Corporation (the "Class A
Common Stock") and the Class B Common Stock, par value $1.00 per share, of
the
Corporation (the "Class B Common Stock") on favorable terms and to provide
a
means through which the Corporation may attract able persons to enter the employ
of the Corporation or one of its Subsidiaries. As used herein, except where
the
context otherwise so requires, the term "Common Stock" shall mean both the
Class
A Common Stock and the Class B Common Stock. For the 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 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.
SECTION
1
Administration
The
Plan
shall be administered by a Committee (the "Committee") appointed by the Board
of
Directors of the Corporation (the "Board") and consisting of not less than
two
members of the Board, who, at the time of their appointment to the Committee
and
at all times during their service as members of the Committee, are
(i) "Non-Employee Directors" as then defined under Rule 16b-3 under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any
successor rule, and (ii) "outside directors" under
Section 162(m)(4)(C) of the Internal Revenue Code of 1986 (the "Code"), or
any successor provision.
The
Committee shall interpret the Plan and prescribe such rules, regulations and
procedures in connection with the operations of the Plan as it shall deem to
be
necessary and advisable for the administration of the Plan consistent with
the
purposes of the Plan.
The
Committee shall keep records of action taken at its meetings. A majority of
the
Committee shall constitute a quorum at any meeting and the acts of a majority
of
the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be the acts of the
Committee.
SECTION
2
Eligibility
Those
employees of the Corporation or any Subsidiary (including, but not limited
to,
covered employees as defined in Section 162(m)(3) of the Code, or any
successor provision) who share responsibility for the management, growth or
protection of the business of the Corporation or any Subsidiary shall be
eligible to be granted stock options (with or without cash payment rights)
and
to receive restricted share awards as described herein.
Subject
to the provisions of the Plan, the Committee shall have full and final
authority, in its discretion, to grant stock options (with or without cash
payment rights) and to award restricted shares as described herein, to determine
whether Class A Common Stock or Class B Common Stock shall be issued, and to
determine the employees to whom any such grant or award shall be made and the
number of shares to be covered thereby. In determining the eligibility of any
employee, as well as in determining the number of shares covered by each grant
of a stock option or award of restricted shares and whether cash payment rights
shall be granted in conjunction with a stock option, the Committee shall
consider the position and the responsibilities of the employee being considered,
the nature and value to the Corporation or a Subsidiary of his or her services,
his or her present and/or potential contribution to the success of the
Corporation or a Subsidiary and such other factors as the Committee may deem
relevant.
SECTION
3
Shares
Available under the Plan
The
maximum aggregate number of shares of the Common Stock for which grants of
stock
options or awards of restricted shares may be made under the Plan on any given
date shall be equal to 15% of the then aggregate issued and outstanding shares
of the Common Stock (not including treasury shares, but including outstanding
restricted shares), less the aggregate number of (i) all outstanding stock
options granted at any time under the Plan since the initial date of adoption
of
the Plan, which remain unexercised and outstanding (and which have not expired)
as of such date and (ii) all restricted shares granted at any time under
the Plan which have not yet vested or been forfeited to the Corporation pursuant
to their terms as of such date, subject to adjustment and substitution as set
forth in Section 8, and shares of the Common Stock may be issued with respect
to
any such grants or awards, provided that the Corporation has authorized but
unissued shares which are reserved at the time of any such grant or award and
are available and unissued at the time of any such issuance equal to or greater
than the number of shares to be so issued. Stated differently, as any
outstanding stock options granted under the Plan are either exercised,
cancelled, terminated or expire for any reason without being exercised, or
any
restricted shares granted under the Plan are either vested (all restrictions
lapse) or forfeited for any reason, the number of shares subject or related
to
such stock options or restricted shares shall again be available for grant
or
award under the Plan.
Notwithstanding
the immediately prior paragraph, the maximum aggregate number of shares of
the
Common Stock which may be issued and as to which grants of incentive stock
options or awards of restricted shares may be made under the Plan is 2,400,000
shares and 500,000 shares, respectively, subject to adjustment and substitution
as set forth in Section 8. If any such incentive stock option granted under
the
Plan and counted against such sub-limit is cancelled by mutual consent or
terminates or expires for any reason without having been exercised, the number
of shares subject thereto shall again be available for purposes of granting
incentive stock options under the Plan. If any shares of the Common Stock are
forfeited to the Corporation pursuant to the restrictions applicable to
restricted shares awarded under the Plan and counted against such sub-limit,
the
number of shares so forfeited shall again be available for purposes of awarding
restricted shares under the Plan.
To
the
extent that the Corporation has such shares available to it and can issue such
shares without violating any law or regulation, including without limitation
the
By-laws of the National Association of Securities Dealers, Inc. concerning
disenfranchisement of shareholders, the Corporation will reserve for issuance
upon the grant of any option and issue when such option is exercised and will
issue upon the award of restricted shares Class B Common Stock of the
Corporation. To the extent Class B Common Stock is not available for
reservation at the time of grant or issuance at the time of award, the
Corporation retains the right to reserve for issuance and to issue Class A
Common Stock and not Class B Common Stock. The shares which may be issued
under the Plan may be either 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.
SECTION
4
Grant
of Stock Options and Cash Payment Rights
and
Awards of Restricted Shares
The
Committee shall have authority, in its discretion, (a) to grant "incentive
stock
options" pursuant to Section 422 of the Code, to grant "nonstatutory stock
options" (i.e., stock options which do not qualify under Sections 422 or 423
of
the Code) or to grant both types of stock options (but not in tandem) and (b)
to
award restricted shares. The Committee also shall have the authority, in its
discretion, to grant cash payment rights in conjunction with nonstatutory stock
options with the effect provided in Section 5(D). Cash payment rights may not
be
granted in conjunction with incentive stock options. Cash payment rights granted
in conjunction with a nonstatutory stock option may be granted either at the
time the stock option is granted or at any time thereafter during the term
of
the stock option.
The
maximum number of shares as to which stock options may be granted and as to
which shares may be awarded under the Plan to any one employee in any one
calendar year is 250,000 shares, subject to adjustment and substitution as
set
forth in Section 8. For the purposes of this limitation, any adjustment or
substitution made pursuant to Section 8 in a calendar year with respect to
the maximum number of shares set forth in the preceding sentence shall also
be
made with respect to any shares subject to stock options or share awards
previously granted under the Plan to such employee in the same calendar
year.
Notwithstanding
any other provision contained in the Plan or in any stock option agreement
or an
amendment thereto, but subject to the possible exercise of the Committee's
discretion contemplated in the last sentence of this Section 4, the aggregate
fair market value, determined as provided in Section 5(H) on the date of grant
of incentive stock options, of the shares with respect to which such incentive
stock options are exercisable for the first time by an employee during any
calendar year under all plans of the corporation employing such employee, any
parent or subsidiary corporation of such corporation and any predecessor
corporation of any such corporation shall not exceed $100,000. If the date
on
which one or more incentive stock options could first be exercised would be
accelerated pursuant to any provision of the Plan or any stock option agreement
or an amendment thereto, and the acceleration of such exercise date would result
in a violation of the $100,000 restriction set forth in the preceding sentence,
then, notwithstanding any such provision, but subject to the provisions of
the
next succeeding sentence, the exercise dates of such incentive stock options
shall be accelerated only to the extent, if any, that does not result in a
violation of such restriction and, in such event, the exercise dates of the
incentive stock options with the lowest option prices shall be accelerated
to
the earliest such dates. The Committee may, in its discretion, authorize the
acceleration of the exercise date of one or more incentive stock options even
if
such acceleration would violate the $100,000 restriction set forth in the first
sentence of this paragraph and even if one or more such incentive stock options
are thereby converted in whole or in part to nonstatutory stock options.
SECTION
5
Terms
and Conditions of Stock Options
and
Cash Payment Rights
Stock
options and cash payment rights granted under the Plan shall be subject to
the
following terms and conditions:
(A)
The
purchase price at which each stock option may be exercised (the "option 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 on the date of grant,
except that in the case of an incentive stock option granted to an employee
who,
immediately prior to such grant, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation or any Subsidiary (a "Ten Percent Employee"), the option price
shall
not be less than one hundred ten percent (110%) of such fair market value on
the
date of grant. For purposes of this Section 5(A), the fair market value of
the
Common Stock shall be determined as provided in Section 5(H). For purposes
of
this Section 5(A), an individual (i) shall be considered as owning not only
shares of stock owned individually but also all shares of stock that are at
the
time owned, directly or indirectly, by or for the spouse, ancestors, lineal
descendants and brothers and sisters (whether by the whole or half blood) of
such individual and (ii) shall be considered as owning proportionately any
shares owned, directly or indirectly, by or for any corporation, partnership,
estate or trust in which such individual is a stockholder, partner or
beneficiary.
(B)
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 at the time of grant in the case of an incentive stock option, or
at
any time in the case of a nonstatutory stock option) 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 5(H), 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. Payment of the option price with shares
shall not increase the number of shares of the Common Stock which may be issued
under the Plan as provided in Section 3.
(C)
Unless the Committee, in its discretion, shall otherwise determine, stock
options shall be exercisable by a grantee during employment commencing on the
date of grant. Subject to the terms of Section 5(F) providing for earlier
termination of a stock option, no stock option shall be exercisable after the
expiration of ten years (five years in the case of an incentive stock option
granted to a Ten Percent Employee) from the date of grant. Unless the Committee,
in its discretion, shall otherwise determine, a stock option to the extent
exercisable at any time may be exercised in whole or in part.
(D)
Cash
payment rights granted in conjunction with a nonstatutory stock option shall
entitle the person who is entitled to exercise the stock option, upon exercise
of the stock option or any portion thereof, to receive cash from the Corporation
(in addition to the shares to be received upon exercise of the stock option)
equal to such percentage as the Committee, in its discretion, shall determine
not greater than one hundred percent (100%) of the excess of the fair market
value of a share of the Common Stock covered by the stock option on the date
of
exercise of the stock option over the option price per share of the stock option
times the number of shares covered by the stock option, or portion thereof,
which is exercised. Payment of the cash provided for in this Section 5(D)
shall be made by the Corporation as soon as practicable after the time the
amount payable is determined. For purposes of this Section 5(D), the fair
market value of the Common Stock shall be determined as provided in
Section 5(H).
(E)
Unless the Committee, in its discretion, shall otherwise determine in the case
of nonstatutory stock options, (i) no stock option shall be transferable by
the grantee otherwise than by Will, or 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, and (ii) all stock options shall be exercisable during the
lifetime of the grantee only by the grantee.
(F)
Unless the Committee, in its discretion, shall otherwise determine but subject
to the provisions of Section 4 in the case of incentive stock
options:
(i)
If
the employment of a grantee who is not disabled within the meaning of Section
422(c)(6) of the Code (a "Disabled Grantee") is voluntarily terminated with
the
consent of the Corporation or a Subsidiary or a grantee retires under any
retirement plan of the Corporation or a Subsidiary, any then outstanding
incentive stock option held by such grantee shall be exercisable by the grantee
(but only to the extent exercisable by the grantee immediately prior to the
termination of employment) at any time prior to the expiration date of such
incentive stock option or within three months after the date of termination
of
employment, whichever is the shorter period;
(ii)
If
the employment of a grantee who is not a Disabled Grantee is voluntarily
terminated with the consent of the Corporation or a Subsidiary or a grantee
retires under any retirement plan of the Corporation or a Subsidiary, any then
outstanding nonstatutory stock option held by such grantee shall be exercisable
by the grantee (but only to the extent exercisable by the grantee immediately
prior to the termination of employment) at any time prior to the expiration
date
of such nonstatutory stock option or within one year after the date of
termination of employment, whichever is the shorter period;
(iii)
If
the employment of a grantee who is a Disabled Grantee is voluntarily terminated
with the consent of the Corporation or a Subsidiary, any then outstanding stock
option held by such grantee shall be exercisable in full (whether or not so
exercisable by the grantee immediately prior to the termination of employment)
by the grantee at any time prior to the expiration date of such stock option
or
within one year after the date of termination of employment, whichever is the
shorter period;
(iv)
Following the death of a grantee during employment, any outstanding stock option
held by the grantee at the time of death shall be exercisable in full (whether
or not so exercisable by the grantee immediately prior to the death of the
grantee) 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
shall die intestate, by the legal representative of the grantee at any time
prior to the expiration date of such stock option or within one year after
the
date of death, whichever is the shorter period;
(v)
Following the death of a grantee after termination of employment during a period
when a stock option is exercisable, any outstanding stock option held by the
grantee at the time of death shall be exercisable by such person entitled to
do
so under the Will of the grantee or by such legal representative (but only
to
the extent the stock option was exercisable by the grantee immediately prior
to
the death of the grantee) at any time prior to the expiration date of such
stock
option or within one year after the date of death, whichever is the shorter
period; and
(vi)
Unless the exercise period of a stock option following termination of employment
has been extended as provided in Section 9(C), if the employment of a grantee
terminates for any reason other than voluntary termination with the consent
of
the Corporation or a Subsidiary, retirement under any retirement plan of the
Corporation or a Subsidiary or death, all outstanding stock options held by
the
grantee at the time of such termination of employment shall automatically
terminate.
Whether
termination of employment is a voluntary termination with the consent of the
Corporation or a Subsidiary and whether a grantee is a Disabled Grantee shall
be
determined in each case, in its discretion, by the Committee and any such
determination by the Committee shall be final and binding.
If
a
grantee of a stock option engages in the operation or management of a business
(whether as owner, partner, officer, director, employee or otherwise and whether
during or after termination of employment) which is in competition with the
Corporation or any of its Subsidiaries, the Committee may immediately terminate
all outstanding stock options held by the grantee; provided, however, that
this
sentence shall not apply if the exercise period of a stock option following
termination of employment has been extended as provided in Section 9(C).
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 shall also
be
determined, in its discretion, by the Committee, and any such determination
by
the Committee shall be final and binding.
(G)
All
stock options 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 agreement confirming a stock option shall
specify whether the stock option is an incentive stock option or a nonstatutory
stock option. The provisions of such agreements need not be
identical.
(H)
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
such other reliable publication as the Committee, in its discretion, may
determine to rely upon): (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, (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 1934 Act
on
which the Common Stock is listed or (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"). 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
5(H). If the fair market value of the Common Stock cannot be determined on
the
basis previously set forth in this Section 5(H) on the date as of which fair
market value is to be determined, the Committee 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.
Subject
to the foregoing provisions of this Section and the other provisions of the
Plan, any stock option 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 5(G) or an amendment
thereto.
SECTION
6
Terms
and Conditions of
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 grantee to sell, assign, transfer
or encumber such shares while such shares are subject to other restrictions
imposed under this Section 6), 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. Awards
of restricted shares shall be effective on the date determined, in its
discretion, by the Committee.
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 grantee. Except as provided in Section 8, 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 grantee shall be a shareholder
with respect to all 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 paragraph
and the other restrictions imposed by the Committee.
If
an
awardee of restricted shares engages in the operation or management of a
business (whether as owner, partner, officer, director, employee or otherwise
and whether during or after termination of employment) which is in competition
with the Corporation or any of its Subsidiaries, 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 shall also be determined, in its
discretion, by the Committee, and any such determination by the Committee shall
be final and binding.
Neither
this Section 6 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.
SECTION
7
Issuance
of Shares
The
obligation of the Corporation to issue shares of the Common Stock under the
Plan
shall be subject to (i) 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, (ii) 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 shares of
Common Stock may then be listed and (iii) all other applicable laws,
regulations, rules and orders which may then be in effect.
SECTION
8
Adjustment
and Substitution of Shares
If
a
dividend or other distribution shall be declared upon the Common Stock payable
in shares of the Common Stock, the number of shares of the Common Stock then
subject to any outstanding stock options, the maximum aggregate number of shares
as to which incentive stock options may be granted and as to which restricted
shares may be awarded under Section 3 of the Plan, and the maximum number
of shares as to which stock options may be granted and as to which shares may
be
awarded to any employee under Section 4 of the Plan 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.
If
the
outstanding shares of the Common Stock shall be changed into or exchangeable
for
a different number or kind of shares of stock or other securities of the
Corporation or another corporation, whether through reorganization,
reclassification, recapitalization, stock split-up, combination of shares,
merger or consolidation or otherwise, then there shall be substituted for each
share of the Common Stock subject to any then outstanding stock option, for
each
share of the Common Stock set forth in the first sentence of Section 3 of
the Plan, for the maximum aggregate number of shares as to which incentive
stock
options may be granted and as to which restricted shares may be awarded under
Section 3 of the Plan, and for the maximum number of shares as to which
stock options may be granted and as to which shares may be awarded to any
employee under Section 4 of the Plan the number and kind of shares of stock
or other securities into which each outstanding share of the Common Stock shall
be so changed or for which each such share shall be exchangeable. 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.
In
case
of any adjustment or substitution as provided for in this Section 8, the
aggregate option price for all shares subject to each then outstanding stock
option prior to such adjustment or substitution shall be the aggregate option
price for all shares of stock or other securities (including any fraction)
to
which such shares shall have been adjusted or which shall have been substituted
for such shares. Any new option price per share shall be carried to at least
three decimal places with the last decimal place rounded upwards to the nearest
whole number.
If
the
outstanding shares of the Common Stock shall be changed in value by reason
of
any spin-off, split-off or split-up, 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 any then
outstanding stock option which it determines are equitably required to prevent
dilution or enlargement of the rights of grantees 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.
No
adjustment or substitution provided for in this Section 8 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.
If
any
such adjustment or substitution provided for in this Section 8 requires the
approval of shareholders in order to enable the Corporation to grant incentive
stock options or to comply with Section 162(m) of the Code, then no such
adjustment or substitution shall be made without the required shareholder
approval. Notwithstanding the foregoing, in the case of incentive stock options,
if the effect of any such adjustment or substitution would be to cause the
stock
option to fail to continue to qualify as an incentive stock option or to cause
a
modification, extension or renewal of such stock option within the meaning
of
Section 424 of the Code, the Committee may determine that such adjustment or
substitution not be made but rather shall use reasonable efforts to effect
such
other adjustment of each then outstanding stock option as the Committee, in
its
discretion, shall deem equitable and which will not result in any
disqualification, modification, extension or renewal (within the meaning of
Section 424 of the Code) of such incentive stock option.
Except
as
provided in this Section 8, a grantee 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
9
Additional
Rights in Certain Events
(A)
Definitions.
For
purposes of this Section 9, the following terms shall have the following
meaning:
(1)
The
term "Person" shall be used as that term is used in Section 13(d) and 14(d)
of
the 1934 Act.
(2)
"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.
(3)
"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).
(4)
"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.
(5)
"Section 9 Event" shall mean the date upon which any of the following events
occurs:
(a)
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;
(b)(i)
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 (ii)
Voting Shares are first purchased pursuant to any other Tender Offer;
(c)
At
any time less than 60% of the members of the Board of Directors shall be
individuals who were either (i) Directors on the effective date of the Plan
or
(ii) 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 Directors) 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;
(d)
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
(e)
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;
provided,
however, that (i) if securities beneficially owned by a grantee are
included in determining the Beneficial Ownership of a Person referred to in
paragraph 5(a) or (ii) a grantee is required to be named pursuant
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(b), then no Section 9 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.
Subject
to the provisions of Section 4 in the case of incentive stock options, unless
the agreement referred to in Section 5(G), or an amendment thereto, shall
otherwise provide, notwithstanding any other provision contained in the Plan,
in
case any Section 9 Event occurs all outstanding stock options shall become
immediately and fully exercisable whether or not otherwise exercisable by their
terms.
(C)
Extension of the Expiration Date of Stock Options.
Subject
to the provisions of Section 4 in the case of incentive stock options, unless
the agreement referred to in Section 5(G), or an amendment thereto, shall
otherwise provide, notwithstanding any other provision contained in the Plan,
all stock options held by a grantee whose employment with the Corporation or
a
Subsidiary terminates within one year of any Section 9 Event for any reason
other than voluntary termination with the consent of the Corporation or a
Subsidiary, retirement under any retirement plan of the Corporation or a
Subsidiary or death shall be exercisable for a period of three months from
the
date of such termination of employment, but in no event after the expiration
date of the stock option.
(D)
Lapse
of Restrictions on Restricted Share Awards.
Unless
the agreement referred to in Section 6, or an amendment thereto, shall otherwise
provide, notwithstanding any other provision contained in the Plan, if any
Section 9 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 9 Event regardless of the
scheduled lapse of such restrictions.
SECTION
10
Effect
of the Plan on the Rights of Employees and Employer
Neither
the adoption of the Plan nor any action of the Board or the Committee pursuant
to the Plan shall be deemed to give any employee any right to be granted a
stock
option (with or without cash payment rights) or to be awarded restricted shares
under the Plan. Nothing in the Plan, in any stock option or cash payment rights
granted under the Plan, in any restricted share award under the Plan or in
any
agreement providing for any of the foregoing or amendment thereto shall confer
any right to any employee to continue in the employ of the Corporation or any
Subsidiary or interfere in any way with the rights of the Corporation or any
Subsidiary to terminate the employment of any employee at any time or adjust
the
compensation of any employee at any time.
SECTION
11
Amendment
or Termination
The
right
to amend the Plan at any time and from time to time and the right to terminate
the Plan are hereby specifically reserved to the Board; provided that no such
amendment of the Plan shall, without shareholder approval (a) increase the
maximum aggregate number of shares for which grants of stock options or awards
of restricted shares may be made under the first sentence of Section 3 of
the Plan, (b) increase the maximum aggregate number of shares as to which
incentive stock options may be granted or as to which restricted shares may
be
awarded under Section 3 of the Plan, (c) make any changes in the class
of employees eligible to receive options or awards under the Plan,
(d) change the maximum number of shares as to which stock options may be
granted and as to which shares may be awarded to any employee under
Section 4 of the Plan, (e) change the option price permitted under
Section 5(A) of the Plan, or (f) be made if shareholder approval of
the amendment is at the time required for stock options or restricted shares
under the Plan to qualify for the exemption from Section 16(b) of the 1934
Act
provided by Rule 16b-3 or by the rules of the NASDAQ National Market System
or any stock exchange on which the Common Stock may then be listed. No amendment
or termination of the Plan shall, without the written consent of the holder
of a
stock option, cash payment rights or restricted shares theretofore granted
or
awarded under the Plan, adversely affect the rights of such holder with respect
thereto.
SECTION
12
Effective
Date and Duration of Plan
The
effective date and date of adoption of the Plan shall be May 8, 1992, the
date of adoption of the Plan by the Board, and the effective date of the
amendments to the Plan adopted by the Board on December 23, 1998 shall be
December 23, 1998, provided that such amendments are approved by a majority
of the votes cast at a meeting of shareholders duly called, convened and held
on
or prior to December 22, 1999, at which a quorom representing a majority of
the
outstanding voting stock of the Corporation is, either in person or by proxy,
present and voting on the Plan. No stock option granted under the Plan on or
after December 23, 1998 may be exercised until after such approval and any
restricted shares awarded under the Plan shall be forfeited to the Corporation
on December 22, 1999 if such approval has not been obtained on or prior to
that
date;
provided
,
that
the foregoing shall not apply to stock options granted or restricted shares
awarded with shares which were available under the Plan prior to the amendment
of the Plan on December 23, 1998. No stock option or cash payment rights
may be granted and no restricted shares may be awarded under the Plan subsequent
to December 22, 2008.
Exhibit
10.2
MATTHEWS
INTERNATIONAL CORPORATION
1994
DIRECTOR FEE PLAN,
as
amended through April 25, 2006
SECTION
1
Purposes;
Reservation of Shares
(a)
Purposes
.
The
purposes of the 1994 Director Fee Plan, as amended through April 25, 2006 (the
"Plan") are:
(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 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;
(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 for:
|
(a)
|
fees
paid for attendance at meetings of the Board ("Board Meeting
Fees");
|
|
(b)
|
fees
paid to Directors for attendance at meetings of Committees of the Board
("Committee Meeting Fees");
|
|
(c)
|
annual
retainer fees paid to the Chairperson of a Committee ("Committee
Chairperson Retainer Fees");
|
|
(d)
|
annual
retainer fees paid to the Lead Director of the Board of Directors (“Lead
Director Fee”); and
|
|
(e)
|
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
|
(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 (15
th
)
business day after the annual shareholders’ meeting of the Corporation.
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
500,000 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:
(i)
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) (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
(ii)
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).
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 the Director files such
Notice of Election within ten (10) business days subsequent to being elected
or
re-elected as a Director. 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 2005 annual meeting of the shareholders
of the Corporation (the “2005 Annual Meeting Date”), each Director 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):
|
Board
Meeting Fees:
|
$1,500
for attendance at each meeting
|
|
Committee
Meeting Fees:
|
$1,000
for attendance at each meeting
|
|
Committee
Chairperson Retainer Fees:
|
$2,000
(or $3,500 in the case of the Audit Committee Chairperson) for a
year of
service as a Committee Chairperson
|
|
Lead
Director Fees (effective after 2006 Annual meeting):
|
$5,000
for a year of service as the Lead Director.
|
|
Shareholders'
Meeting Fees:
|
$1,500
for attendance at each meeting
|
(The
amount and payment of Meeting Fees for meetings prior to the 2005 Annual Meeting
Date shall be governed by the provisions of this Section 4(a) as in effect
prior
to the amendment of this Plan in November, 2004.) 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 (15
th
)
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 with respect to meetings and, if applicable,
Committee Chairperson Retainer Fees or Lead Director Fees payable after the
time
of a person's initial election, or any subsequent re-election, to the office
of
Director 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 ceases 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:
|
(i)
|
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)
|
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.
|
The
provisions of this Section 6(b) are intended to comply with Section 409A(4)(C)
of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor
section, and shall be interpreted consistently therewith.
(c)
Section
13 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 13 Event, as defined below (a “Section 13 Event
Election”), provided, however, that such Section 13 Event Election shall be
effective if and only if (i) such Section 13 Event 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 (ii) payment at the time of such Section
13
Event otherwise satisfies all requirements of Section 409A of the Code or any
successor section. If such requirements are not satisfied with respect to such
Section 13 Event, such Section 13 Event Election shall be void and without
effect as to such Section 13 Event and payment of shares then credited to the
Director’s Deferred Stock Compensation Account shall be made in accordance with
Sections 6(a) or 6(b) hereof (or, if this Section 6(c) later becomes applicable,
upon another Section 13 Event). A Section 13 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 the Director
files such Section 13 Event Election within ten (10) business days subsequent
to
being elected or re-elected as a Director. A Director may terminate a Section
13
Event Election only by filing a Notice of Termination of Section 13 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 13 Event Election is
filed. If payments from a Director’s Deferred Stock Compensation Account have
previously commenced at the time of a Section 13 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 13 Event Election, to the extent
thereof.
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:
(a)
such
arrangement will not cause the Plan to be considered a funded deferred
compensation plan under the Code;
(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
(c)
such
set aside of funds is not described in Section 409A(b) of the Code, or any
successor provision.
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, 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 forty
thousand dollars ($40,000) (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)
|
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)
|
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)
|
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)
|
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)
|
Unless
the Committee, in its discretion, shall otherwise determine:
|
(i)
no
stock option or stock appreciation right shall be transferable or assignable
by
the grantee otherwise than:
(a)
by
Will; or
(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
(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
(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.
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)
|
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:
|
(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;
(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
(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.
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)
|
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)
|
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)
|
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.
|
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):
(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;
(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
(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").
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:
(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
(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.
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:
(i)
no
shares of Common Stock shall be issued or credited on a Payment Date under
the
Plan after November 15, 2014;
(ii)
no
shares of Common Stock shall be credited with respect to Meeting Fees payable
under the Plan after November 15, 2014;
(iii)
no
stock option or stock appreciation right shall be granted under the Plan after
November 15, 2014; and
(iv)
no
restricted shares shall be awarded under the Plan after November 15,
2014.
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.