Exhibit 10.1
Tollgrade Communications, Inc.
2006 Long-Term Incentive Compensation Plan
(as amended and restated on May 6, 2009)
Article 1. Establishment, Objectives, and Duration

1.1   Establishment of the Plan. Tollgrade Communications, Inc., a Pennsylvania
corporation (hereinafter referred to as the “Company”), hereby establishes an
incentive compensation plan to be known as the “Tollgrade Communications, Inc.
2006 Long-Term Incentive Compensation Plan” (hereinafter referred to as the
“Plan”), as set forth in this amended and restated document (this
“Restatement”). The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares and Performance Units.       The Plan was approved by the
Company’s stockholders on May 9, 2006 and became effective as of May 10, 2006
(the “Effective Date”) and, as amended and restated hereby, shall remain in
effect as provided in Section 1.3 hereof. This Restatement is made effective as
of May 6, 2009 (the “Restatement Effective Date”) and shall remain in effect for
the duration of the Plan, subject to any subsequent amendment made pursuant to
the terms hereof. Awards made on or after the Restatement Effective Date shall
be subject to the terms and conditions of this Restatement as amended from time
to time and not to the terms of any prior Plan document.   1.2   Objectives of
the Plan. The objectives of the Plan are to optimize the profitability and
growth of the Company through incentives which are consistent with the Company’s
goals and which link the personal interests of Participants to those of the
Company’s stockholders; to provide Participants with an incentive for excellence
in individual performance; and to promote teamwork among Participants.       The
Plan is further intended to provide flexibility to the Company in its ability to
motivate, attract and retain the services of Participants who make significant
contributions to the Company’s success and to allow Participants to share in the
success of the Company.   1.3   Duration of the Plan. The Plan was adopted by
the Board of Directors on March 6, 2006, subject to approval by the Company’s
stockholders, and shall commence on the Effective Date, as described in
Section 1.1 hereof, and shall remain in effect, subject to the right of the
Board of Directors to amend or terminate the Plan at any time pursuant to
Article 14 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Plan’s provisions. However, in no event may an Award
be granted under the Plan on or after May 9, 2016.

Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings set forth
below, and when the meaning is intended, the initial letter of the word shall be
capitalized:

2.1   “Appropriate Administrator” means, in the case of any Awards to Employees,
the Committee, and in the case of any Awards to Nonemployee Directors, the
Board.   2.2   “Award” means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares or Performance Units.

 

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2.3   “Award Agreement” means an agreement entered into by the Company and each
Participant setting forth the terms and provisions applicable to Awards granted
under this Plan.   2.4   “Beneficial Owner” or “Beneficial Ownership” shall have
the meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.   2.5   “Board” or “Board of Directors”
means the Board of Directors of the Company.   2.6   “Cause” shall mean with
respect to the termination of an Employee’s employment, unless otherwise
determined by the Committee at the time of the grant of the Award (i) in the
case where there is no employment agreement, change of control agreement or
similar agreement in effect between the Employee and the Company at the time of
the grant of the Award (or where there is such an agreement but it does not
define “cause” or words of like import), termination due to an Employee’s
dishonesty, fraud, conviction of a felony, insubordination, willful misconduct,
refusal to perform services, or unsatisfactory performance of his or her duties
for the Company as determined by the Committee in its sole discretion; or
(ii) in the case where there is an employment agreement, change in control
agreement or similar agreement in effect between the Employee and the Company at
the time of the grant of the Award that defines “cause” (or words of like
import), as defined under such agreement.   2.7   “Change in Control” of the
Company shall be deemed to have occurred (as of a particular day, as specified
by the Board) if the Board, by a majority vote, agrees that a Change in Control
has occurred, or is about to occur. Such a change shall not include, however, a
restructuring, reorganization, merger, or other change in capitalization in
which the Persons who own an interest in the Company on the Effective Date (the
“Current Owners”) (or any individual or entity which receives from a Current
Owner an interest in the Company through will or the laws of descent and
distribution) maintain more than a sixty-five percent (65%) interest in the
resultant entity.       Regardless of the Board’s vote, a Change in Control will
be deemed to have occurred as of the first day any one (1) or more of the
following paragraphs shall have been satisfied:

  (a)   Any Person (other than the Person in control of the Company as of the
Effective Date of the Plan, or other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing more than thirty-five percent (35%) of the combined voting power of
the Company’s then outstanding securities; or     (b)   (i) A liquidation of the
Company; or (ii) the sale or disposition of all or substantially all of the
Company’s assets (other than one in which in the stockholders of the Company, as
determined immediately prior to such transaction, hold, directly or indirectly,
as determined immediately following such transaction, a majority of the voting
power of each surviving, resulting or acquiring corporation which, immediately
following such transaction, holds more than 10% of the consolidated assets of
the Company immediately prior to the transaction); or (iii) a merger,
consolidation, or reorganization of the Company with or involving any other
corporation, other than a merger, consolidation, or reorganization that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the

 

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      surviving entity) at least sixty-five percent (65%) of the combined voting
power of the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation, or reorganization.    
(c)   During any two-year period (not including any period prior to the
Effective Date of this Plan), individuals who at the beginning of such period
constitute the Board and any new Director whose nomination or election was
approved by a vote of at least two-thirds of the Directors then still in office
who were either Directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board.

    However, in no event shall a Change in Control be deemed to have occurred,
with respect to a Participant, if that Participant is part of a purchasing
group, which consummates the Change in Control transaction. The Participant
shall be deemed “part of a purchasing group” for purposes of the preceding
sentence if the Participant is an equity participant or has agreed to become an
equity participant in the purchasing company or group (except for (i) passive
ownership of less than five percent (5%) of the voting equity securities of the
purchasing company; or (ii) ownership of equity participation in the purchasing
company or group which is otherwise deemed not to be significant, as determined
prior to the Change in Control by a majority of the nonemployee continuing
Directors).

2.8   “Code” means the Internal Revenue Code of 1986, as amended from time to
time.   2.9   “Committee” means the Compensation Committee of the Board, as
specified in Article 3 herein, or such other Committee appointed by the Board in
accordance with Section 3.1 to administer the Plan with respect to grants of
Awards.   2.10   “Company” means Tollgrade Communications, Inc., a Pennsylvania
corporation, and any successor thereto as provided in Article 17 herein.   2.11
  “Director” means any individual who is a member of the Board of Directors of
the Company.   2.12   “Effective Date” shall have the meaning ascribed to such
term in Section 1.1 hereof.   2.13   “Employee” means any active employee of the
Company. Directors who are not employed by the Company shall not be considered
Employees under this Plan.   2.14   “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, or any successor act thereto.   2.15
  “Fair Market Value” 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): (i) 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, (ii) 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 (iii) 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

 

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    (“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 2.15. If the fair market value of the Common
Stock cannot be determined on any basis previously set forth in this
Section 2.15 for 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.  
2.16   “Incentive Stock Option” or “ISO” means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.  
2.17   “Insider” shall mean an individual who, immediately prior to the grant of
any Award, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company. For purposes of
this Section 2.17, 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 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.   2.18
  “Named Executive Officer” means a Participant who, as of the date of vesting
and/or payout of an Award, as applicable, is one of the group of “covered
employees,” as defined in the regulations promulgated under Code Section 162(m),
or any successor statute.   2.19   “Nonemployee Director” means an individual
who is a member of the Board of Directors of the Company but who is not an
Employee of the Company.   2.20   “Nonqualified Stock Option” or “NQSO” means an
option to purchase Shares granted under Article 6 herein and which is not
intended to meet the requirements of Code Section 422.   2.21   “Option” means
an Incentive Stock Option or a Nonqualified Stock Option, as described in
Article 6 herein.   2.22   “Option Price” means the price at which a Share may
be purchased by a Participant pursuant to an Option.   2.23   “Participant”
means an Employee or a Nonemployee Director who has outstanding an Award granted
under the Plan.

 

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2.24   “Performance-Based Exception” means the performance-based exception from
the tax deductibility limitations of Code Section 162(m).   2.25   “Performance
Share” means an Award granted to a Participant, as described in Article 9
herein.   2.26   “Performance Unit” means an Award granted to a Participant, as
described in Article 9 herein.   2.27   “Period of Restriction” means the period
during which the transfer of Shares of Restricted Stock is limited in some way
(based on the passage of time, the achievement of performance goals, or upon the
occurrence of other events as determined by the Appropriate Administrator, at
its discretion), and the Shares are subject to a substantial risk of forfeiture,
as provided in Article 8 herein.   2.28   “Person” shall have the meaning
ascribed to such term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, including a “group” as defined in Section
13(d) thereof.   2.29   “Restricted Stock” means an Award granted to a
Participant pursuant to Article 8 herein.   2.30   “Retirement” shall mean any
voluntary termination of employment by an Employee following the attainment of
age 65.   2.31   “Shares” means the shares of Common Stock of the Company.  
2.32   “Stock Appreciation Right” or “SAR” means an Award designated as an SAR,
pursuant to the terms of Article 7 herein.

Article 3. Administration

3.1   The Committee. Except as set forth in Section 3.5 below, the Plan shall be
administered by the Compensation Committee of the Board, or by any other
Committee appointed by the Board consisting of not less than two (2) Directors
who (i) are “non-employee” directors and otherwise meet the “disinterested
administration” rules of Rule 16b-3 under the Exchange Act and (ii) are “outside
directors” under Section 162(m)(4)(C) of the Code, or any successor provision.
The members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors.   3.2   Authority of the
Committee. Except as set forth in Section 3.5 below, except as limited by law or
by the Articles of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to grant Options, SARs,
Restricted Stock, Performance Shares and Performance Units as described herein
and to determine the Employees to whom any such Award shall be made and the
number of Shares to be covered thereby; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan as they apply to Employees; and establish, amend, or waive
rules and regulations for the Plan’s administration as they apply to Employees;
and (subject to the provisions of Article 14 herein) amend the terms and
conditions of any outstanding Award except for Incentive Stock Options to the
extent such terms and conditions are within the discretion of the Committee as
provided in the Plan. Further, the Committee shall make all other
determinations, which may be necessary or advisable for the administration of
the Plan, as the

 

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    Plan applies to Employees. As permitted by law and applicable listing
requirements, the Committee may delegate its authority as identified herein.  
3.3   Decisions Binding. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions of
the Board shall be final, conclusive and binding on all persons, including the
Company, its stockholders, Employees, Participants, and their estates and
beneficiaries.   3.4   Non-Competition. If a grantee of an Option, SAR,
Restricted Stock, Performance Units or Performance Shares (i) 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 Company, (ii) induces or attempts
to induce any customer, supplier, licensee or other individual, corporation or
other business organization having a business relationship with the Company to
cease doing business with the Company or in any way interferes with the
relationship between any such customer, supplier, licensee or other person and
the Company or (iii) solicits any employee of the Company to leave the
employment thereof or in any way interferes with the relationship of such
employee with the Company, the Appropriate Administrator, in its discretion, may
immediately terminate all outstanding Options and/or SARs held by the grantee,
declare forfeited all Restricted Stock held by the grantee as to which the
restrictions have not yet lapsed and/or immediately cancel any award of
Performance Units or Performance Shares. Whether a grantee has engaged in any of
the activities referred to in the preceding sentence which would cause the
outstanding Options and/or SARs to be terminated, and/or the Restricted Stock to
be forfeited and/or any award of Performance Units or Performance Shares to be
cancelled shall be determined, in its discretion, by the Appropriate
Administrator, and any such determination by the Appropriate Administrator shall
be final and binding.   3.5   Grants to Nonemployee Directors. Notwithstanding
the foregoing, unless otherwise determined by the Board, the Board shall grant
Nonqualified Stock Options, SARs, Restricted Stock, Performance Shares and
Performance Units, and otherwise exercise the same authority as the Committee as
described in Section 3.2 above, with respect to Nonemployee Directors.

Article 4. Shares Subject to the Plan and Maximum Awards

4.1   Number of Shares Available for Grants. Subject to adjustment as provided
in Section 4.4 herein, the number of Shares hereby reserved for issuance to
Participants under the Plan shall be 1,300,000, all of which may be granted
pursuant to Incentive Stock Options; provided however, that, of that total, the
maximum number of Shares of Restricted Stock granted pursuant to Article 8
herein, shall be 300,000.       The following rules shall apply to grants of
such Awards under the Plan:       (a) The maximum aggregate number of Shares
that may be granted or that may vest, as applicable, pursuant to any Award held
by any one Named Executive Officer shall be 200,000 during any calendar year of
the term of the Plan;       (b) The maximum aggregate cash payout received
during any year by any one Named Executive Officer with respect to Awards
granted shall be $1,000,000.

 

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4.2   Lapsed Awards. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available for the grant of an Award under the Plan.   4.3   Share
Counting. (a) None of the following Shares shall become available for the grant
of an Award under the Plan:

               (i) Shares tendered by a Participant as full or partial payment
to the Company upon exercise of Options which are the subject of an Award
granted under this Plan.
               (ii) Shares reserved for issuance upon an Award of SARs, to the
extent the number of Shares reserved exceeds the number of Shares actually
issued upon exercise of such SARs.
               (iii) Shares withheld by, or otherwise remitted to, the Company
to satisfy a Participant’s tax withholding obligations upon the lapse of
restrictions on Restricted Stock, or the exercise of Options or SARs, which are
the subject of an Award under this Plan, or upon any other taxable event arising
as a result of Awards granted under this Plan.

    (b) When a SAR which is the subject of an Award under this Plan is
exercised, and payment upon exercise is made in Shares as permitted in
Section 7.5 of this Plan, the number of Shares with respect to which the SAR is
exercised shall be counted against the Shares reserved under this Plan,
regardless of the number of Shares actually issued to settle the SAR upon
exercise.

4.4   Adjustments in Authorized Shares. In the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as any
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares which may be delivered under Section 4.1
and as to the number of Shares which may be awarded under the Plan to any Named
Executive Officer during the term of the Plan, and in the number and class of
and/or price of Shares subject to outstanding Awards granted under the Plan, as
may be determined to be appropriate and equitable by the Appropriate
Administrator, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award shall
always be a whole number.

Article 5. Eligibility and Participation

5.1   Eligibility. Persons eligible to participate in this Plan include all
Employees of the Company (including, but not limited to, Employees who are
members of the Board, covered employees as defined in Section 162(m)(3) of the
Code, or any successor provision) and all Nonemployee Directors of the Company.
  5.2   Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees those to
whom Awards shall be granted and shall determine the nature and amount of each
Award and the Board may, from time to time, select from all eligible Nonemployee
Directors those to whom Awards shall be granted and shall determine the nature
and amount of each Award.

 

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Article 6. Stock Options

6.1   Grant of Options. Subject to the terms and provisions of the Plan, the
Committee may grant Incentive Stock Options or Nonqualified Stock Options or
both types of Options (but not in tandem) to Employees and the Board may grant
Nonqualified Stock Options to Nonemployee Directors in such number, and upon
such terms, and at any time and from time to time as shall be determined by the
Appropriate Administrator.   6.2   Award Agreement. Each Option grant shall be
evidenced by an Award Agreement that shall specify the Option Price, the
duration of the Option, the number of Shares to which the Option pertains, and
such other provisions as the Appropriate Administrator shall determine. The
Award Agreement also shall specify whether the Option is intended to be an ISO
within the meaning of Code Section 422, or an NQSO whose grant is intended not
to fall under the provisions of Code Section 422.   6.3   Option Price. The
Option Price at which each Option may be exercised shall be no less than one
hundred percent (100%) of the fair market value per share of the Common Stock
covered by the Option on the date of grant, except that in the case of an
Incentive Stock Option granted to an Insider, 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 6.3, the fair market value of the Common
Stock shall be as determined in Section 2.15. Notwithstanding the authority
granted to the Committee pursuant to Section 3.2 and the Board pursuant to
Section 3.5, once an Option is granted, neither the Committee nor the Board
shall have authority to reduce the Option Price, nor may any Option be
surrendered to the Company as consideration for the grant of a new Option with a
lower Option Price without the approval of the Company’s shareholders, except
under Section 4.4.   6.4   Duration of Options. Each Option granted to a
Participant shall expire at such time as the Appropriate Administrator shall
determine at the time of grant; provided, however, that no Option shall be
exercisable after the expiration of ten years (five years in the case of an
Incentive Stock Option granted to an Insider) from the date of grant.   6.5  
Exercise of Options. Options granted under this Article 6 shall be exercisable
at such times and be subject to such restrictions and conditions as the
Appropriate Administrator shall in each instance approve, which need not be the
same for each grant or for each Participant. Notwithstanding any other provision
contained in the Plan or in any Award Agreement referred to in Section 2.3, but
subject to the possible exercise of the Committee’s discretion contemplated in
the last sentence of this paragraph, the aggregate fair market value, determined
as provided in Section 2.15 on the date of grant, of the Shares with respect to
which 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 of such Incentive Stock Options could first be
exercised would be accelerated pursuant to any provision of the Plan or any
Award Agreement, and the acceleration of such exercise date would result in a
violation of the limitation 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 date or dates, if any, that do not result in a violation
of such limitation 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

 

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    or more Incentive Stock Options even if such acceleration would violate the
$100,000 limitation set forth in the first sentence of this paragraph and even
if such Incentive Stock Options are thereby converted in whole or in part to
Nonqualified Stock Options.   6.6   Payment. Options granted under this
Article 6 shall be exercised by the delivery of a written notice of exercise to
the Company, setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.       The Option
Price upon exercise of any Option shall be payable to the Company in full
either: (a) in cash in United States dollars (including check, bank draft or
money order), or (b) by tendering previously acquired Shares having an aggregate
Fair Market Value at the time of exercise equal to the total Option Price, or
(c) by a combination of (a) and (b).       The Company will also cooperate with
any person exercising an Option who participates in a cashless exercise program
of a broker or other agent under which all or part of the Shares received upon
exercise of the Option are sold through the broker or other agent or under which
the broker or other agent makes a loan to such person. Notwithstanding the
foregoing, unless the Appropriate Administrator, in its discretion, shall
otherwise determine at the time of grant in the case of an Incentive Stock
Option, or at any time in the case of a Nonqualified Stock Option, the exercise
of the Option shall not be deemed to occur and no Shares of Common Stock will be
issued by the Company upon exercise of the Option until the Company has received
payment of the Option Price in full.   6.7   Restrictions on Share
Transferability. The Appropriate Administrator may impose such restrictions on
any Shares acquired pursuant to the exercise of an Option granted under this
Article 6 as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities laws, under the requirements of any stock
exchange or market upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.   6.8  
Termination of Employment. Subject to the provisions of Section 6.5 in the case
of Incentive Stock Options, unless the Committee, in its discretion, shall
otherwise determine:

  (i)   If the employment of an Employee 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 Company or an Employee retires under any
retirement plan of the Company, any outstanding Incentive Stock Option held by
such Employee shall be exercisable by the Employee (but only to the extent
exercisable by the Employee 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 an Employee who is not a
Disabled Grantee is voluntarily terminated with the consent of the Company or an
Employee retires under any retirement plan of the Company, any outstanding
Nonqualified Stock Option held by such Employee shall be exercisable by the
Employee (but only to the extent exercisable by the Employee immediately prior
to the termination of employment) at any time prior to the expiration date of
such Nonqualified Stock Option or within one year after the date of termination
of employment, whichever is the shorter period;

 

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  (iii)   If the employment of an Employee who is a Disabled Grantee is
voluntarily terminated with the consent of the Company, any outstanding Option
held by such Employee shall be exercisable by the Employee in full (whether or
not so exercisable by the Employee immediately prior to the termination of
employment) at any time prior to the expiration date of such Option or within
one year after the date of termination of employment, whichever is the shorter
period;     (iv)   Following the death of an Employee during employment, any
outstanding Option held by the Employee at the time of death shall be
exercisable in full (whether or not so exercisable by the Employee immediately
prior to the death of the Employee) by the person entitled to do so under the
Will of the Employee, or, if the Employee shall fail to make testamentary
disposition of the stock option or shall die intestate, by the legal
representative of the Employee at any time prior to the expiration date of such
stock option or within one year after the date of death of the Employee,
whichever is the shorter period;     (v)   Following the death of an Employee
after termination of employment during a period when an Option is exercisable,
the Option shall be exercisable by such person entitled to do so under the Will
of the Employee by such legal representative (but only to the extent exercisable
by the Employee immediately prior to the termination of employment) at any time
prior to the expiration date of such Option or within one year after the date of
death, whichever is the shorter period;     (vi)   Unless the exercise period of
a stock option following termination of employment has been extended as provided
in Section 13.1, if the employment of an Employee terminates for any reason
other than voluntary termination with the consent of the Company, retirement
under any retirement plan of the Company or death, all outstanding Options held
by the Employee at the time of such termination of employment shall
automatically terminate; provided, however, that if the employment of an
Employee is involuntarily terminated by the Company without Cause, any Option
held by such Employee at the time of such termination shall be exercisable by
the Employee (but only to the extent exercisable by the Employee immediately
prior to the termination of employment) at any time prior to the expiration date
of such Option or within three months after the date of termination of
employment in the case of an Incentive Stock Option or within one year after the
date of termination of employment in the case of a Nonqualified Stock Option,
whichever is the shorter period. Whether termination of employment is a
voluntary termination with the consent of the Company or an involuntary
termination with or without cause shall be determined, in its discretion, by the
Committee and any such determination by the Committee shall be final and
binding.

6.9   Termination of Board Service. Unless the Board, in its discretion, shall
otherwise determine:

  (i)   If a Nonemployee Director ceases to be a Director of the Company for any
reason other than resignation, removal for cause or death, any then outstanding
stock option held by such Nonemployee Director shall be exercisable by the
Nonemployee Director (but only to the extent exercisable by the Nonemployee
Director immediately prior to ceasing to be a Director) at any time prior to the
expiration date of such stock option or within one year after the date the
Nonemployee Director ceases to be a Director, whichever is the shorter period;

 

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  (ii)   If during his or her term of office as a Director a Nonemployee
Director resigns from the Board (which shall not include not standing for
reelection at the end of his or her then current term) or is removed from office
for cause, any then outstanding stock option held by such Nonemployee Director
shall be exercisable by the Nonemployee Director (but only to the extent
exercisable by the Nonemployee Director immediately prior to ceasing to be a
Director) at any time prior to the expiration date of such stock option or
within 90 days after the date of resignation or removal, whichever is the
shorter period;     (iii)   Following the death of a Nonemployee Director during
service as a Director of the Company, any outstanding stock option held by the
Nonemployee Director at the time of death (whether or not exercisable by the
Nonemployee Director immediately prior to death) shall be exercisable by the
person entitled to do so under the Will of the Nonemployee Director, or, if the
Nonemployee Director shall fail to make testamentary disposition of the stock
option or shall die intestate, by the legal representative of the Nonemployee
Director, 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;    
(iv)   Following the death of a Nonemployee Director after ceasing to be a
Director, any outstanding stock option held by such Nonemployee Director at the
time of death shall be exercisable (but only to the extent exercisable by the
Nonemployee Director immediately prior to death) by such person entitled to do
so under the Will of the Nonemployee Director or by such legal representative 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.         Interpretation
of the foregoing shall be done by the Board and any determination by the Board
shall be final and binding.

6.10   Nontransferability of Options. No Option granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by Will or if the Participant dies intestate by the laws of descent
and distribution of the state of domicile of the Participant at the time of
death. Further, all Options granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.

Article 7. Stock Appreciation Rights

7.1   Grant of SARs. Subject to the terms and conditions of the Plan, SARs may
be granted to Employees or Nonemployee Directors at any time and from time to
time as shall be determined by the Appropriate Administrator.       The
Appropriate Administrator shall have complete discretion in determining the
number of SARs granted to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.       The grant price of an SAR shall equal
the Fair Market Value of a Share on the date of grant of the SAR.   7.2  
Exercise of SARs. SARs may be exercised upon whatever terms and conditions the
Appropriate Administrator, in its sole discretion, imposes upon them.

 

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7.3   SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Appropriate Administrator shall determine.   7.4   Term of
SARs. The term of an SAR granted under the Plan shall be determined by the
Appropriate Administrator, in its sole discretion; provided, however, that such
term shall not exceed ten (10) years.   7.5   Payment of SAR Amount. Upon
exercise of an SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying:       (a)     The difference
between the Fair Market Value of a Share on the date of exercise over the grant
price; by       (b)     The number of Shares with respect to which the SAR is
exercised.       At the discretion of the Appropriate Administrator, the payment
upon SAR exercise may be in cash, in Shares of equivalent value, or in some
combination thereof.   7.6   Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Appropriate Administrator may impose such conditions
on exercise of an SAR as may be required to satisfy the requirements of
Section 16 of the Exchange Act and the regulations promulgated thereunder (or
any successor statute or regulation).   7.7   Termination of Employment. Each
SAR Award Agreement shall set forth the extent to which the Participant shall
have the right to exercise the SAR following termination of the Participant’s
employment with the Company and/or its Subsidiaries or the Participant’s
termination of Board Service, as the case may be. Such provisions shall be
determined in the sole discretion of the Appropriate Administrator, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination of such employment or service.   7.8  
Nontransferability of SARs. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
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.
Further, all SARs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant.

Article 8. Restricted Stock

8.1   Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Appropriate Administrator, at any time and from time to time, may
grant Shares of Restricted Stock to Employees or Nonemployee Directors in such
amounts as the Appropriate Administrator shall determine.   8.2   Restricted
Stock Agreement. Each Restricted Stock grant shall be evidenced by a Restricted
Stock Award Agreement that shall specify the Period(s) of Restriction, the
number of Shares of Restricted Stock granted, and such other provisions as the
Appropriate Administrator shall determine.

 

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8.3   Transferability. Except as provided in this Article 8, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Appropriate Administrator and specified in the
Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Appropriate Administrator in its sole discretion
and set forth in the Restricted Stock Award Agreement. All rights with respect
to the Restricted Stock granted to a Participant under the Plan shall be
available during his or her lifetime only to such Participant.   8.4   Other
Restrictions. The Appropriate Administrator shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, and/or individual), time-based restrictions on
vesting following the attainment of the performance goals, and/or restrictions
under applicable Federal or state securities laws. Notwithstanding the
foregoing, all grants of Restricted Stock shall have a Period of Restriction of
at least three (3) years, except that (a) the Period of Restriction for any
Award may be shortened pursuant to the Restricted Stock Award Agreement in
connection with death, disability or Retirement or pursuant to Section 13.1,
(b) Awards with restrictions based upon achievement of performance goals shall
have a Period of Restriction of a least one (1) year, and (c) Awards to
Nonemployee Directors shall have a Period of Restriction of at least one
(1) year.       The Company shall retain the certificates representing Shares of
Restricted Stock in the Company’s possession until such time as all conditions
and/or restrictions applicable to such Shares have been satisfied.       Except
as otherwise provided in this Article 8, Shares of Restricted Stock covered by
each Restricted Stock grant made under the Plan shall become freely transferable
by the Participant after the last day of the applicable Period of Restriction.  
8.5   Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.   8.6   Termination of Employment. Each Restricted
Stock Award Agreement shall set forth the extent to which the Participant shall
have the right to receive unvested Restricted Shares following termination of
the Participant’s employment with the Company or service on the Board, as the
case may be. Such provisions shall be determined in the sole discretion of the
Appropriate Administrator, shall be included in the Award Agreement entered into
with each Participant, need not be uniform among all Shares of Restricted Stock
issued pursuant to the Plan, and may reflect distinctions based on the reasons
for termination of such employment or service; provided, however that, except in
the cases of terminations connected with a Change in Control and terminations by
reason of death or disability the vesting of Shares of Restricted Stock which
qualify for the Performance-Based Exception and which are held by Named
Executive Officers shall occur at the time they otherwise would have, but for
the employment termination.

Article 9. Performance Units and Performance Shares

9.1   Grant of Performance Units/Shares. Subject to the terms of the Plan,
Performance Units and/or Performance Shares may be granted to Participants in
such amounts and upon such terms, and at any time and from time to time, as
shall be determined by the Appropriate Administrator.

 

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9.2   Value of Performance Units/Shares. Each Performance Unit shall have an
initial value that is established by the Appropriate Administrator at the time
of grant. Each Performance Share shall have an initial value equal to the Fair
Market Value of a Share on the date of grant. The Appropriate Administrator
shall set performance goals in its discretion which, depending on the extent to
which they are met, will determine the number and/or value of Performance
Units/Shares that will be paid out to the Participant. For purposes of this
Article 9, the time period during which the performance goals must be met shall
be called a “Performance Period.”   9.3   Earning of Performance Units/Shares.
Subject to the terms of this Plan, after the applicable Performance Period has
ended, the holder of Performance Units/Shares shall be entitled to receive
payout on the number and value of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been achieved.   9.4  
Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares shall be made in a single lump sum within 21/2 months
following the close of the applicable Performance Period. Subject to the terms
of this Plan, the Appropriate Administrator, in its sole discretion, may pay
earned Performance Units/Shares in the form of cash or in Shares (or in a
combination thereof) which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable
Performance Period. Such Shares may be granted subject to any restrictions
deemed appropriate by the Appropriate Administrator.       Participants may, at
the discretion of the Appropriate Administrator, be entitled to exercise their
voting rights with respect to such Shares.   9.5   Termination of Employment Due
to Death, Disability, or Retirement. Unless determined otherwise by the
Appropriate Administrator and set forth in the Participant’s Award Agreement, in
the event the employment or the Board service of a Participant is terminated by
reason of death, disability, or Retirement during a Performance Period, the
Participant shall receive a payout of the Performance Units/Shares which is
prorated, as specified by the Appropriate Administrator in its discretion.      
Payment of earned Performance Units/Shares shall be made at a time specified by
the Appropriate Administrator in its sole discretion and set forth in the
Participant’s Award Agreement. Notwithstanding the foregoing, with respect to
Named Executive Officers who retire during a Performance Period, payments shall
be made at the same time as payments are made to Participants who did not
terminate employment during the applicable Performance Period.   9.6  
Termination of Employment or Board Service for Other Reasons. In the event that
a Participant’s employment or Board service terminates for any reason other than
those reasons set forth in Section 9.5 herein, all Performance Units/Shares
shall be forfeited by the Participant to the Company unless determined otherwise
by the Appropriate Administrator, as set forth in the Participant’s Award
Agreement.   9.7   Nontransferability. Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
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.
Further, a Participant’s rights under the Plan shall be exercisable during the
Participant’s lifetime only by the Participant or the Participant’s legal
representative.

 

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Article 10. Performance Measures
Unless and until the Appropriate Administrator proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 10, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Named Executive Officers which are
designed to qualify for the Performance Based Exception, the performance
measure(s) to be used for purposes of such grants shall be chosen from among the
following alternatives:
(a) Revenues of the Company or any specified division;
(b) Percentage increase over a specified period in revenues of the Company or
any specified division;
(c) Expenses or any designated category of expenses of the Company or any
specified division;
(d) Percentage decrease over a specified period in expenses or any designated
category of expenses of the Company or any specified division;
(e) Pretax or after-tax income of the Company or any specified division, or
figures derived from income of the Company or any specified division to account
for non-cash charges such as amortization and depreciation; and
(f) Percentage increase over a specified period in pretax or after-tax income of
the Company or any specified division.
The Appropriate Administrator shall have the discretion to adjust the
determinations of the degree of attainment of the preestablished performance
goals; provided, however, that Awards which are designed to qualify for the
Performance Based Exception, and which are held by Named Executive Officers, may
not be adjusted upward (the Committee shall retain the discretion to adjust such
Awards downward).
In the event that applicable tax and/or securities laws change to permit the
Appropriate Administrator discretion to alter the governing performance measures
without obtaining shareholder approval of such changes, the Appropriate
Administrator shall have sole discretion to make such changes without obtaining
shareholder approval. In addition, in the event that the Appropriate
Administrator determines that it is advisable to grant Awards, which shall not
qualify for the Performance-Based Exception, the Appropriate Administrator may
make such grants without satisfying the requirements of Code Section 162(m).
Article 11. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in 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 Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant’s death shall be paid
to the Participant’s estate.

 

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Article 12. Rights of Employees and Nonemployee Directors

12.1   Employment and Board Service. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s
employment at any time, nor confer upon any Participant any right to continue in
the employ of the Company, nor shall it confer any right to a person to continue
as a Director of the Company or interfere in any way with the rights of
shareholders of the Company or the Board to elect and remove Directors.   12.2  
Participation. No Employee or Nonemployee Director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

Article 13. Change in Control

13.1   Treatment of Outstanding Awards. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:       (a) Any and all Options and SARs granted hereunder
shall become immediately exercisable, and shall remain exercisable throughout
their entire term;       (b) Any restriction periods and restrictions imposed on
Restricted Shares shall lapse;       (c) The target payout opportunities
attainable under all outstanding Awards of Restricted Stock, Performance Units
and Performance Shares shall be deemed to have been fully earned for the entire
Performance Period(s) as of the effective date of the Change in Control. The
vesting of all Awards denominated in Shares shall be accelerated as of the
effective date of the Change in Control, and there shall be paid out in cash to
Participants within thirty (30) days following the effective date of the Change
in Control an amount equal to one hundred percent (100%) of all targeted cash
payout opportunities associated with outstanding cash-based Awards; and      
(d) Subject to Article 14 herein, the Appropriate Administrator shall have the
authority to make any modifications to the Awards as determined by the
Appropriate Administrator to be appropriate before the effective date of the
Change in Control.   13.2   Acceleration of Award Vesting. Notwithstanding any
provision of this Plan or any Award Agreement provision to the contrary, the
Appropriate Administrator, in its sole and exclusive discretion, shall have the
power at any time to accelerate the vesting of any Award granted under the Plan
to a Participant, including without limitation acceleration to such a date that
would result in said Awards becoming immediately vested, except that the
Appropriate Administrator shall not have the authority to accelerate any Award
(a) that would otherwise qualify for the Performance-Based Exception in any
manner that would cause the Award to fail to qualify as such or (b) in a manner
that would conflict with the last sentence of the first paragraph of
Section 8.4.   13.3   Termination, Amendment, and Modifications of Change in
Control Provisions. Notwithstanding any other provision of this Plan or any
Award Agreement provision, the provisions of this Article 13 may not be
terminated, amended, or modified on or after the date of a Change in Control to
affect adversely any Award theretofore granted under the Plan without the prior
written consent of the Participant with respect to said Participant’s
outstanding Awards;

 

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    provided, however, the Board of Directors, upon recommendation of the
Committee, may terminate, amend, or modify this Article 13 at any time and from
time to time prior to the date of a Change in Control.

Article 14. Amendment, Modification, and Termination

14.1   Amendment, Modification, and Termination. The Board or the Committee may
terminate the Plan in whole or in part at any time. The Board or the Committee
may alter, amend, suspend or modify the Plan from time to time in such respects
as the Board or the Committee may deem advisable in order that any Awards shall
conform to any change in applicable laws or regulations or in any other respect
the Board or the Committee may deem to be in the best interests of the Company;
provided, however, that no such amendment or modification shall, without
shareholder approval:       (a) Except as provided in Section 4.4, increase the
number of Shares which may be issued under the Plan;       (b) Expand the types
of Awards available to Participants under the Plan;       (c) Materially expand
the class of persons eligible to participate in the Plan;       (d) Delete or
limit the provisions in Section 6.3 prohibiting the repricing of Options or
reduce the price at which Shares may be offered under Options; or      
(e) Extend the termination date for making Awards under the Plan.       In
addition, the Plan shall not be amended without the approval of such amendment
by the Company’s shareholders if such approval is required under (1) the rules
and regulations of NASDAQ or any stock exchange on which the Shares are then
listed, or (2) other applicable laws, rules, or regulations, including, but not
limited to, Rule 16b-3 under the Exchange Act, including any successor to such
Rule.   14.2   Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.4 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan; provided that no such adjustment
shall be authorized to the extent that such authority would be inconsistent with
the Plan’s meeting the requirements of Section 162(m) of the Code, as from time
to time amended.   14.3   Awards Previously Granted. No termination, amendment,
or modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.   14.4   Compliance with Code Section 162(m). At
all times when Code Section 162(m) is applicable, all Awards granted under this
Plan shall comply with the requirements of Code Section 162(m); provided,
however, that in the event the Committee determines that such compliance is not
desired with respect to any Award or Awards available for grant under the Plan,
then compliance

 

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    with Code Section 162(m) will not be required. In addition, in the event
that changes are made to Code Section 162(m) to permit greater flexibility with
respect to any Award or Awards available under the Plan, the Committee may,
subject to this Article 15, make any adjustments it deems appropriate.   14.5  
Code Section 409A Compliance. To the extent applicable, it is intended that this
Plan and any Awards granted hereunder, are excepted from, or otherwise comply
with, the requirements of Section 409A of the Code and any related regulations
or other guidance promulgated with respect to such Section by the U.S.
Department of Treasury or the Internal Revenue Service (“Section 409A”). Any
provision that would cause the Plan or any Award granted hereunder to fail to
satisfy Section 409A shall have no force or effect until amended to comply with
Section 409A, which amendment may be retroactive to the extent permitted by
Section 409A. Unless otherwise required by applicable law or listing
requirement, such amendment shall not require the approval of the shareholders.

Article 15. Withholding

15.1   Tax Withholding. The Company shall have the power and the right to deduct
or withhold, or require an Employee to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.

15.2   Share Withholding. With respect to withholding required upon the exercise
of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon
any other taxable event arising as a result of Awards granted hereunder,
Employees may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the action. All
such elections shall be irrevocable, made in writing, signed by the Employee,
and shall be subject to any restrictions or limitations that the Committee, in
its sole discretion, deems appropriate.

Article 16. Indemnification
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company’s approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company’s Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
Article 17. Successor
All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or

 

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indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.
Article 18. Legal Construction

18.1   Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.   18.2  
Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

Article 19. Requirements of Law.
The granting of Awards and the issuance of Shares under the Plan shall be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.
Article 20. Securities Law Compliance.
With respect to (i) a Director of the Company, (ii) an executive officer of the
Company or other person who is required to file reports pursuant to the rules
promulgated under Section 16 of the Exchange Act and (iii) Insiders,
transactions under this Plan are intended to comply with all applicable
conditions or Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Appropriate Administrator fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Appropriate Administrator.
Article 21. Governing Law.
To the extent not preempted by Federal law, the Plan and all agreements
hereunder, shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.
* * * * * * * * * * * * * * * * * * *