Exhibit 10.2
 
 

CUSTOMERS BANCORP, INC.
2010 STOCK OPTION PLAN

ARTICLE 1
PURPOSE
 
1.1       GENERAL.  The purpose of this Plan is to promote the success and
enhance the value of Customers Bancorp, Inc. (the “Company”), by linking the
personal interests of executive and senior management-level employees and
directors of the Company and subsidiaries of the Company (“Subsidiaries”) to
those of shareholders and by providing such individuals with an incentive for
outstanding performance in order to generate superior returns to
shareholders.  The Plan is further intended to provide flexibility to the
Company and Subsidiaries in their ability to motivate, attract, and retain the
services of employees, directors, officers, and executives upon whose judgment,
interest, and special effort the successful conduct of the Company’s and the
Subsidiaries operations are largely dependent.
 
ARTICLE 2
EFFECTIVE DATE AND TERM
 
2.1       EFFECTIVE DATE.  The Plan became effective as of December 9, 2010, the
date it was approved by the shareholders of the Bank.  The Plan has been amended
by the Board to reflect the terms of the Plan of Merger and Reorganization
approved by the shareholders of the Bank, which became effective as of September
17, 2011 .
 
2.2       TERM.  Unless sooner terminated by the Board, the Plan shall terminate
on the Plan Termination Date, and no Options may be granted under the Plan
thereafter.  The termination of the Plan shall not affect any Option that is
outstanding on the termination date, without the consent of the Participant.
 
ARTICLE 3
DEFINITIONS AND CONSTRUCTION
 
3.1       DEFINITIONS.  When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context.  The following words and phrases shall have the following
meanings:
 
(a)        “Bank” means Customers Bank.
 
(b)       “Board” means the Board of Directors of the Company.
 
(c)        “Capital Raising Transaction” means the sale of equity securities of
the Bank pursuant to the offering described in the Confidential Private Offering
Memorandum dated January 20, 2010 (as supplemented by the Supplement thereto
dated January 21, 2010), and any subsequent sale of equity securities, or
subsequent offering of equity securities in connection with an acquisition or
business combination, the result of which it to increase the tangible net worth
of the Bank or, after September 17, 2011, the Company. 

(d)       “Cause” means actions of or failure to act by a Participant which
would authorize the forfeiture of fringe benefits or other remuneration under
his or her written contract of employment with the Company or a Subsidiary or,
if there is no written contract of employment, (l) the willful material failure
to perform the duties to the Company or a Subsidiary required of the Participant
(other than any such failure resulting from incapacity due to physical or mental
illness of the Participant or material changes in the direction and policies of
the Board of Directors of the Company or a Subsidiary), if such failure
continues for fifteen (15) days after a written demand for substantial
performance is delivered to the Participant by the Company or a Subsidiary which
specifically identifies the manner in which it is believed that the Participant
has failed to attempt to perform his duties hereunder; (2) the willful engaging
by the Participant in misconduct materially injurious to the Company or a
Subsidiary; (3) receipt by the Company or a Subsidiary of a notice (which shall
not have been appealed by the Participant  or shall have become final and
non-appealable) of any governmental body or entity having jurisdiction over the
Company or a Subsidiary requiring termination or removal of the Participant from
his then present position, or receipt of a written directive or order of any
governmental body or entity having jurisdiction over the Company or a Subsidiary
(which shall not have been appealed by Participant or shall have become final
and non-appealable) requiring termination or removal of the Participant from his
then present position; or (4) personal dishonesty, incompetence, willful
misconduct, willful breach of fiduciary duty involving personal profit or
conviction of a felony.  For purposes of this paragraph, no act, or failure to
act, on the Participant's part shall be considered ''willful'' unless done or
omitted to be done by the Participant in bad faith and without reasonable belief
that his action or omission was in the best interest of Company or a
Subsidiary.  Any act or omission to act by the Participant in reliance upon a
written opinion of counsel to Company or a Subsidiary shall not be deemed to be
willful.
 
 
 
 
 
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(e)       “Change in Control” means:
 
(1)        there occurs a merger, consolidation or other business combination or
reorganization to which the Company is a party, whether or not approved in
advance by the Board, in which (A) the members of the Board immediately
preceding the consummation of such transaction do not constitute a majority of
the members of the Board of the resulting corporation and of any parent
corporation thereof immediately after the consummation of such transaction, and
(B) the shareholders of the Company immediately before such transaction do not
hold more than fifty  percent (50%) of the voting power of securities of the
resulting corporation;
 
(2)           There occurs a sale, exchange, transfer, or other disposition of
substantially all of the assets of the Company to another entity, whether or not
approved in advance by the Board (for purpose of this Agreement, a sale of more
than one-half of the branches of the Bank would constitute a Change in Control,
but for purposes of this paragraph, no branches or assets will be deemed to have
been sold if they are leased back contemporaneously with or promptly after their
sale);

(3)       A plan of liquidation or dissolution is adopted for the Company; or

(4)       Any “person” or any group of “persons” (as such term is defined in
Sections 13(d) and 14(d) of the Exchange Act), other than existing holders of
shares of the Company’s common stock, is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company’s then outstanding securities.

(f)        “Code” means the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
 
(g)       “Committee” means the Compensation Committee of the Board.
 
(h)       “Company” means Customers Bancorp, Inc.

(i)        "Employee" shall mean an individual who is an employee of the Company
or a Subsidiary under general common law principles. An individual who is an
"Employee," as so defined, may also be a member of the Board or the Board of
Directors of a Subsidiary (but not a Non-Employee Director).
 
(j)        “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
 
(k)       “Fair Market Value” means, as of any given date, the fair market value
of Stock on a particular date determined in accordance with the requirements of
Section 422 of the Code.
 
(l)        “Incentive Stock Option” means an option that is intended to meet the
requirements of Section 422 of the Code.
 
(m)      “Non-Employee Director” means a member of the Board or the Board of
Directors of the Bank who is not an Employee.
 
 
 
 
 
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(n)      “Option” means a right granted to a Participant under Article 7 of the
Plan to purchase Stock at a specified price during specified time periods.
 
(o)      “Option Agreement” means a writing, in such form as the Committee in
its discretion shall prescribe, evidencing an Option.
 
(p)      “Participant” means a person who has been granted an Option under the
Plan.
 
(q)      “Plan” means the Customers Bancorp, Inc. 2010 Stock Option Plan as set
forth herein.
 
(r)       “Plan Termination Date” means the date that is ten (10) years after
the Effective Date.
 
(s)       “Stock” means (i) prior to March 6, 2012, the voting common stock of
the Company and such other securities of the Company which may be substituted
therefor pursuant to Article 8, and (ii) on and after March 6, 2012, the voting
or non-voting common stock of the Company and such other securities of the
Company which may be substituted therefor pursuant to Article 8.

(t)       “Subsidiary” means a subsidiary corporation with respect to the
Company as described in Section 424(f) of the Code.

ARTICLE 4
ADMINISTRATION
 
4.1        COMMITTEE; BOARD APPROVAL.  The Plan shall be administered by the
Committee.  Notwithstanding any other provision of the Plan, during any period
in which the Company may be subject to the Exchange Act, either: (i) the
Committee shall consist of at least two individuals and each member of the
Committee shall qualify as a Non-Employee Director; or (ii) (A) at least two
members of the Committee must qualify as Non-Employee Directors, (B) any member
of the Committee who does not qualify as a “Non-Employee Director” may not
participate in any action of the Committee with respect to any Option awarded
under the Plan, and (C) the Plan shall be deemed to be administered by the full
Board, the actions of the Committee under the Plan shall be deemed merely
advisory to the Board, and the Board’s approval shall be required for all
actions of the Committee under the Plan, including without limitation the grant
of each Option.  To the extent necessary or desirable (as may be determined by
the Board from time to time) each member of the Committee shall also qualify as
an “outside director” under Section 162(m) of the Code.  The members of the
Committee shall meet such additional criteria as may be necessary or desirable
to comply with regulatory or stock exchange rules or exemptions.  The Company
will pay all reasonable expenses of the Committee.
 
4.2        AUTHORITY OF COMMITTEE.  Subject to any specific designation in the
Plan, the Committee (or the Board, in cases where the Board administers the Plan
pursuant to Section 4.1) has the exclusive power, authority and discretion to:
 
(a)       Designate Participants to receive Options;
 
(b)       Determine the type or types of Options to be granted to each
Participant;
 
(c)       Determine the number of shares of Stock to which an Option will
relate;
 
(d)       Determine the terms and conditions of any Option granted under the
Plan including but not limited to, the exercise price, grant price, or purchase
price, any restrictions or limitations on the Option, any restrictions on the
exercisability of an Option, and accelerations or waivers thereof, based in each
case on such considerations as the Committee in its sole discretion determines;
 
(e)       Amend, modify, or terminate any outstanding Option, with the
Participant’s consent unless the Committee has the authority to amend, modify,
or terminate an Option without the Participant’s consent under any other
provision of the Plan.
 
 
 
 
 
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(f)        Determine whether, to what extent, and under what circumstances the
exercise price of an Option may be paid in, cash, Stock or other property, or an
Option may be canceled, forfeited, or surrendered;
 
(g)       Prescribe the form of each Option Agreement, which need not be
identical for each Participant;
 
(h)       Decide all other matters that must be determined in connection with an
Option;
 

(i)        Establish, adopt, revise, amend or rescind any guidelines, rules and
regulations as it may deem necessary or advisable to administer the Plan; and
 
(j)        Interpret the terms of, and rule on any matter arising under, the
Plan or any Option Agreement;
 
(k)       Make all other decisions and determinations that may be required under
the Plan or as the Committee deems necessary or advisable to administer the
Plan; and
 
(l)        Retain counsel, accountants and other consultants to aid in
exercising its powers and carrying out its duties under the Plan.
 
4.3       DECISIONS BINDING.  The Committee’s interpretation of the Plan, any
Options granted under the Plan, any Option Agreement and all decisions and
determinations by the Committee with respect to the Plan shall (if approved or
ratified by the Board during any period when the Board is deemed to administer
the Plan pursuant to Section 4.1) be final, binding, and conclusive on all
parties and any other persons claiming an interest in any Option or under the
Plan.
 
ARTICLE 5
SHARES SUBJECT TO THE PLAN
 
5.1       NUMBER OF SHARES.  Subject to adjustment provided in Section 8.1, the
aggregate number of shares of Stock reserved and available for grant under the
Plan shall be the that number representing fifteen percent (15%) of the
outstanding shares of capital stock of the Bank as of the Effective Date;
provided that such number shall be increased, as and when unexercised options
and warrants to acquire capital stock of the Bank outstanding as of the
Effective Date are exercised or anti-dilution obligations become performable by
the Bank, by fifteen percent (15%) of the shares of capital stock that become
outstanding as a result of such exercises or the honoring of such anti-dilution
rights; and provided, further, that the total number of shares available for
grant under the Plan shall not exceed the lesser of (a) three million, three
hundred and thirty-three thousand, three hundred and thirty-four (3,333,334)
shares or (b) fifteen percent (15%) of the number of shares of Stock and Class B
Non-Voting Common Stock issued in consideration of cash or other property after
December 31, 2009 by the Company or the Bank; and provided further that the
exchange of one (1) share of common stock of the Company for three (3) shares of
common stock of the Bank pursuant to the Plan of Merger and Reorganization which
was effective as of September 17, 2011 shall be taken into account in applying
the foregoing percentages.
 
5.2       LAPSED OPTIONS.  To the extent that an Option terminates, is
cancelled, expires, lapses or is forfeited for any reason, any shares of Stock
subject to the Option will again be available for the grant of an Option under
the Plan.
 
5.3       STOCK DISTRIBUTED.  Any Stock distributed pursuant to an Option may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
 
5.4       LIMITATION ON NUMBER OF SHARES SUBJECT TO OPTIONS.  Notwithstanding
any provision in the Plan to the contrary, and subject to the adjustment in
Section 8.1, but subject to any restrictions of applicable law and the other
terms and conditions of the Plan, the maximum number of shares of Stock with
respect to Options may be granted to any one Participant during a fiscal year of
the Company shall be two million, two hundred and twenty-two thousand, two
hundred and twenty-three (2,222,223) shares.
 
 
 
 
 
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ARTICLE 6
ELIGIBILITY AND PARTICIPATION
 
6.1          ELIGIBILITY.  Employees and Non-Employee Directors shall be
potentially eligible to receive Options under the Plan.  In making
determinations regarding the potential eligibility of any Employee or
Non-Employee Director, the Committee may take into account the nature of the
services rendered by such Employee or Non-Employee Director, his or her present
and potential contributions to the Company’s or a Subsidiary’s success and such
other factors as the Committee in its discretion shall deem relevant.
 
6.2          ACTUAL PARTICIPATION.  Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals
those to whom Options shall be granted and shall determine the nature and amount
of each Option.  No individual shall have any right to be granted an Option
under this Plan.
 
ARTICLE 7
STOCK OPTIONS
 
7.1          GENERAL.  The Committee is authorized to grant Options to
Participants on the following terms and conditions:
 
(a)       EXERCISE PRICE.  The exercise price per share of Stock under an Option
shall not be less than the Fair Market Value as of the date of grant.
 
(b)       TERM OF OPTION.  No Option shall be exercisable after the date that is
10 years from the date it is granted.
 
(c)       TIME AND CONDITIONS OF EXERCISE. Options shall be exercisable only to
the extent provided below.
 
(1)        A Participant shall have a vested right to exercise an Option upon
the first to occur of (A) the fifth (5 th ) one (1)-year anniversary of the
Capital Raising Transaction to which it relates, (B) a Change in Control, (C)
the Participant’s termination of employment without Cause, (D) the Participant’s
death, or (E) such other event as the Committee shall specify in the Option
Agreement as necessary to comply with the Company’s or a Subsidiary’s
obligations under an employment agreement with the Participant.  All unvested
Options shall be forfeited upon the Participant’s termination of employment for
Cause or as a result of his or her voluntary resignation from employment.

(2)        Notwithstanding the achievement of a vested right to exercise
pursuant to paragraph (1) above, an Option shall be exercisable only when (a) if
the Stock under the Option is not listed on a national stock market or other
national securities quotation system at the time the Option is granted, the
“Fully Diluted Tangible Book Value” (as hereinafter defined) of the Stock first
equals or exceeds one hundred and fifty percent (150%) of the Fully Diluted
Tangible Book Value of the Stock per share as of the date of grant of the
option, or, if after the date of grant the Stock under the Option becomes listed
on a national stock market or other national securities quotation system, the
Fair Market Value of the Stock per share first equals or exceeds one hundred and
fifty percent (150%) of the Fully Diluted Tangible Book Value of the Stock as of
the date of grant of the option, or (b) if the Stock under the Option is listed
on a national stock market or other national securities quotation system at the
time the Option is granted, the trading price of such Stock as quoted by such
stock market or quotation system equals or exceeds one hundred and fifty percent
(150%) of the Fair Market Value of the Stock per share as of the date of the
grant of the option.  For this purpose, the Fully Diluted Tangible Book Value of
the Stock shall be determined as (A) the amount derived by dividing the common
shareholders’ equity, minus intangible assets and goodwill, by the number of
shares of common stock outstanding, (B) assuming that all outstanding option and
warrants to acquire stock are then exercised, and (C) assuming performance of
all anti-dilution obligations under such options and warrants and other
anti-dilution agreements as of the date of determination.  If the condition set
forth in this paragraph (2) is satisfied prior to the achievement of a vested
right to exercise an Option pursuant to paragraph (1) above, the Option shall be
exercisable immediately upon achievement of a vested right to exercise pursuant
to paragraph (1).
 
 
 
 
 
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(3)        Nothing in this subsection (c) shall be construed to extend the
exercise period of any Option beyond the tenth (10 th ) anniversary of the date
of its grant.

(d)         TRANSFERABILITY.  Each Option granted under the Plan shall, by its
terms, not be transferable otherwise than by will or the laws of descent and
distribution.  No right or interest of a Participant in any Option may be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Company, or shall be subject to any lien, obligation, or liability of such
Participant to any other party other than the Company; provided, however, that
the foregoing shall not be deemed to imply any obligation of the Company to lend
against or accept a lien or pledge of any Option for any
reason.  Notwithstanding the foregoing, or any other provision of this Plan, a
Participant who holds Options (but not Incentive Stock Options) may transfer
such Options to his or her spouse, lineal ascendants, lineal descendants, or to
a duly established trust for the benefit of one or more of these
individuals.  Options so transferred may thereafter be transferred only to the
Participant who originally received the grant or to an individual or trust to
whom the Participant could have initially transferred the Options pursuant to
this Section 7.1(d).  Options which are transferred pursuant to this Section
7.1(d) shall be exercisable by the transferee according to the same terms and
conditions as applied to the Participant (for example, such Options shall
terminate automatically, upon the termination of employment or service as a
Director of the Participant for Cause)
 
(e)         PAYMENT.  An Option shall be exercised by giving a written notice to
the Chief Executive Officer of the Company stating the number of shares of Stock
with respect to which the Option is being exercised and containing such other
information as the Committee may require and by tendering payment therefore with
a cashier's check, certified check, or with existing holdings of Stock held for
more than six months. In addition, if the terms of a Stock Option so provide,
the optionee may pay the exercise price by directing the Company to withhold
from those shares of Common Stock that would otherwise be received upon the
exercise of the Stock Option that number of shares of Common Stock having an
aggregate fair market value as of the date of exercise equal to the Stock
Option’s exercise price, or the applicable portion of the Stock Option’s
exercise price if the Stock Option is not exercised in full.  The shares of
Common Stock so withheld shall not be deemed to have been issued for purposes of
the aggregate-share limitation set forth in Section 4, above.
 
(f)          STOCK CERTIFICATES.  Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any certificates
evidencing shares of Stock pursuant to the exercise of any Options, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded as well as the
terms of this Plan and any other terms, conditions or restrictions that may be
applicable.  All Stock certificates delivered under the Plan are subject to any
stop-transfer orders and other restrictions as the Committee deems necessary or
advisable to comply with Federal, state, or foreign jurisdiction, securities or
other laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or
traded.  The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock.  In addition to the terms and conditions
provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion,
deems advisable in order to comply with any such laws, regulations, or
requirements.
 
(g)         EVIDENCE OF GRANT.  All Options shall be evidenced by an Option
Agreement.  The Option Agreement shall include such additional provisions as may
be specified by the Committee which are not inconsistent with the provisions of
this Section 7.1.
 
7.2          INCENTIVE STOCK OPTIONS. Incentive Stock Options granted under the
Plan must comply with the following additional rules, which in case of conflict
shall control over other provisions of this Plan that might otherwise be
applicable:

(a)         INDIVIDUAL DOLLAR LIMITATION.  The aggregate Fair Market Value
(determined as of the time an Option is granted) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a Participant
in any calendar year may not exceed one hundred thousand dollars ($100,000) or
such other limitation as imposed by Section 422(d) of the Code, or any successor
provision.  To the extent that Incentive Stock Options are first exercisable by
a Participant in excess of such limitation, the excess shall be considered
Options that are not Incentive Stock Options.
 
 
 
 
 
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(b)        TEN PERCENT OWNERS.  An Incentive Stock Option shall be granted to
any individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company only if such Option is granted at a price that is not less than 110% of
the Fair Market Value on the date of grant and the Option is exercisable for no
more than five years from the date of grant.

(c)         RIGHT TO EXERCISE.  During a Participant’s lifetime, an Incentive
Stock Option may be exercised only by the Participant.

ARTICLE 8
CHANGES IN CAPITAL STRUCTURE
 
8.1          GENERAL.
 
(a)       SHARES AVAILABLE FOR GRANT.  In the event of any change in the number
of shares of Stock outstanding by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
similar corporate change, the maximum aggregate number of shares of Stock with
respect to which the Committee may grant Options shall be appropriately
adjusted.  In the event of any change in the number of shares of Stock
outstanding by reason of any other event or transaction, the Committee may, but
need not, make such adjustments in the number and class of shares of Stock with
respect to which Options may be granted as the Committee may deem appropriate.
 
(b)       OUTSTANDING OPTIONS – INCREASE OR DECREASE IN ISSUED SHARES WITHOUT
CONSIDERATION.  Subject to any required action by the shareholders of the
Company, in the event of any increase or decrease in the number of issued shares
of Stock resulting from a subdivision or consolidation of shares of Stock or the
payment of a stock dividend (but only on the shares of Stock), or any other
increase or decrease in the number of such shares effected without receipt or
payment of consideration by the Company, the Committee shall proportionally
adjust the number of shares of Stock subject to each outstanding Option and the
exercise price per share of Stock of each such Option.
 
(c)       OUTSTANDING OPTIONS – CERTAIN MERGERS.  Subject to any required action
by the shareholders of the Company, in the event that the Company shall be the
surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Option outstanding on the date of such
merger or consolidation shall pertain to and apply to the securities which a
holder of the number of shares of Stock subject to such Option would have
received in such merger or consolidation.
 
(d)       OUTSTANDING OPTIONS – CERTAIN OTHER TRANSACTIONS.  In the event of (i)
a dissolution or liquidation of the Company, (ii) a sale of all or substantially
all of the Company’s assets, (iii) a merger or consolidation involving the
Company in which the Company is not the surviving corporation or (iv) a merger
or consolidation involving the Company, or any other reorganization transaction
in which the Company is the surviving corporation but the holders of shares of
Stock receive securities of another corporation and/or other property, including
cash, the Committee shall, in its absolute discretion, have the power to:
 
(1)     cancel, effective immediately prior to the occurrence of such event,
each Option outstanding immediately prior to such event (whether or not then
exercisable), and, in full consideration of such cancellation, pay to the
Participant to whom such Option was granted an amount in cash, for each share of
Stock subject to such Option, respectively, equal to the excess of (A) the
value, as determined by the Committee in its absolute discretion, of the
property (including cash) received by the holder of a share of Stock as a result
of such event over (B) the exercise price of such Option; or

(2)     provide for the exchange of each Option outstanding immediately prior to
such event (whether or not then exercisable) for an option with respect to, as
appropriate, some or all of the property for which such Stock is exchanged and,
incident thereto, make an equitable adjustment as determined by the Committee in
its absolute discretion in the exercise price or value of the option, or the
number of shares or amount of property subject to the option, or, if
appropriate, provide for a cash payment to the Participant to whom such Option
was granted in partial consideration for the exchange of the Option, or any
combination thereof.
 
 
 
 
 
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(e)        OUTSTANDING OPTIONS – OTHER CHANGES.  In the event of any other
change in the capitalization of the Company or corporate change other than those
specifically referred to in this Article, the Committee may, in its absolute
discretion, make such adjustments in the number and class of shares subject to
Options outstanding on the date on which such change occurs and in the per share
exercise price of each Option as the Committee may consider appropriate to
prevent dilution or enlargement of rights.
 
(f)        NO ADDITIONAL SHAREHOLDER APPROVAL REQUIRED IN CERTAIN CASES.  Except
to the extent required by applicable law, no adjustment in the number of shares
subject to outstanding Options, and no adjustment in the number of shares
available for grant under this Plan, shall require additional shareholder
approval, and all such future adjustments shall be deemed approved by the
approval of this Plan, to the extent that such adjustment, whether automatic or
discretionary, is proportional to and accompanies an equivalent adjustment in
the number of shares held by the Company’s shareholders.
 
(g)       NO OTHER RIGHTS.  Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other
corporation.  Except as expressly provided in the Plan, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number of shares of Stock subject to an Option or
the exercise price of any Option.
 
 
 
 
 
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ARTICLE 9
AMENDMENT, MODIFICATION, AND TERMINATION
 
9.1        AMENDMENT, MODIFICATION, AND TERMINATION.  At any time and from time
to time, the Board may terminate, amend or modify the Plan; provided, however,
that the Board shall not, without the affirmative vote of the holder of a
majority of the shares of each class of voting stock of the Company, make any
amendment which would (i) abolish the Committee without designating such other
committee, change the qualifications of its members, or withdraw the
administration of the Plan from its supervision, (ii) except strictly as and to
the extent provided in this Plan and permitted by applicable law, increase the
maximum number of shares of Stock for which Options may be granted under the
Plan, (iii) amend the formula for determination of the exercise price of
Options, (iv) extend the term of the Plan, and (v) amend the requirements as to
the employees eligible to receive Options; and further provided that no other
amendment shall be made without shareholder approval to the extent shareholder
approval is necessary to comply with any applicable law, regulations or stock
exchange rule.
 
9.2        OPTIONS PREVIOUSLY GRANTED.  Except as otherwise provided in the
Plan, including without limitation, the provisions of Article 8, no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Option previously granted under the Plan, without the written consent of
the Participant.
 
ARTICLE 10
GENERAL PROVISIONS
 
10.1      NO RIGHTS TO OPTIONS.  No Participant, employee, or other person shall
have any claim to be granted any Option under the Plan, and neither the Company,
a Subsidiary nor the Committee is obligated to treat Participants, employees,
and other persons uniformly.
 
10.2      NO STOCKHOLDERS RIGHTS.  No Option gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Option.
 
10.3      WITHHOLDING.  The Company or a Subsidiary shall have the authority and
the right to deduct or withhold, or require a Participant to remit to the
Company or a Subsidiary, an amount sufficient to satisfy Federal, state, and
local taxes (including the Participant’s FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of this Plan.  A
Participant may elect to have the Company withhold from those shares of Stock
that would otherwise be received upon the exercise of any Option, a number of
shares having a Fair Market Value equal to the minimum statutory amount
necessary to satisfy the Company’s or a Subsidiary’s applicable federal, state,
local and foreign income and employment tax withholding obligations.
 
10.4     NO RIGHT TO EMPLOYMENT OR SERVICES.  Nothing in the Plan or any Option
Agreement shall interfere with or limit in any way the right of the Company, a
Subsidiary or any of their affiliates or subsidiaries to terminate any
Participant’s employment or services at any time, nor confer upon any
Participant any right to continue in the employ of the Company, a Subsidiary or
such affiliates or subsidiaries.
 
10.5     INDEMNIFICATION.  To the extent allowable under applicable law, each
member of the Committee or of the Board shall be indemnified and held harmless
by the Company and any of its applicable subsidiaries from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by such
member 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 or failure to act under the Plan and against
and from any and all amounts paid by him or her in satisfaction of judgment in
such action, suit, or proceeding against him or her provided he or she gives 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 or any
of its applicable subsidiaries’ Articles of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company or any of its applicable
subsidiaries may have to indemnify them or hold them harmless.
 
 
 
 
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10.6       FRACTIONAL SHARES.  No fractional shares of stock shall be issued and
the Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.
 
10.7       GOVERNMENT AND OTHER REGULATIONS.  The obligation of the Company to
transfer shares of Stock shall be subject to all applicable laws, rules, and
regulations, and to such approvals by government agencies as may be
required.  The Company shall be under no obligation to register, under the
Securities Act of 1933, as amended, or any other federal or state securities
laws, any of the shares of Stock transferred under the Plan.  If the shares paid
under the Plan may in certain circumstances be exempt from registration under
the Securities Act of 1933, as amended, or applicable state laws, the Company
may restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.
 
10.8       RECOVERY.  Plan benefits shall be subject to recovery by the Company
under any clawback, recovery, recoupment or similar policy hereafter adopted or
continued by the Company, whether in connection with Section 954 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended from time
to time, or otherwise required by law.

10.9       GOVERNING LAW.  The Plan and the terms of all Options shall be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania without regard to rules of choice of law or conflict of laws,
except to the extent such laws may be pre-empted by the federal laws of the
United States of America.
 
 
 
 
 
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