EX-10.1







	 	 	 	 	 



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.




 









 






	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




 









 






	 	 	 	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




 









 






	 	 	(“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.




 









 






	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




 









 






	 	 	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.




 









 












	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.




 









 











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




 









 






	 	 	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;




 









 






	 	(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;




 









 






	 	(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.




 









 






	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.




 









 






	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.




 









 






	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.




 









 











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.




 









 








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;





 









 





	 	 	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




 









 






	 	 	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






 









 







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.




* * * * * * * * * * * * * * * * * * *