ex10-2.htm


    Exhibit
10.2

    


    


    


    Amendment
and Restatement No. 3

    Of

    The
Stock Option Plan and Restricted Stock Plan

    Of

    Republic
First Bancorp, Inc.

     

    The
purpose of the Amendment and Restatement No. 2 of the Stock Option and
Restricted Stock Plan (the
“Plan”) of the Republic First Bancorp, Inc. (the “Company”) is to promote the
interests of the Company by providing incentives to (i) designated officers and
other employees of the Company or a Subsidiary Corporation (as defined herein),
(ii) non-employee members of the Company's Board of Directors (the “Board”) and (iii)
independent contractors and consultants (who may be individuals or entities) who
perform services for the Company, to enable the Company to attract and retain
them and to encourage them to acquire a proprietary interest, or to increase
their proprietary interest, in the Company.  The Company believes that the
Plan will cause participants to contribute materially to the growth of the
Company, thereby benefiting the Company's shareholders.  For purposes of
the Plan, the terms “Parent
Corporation” and
“Subsidiary Corporation” shall have the meanings set forth in subsections
(e) and (f) of Section 424 of the Internal Revenue Code of 1986, as amended
(the
“Code”).

     

    1.     
Administration

     

    (a)    
This Plan shall be administered and interpreted by a committee of the Board
(the “Committee”) consisting of not
less than three persons, all of whom shall be “Non-Employee Directors”
as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)
(a “Committee
Member”). 
With respect to Eligible Participants (as hereinafter defined), the Committee
shall have the sole authority to determine (i) who is eligible to receive Grants
(as defined in Section 2 below) under the Plan, (ii) the type, size and terms of
each Grant under the Plan (subject to Section 4 below), (iii) the time when each
Grant will be made and the duration of any exercise or restriction period; (iv)
any restrictions on resale applicable to the shares to be issued or transferred
pursuant to the Grant; and (v) any other matters arising under the Plan. 
The Committee may, if it so desires, base any of the foregoing determinations
upon the recommendations of management of the Company.  The Committee shall
have full power and authority to administer and interpret the Plan and to adopt
or amend such rules, regulations, agreements and instruments as it may deem
appropriate for the proper administration of the Plan.  The Committee's
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interests in the Plan or in any Grants under the
Plan.  No person acting under this subsection shall be held liable for any
action or determination made in good faith with respect to the Plan or any Grant
under the Plan.

     

    (b)    
Each member of the Committee shall be indemnified and held harmless by the
Company against any cost or expense (including counsel fees) reasonably incurred
by him or her, or liability (including any sum paid in settlement of a claim
with the approval of the 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Company)
arising out of any act or omission to act in connection with the Plan, unless
arising out of such member's own fraud or bad faith, to the extent permitted by
applicable law.  Such indemnification shall be in addition to any rights of
indemnification the members may have as directors or otherwise under the
Articles of Incorporation or By-Laws of the Company, any agreement of
shareholders or disinterested directors or otherwise.

     

    2.     
Grants

     

    Grants to Eligible
Participants.  With respect to Eligible Participants, incentives
under the Plan shall consist of Incentive Stock Options (as defined in Section
5(b) below), Nonqualified Stock Options (as defined in Section 5(b) below),
Restricted Stock Grants (as defined in Section 6 below) or SARs (as defined in
Section 7 below) (hereinafter collectively referred to as “Grants”). 
All Grants shall be subject to the terms and conditions set forth herein and to
such other terms and conditions of any nature as long as they are not
inconsistent with the Plan as the Committee deems appropriate and specifies in
writing to the participant (the
“Grant Letter”). 
The Committee shall approve the form and provisions of each Grant Letter. 
Grants under any section of the Plan need not be uniform as among the
participants receiving the same type of Grant, and Grants under two or more
sections of the Plan may be combined in one Grant Letter.

     

    3.     
Shares Subject to the Plan

     

    (a)    
Subject to adjustment pursuant to Section 3(b) below, the maximum number of
shares of Common Stock, par value $0.01 (“Common Stock”),
of the Company which may be issued or awarded under the Plan is 1,540,000
shares, plus an annual increase equal to the number of shares needed to restore
the maximum number of shares that may be available for Grant under the plan to
1,540,000 shares.  Such shares may be authorized but unissued shares
or reacquired shares.  If and to the extent that options granted under the
Plan terminate, expire or are canceled without having been exercised (including
shares canceled as part of an exchange of Grants), or if any shares of
restricted stock are forfeited, the shares subject to such Grant shall again be
available for subsequent Grants under the Plan and shall no longer be deemed
shares issued or awarded under the Plan until such time that such shares are
reissued or reawarded pursuant to a subsequent Grant.  The amount of
the annual increase in the maximum number of shares which may be issued or
awarded under the Plan referred to in the first sentence of this paragraph shall
be equal to (i) the number of options previously granted under the Plan that
were exercised by the holders thereof during the preceding twelve months plus
(ii) the number of shares of restricted stock awards as to which forfeiture
restrictions lapsed during the preceding twelve months.

     

    (b)    
If any change is made to the Common Stock (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, or exchange of shares or any other change in capital
structure made without receipt of consideration), then unless such event or
change results in the termination of all outstanding Grants under the Plan, the
Committee shall preserve the value of the outstanding Grants by adjusting the
maximum number and class of shares issuable under the Plan to reflect the effect
of such event or change in the Company's capital structure, and by making
appropriate adjustments to the number and class of shares, the exercise price of
each outstanding option and otherwise, except that any fractional shares
resulting from such adjustments shall be eliminated by rounding 

     

    
      
         

      

      
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    any
portion of a share equal to .500 or greater up, and any portion of a share equal
to less than .500 down, in each case to the nearest whole number.

     

    4.     
Eligibility for Participation

     

    Officers
and other employees of the Company or a Subsidiary Corporation, non-employee
members of the Board who are not members of the Committee, and independent
contractors and consultants who perform services for the Company shall be
eligible to participate in the Plan (hereinafter referred to individually as
an “Eligible
Participant”
and collectively as “Eligible
Participants”). 
Only Eligible Participants who are officers or other employees of the Company or
a Subsidiary Corporation shall be eligible to receive Incentive Stock
Options.  All Eligible Participants shall be eligible to receive
Nonqualified Stock Options, Restricted Stock Grants and SARs.  The
Committee shall select from among the Eligible Participants those who will
receive Grants (such Eligible Participants are hereinafter referred to as “Grantees”)
and shall determine the number of shares of Common Stock subject to each
Grant; provided,
however, that the maximum number of shares of Common Stock which may be
subject to Grants awarded to any Grantee shall not exceed the maximum number of
shares of Common Stock then available for grants under Section 3(a) of the
Plan.  The Committee may, if it so desires, base any such selections or
determinations upon the recommendations of management of the Company. 
Nothing contained in the Plan shall be construed to limit in any manner
whatsoever the right of the Company to grant rights or options to acquire Common
Stock or awards of Common Stock otherwise than pursuant to the
Plan.

     

    5.     
Stock Options

     

    (a)     Number of
Shares.  The Committee, in its sole discretion, shall determine the
number of shares of Common Stock that will be subject to each
option.

     

    (b)     Type of Option and Option
Price.

     

    (1)    
The Committee may grant options qualifying as incentive stock options within the
meaning of Section 422 of the Code (“Incentive Stock Options”)
and other stock options (“Nonqualified Stock
Options”),
in accordance with the terms and conditions set forth herein, or may grant any
combination of Incentive Stock Options and Nonqualified Stock Options
(hereinafter referred to collectively as “Stock Options”). 
The option price per share of an Incentive Stock Option shall be the fair market
value (as defined herein) of a share of Common Stock on the date of grant. 
If the Grantee of an Incentive Stock Option owns Common Stock (as determined
under Section 424(d) of the Code) possessing more than 10% of the total combined
voting power of all classes of stock of the Company or a Parent Corporation or
Subsidiary Corporation, the option price per share in the case of an Incentive
Stock Option shall not be less than 110% of the fair market value of a share of
Common Stock on the date of grant and such option by its terms is not
exercisable after the expiration of five (5) years from the date of
grant.

     

    (2)    
For all valuation purposes under the Plan, the fair market value of a share of
Common Stock shall be determined in accordance with the following
provisions:

     

    (A)    
If the Common Stock is not at the time listed or admitted to trading on any
stock exchange but is traded in the over-the-counter market (but not on the
Nasdaq 

     

    
      
         

      

      
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    National
Market segment of The Nasdaq Stock Market), the fair market value shall be the
mean between the last reported bid and asked prices of one share of Common Stock
on the date in question in the over-the-counter market, as such prices are
reported by the National Association of Securities Dealers through its Nasdaq
system or any successor system.  If there are no reported bid and asked
prices on the date in question, then the mean between the last reported bid and
asked prices on the next preceding date for which such quotations exist shall be
determinative of fair market value.  If the Common Stock is traded
over-the-counter on the Nasdaq National Market segment of The Nasdaq Stock
Market, the fair market value shall be the closing selling price of one share of
Common Stock on the date in question as such price is reported by the National
Association of Securities Dealers through such system or any successor
system.  If there is no reported closing selling price for the Common Stock
on the date in question, then the closing selling price on the next preceding
date for which such quotation exists shall be determinative of fair market
value.

     

    (B)    
If the Common Stock is at the time listed or admitted to trading on any stock
exchange, then the fair market value shall be the closing selling price of one
share of Common Stock on the date in question on the stock exchange determined
by the Committee to be the primary market for the Common Stock, as such prices
are officially quoted on such exchange.  If there is no reported closing
selling price of Common Stock on such exchange on the date in question, then the
fair market value shall be the closing selling price on the next preceding date
for which such quotation exists.

     

    (C)    
If the Common Stock is at the time neither listed nor admitted to trading on any
stock exchange nor traded in the over-the-counter market (or, the Committee
determines that the value as determined pursuant to Section 5(b)(2)(A) or (B)
above does not reflect fair market value), then the Committee shall determine
fair market value after taking into account such factors as it deems
appropriate.

     

    (c)     Exercise
Period.  The Committee shall determine the option exercise period of
each Stock Option.  The exercise period shall not exceed ten years from the
date of grant.  Notwithstanding any determinations by the Committee
regarding the exercise period of any Stock Option, all outstanding Stock Options
shall be immediately exercisable upon a Change of Control of the Company (as
defined in Section 9 below).

     

    (d)     Vesting of
Options and Restrictions on Shares.  The vesting period for Stock
Options shall commence on the date of grant and shall end on the date or dates,
determined by the Committee, that shall be specified in the Grant Letter. 
The Committee may impose upon the shares of Common Stock issuable upon the
exercise of a Stock Option such restrictions as it deems appropriate and
specifies in the Grant Letter.  During any period  in which such
restrictions apply, the provisions of Section 6(d) below shall be applicable to
such shares, and the Committee, in such circumstances as it deems equitable, may
determine that all such restrictions shall lapse.  Notwithstanding any
other provision of the Plan, all outstanding Stock Options shall become 
immediately exercisable upon a Change of Control of the Company (as defined in
Section 9 below).

     

    (e)     Manner of
Exercise.  A Grantee may exercise  a Stock Option by delivering
a duly completed notice of exercise to the Committee, together with payment of
the option price.  Such notice may include instructions authorizing the
Company to deliver the certificates representing 

     

    
      
         

      

      
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    the
shares of Common Stock issuable upon the exercise of such Stock Option to any
designated registered broker or dealer (“Designated Broker”). 
Such instructions shall designate the account into which the shares are to be
deposited.  The Grantee may tender such notice of exercise, which has been
properly executed by the Grantee, and the aforementioned delivery instructions
to any Designated Broker.

     

    (f)     Termination
of Employment, Disability or Death.

     

    (1)    
If a Grantee who is an employee ceases to be an employee (in the case of an
Incentive Stock Option) or ceases to be an Eligible Participant (in the case of
a Nonqualified Stock Option) for any reason (other than, in the case of an
individual, the death of such individual) any Stock Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within three months
after the date on which the Grantee ceases to be an employee or an Eligible
Participant, as the case may be (or within such other period of time, which may
be longer or shorter than three months, as may be specified in the Grant
Letter), but in any event no later than the date of expiration of the option
exercise period, except that in the case of an individual Grantee who is
disabled within the meaning of Section 22(e)(3) of the Code, such period shall
be one year rather than three months (except as otherwise provided in the Grant
Letter).

     

    (2)    
In the event of the death of an individual Grantee while he or she is an
Eligible Participant or within not more than three months after the date on
which the Grantee ceases to be an Eligible Participant (or within such other
period of time, which may be longer or shorter than three months, as may be
specified in the Grant Letter), any Stock Option which was otherwise exercisable
by the Grantee at the date of death may be exercised by the Grantee's personal
representative at any time prior to the expiration of one year from the date of
death, but in any event no later than the date of expiration of the option
exercise period.

     

    (g)    
Satisfaction of Option Price.  The Grantee shall pay the option
price in full at the time of exercise in cash, or, with the consent of the
Committee in its sole discretion, by delivering shares of Common Stock already
owned by the Grantee and having a fair market value on the date of exercise
equal to the option price or a combination of cash and shares of Common
Stock; provided,
however, that in lieu of payment in full in such manner, a Grantee may
with the approval of the Board in its sole discretion, be entitled to pay for
the shares purchased upon exercise of the Stock Option by payment to the Company
in cash or by certified or bank check a sum equal at least to the par value of
the Common Stock, with the remainder of the purchase price satisfied by the
issuance of an interest bearing promissory note or notes, in a form and having
terms, including rate of interest and collateral security, satisfactory to the
Board in its sole discretion.  The Grantee shall also pay the amount of
withholding tax due, if any, at the time of exercise.  Shares of Common
Stock shall not be issued or transferred upon any purported exercise of a Stock
Option until the option price and the withholding obligation are fully
paid.

     

    (h)     Limits on
Incentive Stock Options.  Each Grant of an Incentive Stock Option
shall provide that:

     

    (1)    
the Stock Option is not transferable by the Grantee, except, in the case of an
individual Grantee, by will or laws of descent and distribution;

     

    
      
         

      

      
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    (2)    
the Stock Option is exercisable only by the Grantee, except as otherwise
provided herein or in the Grant Letter in the event of the death of an
individual Grantee;

     

    (3)    
the aggregate fair market value of the Common Stock determined as of the date of
the Grant with respect to which Incentive Stock Options are exercisable for the
first time by a Grantee during any calendar year under the Plan and under any
other stock option plan of the Company shall not exceed $100,000;
and

     

    (4)    
unless the Grantee could otherwise transfer Common Stock issued pursuant to the
Stock Option without incurring liability under Section 16(b) of the Exchange Act
at least six months must elapse from the date of acquisition of the Stock Option
until the date of disposition of the Common Stock issued upon exercise
thereof.

     

    6.     
Restricted Stock Grants

     

    The
Committee may issue shares of Common Stock to an Eligible Participant pursuant
to an incentive or long range compensation plan, program or contract approved by
the Committee (a “Restricted
Stock Grant”). 
The following provisions are applicable to Restricted Stock Grants:

     

    (a)     General Requirements. 
Shares of Common Stock issued pursuant to Restricted Stock Grants will be issued
in consideration for cash or services rendered having a value, as determined by
the Board, at least equal to the par value thereof.  All conditions and
restrictions imposed under each Restricted Stock Grant, and the period of years
during which the Restricted Stock Grant will remain subject to such
restrictions, shall be set forth in the Grant Letter and designated therein as
the “Restriction
Period”. 
All restrictions imposed under any Restricted Stock Grant shall lapse on such
date or dates as the Committee may approve until the restrictions have lapsed as
to 100% of the shares, except that upon a Change of Control of the Company, all
restrictions on the transfer of the shares which have not been forfeited prior
to such date shall lapse.  In addition, the Committee, in circumstances
that it deems equitable, may determine as to any or all Restricted Stock Grants,
that all the restrictions shall lapse, notwithstanding any Restriction
Period.

     

    (b)     Number of Shares.  The
Committee, in its sole discretion, shall determine the number of shares of
Common Stock that will be granted in each Restricted Stock Grant.

     

    (c)     Requirement of Relationship with
Company.  If the Eligible Participant’s
relationship with the Company (as an employee, non-employee member of the Board,
independent contractor or consultant, as the case may be) terminates during the
period designated in the Grant Letter as the Restriction Period, the Restricted
Stock Grant shall terminate as to all shares covered by the Grant as to which
restrictions on transfer have not lapsed, and such shares shall be immediately
returned to the Company.  The Committee may, in its sole discretion,
provide for complete or partial exceptions to the provisions of this Section
6(c).

     

    (d)     Restrictions on Transfer and Legend
on Stock Certificate.  During the Restriction Period, an Eligible
Participant may not sell, assign, transfer, pledge or otherwise dispose of the
shares of Common Stock to which such Restriction Period applies except to a
Successor Grantee pursuant to Section 8 below.  Each certificate
representing a share of Common Stock issued or transferred under a Restricted
Stock Grant shall contain a legend giving appropriate notice of the


     

    
      
         

      

      
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    restrictions
in the Grant.  The Grantee shall be entitled to have the legend removed
from the stock certificate or certificates representing any such shares as to
which all restrictions have lapsed.

     

    7.      Stock Appreciation
Rights

     

    (a)     General Provisions. 
The Committee may grant stock appreciation rights (“SARs”)
to any Eligible Participant in tandem with any Stock Option, for all or a
portion of the applicable Stock Option, either at the time the Stock Option is
granted or at any time thereafter while the Stock Option remains
outstanding.

     

    (b)     Number of SARs.  The
number of SARs granted to an Eligible Participant which shall be exercisable
during any given period of time shall not exceed the number of shares of Common
Stock which the Eligible Participant may purchase upon the exercise of the
related Stock Option during such period.

     

    (c)      Settlement
Amount.  Upon an Eligible Participant’s exercise
of some or all of the Eligible Participant's SARs, the Eligible Participant
shall receive in settlement of such SARs an amount equal to the stock
appreciation (as defined herein) for the number of SARs exercised, payable in
cash, Common Stock or a combination thereof.  The “stock appreciation”
for a SAR is the difference between the option price specified for the related
Stock Option and the fair market value of the underlying Common Stock on the
date of exercise of the SAR; provided that the maximum value of any stock
appreciation right shall be limited to the exercise price of the tandem Stock
Option with respect to which it is issued.

     

    (d)     Settlement Election. 
Upon the exercise of any SARs, the Eligible Participants shall have the right to
elect the portions of the settlement amount that the Eligible Participant
desires to receive in cash and shares of Common Stock, respectively.  For
purposes of calculating the number of shares of Common Stock to be 
received upon settlement, shares of Common Stock shall be valued at their fair
market value on the date of exercise of the SARs.  Notwithstanding the
foregoing, the Committee shall have the right (i) to disapprove an Eligible
Participant's election to receive such settlement in whole or in part in cash,
and to require that shares of Common Stock be delivered in lieu of cash or (ii)
to require that settlement be made in cash.  If shares of Common Stock are
to be received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.

     

    (e)     Exercise.   A SAR
is exercisable only during the period when the Stock Option to which it is
related is also exercisable.  SARs shall be exercisable only at the same
time and to the same extent as, and shall terminate and no longer be exercisable
upon the termination or immediately after the exercise of, the tandem Stock
Options or applicable portion thereof.

     

    8.     
Transferability of Options and Grants

     

    Only a
Grantee (or, in the case of an individual Grantee, his or her authorized legal
representative on behalf of Grantee) may exercise rights under a Grant.  No
individual Grantee  may transfer those rights except by will or by the laws
of descent and distribution or, in the case of a Grant other than an Incentive
Stock Option and to the extent permitted under Rule 16b-3 of the Exchange Act
and by the Committee in its sole discretion, (a) pursuant to a qualified
domestic relations order as defined under the Code or Title I of ERISA or
the rules thereunder 

     

    
      
         

      

      
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    and (b)
to a trust for the benefit of a member of the Grantee's immediate family. 
Upon the death of an individual Grantee, the personal representative or other
person entitled to succeed to the rights of the Grantee (“Successor Grantee”)
may exercise such rights.  A Successor Grantee shall furnish proof
satisfactory to the Company of such person's right to receive the Grant or the
Committee Grant under the Grantee's will or under the applicable laws of descent
and distribution.

     

    9.     
Change of Control of the Company

     

    As used
herein, a “Change of
Control”
shall be deemed to have occurred when (a) any  “person”
(as such term is used in Section 13(d) and 14(d) of the Exchange Act) becomes
the “beneficial owner”,
directly or indirectly, of securities of the Company representing thirty (30%)
percent or more of the combined voting power of the Company's then outstanding
securities or (b) the Company becomes a subsidiary of another corporation or is
merged or consolidated into another corporation or if substantially all of its
assets shall have been sold to an unaffiliated party or parties unless
thereafter (1) directors of the Company immediately prior thereto continue to
constitute at least fifty (50%) percent of the directors of the surviving entity
or purchaser or (2) the Company's securities continue to represent, or are
converted into securities which represent, more than sixty-six and two thirds
(66 2/3%) percent of the combined voting power of the surviving entity or
purchaser, or (c) fifty (50%) percent or more of the Board is comprised of
persons who were not nominated by the Board for election as directors, or (d)
the Board adopts a plan of complete liquidation of the Company.

     

    10.    
Certain Corporate Changes

     

    (a)     Sale or Exchange of Assets,
Dissolution or Liquidation or Merger or Consolidation Where the Company Does Not
Survive.  If all or substantially all of the assets of the Company
are to be sold or exchanged, the Company is to be dissolved or liquidated, or
the Company is a party to a merger or consolidation with another corporation in
which the Company will not be the surviving corporation, then, at least ten days
prior to the effective date of such event, the Company shall give each Grantee
with any outstanding Grants written notice of such event.  Each such
Grantee shall thereupon have the right to exercise in full any installments of
such Grants not previously exercised (whether or not the right to exercise such
installments has accrued pursuant to such Grants), within ten days after such
written notice is sent by the Company.  Any installments of such Grants not
so exercised shall thereafter lapse and be of no further force or
effect.

     

    (b)     Merger or Consolidation Where the
Company Survives.  If  the Company is a party to a merger or
consolidation in which the Company will be the surviving corporation, then the
Committee may, in its sole discretion, elect to give each Grantee with any
outstanding Grants written notice of such event.  If such notice is given,
each such Grantee shall thereupon have the right to exercise in full any
installments of such Grants not previously exercised (whether or not the right
to exercise such installments has accrued pursuant to such Grants), within ten
days after such written notice is sent by the Company.  Any installments of
such Grants not so exercised shall thereafter lapse and be of no further force
or effect.

     

    11.    
Shareholder Approval

     

    
      
         

      

      
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    This Plan
is subject to and no options shall be exercisable hereunder until after approval
of this Plan by holders of a majority of the shares of the stock of the Company
present or represented by a proxy in a separate vote at a duly held meeting of
the shareholders of the Company within twelve months after the date of the
adoption of the Plan by the Board.  If the Plan is not so approved by
shareholders, the Plan and all Grants hereunder shall terminate and be of no
force or effect.

     

    12.     Amendment and Termination of the
Plan

     

    (a)     Amendment.  The Board
may amend or terminate the Plan at any time; provided that the approval of the
shareholders of the Company shall be required in respect of any amendment that
(i) materially increases the benefits accruing to Eligible Participants under
the Plan, (ii) increases the aggregate number of shares of Common Stock that may
be issued or transferred under the Plan (other than by operation of Section 3(b)
above), (iii) materially modifies the requirements as to eligibility for
participation in the Plan; or (iv) modifies the provisions for determining the
fair market value of a share of Common Stock.

     

    (b)     Termination
of Plan.  The Plan shall terminate on November 14, 2015 (as set
forth in Section 19 below) unless earlier terminated by the Board or unless
extended by the Board with the approval of the shareholders.

     

    (c)     Termination and Amendment of
Outstanding Grants.  A termination or amendment of the Plan that
occurs after a Grant is made shall not result in the termination or amendment of
the Grant unless the Grantee consents or unless the Committee acts under Section
20(b) below.  The termination of the Plan shall not impair the power and
authority of the Committee with respect to an outstanding Grant.  Whether
or not the Plan has terminated, an outstanding Grant may be terminated or
amended under Section 20(b) below or may be amended by agreement of the Company
and the Grantee which is consistent with the Plan.

     

    13.    
Funding of the Plan

     

    The Plan
shall be unfunded.  The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Grants under the Plan.  In no event shall interest be
paid or accrued on any Grant, including unpaid installments of
Grants.

     

    14.    
Rights of Eligible Participants

     

    Nothing
in the Plan shall entitle any Eligible Participant or other person to any claim
or right to any Grant under the Plan.  Neither the Plan nor any action
taken hereunder shall be construed as giving any Eligible Participant or Grantee
any rights to be retained by the Company in any capacity, whether as an
employee, non-employee member of the Board, independent contractor, consultant
or otherwise.

     

    15.    
Withholding of Taxes

     

    The
Company shall have the right to deduct from all Grants paid in cash any federal,
state or local taxes required by law to be withheld with respect to such Grants
paid in cash.  In the case of Grants paid in Common Stock, the Company
shall have the right to require the Grantee to 

     

    
      
         

      

      
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    pay to
the Company the amount of any taxes which the Company is required to withhold in
respect of such Grants or to take whatever action it deems necessary to protect
the interests of the Company in respect of such tax liabilities, including,
without limitation, withholding a portion of the shares of Common Stock
otherwise deliverable pursuant to the Plan.  The Company's obligation to
issue or transfer shares of Common Stock upon the exercise of a Stock Option or
SAR or the acceptance of a Restricted Stock Grant shall be conditioned upon the
Grantee's compliance with the requirements of this section to the satisfaction
of the Committee.

     

    16.    
Agreements with Grantees

     

    Each
Grant made under the Plan shall be evidenced by a Grant Letter containing such
terms and conditions as the Committee shall approve.

     

    17.    
Requirements for Issuance of Shares

     

    No Common
Stock shall be issued or transferred under the Plan unless and until all
applicable legal requirements have been complied with to the satisfaction of the
Committee.  The Committee shall have the right to condition any Stock
Option, Restricted Stock Grant or SAR on the Grantee's undertaking in writing to
comply with such restrictions on any subsequent disposition of the shares of
Common Stock issued or transferred thereunder as the Committee shall deem
necessary or advisable as a result of any applicable law, regulation or official
interpretation thereof, and certificates representing such shares may be
legended to reflect any such restrictions.

     

    18.    
Headings

     

    The
section headings of the Plan are for reference only.  In the event of a
conflict between a section heading and the content of a section of the Plan, the
content of the section shall control.

     

    19.    
Effective Date of the Plan

     

    The
termination date of the Plan shall be November 14, 2015.  The Plan
became effective on November 14, 1995, and was subsequently approved by the
Company's shareholders within 12 months after such effective date and again at
the Company’s 2005 annual meeting of shareholders.

     

    
      
         

      

      
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    20.    
Miscellaneous

     

    (a)     Substitute Grants.  The
Committee may make a Grant to an employee, a non-employee director, or an
independent contractor or consultant of another corporation, if such person
shall become an Eligible Participant by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or a Subsidiary Corporation and such other
corporation.  Any such Grant shall be made in substitution for a stock
option or restricted stock grant granted by the other corporation (“Substituted Stock
Incentives”),
but the terms and conditions of the substitute Grant may vary from the terms and
conditions required by the Plan and from those of the Substituted Stock
Incentives.  The Committee shall prescribe the provisions of the substitute
Grants.

     

    (b)     Compliance with Law. 
The Plan, the exercise of Grants and the obligations of the Company to issue or
transfer shares of Common Stock under Grants shall be subject to all applicable
laws and required approvals by any governmental or regulatory agencies. 
The Committee (or, in the case of Committee Grants, the Board) may revoke any
Grant if it is contrary to law or modify any Grant to bring it into compliance
with any valid and mandatory government regulations.  The Committee may
also adopt rules regarding the withholding of taxes on payments to
Grantees.  The Committee may, in its sole discretion, agree to limit its
authority under this section.

     

    (c)     Ownership of Stock.  A
Grantee or Successor Grantee shall have no rights as a shareholder with respect
to any shares of Common Stock covered by a Grant until the shares are issued or
transferred to the Grantee or Successor Grantee on the stock transfer records of
the Company.

     

     

     

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