Filed by Bowne Pure Compliance





Exhibit 10.1




CSS INDUSTRIES, INC.




2004 EQUITY COMPENSATION PLAN




(Amended and restated as of July 31, 2008)




The purpose of the CSS Industries, Inc. 2004 Equity Compensation Plan (the “Plan”) is to
provide designated employees and officers of CSS Industries, Inc. (the “Company”) and its
subsidiaries with the opportunity to receive grants of incentive stock options, nonqualified stock
options, restricted stock grants, stock appreciation rights and stock bonus awards. The Company
believes that the Plan will encourage the participants to contribute materially to the growth of
the Company, thereby benefitting the Company’s stockholders, and will align the economic interests
of the participants with those of the stockholders.




1. Human Resources Committee



(a) Administration. The Plan shall be administered and interpreted by the Human
Resources Committee (“Committee”), which shall consist of not less than three members of the Board
of Directors of the Company (the “Board”), all of whom shall be “outside directors” as defined
under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and related
Treasury regulations, “non-employee directors” as defined under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and “independent directors” in accordance
with the governance rules of the New York Stock Exchange (“NYSE”).



(b) Authority. The Committee shall have the sole authority to (i) determine the
individuals to whom grants shall be made under the Plan; (ii) determine the type, size, and terms
of the grants to be made to each such individual; (iii) determine the time when the grants will be
made and the duration of any applicable exercise or restriction period, including the criteria for
exercisability and the acceleration of exercisability; (iv) amend the terms of any previously
issued grant, subject to the provisions of Section 16 below; and (v) deal with any other matters
arising under the Plan.



(c) Determinations. The Committee shall have full power and authority to administer
and interpret the Plan, to make factual determinations and to adopt or amend such rules,
regulations, agreements and instruments for implementing the Plan and for the conduct of its
business as it deems necessary or advisable, in its sole discretion. 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 interest in the
Plan or in any awards granted hereunder. All powers of the Committee shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated individuals.


 


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2. Grants



Awards under the Plan may consist of grants of Incentive Stock Options and Nonqualified Stock
Options (as described in Section 5 and collectively referred to as “Options”), restricted stock
grants (as described in Section 6 and referred to as “Restricted Stock Grants”), stock appreciation
rights (as described in Section 7 and referred to as “SARs”) and stock bonus awards (as described
in Section 8 and referred to as “Stock Bonus Awards”) (Options, Restricted Stock Grants, SARs and
Stock Bonus Awards are 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
consistent with this Plan as the Committee deems appropriate and as are specified in writing by the
Committee to the individual in a grant instrument or an amendment to the grant instrument (the
“Grant Instrument”). All Grants shall be made conditional upon the Grantee’s acknowledgement, in
writing or by acceptance of the Grant, that all decisions and determinations of the Committee shall
be final and binding on the Grantee, his or her beneficiaries, and any other person having or
claiming an interest under such Grant. The Committee shall approve the form and provisions of each
Grant Instrument or may delegate such authority to the executive officers of the Company or to any
of them acting singly. Grants under a particular Section of the Plan need not be uniform as among
the grantees.




3. Shares Subject to the Plan



(a) Shares Authorized. Subject to adjustment as described below, the aggregate number
of shares of common stock, par value $.10 (“Company Stock”), of the Company that may be issued or
transferred under the Plan is 2,000,000 shares. The shares may be authorized but unissued shares
of Company Stock or reacquired shares of Company Stock, including shares purchased by the Company
on the open market for purposes of the Plan. If, and to the extent, Options or SARs granted under
the Plan terminate, expire, or are canceled, forfeited, exchanged, or surrendered without having
been exercised or if any Restricted Stock Grants (including Restricted Stock Grants received upon
the exercise of Options) or Stock Bonus Awards are forfeited, terminated or otherwise not paid in
full, the shares subject to such Grants shall again be available for purposes of the Plan.



(b) Individual Limits. The maximum aggregate number of shares of Company Stock that
shall be subject to Grants made under the Plan to any individual during any calendar year shall be
300,000 shares, subject to adjustment as described below.



(c) Adjustments. If there is any change in the number or kind of shares of Company
Stock outstanding by reason of (i) a stock dividend, spinoff, recapitalization, stock split, or
combination or exchange of shares; (ii) a merger, reorganization or consolidation; (iii) a
reclassification or change in par value; or (iv) any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company’s receipt of consideration, or if the
value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or
the Company’s payment of an extraordinary dividend or distribution, the maximum number of shares of
Company Stock available for issuance under the Plan, the maximum number of shares of Company Stock
for which any individual may receive Grants in any year, the kind and number of shares covered by
outstanding Grants, the kind and number of shares issued and to be issued under the Plan, and the
price per share or the applicable market value of such Grants shall be equitably adjusted by the
Committee to reflect any increase or decrease in the number of, or change in the kind or value of,
the issued shares of Company Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under the Plan and such outstanding Grants; provided, however, that
any fractional shares resulting from such adjustment shall be eliminated. In addition, in the event of a Change of Control of the Company, the provisions
of Section 14 of the Plan shall apply. Any adjustments to outstanding Grants shall be consistent
with section 409A or 424 of the Code, to the extent applicable. Any adjustments determined by the
Committee shall be final, binding and conclusive.


 


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4. Eligibility for Participation



(a) Eligible Persons. Employees of the Company and its subsidiaries (“Employees”),
including Employees who are officers or members of the Board shall be eligible to participate in
the Plan.



(b) Selection of Grantees. The Committee shall select the Employees to receive Grants
and shall determine the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines. Employees who receive Grants under this Plan shall hereinafter
be referred to as “Grantees.”




5. Granting of Options



The Committee may grant Options to an Employee, upon such terms as the Committee
deems appropriate. The following provisions are applicable to Options:



(a) Number of Shares. The Committee shall determine the number of shares of Company
Stock that will be subject to each Grant of Options to Employees.




(b) Type of Option and Price.



(i) The Committee may grant Incentive Stock Options that are intended to qualify as “incentive
stock options” within the meaning of section 422 of the Code (“Incentive Stock Options”) or
nonqualified stock options that are not intended so to qualify (“Nonqualified Stock Options”) or
any combination of Incentive Stock Options and Nonqualified Stock Options, all in accordance with
the terms and conditions set forth herein.



(ii) The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be
determined by the Committee and shall be equal to or greater than the Fair Market Value (as defined
below) of a share of Company Stock on the date the Option is granted; provided, however, that an
Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock
possessing more than ten percent of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary of the Company, as defined in section 424 of the Code, unless
the Exercise Price per share is not less than 110% of the Fair Market Value of a share of Company
Stock on the date of grant.



(iii) The “Fair Market Value” per share of Company Stock shall mean (A) if the principal
trading market for the shares of Company Stock is a national securities exchange, the last reported
sale price of the shares of Company Stock on the trading day immediately prior to the relevant date
or (if there were no trades on that date) the latest preceding date upon which a sale was reported,
(B) if the shares of Company Stock are not principally traded on a national securities exchange,
the mean between the last reported “bid” and “asked” prices of shares of Company Stock on the
relevant date, as reported on the OTC Bulletin Board, or (C) if the shares of Company Stock are not
publicly traded or, if publicly traded, are not so reported, the Fair Market Value shall be as
determined by the Committee.


 


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(c) Option Term. The Committee shall determine the term of each Option. The term of
any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option
that is granted to an Employee who, at the time of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the Company, or any parent or
subsidiary of the Company, as defined in section 424 of the Code, may not have a term that exceeds
five years from the date of grant.



(d) Exercisability of Options. Options shall become exercisable in accordance with
such terms and conditions, consistent with the Plan, as may be determined by the Committee and
reflected in the Grant Instrument. The Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason.



(e) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options granted to
persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, shall
have an Exercise Price not less than 85% of the Fair Market Value of the Company Stock on the date
of grant, and may not be exercisable for at least six months after the date of grant (except that
such Options may become exercisable, as determined by the Committee, upon the Grantee’s death or
retirement, or upon a Change of Control or other circumstances permitted by applicable
regulations).



(f) Termination of Employment, Death or Retirement. Except as provided below, an
Option may only be exercised while the Grantee is employed by the Employer (as defined below) as an
Employee.



(i) In the event that a Grantee ceases to be employed by the Employer for any reason other
than death, termination for Cause, or the Employee’s sole determination to terminate his or her
employment (other than by reason of retirement approved by the Committee), any Option that is
otherwise exercisable by the Grantee shall terminate unless exercised within 90 days after the date
on which the Grantee ceases to be employed by the Employer (or within such other period of time as
may be specified by the Committee), but in any event no later than the date of expiration of the
Option term. Except as otherwise provided by the Committee, any of the Grantee’s Options that are
not otherwise exercisable as of the date on which the Grantee ceases to be employed by the Employer
shall terminate as of such date.



(ii) In the event the Grantee ceases to be employed by the Employer on account of a
termination for Cause by the Employer or the Grantee’s voluntary termination (other than by reason
of retirement approved by the Committee), any Option held by the Grantee shall terminate as of the
date the Grantee ceases to be employed by the Employer. In addition, notwithstanding any other
provisions of this Section 5, if the Committee determines that the Grantee has engaged in conduct
that constitutes Cause at any time while the Grantee is employed by the Employer or after the
Grantee’s termination of employment, any Option held by the Grantee shall immediately terminate,
and the Grantee shall automatically forfeit all shares underlying any exercised portion of an
Option for which the Company has not yet delivered the share certificates, upon refund by the
Company of the Exercise Price paid by the Grantee for such shares. Upon any exercise of an Option,
the Company may withhold delivery of share certificates pending resolution of an inquiry that could
lead to a finding resulting in a forfeiture.



(iii) If the Grantee dies while employed by the Employer or retires from such employment with
the consent of the Committee, any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within 180 days after the date on which the Grantee ceases to be
employed by the Employer (or within such other period of time as may be specified by the Committee), but in any event no later than the date of expiration of
the Option term. Except as otherwise provided by the Committee, any of the Grantee’s Options that
are not otherwise exercisable as of the date on which the Grantee ceases to be employed by the
Employer shall terminate as of such date.


 


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(iv) For purposes of the Plan:




(A) The term “Employer” shall mean the Company and its subsidiary corporations or
other entities, as determined by the Committee.




(B) “Employed by the Employer” shall mean employment as an Employee (so that, for
purposes of exercising Options and SARs and satisfying conditions with respect to
Restricted Stock Grants and Stock Bonus Awards, a Grantee shall not be considered to have
terminated employment until the Grantee ceases to be an Employee), unless the Committee
determines otherwise.




(C) “Cause” shall mean, except to the extent specified otherwise by the Committee, a
finding by the Committee that the Grantee (i) has breached his or her employment agreement
with the Employer; (ii) has engaged in disloyalty to the Company, including, without
limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty; (iii)
has disclosed trade secrets or confidential information of the Employer to persons not
entitled to receive such information; (iv) has breached any written noncompetition or
nonsolicitation agreement between the Grantee and the Employer; or (v) has engaged in such
other behavior detrimental to the interests of the Employer as the Committee determines.



(g) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee
shall pay the Exercise Price for an Option as specified by the Committee (i) in cash; (ii) by
delivering shares of Company Stock owned by the Grantee (including Company Stock acquired in
connection with the exercise of an Option), subject to such restrictions as the Committee deems
appropriate and having a Fair Market Value on the date of exercise at least equal to the Exercise
Price or by attestation (on a form prescribed by the Committee) to ownership of Shares having a
Fair Market Value on the date of exercise at least equal to the exercise price; (iii) payment
through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve
Board; or (iv) by such other method as the Committee may approve, to the extent permitted by
applicable law. Shares of Company Stock used to exercise an Option shall have been held by the
Grantee for the requisite period of time necessary to avoid adverse accounting consequences to the
Company with respect to the Option. The Grantee shall pay the Exercise Price and the amount of any
withholding tax due (pursuant to Section 11) as specified by the Committee. Payment for the shares
to be issued or transferred pursuant to the Option, and any required withholding taxes, must be
received by the Company by the time specified by the Committee depending on the type of payment
being made, but in all cases prior to, or simultaneously with, the issuance or transfer of such
shares.



(h) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the Company Stock on 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 or any other stock option plan of the Company or a parent or
subsidiary, as defined in section 424 of the Code, exceeds $100,000, then the Option, as to the
excess, shall be treated as a Nonqualified Stock Option.


 


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6. Restricted Stock Grants



The Committee may issue or transfer shares of Company Stock to an Employee under a Restricted
Stock Grant, upon such terms as the Committee deems appropriate. The following provisions are
applicable to Restricted Stock Grants:



(a) General Requirements. Shares of Company Stock issued or transferred pursuant to a
Restricted Stock Grant may be issued or transferred for consideration or for no consideration, and
subject to restrictions or no restrictions, as determined by the Committee. The Committee may
establish conditions under which restrictions on Restricted Stock Grants shall lapse over a period
of time or according to such other criteria as the Committee deems appropriate, including, without
limitation, restrictions based upon the achievement of specific performance goals. The period of
time during which the Restricted Stock Grant shall remain subject to restrictions will be
designated in the Grant Instrument as the “Restriction Period.”



(b) Number of Shares. The Committee, in its sole discretion, shall determine the
number of shares of Company Stock to be issued or transferred pursuant to a Restricted Stock Grant
and the restrictions applicable to such shares.



(c) Requirement of Employment. If the Grantee ceases to be employed by the Employer
or if other specified conditions are not met, the Restricted Stock Grant shall terminate as to all
shares covered by the Grant as to which the restrictions have not lapsed, and those shares of
Company Stock must immediately be returned to the Company. The Committee may, however, provide for
complete or partial exceptions to this requirement as it deems appropriate.



(d) Restrictions on Transfer and Legend on Stock Certificate. During the Restriction
Period, a Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the shares of the
Restricted Stock Grant except to a successor under Section 12. Each certificate for Restricted
Stock Grants shall contain a legend giving appropriate notice of the restrictions in the Grant.
The Grantee shall be entitled to have the legend removed from the stock certificate covering the
shares subject to restrictions and to delivery of such stock certificate when all restrictions on
such shares have lapsed. The Committee may determine that the Company will not issue certificates
for Restricted Stock Grants until all restrictions on such shares have lapsed. If certificates are
issued, the Company will retain possession of such certificates for Restricted Stock Grants until
all restrictions on such shares have lapsed.



(e) No Right to Vote and to Receive Dividends. During the Restriction Period, the
Grantee shall not have the right to vote shares subject to Restricted Stock Grants nor to receive
any dividends or other distributions paid on such shares.



(f) Lapse of Restrictions. All restrictions imposed upon Restricted Stock Grants
shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all
conditions imposed by the Committee. The Committee may determine, as to any or all Restricted
Stock Grants, that the restrictions shall lapse without regard to any Restriction Period.




7. Stock Appreciation Rights



The Committee may grant SARs to an Employee separately or in tandem with any Option. The
following provisions are applicable to SARs:


 


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(a) General Requirements. The Committee may grant SARs to an Employee separately or
in tandem with any Option (for all or a portion of the applicable Option). Tandem SARs may be
granted either at the time the Option is granted or at any time thereafter while the Option remains
outstanding; provided, however, that, in the case of an Incentive Stock Option, SARs may be granted
only at the time of the Grant of the Incentive Stock Option. The Committee shall establish the
base amount of the SAR at the time the SAR is granted. Unless the Committee determines otherwise,
the base amount of each SAR shall be equal to the per share Exercise Price of the related Option
or, if there is no related Option, the Fair Market Value of a share of Company Stock as of the date
of Grant of the SAR.



(b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to a Grantee
that shall be exercisable during a specified period shall not exceed the number of shares of
Company Stock that the Grantee may purchase upon the exercise of the related Option during such
period. Upon the exercise of an Option, the SARs relating to the Company Stock covered by such
Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.



(c) Exercisability. An SAR shall be exercisable during the period specified by the
Committee in the Grant Instrument and shall be subject to such vesting and other restrictions as
may be specified in the Grant Instrument. The Committee may accelerate the exercisability of any
or all outstanding SARs at any time for any reason. SARs may only be exercised while the Grantee
is employed by the Employer or during the applicable period after termination of employment as
described in Section 5(f). A tandem SAR shall be exercisable only during the period when the
Option to which it is related is also exercisable.



(d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs granted to
persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, shall
have a base amount not less than 85% of the Fair Market Value of the Company Stock on the date of
grant, and may not be exercisable for at least six months after the date of grant (except that such
SARs may become exercisable, as determined by the Committee, upon the Grantee’s death, retirement,
or upon a Change of Control or other circumstances permitted by applicable regulations).



(e) Value of SARs. When a Grantee exercises SARs, the Grantee shall receive in
settlement of such SARs an amount equal to the value of the stock appreciation for the number of
SARs exercised, payable in cash, Company Stock, or a combination thereof. The stock appreciation
for an SAR is the amount by which the Fair Market Value of the underlying Company Stock on the date
of exercise of the SAR exceeds the base amount of the SAR as described in subsection (a).



(f) Form of Payment. The Committee shall determine whether the appreciation in an SAR
shall be paid in the form of cash, shares of Company Stock, or a combination of the two, in such
proportion as the Committee deems appropriate. For purposes of calculating the number of shares of
Company Stock to be received, shares of Company Stock shall be valued at their Fair Market Value on
the date of exercise of the SAR. If shares of Company Stock are to be received upon exercise of an
SAR, cash shall be delivered in lieu of any fractional share.



8. Stock Bonus Awards. The Committee may grant shares of Company Stock as a bonus, or
may grant other awards in lieu of obligations of the Company or any of its subsidiaries to pay cash
or deliver other property under this Plan or under other plans or compensatory arrangements,
subject to such terms as shall be determined by the Committee.


 


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9. Qualified Performance-Based Compensation.



The Committee may determine that Restricted Stock Grants and Stock Bonus Awards granted to an
Employee shall be considered “qualified performance-based compensation” under section 162(m) of the
Code. The following provisions shall apply to Restricted Stock Grants and Stock Bonus Awards that
are to be considered “qualified performance-based compensation” under section 162(m) of the Code:




(a) Performance Goals.



(i) When Restricted Stock Grants and Stock Bonus Awards that are to be considered “qualified
performance-based compensation” are granted, the Committee shall establish in writing (A) the
objective performance goals that must be met, (B) the performance period during which the
performance will be measured, (C) the threshold, target and maximum amounts that may be paid if the
performance goals are met, and (D) any other conditions that the Committee deems appropriate and
consistent with the Plan and section 162(m) of the Code.



(ii) The business criteria may relate to the Grantee’s business unit or the performance of the
Company and its parents and subsidiaries as a whole, or any combination of the foregoing, and in
either absolute terms or relative to the performance of one or more comparable companies or an
index covering multiple companies. The Committee shall use objectively determinable performance
goals based on one or more of the following criteria: the price of the Company’s stock, earnings
per share, income before taxes and extraordinary items, net income, operating income, revenues,
earnings before income tax, EBITDA (earnings before interest, taxes, depreciation and
amortization), after-tax or pre-tax profits, operational cash flow, return on capital employed or
return on invested capital, after-tax or pre-tax return on stockholders’ equity, decreasing or
increasing the level of all, or a portion of, the Company’s assets and/or liabilities, stockholder
return, return on equity, growth in assets, unit volume, sales or market share, or strategic
business criteria consisting of one or more objectives based on meeting specified revenue goals,
market penetration goals, geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures. The Committee may provide, at the time the performance goals are
established, that adjustments will be made to the applicable performance goals to take into
account, in any objective manner specified by the Committee, the impact of one or more of the
following: (i) gain or loss from all or certain claims and/or litigation and insurance recoveries,
(ii) the impairment of tangible or intangible assets, (iii) stock-based compensation expense, (iv)
extraordinary, unusual or infrequently occurring events reported in the Company’s public filings,
(v) restructuring activities reported in the Company’s public filings, (vi) investments,
dispositions or acquisitions, (vii) gain or loss from the disposal of certain assets, (viii) gain
or loss from the early extinguishment, redemption, or repurchase of debt, or (ix) changes in
accounting principles that become effective during the performance period.



(b) Establishment of Goals. The Committee shall establish the performance goals in
writing either before the beginning of the performance period or during a period ending no later
than the earlier of (i) 90 days after the beginning of the performance period or (ii) the date on
which 25% of the performance period has been completed, or such other date as may be required or
permitted under applicable regulations under section 162(m) of the Code. The performance goals
shall satisfy the requirements for “qualified performance-based compensation,” including the
requirement that the achievement of the goals be substantially uncertain at the time they are
established and that the goals be established in such a way that a third party with knowledge of
the relevant facts could determine whether and to what extent the performance goals have been met. The Committee shall not have discretion to increase the
amount of compensation that is payable upon achievement of the designated performance goals.


 


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(c) Announcement of Grants. The Committee shall certify and announce the results for
each performance period to all Grantees after the announcement of the Company’s financial results
for the performance period. If and to the extent that the Committee does not certify that the
performance goals have been met, the grants of Restricted Stock Grants and Stock Bonus Awards for
the performance period shall be forfeited or shall not be made, as applicable.



(d) Death or Other Circumstances. The Committee may provide that Restricted Stock
Grants and Stock Bonus Awards shall be payable or restrictions on such Grants shall lapse, in whole
or in part, in the event of the Grantee’s death during the performance period, or under other
circumstances consistent with the Department of Treasury regulations and rulings under section
162(m) of the Code.



10. Deferrals. The Committee may permit or require a Grantee to defer receipt of the
payment of cash or the delivery of shares that would otherwise be due to such Grantee in connection
with any Grant. If any such deferral election is permitted or required, the Committee shall
establish rules and procedures for such deferrals and may provide for interest or other earnings to
be paid on such deferrals. The rules and procedures for any such deferrals shall be consistent
with applicable requirements of section 409A of the Code.




11. Withholding of Taxes



(a) Required Withholding. All Grants under the Plan shall be subject to applicable
federal (including FICA), state, and local tax withholding requirements. The Employer may require
that the Grantee or other person receiving or exercising Grants pay to the Employer the amount of
any federal, state, or local taxes that the Employer is required to withhold with respect to such
Grants, or the Employer may deduct from other wages paid by the Employer the amount of any
withholding taxes due with respect to such Grants.



(b) Election to Withhold Shares. Unless the Committee prohibits the same, a Grantee
may elect to satisfy the Employer’s tax withholding obligation with respect to a Grant paid in
Company Stock by having shares withheld up to an amount that does not exceed the Grantee’s minimum
applicable withholding tax rate for federal (including FICA), state, and local tax liabilities.




12. Transferability of Grants



(a) Nontransferability of Grants. Except as provided below, only the Grantee may
exercise rights under a Grant during the Grantee’s lifetime. A Grantee may not transfer those
rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Grants
other than Incentive Stock Options, if permitted in any specific case by the Committee, pursuant to
a domestic relations order or otherwise as permitted by the Committee. When a Grantee dies, the
personal representative or other person entitled to succeed to the rights of the Grantee may
exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or
her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and
distribution.


 


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(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the
Committee may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned
by family members, consistent with applicable securities laws, according to such terms as the
Committee may determine; provided that the Grantee receives no consideration for the transfer of an
Option and the transferred Option shall continue to be subject to the same terms and conditions as
were applicable to the Option immediately before the transfer.




13. Change of Control of the Company




As used herein, a “Change of Control” shall be deemed to have occurred if:



(a) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) (other
than persons who are stockholders on the effective date of the Plan) becomes a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a result of a change of
ownership resulting from the death of a stockholder, and a Change of Control shall not be deemed to
occur as a result of a transaction in which the Company becomes a subsidiary of another corporation
and in which the stockholders of the Company, immediately prior to the transaction, will
beneficially own, immediately after the transaction, shares entitling such stockholders to more
than 50% of all votes to which all stockholders of the parent corporation would be entitled in the
election of directors (without consideration of the rights of any class of stock to elect directors
by a separate class vote); or



(b) The consummation of (i) a merger or consolidation of the Company with another corporation
where the stockholders of the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares entitling such stockholders
to more than 50% of all votes to which all stockholders of the surviving corporation would be
entitled in the election of directors (without consideration of the rights of any class of stock to
elect directors by a separate class vote); (ii) a sale or other disposition of all or substantially
all of the assets of the Company; or (iii) a liquidation or dissolution of the Company.




14. Consequences of a Change of Control



(a) Notice and Acceleration. Upon a Change of Control, unless the Committee
determines otherwise, (i) the Company shall provide each Grantee with outstanding Grants not less
than ten days’ advance written notice of such Change of Control; (ii) all outstanding Options and
SARs shall automatically accelerate and become fully exercisable; and (iii) the restrictions and
conditions on all outstanding Restricted Stock Grants and Stock Bonus Awards shall immediately
lapse.



(b) Assumption of Grants. Upon a Change of Control where the Company is not the
surviving corporation (or survives only as a subsidiary of another corporation), unless the
Committee determines otherwise, all outstanding Options and SARs that are not exercised shall be
assumed by, or replaced with comparable options and rights by, the surviving corporation (or a
parent or subsidiary of the surviving corporation), and other outstanding Grants shall be converted
to similar grants of the surviving corporation (or a parent or subsidiary of the surviving
corporation).


 


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(c) Other Alternatives. Notwithstanding the foregoing, in the event of a Change of
Control, the Committee may take one or both of the following actions with respect to any or all outstanding Options and SARs: the Committee may (i) require that the Grantees surrender their
outstanding Options and SARs in exchange for a payment by the Company, in cash or Company Stock as
determined by the Committee, in an amount equal to the amount by which the then Fair Market Value
of the shares of Company Stock subject to the Grantee’s unexercised Options and SARs exceeds the
Exercise Price of the Options or the base amount of the SARs, as applicable; or (ii) after giving
the Grantees an opportunity to exercise their outstanding Options and SARs, terminate any or all
unexercised Options and SARs at such time as the Committee deems appropriate. Such surrender or
termination shall take place as of the date of the Change of Control or such other date as the
Committee may specify.



15. Requirements for Issuance or Transfer of Shares. No Company Stock shall be issued
or transferred in connection with any Grant hereunder unless and until all legal requirements
applicable to the issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition any Grant made to
any Grantee hereunder on the Grantee’s undertaking in writing to comply with such restrictions on
his or her subsequent disposition of the shares of Company Stock as the Committee shall deem
necessary or advisable, and certificates representing such shares may be legended to reflect any
such restrictions. Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as may be required by
applicable laws, regulations and interpretations, including any requirement that a legend be placed
thereon.




16. Amendment and Termination of the Plan



(a) Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without stockholder approval if such approval is
required in order to comply with the Code or other applicable laws, or to comply with applicable
stock exchange requirements.



(b) No Repricing Without Stockholder Approval. Notwithstanding anything in the Plan
to the contrary, the Committee may not reprice Options, nor may the Board amend the Plan to permit
repricing of Options, unless the stockholders of the Company provide prior approval for such
repricing. An adjustment to an Option pursuant to Section 3(c) above shall not constitute a
repricing of the Option. For purposes of this Section 16(b), “repricing” shall have the same
meaning as set forth in Section 303A.08 of the New York Stock Exchange Listed Company Manual, or
any successor provision thereto.



(c) Stockholder Re-Approval Requirement. If Restricted Stock Grants and Stock Bonus
Awards are granted as “qualified performance-based compensation” under Section 9 above, Section 9
must be reapproved by the stockholders no later than the first stockholders meeting that occurs in
the fifth year following the year in which the stockholders previously approved the provisions of
Section 9, if required by section 162(m) of the Code or the regulations thereunder.



(d) Termination of Plan. The Plan shall terminate on the day immediately preceding
the tenth anniversary of the Original Effective Date (as defined below), unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of the stockholders.


 


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(e) Termination and Amendment of Outstanding Grants. A termination or amendment of
the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Committee acts under Section 22(b). 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 22(b) or may be amended by agreement of the Company and the
Grantee consistent with the Plan.



(f) Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials, or examples, oral or written, may amend the
Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its
successors and assigns.



17. Funding of the Plan. This 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 this Plan. In no event shall interest be paid or accrued on
any Grant, including unpaid installments of Grants.



18. Rights of Grantees. Nothing in this Plan shall entitle any Employee or other
person to any claim or right to be granted a Grant under this Plan. Neither this Plan nor any
action taken hereunder shall be construed as giving any individual any rights to be retained by or
in the employ of the Employer or any other employment rights.



19. No Fractional Shares. No fractional shares of Company Stock shall be issued or
delivered pursuant to the Plan or any Grant. The Committee shall determine whether cash, other
awards, or other property shall be issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise eliminated.



20. Headings. Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall control.



21. Effective Date of the Plan. The Plan was originally effective August 4, 2004 (the
“Original Effective Date”). The Plan as amended and restated herein is effective as of July 31,
2008, subject to the approval by the Company’s stockholders.




22. Miscellaneous



(a) Grants in Connection with Corporate Transactions and Otherwise. Nothing contained
in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this
Plan in connection with the acquisition, by purchase, lease, merger, consolidation, or otherwise,
of the business or assets of any corporation, firm, or association, including Grants to employees
thereof who become Employees, or for other proper corporate purposes; or (ii) limit the right of
the Committee to grant stock options or make other awards outside of this Plan. Without limiting
the foregoing, the Committee may make a Grant to an employee of another corporation who becomes an
Employee by reason of a corporate merger, consolidation, acquisition of stock or property,
reorganization, or liquidation involving the Company or any of its subsidiaries in substitution for
a stock option or restricted stock awards made by such corporation. The terms and conditions of
the substitute grants 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 as it deems appropriate, including setting the Exercise Price of Options or the base price
of SARs at a price necessary to retain for the Grantee the same economic value as the prior options
or rights.


 


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(b) Compliance with Law. The Plan, the exercise of Options, and the obligations of
the Company to issue or transfer shares of Company Stock under Grants shall be subject to all
applicable laws and to approvals by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or
its successors under the Exchange Act. In addition, it is the intent of the Company that Incentive
Stock Options comply with the applicable provisions of section 422 of the Code, that Grants of
“qualified performance-based compensation” comply with the applicable provisions of section 162(m)
of the Code and that, to the extent applicable, Grants comply with the requirements of section 409A
of the Code. To the extent that any provision that is designed to comply with section 16 of the
Exchange Act or the legal requirements of section 422, 162(m) or 409A of the Code as set forth in
the Plan ceases to be necessary under section 16 of the Exchange Act or required under section 422,
162(m) or 409A of the Code, that Plan provision shall cease to apply. The Committee may revoke any
Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and
mandatory government regulation.



(c) Employees Subject to Taxation Outside the United States. With respect to Grantees
who are subject to taxation in countries other than the United States, the Committee may make
Grants on such terms and conditions as the Committee deems appropriate to comply with the laws of
the applicable countries, and the Committee may create such procedures, addenda and subplans and
make such modifications as may be necessary or advisable to comply with such laws.



(d) Governing Law. The validity, construction, interpretation, and effect of the Plan
and Grant Instruments issued under the Plan shall be governed and construed by and determined in
accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflict
of laws provisions thereof.




 


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