Document:

ex_10-1.htm

    Exhibit 10.1

     

     

     

    

      Fourth
Amendment

      

      to

      

      Credit
Agreement

      

      Among

      

      Legacy
Reserves LP

      as
Borrower,

      

      BNP
Paribas,

      as
Administrative Agent,

      

      and

      

      The
Lenders Signatory Hereto

      

      

      Effective
as of April 24, 2008

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Fourth
Amendment to Credit Agreement

      

      This
Fourth Amendment to Credit Agreement (this “Fourth Amendment”)
executed effective as of April 24, 2008 (the “Fourth Amendment Effective
Date”) is among Legacy Reserves LP, a limited partnership formed under
the laws of the State of Delaware (the “Borrower”); each of
the undersigned guarantors (the “Guarantors”, and
together with the Borrower, the “Obligors”); each of
the Lenders that is a signatory hereto; and BNP Paribas, as administrative agent
for the Lenders (in such capacity, together with its successors, the “Administrative
Agent”).

      

      Recitals

      

      A.           The
Borrower, the Administrative Agent and the Lenders are parties to that certain
Credit Agreement dated as of March 15, 2006 (as amended to date, the “Credit Agreement”),
pursuant to which the Lenders have made certain credit available to and on
behalf of the Borrower.

      

      B.           The
Borrower has requested and the Administrative Agent and the Lenders have agreed
to amend certain provisions of the Credit Agreement.

      

      C.           NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

      

      Section
1.                                Defined
Terms.  Each capitalized term which is defined in the Credit
Agreement, but which is not defined in this Fourth Amendment, shall have the
meaning ascribed to such term in the Credit Agreement.  Unless
otherwise indicated, all section references in this Fourth Amendment refer to
the Credit Agreement.

      

      Section
2.                      Amendments to Credit
Agreement.

      

      2.1           Definitions.  Section
1.02 is hereby amended by amending and restating the following definitions as
follows:

      

      “ ‘Agreement’ means this
Credit Agreement, as amended by that certain First Amendment to Credit
Agreement, dated as of July 7, 2006, the Second Amendment to Credit Agreement,
dated as of May 3, 2007, the Third Amendment to Credit Agreement, dated as of
October 24, 2007, and the Fourth Amendment to Credit Agreement, dated as of
April 24, 2008, and as the same may from time to time be further amended,
modified, supplemented or restated.”

      

      “ ‘Applicable Margin’
means, for any day, with respect to any ABR Loan or Eurodollar Loan, as the case
may be, the rate per annum set forth in the Borrowing Base Utilization Grid
below based upon the Borrowing Base Utilization Percentage then in
effect:

       

      
        
           

        

        
          Fourth
Amendment 2

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Borrowing
      Base Utilization Percentage

              	
                Eurodollar
      Loans

              	
                ABR
      Loans

              
	
                Level
      1

              	
                less
      than 33%

              	
                1.250%

              	
                0.000%

              
	
                Level
      2

              	
                greater
      than or equal to 33%, but less than 66%

              	
                1.500%

              	
                0.000%

              
	
                Level
      3

              	
                greater
      than or equal to 66%, but less than 85%

              	
                1.750%

              	
                0.125%

              
	
                Level
      4

              	
                greater
      than or equal to 85%

              	
                1.875%

              	
                0.250%

              

      

      

       

      Each
change in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change, provided, however, that if at any time
the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then
the “Applicable Margin” means the rate per annum set forth on the grid when the
Borrowing Base Utilization Percentage is at its highest level.”

       

      2.2           Annex
I.  Annex I is hereby amended and restated in its entirety with
the Annex I attached hereto.

      

      Section
3.                      Assignment; Borrowing
Base.

      

      3.1           Assignment.  For
an agreed consideration, each of BNP Paribas, Bank of America, N.A., Comerica
Bank, KeyBank, National Association and Wachovia Bank, National Association
(collectively, the “Assignor Lenders”)
hereby irrevocably sells and assigns to Fortis Capital Corp., The Bank of Nova
Scotia and Compass Bank (the “Assignee Lenders”),
and each of the Assignee Lenders, by its signature hereto, hereby irrevocably
purchases and assumes from the Assignor Lenders, subject to and in accordance
with the Credit Agreement, as of the Fourth Amendment Effective Date (i) such
Assignor Lenders’ rights and obligations in their capacities as Lenders under
the Credit Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified
on the attached Annex
I, of such outstanding rights and obligations of the Assignor Lenders
under the Credit Agreement and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor Lenders against any Person, whether known or unknown, arising under or
in connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to
clause (i) above.

       

      
        
           

        

        
          Fourth
Amendment 3

          
            

          

        

        
           

        

      

      
 

      3.2           Borrowing
Base.

      

      (a)           For
the period from and including the Fourth Amendment Effective Date to but
excluding the next Redetermination Date, the amount of the Borrowing Base shall
be equal to $272,000,000.  Notwithstanding the foregoing, the
Borrowing Base may be subject to further adjustments from time to time pursuant
to Section 8.13(c) or Section 9.12(d).

      

      (b)           The
Borrowing Base shall automatically increase to $320,000,000 upon the completion
of the following conditions:

      

      (i)           The
Administrative Agent shall have received a certificate of a Responsible Officer
certifying that the Borrower is concurrently consummating that certain
acquisition for approximately $82,000,000 (in cash and Equity Interests) of Oil
and Gas Properties in the Permian Basin (the “Acquisition
Properties”) which is currently scheduled to close April 30, 2008 (the
“Acquisition”).

      

      (ii)           The
Administrative Agent shall have received, or be receiving concurrently with the
closing of the Acquisition, original assignments conveying the Acquisition
Properties to the Borrower, for the Administrative Agent to file for record in
the respective counties.

      

      (iii)           The
Administrative Agent shall have received from each party thereto duly executed
counterparts (in such number as may be requested by the Administrative Agent) of
security instruments with respect to the Acquisition Properties, including
mortgages and deeds of trust in form satisfactory to the Administrative
Agent.  In connection with the execution and delivery of such security
instruments, the Administrative Agent shall be reasonably satisfied that the
security instruments create first priority, perfected Liens (subject only to
Excepted Liens identified in clauses (a) to (d) and (f) of the definition
thereof, but subject to the provisos at the end of such definition) on at least
80% of the total value of the Acquisition Properties.

      

      (iv)           The
Administrative Agent shall have received title information as the Administrative
Agent may reasonably require satisfactory to the Administrative Agent setting
forth the status of title to at least 80% of the total value of the Acquisition
Properties.

      

      (v)           The
Administrative Agent shall have received payment of all fees and other amounts
due and payable, including, for the account of each Lender then party to the
Credit Agreement, ratably in accordance with its Applicable Percentage, a
Borrowing Base increase fee equal to 25 bps on the amount of any increase of
each Lender’s Commitment over such Lender’s highest Commitment previously in
effect, payable on the consummation of the Acquisition.

      

      Section
4.                      Conditions
Precedent.  The effectiveness of this Fourth Amendment is
subject to the receipt by the Administrative Agent of the following documents
and satisfaction of the other conditions provided in this Section 4, each
of which shall be reasonably satisfactory to the Administrative Agent in form
and substance:

       

      
        
           

        

        
          Fourth
Amendment 4

          
            

          

        

        
           

        

      

      
 

      4.1           Fourth
Amendment.  The Administrative Agent shall have received
multiple counterparts as requested of this Fourth Amendment from each Lender and
the Borrower.

      

      4.2           Notes.  The
Administrative Agent shall have received a Note payable to the order of each
Lender in the amount of such Lender’s Commitment after giving effect to the
assignment and increase in commitments pursuant to this Fourth Amendment, duly
executed and delivered by Borrower, to be dated as of the Fourth Amendment
Effective Date.

       

      4.3           Security
Instruments.  The Administrative Agent shall have received from
each party thereto duly executed counterparts (in such number as may be
requested by the Administrative Agent) of Security Instruments in form and
substance satisfactory to the Administrative Agent, such that the Borrower
remains in compliance with Section 8.14 of the Credit Agreement.

       

      4.4           Borrowing Base Increase
Fee.  The Administrative Agent shall have received payment of
all fees and other amounts due and payable, including, for the account of each
Lender party to this Amendment, ratably in accordance with its Applicable
Percentage, a Borrowing Base increase fee equal to 25 bps on the amount of any
increase of each Lender’s Commitment over such Lender’s highest Commitment
previously in effect, payable on the First Amendment Effective
Date.

       

      4.5           No
Default.  No Default or Event of Default shall have occurred
and be continuing as of the Fourth Amendment Effective Date.

      

      Section
5.                      Representations and
Warranties; Etc.  Each Obligor hereby affirms:  (a)
that as of the date of execution and delivery of this Fourth Amendment, all of
the representations and warranties contained in each Loan Document to which such
Obligor is a party are true and correct in all material respects as though made
on and as of the Fourth Amendment Effective Date (unless made as of a specific
earlier date, in which case, was true as of such date); and (b) that after
giving effect to this Fourth Amendment and to the transactions contemplated
hereby, no Defaults exist under the Loan Documents or will exist under the Loan
Documents.

      

      Section
6.                      Miscellaneous.

      

      6.1           Confirmation.  The
provisions of the Credit Agreement (as amended by this Fourth Amendment) shall
remain in full force and effect in accordance with its terms following the
effectiveness of this Fourth Amendment.

      

      6.2           Ratification and Affirmation
of Obligors.  Each of the Obligors hereby expressly (i)
acknowledges the terms of this Fourth Amendment, (ii) ratifies and affirms its
obligations under the Guaranty Agreement and the other Security Instruments to
which it is a party, (iii) acknowledges, renews and extends its continued
liability under the Guaranty Agreement and the other Security Instruments to
which it is a party and (iv) agrees that its guarantee under the Guaranty
Agreement and the other Security Instruments to which it is a party remains in
full force and effect with respect to the Indebtedness as amended
hereby.

       

      
        
           

        

        
          Fourth
Amendment 5

          
            

          

        

        
           

        

      

      
 

      6.3           Counterparts.  This
Fourth Amendment may be executed by one or more of the parties hereto in any
number of separate counterparts, and all of such counterparts taken together
shall be deemed to constitute one and the same instrument.

      

      6.4           No Oral
Agreement.  This written Fourth Amendment, the Credit Agreement
and the other Loan Documents executed in connection herewith and therewith
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or unwritten oral agreements of the
parties.  There are no subsequent oral agreements between the
parties.

      

      6.5           Governing
Law.  This Fourth Amendment (including, but not limited to, the
validity and enforceability hereof) shall be governed by, and construed in
accordance with, the laws of the State of Texas.

      
        
           

        

        
          Fourth
Amendment 6

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be duly
executed effective as of the date first written above.

      
        
          	BORROWER:	LEGACY
      RESERVES LP	 
	 	
                   

                  By: 

                   

                	
                   

                  Legacy Reserves GP,
      LLC,

                  its general partner

                	 
	
                   

                	
                  By:
      

                	/s/ Steven
      H. Pruett	 
	 	 	Steven
      H. Pruett 	 
	 	 	President,
      Chief Financial Officer and Secretary	 
	 	 	 	 

        

      
        	GUARANTORS:	LEGACY
      RESERVES OPERATING LP	 
	 	
                 

                By:

                 

              	
                 

                Legacy Reserves Operating GP,
      LLC,

                its general
      partner

              	 
	
                 

              	
                By:
      

              	/s/ Steven
      H. Pruett	 
	 	 	Steven
      H. Pruett	 
	 	 	President,
      Chief Financial Officer and Secretary	 
	 	 	 	 

      

      
        	 	LEGACY
      RESERVES OPERATING GP, LLC	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Steven
      H. Pruett	 
	 	 	Steven
      H. Pruett	 
	 	 	President,
      Chief Financial Officer and Secretary	 
	 	 	 	 

      

      
        	 	LEGACY
      RESERVES SERVICES, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Steven
      H. Pruett	 
	 	 	Steven
      H. Pruett	 
	 	 	President,
      Chief Financial Officer and Secretary	 
	 	 	 	 

      

    
      
         

      

      
        Fourth
Amendment 7

        
          

        

      

      
         

      

    

     

    
      
        	ADMINISTRATIVE
      AGENT:	
                BNP
      PARIBAS

                as Administrative
      Agent and Lender

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Russell
      Otts	 
	 	 	Russell
      Otts	 
	 	 	Director 	 
	 	 	 	 

      

    

    
      	
               

            	
              By:
      

            	/s/ Brian
      M. Malone	 
	 	 	Brian
      M. Malone	 
	 	 	Managing
      Director	 
	 	 	 	 

    

     

     

    
      
         

      

      
        Fourth
Amendment 8

        
          

        

      

      
         

      

    

     

    
      
        	LENDERS:	BANK
      OF AMERICA N.A.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Charles
      W. Patterson	 
	 	 	Charles
      W. Patterson	 
	 	 	Managing
      Director	 
	 	 	 	 

      

    

    
      	 	COMERICA
      BANK	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Peter
      L. Sefzik	 
	 	 	Peter
      L. Sefzik 	 
	 	 	Vice
      President	 
	 	 	 	 

    

    
      	 	KEY
      BANK N.A.	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Thomas
      Rajan	 
	 	 	Thomas
      Rajan	 
	 	 	Managing
      Director	 
	 	 	 	 

    

     

     

    
      
         

      

      
        Fourth
Amendment 9

        
          

        

      

      
         

      

    

     

    
      
        	 	WACHOVIA
      BANK NATIONAL ASSOCIATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ LS
      Phillips	 
	 	 	Leanne
      S. Phillips	 
	 	 	Director	 
	 	 	 	 

      

    

    
      	 	FORTIS
      CAPITAL CORP.	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Michele
      Jones	 
	 	 	Michele
      Jones	 
	 	 	Director	 
	 	 	 	 

    

    
      	
               

            	
              By:
      

            	/s/ Ilene
      Fowler	 
	 	 	Ilene
      Fowler	 
	 	 	Director	 
	 	 	 	 

    

    
      	 	COMPASS
      BANK	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Kathleen
      J. Bowen	 
	 	 	Kathleen
      J. Bowen	 
	 	 	Senior
      Vice President	 
	 	 	 	 

    

     

     

    
      
         

      

      
        Fourth
Amendment 10

        
          

        

      

      
         

      

    

     

    
      
        	 	THE
      BANK OF NOVIA SCOTIA	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ David
      G. Mills	 
	 	 	David
      G. Mills	 
	 	 	Director	 
	 	 	 	 

      

    

     

     

    
      
         

      

      
        Fourth
Amendment 11Filed by Bowne Pure Compliance

 

EXHIBIT 10.1

SAFEGUARD SCIENTIFICS,
INC.

MANAGEMENT INCENTIVE PLAN

1. BACKGROUND
AND PURPOSE

Safeguard Scientifics,
Inc., a Pennsylvania corporation, hereby adopts this Safeguard Scientifics,
Inc. Management Incentive Plan (the “Plan”), effective as of
January 1, 2008. The purpose of the Plan is to provide a short-term,
performance-based, variable, at-risk compensation program for executive
officers and certain other employees of Safeguard Scientifics, Inc. (the
“Company”), in accordance with the terms outlined herein. This Plan
is intended to serve as one component of the Company’s overall
compensation program. The purpose of this Plan, together with the
Company’s overall compensation program, is to assist the Company in
motivating and retaining highly-qualified, experienced employees.

2. DEFINITIONS

(a) “Administrator” means the President or
such other appropriate officer of the Company as may be appointed from time to
time by the Chief Executive Officer of the Company.

(b) “Award” means a dollar denominated
incentive granted under the Plan. Actual amounts pursuant to an Award will be
paid to a Grantee if the terms and conditions of this Plan are satisfied. Such
amounts may be payable in cash or Company common stock, or a combination
thereof, in the discretion of the Committee.

(c) “Base Salary” means an
individual’s regular, annual rate of compensation, but does not include
any amounts paid by the Company to any Grantee as overtime pay, signing
bonuses, one-time incentive or other bonus payments or any other non-regular
payments.

(d) “Board” means the Board of Directors
of the Company.

(e) “Committee” means the Compensation
Committee of the Board or such other committee of the Board assigned by the
Board to administer the Plan.

(f) “Company” means Safeguard Scientifics,
Inc., a Pennsylvania corporation, including any successor thereto by merger,
consolidation, acquisition of all or substantially all the assets thereof, or
otherwise.

(g) “Corporate Objectives” means annual
performance objectives for the Company and other objectives relevant to the
Company’s business as may be established by the Committee, including, but
not limited to: capital deployment; monetization of partner company holdings or
assets; performance of partner companies; execution of the Company’s
business strategy; accomplishment by management of specific Board directives;
maintenance of capital deployment pipeline; and maintenance of financial
reporting, regulatory and legal compliance.

-1-

1

 

(h) “Corporate Performance” means the
Committee’s determination of the percentage achievement of the annual
Corporate Objectives, after adjustment, if any, in the discretion of the
Committee.

(i) “Eligible Employee” means any employee
of the Company, as determined by the Committee (or, if applicable, the
Administrator).

(j) “Executive” shall mean any Eligible
Employee who has the title of Chief Executive Officer, Executive Vice President
or Senior Vice President of the Company.

(k) “Grantee” means an Eligible Employee
who is granted an Award.

(l) “Individual Objectives” means, with
respect to a given Grantee, annual performance objectives relevant to the
Company’s business and such Grantee’s position and responsibilities
with the Company or responsibilities with respect to any partner companies, as
may be established by the Committee (or, if applicable, the Administrator).

(m) “Individual Performance” means for a
given Grantee, the percentage achievement of the annual Individual Objectives
of such Grantee as the Committee (or, if applicable, the Administrator)
determines, in its discretion.

(n) “Person” means an individual, a
corporation, a partnership, an association, a trust or any other entity or
organization.

(o) “Performance Targets” means, the
annual Corporate Objectives and the annual Individual Objectives established by
the Committee. Corporate Objectives and Individual Objectives and the weighting
of such objectives may differ among Grantees or classes of Grantees.

(p) “Plan” means the Safeguard
Scientifics, Inc. Management Incentive Plan, as set forth herein, and as
amended from time to time.

3. ADMINISTRATION OF THE PLAN

(a) Administration. The Plan shall be administered by
the Committee. The Committee shall have the power and duty to do all things
necessary or convenient to effect the intent and purposes of the Plan and not
inconsistent with any of the provisions hereof, whether or not such powers and
duties are specifically set forth herein, and, by way of amplification and not
limitation of the foregoing, the Committee shall have the power to:

(i) determine
annual Awards available under the Plan and the Corporate Objectives and
Individual Objectives related thereto

(ii) provide
rules and regulations for the management, operation and administration of the
Plan, and, from time to time, to amend or supplement such rules and regulations;

-2-

2

 

(iii) construe
the Plan, which construction, as long as made in good faith, shall be final and
conclusive upon all parties hereto;

(iv) correct any
defect, supply any omission, or reconcile any inconsistency in the Plan in such
manner and to such extent as it shall deem expedient to carry the same into
effect, and it shall be the sole and final judge of when such action shall be
appropriate; and

(v) determine
whether the conditions to the payment of any amounts pursuant to an Award have
been satisfied.

The resolution of any questions with
respect to payments and entitlements pursuant to the provisions of the Plan
shall be determined by the Committee, and all such determinations shall be
final and conclusive.

(b) Grants. Subject to the express terms and
conditions set forth in the Plan, and, if applicable, subject to contractual
obligations between the Company and a Grantee, the Committee shall have the
power, from time to time, to select those Eligible Employees to whom Awards
shall be granted under the Plan, to determine the amount payable pursuant to
each Award, and, pursuant to the provisions of the Plan, to determine the terms
and conditions of each Award.

(c) Delegation
of Authority. The Committee may delegate to the Administrator, its
authority under the Plan, including, but not limited to, its authority to grant
an Award and its authority to determine whether the conditions to the payment
of any amounts pursuant to an Award have been satisfied, with respect to any
employee of the Company who is not an Executive. Such delegation of authority
shall continue in effect until the earliest of (i) such time as the
Committee shall, in its discretion, revoke such delegation of authority,
(ii) its delegate shall cease to be an employee of the Company for any
reason or (iii) its delegate shall notify the Committee that he declines
to continue to exercise such authority.

(d) Grantee
Information. The Company shall furnish to the Committee and the
Administrator in writing all information the Company deems appropriate for the
Committee and the Administrator to exercise their respective powers and duties
in administration of the Plan. Such information shall be conclusive for all
purposes of the Plan and the Committee and the Administrator shall be entitled
to rely thereon without any investigation thereof; provided, however, that the
Committee and the Administrator may correct any errors discovered in any such
information.

4. ELIGIBILITY

Awards may be granted
only to Eligible Employees of the Company, as determined by the Committee.

-3-

3

 

5. AWARDS

The Committee may
grant Awards in accordance with the Plan. The terms and conditions of Awards
shall be as determined from time to time by the Committee, consistent, however,
with the following:

(a) Time of
Grant. Awards may be granted at any time from the date of adoption of the
Plan by the Board until the Plan is terminated by the Board or the Committee.

(b) Non-uniformity of Awards. The provisions of Awards
need not be the same with respect to each Grantee.

(c) Establishment of Performance Targets and Conditions to
Payment of Awards.

(i) An Award
shall be expressed as either a fixed target dollar amount or as a percentage of
a Grantee’s Base Salary and shall become payable for a given calendar
year to the extent that the Performance Targets established by the Committee
are satisfied.

(ii) The
Committee shall establish annual Performance Targets for each annual period,
and the weighting of individual Performance Targets for each year and among
Grantees or classes of Grantees.

(iii) After the
end of the annual period for which an Award is granted, the Committee shall
determine to what extent the annual Performance Targets established by the
Committee have been satisfied. Each Grantee shall be entitled to receive
payment pursuant to an annual Award only after review by the Committee of the
final annual operating results and the Committee’s determination as to
what extent the Performance Targets have been met.

(iv) The Company
shall pay all Awards granted with respect to the Performance Targets set for a
given annual period under the Plan to each Grantee as soon as practicable
following the determination by the Committee described in
Section 5(c)(iii) above with respect to such given annual period, but in
no event later than March 15th of the year following such
period.

(d) Termination of Grantee’s Employment. Upon
termination of a Grantee’s employment with the Company, all of such
Grantee’s rights to Awards shall cease and no further payments shall be
made with respect thereto, subject to contractual obligations between the
Company and such Grantee, or unless the Committee in its discretion shall
determine otherwise.

(e) Payment. Amounts deemed payable by the Committee
pursuant to Awards hereunder may be paid, in the discretion of the Committee,
in cash or shares of the Company’s common stock available under any of
the Company employee benefit plan that previously was approved by the
Company’s shareholders (and, if such plan has been amended in a manner
requiring shareholder approval under applicable law or the rules of a national
securities exchange upon which the Company’s common stock is then listed,
that, as so amended, previously was approved by the Company’s
shareholders), or any combination thereof.

-4-

4

 

6. AMENDMENT
AND TERMINATION

The Plan may be
terminated by the Board or the Committee at any time. The Plan may be amended
by the Board or the Committee at any time. No Award shall be affected by any
such termination or amendment without the written consent of the Grantee.

7. MISCELLANEOUS PROVISIONS

(a) Unsecured
Creditor Status. A Grantee entitled to payment of an Award hereunder shall
rely solely upon the unsecured promise of the Company, as set forth herein, for
the payment thereof, and nothing herein contained shall be construed to give to
or vest in a Grantee or any other person now or at any time in the future, any
right, title, interest, or claim in or to any specific asset, fund, reserve,
account, insurance or annuity policy or contract, or other property of any kind
whatever owned by the Company, or in which the Company may have any right,
title, or interest, nor or at any time in the future.

(b) Non-Assignment of Awards. The Grantee shall not be
permitted to sell, transfer, pledge or assign any amount payable pursuant to
the Plan or an Award, provided that the right to payment under an Award may
pass by will or the laws of descent and distribution.

(c) Other
Company Plans. It is agreed and understood that any benefits under this
Plan are in addition to any and all benefits to which a Grantee may otherwise
be entitled under any other contract (other than any employment contract
entered into by and between the Company and any Grantee), arrangement, or
voluntary pension, profit sharing or other compensation plan of the Company,
whether funded or unfunded, and that this Plan shall not affect or impair the
rights or obligations of the Company or a Grantee under any other such
contract, arrangement, or voluntary pension, profit sharing or other
compensation plan.

(d) Separability. If any term or condition of the Plan
shall be invalid or unenforceable to any extent or in any application, then the
remainder of the Plan, with the exception of such invalid or unenforceable
provision, shall not be affected thereby, and shall continue in effect and
application to its fullest extent.

(e) Continued
Employment. Neither the establishment of the Plan, any provisions of the
Plan, nor any action of the Committee shall be held or construed to confer upon
any Grantee the right to a continuation of employment by the Company. The
Company reserves the right to dismiss any employee (including a Grantee), or
otherwise deal with any employee (including a Grantee) to the same extent as
though the Plan had not been adopted.

(f) Incapacity. If the Committee determines that a
Grantee is unable to care for his affairs because of illness or accident, any
benefit due such Grantee under the Plan may be paid to his spouse, child,
parent, or any other person deemed by the Committee to have incurred expense
for such Grantee (including a duly appointed guardian, committee, or other
legal representative), and any such payment shall be a complete discharge of
the Company’s obligation hereunder.

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(g) Withholding. The Company shall withhold the amount
of any federal, state, local or other tax, charge or assessment attributable to
the grant of any Award or lapse of restrictions under any Award as it may deem
necessary or appropriate, in its sole discretion.

(h) Section 409A.

(i) Amounts
payable under this Plan are intended, in whole or in part, to meet the
requirements of the “short-term deferral” exception or another
exception under Section 409A of the Code. Notwithstanding anything in this
Plan to the contrary, if Grantee is a “specified employee” of a
publicly traded corporation under Section 409A of the Code on the
Effective Termination Date, and if payment of any amount under this Plan is
required to be delayed for a period of six (6) months after separation
from service pursuant to Section 409A of the Code, payment of such amount
shall be delayed as required by Section 409A of the Code, and the
accumulated postponed amount, with interest (as described below), shall be paid
in a lump sum payment on the first payroll date that occurs after the end of
the six-month period. If Grantee dies during the postponement period prior to
the payment of postponed amount, the amounts withheld on account of
Section 409A of the Code, with interest, shall be paid to the personal
representative of Grantee’s estate within sixty (60) days after the
date of Grantee’s death. A “specified employee” shall mean a
Grantee who, at any time during the twelve (12) month period ending on the
identification date, is a “specified employee” under
Section 409A of the Code, as determined by the Company’s Board of
Directors. The determination of “specified employees,” including
the number and identity of persons considered “specified employees”
and the identification date, shall be made by the Company’s Board of
Directors in accordance with the provisions of Sections 416(i) and 409A of the
Code and the regulations issued thereunder. If amounts are postponed on account
of Section 409A, the postponed amounts will be credited with interest for
the postponement period at the “prime rate” as published in The
Wall Street Journal on the Termination Date. Notwithstanding the foregoing,
payments under this Plan may be made without the delay for a period of six
(6) months to the extent that the payments are made in compliance with the
exemptions under Section 409A including, but not limited, to the
separation pay exemption and short-term deferral exemption as determined in the
reasonable judgment of the Company.

(ii) Notwithstanding anything in this Plan to the contrary,
if required by Section 409A, payments may only be made under this Plan
upon an event and in a manner permitted by Section 409A, to the extent
applicable. As used in the Plan, the term “termination of
employment” shall mean Grantee’s separation from service with the
Company and its subsidiaries and affiliates within the meaning of
Section 409A and the regulations promulgated thereunder. For purposes of
Section 409A, the right to a series of payments under the Plan shall be
treated as a right to a series of separate payments. In no event may Grantee
designate the year of payment for any amounts payable under the Plan. All
reimbursements and in-kind benefits provided under the Plan shall be made or
provided in accordance with the requirements of Section 409A of the Code.

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8. GOVERNING
LAW

The Plan and all
determinations made and actions taken pursuant to the Plan shall be governed in
accordance with Pennsylvania law.

9. EFFECTIVE
DATE

The effective date of
this Plan is as of January 1, 2008.

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