Exhibit 4.2
S&T BANCORP, INC.
AMENDED AND RESTATED 1992 INCENTIVE STOCK PLAN
1. Definitions
In this Plan, except where the context otherwise
indicates, the following definitions apply:
1.1. "Agreement" means a written agreement
implementing a grant of an Option or Right or an award of
Restricted Stock or Incentive Shares.
1.1. "Board" means the Board of Directors of the
Corporation, but does not include members emeritus of the Board
of Directors.
1.2. "Code" means the Internal Revenue Code of 1986,
as amended.
1.3. "Committee" means the committee of the Board
meeting the standards of Rule 16b-3(c)(2)(i) under the Exchange
Act, or any similar successor rule, appointed by the Board to
administer the Plan. Unless otherwise determined by the Board,
the Compensation Committee of the Board shall be the Committee.
1.4. "Common Stock" means the common stock, par
value $2.50 per share, of the Corporation.
1.5. "Corporation" means S&T Bancorp, Inc.
1.6. "Date of Exercise" means the date on which the
Corporation receives notice of the exercise of an Option or
Right in accordance with the terms of Article 9.
1.7. "Date of Grant" means the date on which an Option
or Right is granted or Restricted Stock or Incentive Shares are
awarded by the Committee.
1.8. "Director" means a member of the Board of the
Corporation.
1.9. "Employee" means any person determined by the
Committee to be an employee of the Corporation or a Subsidiary,
including an Employee Director.
1.10. "Employee Director" means a Director who is an
Employee of the Corporation.
1.11. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
1
1.12. "Fair Market Value" of a share of Common Stock
means the amount equal to the fair market value of a share of
Common Stock determined pursuant to a reasonable method adopted
by the Committee in good faith for such purpose. Unless and
until the Committee has adopted another method, the fair market
value of a share of Common Stock shall equal the average of the
high and low sales prices on the date such fair market value is
to be determined, as reported by the National Association of
Securities Dealers Automated Quotation System's National Market
System ("NASDAQ"), or if there are no sales of Common Stock
reportedly thereby on such date, the average of the
high and low sales prices for shares of Common Stock reported by
NASDAQ on the nearest trading date preceding such date.
1.13. "Grantee" means an Employee to whom Restricted
Stock has been awarded pursuant to Article 11 or Incentive
Shares have been awarded pursuant to Article 12.
1.14. "Incentive Shares" means Shares awarded
pursuant to the provisions of Article 12.
1.15. "Incentive Stock Option" means an Option granted
under the Plan that qualifies as an incentive stock option under
section 422 of the Code and that the Corporation designates as
such in the Agreement granting the Option.
1.16. "Nonstatutory Stock Option" means an Option
granted under the Plan that is not an Incentive Stock Option.
1.17. "Option" means an option to purchase Shares
granted under the Plan in accordance with the terms of Article 6
or Article 7.
1.18. "Option Period" means the period during which an
Option may be exercised.
1.19. "Option Price" means the price per Share at which
an Option may be exercised. The Option Price shall be
determined by the Committee, but in no event shall the
Option Price of an Incentive Stock Option be less than
the greater of the Fair Market Value per Share determined
as of the Date of Grant or the par value
of a Share.
1.20. "Optionee" means an Employee or Director to
whom an Option or Right has been granted.
1.21. "Outside Director" means a Director who is not an
Employee Director.
1.22. "Outside Director Program" means that portion of
the Plan under which grants are made to Directors, other than
Employee Directors.
2
1.23. "Performance Goals" means performance goals
established by the Committee which may be based on earnings or
earnings growth, sales, return on assets, equity or investment,
regulatory compliance, satisfactory internal or external audits,
improvement of financial ratings, achievement of balance sheet
or income statement objectives, or any other objective goals
established by the Committee, and may be absolute in their terms
or measured against or in relationship to other companies
comparably, similarly or otherwise situated. Such performance
standards may be particular to an employee or the department, branch,
Subsidiary or other division in which he or she works, or may be
based on the performance of the Corporation generally, and may
cover such period as may be specified by the Committee.
1.24. "Plan" means the Amended and Restated S&T
Bancorp, Inc. 1992 Incentive Stock Plan.
1.25. "Related Option" means the Option in connection
with which, or by amendment to which, a specified Right is
granted.
1.26. "Related Right" means the Right granted in
connection with, or by amendment to, a specified Option.
1.27. "Restricted Stock" means Shares awarded
pursuant to the provisions of Article 11.
1.28. "Right" means a stock appreciation right granted
under the Plan in accordance with the terms of Article 8.
1.29. "Right Period" means the period during which a
Right may be exercised.
1.30. "Share" means a share of authorized but unissued
Common Stock or a reacquired share of Common Stock.
1.31. "Subsidiary" means a corporation at least 50% of
the total combined voting power of all classes of stock of which
is owned by the Corporation, either directly or through one or
more other Subsidiaries.
2. Purpose
The Plan is intended to assist in attracting and retaining
Employees and Directors of outstanding ability and to promote
the identification of their interests with those of the
shareholders of the Corporation.
3
3. Administration
The Plan shall be administered by the Committee. In
addition to any other powers granted to the Committee, it shall
have the following powers, subject to the express provisions of
the Plan:
3.1. To determine in its discretion the Employees to
whom Options or Rights shall be granted and to whom Restricted
Stock or Incentive Shares shall be awarded, the number of Shares
to be subject to each Option, Right, Restricted Stock or
Incentive Share award, and the terms upon which Options or
Rights granted to Employees may be acquired and exercised
and the terms and conditions of Restricted Stock and
Incentive Share awards;
3.2. To determine all other terms and provisions of each
Agreement with an Employee, which need not be identical;
3.3. Without limiting the generality of the foregoing, to
provide in its discretion in an Agreement with an Employee:
(i) For an agreement by the Optionee or Grantee
to render services to the Corporation or a Subsidiary upon such
terms and conditions as may be specified in the Agreement,
provided that the Committee shall not have the power to commit
the Corporation or any Subsidiary to employ or otherwise retain
any Optionee or Grantee;
(ii) For restrictions on the transfer, sale or other
disposition of Shares issued to the Optionee upon the exercise
of an Option or Right, for other restrictions permitted by
Article 11 with respect to Restricted Stock or for conditions
with respect to the issuance of Incentive Shares;
(iii) For an agreement by the Optionee or Grantee
to resell to the Corporation, under specified conditions, Shares
issued upon the exercise of an Option or Right or awarded as
Restricted Stock or Incentive Shares; and
(iv) For the payment of the Option Price upon the
exercise of an Option otherwise than in cash, including without
limitation by delivery of shares of Common Stock (other than
Restricted Stock) valued at Fair Market Value on the Date of
Exercise of the Option, or a combination of cash and shares of
Common Stock, or for the payment in part of the Option Price
with a promissory note in accordance with the terms of
Section 9.2; and
(v) For the right of the Optionee to surrender his
or her Option (or a portion thereof) and to receive upon such
surrender that number of shares having an aggregate Fair Market
Value as of the date of surrender equal to the product of (i)
the excess of the Fair Market Value of one share of Common Stock as
of such surrender date over the Option Price with respect to
such surrendered Option (or portion thereof), multiplied by (ii) the
number of shares covered by the Option or portion thereof
surrendered. No fractional shares shall be issued upon such
surrender. Cash shall be paid in lieu of any such fractional
share in an amount equal to the product of such fraction multiplied
by the Fair Market Value of one share of Common Stock on the date of
surrender. Any such surrender shall be treated as an exercise
of such Option or portion thereof for purposes of this Plan. No
such surrender may be made before the Option is exercisable.
4
3.4. To construe and interpret the Agreements and the
Plan;
3.5. To require, whether or not provided for in the
pertinent Agreement, of any person exercising an Option or Right
or acquiring Restricted Stock or Incentive Shares, at the time
of such exercise or acquisition, the making of any representations
or agreements which the Committee may deem necessary or advisable
in order to comply with the securities laws of the United States
or of any state;
3.6. To provide for satisfaction of an Optionee's or
Xxxxxxx's tax liabilities arising in connection with the Plan
through, without limitation, retention by the Corporation of shares of
Common Stock otherwise issuable on the exercise of a
Nonstatutory Stock Option or Right or pursuant to an award of
Incentive Shares or through delivery of Common Stock to the
Corporation by the Optionee or Grantee under such terms and
conditions as the Committee deems appropriate; and
3.7. To make all other determinations and take all other
actions necessary or advisable for the administration of the
Plan.
Any determinations or actions made or taken by the Committee
pursuant to this Article shall be binding and final.
4. Eligibility
Options, Rights, Restricted Stock and Incentive Shares
may be granted or awarded only to Employees, provided, however,
that Outside Directors may receive Nonstatutory Stock Options in
accordance with the provisions of Article 7 and provided
further, that the members of the Committee are not eligible
to receive Options (except for Nonstatutory Stock Options
in accordance with the provisions of Article 7), Rights,
Restricted Stock or Incentive Shares.
5. Stock Subject to the Plan
5.1. The maximum number of Shares that may be issued
under the Plan is 1,600,000 shares.
5.2. If an Option or Right expires or terminates for any
reason (other than termination by virtue of the exercise of a
Related Option or Related Right, as the case may be) without
having been fully exercised, if Shares of Restricted Stock
are forfeited or if Incentive Shares are not issued or are
forfeited, the unissued or forfeited Shares which had been
subject to the Agreement relating thereto shall become available
for the grant of other Options and Rights or for the award of
additional Restricted Stock or Incentive Shares.
5
5.3. The Shares issued upon the exercise of a Right (or,
if cash is payable in connection with such exercise, that number
of Shares having a Fair Market Value equal to the cash payable upon
such exercise), shall be charged against the number of Shares
issuable under the Plan and shall not become available for the
grant of other Options and Rights for the award of Restricted
Stock or Incentive Shares. If the Right referred to in the preceding
sentence is a Related Right, the Shares subject to the Related
Option, to the extent not charged against the number of Shares
subject to the Plan in accordance with this Section 5.3, shall
become available for the grant of other Options or Rights or for
the award of additional Restricted Stock or Incentive Shares.
6. Options
6.1. The Committee is hereby authorized to grant
Nonstatutory Stock Options and Incentive Stock Options to
Employees. Nonstatutory Stock Options also may be granted to
Outside Directors, pursuant to Article 7.
6.2. All Agreements granting Options to Employees
shall contain a statement that the Option is intended to be
either (i) a Nonstatutory Stock Option or (ii) an Incentive
Stock Option.
6.3. The Option Period for Options granted to Employees shall
be determined by the Committee and specifically
set forth in the Agreement, provided, however, that an Option
shall not be exercisable before six months from the Date of Grant
(except that this limitation need not apply in the event of the
death or disability of the Optionee within the six-month period) or
after ten years from the Date of Grant.
6.4. All Incentive Stock Options granted under the Plan
shall comply with the provisions of the Code governing incentive
stock options and with all other applicable rules and
regulations.
6.5. The maximum number of Shares of Common Stock
with respect to which Options may be granted to any Employee
under this Plan during its term is 200,000 Shares. In no event
shall the Option Price of an Option be less than the Fair Market Value
of a Share of Common Stock on the Date of Grant.
6.6. All other terms of Options granted under the Plan
shall be determined by the Committee in its sole discretion.
6
7. Outside Director Program
7.1. The Outside Director Program shall be a formula
plan under which Outside Directors shall be granted Nonstatutory
Stock Options, but only in accordance with the provisions set
forth in this Article 7.
7.2. Nonstatutory Stock Options shall be granted to
Outside Directors as follows:
(i) Commencing on December 19, 1994, and on
the third Monday in December of each succeeding year (or the
next business day if such date is a non-business day) (the
"Automatic Grant Date"), each Outside Director shall be
granted a Nonstatutory Stock Option to purchase 2,500 Shares
at an Option Price equal to the Fair Market Value of the
Shares on such date, which date shall be the Date of Grant;
provided that the exercisability of such Nonstatutory Stock
Options shall be conditioned upon approval of this Plan by
the shareholders of the Corporation; and provided further,
that if any such Outside Director has not served as a
Director of the Corporation continuously since the last
Automatic Grant Date, the Nonstatutory Stock Option granted
pursuant to this Section 7.2(i) shall be for a
number of Shares (rounded to the nearest whole Share) equal to
2,500 multiplied by a fraction, the numerator of which shall be
the number of days since the last Automatic Grant Date that such
person has served as a Director of the Corporation, and the
denominator of which shall be 365; and
(ii) Nonstatutory Stock Options granted under this
Article 7 shall vest six months from the Date of Grant and may
be exercised by the Optionee at any time after vesting and prior to
the termination of the Nonstatutory Stock Option; provided, however,
that any Nonstatutory Stock Option granted prior to the approval
of this Plan by the shareholders of the Corporation shall vest
six months from the date of such shareholder approval. Nonstatutory
Stock Options granted pursuant to this Article 7 shall terminate
upon the earlier to occur of (A) 10 years from the date of Grant
or (B) one year from the date on which such Optionee ceases to be a
member of the Board or, if such Optionee ceases to be a member
of the Board by reason of retirement, disability, death or removal
from such position without cause, five years from the date on which
such Optionee ceases to be a member of the Board. Nonstatutory Stock
Options are not transferable except to the extent provided in
Article 10 hereof. Exercise of Nonstatutory Stock Options may
be made only in writing delivered to the Corporation accompanied by
payment of the Option Price.
7.3. In the event of any change in the capitalization of
the Corporation by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, exchanges of shares
or the like, the Nonstatutory Stock Options granted pursuant to
Section 7.2 above shall be for such number of Shares and at an
Option Price as shall be adjusted in accordance with Article 13 hereof.
7
7.4. If on any Date of Grant of Nonstatutory Stock
Options to Outside Directors there is an insufficient number of
Shares available for such grants to Outside Directors, the
number of Shares subject to each grant shall be reduced to the
greatest whole number of Shares arrived at by dividing the remaining
Shares available for such grants by the number of Outside Directors
eligible for such grants.
8. Rights
8.1. The Committee is hereby authorized to grant Rights
to Employees.
8.2. A Right may be granted under the Plan:
(i) In connection with, and at the same time as,
the grant of an Option under the Plan;
(ii) By amendment of an outstanding
Nonstatutory Stock Option granted under the Plan; or
(iii) Independently of any Option granted under
the Plan.
A Right granted under clause (i) or (ii) of the preceding
sentence is a Related Right. A Related Right may, in the
Committee's discretion, apply to all or a portion of the Shares
subject to the Related Option.
8.3. A Right may be exercised in whole or in part as
provided in the Agreement, and, subject to the provisions of the
Agreement, entitles its Optionee to receive, without any payment
to the Corporation (other than required income tax withholding
amounts), either cash or that number of Shares (equal to the
highest whole number of Shares), or a combination thereof, in
an amount or having a Fair Market Value determined as of the Date of
Exercise not to exceed the number of Shares subject to the
portion of the Right exercised multiplied by an amount equal to the
excess of (i) the Fair Market Value of a share of Common Stock on the
Date of Exercise of the Right over (ii) either (A) the Fair Market
Value of a share of Common Stock on the Date of Grant of the
Right if it is not a Related Right, or (B) the Option Price as
provided in the Related Option if the Right is a Related Right.
8.4. The Right Period shall be determined by the
Committee and specifically set forth in the Agreement, provided,
however:
(i) A Right may not be exercised until the
expiration of six months from the Date of Grant (except that
this limitation need not apply in the event of the death or
disability of the Optionee within the six-month period);
(ii) A Right will expire no later than the earlier of
(A) ten years from the Date of Grant, or (B) in the case of a
Related Right, the expiration of the Related Option;
8
(iii) A Right may be exercised only when the Fair
Market Value of a share of Common Stock exceeds either (A) the
Fair Market Value of a share of Common Stock on the Date of
Grant of the Right if it is not a Related Right, or (B) the
Option Price as provided in the Related Option if the Right is a
Related Right; and
(iv) A Right that is a Related Right to an
Incentive Stock Option may be exercised only when and to the
extent the Related Option is exercisable.
8.5. The exercise, in whole or in part, of a Related Right
shall cause a reduction in the number of Shares subject to the
Related Option equal to the number of Shares with respect to
which the Related Right is exercised. Similarly, the exercise, in
whole or in part, of a Related Option shall cause a reduction in the
number of Shares subject to the Related Right equal to the number of
Shares with respect to which the Related Option is exercised.
8.6. Rights granted under the Plan (other than cash-only
Rights) shall comply with the requirements of Rule 16b-3(e)
under the Exchange Act during the term of this Plan. Should any
provision of this Article 8 necessary for that purpose at the
date of adoption of this Plan by the Board no longer be necessary to
comply with the requirements of Rule 16b-3(e) or should any
additional provisions be necessary for this Article 8 to comply
with the requirements of Rule 16b-3(e), the Board or the Committee
may amend this Plan to delete, add to or modify the provisions
of the Plan accordingly. The Company intends to comply, if and to
the extent applicable, with the public information and reporting
requirements of Rule 16b-3(e)(1); however, the Company's
failure for any reason whatsoever to comply with such
requirements or with any other requirements of Rule 16b-3, and
any resultant unavailability of Rule 16b-3(e) to Optionees shall
not impose any liability on the Company to any Optionee or any
other party.
8.7. To the extent required by Rule 16b-3(e) under the
Exchange Act or otherwise provided in the Agreement, the
Committee shall have sole discretion to consent to or disapprove
the election of any Optionee to receive cash in full or partial
settlement of a Right. In cases where an election of settlement
in cash must be consented to by the Committee, the Committee may
consent to, or disapprove, such election at any time after such
election, or within such period for taking action as is
specified in the election, and failure to give consent shall be
disapproval. Consent may be given in whole or as to a portion of
the Right surrendered by the Optionee. If the election to receive
cash is disapproved in whole or in part, the Right shall be deemed to
have been exercised for Shares, or, if so specified in the notice of
exercise and election, not to have been exercised to the extent
the election to receive cash is disapproved.
8.8. The maximum number of Shares of Common Stock
with respect to which Rights may be granted to any Employee
under this Plan during its term is 200,000 Shares.
9
9. Exercise
9.1. An Option or Right may, subject to the provisions
of the Agreement under which it was granted, be exercised in
whole or in part by the delivery to the Corporation of written
notice of the exercise, in such form as the Committee may
prescribe, accompanied, in the case of an Option, by full
payment for the Shares with respect to which the Option is
exercised, unless and to the extent that the Committee agreed
in the Agreement in which an Option was granted to accept a
promissory note as provided in Section 9.2 hereof.
9.2. To the extent permitted by applicable law, the
Committee may agree in the Agreement in which an Option is
granted to an Employee to accept as partial payment for the
Shares a promissory note of the Optionee evidencing his or her
obligation to make future cash payment thereof; provided, however,
that in no event may the Committee accept a promissory note for
an amount in excess of the difference between the aggregate Option Price
and the par value of the Shares. Promissory notes made pursuant to
this Section 9.2 shall be payable as determined by the
Committee, shall be secured by a pledge of the Shares and shall bear
interest at a rate fixed by the Committee.
10. Nontransferability
Options, Rights, Incentive Shares granted or awarded
under the Plan shall not be transferable otherwise than (A) by
will or the laws of descent and distribution, or (B) pursuant to a
qualified domestic relations order as defined in section 414(p)
of the Code, and an Option or Right may be exercised during his or
her lifetime only by the Optionee or, in the event of his or her
legal disability, by his or her legal representative. A Related Right
is transferable only when the Related Option is transferable and
only with the Related Option and under the same conditions.
11. Restricted Stock Awards
11.1. The Committee is hereby authorized to award
Shares of Restricted Stock to Employees.
11.2. Restricted Stock awards under the Plan shall
consist of Shares that are restricted against transfer, subject
to forfeiture, and subject to such other terms and conditions
intended to further the purposes of the Plan as may be determined by the
Committee. Such terms and conditions may provide, in the
discretion of the Committee, for the vesting of such awards to
be contingent upon the achievement of one or more specified
Performance Goals.
11.3. Restricted Stock awards shall be evidenced by
Agreements containing provisions setting forth the terms and
conditions governing such awards. Each such Agreement shall
contain the following:
10
(i) Prohibitions against the sale, assignment,
transfer, exchange, pledge, hypothecation, or other encumbrance
of (A) the Shares awarded as Restricted Stock under the Plan, (B)
the right to vote the Shares, or (C) the right to receive dividends
thereon in each case during the restriction period applicable to
the Shares; provided, however, that the Grantee shall have all the
other rights of a shareholder including, but not limited to, the right
to receive dividends and the right to vote the Shares;
(ii) At least one term, condition or restriction
constituting a "substantial risk of forfeiture" as defined in
section 83(c) of the Code;
(iii) Such other terms, conditions and restrictions
as the Committee in its discretion may specify (including,
without limitation, provisions creating additional substantial risks of
forfeiture);
(iv) A requirement that each certificate
representing Shares of Restricted Stock shall be deposited with
the Corporation, or its designee, and shall bear the following
legend:
"This certificate and the shares of stock
represented hereby are subject to the terms and
conditions (including the risks of forfeiture and
restrictions against transfer) contained in the Amended
and Restated S&T Bancorp, Inc. 1992 Incentive Stock
Plan, and an Agreement entered into between the
registered owner and S&T Bancorp, Inc. Release from
such terms and conditions shall be made only in
accordance with the provisions of the Plan and the
Agreement, a copy of each of which is on file in the
office of the Secretary of S&T Bancorp, Inc."
(v) The applicable period or periods of any
terms, conditions or restrictions applicable to the Restricted
Stock, provided, however, that the Committee in its discretion may
accelerate the expiration of the applicable restriction period
with respect to any part or all of the Shares awarded to a Grantee;
and
(vi) The terms and conditions upon which any
restrictions upon Shares of Restricted Stock awarded under the
Plan shall lapse and new certificates free of the foregoing
legend shall be issued to the Grantee or his or her legal
representative.
11.4. The Committee may include in an Agreement a
requirement that in the event of a Grantee's termination of
employment for any reason prior to the lapse of restrictions,
all Shares of Restricted Stock shall be forfeited by the Grantee to
the Corporation without payment of any consideration by the
Corporation, and neither the Grantee nor any successors, heirs,
assigns or personal representatives of the Grantee shall
thereafter have any further rights or interest in the Shares or
certificates.
11
11.5. The maximum number of Shares of Restricted
Stock that may be awarded to any Employee under this Plan during
its term is 200,000 Shares.
12. Incentive Share Awards
12.1. The Committee is hereby authorized to award
Incentive Shares to Employees.
12.2. Incentive Shares shall be Shares that shall be
issued at such times, subject to achievement of such Performance
Goals or other goals and on such other terms and conditions as
the Committee shall deem appropriate and specify in the Agreement
relating thereto.
12.3. The maximum number of Incentive Shares that
may be awarded to any Employee under this Plan during its term
is 200,000 Shares.
13. Capital Adjustments
The number and class of Shares subject to each
outstanding Option or Right or Restricted Stock or Incentive
Share award, the Option Price and the aggregate number and class of
Shares for which grants or awards thereafter may be made shall
be subject to reflect such events as stock dividends, stock splits,
adoption of stock rights plans, recapitalizations, mergers,
consolidations or reorganizations of or by the Corporation. The
adjustments made with respect to Nonstatutory Stock Options
granted pursuant to Article 7 hereof shall be equivalent to the
treatment accorded to holders of Common Stock.
14. Termination or Amendment
The Board shall have the power to terminate the Plan
and to amend it in any respect, provided that, after the Plan
has been approved by the shareholders of the Corporation, the Board
may not, without the approval of the shareholders of the
Corporation if such approval is then required by applicable law
or in order for the Plan to continue to satisfy the requirements of
Rule 16b-3 under the Exchange Act, amend the Plan so as to
increase the number of Shares that may be issued under the Plan
(except as provided in Article 13), to modify materially the
requirements as to eligibility for participation in the Plan, to
change the class of persons eligible to receive Incentive Stock
Options, or to increase materially the benefits accruing to participants
under the Plan. No amendment to the Outside Director Program shall be
made more frequently than once every six months, other than to
comport with changes in the Code or the rules thereunder. No
termination or amendment of the Plan shall, without his or her
consent, adversely affect the rights or obligations of any
Optionee or Grantee.
12
15. Modification, Extension and Renewal of Options, Rights,
Restricted Stock and Incentive Shares
Subject to the terms and conditions and within the
limitations of the Plan, the Committee may modify, extend or
renew outstanding Options and Rights, or accept the surrender of
outstanding options, rights and performance units (to the extent
not theretofore exercised) granted under the Plan or under any other
plan of the Corporation, a Subsidiary or a company or similar
entity acquired by the Corporation or a Subsidiary, and authorize the
granting of new Options and Rights pursuant to the Plan in
substitution therefor (to the extent not theretofore exercised),
and the substituted Options or Rights may specify a lower exercise
price than the surrendered options, rights and performance units, a
longer term than the surrendered options, rights and performance units
or have any other provisions that are authorized by the Plan.
Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify the terms of any outstanding Agreement
providing for awards of Restricted Stock or Incentive Shares.
Notwithstanding the foregoing, however, no modification of an
Option or Right granted under the Plan, or an award of
Restricted Stock or Incentive Shares, shall, without the consent of the
Optionee, or Grantee, alter or impair any of the Optionee's or
Grantee's rights or obligations.
16. Effectiveness of the Plan
The Plan and any amendments requiring shareholder
approval pursuant to Article 14 are subject to approval by vote
of the shareholders of the Corporation within 12 months after their
adoption by the Board. Subject to that approval, the Plan and
any amendments are effective on the date on which they are adopted
by the Board. Options, Rights, Restricted Stock and Incentive
Shares may be granted or awarded prior to shareholder approval of the
Plan or amendments, but each such Option, Right, Restricted
Stock or Incentive Share grant or award shall be subject to the
approval of the Plan or amendments by the shareholders. Except to the
extent required to satisfy the requirements of Rule 16b-3 under
the Exchange Act, the date on which any Option, Right, Restricted
Stock or Incentive Shares granted or awarded prior to
shareholder approval of the Plan or amendment is granted or awarded shall be
the Date of Grant for all purposes as if the Option, Right,
Restricted Stock or Incentive Shares had not been subject to
approval. No Option or Right may be exercised prior to such
shareholder approval, and any Restricted Stock or Incentive
Shares awarded shall be forfeited if such shareholder approval is not
obtained.
13
17. Term of the Plan
Unless sooner terminated by the Board pursuant to
Article 14, the Plan shall terminate on the date ten years after
its adoption by the Board, and no Options or Rights, Restricted
Stock or Incentive Shares may be granted or awarded after termination.
The termination shall not affect the validity of any Option,
Right, Restricted Stock or Incentive Shares outstanding on the date of
termination.
18. Indemnification of Committee
In addition to such other rights of indemnification as they
may have as Directors or as members of the Committee, the
members of the Committee shall be indemnified by the Corporation
against the reasonable expenses, including attorneys' fees,
actually and reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or
any Option, Right, Restricted Stock or Incentive Shares granted or
awarded hereunder, and against all amounts reasonably paid by
them in settlement thereof or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, if such members
acted in good faith and in a manner which they believed to be
and not opposed to, the best interests of the Corporation.
19. General Provisions
19.1. The establishment of the Plan shall not confer
upon any Employee or Director any legal or equitable right
against the Corporation, any Subsidiary or the Committee, except as
expressly provided in the Plan.
19.2. The Plan does not constitute inducement or
consideration for the employment of any Employee or the service
of any Director, nor is it a contract between the Corporation or
any Subsidiary and any Employee or Director. Participation in the
Plan shall not give an Employee or Director any right to be retained
in the service of the Corporation or any Subsidiary.
19.3. The Corporation and its Subsidiaries may assume
options, warrants, or rights to purchase stock issued or granted
by other corporations whose stock or assets shall be acquired by
the Corporation or its Subsidiaries, or which shall be merged into
or consolidated with the Corporation. Neither the adoption of this
Plan, nor its submission to the shareholders, shall be taken to
impose any limitations on the powers of the Corporation or its
affiliates to issue, grant, or assume options, warrants, rights,
or restricted stock, otherwise than under this Plan, or to adopt
other stock option or restricted stock plans or to impose any
requirement of shareholder approval upon the same.
19.4. The interests of any Employee or Director under
the Plan are not subject to the claims of creditors and may not,
in any way, be assigned, alienated or encumbered except as provided
in Article 11.
19.5. The Plan shall be governed, construed and
administered in accordance with the laws of Pennsylvania and the
intention of the Corporation that Incentive Stock Options
granted under the Plan qualify as such under section 422 of the Code.
14
