As filed with the Securities and Exchange Commission on
December 27, 1999
Registration No. ______________
________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OLD GUARD GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 23-2852984
(State of Incorporation) (I.R.S. Employer Identification No.)
2929 Lititz Pike, Lancaster, Pa. 17604
(Address of Principal Executive Offices) (Zip Code)
Old Guard Group, Inc.
Employee Stock Purchase Plan
(Full title of the Plan)
David E. Hosler, Chairman Jeffrey P. Waldron, Esquire
and Chief Executive Officer Stevens & Lee
Old Guard Group, Inc. One Glenhardie Corporate Center
2929 Lititz Pike 1275 Drummers Lane
Lancaster Pennsylvania 17604 P.O. Box 236
(717) 569-5361 Wayne, Pennsylvania 19087
(610) 293-4961
(Names, addresses and telephone numbers of agents for service)
_____________________
CALCULATION OF REGISTRATION FEE
________________________________________________________________
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Unit(1) Price(1) Fee
Common stock, 250,000 $ 11.00 $2,750,000 $762.00
no par value shares
per share
________________________________________________________________
(1) Estimated solely for the purpose of calculating the
amount of the registration fee pursuant to Rule 457(c),
on the basis of the closing price of Old Guard Group,
Inc. Common Stock on December 22, 1999.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation Of Documents By Reference
The following documents have been filed by Old Guard Group,
Inc. (the "Registrant") with the Securities and Exchange
Commission ("SEC") and are incorporated herein by reference:
(a) Registrant's Annual Report on Form 10-K dated
March 31, 1999 filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) All other reports filed by the Company pursuant
to Section 13(a) or 15(d) of the Exchange Act
since January 1, 1999.
(c) The description of the Registrant's common stock,
no par value per share (the "Common Stock"), set
forth in the Registrant's Registration Statement
on Form 8-A filed with the Securities and
Exchange Commission on October 25, 1996.
All documents subsequently filed by Old Guard Group, Inc.
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing such
documents.
Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes hereof to the extent that
a statement contained herein or in any other subsequently filed
incorporated document modifies or supersedes such statement.
Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a
part hereof.
ITEM 4. Description Of Securities
Not applicable.
ITEM 5. Interests Of Named Experts And Counsel
Not applicable.
ITEM 6. Indemnification Of Directors And Officers
Pennsylvania law provides that a Pennsylvania corporation
may indemnify directors, officers, employees and agents of the
corporation against liabilities they may incur in such
capacities for any action taken or any failure to act, whether
or not the corporation would have the power to indemnify the
person under any provision of law, unless such action or failure
to act is determined by a court to have constituted recklessness
or willful misconduct. Pennsylvania law also permits the
adoption of a bylaw amendment, approved by shareholders,
providing for the elimination of a director's liability for
monetary damages for any action taken or any failure to take any
action unless (1) the director has breached or failed to perform
the duties of his office and (2) the breach or failure to
perform constitutes self-dealing, willful misconduct or
recklessness.
The bylaws of the Company provide for (1) indemnification
of directors, officers, employees and agents of the registrant
and (2) the elimination of a director's liability for monetary
damages, to the fullest extent permitted by Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by the Company.
ITEM 7. Incorporation Of Documents By Reference
Not applicable.
ITEM 8. Exhibits
4.1 Articles of Incorporation of Old Guard Group, Inc., as
amended, incorporated herein by reference to
Exhibit 3.1 of the Registration Statement No. 333-2779
on Form S-1 of the Registrant.
4.2 Bylaws of Old Guard Group, Inc. incorporated herein by
reference to Exhibit 3.2 of the Registration Statement
No. 333-12779 on Form S-1 of the Registrant.
5.1 Opinion of Stevens & Lee re: legality of common stock
being registered.
23.1 Consent of PricewaterhouseCoopers, LLP, independent
auditors.
24. Power of Attorney (included on signature page).
99.1 Old Guard Group, Inc. 1999 Employee Stock Purchase
Plan.
ITEM 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement to include any additional or changed
material information with respect to the plan of distribution.
(2) That, for the purpose of determining liability
under the Securities Act of 1933, to treat each post-effective
amendment as a new registration statement of the securities
offered, and the offering of such securities at that time to be
the initial bona fide offering thereof.
(3) To file a post-effective amendment to remove from
registration any of the securities being registered which remain
unsold at the termination of the offering.
Provided, however, that subparagraphs (a)(1)(i) and
(a)(1)(ii) of this section do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(4) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(5) To remove from registration by means of a
post-effective amendment any of the securities being registered
that remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
the purpose of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of a
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 if under
the Securities Act of 1934; and, where interim financial
information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus
is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to
provide such interim financial information.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Lancaster, Commonwealth of Pennsylvania, on December
__, 1999.
OLD GUARD GROUP, INC.
By:/s/David E. Hosler
David E. Hosler
Chairman, President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints David E. Hosler
and Jeffrey P. Waldron, Esquire, and each of them, his true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for such person and in such
person's name, place and stead, in any and all capacities, to
sign any and all amendments (including post-effective
amendments) to the Registration Statement to which this power of
attorney is attached, and to file all those amendments and all
exhibits to them and other documents to be filed in connection
with them, with the Securities and Exchange Commission, granting
unto such attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully and to
all intents and purposes as they might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact
and agents, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the date indicated
below.
Signatures Title Date
/s/Jay S. Sidu Director December 17, 1999
Jay S. Sidu
/s/David E. Hosler Director December 17, 1999
David E. Hosler Chairman,
President, Chief
Executive Officer
/s/E. Matthew Brown Director December 17, 1999
E. Matthew Brown
/s/Karen M. Balaban Director December 17, 1999
Karen M. Balaban
/s/Noah W. Kreider, Jr. Director December 17, 1999
Noah W. Kreider, Jr.
/s/Luther R. Campbell Director December 17, 1999
Luther R. Campbell
/s/Robert L. Wechter Director December 17, 1999
Robert L. Wechter
/s/James W. Appel Director December 17, 1999
James W. Appel
/s/M. Scott Clements Director December 17, 1999
M. Scott Clemens
/s/G. Arthur Weaver Director December 17, 1999
G. Arthur Weaver
/s/Henry J. Straub Chief Financial December 17, 1999
Henry J. Straub Officer and
Treasurer
(Principal
Financial Officer)
INDEX TO EXHIBITS
Exhibit No. Exhibit Page
Number
4.1 Articles of Incorporation of Old
Guard Group, Inc., as amended,
incorporated herein by reference
to Exhibit 3.1 of the Registration
Statement No. 333-12779 on Form S-1
of the Registrant.
4.2 Bylaws of Old Guard Group, Inc.
incorporated herein by reference
to Exhibit 3.2 of the Registration
Statement No. 333-12779 on
Form S-1 of the Registrant.
5.1 Opinion of Stevens & Lee re:
legality of common stock being
registered.
23.1 Consent of PricewaterhouseCoopers,
LLP, independent auditors.
24. Power of Attorney (included on
signature page).
99.1 Old Guard Group, Inc. 1999 Employee
Stock Purchase Plan.
2
12/23/99/SL1 27661v1/41597.006
12/23/99/SL1 27661v1/41597.006
December 20, 1999
Board of Directors
Old Guard Group, Inc.
2929 Lititz Pike
Lancaster, Pa. 17604
Re: Registration Statement on Form S-8
Gentlemen:
In connection with the proposed issuance by Old Guard
Group, Inc. (the "Company") of up to 250,000 shares of the
Company's common stock, no par value per share (the "Common
Stock"), pursuant to the 1999 Employee Stock Purchase Plan (the
"Plan"), adopted by the shareholders of the Company at the
annual meeting on May 13, 1999, we as counsel to the Company,
have reviewed:
1. The Articles of Incorporation of the Company;
2. The Bylaws of the Company;
3. The Plan;
4. Copies of the certificates representing shares of the
Common Stock; and
5. The Company's Registration Statement on Form S-8 (the
"Registration Statement"), relating to the shares of Common
Stock issuable under the Plan.
Based upon our review of such documents, it is our opinion
that the shares of Common Stock issuable under the Plan have
been duly authorized and, when and as issued in accordance with
the provisions of the Plan, will be legally issued by the
Company and fully paid and nonassessable.
The opinion speaks as of the date hereof. It is based on
facts and circumstances which exist on the date hereof. We
assume no obligation to update or supplement our opinion set
forth herein to reflect any change in facts or circumstances
which occur after the date hereof. This opinion assumes that
there will be no material change in any of the documents
reviewed for the term of the Plan.
We consent to the filing of this opinion as an exhibit to
the Registration Statement, and to the reference to us under the
heading "Legal Matters" in the related Prospectus. In giving
this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the Rules and
Regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
STEVENS & LEE
/s/ Stevens & Lee
Board of Directors
December 20, 1999
Page 2
12/23/99/SL1 30131v1/41597.001
[Letterhead of PricewaterhouseCoopers]
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
on Form S-8 of our report dated February 24, 1999, except for Notes 15 and
16, for which the date is March 5, 1999 relating to the financial
statements, which appears in Old Guard Group, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998. We also consent to the
incorporation by reference of our report dated February 24, 1999, except
for Notes 15 and 16, for which the date is March 5, 1999, relating to the
financial statement schedules, which appears in such Annual Report on Form
10-K.
/s/ PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 22, 1999
12/23/99/SL1 30858v1/41597.001
EXHIBIT 99.1
OLD GUARD GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Effective January 1, 1999)
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
Section 1.1 PURPOSE.
The Old Guard Group, Inc. Employee Stock Purchase Plan
is intended to encourage employee participation in the ownership
and economic progress of the Company.
Section 1.2 DEFINITIONS.
Unless the context clearly indicates otherwise, the
following terms have the meaning set forth below:
"Board of Directors" means the Board of Directors of
the Company.
"Code" means the Internal Revenue Code of 1986, as
amended, and as the same may be further amended from time to
time, and the Treasury Regulations promulgated thereunder.
"Committee" means the Company's Compensation Committee
which shall administer the Plan as provided in Section 1.3.
"Common Stock" means the common stock of the Company.
"Company" means Old Guard Group, Inc., a Pennsylvania
corporation.
"Compensation" means an Employee's total salary or
hourly pay, as the case may be, including bonuses, commissions
and any other payment in excess of normal salary or hourly pay.
"Continuous Service" means the period of time,
uninterrupted by a termination of employment, that an Employee
has been employed by the Company or a Subsidiary, or both,
immediately preceding an Offering Date. Such period of time
shall include any leave of absence permitted or required to be
taken into account by applicable Treasury Regulations.
"Effective Date" means the date specified in
Section 1.4 on which the provisions of the plan become effective.
"Employee" means any common law employee of the Company
or a Subsidiary.
"Exercise Date" means March 31, June 30, September 30
and December 31 of each Plan Year.
"Fair Market Value" of a share of Common Stock on any
given date means the closing sale price for such shares on that
date as reported by the National Association of Securities
Dealers Automated Quotations or the Bloomberg Financial Markets
System. If a closing sale price for the Common Stock for the
given date is not reported, or if there is none, the Fair Market
Value will be equal to the closing sale price on the nearest
trading day preceding such date. Notwithstanding the foregoing,
if, in the Board of Directors' judgment, there are unusual
circumstances or occurrences under which the otherwise determined
Fair Market Value of the Common Stock does not represent the
actual fair value thereof, then the Fair Market Value of such
Common Stock shall be determined by the Board of Directors on the
basis of such prices or market quotations as it shall deem
appropriate and fairly reflective of the then fair value of such
Common Stock.
"Leave of Absence" means, for purposes of participation
in the Plan, a person who is on leave of absence who shall be
deemed to be an employee for the first ninety (90) days of such
leave of absence and such Employee's employment shall be deemed
to have terminated at the close of business on the ninetieth
(90th) day of such leave of absence unless such Employee shall
have returned to regular employment prior to the close of
business on such ninetieth (90th) day. Termination by the
Company of any Employee's leave of absence, other than
termination of such leave of absence on return to employment,
shall terminate an Employee's employment for all purposes under
the Plan and shall terminate such Employee's participation in the
Plan and the right to purchase Common Stock hereunder.
"Offering Date" means January 1, April 1, July 1 and
October 1 of each Plan Year.
"Option Period" or "period" means the period beginning
on an Offering Date and ending on the next succeeding Exercise
Date.
"Option Price" means the purchase price of a share of
Common Stock hereunder as provided in Section 3.1.
"Participant" means any Employee who (i) is eligible to
participate in the Plan under Section 2.1, and (ii) elects to
participate.
"Plan" means the Old Guard Group, Inc. Employee Stock
Purchase Plan, as the same may be amended from time to time.
"Plan Year" means the 12-consecutive-month period
beginning on January 1 and ending on the following December 31.
"Stock Purchase Account" or "Account" means an account
established and maintained in the name of each Participant to
record the dollar amounts and shares of Common Stock accumulated
on his behalf from time to time.
"Stock Purchase Agreement" means the form prescribed by
the Committee which must be executed by an Employee who elects to
participate in the Plan. The proper execution and filing of such
form shall constitute the grant of an option from time to time to
the Employee in accordance with the terms of this Plan document
and the terms of such form.
"Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if, at the beginning of an Option Period, each of the
corporations other than the last corporation in the unbroken
chain owns stock possessing 50 percent or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
Section 1.3 ADMINISTRATION OF PLAN.
The Plan shall be administered by the Committee.
Subject to direction by the Board of Directors and the express
provisions of this Plan document, the Committee shall be
authorized to prescribe, amend and rescind rules and regulations
relating to the Plan and the Committee's administration thereof;
to interpret the Plan; to fix the terms of an offering under the
Plan; to fix the rate of interest to be paid on balances in Stock
Purchase Accounts, if applicable; to prescribe the maximum
percentage of payroll deductions permitted for an Option Period;
to restrict participation in the Plan consistent with any
requirement of law or regulation; and to make all other
determinations necessary to the administration of the Plan,
including appointment of individuals to facilitate the day-to-day
operation thereof. The Committee's determinations as to the
interpretation and operation of the Plan shall be final and
conclusive.
Section 1.4 EFFECTIVE DATE OF PLAN.
The Effective Date of the Plan is January 1, 1999.
Section 1.5 TERMINATION OF PLAN.
The Board of Directors shall have the right to
terminate the Plan at any time. Upon any such termination, the
dollar amount and shares of Common Stock, if any, in each
Participant's Account shall be distributed.
ARTICLE II
PARTICIPATION
Section 2.1 ELIGIBILITY.
Each Employee, who on an Offering Date (i) will have at
least three (3) months of continuous service with the Company
and/or a Subsidiary, and (ii) will be an Employee whose customary
employment is more than five (5) months in a calendar year, may
become a Participant by executing and filing with the Committee a
Stock Purchase Agreement prior to the earlier of such Offering
Date or five business days prior to the first pay day in the
applicable Option Period. An election to participate shall
continue in effect until termination of participation occurs in
accordance with Article V.
Section 2.2 PAYROLL DEDUCTIONS.
Payment for shares of Common Stock purchased under the
Plan shall be made solely by authorized payroll deduction from
each payment of Compensation in accordance with instructions
received from a Participant. Deductions from payroll shall be
expressed as a whole percentage of Compensation (determined on
the first day of each Option Period) no greater than the
percentage set by the Committee, or as a fixed dollar amount (as
determined by the Committee), but shall not be less than $10.00
per pay period. The Committee may fix a maximum percentage. A
Participant may not increase or decrease the percentage or dollar
amount of deduction during an Option Period. However, a
Participant may change the percentage or dollar amount of
deduction for any subsequent Option Period by filing notice
thereof with the Committee prior to the date described in
Section 2.1 for filing a Stock Purchase Agreement. Amounts
deducted from a Participant's Compensation pursuant to this
section shall be credited to such Participant's Account.
Section 2.3 TRANSFER OF PAYROLL DEDUCTIONS.
All payroll deductions withheld by a Subsidiary under
the Plan shall be immediately transferred to the Company.
Section 2.4 LEAVE OF ABSENCE.
If a Participant goes on a Leave of Absence, such
Participant shall have the right to elect (i) to withdraw the
balance in his Stock Purchase Account, (ii) discontinue
contributions to the Plan but remain a Participant in the Plan,
or (iii) remain a Participant in the Plan during such Leave of
Absence, authorizing deductions to be made from payments by the
Company to the Participant during such Leave of Absence and
undertaking to make cash payments to the Plan at the end of each
Payroll Period to the extent that amounts payable by the Company
to such Participant are insufficient to meet such Participant's
authorized Plan deductions.
ARTICLE III
PURCHASE OF SHARES
Section 3.1 OPTION PRICE.
The Option Price per share of the Common Stock sold to
Participants hereunder shall be set by the Committee prior to the
Offering Date. Under the Code, the Option Price shall not be
less than 85%, nor more than 100%, of the Fair Market Value of
such share on each Exercise Date of an Option Period. The
Committee may, in its discretion, provide for the Option Price on
the Effective Date to be 90% of the Fair Market Value of the
Common Stock on an Exercise Date.
Section 3.2 PURCHASE OF SHARES.
On each Exercise Date, the amount in a Participant's
Account shall be charged with the aggregate Option Price of the
number of whole and fractional (to three decimal places) shares
of Common Stock which can be purchased with such amount.
Section 3.3 LIMITATIONS ON PURCHASE AND GRANT.
No Participant shall purchase Common Stock hereunder in
any calendar year having a Fair Market Value of more than
$25,000, provided that any such purchase shall not exceed the
limitations imposed by Code Section 423(b)(8). Further, no
Participant shall be granted the right to purchase Common Stock
hereunder if, by reason of such grant, such Participant would be
deemed to possess five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or a
Subsidiary. For purposes of the preceding sentence, the rules of
Code Section 424(d) shall apply and Common Stock which a
Participant may purchase under outstanding options shall be
treated as stock owned by the Participant.
Section 3.4 RESTRICTION ON TRANSFERABILITY.
Rights to purchase shares hereunder shall be
exercisable only by the Participant. Such rights shall not be
transferable and shall expire upon a Participant's death.
Section 3.5 DIVIDEND REINVESTMENT.
The Committee may, in its discretion, provide
Participants with the opportunity to have dividends on shares
held in their Accounts reinvested through (i) any dividend
reinvestment plan that the Company may maintain from time to
time, or (ii) any other program or arrangement (including the
treatment of dividends as additional Participant contributions)
that is permissible under applicable law.
ARTICLE IV
PROVISIONS RELATING TO COMMON STOCK
Section 4.1 COMMON STOCK RESERVED.
Except as provided in Section 4.2, no more than 250,000
shares of the Company's Common Stock may be sold pursuant to
options granted under the Plan. The Common Stock to be issued
under the Plan shall be made available at the discretion of the
Board of Directors, either from authorized but unissued Common
Stock or from Common Stock acquired by the Company, including
shares purchased in the open market.
Section 4.2 ADJUSTMENT FOR CHANGES IN COMMON STOCK.
(i) In the event that the shares of Common Stock
of the Company as presently constituted, shall be changed into
or exchanged for a different number or kind of shares of stock
or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization,
reclassification, split-up, combination of shares or otherwise)
or if the number of such shares of stock shall be increased
through the payment of a stock dividend, then subject to the
provisions of subsection (iii) below, a majority of the
disinterested members of the Board of Directors may substitute
for or add to each share of stock of the Company which was
theretofore appropriated, or which thereafter may become subject
to an offering under the Plan, the number and kind of shares of
stock or other securities into which each outstanding share of
the stock of the Company shall be so changed or for which each
such share shall be exchanged or to which such share shall be
entitled, as the case may be. Outstanding Stock Purchase
Agreements shall also be deemed appropriately amended as to
price and other terms, as may be necessary to reflect the
foregoing events.
(ii) If there shall be any other change in the
number or kind of the outstanding shares of Common Stock of the
Company, or of any stock or other securities in which such stock
shall have been changed or for which it shall have been
exchanged, and if a majority of the disinterested members of the
Board of Directors shall, in its sole discretion, determine that
such change equitably requires an adjustment in any offering
which was theretofore made or which may thereafter be made under
the Plan, that such adjustment shall be made in accordance with
such determination.
(iii) An offering pursuant to the Plan shall not
affect in any way the right or power of the Company to make
adjustments or reclassifications, reorganizations or changes in
its capital or business structure, to merge, to consolidate, to
dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.
Section 4.3 INSUFFICIENT SHARES.
If the aggregate funds available for the purchase of
Common Stock on any Exercise Date would cause an issuance of
shares in excess of the number provided for in Section 4.1 (as
the same may be adjusted as provided in Section 4.2), (i) the
Committee shall proportionately reduce the number of shares which
would otherwise be purchased by each Participant in order to
eliminate such excess, and (ii) the Plan shall automatically
terminate immediately after such Exercise Date.
Section 4.4 CONFIRMATION OF PURCHASES; REGISTRATION OF SHARES.
Purchases of Common Stock hereunder shall be confirmed
in writing to Plan Participants. All shares purchased shall be
credited to his Account, but shall initially be registered in the
name of the Company's nominee or the nominee name of American
Stock Transfer & Trust Company as recordkeeper for the Plan, or
any successor appointed by the Company, as agent for Plan
Participants. Such nominee will hold a Participant's share
certificates until such time as his participation in the Plan
terminates or he files a written request with the Committee to
have a certificate or certificates issued in his name. Except in
the case of death, any certificate issued to a Participant must
initially be issued in his name alone. Registration of any
shares following the death of a Participant will be subject to
the same rules as are then applicable to decedent shareholders
generally.
Section 4.5 RIGHTS AS SHAREHOLDERS.
The shares of Common Stock purchased by a Participant
on an Exercise Date shall, for all purposes, be deemed to have
been issued and sold at the close of business on such Exercise
Date. Participants for whom shares have been purchased shall be
entitled to all rights of a shareholder with respect to such
shares, including the right to receive dividends and the right to
vote. The Company will take such steps as may be necessary to
ensure that such rights are enjoyed by each Participant whose
shares are held in nominee name.
Section 4.6 CORPORATE REORGANIZATIONS, LIQUIDATIONS, ETC.
In the event of any corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or
liquidation, provision may be made for the substitution of a new
option for an old option, or an assumption of an old option, by
an employer corporation or a corporation related to such
corporation. Any provision for such substitution or assumption
shall be subject to the limitations and provisions of Code
Section 424.
ARTICLE V
TERMINATION OF PARTICIPATION
Section 5.1 VOLUNTARY WITHDRAWAL.
A Participant may withdraw from the Plan at any time by
filing notice of withdrawal with the Committee prior to an
Exercise Date. Upon withdrawal, the dollar amount and shares, if
any, credited to his Stock Purchase Account shall be distributed
to him and no shares will be purchased on his behalf for the
applicable Option Period. Any Participant who withdraws from the
Plan may again become a Participant in accordance with
Section 2.1.
Section 5.2 TERMINATION OF ELIGIBILITY.
If a Participant ceases to be employed by the Company
or a Subsidiary during an Option Period, his participation in the
Plan shall thereupon terminate. In such event, the dollar amount
and shares, if any, in his Stock Purchase Account shall be
distributed to him (or in the case of death, to his designated
beneficiary(ies)) and no further shares will be purchased on his
behalf. For purposes of this section, an Employee's
participation in the Plan will not automatically terminate if he
becomes an individual on a leave of absence permitted or required
to be taken into account by applicable Treasury Regulations.
Section 5.3 NO INTEREST ON ACCOUNT BALANCES.
Unless otherwise provided by the Company's Board of
Directors, no interest shall be paid on the cash balance in a
Participant's Stock Purchase Account pending its investment.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 TAX WITHHOLDING; INFORMATION RETURNS.
Each Employee who elects to participate in the Plan
shall be deemed to have consented to any income tax withholding
that may hereafter be required by reason of his participation in
the Plan or the disposition of, or payment of any dividends on,
shares acquired by him under the Plan. The proper officers of
the Company and each Subsidiary shall prepare (or cause to be
prepared) and, where required, timely file (or cause to be filed)
such tax information returns and other notices as may be required
by law from time to time.
Section 6.2 NOTICES.
Any notice which a Participant files pursuant to the
Plan shall be made on forms prescribed by the Committee and shall
be effective when received by the Committee.
Section 6.3 CONDITION OF EMPLOYMENT.
Neither the creation of the Plan, nor participation
therein, shall be deemed to create any right of continued
employment or in any way affect the right of the Company or a
Subsidiary to terminate an Employee.
Section 6.4 AMENDMENT OF THE PLAN.
The Board of Directors may at any time, and from time
to time, amend the Plan in any respect, except, that without
approval of the Company's shareholders, no amendment may
(i) increase the aggregate number of shares permitted to be
reserved by the Board of Directors under the Plan other than as
provided in Section 4.2, (ii) materially change the Plan benefits
provided for herein, (iii) change the definition of a Subsidiary,
or (iv) materially change the eligibility requirements for
Employees. Any amendment of the Plan must be made in accordance
with applicable provisions of the Code.
Section 6.5 APPLICATION OF FUNDS.
All funds received by the Company by reason of a
purchase of shares hereunder may be used for any corporate
purpose.
Section 6.6 LEGAL RESTRICTIONS.
The Company shall not be obligated to sell shares of
Common Stock hereunder if counsel to the Company determines that
such sale would violate any applicable law or regulation.
Section 6.7 GENDER.
Whenever used herein, use of any gender shall be
applicable to all genders.
Section 6.8 NUMBER.
Whenever used herein, singular words shall include the
plural, and vice versa, as the context requires.
Section 6.9 GOVERNING LAW.
Except to the extent preempted by Federal law, the Plan
and all rights and obligations thereunder shall be construed and
enforced in accordance with the domestic internal law of the
Commonwealth of Pennsylvania.
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