As filed with the Securities and Exchange Commission on June 26,
1998
Registration No. ______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MAIN STREET BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 23-2960905
(State of Incorporation) (I.R.S. Employer Identification Number)
601 Penn Street, Reading, PA 19601
(Address of Principal Executive Offices) (Zip Code)
_________________
MAIN STREET BANCORP, INC. 1995 STOCK INCENTIVE PLAN
(Full Title of the Plan)
Nelson R. Oswald Jeffrey P. Waldron, Esquire
Chairman and Stevens & Lee
Chief Executive Officer One Glenhardie Corporate Center
Main Street Bancorp, Inc. 1275 Drummers Lane
601 Penn Street P.O. Box 236
Reading, PA 19601 Wayne, PA 19087
(610) 685-1400 (610) 293-4961
(Names, Addresses and Telephone Numbers of Agents for Service)
PAGE 1
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Offering Aggregate Amount of
Securities Amount to be Price Offering Registration
to be Registered Registered Per Share(1) Price Fee
<S> <C> <C> <C> <C>
Common Stock, 200,025 shares $26.125 $5,225,653.10 $1,584
par value $1.00
per share
</TABLE>
(1)Estimated solely for the purposes of calculating the amount of
the registration fee, pursuant to Rule 457, on the basis of the
closing price of Main Street Bancorp, Inc. common stock on
June 23, 1998.
PAGE 2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by Main Street
Bancorp, Inc. (the "Registrant") with the Securities and Exchange
Commission ("SEC") and are incorporated herein by reference:
(a) Registrant's Current Report on Form 8-K dated May 15,
1998 filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") and as amended on Form 8-K/A on
June 25, 1998.
(b) All other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act since
April 29, 1998.
(c) The description of the Registrant's common stock, par
value $1.00 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
April 30, 1998, and as amended on Form 8-A/A on May 8,
1998.
All documents subsequently filed by the Registrant 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.
<PAGE 3>
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 Registrant 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 Registrant.
ITEM 7. INCORPORATION OF DOCUMENTS BY REFERENCE
Not applicable.
ITEM 8. EXHIBITS
4.1 Articles of Incorporation of Main Street Bancorp,
Inc., as amended, incorporated herein by reference
to Exhibit 3.1 of the Registration Statement
No. 333-44697 on Form S-4 of the Registrant.
4.2 Bylaws of Main Street Bancorp, Inc. incorporated
herein by reference to Exhibit 3.2 of the
Registration Statement No. 333-44697 on Form S-4
of the Registrant.
5.1 Opinion of Stevens & Lee re: legality of common
stock being registered.
23.1 Consent of Beard & Company, Inc., independent
auditors.
24. Power of Attorney (included on signature page).
99.1 Main Street Bancorp, Inc. 1995 Stock Incentive
Plan.
<PAGE 4>
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
<PAGE 5> 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.
(d) 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.
PAGE 6
<PAGE>
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 Reading, Commonwealth of Pennsylvania,
on June 23, 1998.
MAIN STREET BANCORP, INC.
By: /s/ Nelson R. Oswald
Nelson R. Oswald
Chairman and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Nelson R.
Oswald, Allen E. Kiefer, 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.
<PAGE 7>
Signature Title Date
/s/ Nelson R. Oswald Chairman and June 23, 1998
Nelson R. Oswald Chief Executive Officer
(Principal Executive
Officer)
/s/ Allen E. Kiefer President, Chief June 23, 1998
Allen E. Kiefer Operating Officer
and Director
/s/ Robert D. McHugh, Jr. Executive Vice June 23, 1998
Robert D. McHugh, Jr. President and Chief
Financial Officer
(Principal Financial
Officer)
/s/ Donna L. Rickert Senior Vice President, June 23, 1998
Donna L. Rickert Chief Accounting Officer,
Controller (Principal
Accounting Officer)
/s/ Richard D. Biever Director June 23, 1998
Richard D. Biever
/s/ Edward J. Edwards Director June 23, 1998
Edward J. Edwards
/s/Richard T. Fenstermacher Director June 23, 1998
Richard T. Fenstermacher
/s/ Ivan H. Gordon Director June 23, 1998
Ivan H. Gordon
/s/ Jeffrey W. Hayes Director June 23, 1998
Jeffrey W. Hayes
/s/ Alfred B. Mast Director June 23, 1998
Alfred B. Mast
/s/ Frederick A. Gosch Director June 23, 1998
Frederick A. Gosch
Director June 23, 1998
Wesley R. Pace
/s/ Floyd S. Weber Director June 23, 1998
Floyd S. Weber
/s/ Joseph Schlitzer Director June 23, 1998
Joseph Schlitzer
<PAGE 8>
/s/ Albert L. Evans, Jr. Director June 23, 1998
Albert L. Evans, Jr.
PAGE 9
<PAGE>
INDEX TO EXHIBITS
Sequential
Exhibit No. Exhibit Page Number
4.1 Articles of Incorporation of Main Street
Bancorp, Inc. incorporated herein by
reference to Exhibit 3.1 of the Registration
Statement No. 333-44697 on Form S-4 of the
Registrant.
4.2 Bylaws of Main Street Bancorp, Inc.
incorporated herein by reference to
Exhibit 3.2 of the Registration Statement
No. 333-44697 on Form S-4 of the Registrant.
5.1 Opinion of Stevens & Lee re: legality of
common stock being registered.
23.1 Consent of Beard & Company, Inc., independent
auditors.
24. Power of Attorney (included on signature
page).
99.1 Main Street Bancorp, Inc. 1995 Stock
Incentive Plan. <PAGE 10>
Exhibit 5.1
June 26, 1998
Board of Directors
Main Street Bancorp
601 Penn Street
Reading, Pennsylvania 19603
Re: Main Street Bancorp, Inc. 1995 Stock Incentive Plan
Gentlemen:
You have asked us to provide you with our opinion whether
the 150,000 shares of common stock, par value $1.00 per share
(the "Common Stock"), of Main Street Bancorp, Inc. (the
"Company") that may be issued from time to time pursuant to the
exercise of options issued under the Main Street Bancorp, Inc.
1995 Stock Incentive Plan (the "Plan"), when and if such shares
are issued pursuant to and in accordance with the Plan, will be
duly and validly issued, fully paid and nonassessable. We, as
counsel to the Company, have reviewed:
1. The Pennsylvania Business Corporation Law of 1988, as
amended;
2. The Articles of Incorporation of the Company;
3. The By-laws of the Company; and
4. The Resolutions of the Board of Directors of the
Company adopted June 23, 1998 as certified by the Corporate
Secretary of the Company.
Based on our review of such documents, it is our opinion
that the Common Stock issuable upon the exercise of options
granted under the Plan, when and as issued and paid for in
accordance with the provisions of the Plan, will be duly and
validly issued, fully paid and nonassessable. In giving the
foregoing opinion, we have assumed that the Company will have, at
the time of the issuance of such Common Stock, a sufficient
number of authorized shares available for issue.
We consent to the filing of this opinion as an exhibit to
the registration statement the Company is filing today in
connection with the registration of 150,000 shares of the
Company's Common Stock. In giving this consent, we do not
<PAGE 1> 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
/s/ STEVENS & LEE
STEVENS & LEE <PAGE 2>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8, pertaining to the Main Street
Bancorp, Inc. 1995 Stock Incentive Plan, of our report dated
May 29, 1998, relating to the supplemental consolidated financial
statements of Main Street Bancorp, Inc. appearing in the Company's
Current Report on Form 8-K/A dated June 25, 1998.
/s/ Beard & Company, Inc.
BEARD & COMPANY, INC.
Reading, Pennsylvania
June 19, 1998
MAIN STREET BANCORP, INC.
1995 STOCK INCENTIVE PLAN
ARTICLE I.
Purpose
This 1995 Stock Incentive Plan (the "Plan") is
intended to provide a means for the granting of awards (each such
award, an "Award") of stock options and stock appreciation rights
to selected key employees of Main Street Bancorp, Inc. (the
"Company") and such of its present or future affiliated companies
as shall be designated from time to time by the Company's Board
of Directors (the "Board") (each such employee, upon receipt of
an Award, a "Participant"). This Plan is designed to (a) provide
incentives and rewards to those employees who are in a position
to contribute to the long-term growth and profitability of the
Company; (b) assist the Company and such affiliated companies
(the "affiliates") to attract, retain and motivate personnel with
experience and ability; (c) make the Company's compensation
program more competitive with those of other major employers; and
(d) link Participants directly to shareholder interests through
increased stock ownership.
ARTICLE II.
Administration
2.1 This Plan shall be administered by a
committee (the "Committee") consisting of two or more directors
from the Board serving for such terms as determined, selected and
appointed by the Board. The Board shall fill all vacancies
occurring in the Committee's membership, and at any time and for
any reason may add additional members to the Committee or may
remove members from the Committee and appoint their successors.
Except as otherwise permitted under Section 16(b) of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act")
and applicable rules and regulations promulgated thereunder, a
member of the Committee must be a director of the Company and a
"disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act. Under current Rule 16b-3, a "disinterested person"
is a person who does not at the time such person exercises
discretion in administering the Plan, and at any time within one
year prior thereto, receive a discretionary grant or award of
stock or options or rights with respect to any equity securities
of the Company or its affiliates pursuant to any plan of the
Company or its affiliates.
2.2 Subject to the express provisions of this
Plan and to such orders or resolutions not inconsistent with the
provisions of this Plan and applicable law as may be issued or
<PAGE 1> adopted from time to time by the Board, the Committee
shall have full power and authority, in its discretion, to grant
Awards; to determine to whom and the time when Awards will be
granted; to designate Awards as incentive stock options or
nonqualified stock options or stock appreciation rights; to
determine the purchase price of the common stock covered by each
option and the term of each option; to determine the terms of
stock appreciation rights; to determine the terms and provisions
of the option agreements (which need not be identical) entered
into in connection with Awards under this Plan; to accelerate the
exercisability of Awards subsequent to their issuance; to
interpret this Plan; to supervise the administration of this
Plan; to prescribe, amend and rescind rules and regulations
relating to this Plan; and to make all other determinations and
take any other action deemed necessary or desirable to the proper
operation or administration of this Plan. The Committee may
authorize such of the Company's officers or other persons to
perform functions related to the execution and administration of
this Plan (other than the granting of Awards, the interpretation
of this Plan and the adoption of rules governing its execution
and administration) as the Committee shall determine from time to
time.
2.3 All decisions made by the Committee pursuant
to the powers vested in it by this Plan document and related
orders or resolutions of the Board shall be final and binding on
all persons (including Participants, the Company and any
stockholder and/or employee of the Company or any affiliate). No
member of the Committee or the Board of Directors shall be liable
for any action or determination made in good faith with respect
to this Plan or any Award granted under it.
2.4 Neither the Committee, the Board, the Company
nor any officers or employees of the Company or any of its
affiliates shall have any duty to advise Participants of any
rules, interpretations or determinations by the Committee, and
each Participant shall be bound by such rules, interpretations or
determinations upon communication thereof to such Participant,
effective as of such date (prior to, subsequent to or concurrent
with such communication) that each such rule, interpretation or
determination shall have been intended to be effective by the
Committee.
2.5 The Committee shall be entitled to make such
rules, regulations and determinations as it deems appropriate
under the Plan regarding any leave of absence taken by a
Participant who is the recipient of any Award. Without limiting
the generality of the foregoing, the Committee shall be entitled
to determine (a) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of the
Plan, and (b) the impact, if any, of any such leave of absence on
Awards under the Plan theretofore made to any Participant who
<PAGE 2> takes such leave of absence.
ARTICLE III.
Scope and Term
3.1 Awards under this plan may be granted in the
form of incentive stock options (the "ISOs") as provided in
Section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code") or in the form of nonqualified stock options (the
"NQSOs"). Any NQSO may, in the discretion of the Committee, be
accompanied by stock appreciation rights (the "SARs"). As used
in the preceding sentence, the term "stock appreciation rights"
means the right to receive the payment provided for in
Article VII, upon the surrender of an unexercised related NQSO.
Unless otherwise expressly provided at the time of grant, Options
granted under the Plan will not be ISOs. Unless otherwise
indicated, references in this Plan to "Options" shall include
ISOs and NQSOs.
3.2 The total number of shares of common stock of
the Company (the "Stock") that may be subject to Awards under
this Plan shall be 150,000 shares, subject to adjustment in
accordance with Article X hereof. Shares which are subject to
Options and related SARs shall be counted only once in
determining whether the maximum number has been exceeded.
Issuance of Stock upon exercise of an Option or SAR and/or
reduction in the number of shares of Stock subject to an Option
upon exercise of an SAR shall reduce the total number of shares
of Stock available under this Plan. There shall not be counted
against this total any shares of Stock covered by an Option or
SAR that has lapsed unexercised or has been terminated,
forfeited, cancelled or surrendered unexercised (other than in
connection with exercise of a related SAR) as hereinafter
provided. Under no circumstances shall any fractional shares of
stock be issued or sold under the Plan or any Award.
3.3 Shares of Stock as to which Options and SARs
under this Plan may be granted may be made available by the
Company from authorized but unissued shares of Stock or from
shares reacquired by the Company (including, without limitation,
shares purchased in the open market or in private transactions),
subject to adjustment provided for in Article X hereof.
ARTICLE IV.
Eligible Employees
4.1 The persons who shall be eligible to receive
Awards under this Plan shall be such key officers and other
management employees (including officers and directors who are
<PAGE 3> employees) of the Company or its affiliates, without
limitation as to length of service, who are from time to time
serving in a managerial, administrative or professional position
which is recommended to, and authorized by, the Committee for
Awards under this Plan.
ARTICLE V.
Granting Awards
5.1 Subject to the limitations of this Plan, the
Committee, at any time and from time to time, and after such
consultation with and consideration of the recommendations of
management as the Committee deems desirable, shall select from
eligible employees those persons to be granted Awards and
determine the time when each Award shall be granted, the number
of shares of Stock to be subject to an Option and the terms and
conditions, consistent with this Plan, upon which Options and
SARs shall be awarded. The Committee shall make Awards to the
key employees so selected for the number of Options and SARs and
upon the terms and conditions so determined. No Options or SARs
or underlying shares of Stock shall be issued or distributed
under this Plan unless and until all legal requirements
applicable to the issuance or transfer of such Options, SARs
and/or Stock have been complied with to the satisfaction of the
Committee and the Company.
5.2 No Awards shall be granted under this Plan
after its termination but Awards granted prior to such
termination may extend beyond the termination date, and the terms
of this Plan shall continue to apply to such Awards.
ARTICLE VI.
Terms and Conditions of Options
6.1 General. Each Option granted pursuant to
this Plan shall be subject to all of the terms and conditions
hereinafter provided in this Article VI, all other terms and
conditions as may be provided in any other Section of this
Plan, -and such other terms and conditions ("Discretionary
Conditions") as may be specified by the Committee with respect to
the Option and the Stock covered thereby at the time of the
making of the Award or as may be specified thereafter by the
Committee in the exercise of its powers under this Plan. Without
limiting the foregoing, it is understood that the Committee may,
at any time and from time to time after the granting of an Award
under this Plan, specify such additional terms and conditions
with respect to such Award as may be deemed necessary or
appropriate to ensure compliance with any and all applicable
laws, including, but not limited to, terms and conditions for
compliance with federal and state securities laws, and methods of
<PAGE 4> withholding or providing for the payment of required
taxes. The terms and conditions with respect to any Award, or
with respect to any Award to any Participant, need not be
identical with the terms and conditions with respect to any Award
to the Participant or any other Participant.
6.2 Option Agreement. Receipt of an Option shall
be subject to execution of a written agreement (the "Option
Agreement") between the Company and the Participant, in a form
approved by the Committee, which shall set forth the number of
Options Awarded, the number of shares of Stock that may be
purchased pursuant to such Options, the applicable Option Price
(as defined herein) and such other terms and conditions provided
in the Plan as may be deemed appropriate by the Committee,
including, but not limited to, any Discretionary Conditions. The
Option Agreement shall be subject to, and shall be deemed amended
to include, such additional Discretionary Conditions as the
Committee may thereafter specify in the exercise of its powers
under this Plan. A fully executed original counterpart of the
Agreement shall be provided to the Company and the Participant.
The Option Agreement shall also apply to any SARs that are
awarded in tandem with a NQSO.
6.3 Option Price. The purchase price of the
Stock covered by each Option (the "Option Price") shall be
determined by the Committee, but in no event shall the Option
Price be less than 100% of the Fair Market Value of such Stock on
the date the Option is granted. As used in this Plan, "Fair
Market Value" as of any date shall mean the market price of the
Stock, determined by the Committee as follows:
(a) If the Stock was classified by Nasdaq as a
national market issue (or, in the judgment of the
Committee, a comparable designation), then the Fair
Market Value shall be equal to the average of the high
and low sales prices of the shares of Stock reported in
Nasdaq trading for that date or, if no reported sale of
shares of Stock shall have occurred on such date, then
on the next preceding day on which there was a reported
sale.
(b) If the shares of Stock were traded over-the-
counter on the date in question but the Stock was not
classified by Nasdaq as a national market issue (or, in
the judgment of the Committee, a comparable
designation), then the Fair Market Value shall be equal
to the mean between the last reported representative
bid and asked prices quoted by the Nasdaq system for
such date.
(c) If the shares of Stock were traded on a stock
exchange on the date in question, then the Fair Market
<PAGE 5> Value shall be equal to the closing price
reported by the applicable composite transactions
report for such date; and
(d) If none of the foregoing provisions is
applicable, then the Fair Market Value shall be
determined by the Board in good faith on such basis as
it deems appropriate, provided, however, that no
determination with respect to the Fair Market Value of
Common Stock subject to an ISO shall be inconsistent
with the Section 422 of the Code or the regulations
thereunder.
Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in the Eastern
Edition of THE WALL STREET JOURNAL. Such determination shall be
conclusive and binding on all persons.
6.4 Term and Exercisability of Option. Subject
to earlier termination as provided in this Plan, each Option
Agreement entered into with a Participant shall state the period
or periods of time, as may be determined by the Committee, within
which the Option may be exercised by the Participant, in whole or
in part, provided that the time period during which the Option is
exercisable shall not end later than ten years after the date of
the grant of the Option. The Committee shall have the power to
permit, in its discretion, acceleration of the previously
determined exercise terms of Awards granted to a Participant,
subject to the terms of this Plan, under such circumstances and
upon such terms and conditions as it deems appropriate. The
expiration of outstanding Awards may also be accelerated as
provided in Article X.
6.5 Exercise. A. Subject to the provisions of
this Plan and unless otherwise provided in the Option Agreement,
an Option may be exercised, from time to time (subject, in the
case of ISOs, to such restrictions as may be imposed from time to
time by the Code unless waived by the Committee), as to any and
all full shares of Stock subject to the Option by giving written
notice to the Company of the exercise of the Option in accordance
with such procedures as may be established from time to time by
the Committee. Except as provided in Section 6.6 or Article X,
no Option may be exercised at any time unless the Participant is
then an employee of the Company or an affiliate.
6.6 Rights Upon Termination of Employment.
A. In the event that a Participant who has been
granted an ISO ceases to be an officer or employee of the
Company, or its affiliates, for any cause other than retirement,
death, or disability, the Participant shall have the right,
unless otherwise determined by the Committee, to exercise the ISO
<PAGE 6> during its term within a period of three months after
such termination to the extent that the ISO was exercisable at
the date of such termination of employment; upon retirement, the
optionee shall have the right to exercise an ISO during its term
within a period of three months after such retirement to the
extent that the ISO was exercisable at the date of such
retirement. Should the Participant holding an ISO die or become
disabled (as determined by the Committee), the Participant or, as
provided in the relevant Option Agreement, the Participant's
successor in interest shall have the right to exercise the ISO
during its term within a period of 12 months after such death or
within a period of 12 months after such disability to the extent
that the ISO was exercisable at the date of death or disability,
but in no event after the expiration of its term.
B. In the event that a Participant who has been
granted a NQSO ceases to be an employee of the Company, or its
affiliates, for any cause other than retirement, death, or
disability, the Participant shall have the right, unless
otherwise determined by the Committee, to exercise the NQSO
during its term within a period of three months after such
termination to the extent that the option was exercisable at the
date of such termination of employment. In the event that a
Participant retires, dies, or becomes disabled (as determined by
the Committee) prior to termination of the NQSO without having
fully exercised such Option, the Participant or, as provided in
the relevant Option Agreement, such Participant's successor in
interest shall have the right to exercise the NQSO during its
term within a period of 12 months after the date of such
termination due to retirement, death or disability, to the extent
that the NQSO was exercisable at the date of termination due to
retirement, death, or disability, or during such other period and
subject to such terms as may be determined by the Committee at
the time of issuance of the Options. Notwithstanding the
foregoing, the Committee, in its discretion, may permit a
Participant to exercise an NQSO, or any part thereof, during the
3 or 12 month period specified above if the NQSO becomes
exercisable after termination of such Participant's employment,
provided, however, that in no event may an Option be exercised
after the expiration of its term.
C. For purposes of this Section 6.6:
(i) continued employment of a Participant by
a successor corporation to the Company or by an
affiliate of such successor corporation shall be
deemed continued employment by the Company if such
successor corporation or its affiliate has assumed
this Plan and any Awards then held by the
Participant; and
(ii) an Option shall be exercisable as of a
<PAGE 7> particular time if it is then exercisable
in accordance with the terms of the Option
Agreement or this Plan, or as a result of
acceleration, whether at the discretion of the
Committee or otherwise.
6.7 Payment. The Option Price for the shares as
to which an Option is exercised shall be paid to the Company in
full at the time the Option is exercised. Such payment shall be
in cash, equal to the Option Price for the shares of Stock being
purchased , unless the Committee determines to permit payment of
the Option Price in accordance with the immediately following
sentence. The Committee shall have the sole discretion to
determine that it shall permit, at the election of a Participant,
payment of the Option Price (i) in cash, (ii) in shares of Stock
owned by the Participant prior to exercising the Option and
having a Fair Market Value on date of payment equal to the Option
Price for the shares of Stock being purchased and satisfying such
other requirements as may be imposed by the Committee, or (iii)
partly in cash and partly in such shares of Stock. Under no
circumstances may Stock acquired by the Participant which is
identified as having been obtained through an ISO under this Plan
and still subject to ISO holding requirements as defined in the
Code, be tendered in payment of the Option Price without the
consent of the Committee. In addition, and subject to the
provisions of Section 12.2 with respect to withholding for taxes,
(i) prior to delivery of the shares of Stock issuable upon
exercise of the Option, any amount necessary to satisfy
applicable federal, state and/or local tax requirements shall be
paid promptly by the Participant upon notification of the amount
due; and (ii) whenever under the Plan payments are to be made in
cash, such payments shall be net of an amount sufficient to
satisfy any federal, state and/or local withholding tax
requirements.
6.8 Right as a Shareholder. No Participant shall
have any rights to dividends or other rights of a stockholder
with respect to shares of Stock subject to an Option or SAR until
the Participant has given written notice of exercise of the
Option, has paid in full the Option Price for such shares of
Stock and has otherwise complied with this Plan, the Option
Agreement and such rules and regulations as may be established by
the Committee.
6.9 Additional Conditions of ISOs.
A. No ISO shall be granted hereunder more than
ten (10) years after the date the Plan is adopted by the Board or
the date the Plan is approved by the Company's shareholders,
whichever is earlier.
B. Each ISO shall be subject to such other and
<PAGE 8> additional terms, conditions and provisions as the
Committee may deem necessary or appropriate in order to qualify
such ISO as an incentive stock option under Section 422 of the
Code, including but not limited to the following provisions:
(i) the aggregate Fair Market Value, at the
time such ISO is awarded, of the Stock
subject thereto and of any Stock or other
capital stock with respect to which incentive
stock options qualifying under Sections 422
of the Code are exercisable for the first
time by the Participant during any calendar
year under the plan and any other plans of
the Company or its affiliates, shall not
exceed $100,000.00; and
(ii) no ISO shall be awarded to any person if
at the time of such award, such person owns
Stock possessing more than ten percent (10%)
of the total combined voting power of all
classes of capital stock of the Company or
its affiliates, unless at the time such ISO
is awarded the option price under such ISO at
least one hundred and ten percent (10%) of
the Fair Market Value of the Stock subject to
such Option and the ISO by its terms is not
exercisable after the expiration of five (5)
years from the date it is awarded.
C. From time to time, the Committee may rescind,
revise and add to any of such terms, conditions and provisions as
may be necessary or appropriate to have any Awards be or remain
qualified as incentive stock options under the Code and in
compliance with all applicable laws, rules and regulations, and
may delete, omit or waive any of such terms, conditions or
provisions that are no longer required by reason of changes in
applicable laws, rules or regulations. The Committee may, in its
sole discretion, cause the Company to convert an ISO to an NQSO
upon such terms and conditions and in such manner as the
Committee deems appropriate and equitable.
6.10 Investment Purpose.
A. Each Award under this Plan shall be granted
on the condition that the purchases of shares of Stock hereunder
(whether by exercise of an Option or SAR) shall be for investment
purposes, and not with a view to resale or distribution, except
that in the event the Stock subject to such Option or SAR is
registered under the Securities Act of 1933, as amended, or in
the event of a resale of such Stock without registration
thereunder would otherwise be permissible, such condition shall
be inoperative if in the opinion of counsel for the Company such
<PAGE 9> condition is not required under the Securities Act of
1933 or any other applicable law, regulation or rule of any
governmental agency.
B. The Committee may require each person
purchasing shares of Stock pursuant to exercise of an Option or
an SAR to represent to and agree with the Company in writing that
such shares are being acquired for investment and without a view
to distribution thereof. The certificates for shares of Stock so
purchased may include any legend which the Committee deems
appropriate to reflect any restriction or transfer. The
Committee also may impose, in its discretion, as a condition of
any Option or SAR, any restrictions on the transferability of
shares of Stock acquired through the exercise of such Option or
SAR as it may deem fit. Without limiting the generality of the
foregoing, the Committee may impose conditions restricting
absolutely the transferability of shares of Stock acquired
through the exercise of Options and SARs for such periods as the
Committee may determine and, further, in the event a
Participant's employment by the Company or any of its affiliates
terminates during the period in which such shares of Stock are
nontransferable, the Participant may be required, if required by
the related Option Agreement, to sell such Stock back to the
Company at such price and on such other terms as the Committee
may have specified in the Option Agreement.
C. A Participant shall give prompt written
notice to the Company of any disposition of shares of Stock
acquired upon exercise of an ISO if such disposition occurs
within either two years after grant or one year after receipt of
such shares by the Participant.
ARTICLE VII.
Terms and Conditions of SARS
7.1 Grants. The Committee may grant SARs to
employees in connection with NQSOs granted under this Plan at the
time of grant of the NQSOs. Each SAR shall entitle the
Participant to surrender to the Company an unexercised related
NQSO (or any portion thereof which the Participant from time to
time determines to surrender for this purpose) and to receive
from the Company in exchange therefore, subject to the provision
of this Plan and such rules and regulations as from time to time
may be established by the Committee, a payment (the "SAR
Payment") equal to the excess of the Fair Market Value on the
exercise date of one share of Stock over the Option Price per
share times the number of full or whole shares covered by the
NQSO, or portion thereof, which is surrendered. The date a
notice of exercise is received by the Company shall be the
exercise date.
<PAGE 10>
7.2 General. Each SAR shall be subject to the
same terms and conditions as the Option to which it relates
(including terms set forth in the related Option Agreement),
shall be exercisable only to the extent the related Option is
exercisable and shall be subject to such other terms and
conditions as the Committee may determine.
7.3 Exercise of SARS; Payments.
A. SARs may be exercised from time to time upon
actual receipt by the Company of written notice of exercise
stating the whole number of shares of Stock subject to an
exercisable Option with respect to which the SAR is being
exercised.
B. Upon exercise of an SAR, payment shall be
made in the form of shares of Stock with a Fair Market Value
equal to the SAR Payment, provided that, no fractional shares
shall be issued and the number of shares of Stock to be received
by the Participant shall be rounded down to the nearest whole
number, unless the Committee, in its discretion, determines
otherwise, in which case cash shall be paid in lieu of a
fractional share otherwise required to be delivered to the
Participant; provided further, that the Committee shall have sole
discretion to cause the Company to settle SARs by payment in cash
or partly in cash and partly in Stock. All such shares shall be
valued at their Fair Market Value as of the date of exercise of
the SAR. So long as the Participant who receives an SAR is
subject to Section 16(b) of the Securities Exchange Act of 1934
with respect to securities of the Company and except as otherwise
provided by Section 7.3.E, the Committee may not cause the
Company to elect to settle any part or all of its obligation
arising out of the exercise of an SAR by the payment of cash
pursuant to this subsection, unless (i) such exercise occurs no
earlier than six months after the date of grant of the SAR and
during the period beginning on the third business day following
the date of release by the Company for publication of its
quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such date or
otherwise complies with the restrictions of Rule 16b-3 under the
Exchange Act, and (ii) the Committee approves such form of
settlement.
C. Subject to the provisions of Section 12.2, no
payment will be required from the Participant upon exercise of an
SAR, except that any amount necessary to satisfy applicable
Federal, state or local tax requirements shall be withheld or
paid promptly by the Participant upon notification of the amount
due and prior to or concurrently with delivery of cash or a
certificate representing shares of Stock.
D. Upon exercise of an SAR, the number of shares
<PAGE 11> of Stock subject to exercise under the SAR or a related
Option shall automatically be reduced by the number of shares of
Stock represented by the SAR or related Option or portion thereof
surrendered. Shares of Stock subject to SARs or related Options
or portions thereof surrendered upon the exercise of SARs shall
not be available for subsequent Awards under this Plan.
E. If neither the SAR nor the related Option, in
whole or in part, is exercised before the end of the day on which
the SAR ceases to be exercisable, such SAR or portion thereof (to
the extent exercisable) shall be deemed exercised on such day and
a payment in the amount prescribed by Section 7.3.B. of this
Article VII, less any applicable taxes, shall be paid to the
Participant in cash.
ARTICLE VIII.
Nontransferability of Options and SAR's
8.1 Options and SARs granted under this Plan
shall not be transferable by the Participant other than by will
or by the laws of descent and distribution. During the lifetime
of a Participant, Options and SARs may be exercised only by the
Participant. Options and SARs exercisable after the death of a
Participant may be exercised by the legatees, personal
representatives or distributees of the Participant.
ARTICLE IX.
Forfeiture Upon Occurrence of Certain Acts
9.1 Notwithstanding any other provision of this
Plan, no payment of any Award shall be made and all rights of the
Participant who received such Award (or his designated
beneficiary or legal representatives) to the payment thereof
under this Plan shall be forfeited if, prior to the time of such
payment, the Participant (i) shall be employed without the
Company's or affiliate's consent by a competitor of, or shall be
engaged in any activity in competition with, the Company or an
affiliate; (ii) divulges without the consent of the Company any
secret or confidential information belonging to the Company or an
affiliate; (iii) has been dishonest or fraudulent in any matter
affecting the Company or any affiliate; or (iv) has committed any
act which, in the sole judgment of the Committee, has been
substantially detrimental to the interests of the Company or any
affiliate. The Company shall give a Participant written notice
of the occurrence of any such event prior to making any such
forfeiture. The determination of the Committee as to the
occurrence of any of the events specified in the foregoing
clauses (i), (ii), (iii) and (iv) of this Section 9.1 shall be
conclusive and binding upon all persons for all purposes. Any
Award shall be subject to forfeiture for the reasons provided in
this Section in such manner as shall be provided by the
<PAGE 12> Committee.
ARTICLE X.
Stock Adjustments
10.1 In the event that the shares of Stock shall
be changed into or exchanged for a different number or kind of
shares of Stock of the Company or of another corporation (whether
by reason of merger, consolidation, recapitalization,
reclassification, stock split, 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 there
shall be substituted for or added to each share of Stock subject
to an Award under this Plan and to the maximum number of shares
of Stock that may be subject to Awards as set forth in
Section 3.2, the number and kind of shares into which each
outstanding share of Stock shall be exchanged, or to which each
such share shall be entitled, as the case may be. A change in
only the par value of the Shares shall not require any
adjustment. Where appropriate, outstanding Awards shall also be
amended as to Option Price and other terms as may be necessary to
equitably reflect the foregoing events. In the event there shall
be any other change in the number or kind of outstanding shares
of the Stock, or any shares into which such shares shall have
been changed, or for which the Committee shall, in its sole
discretion, determine that such change equitably requires an
adjustment in any Award theretofore granted or which may be
granted under this Plan, such adjustments shall be made in
accordance with such determination.
10.2 Fractional shares resulting from any
adjustment in Awards pursuant to this Article X shall be carried
through until exercise of affected Awards, but Awards may only be
exercised for full or whole shares and, unless the Committee
determines otherwise, a Participant shall not be entitled to any
settlement for fractional shares. In the event that an Award is
exercised for all full or whole shares of Stock subject to the
Award, the number of shares of Stock subject to the Award shall
be deemed rounded down to the nearest whole number and, upon
exercise for such whole number of shares of Stock, the Award
shall terminate. Notice of any adjustments shall be given by the
Company to each holder of an Award which shall have been so
adjusted and such adjustment (whether or not such notice is
given) shall be effective and binding for all purposes of this
Plan.
10.3 Notwithstanding anything to the contrary in
this Plan, in the event an agreement is entered into by the
Company providing for any merger or consolidation or similar
transaction of the Company with or into any other corporation
whereby the Company is not to be the surviving entity, or the
<PAGE 13> sale of all or substantially all of the assets of the
Company, or an offer to purchase by a party, other than the
Company, to all stockholders of the Company for at least 35 % of
the outstanding Stock is made, all outstanding Awards shall be
immediately exercisable.
10.4 Any agreement to which the Company is a party
which provides for any merger, consolidation or similar
transaction of the Company with or into another corporation
whereby the Company is not to be the surviving corporation may
provide, without limitation, for the assumption of outstanding
Awards by the surviving corporation or its parent, for
accelerated vesting and accelerated expiration, or for an
equitable mandatory settlement of outstanding Awards in cash
based on the consideration paid to shareholders in such
transaction and all outstanding Awards shall be subject to such
agreement. In any case where the Awards are assumed by another
corporation, appropriate equitable adjustments as to the number
and kind of shares or other securities and the per share purchase
price shall be made.
ARTICLE XI.
Suspension, Termination and Amendment of the Plan
11.1 To the extent permitted by applicable law,
the Board may amend, suspend, or terminate the Plan at any time;
provided, however, that: (a) no amendment may be adopted that
permits an Award to be granted to any member of the Committee;
and (b) notwithstanding anything to the contrary herein, no
amendment may be adopted to increase the number of securities
that may be issued under the Plan (except as specified in
Article X hereof), materially increase the benefits accruing to
recipients or materially modify the requirements for eligibility
to participate in the Plan, without the approval of the
shareholders of the Company, to the extent that shareholder
approval is required under Section 16 of the Securities Exchange
Act, and the regulations thereunder, as from time to time in
effect. The amendment or termination of this Plan shall not,
without the consent of a Participant, adversely affect or impair
any rights of a Participant under any Award previously granted
hereunder; provided, however, that any amendment or termination
contemplated by this Plan, including without limitation, by
Section 10.4, shall be conclusively presumed not to adversely
affect or impair rights of a Participant under any Award.
11.2 Upon the dissolution or liquidation of the
Company, this Plan and the Awards issued thereunder shall
terminate.
<PAGE 14>
ARTICLE XII.
Miscellaneous
12.1 No Rights to Continued Employment or Award.
This Plan does not, directly or indirectly, create any right for
the benefit of any employee or class of employees to receive any
Awards under this Plan, or create in any employee or class of
employees any right with respect to continuation of employment by
the Company or any affiliate, and it shall not be deemed to
interfere in any way with the Company's or an affiliate's right
to terminate or otherwise modify an employee's employment at any
time.
12.2 Withholding Taxes. Whenever the Company
proposes or is required to issue or transfer shares of Stock to a
Participant under the Plan, the Company shall have the right to
require the Participant to remit to the Company an amount
sufficient to satisfy all federal, state and local withholding
tax requirements prior to the delivery of any certificate or
certificates for such shares. If such certificates have been
delivered prior to the time a withholding obligation arises, the
Company shall have the right to require the Participant to remit
to the Company an amount sufficient to satisfy all federal, state
or local withholding tax requirements at the time such obligation
arises and to withhold from other amounts payable to the
Participant, as compensation or otherwise, as necessary.
Whenever payments under the Plan are to be made to a Participant
in cash, such payments shall be net of any amounts sufficient to
satisfy all federal, state and local withholding tax
requirements. The Committee, in its sole discretion, may permit
a Participant to elect to satisfy all or part of such
Participant's withholding or income tax obligations, arising in
connection with Awards under the Plan by having the Company
withhold all or a portion of any shares of Stock that otherwise
would be issued to the Participant or by surrendering all or a
portion of any shares of stock previously acquired by the
Participant. Such shares of Stock shall be valued at their Fair
Market Value on the date when taxes otherwise would be withheld
in cash. Any payment of withholding taxes by assigning shares of
Stock to the Company may be subject to such additional
restrictions as the Committee at any time deems appropriate. If
the holder of shares of Stock purchased in connection with the
exercise of an ISO disposes of such shares within two years of
the date such ISO was granted or within one year of such
exercise, he shall notify the Company of such disposition and
remit an amount necessary to satisfy applicable withholding
requirements including those arising under federal income tax
laws. If such holder does not remit such amount, the Company may
withhold all or a portion of any salary then or in the future
owed to such holder as necessary to satisfy such requirements.
The Committee may, from time to time, make or impose, in its
<PAGE 15> discretion, such additional restrictions, rules or
regulations as it deems appropriate with respect to withholding
of any taxes.
12.3 Failure to Comply With Terms and Conditions.
Notwithstanding any other provisions of this Plan, no payment or
delivery with respect to any Award shall be made, and all rights
of the Participant who receives such Award (or his designated
beneficiary or legal representative) to such payment or delivery
under this Plan shall be forfeited, at the discretion of the
Committee, if, prior to the time of such payment or delivery, the
Participant breaches a restriction or any of the terms,
restrictions and/or conditions of this Plan and/or the Agreement.
12.4 Parties in Interest. The provisions of this
Plan and the terms and conditions of any Award shall, in
accordance with their terms, be binding upon, and inure to the
benefit of, all successors of each Participant, including,
without limitation, such Participant's estate and the executors,
administrators or trustees thereof, heirs and legatees and any
receiver. Subject to the terms of this Plan, all obligations of
the Company under the Plan with respect to Awards shall be
binding on successors and assigns of the Company.
12.5 Indemnification. No member of the Committee
shall be personally liable by reason of any contract or other
instrument executed by him or on his behalf in his capacity as a
member of the Committee, nor for any mistake or judgment made in
good faith, and the Company shall indemnify and hold harmless
each member of the Committee and each other officer, employee or
director of the Company to whom any duty or power relating to the
administration or interpretation of his Plan may be allocated or
delegated, against any cost or expense (including counsel fees)
or liability (including any sum paid in settlement of a claim
with the approval of the Board) arising out of any act or
omission to act in connection with this Plan, unless arising out
of such person's own fraud or bad faith.
12.6 Designation of Beneficiary. Each Participant
may designate a beneficiary or beneficiaries (on a form supplied
by the Committee) to exercise his Awards in the event of his
death, and may change such designation from time to time and at
any time prior to the death of such Participant.
12.7 Governing Law. All questions pertaining to
construction, validity and effect of the provisions of this Plan
and the rights of all persons hereunder shall be governed by the
laws of the Commonwealth of Pennsylvania, without regard to the
conflict of laws, principles thereof.
12.8 Miscellaneous. Any reference contained in
this Plan to a particular section or provision of law, rule or
<PAGE 16> regulation, including, but not limited to, the Code and
the Exchange Act, shall include any subsequently enacted or
promulgated section or provision of law, rule or regulation, as
the case may be, of similar import. With respect to persons
subject to Section 16 of the Exchange Act, transactions under
this Plan are intended to comply with all applicable conditions
of Rule 16b-3 or any successor rule that may be promulgated by
the Securities and Exchange Commission, and to the extent any
provision of this Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted
by applicable law and deemed advisable by the Committee. Where
used in this Plan, the plural shall include the singular, and
unless the context otherwise clearly requires, the singular shall
include the plural and, the term "affiliates" shall mean each and
every Subsidiary and any parent of the Company as such terms are
defined under Section 424 of the Code. The captions of the
numbered sections contained in this Plan are for convenience
only, and shall not limit or affect the meaning, interpretation
or construction of any of the provisions of the Plan.
12.9 No Restrictions on Issuances of Other Shares
and Securities. Neither the adoption of this Plan, nor its
submission to the shareholders, shall be taken to impose any
limitations on the powers of the Company, its affiliates or any
other of its or their affiliates to issue, grant, award or assume
stock or options, warrants or rights to purchase or receive
stock, otherwise than under this Plan, or to adopt other stock
plans or to impose any requirement of shareholder approval upon
the same. <PAGE 17>
