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Exhibit 10.25
CELLOMICS, INC. STOCK PLAN
SECTION 1. PURPOSE.
The purpose of the Cellomics, Inc. Stock Plan (the "Plan") is to secure
for Cellomics, Inc. (the "Company") the benefits arising from capital stock
ownership by those employees, directors, officers and consultants of the Company
who will be responsible for the Company's future growth and continued success.
The Plan will provide a means whereby (a) employees of the Company may
purchase stock in the Company pursuant to options which qualify as "incentive
stock options" ("Incentive Stock Options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"); (b) directors, employees and
consultants of the Company may purchase stock in the Company pursuant to options
granted hereunder which do not qualify as Incentive Stock Options
("Non-Qualified Options"); (c) directors, employees and consultants of the
Company may be awarded stock in the Company ("Awards"); (d) directors, employees
and consultants of the Company may receive stock appreciation rights ("SARs");
and (e) directors, employees and consultants of the Company may make direct
purchases of stock in the Company ("Purchases"). Both Incentive Stock Options
and Non-Qualified Options are sometimes referred to hereinafter individually as
an "Option" and collectively as "Options". As used herein the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 424 of the Code and the term "Related Corporation"
shall mean any parent or subsidiary of the Company. Options, Awards, SARs and
Purchases are referred to hereafter individually as a "Plan Benefit" and
collectively as "Plan Benefits". Directors, employees and consultants of the
Company who are eligible to participate in this Plan are referred to herein as
"Participants".
SECTION 2. ADMINISTRATION.
2.1 Board of Directors and the Committee. The Plan will be administered
by the Board of Directors of the Company whose construction and interpretation
of the terms and provisions of the Plan shall be final and conclusive. Any
director to whom a Plan Benefit is awarded shall be ineligible to vote upon his
or her Plan Benefit, but Plan Benefits may be granted to any such director by a
vote of the remainder of the directors, except as limited below. The Board of
Directors may, in its sole discretion, authorize the grant of Options, authorize
the issuance of shares upon exercise of such Options, authorize the grant of
Awards, authorize the grant of SARs and approve Purchases, all as provided in
the Plan. The Board of Directors shall have authority, subject to the express
provisions of the Plan, to construe the Plan and its related agreements to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the respective Option, Award, SAR and
Purchase agreements, which need not be identical, and to make all other
determinations in the judgment of the Board of Directors necessary or desirable
for the administration of the Plan. The Board of Directors may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any related agreement in the manner and to the extent it shall in its sole
discretion deem expedient to carry the Plan into effect. No director shall be
liable for any action or determination made in good faith. The Board of
Directors may delegate any or all of its powers under the Plan to a Compensation
Committee or other Committee (the "Committee") appointed by the Board of
Directors consisting of at least three (3) members of the Board of Directors. If
the Company has a class of stock registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), then members
of the Committee shall at all times be: (i) "outside directors" as such term is
defined in Treas. Reg. Section 1.162-27(e)(3) (or any successor regulation); and
(ii) "non-employee directors" within the meaning of Rule 16b-3 (or any successor
rule) under the Exchange Act, as such terms are interpreted from time to time.
If the Committee is so appointed, all references to the Board of Directors
herein shall mean and relate to such Committee, unless the context otherwise
requires.
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2.2 Compliance with Section 162(m) of the Code. Section 162(m) of the
Code, added by the Omnibus Budget Reconciliation Act of 1993, generally limits
the tax deductibility to publicly held companies of compensation in excess of
$1,000,000 paid to certain "covered employees" ("Covered Employees"). If the
Company is subject to Section 162(m) of the Code, it is the Company's intention
to preserve the deductibility of such compensation to the extent it is
reasonably practicable and to the extent it is consistent with the Company's
compensation objectives. For purposes of this Plan, Covered Employees of the
Company shall be those employees of the Company described in Section 162(m)(3)
of the Code, as amended from time to time (or any successor provision).
SECTION 3. ELIGIBILITY.
3.1 Incentive Stock Options. Participants who are employees shall be
eligible to receive Incentive Stock Options pursuant to the Plan; provided that
no person shall be granted any Incentive Stock Option under the Plan who, at the
time such Option is granted, owns, directly or indirectly, Voting Common Stock
of the Company possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of its Related
Corporations, unless the requirements of Section 6.6(b) hereof are satisfied. In
determining whether this ten percent (10%) threshold has been reached, the stock
attribution rules of Section 424(d) of the Code shall apply. Directors who are
not regular employees are not eligible to receive Incentive Stock Options.
3.2 Non-Qualified Options, Awards, SARs and Purchases. Non-Qualified
Options, Awards, SARs and authorizations to make Purchases may be granted to any
Participant.
3.3 Generally. The Board of Directors may take into consideration a
Participant's individual circumstances in determining whether to grant an
Incentive Stock Option, a Non-Qualified Option, an Award or an SAR or to approve
a Purchase. Granting of any Option, Award or SAR or approval of any Purchase for
any individual shall neither entitle that individual to, nor disqualify that
individual from, participation in any other grant of Plan Benefits, except as
otherwise contemplated by this Plan or the Code.
SECTION 4. STOCK SUBJECT TO PLAN.
Subject to adjustment as provided in Sections 10 and 11 hereof, the
stock to be offered under the Plan shall consist of shares of the Company's
Voting Common Stock, $.01 par value, and the maximum number of shares of stock
which will be reserved for issuance, and in respect of which Plan Benefits may
be granted pursuant to the provisions of the Plan, shall not exceed in the
aggregate Three Hundred Thousand (300,000) shares of Voting Common Stock. Such
shares may be authorized and unissued shares or may be treasury shares. If an
Option or SAR granted hereunder shall expire or terminate for any reason without
having been exercised in full, or if the Company shall reacquire any unvested
shares issued pursuant to Awards or Purchases, the unpurchased shares subject
thereto and any unvested shares so reacquired shall again be available for
subsequent grants of Plan Benefits under the Plan. Stock issued pursuant to the
Plan may be subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Board of Directors.
SECTION 5. GRANTING OF OPTIONS, AWARDS AND SARS AND APPROVALS OF PURCHASES.
Options, Awards, and SARs may be granted and Purchases may be approved
under the Plan at any time after April 1, 1998 and prior to March 30, 2003. The
date of grant of an Option, Award or SAR or approval of a Purchase under the
Plan will be the date specified by the Board of Directors at the time of the
Option, Award or SAR or approval of such Purchase; provided, however, that such
date shall not be prior to the
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date on which the Board of Directors takes such action. The Board of Directors
shall have the right, with the consent of a Participant, to convert an Incentive
Stock Option granted under the Plan to a Non-Qualified Option pursuant to
Section 6.7. Specific Plan Benefits may be granted alone or in addition to other
grants under the Plan.
SECTION 6. SPECIAL PROVISIONS APPLICABLE TO OPTIONS AND SARS.
6.1 Purchase Price and Shares Subject to Options and SARs.
(a) The purchase price for each share deliverable upon the
exercise of an Incentive Stock Option shall be determined by the Board
of Directors, provided, however, that the exercise price with respect
to an Incentive Stock Option shall not be less than one hundred percent
(100%) of the fair market value of the shares subject to the Incentive
Stock Option on the date such Option is granted (except as modified in
Section 6.6(b) hereof). In the case of Non-Qualified Options, the
exercise price shall be determined by the Board of Directors in its
discretion.
(b) Options granted under the Plan may provide for the payment
of the exercise price by delivery of (i) cash or a check payable to the
order of the Company in an amount equal to the exercise price of such
Options, (ii) shares of Voting Common Stock of the Company owned by the
Participant having a fair market value equal in amount to the exercise
price of the Options being exercised, or (iii) any combination of the
foregoing subsections (i) and (ii). The fair market value of any shares
of the Company's Voting Common Stock which may be delivered upon
exercise of an Option shall be determined pursuant to Section 6.1(c)
below. The purchase price shall be paid on the date the Option is
exercised.
(c) If, at the time an Option is granted under the Plan, the
Company's Voting Common Stock is publicly traded, "fair market value",
as such phrase is used in this Plan, shall be determined as of the last
business day for which the prices or quotes discussed in this sentence
are available prior to the date such Option is granted (the
"Determination Date") and shall mean (i) the average (on the
Determination Date) of the high and low prices of the Voting Common
Stock on the principal National securities exchange on which the Voting
Common Stock is traded, if such Voting Common Stock is then traded on a
national securities exchange; (ii) the last reported sale price (on the
Determination Date) of the Voting Common Stock on the Nasdaq Stock
Market if the Voting Common Stock is not then traded on a national
securities exchange; or (iii) the closing bid price (or average of bid
prices) last quoted (on the Determination Date) by an established
quotation service for over-the-counter securities, if the Voting Common
Stock is not reported on the Nasdaq Stock Market. However, if the
Voting Common Stock is not publicly traded at the time an Option is
granted under the Plan, "fair market value" shall be deemed to be the
fair market value of the Voting Common Stock as determined by the Board
of Directors after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer
prices of the Voting Common Stock in private transactions negotiated at
arm's length.
(d) If the Company is subject to Section 162(m) of the Code,
the maximum number of shares with respect to which Options or SARs may
be granted to any Covered Employee, including any cancellations or
repricings which may occur, shall be limited to 25,000 shares in any
calendar year.
6.2 Duration of Options and SARs. Subject to Section 6.6(b) hereof,
each Option and SAR and all rights thereunder shall expire on such date as the
Board of Directors may determine, but in no event later than ten (10) years from
the day on which the Option or SAR is granted and shall be subject to earlier
termination as provided herein.
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6.3 Exercise of Options and SARs
(a) Subject to Section 6.6(b) hereof, each Option and SAR
granted under the Plan shall be exercisable at such time or times and
during such period as shall be set forth in the instrument evidencing
such Option or SAR. To the extent that an Option or SAR is not
exercised by a Participant when it becomes initially exercisable, it
shall not expire but shall be carried forward and shall be exercisable,
on a cumulative basis until the expiration of the exercise period. No
partial exercise may be for less than ten (10) full shares of Voting
Common Stock (or its equivalent).
(b) The Board of Directors shall have the right to accelerate
the date of exercise of any installments of any Option or SAR; provided
that the Board of Directors shall not accelerate the exercise date of
any installment of any Option granted to a Participant as an Incentive
Stock Option (and not previously converted into a Non-Qualified Option
pursuant to Section 6.7) if such acceleration would violate the annual
vesting limitation contained in Section 422(d)(1) of the Code, as
amended, which, on the date of this Plan, provides generally the
aggregate fair market value (determined at the time the Option is
granted) of the stock with respect to which Incentive Stock Options
granted to any Participant are exercisable for the first time by such
Participant during any calendar year (under all plans of the Company
and any Related Corporations) shall not exceed $100,000.
6.4 Nontransferability of Options and SARs. No Option or SAR granted
under the Plan shall be assignable or transferable by the Participant, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, with respect to Non-Qualified Options and SARs, pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act ("ERISA") or the rules promulgated
thereunder or unless the Participant's non-qualified stock option agreement
granting such options (the "Non-Qualified Stock Option Agreement") or the
Participant's SAR agreement granting such SARs (the "SAR Agreement") provides
otherwise. Unless otherwise provided by the Non-Qualified Stock Option Agreement
or the SAR Agreement, during the life of the Participant, the Option or SAR
shall be exercisable only by him or her. If any Participant should attempt to
dispose of or encumber his or her Options or SARs, other than in accordance with
the applicable terms of a Non-Qualified Stock Option Agreement or SAR Agreement,
his or her interest in such Options or SARs shall terminate.
6.5 Effect of Termination of Employment or Death.
(a) If a Participant ceases to be employed by the Company for
any reason, including retirement but other than death, any Option or
SAR granted to such Participant under the Plan shall immediately
terminate; provided, however, that any portion of such Option or SAR
which was otherwise exercisable on the date of termination of the
Participant's employment may, subject to the terms of the applicable
Option Agreement or SAR Agreement, be exercised within the three-month
period following the date on which the Participant ceased to be so
employed, but in no event after the expiration of the exercise period.
Any such exercise may be made only to the extent of the number of
shares subject to the Option or SAR which were purchasable on the date
of such termination of employment. If the Participant dies during such
three-month period, the Option or SAR shall be exercisable by the
Participant's personal representatives, heirs or legatees to the same
extent and during the same period that the Participant could have
exercised the Option or SAR on the date of his or her death.
(b) If the Participant dies while an employee of the Company
or any Related Corporation, any Option or SAR granted to such
Participant under the Plan shall be exercisable by the Participant's
personal representatives, heirs or
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legatees, for the purchase of the number of shares and to the same
extent that the Participant could have exercised the Option or SAR on
the date of his or her death. The Option or SAR or any unexercised
portion thereof shall terminate unless so exercised prior to the
earlier of the expiration of six months from the date of such death or
the expiration of the exercise period.
6.6 Designation of Incentive Stock Options; Limitations. Options
granted under the Plan which are intended to be Incentive Stock Options
qualifying under Section 422 of the Code shall be designated as Incentive Stock
Options and shall be subject to the following additional terms and conditions:
(a) Dollar Limitation. The aggregate fair market value
(determined at the time the option is granted) of the Voting Common
Stock for which Incentive Stock Options are exercisable for the first
time during any calendar year by any person under the Plan (and all
other incentive stock option plans of the Company and any Related
Corporations) shall not exceed $100,000. In the event that Section
422(d)(1) of the Code is amended to alter the limitation set forth
therein so that following such amendment such limitation shall differ
from the limitation set forth in this Section 6.6(a), the limitation of
this Section 6.6(a) shall be automatically adjusted accordingly.
(b) 10% Stockholder. If any employee to whom an Incentive
Stock Option is granted pursuant to the provisions of the Plan is on
the date of grant the owner of stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company or any Related Corporations, then the following special
provisions shall be applicable to the Incentive Stock Option granted to
such individual:
(i) The purchase price per share of the Voting Common
Stock subject to such Incentive Stock Option shall not be less
than one hundred ten percent (110%) of the fair market value
of one share of Voting Common Stock on the date of grant; and
(ii) The option exercise period shall not exceed five
years from the date of grant.
In determining whether the ten percent (10%) threshold has been
reached, the stock attribution rules of Section 424(d) of the Code, as
amended from time to time, shall apply.
(c) Except as modified by the preceding provisions of this
Section 6.6 or as otherwise required by applicable law, all of the
provisions of the Plan shall be applicable to Incentive Stock Options
granted hereunder.
6.7 Conversion of Incentive Stock Options into Non-Qualified Options;
Termination of Incentive Stock Options. The Board of Directors, at the written
request of any Participant, may in its discretion take such actions as may be
necessary to convert such Participant's Incentive Stock Options (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such Incentive Stock Options, regardless of whether the
Participant is an employee of the Company at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Board of Directors (with the consent of the
Participant) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Board of Directors in its discretion may determine,
provided that such conditions shall not be inconsistent with the Plan. Nothing
in the Plan shall be deemed to give any Participant the right to have such
Participant's Incentive Stock Options converted into Non-Qualified Options, and
no such conversion shall occur until and unless the Board of Directors takes
appropriate action. The Board of Directors, with the
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consent of the Participant, may also terminate any portion of any Incentive
Stock Option that has not been exercised at the time of such termination.
6.8 Stock Appreciation Rights. An SAR is the right to receive, without
payment, an amount equal to the excess, if any, of the fair market value of a
share of Voting Common Stock on the date of exercise over the grant price, which
amount will be multiplied by the number of shares with respect to which the SARs
shall have been exercised. The grant of SARs under the Plan shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the Board of
Directors shall deem desirable:
(a) Grant. SARs may be granted in tandem with, in addition to
or completely independent of any other Plan Benefit.
(b) Grant Price. The grant price of an SAR may be the fair
market value of a share of Voting Common Stock on the date of grant or
such other price as the Board of Directors may determine.
(c) Exercise. An SAR may be exercised by a Participant in
accordance with procedures established by the Board of Directors or as
otherwise provided in any agreement evidencing any SARs. The Board of
Directors may provide that an SAR shall be automatically exercised on
one or more specified dates.
(d) Form of Payment. Payment upon exercise of an SAR may be
made in cash, in shares of Voting Common Stock or any combination
thereof, as the Board of Directors shall determine.
(e) Fair Market Value. For purposes of SARs, fair market value
shall be determined in accordance with Section 6.1(c) with the
"Determination Date" being determined by reference to the date of grant
or the date of exercise of an SAR, as applicable.
6.9 Rights as a Stockholder. The holder of an Option or SAR shall have
no rights as a stockholder or SAR holder with respect to any shares covered by
the Option or SAR until the date of issue of a stock certificate to him or her
for such shares or a certificate evidencing SARs. Except as otherwise expressly
provided in the Plan, no adjustment shall be made for dividends or other rights
for which the record date is prior to the date such stock certificate or SAR
certificate is issued.
6.10 Special Provisions Applicable to Non-Qualified Options and SARs
Granted to Covered Employees. If the Company is subject to Section 162(m) of the
Code, in order for the full value of Non-Qualified Options or SARs granted to
Covered Employees to be deductible by the Company for federal income tax
purposes, the Company may intend for such Non-Qualified Options or SARs to be
treated as "qualified performance-based compensation" as described in Treas.
Reg. Section 1.162-27(e) (or any successor regulation). In such case,
Non-Qualified Options or SARs granted to Covered Employees shall be subject to
the following additional requirements:
(a) such Options and SARs shall be granted only by the
Committee; and
(b) the exercise price of such Options and the grant price of
such SARs granted shall in no event be less than the fair market value
of the Voting Common Stock as of the date of grant of such Options or
SARs.
SECTION 7. SPECIAL PROVISIONS APPLICABLE TO AWARDS.
7.1 Grant of Awards. The Board of Directors may grant a Participant an
Award subject to such terms and conditions as the Board of Directors deems
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appropriate, including, without limitation, restrictions on the pledging, sale,
assignment, transfer or other disposition of such shares and the requirement
that the Participant forfeit all or a portion of such shares back to the Company
upon termination of employment.
7.2 Conditions. Approvals of Awards may be subject to the following
conditions, among others:
(a) Each Participant receiving an Award shall enter into an
agreement (a "Stock Restriction Agreement") with the Company, if
required by the Board of Directors, in a form specified by the Board of
Directors agreeing to such terms and conditions of the Award as the
Board of Directors deems appropriate.
(b) Shares issued and transferred to a Participant pursuant to
an Award may, if required by the Board of Directors, be deposited with
the Treasurer or other officer of the Company designated by the Board
of Directors to be held until the lapse of the restrictions upon such
shares, and each Participant shall execute and deliver to the Company
stock powers enabling the Company to exercise its rights hereunder and
under the Stock Restriction Agreement.
(c) Certificates for shares issued pursuant to an Award shall,
if the Company shall deem it advisable, bear a legend to the effect
that they are issued subject to specified restrictions.
(d) Certificates representing the shares issued pursuant to an
Award shall be registered in the name of the Participant and shall be
owned by such Participant. Such Participant shall be the holder of
record of such shares for all purposes, including voting and receipt of
dividends paid with respect to such shares.
7.3 Nontransferability. Shares issued pursuant to an Award may not be
sold, assigned, transferred, alienated, commuted, anticipated, or otherwise
disposed of (except, subject to the provisions of such Participant's Stock
Restriction Agreement, by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of ERISA or the rules promulgated thereunder), or pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation, or
be otherwise encumbered, and shall not be subject to attachment, garnishment,
execution or other legal or equitable process, prior to the lapse of
restrictions on such shares, and any attempt at action in contravention of this
Section shall be null and void. If any Participant should attempt to dispose of
or encumber his or her shares issued pursuant to an Award prior to the lapse of
the restrictions imposed on such shares, his or her interest in such shares
shall terminate.
7.4 Effect of Termination of Employment or Death on Awards. If, prior
to the lapse of restrictions applicable to Awards, the Participant ceases to be
an employee of the Company for any reason (including, without limitation, the
death of the Participant), Awards to such Participant, as to which restrictions
have not lapsed, shall be forfeited to the Company, effective on the date of the
Participant's termination of employment. The Board of Directors shall have the
sole power to decide in each case to what extent leaves of absence shall be
deemed a termination of employment.
SECTION 8. SPECIAL PROVISIONS APPLICABLE TO PURCHASES.
All approvals of Purchases which provide that the Company has a right
to repurchase the shares subject to such Purchase (the "Restricted Shares")
shall be subject to the terms and conditions set forth in the related agreement
(the "Stock Purchase Restriction Agreement") approved by the Board of Directors,
and shall be subject to the other terms and conditions of this Section 8.
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8.1 Conditions. All approvals of Purchases shall be subject to the
following conditions, among others:
(a) Prior to the issuance of Restricted Shares, the
Participant shall pay to the Company the purchase price (the "Purchase
Price") of the Restricted Shares in cash or in such other manner as
shall be approved by the Board of Directors.
(b) Restricted Shares issued to a Participant may, if required
by the Board of Directors, be deposited with the Treasurer or other
officer of the Company designated by the Board of Directors to be held
until the lapse of the restrictions upon such Restricted Shares, and
each Participant shall execute and deliver to the Company stock powers
enabling the Company to exercise its rights hereunder and under the
Stock Purchase Restriction Agreement.
(c) Certificates for Restricted Shares shall, if the Company
shall deem it advisable, bear a legend to the effect that they are
issued subject to specified restrictions.
(d) Certificates representing the Restricted Shares shall be
registered in the name of the Participant and shall be owned by such
Participant. Such Participant shall be the holder of record of such
Restricted Shares for all purposes, including voting and receipt of
dividends paid with respect to such Restricted Shares.
8.2 Nontransferability. A Participant's Restricted Shares may not be
sold, assigned, transferred, alienated, commuted, anticipated, or otherwise
disposed of (except, subject to the provisions of such Participant's Stock
Purchase Restriction Agreement, by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code of
Title I of ERISA or the rules promulgated thereunder), or pledged or
hypothecated as collateral for a loan or as security for the performance of any
obligation, or be otherwise encumbered, and shall not be subject to attachment,
garnishment, execution or other legal or equitable process, prior to the lapse
of restrictions on such Restricted Shares, and any attempt at action in
contravention of this Section shall be null and void. If any Participant should
attempt to dispose of or encumber his or her Restricted Shares prior to the
lapse of the restrictions imposed on such Restricted Shares, his or her interest
in the Restricted Shares awarded to him or her shall terminate.
SECTION 9. REQUIREMENTS OF LAW.
9.1 Violations of Law. No shares or SARs shall be issued and delivered
upon exercise of any Option or the making of any Award or Purchase or the
payment of any SAR, respectively, unless and until, in the opinion of counsel
for the Company, any applicable registration requirements of the Securities Act
of 1933, as amended, any applicable listing requirements of any national
securities exchange on which stock of the same class is then listed, and any
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery, shall have been fully complied with. Each
Participant may, by accepting Plan Benefits, be required to represent and agree
in writing, for himself or herself and for his or her transferees by will or the
laws of descent and distribution, that the securities acquired by him, her or
them is being acquired for investment. The requirement for any such
representation may be waived at any time by the Board of Directors.
9.2 Compliance with Rule 16b-3. If the Company has a class of stock
registered pursuant to Section 12 of the Exchange Act, the intent of this Plan
is to qualify for the exemption provided by Rule 16b-3 under the Exchange Act.
To the extent any provision of the Plan does not comply with the requirements of
Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and
deemed advisable by the Board of Directors and shall not affect the validity of
the Plan. In the event Rule
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16b-3 is revised or replaced, the Board of Directors may exercise discretion to
modify this Plan in any respect necessary to satisfy the requirements of the
revised exemption or its replacement.
SECTION 10. RECAPITALIZATION
In the event that dividends are payable in Voting Common Stock of the
Company or in the event there are splits, reverse splits, sub-divisions or
combinations of shares of Voting Common Stock of the Company, the number of
shares available under the Plan shall be increased or decreased proportionately,
as the case may be, and the number of shares deliverable upon the exercise
thereafter of any Option previously granted shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price, and the number of shares to which granted SARs relate shall be increased
or decreased proportionately, as the case may be, and the grant price of such
SARs shall be decreased or increased proportionately, as the case may be,
without change in the aggregate purchase price.
SECTION 11. REORGANIZATION.
In case the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or, in the case of a
reorganization, dissolution, liquidation or sale of substantivally all of the
assets of the Company (each a "Transaction"), the Board of Directors of the
Company, or the board of directors of any corporation assuming the obligations
of the Company hereunder, shall, as to outstanding Plan Benefits, either (i)
make appropriate provision for the protection of any such outstanding Plan
Benefits by the substitution on an equitable basis of appropriate securities of
the Company or of the merged, consolidated, reorganized or other successor
corporation which will be issuable in respect of the shares of Voting Common
Stock of the Company, provided only that the excess of the aggregate fair market
value of the securities subject to the Plan Benefits immediately after such
substitution over the purchase price thereof is not more than the excess of the
aggregate fair market value of the securities subject to such Plan Benefits
immediately before such substitution over the purchase price thereof, (ii) upon
written notice to the Participants, provide that all unexercised Plan Benefits
must be exercised within a specified number of days of the date of such notice
or such Plan Benefits will be terminated, or (iii) upon written notice to the
Participants, provide that the Company or the merged, consolidated, reorganized
or other successor corporation shall have the right, upon the effective date of
any such Transaction, to purchase all Plan Benefits held by each Participant and
unexercised as of that date at an amount equal to the aggregate fair market
value on such date of the shares subject to the Plan Benefits held by such
Participant over the aggregate purchase price therefor, such amount to be paid
in cash or, if securities of the merged, consolidated, reorganized or other
successor corporation are issuable in respect of the shares of the Voting Common
Stock of the Company, then, in the discretion of the Board of Directors, in
stock of such merged, consolidated, reorganized or other successor corporation
equal in fair market value to the aforesaid amount. In any such case the Board
of Directors shall, in good faith, determine fair market value and may, in its
discretion, advance the lapse of any waiting or installment periods and exercise
dates. As used in this Section 11, the term "stock" shall include securities of
any entity which is not a corporation.
SECTION 12. NO SPECIAL EMPLOYMENT RIGHTS.
Nothing contained in the Plan or in any Plan Benefit documentation
shall confer upon any Participant receiving, or eligible to receive, a grant of
any Plan Benefit any right with respect to the continuation of his or her
employment by the Company (or any Related Corporation) or interfere in any way
with the right of the Company (or any Related Corporation), subject to the terms
of any separate employment agreement to the contrary, at any time to terminate
such employment or to, from time to time, increase or decrease the compensation
of the Participant from the rate in existence at the time of the grant of any
Plan Benefit. Whether an authorized leave of absence, or
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absence in military or government service, shall constitute termination of
employment for purposes of this Plan shall be determined by the Board of
Directors.
SECTION 13. AMENDMENT OF THE PLAN.
The Board of Directors may at any time and from time to time modify or
amend the Plan in any respect. The termination or any modification or amendment
of the Plan shall not, without the consent of a recipient of any Plan Benefit,
affect his or her rights under any Plan Benefit previously granted. With the
consent of the affected Participant, the Board of Directors may amend
outstanding agreements relating to any Plan Benefit, in a manner not
inconsistent with the Plan. The Board of Directors hereby reserves the right to
amend or modify the terms and provisions of the Plan and of any outstanding
Options to the extent necessary to qualify any or all Options under the Plan for
such favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, provided, however, that the consent of a Participant is required if such
amendment or modification would cause unfavorable income tax treatment for such
Participant.
SECTION 14. WITHHOLDING
The Company's obligation to deliver shares of stock upon the exercise
of any Option or the granting of an Award or to make payment upon any exercise
of any SAR or making of a Purchase shall be subject to the satisfaction by the
Participant of all applicable federal, state and local income and employment tax
withholding requirements. The Company may, in its discretion, withhold a portion
of the shares to which a Participant is entitled in connection with the
Participant's Plan Benefits to satisfy the Participant's withholding obligation.
SECTION 15. EFFECTIVE DATE AND DURATION OF THE PLAN.
15.1 Effective Date. The Plan shall become effective when adopted by
the Board of Directors, but no Incentive Stock Option granted under the Plan
shall become exercisable unless and until the Plan shall have been approved by
the Company's stockholders. If such stockholder approval is not obtained within
twelve (12) months after the date of the Board's adoption of the Plan, then any
Incentive Stock Options previously granted under the Plan shall terminate and no
further Incentive Stock Options shall be granted. Subject to such limitation,
Options may be granted under the Plan at any time after the effective date and
before the date fixed herein for termination of the Plan.
15.2 Duration. Unless sooner terminated in accordance with Section 11
hereof, the Plan shall terminate upon the earlier of (i) the tenth (10th)
anniversary of the date of its adoption by the Board of Directors or (ii) the
date on which all shares available for issuance under the Plan shall have been
issued pursuant to any Awards or Purchases or the exercise or cancellation of
Options and SARs granted hereunder. If the date of termination is determined
under subsection (i) above, then Plan Benefits outstanding on such date shall
continue to have force and effect in accordance with the provisions of the
instruments evidencing such Plan Benefits.
SECTION 16. GOVERNING LAW
The Plan and all actions taken thereunder shall be governed by the laws
of the Commonwealth of Pennsylvania.
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