SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report November 19, 1996
STERLING FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 0-16276 23-2449551
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State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification
Number)
101 North Pointe Boulevard
Lancaster, Pennsylvania 17601-4133
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number including area code:(717) 581-6030
N/A
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
Not Applicable.
Item 2. Acquisition or Disposition of Assets.
Not Applicable.
Item 3. Bankruptcy or Receivership.
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not Applicable.
Item 5. Other Events.
As previously disclosed in a Current Report on Form
8-K, filed with the Commission on November 29, 1996,
the Board of Directors of the Registrant adopted
the 1996 Stock Incentive Plan ("Plan") on November 19,
1996. 500,000 shares of the Registrant's common stock,
par value $5.00 per share, are subject to the Plan.
Awards under the Plan may be granted in the form of
qualified stock options, non-qualified stock options,
restricted stock or stock appreciation rights. The
Plan will be submitted for shareholder approval at the
1997 Annual Meeting of Stockholders. A copy of the
plan is attached as Exhibit 99 to this Report.
Item 6. Resignations of Registrant's Directors.
Not Applicable.
Item 7. Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits
The Registrant's 1996 Stock Incentive Plan is
attached hereto, as Exhibit 99.
Item 8. Change in Fiscal Year.
Not Applicable.
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Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
STERLING FINANCIAL CORPORATION
(Registrant)
Dated: February 5, 1997 /s/ John E. Stefan
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John E. Stefan
Chairman of the Board,
President and
Chief Executive Officer
(Principal Executive Officer)
/s/ Ronald L. Bowman
-----------------------
Ronald L. Bowman
Vice President and Secretary
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EXHIBIT INDEX
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Page Number
in Manually
Exhibit Signed Original
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99 1996 Incentive Stock Option Plan
EXHIBIT 99
1996 INCENTIVE STOCK OPTION PLAN
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STERLING FINANCIAL CORPORATION
1996 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Stock Incentive Plan (the
"Plan") is to advance the development, growth and financial
condition of Sterling Financial Corporation (the "Corporation")
and each subsidiary thereof as defined in Section 424 of the
Internal Revenue Code of 1986, as amended (the "Code"), by
providing incentives through participation in the appreciation of
capital stock of the Corporation so as to secure, retain and
motivate personnel who may be responsible for the operation and
management of the affairs of the Corporation and any such
subsidiary now or hereafter existing ("Subsidiary").
2. Term. The Plan shall become effective as of the date it
is adopted by the Corporation's Board of Directors (the "Board"),
so long as the Corporation's stockholders duly approve the Plan
within twelve (12) months either before or after the date of the
Board's adoption of the Plan. Any and all options and rights
awarded under the Plan ("Awards") before it is so approved by the
Corporation's stockholders shall be conditional upon and may not
be exercised before timely obtainment of such approval, and shall
lapse upon the failure thereof. If the Plan is so approved, it
shall continue in effect until all Awards either have lapsed or
been exercised, satisfied or cancelled according to their terms
under the Plan.
3. Stock. The shares of stock that may be issued under the
Plan shall not exceed in the aggregate 500,000 shares of the
Corporation's common stock, par value $5.00 per share (the
"Stock"), as may be adjusted pursuant to paragraph 18 hereof.
Such shares of Stock may be either authorized and unissued shares
of Stock, or authorized shares of Stock issued by the Corporation
and subsequently reacquired by it as treasury stock. Under no
circumstances shall any fractional shares of Stock be issued or
sold under the Plan or any Award. Except as may be otherwise
provided in the Plan, any Stock subject to an Award that for any
reason lapses or terminates prior to its exercise as to such
Stock shall become and again be available under the Plan. The
Corporation shall reserve and keep available, and shall duly
apply for any requisite governmental authority to issue or sell
the number of shares of Stock needed to satisfy the requirements
of the Plan while in effect. The Corporation's failure to obtain
any such governmental authority deemed necessary by the
Corporation's legal counsel for the lawful issuance and sale of
Stock under the Plan shall relieve the Corporation of any duty,
or liability for the failure to issue or sell such Stock as to
which such authority has not been obtained.
4. Administration. The Plan shall be administered by a
committee (the "Committee") consisting exclusively of two (2) or
more non-employee 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,
and applicable rules and regulations thereto, a member of the
Committee must be a director of the Corporation and during the
year prior to commencing service on the Committee, and while a
member of the Committee, was not granted or awarded any Awards,
allocations or other options or rights of or with respect to
Stock or any other equity securities of the Corporation or its
affiliates pursuant to the Plan or any other plan of the
Corporation or its affiliates which provides
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for grants or awards. A majority of the Committee's membership
shall constitute a quorum for the transaction of all business of
the Committee, and all decisions and actions taken by the
Committee shall be determined by a majority of the members of the
Committee attending a meeting at which a quorum of the Committee
is present.
The Committee shall be responsible for the management and
operation of the Plan and, subject to its provisions, shall have
full, absolute and final power and authority, exercisable in its
sole discretion: to interpret and construe the provisions of the
Plan, adopt, revise and rescind rules and regulations relating to
the Plan and its administration, and decide all questions of fact
arising in the application thereof; to determine what, to whom,
when and under what facts and circumstances Awards shall be made,
and the form, number, terms, conditions and duration thereof,
including but not limited to when exercisable, the number of
shares of Stock subject thereto, and Stock option purchase
prices; to adopt, revise and rescind procedural rules for the
transaction of the Committee's business, subject to any
directives of the Board not inconsistent with the provisions or
intent of the Plan or applicable provisions of law; and to make
all other determinations and decisions, take all actions and do
all things necessary or appropriate in and for the administration
of the Plan. The Committee's determinations, decisions and
actions under the Plan, including but not limited to those
described above, need not be uniform or consistent, but may be
different and selectively made and applied, even in similar
circumstances and among similarly situated persons. Unless
contrary to the provisions of the Plan, all decisions,
determinations and actions made or taken by the Committee shall
be final and binding upon the Corporation and all interested
persons, and their heirs, personal and legal representatives,
successors, assigns and beneficiaries. No member of the
Committee or of the Board shall be liable for any decision,
determination or action made or taken in good faith by such
person under or with respect to the Plan or its administration.
5. Awards. Awards may be made under the Plan in the form
of: (a) "Qualified Options" to purchase Stock that are intended
to qualify for certain tax treatment as incentive stock options
under Sections 421 and 422 of the Code, (b) "Non-Qualified
Options" to purchase Stock that are not intended to qualify under
Sections 421-424 of the Code, (c) Stock appreciation rights
("SARs"), or (d) "Restricted Stock". More than one Award may be
granted to an eligible person, and the grant of any Award shall
not prohibit the grant of any other Award, either to the same
person or otherwise, or impose any obligation upon the person to
whom granted to exercise the Award. All Awards and the terms and
conditions thereof shall be set forth in written agreements, in
such form and content as approved by the Committee from time to
time, and shall be subject to the provisions of the Plan whether
or not contained in such agreements. Multiple Awards for a
particular person may be set forth in a single written agreement
or in multiple agreements, as determined by the Committee, but in
all cases each agreement for one or more Awards shall identify
each of the Awards thereby represented as a Qualified Option,
Non-Qualified Option, SAR, or Restricted Stock, as the case may
be. Every Award made to a person (a "Recipient") shall be
exercisable during his or her lifetime only by the Recipient, and
shall not be salable, transferable or assignable by the Recipient
except by his or her Will or pursuant to applicable laws of
descent and distribution.
6. Eligibility. Persons eligible to receive Awards shall
be those key officers and other management employees of the
Corporation and each Subsidiary as determined by the Committee.
In no case, however, shall any current member of the Committee be
eligible to receive any Awards.
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A person's eligibility to receive Awards shall not confer upon
him or her any right to receive any Awards; rather, the Committee
shall have the sole authority, exercisable in its discretion
consistent with the provisions of the Plan, to select when, to
whom and under what facts and circumstances Awards will be made.
Except as otherwise provided, a person's eligibility to receive,
or actual receipt of Awards under the Plan shall not limit or
affect his or her benefits under or eligibility to participate in
any other incentive or benefit plan or program of the Corporation
or its affiliates.
7. Qualified Options. In addition to other applicable
provisions of the Plan, all Qualified Options and Awards thereof
shall be under and subject to the following terms and conditions:
(a) No Qualified Option shall be awarded more than ten
(10) years after the date the Plan is adopted by the Board
or the date the Plan is approved by the Corporation's
stockholders, whichever date is earlier;
(b) The time period during which any Qualified Option
is exercisable, as determined by the Committee, shall not
commence before the expiration of six (6) months or continue
beyond the expiration of ten (10) years after the date such
Option is awarded;
(c) If the Recipient of a Qualified Option ceases to
be employed by the Corporation or any Subsidiary for any
reason other than his or her death, the Committee may permit
the Recipient thereafter to exercise such Option during its
remaining term for a period of not more than three (3)
months after such cessation of employment to the extent that
the Option was then and remains exercisable, unless such
employment cessation was due to the Recipient's disability
as defined in Section 422(e)(3) of the Code, in which case
such three (3) month period shall be twelve (12) months; if
the Recipient dies while employed by the Corporation or a
Subsidiary, the Committee may permit the Recipient's
qualified personal representatives, or any persons who
acquire the Qualified Option pursuant to his or her Will or
laws of descent and distribution, thereafter to exercise
such Option during its remaining term for a period of not
more than twelve (12) months after the Recipient's death to
the extent that the Option was then and remains exercisable;
the Committee may impose terms and conditions upon and for
said exercise of such Qualified Option after such cessation
of the Recipient's employment or his or her death;
(d) The purchase price of a share of Stock subject to
any Qualified Option, as determined by the Committee, shall
not be less than the Stock's fair market value at the time
such Option is awarded, as determined under paragraph 13
hereof, or less than the Stock's par value.
8. Non-Qualified Options. In addition to other applicable
provisions of the Plan, all Non-Qualified Options and Awards
thereof shall be under and subject to the following terms
and conditions:
(a) The time period during which any Non-Qualified
Option is exercisable, as determined by the Committee, shall
not commence before the expiration of six (6) months or
continue beyond the expiration of ten (10) years after the
date such Option is awarded;
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(b) If a Recipient of a Non-Qualified Option, before
its lapse or full exercise, ceases to be eligible under the
Plan, the Committee may permit the Recipient thereafter to
exercise such Option during its remaining term, to the
extent that the Option was then and remains exercisable, for
such time period and under such terms and conditions as may
be prescribed by the Committee;
(c) The purchase price of a share of Stock subject to
any Non-Qualified Option, as determined by the Committee,
shall not be less than the Stock's fair market value at the
time such Option is awarded, as determined under paragraph
13 hereof.
9. Stock Appreciation Rights. In addition to other
applicable provisions of the Plan, all SARs and Awards thereof
shall be under and subject to the following terms and conditions:
(a) SARs may be granted either alone, or in connection
with another previously or contemporaneously granted Award
(other than another SAR) so as to operate in tandem
therewith by having the exercise of one affect the right to
exercise the other, as and when the Committee may determine;
however, no SAR shall be awarded in connection with a
Qualified Option more than ten (10) years after the date the
Plan is adopted by the Board or the date the Plan is
approved by the Corporation's stockholders, whichever date
is earlier;
(b) Each SAR shall entitle its Recipient to receive
upon exercise of the SAR all or a portion of the excess of
(i) the fair market value at the time of such exercise of a
specified number of shares of Stock as determined by the
Committee, over (ii) a specified price as determined by the
Committee of such number of shares of Stock that, on a per
share basis, is not less than the Stock's fair market value
at the time the SAR is awarded;
(c) Upon exercise of any SAR, the Recipient shall be
paid either in cash or in Stock, or in any combination
thereof, as the Committee shall determine; if such payment
is to be made in Stock, the number of shares thereof to be
issued pursuant to the exercise shall be determined by
dividing the amount payable upon exercise by the Stock's
fair market value at the time of exercise;
(d) The time period during which any SAR is
exercisable, as determined by the Committee, shall not
commence before the expiration of six (6) months or continue
beyond the expiration of ten (10) years after the date such
SAR is awarded; however, no SAR connected with another Award
shall be exercisable beyond the last date that such other
connected Award may be exercised;
(e) If a Recipient of a SAR, before its lapse or full
exercise, ceases to be eligible under the Plan, the
Committee may permit the Recipient thereafter to exercise
such SAR during its remaining term, to the extent that the
SAR was then and remains exercisable, for such time period
and under such terms and conditions as may be prescribed by
the Committee;
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(f) No SAR shall be awarded in connection with any
Qualified Option unless the SAR (i) lapses no later than the
expiration date of such connected Option, (ii) is for not
more than the difference between the Stock purchase price
under such connected Option and the Stock's fair market
value at the time the SAR is exercised, (iii) is
transferable only when and as such connected Option is
transferable and under the same conditions, (iv) may be
exercised only when such connected Option may be exercised,
and (v) may be exercised only when the Stock's fair market
value exceeds the Stock purchase price under such connected
Option.
10. Restricted Stock. In addition to other applicable
provisions of the Plan, all Restricted Stock and Awards thereof
shall be under and subject to the following terms and conditions:
(a) Restricted Stock shall consist of shares of Stock
that may be acquired by and issued to a Recipient at such
time, for such or no purchase price, and under and subject
to such transfer, forfeiture and other restrictions,
conditions or terms as shall be determined by the Committee,
including but not limited to prohibitions against transfer,
substantial risks of forfeiture within the meaning of
Section 83 of the Code, and attainment of performance or
other goals, objectives or standards, all for or applicable
to such time periods as determined by the Committee;
(b) Except as otherwise provided in the Plan or the
Restricted Stock Award, a Recipient of shares of Restricted
Stock shall have all the rights as does a holder of Stock,
including without limitation the right to vote such shares
and receive dividends with respect thereto; however, during
the time period of any restrictions, conditions or terms
applicable to such Restricted Stock, the shares thereof and
the right to vote the same and receive dividends thereon
shall not be sold, assigned, transferred, exchanged,
pledged, hypothecated, encumbered or otherwise disposed of
except as permitted by the Plan or the Restricted Stock
Award;
(c) Each certificate issued for shares of Restricted
Stock shall be deposited with the Secretary of the
Corporation, or the office thereof, and shall bear a legend
in substantially the following form and content:
This Certificate and the shares of Stock hereby
represented are subject to the provisions of the
Corporation's Stock Incentive Plan and a certain
agreement entered into between the owner and the
Corporation pursuant to said Plan. The release of this
Certificate and the shares of Stock hereby represented
from such provisions shall occur only as provided by
said Plan and agreement, a copy of which are on file in
the office of the Secretary of the Corporation.
Upon the lapse or satisfaction of the restrictions,
conditions and terms applicable to such Restricted Stock, a
certificate for the shares of Stock free thereof without
such legend shall be issued to the Recipient;
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(d) If a Recipient's employment with the Corporation
or a Subsidiary ceases for any reason prior to the lapse of
the restrictions, conditions or terms applicable to his or
her Restricted Stock, all of the Recipient's Restricted
Stock still subject to unexpired restrictions, conditions or
terms shall be forfeited absolutely by the Recipient to the
Corporation without payment or delivery of any consideration
or other thing of value by the Corporation or its
affiliates, and thereupon and thereafter neither the
Recipient nor his or her heirs, personal or legal
representatives, successors, assigns, beneficiaries, or any
claimants under the Recipient's Last Will or laws of descent
and distribution, shall have any rights or claims to or
interests in the forfeited Restricted Stock or any
certificates representing shares thereof, or claims against
the Corporation or its affiliates with respect thereto.
11. Exercise. Except as otherwise provided in the Plan,
Awards may be exercised in whole or in part by giving written
notice thereof to the Secretary of the Corporation, or his or her
designee, identifying the Award being exercised, the number of
shares of Stock with respect thereto, and other information
pertinent to exercise of the Award. The purchase price of the
shares of Stock with respect to which an Award is exercised shall
be paid with the written notice of exercise, either in cash or in
Stock at its then current fair market value, or in any
combination thereof, as the Committee shall determine; provided,
that if the Stock tendered as payment for a Qualified Option was
acquired through the exercise of a Qualified Option, the
Recipient must have held such Stock for a period not less than
the holding period described in Code Section 422(a)(1). Funds
received by the Corporation from the exercise of any Award shall
be used for its general corporate purposes.
The number of shares of Stock subject to an Award shall be
reduced by the number of shares of Stock with respect to which
the Recipient has exercised rights under the Award. If a SAR is
awarded in connection with another Award, the number of shares of
Stock that may be acquired by the Recipient under the other
connected Award shall be reduced by the number of shares of Stock
with respect to which the Recipient has exercised his or her SAR,
and the number of shares of Stock subject to the Recipient's SAR
shall be reduced by the number of shares of Stock acquired by the
Recipient pursuant to the other connected Award.
The Committee may permit an acceleration of previously
established exercise terms of any Awards or the lapse of
restrictions thereon as, when, under such facts and
circumstances, and subject to such other or further requirements
and conditions as the Committee may deem necessary or
appropriate. In addition: (a) if the Corporation or its
stockholders execute an agreement to dispose of all or
substantially all of the Corporation's assets or capital stock by
means of sale, merger, consolidation, reorganization, liquidation
or otherwise, as a result of which the Corporation's stockholders
as of immediately before such transaction will not own at least
fifty percent (50%) of the total combined voting power of all
classes of voting capital stock of the surviving entity (be it
the Corporation or otherwise) immediately after the consummation
of such transaction, thereupon any and all Awards immediately
shall become and remain exercisable with respect to the total
number of shares of Stock still subject thereto for the remainder
of their respective terms unless the transaction is not
consummated and the agreement expires or is terminated, in which
case thereafter all Awards shall be treated as if said agreement
never had been executed; (b) if there is an actual, attempted or
threatened change in the ownership of at least twenty-five
percent (25%) of all classes
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of voting capital stock of the Corporation, as determined by the
Committee in its sole discretion, through the acquisition of, or
an offer to acquire such percentage of the Corporation's voting
capital stock by any person or entity, or persons or entities
acting in concert or as a group, and such acquisition or offer
has not been duly approved by the Board, thereupon any and all
Awards immediately shall become and remain exercisable with
respect to the total number of shares of Stock still subject
thereto for the remainder of their respective terms; or (c) if
during any period of two (2) consecutive years, the individuals
who at the beginning of such period constituted the Board, cease
for any reason to constitute at least a majority of the Board,
unless the election of each director of the Board, who was not a
director of the Board at the beginning of such period, was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such
period, thereupon any and all Awards immediately shall become and
remain exercisable with respect to the total amount of shares of
Stock still subject thereto for the remainder of their respective
terms. If an event described in (a), (b) or (c) occurs, the
Committee shall immediately notify the Recipients in writing of
the occurrence of such event and their rights under this
paragraph 11.
12. Withholding. Whenever the Corporation is about to
issue or transfer Stock pursuant to any Award, the Corporation
may require the Recipient to remit to the Corporation an amount
sufficient to satisfy fully any federal, state and other
jurisdictions' income and other tax withholding requirements
prior to the delivery of any certificates for such shares of
Stock. Whenever payments are to be made in cash to any Recipient
pursuant to his or her exercise of an Award, such payments shall
be made net after deduction of all amounts sufficient to satisfy
fully any federal, state and other jurisdictions' income and
other tax withholding requirements.
13. Value. Where used in the Plan, the "fair market value"
of Stock or Options or rights with respect thereto, including
Awards, shall mean and be determined by: (a) in the event that
the Stock is listed on an established exchange, the closing price
of the Stock on the relevant date or, if no trade occurred on
that day, on the next preceding day on which a trade occurred,
(b) in the event that the Stock is not listed on an established
exchange, but is then quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), the
average of the average of the closing bid and asked quotations of
the Stock for the five (5) trading days immediately preceding the
relevant date, or (c) in the event that the Stock is not then
listed on an established exchange or quoted on NASDAQ, the
average of the average of the closing bid and asked quotations of
the Stock for five (5) trading days immediately preceding the
relevant date as reported by such brokerage firms which are then
making a market in the Stock. In the event that the Stock is not
listed on an established exchange, quoted on NASDAQ, and no
closing bid and asked quotations are available, fair market value
shall be determined in good faith by the Committee. In the case
of (b) or (c) above, in the event that no closing bid or asked
quotation is available on one or more of such trading days, fair
market value shall be determined by reference to the five (5)
trading days immediately preceding the relevant date on which
closing bid and asked quotations are available.
14. Amendment. 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;
(b) with respect to qualified options, except as specified in
paragraph 18 hereof, no amendment may be adopted that will
increase the number of shares reserved for Awards under the Plan,
change the option price, or
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change the provisions required for compliance with Section 422 of
the Code and regulations issued thereunder. The amendment or
termination of this Plan shall not, without the consent of the
Recipients, alter or impair any rights or obligations under any
Award previously granted hereunder.
In addition and subject to the foregoing, the Committee may
prescribe other or additional terms, conditions and provisions
with respect to the grant or exercise of any or all Awards as the
Committee may determine necessary or appropriate for such Awards
and the Stock subject thereto to qualify under and comply with
all applicable laws, rules and regulations, and changes therein,
including but not limited to the provisions of Sections 421 and
422 of the Code and Section 16 of the Securities Exchange Act of
1934, as amended. Without limiting the generality of the
preceding sentence, each Qualified Option, and any SAR awarded in
connection therewith, shall be subject to such other and
additional terms, conditions and provisions as the Committee may
deem necessary or appropriate in order to qualify such Option, or
connected Option and SAR, 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
Option 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 421 and 422 of the
Code are exercisable for the first time by the Recipient
during any calendar year under the Plan and any other plans
of the Corporation or its affiliates, shall not exceed
$100,000.00; and
(ii) No Qualified Option, or any SAR in connection
therewith, 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 Corporation or its
affiliates, unless at the time such Option or SAR is awarded
the Stock purchase price under such Option is at least one
hundred and ten percent (110%) of the fair market value of
the Stock subject to such Option and the Option (and any SAR
connected therewith) by its terms is not exercisable after
the expiration of five (5) years from the date it is
awarded.
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 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.
15. Continued Employment. Nothing in the Plan or any Award
shall confer upon any Recipient or other persons any right to
continue in the employment of, or maintain any particular
relationship with the Corporation or its affiliates, or limit or
affect any rights, powers or privileges that the Corporation or
its affiliates may have to supervise, discipline and terminate
such Recipient or other persons, and the employment and other
relationships thereof. However, the Committee may require as a
condition of making and/or exercising any Award that its
Recipient agree to, and in fact provide services, either as an
employee or in another capacity, to or for the Corporation or any
Subsidiary for such time period following the date the Award is
made and/or exercised as the Committee may prescribe. The
immediately preceding sentence shall not apply to any Qualified
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Option to the extent such application would result in
disqualification of said Option as an incentive stock option
under Sections 421 and 422 of the Code.
16. General Restrictions. Each Award shall be subject to
the requirement and provision that if at any time the Committee
determines it necessary or desirable as a condition of or in
consideration of making such Award, or the purchase or issuance
or Stock thereunder, (a) the listing, registration or
qualification of the Stock subject to the Award, or the Award
itself, upon any securities exchange or under any federal or
state securities or other laws, (b) the approval of any
governmental authority, or (c) an agreement by the Recipient with
respect to disposition of any Stock (including without limitation
that at the time of the Recipient's exercise of the Award, any
Stock thereby acquired is being and will be acquired solely for
investment purposes and without any intention to sell or
distribute such Stock), then such Award shall not be consummated
in whole or in part unless such listing, registration,
qualification, approval or agreement shall have been
appropriately effected or obtained to the satisfaction of the
Committee and legal counsel for the Corporation.
17. Rights. Except as otherwise provided in the Plan, the
Recipient of any Award shall have no rights as a holder of the
Stock subject thereto unless and until one or more certificates
for the shares of such Stock are issued and delivered to the
Recipient. No adjustments shall be made for dividends, either
ordinary or extraordinary, or any other distributions with
respect to Stock, whether made in cash, securities or other
property, or any rights with respect thereto, for which the
record date is prior to the date that any certificates for Stock
subject to an Award are issued to the Recipient pursuant to his
or her exercise thereof. No Award, or the grant thereof, shall
limit or affect the right or power of the Corporation or its
affiliates to adjust, reclassify, recapitalize, reorganize or
otherwise change its or their capital or business structure, or
to merge, consolidate, dissolve, liquidate or sell any or all of
its or their business, property or assets.
18. Adjustments. In the event of any change in the number
of issued and outstanding shares of Stock which results from a
stock split, reverse stock split, payment of a stock dividend or
any other change in the capital structure of the Corporation, the
Committee shall proportionately adjust the maximum number of
shares subject to each outstanding Award, and (where appropriate)
the purchase price per share thereof (but not the total purchase
price under the Award), so that upon exercise or realization of
such Award, the Recipient shall receive the same number of shares
he or she would have received had he or she been the holder of
all shares subject to his or her outstanding Award and
immediately before the effective date of such change in the
number of issued and outstanding shares of Stock. Such
adjustments shall not, however, result in the issuance of
fractional shares. Any adjustments under this paragraph 18 shall
be made by the Committee, subject to approval by the Board. No
adjustments shall be made that would cause a Qualified Option to
fail to continue to qualify as an incentive stock option within
the meaning of Section 422 of the Code.
In the event the Corporation is a party to any merger,
consolidation or other reorganization, any and all outstanding
Awards shall apply and relate to the securities to which a holder
of Stock is
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entitled after such merger, consolidation or other
reorganization. Upon any liquidation or dissolution of the
Corporation, any and all outstanding Awards shall terminate upon
consummation of such liquidation or dissolution, but prior to
such consummation shall be exercisable to the extent that the
same otherwise are exercisable under the Plan.
19. Forfeiture. Notwithstanding anything to the contrary
in this Plan, if the Committee finds after full consideration of
the facts presented on behalf of the Corporation and the involved
Recipient, that he or she has been engaged in fraud,
embezzlement, theft, commission of a felony, or dishonesty in the
course of his or her employment by the Corporation or any
Subsidiary that has damaged it, or that the Recipient has
disclosed trade secrets of the Corporation or its affiliates, the
Recipient shall forfeit all rights under and to all unexercised
Awards, and all exercised Awards under which the Corporation has
not yet delivered payment or certificates for shares of Stock (as
the case may be), all of which Awards and rights shall be
automatically canceled. The decision of the Committee as to the
cause of the Recipient's discharge from employment with the
Corporation or any Subsidiary and the damage thereby suffered
shall be final for purposes of the Plan, but shall not affect the
finality of the Recipient's discharge by the Corporation or
Subsidiary for any other purposes. The preceding provisions of
this paragraph shall not apply to any Qualified Option to the
extent such application would result in disqualification of said
Option as an incentive stock option under Sections 421 and 422 of
the Code.
20. Indemnification. In and with respect to the
administration of the Plan, the Corporation shall indemnify each
present and future member of the Committee and/or of the Board,
who shall be entitled without further action on his or her part
to indemnity from the Corporation for all damages, losses,
judgments, settlement amounts, punitive damages, excise taxes,
fines, penalties, costs and expenses (including without
limitation attorneys' fees and disbursements) incurred by such
member in connection with any threatened, pending or completed
action, suit or other proceedings of any nature, whether civil,
administrative, investigative or criminal, whether formal or
informal, and whether by or in the right or name of the
Corporation, any class of its security holders, or otherwise, in
which such member may be or have been involved, as a party or
otherwise, by reason of his or her being or having been a member
of the Committee and/or of the Board, whether or not he or she
continues to be such a member. The provisions, protection and
benefits of this paragraph shall apply and exist to the fullest
extent permitted by applicable law to and for the benefit of all
present and future members of the Committee and/or of the Board,
and their respective heirs, personal and legal representatives,
successors and assigns, in addition to all other rights that they
may have as a matter of law, by contract, or otherwise, except
(a) as may not be allowed by applicable law, (b) to the extent
there is entitlement to insurance proceeds under insurance
coverage provided by the Corporation on account of the same
matter or proceeding for which indemnification hereunder is
claimed, or (c) to the extent there is entitlement to
indemnification from the Corporation, other than under this
paragraph, on account of the same matter or proceeding for which
indemnification hereunder is claimed.
21. Miscellaneous. Any reference contained in this Plan to
a particular section or provision of law, rule or regulation,
including but not limited to the Internal Revenue Code of 1986
and the Securities Exchange Act of 1934, both as amended, shall
include any subsequently enacted or promulgated section or
provision of law, rule or regulation, as the case may be, of
similar import.
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With respect to persons subject to Section 16 of the Securities
Exchange Act of 1934, as amended, 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, 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, and to the
extent that there are additional requirements under Rules 16b-3,
it is the responsibility of the participants to satisfy such
requirements. 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
Corporation. The captions of the numbered paragraphs 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.
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END
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