As filed with the Securities and Exchange Commission on May 9, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------
QUAKER CHEMICAL CORPORATION
(Exact name of issuer as specified in its charter)
Pennsylvania 23-0993790
- ------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
QUAKER CHEMICAL CORPORATION
Elm and Lee Streets
Conshohocken, PA 19428
(610) 832-4000
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
QUAKER CHEMICAL CORPORATION DIRECTOR STOCK OWNERSHIP PLAN
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(Full title of the plan)
Karl H. Spaeth, Esquire
Corporate Secretary
Quaker Chemical Corporation
Elm and Lee Streets
Conshohocken, PA 19428
(610) 832-4000
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Ramon R. Obod, Esquire
Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street
10th Floor
Philadelphia, PA 19103
CALCULATION OF REGISTRATION FEE
| | Proposed | Proposed |
Title of | | Maximum | Maximum |
securities | Amount | offering | aggregate | Amount of
to be | to be | price per | offering | registration
registered | registered | share | price | fee
- --------------|---------------|--------------|--------------|-------------
Common | | | |
Stock | 50,000 | | |
$1 par value | shares | $16.75 (1) | $837,500 | $254
(1) Estimated solely for the purpose of calculating the registration
fee. The proposed maximum aggregate offering price has been computed in
accordance with Rule 457(c) based on the average of the high and low
prices of the Common Stock on the New York Stock Exchange on May 7, 1997.
<PAGE>
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission are
incorporated by reference in this Registration Statement:
(a) The Company's annual report on Form 10-K for the fiscal year
ended December 31, 1996.
(b) The description of the Company's Common Stock contained in
its Registration Statement on Form 8-A filed with the SEC on
August 2, 1996.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be
a part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be
incorporated by reference 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 document which also is, or is deemed to
be, incorporated herein by reference modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed to constitute a part hereof except as so modified or superseded.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 1741 through 1750 of Subchapter D of Chapter 17 of the
Pennsylvania Business Corporation Law of 1988, as amended, (the "PBCL")
contain, among other things, provisions for mandatory and discretionary
indemnification of a corporation's directors, officers, and other
personnel.
Under Section 1741, unless otherwise limited by its by-laws, a
corporation has the power to indemnify directors and officers under
certain prescribed circumstances against expenses (including attorney's
fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred in connection with a threatened, pending, or
completed action or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the
corporation) to which any of them is a party or threatened to be made a
party by reason of his being a representative, director, or officer of
the corporation or serving at the request of the corporation as a
representative of another domestic or foreign corporate for profit or
not-for-profit, partnership, joint venture, trust, or other enterprise
if he acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the corporation and, with
respect to any criminal proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action or proceeding
by judgment, order, settlement, or conviction or upon a plea of nolo
contendere or its equivalent does not of itself create a presumption
that the person did not act in good faith and in a manner that he
reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action or proceeding by judgment, order, settlement, or
conviction or upon a plea of nolo contendere or its equivalent does not
of itself create a presumption that the person did not act in good faith
and in a manner that he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal
proceeding, had reasonable cause to believe that his conduct was
unlawful.
Section 1742 provides for indemnification with respect to
derivative and corporate actions similar to that provided by Section
1741. However, indemnification is not provided under Section 1742 with
respect to any claim, issue or matter as to which a director or officer
has been adjudged to be liable to the corporation unless and only to the
extent that the proper court determines upon application that, despite
the adjudication of liability but in view of all the
<PAGE>
circumstances of the case, a director or officer is fairly and reasonably
entitled to indemnity for the expenses that the court deems proper.
Section 1743 provides that indemnification against expenses is
mandatory to the extent that the director or officer has been successful
on the merits or otherwise in defense of any such action or proceeding
referred to in Sections 1741 or 1742.
Section 1744 provides that unless ordered by a court, any
indemnification under Sections 1741 or 1742 shall be made by the
corporation as authorized in the specific case upon a determination that
indemnification of directors and officers is proper because the director
or officer met the applicable standard of conduct, and such
determination will be made by the board of directors by a majority vote
of a quorum of directors not parties to the action or proceeding; if a
quorum is not obtainable or, if obtainable, and a majority of
disinterested directors so directs, by independent legal counsel or by
the shareholders.
Section 1745 provides that expenses incurred by a director or
officer in defending any action or proceeding referred to in the
Subchapter may be paid by the corporation in advance of the final
disposition of such action or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified
by the corporation.
Section 1746 provides generally that except in any case where
the act or failure to act giving rise to the claim for indemnification
is determined by a court to have constituted willful misconduct or
recklessness, the indemnification and advancement of expenses provided
by the Subchapter shall not be deemed exclusive of any other rights to
which a director or officer seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of
shareholders, or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding that office.
Section 1747 also grants a corporation the power to purchase and
maintain insurance on behalf of any director or officer against any
liability incurred by him in his capacity as officer or director whether
or not the corporation would have the power to indemnify him against the
liability under the Subchapter of the PBCL.
Sections 1748 and 1749 apply to the indemnification and
advancement of expenses contained in the Subchapter to successor
corporations resulting from consolidation, merger, or division and to
service as a representative of such corporations or of employee benefit
plans.
Section 1750 provides that the indemnification and advancement
of expenses granted pursuant to the Subchapter, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a representative of the corporation and shall inure to the
benefit of the heirs and personal representatives of that person.
Section 7.1 of the Company's By-Laws contains provisions
allowing for indemnification of directors and officers to the extent
permitted under Subchapter D of Chapter 17 of the PBCL.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
The following exhibits are filed herewith or incorporated by
reference.
4-1 Articles of Incorporation--Incorporated by reference to
Exhibit 3(a) to Form 10-K as filed by the Company for the year
ended December 31, 1996.
4-2 By-Laws--Incorporated by reference to Exhibit 3(b) to Form
10-Q as filed by the Company for the quarter ended June 30, 1993.
4-3 Shareholder Rights Plan--Incorporated by reference to Form
8-K as filed by the Company on February 20, 1990.
5-1 Opinion of Fox, Rothschild, O'Brien & Frankel, LLP.
<PAGE>
23-1 Consent of Price Waterhouse LLP.
23-2 Consent of Fox, Rothschild, O'Brien & Frankel, LLP.
(See Exhibit 5-1)
99-1 Quaker Chemical Corporation Director Stock Ownership Plan.
Item 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (ii) do not apply if
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 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the 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) 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>
SIGNATURES
The Registrant. 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 City of Conshohocken,
Commonwealth of Pennsylvania, on the 7th day of May, 1997.
QUAKER CHEMICAL CORPORATION
By: /S/RONALD J. NAPLES
-----------------------------
Ronald J. Naples
President, Chief Executive
Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ronald J. Naples and Thomas F.
Kirk, or each of them, as true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to be done in an about the premises, as
fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his 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 by the following persons in the
capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
/S/RONALD J. NAPLES
- --------------------------
Ronald J. Naples President, Chief Executive May 7, 1997
Officer and a Director
/S/THOMAS F. KIRK
- --------------------------
Thomas F. Kirk Vice President and Chief May 7, 1997
Financial Officer
/S/PETER A. BENOLIEL
- --------------------------
Peter A. Benoliel Director May 7, 1997
- --------------------------
Joseph B. Anderson, Jr. Director May _, 1997
/S/PATRICIA C. BARRON
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Patricia C. Barron Director May 7, 1997
<PAGE>
/S/WILLIAM L. BATCHELOR
- --------------------------
William L. Batchelor Director May 7, 1997
/S/LENNOX K. BLACK
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Lennox K. Black Director May 7, 1997
/S/DONALD R. CALDWELL
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Donald R. Caldwell Director May 7, 1997
/S/ROBERT E. CHAPPELL
- --------------------------
Robert E. Chappell Director May 7, 1997
/S/EDWIN J. DELATTRE
- --------------------------
Edwin J. Delattre Director May 7, 1997
/S/ROBERT P. HAUPTFUHRER
- --------------------------
Robert P. Hauptfuhrer Director May 7, 1997
/S/ROBERT H. ROCK
- --------------------------
Robert H. Rock Director May 7, 1997
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
4-1 Articles of Incorporation--Incorporated by reference
to Exhibit 3(a) to Form 10-K as filed by the Company
for the year ended December 31, 1996.
4-2 By-Laws--Incorporated by reference to Exhibit 3(b) to Form 10-Q
as filed by the Company for the quarter ended June
30, 1993.
4-3 Shareholder Rights Plan--Incorporated by reference to
Form 8-K as filed by the Company on February 20, 1990.
5-1 Opinion of Fox, Rothschild, O'Brien & Frankel, LLP.
23-1 Consent of Price Waterhouse LLP.
23-2 Consent of Fox, Rothschild, O'Brien & Frankel, LLP.
(See Exhibit 5-1)
EXHIBIT 5-1
-----------
Opinion of Fox, Rothschild, O'Brien & Frankel, LLP as to the
legality of the shares registered.
<PAGE>
=========
| FRO&F | Fox, Rothschild, O'Brien & Frankel, LLP
=========
Attorneys at Law Founded 1907
* * *
2000 Market Street, Tenth Floor
Philadelphia, PA 19103-3291
(215) 299-2000 FAX (215) 299-2150
May 9, 1997
Quaker Chemical Corporation
Elm and Lee Streets
Conshohocken, PA 19428
Gentlemen:
We have acted as counsel to Quaker Chemical Corporation (the
"Company") in connection with the proposed issuance by the Company of up
to 50,000 shares of the Company's Common Stock, $1.00 par value, (the
"Plan Shares") pursuant to the Company's Director Stock Ownership Plan
(the "Plan"). The Plan Shares are to be offered and issued pursuant to
a registration statement on Form S-8 to be filed with the Securities and
Exchange Commission (the "Registration Statement").
We, as counsel to the Company, have examined such corporate
records, certificates and other documents and such questions of law as
we have considered necessary for the purpose of this opinion. Based
upon the foregoing, we advise you that in our opinion such of the 50,000
Plan Shares as are issued as contemplated by the Registration Statement
and the Plan, when so issued will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement, and to the reference to our Firm under the
heading "Legal Matters" in Prospectus forming a part of the Registration
Statement. In giving this consent, we do not hereby 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
thereunder.
Very truly yours,
/S/FOX, ROTHSCHILD, O'BRIEN & FRANKEL, LLP
by
FORMED IN THE COMMONWEALTH OF PENNSYLVANIA
EXTON, PA (o) LANSDALE, PA (o) LAWRENCEVILLE, PA (o) PHILADELPHIA, PA
EXHIBIT 23-1
------------
Consent of Price Waterhouse LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 13, 1997, which
appears on page 31 of the 1996 Annual Report to Shareholders of Quaker
Chemical Corporation, which is incorporated by reference in Quaker
Chemical Corporation's Annual Report on Form 10-K for the year ending
December 31, 1996.
/S/PRICE WATERHOUSE LLP
Philadelphia, PA
May 9, 1997
QUAKER CHEMICAL CORPORATION
DIRECTOR STOCK OWNERSHIP PLAN
1. PURPOSE OF THE PLAN.
The purpose of the Quaker Chemical Corporation Director Stock
Ownership Plan is to encourage Directors of Quaker Chemical Corporation,
a Pennsylvania corporation (the "Company"), to increase their individual
investment in the Company and thereby align their interests more closely
with the interests of other shareholders of the Company.
2. DEFINITIONS.
Unless the context clearly indicates otherwise, the following terms
when used in the Plan shall have the following meanings:
(a) "Annual Retainer" means the annual fee paid to Eligible
Directors for service as a member of the Board. Annual Retainer shall
not include fees paid for services as a committee chair or for attending
meetings of the Board or Board committees.
(b) "Beneficial Owner" shall have the meaning set forth in Rule
16a- 1(a)(2) of the General Rules and Regulations under the Securities
Exchange Act of 1934 or any successor Rule.
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means the committee appointed by the Board to
administer the Plan. Unless otherwise determined by the Board, the
Committee shall be the Compensation/Management Development Committee of
the Board.
(e) "Common Stock" means the Common Stock, $1.00 par value, of the
Company.
(f) "Discretionary Election" means an election made by an Eligible
Director pursuant to Section 7.
(g) "Eligible Director" means a member of the Board who is not an
employee of the Company and who is not affiliated with General Counsel
to the Company.
(h) "Fair Market Value" of a share of Common Stock means, on any
date, an amount equal to the average of the closing prices per share of
Common Stock as reported by the composite tape of the New York Stock
Exchange for the first 2 of the 4 trading days immediately preceding the
Retainer Payment Date.
<PAGE>
(i) "Measuring Date" means May 1 of each calendar year commencing
April 1, 1997.
(j) "Plan" means the Quaker Chemical Corporation Director Stock
Ownership Plan.
(k) "Retainer Payment Date" means June 1 of each calendar year
commencing June 1, 1997 or if June 1 of any year is not a day on which
the New York Stock Exchange is open for trading, Retainer Payment Date
shall be the first day thereafter on which the New York Stock Exchange
is open for trading.
(l) "Rule 16b-3" means Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934 or any successor
Rule.
3. PLAN ADMINISTRATION.
The Plan will be administered by the Committee. The Committee
shall have full power, discretion and authority to interpret and
administer the Plan consistent with the express provisions of the Plan.
The interpretation and construction of any provision of the Plan by the
Committee shall be final and conclusive.
4. EFFECTIVE DATE AND DURATION.
The effective date of the Plan shall be May 1, 1997. Unless sooner
terminated by the Board, the Plan shall remain in effect until April 30,
2007.
5. COMMON STOCK SUBJECT TO THE PLAN.
The maximum number of shares of Common Stock which may be issued
under the Plan shall be 50,000 subject to adjustment in accordance with
Section 9, which shares may be either authorized and unissued shares of
Common Stock or authorized and issued shares of Common Stock purchased
or acquired by the Company for any purpose.
6. PAYMENT OF ANNUAL RETAINER.
(a) The Company will pay the Annual Retainer on the Retainer
Payment Date.
(b) If on the Measuring Date immediately preceding a Retainer
Payment Date an Eligible Director is the Beneficial Owner of less than
5,000 shares of Common Stock, 75% of the Annual Retainer payable to the
Eligible Director shall be paid in shares of Common Stock, and 25% of
the Annual Retainer shall be paid in cash.
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<PAGE>
(c) If on the Measuring Date immediately preceding a Retainer
Payment Date an Eligible Director is the Beneficial Owner of 5,000 or
more shares of Common Stock, unless the Eligible Director made a
Discretionary Election, the Annual Retainer payable to the Eligible
Director shall be paid 75% in shares of Common Stock and 25% of the
Annual Retainer shall be paid in cash. If an Eligible Director made a
Discretionary Election, the Annual Retainer payable to the Eligible
Director shall be paid in accordance with the terms of the Discretionary
Election.
(d) Shares of Common Stock issued in payment of the Annual Retainer
shall be valued at Fair Market Value.
(e) No fractional shares of Common Stock will be issued pursuant to
this Section. The number of shares of Common Stock otherwise issuable
under this Section shall be rounded down to the nearest whole share, and
any fractional interest otherwise issuable shall be paid in cash.
7. DISCRETIONARY ELECTION.
If on the Measuring Date immediately preceding a Retainer Payment
Date an Eligible Director is the Beneficial Owner of 5,000 or more
shares of Common Stock, the Eligible Director may, in the Eligible
Director's discretion, within the 10 day period following the Measuring
Date, irrevocably elect to receive the payment of the next Annual
Retainer in cash, in shares of Common Stock, or a combination of both
(in proportions different from those set forth in Section 6). The
Discretionary Election shall be made on a form provided the Eligible
Director by the Company for that purpose. The Discretionary Election is
made annually and is binding only with respect to the Annual Retainer
payable following the date of the Discretionary Election.
8. SUSPENSION, TERMINATION AND AMENDMENT OF THE PLAN.
The Plan may be suspended, terminated or reinstated, in whole or in
part, at any time by the Board. The Board may from time to time make
such amendments to the Plan as it may deem advisable, provided, however,
no such amendments shall be effected between a Measuring Date and the
next succeeding Retainer Payment Date.
9. ADJUSTMENTS PROVISIONS.
In the event of any recapitalization, reorganization, merger,
consolidation, spin-off, combination, share exchange, stock split or
reverse split, liquidation, dissolution, or other similar corporate
transaction or event which affects the Common
-3-
<PAGE>
Stock such that the Committee determines that an adjustment is
appropriate in order to prevent dilution or enlargement of Eligible
Directors' rights under the Plan, the Committee may make an adjustment
in the number of shares of Common Stock subject to the Plan, and the
number of shares of Common Stock which an Eligible Director is required
to own.
10. GENERAL PROVISIONS.
(a) Notwithstanding any other provision of the Plan, the Company
shall not be required to issue or deliver any certificate for shares of
Common Stock prior to the fulfillment of all of the following
conditions:
(i) Any required listing or approval upon notice of issuance of
such shares of Common Stock on any securities exchange on which the
Common Stock may then be traded.
(ii) Any registration or qualification of the shares of Common
Stock subject to the Plan under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, if such registration shall be
necessary.
(iii) Any registration or qualification of the shares of Common
Stock under any state or federal law or regulation or other
qualification which the Board deems necessary.
(iv) Any other required consent or approval or permit from any
state or federal government agency.
The Company shall use its best efforts to effect promptly such registrations
and to comply promptly with such laws, regulations and rulings.
(b) It is the intent of the Company that the Plan and all
transactions under the Plan comply in all respects with applicable
provisions of Rule 16b- 3. Accordingly, if any provision of the Plan or
any transaction pursuant to the Plan does not comply with the
requirements of Rule 16b-3 as then applicable to Eligible Directors,
such provision or transaction will be construed, modified or deemed
amended to the extent necessary to conform to the applicable
requirements with respect to such Eligible Director. To the extent that
any provision of the Plan or any action by the Board or the Committee
fails to so comply, it shall be deemed null and void to the extent
permitted by law and to the extent deemed advisable by the Board or the
Committee.
(c) Nothing contained in the Plan will confer upon any Director any
right to continue to serve as a member of the Board.
-4-
<PAGE>
The Plan shall not interfere with or limit in any way the right of
the Company to remove an Eligible Director from the Board.
(d) The adoption of the Plan by the Board shall not be construed as
creating any limitations on the power of the Board to adopt such other
compensatory arrangements for members of the Board as it may deem
desirable.
(e) To the extent not preempted by Federal law, the Plan shall be
construed in accordance with and governed by the internal laws of the
Commonwealth of Pennsylvania.
(f) In the event any provision of the Plan or any action taken
pursuant to the Plan shall be held illegal or invalid for any reason,
the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included, and the illegal or invalid
action shall be deemed null and void.
(g) The issuance of shares of Common Stock under the Plan shall be
subject to applicable taxes or other laws or regulations of the United
States of America or any state having jurisdiction. To the extent
required by applicable law or regulation, an Eligible Director must
arrange with the Company for the payment of any federal, state or local
income or other tax applicable to the receipt of Common Stock under the
Plan before the Company shall be required to deliver to the Eligible
Director a certificate for Common Stock.
(h) Titles and headings of sections of the Plan are for convenience
of reference only and shall not affect the construction of any provision
of the Plan.
-5-
