As filed with the Securities and Exchange Commission on March 31, 2000
Registration No. 333-
-------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
ORRSTOWN FINANCIAL SERVICES, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 23-2530374
- ------------------------ ----------------------
(State of Incorporation) (I.R.S. Employer
Identification Number)
77 East King Street
Shippensburg, Pennsylvania 17257
(717) 532-6114
----------------------------------------------------
(Address, including Zip Code, and Telephone Number,
including Area Code, of Principal Executive Offices)
---------------------
Orrstown Financial Services, Inc.
Non-Employee Director Stock Option Plan of 2000
-----------------------------------------------
(Full Title of the Plan)
Kenneth R. Shoemaker
President and Chief Executive Officer
Orrstown Financial Services, Inc.
77 East King Street
Shippensburg, Pennsylvania 17257
---------------------------------------------------------
(Name, Address and Telephone Number of Agent for Service)
---------------------
Copy to:
Dean H. Dusinberre, Esquire
Rhoads & Sinon LLP
One South Market Square, 12th Floor
P.O. Box 1146
Harrisburg, PA 17108-1146
(717) 233-5731
---------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Securities Registration Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share(1) Offering Price(1) Fee
- -------------------------------- ------------- -------------- ----------------- ---------
<S> <C> <C> <C> <C>
Common Stock, no par value 30,000 shares $40.00 $1,200,000.00 $317.00
</TABLE>
(1) Estimated solely for the purposes of calculating the amount of the
registration fee, pursuant to Rule 457(c), on the basis of $40.00 per share,
which was the last reported sale price of the Common Stock as of March 27, 2000.
There were no bid or asked prices on March 27, 2000. The last reported sale was
on March 22, 2000.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Orrstown Financial Services,
Inc. with the Securities and Exchange Commission ("SEC") and are incorporated
herein by reference:
(a) Registrant's Annual Report on Form 10-K for the year ended December
31, 1999.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") since the end of
Registrant's fiscal year covered by the annual report referred to in
(a) above.
(c) The description of Registrant's Common Stock contained in its
registration statement filed under the Exchange Act, and any amendment
or report filed for the purpose of updating such description.
All documents subsequently filed by Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein or in any
other subsequently filed incorporated document modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part hereof.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 1741-1743 of the Pennsylvania Business Corporation Law of 1988, as
amended (the "BCL"), provide that a business corporation may indemnify directors
and officers against liabilities they may incur in such capacities provided
certain standards are met, including good faith and the belief that the
particular action is in the best interests of the corporation. In general, this
power to indemnify does not exist in the case of actions against a director or
officer by or in the right of the corporation if the person entitled to
indemnification shall have been adjudged to be liable to the corporation unless
and only to the extent a court determines that the person is fairly and
reasonably entitled to indemnification. A corporation is required to indemnify
directors and officers against expenses they may incur in defending actions
against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions. Section 1746 of the BCL provides that
the foregoing provisions shall not be deemed exclusive of any other rights to
which a person seeking indemnification may be entitled under, among other
things, any by-law provision, provided that no indemnification may be made in
any case where the act or failure or act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness. Section 1747 of the BCL authorizes a corporation to purchase
insurance for directors and other representatives. The foregoing statement is
subject to the detailed provisions of Section 1741-1850 of the BCL.
The By-laws of Orrstown Financial Services, Inc. (the "Company") provide
for indemnification of directors and officers to the extent provided in the BCL.
In accordance with Section 1713 of the BCL, the By-laws of the Company also
include a provision that the directors of the Company shall not be personally
liable for monetary damages as such for any action taken, or failure to take any
action, unless: (1) the director has breached or failed to perform the duties of
his office in good faith, in a manner he reasonably believes to be in the best
interests of the Company and with such care, including reasonable inquiry, skill
and diligence, as a person of ordinary prudence would use under similar
circumstances; and (2) the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness. Pursuant to Section 1713 of
the BCL, this limitation of personal liability does not apply to (i) the
responsibility or liability of a director pursuant to any criminal statute or
(ii) the liability of a director for the payment of taxes pursuant to federal,
state or local law.
The Company maintains directors and officers liability insurance providing
insurance under certain circumstances for directors and certain officers.
-2-
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
5 Opinion of Rhoads & Sinon LLP.
23.1 Consent of Rhoads & Sinon LLP (included as part of Exhibit 5).
23.2 Consent of Smith Elliott Kearns & Company.
24 Powers of Attorney (included as part of signature page).
99.1 Orrstown Financial Services, Inc. Non-Employee Director Stock Option
Plan of 2000.
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 (the "Securities Act");
(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 paragraph (A)(1)(i) and (A)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
the foregoing paragraph is contained in periodic reports filed by the
registrant pursuant to Section
-3-
<PAGE>
13 or Section 15(d) of the Exchange Act that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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 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 Securities 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Shippensburg, Commonwealth of Pennsylvania, on March
27, 2000.
ORRSTOWN FINANCIAL SERVICES, INC.
(Registrant)
By: /s/ Kenneth R. Shoemaker
-----------------------------------------
Kenneth R. Shoemaker
President and Chief Executive Officer
-5-
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Kenneth R. Shoemaker and Joel R. Zullinger, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the Registration Statement to which
this power of attorney is attached, and to file all those amendments and all
exhibits to them and other documents to be filed in connection with them, with
the Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated below.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Kenneth R. Shoemaker President and CEO and March 27, 2000
- --------------------------- Director
Kenneth R. Shoemaker
/s/ Bradley S. Everly Senior Vice President (chief March 27, 2000
- --------------------------- financial officer)
Bradley S. Everly
/s/ Robert B. Russell Vice President (chief accounting March 27, 2000
- --------------------------- officer)
Robert B. Russell
/s/ Anthony F. Ceddia Director March 27, 2000
- ---------------------------
Anthony F. Ceddia
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Jeffrey W. Coy Director March 27, 2000
- ---------------------------
Jeffrey W. Coy
/s/ Andrea Pugh Director March 27, 2000
- ---------------------------
Andrea Pugh
/s/ Gregory A. Rosenberry Director March 27, 2000
- ---------------------------
Gregory A. Rosenberry
/s/ Glenn W. Snoke Director March 27, 2000
- ---------------------------
Glenn W. Snoke
- --------------------------- Director
Denver L. Tuckey
- --------------------------- Director
John S. Ward
/s/ Joel R. Zullinger Director March 27, 2000
- ---------------------------
Joel R. Zullinger
</TABLE>
-7-
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
5 Opinion of Rhoads & Sinon LLP.
23.1 Consent of Rhoads & Sinon LLP (included as part of Exhibit 5).
23.2 Consent of Smith Elliott Kearns & Company, LLC.
24 Powers of Attorney (included as part of signature page).
99.1 Orrstown Financial Services, Inc. Employee Stock Option Plan
of 2000.
-8-
[Rhoads & Sinon LLP--Letterhead]
Exhibit 5
March 24, 2000
Opinion and Consent of Rhoads & Sinon LLP
Board of Directors
Orrstown Financial Services, Inc.
77 East King Street
Shippensburg, PA 17257
Ladies and Gentlemen:
Reference is made to your Registration Statement on Form S-8, which is to
be filed with the Securities and Exchange Commission regarding the registration
of 30,000 shares of common stock, no par value per share, of Orrstown Financial
Services, Inc. (the "Company") in connection with the Company's Non-Employee
Director Stock Option Plan of 2000 (the "Plan").
We have examined the records relating to the organization of the Company,
its Articles of Incorporation, By-laws and all amendments thereto, and the
records of proceedings of its stockholders and directors.
Based upon the foregoing, and upon the examination of such other documents
as we have deemed necessary to express the opinions hereinafter set forth, we
are of the opinion that:
1. The Company is a corporation duly organized and in good standing under
the Laws of the Commonwealth of Pennsylvania; and
2. The shares of the Company's Common Stock to be registered will, when
issued pursuant to and in accordance with the Plan, be duly authorized, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the said
Registration Statement and to all references to us therein.
In giving such consent, we do not thereby admit that we are experts within
the meaning of Section 7 of the Securities Act of 1933.
Very truly yours,
RHOADS & SINON LLP
By: /s/ Dean H. Dusinberre
----------------------
Dean H. Dusinberre
The Board of Directors and Stockholders
Orrstown Financial Services, Inc.
We consent to the use of our report, dated January 31, 2000, on our audits of
the financial statements of Orrstown Financial Services, Inc. incorporated by
reference to the Registration Statement on Form S-3, and to the reference to our
firm under the heading "Experts" in the Prospectus, in connection with the
Non-Employees Directors' Plan for Orrstown Financial Services, Inc.
/s/ SMITH ELLIOTT KEARNS & COMPANY, LLC
-----------------------------------
Smith Elliott Kearns & Company, LLC
Chambersburg, Pennsylvania
March 28, 2000
Exhibit 99.1
ORRSTOWN FINANCIAL SERVICES, INC.
NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN OF 2000
TABLE OF CONTENTS
-------------------------------------
Section I Definitions
Section II Purpose
Section III Available Shares; Adjustments
Section IV Class of Employees Eligible to Receive Options
Section V Stock Options
Section VI Amendment and Termination
Section VII Limitation on Resale
Section VIII Miscellaneous Provisions
Section IX Effective Date
<PAGE>
ORRSTOWN FINANCIAL SERVICES, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
OF 2000
SECTION I
DEFINITIONS
ss.1.1. "Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
ss.1.2. "Corporation" shall mean Orrstown Financial Services, Inc.
ss.1.3. "ERISA" shall mean the Employee Retirement Income Security Act, as
amended, and any successor statute thereto.
ss.1.4. "Non-Employee Director" shall mean as of any date a member of the
Corporation's Board of Directors who is not an employee of the
Corporation or any of its Subsidiaries.
ss.1.5. "Permanently Disabled" shall mean the physical or mental condition of an
optionee which renders him incapable of continuing his customary duties
of employment as determined by the Committee.
ss.1.6. "Shares" shall mean shares of the Common Stock, no par value, of the
Corporation.
ss.1.7. "Subsidiary" or "Subsidiaries" shall have the meaning that is ascribed
to those terms in Section 424 (f) of the Code, and the Corporation shall
be deemed to be the grantor corporation for purposes of applying such
meaning.
SECTION II
PURPOSE
ss.2.1. The purpose of the Non-Employee Director Stock Option Plan (this "Plan")
is to provide additional incentive to Non-Employee Directors who make
substantial contributions to the Corporation and its Subsidiaries by
their services. By encouraging them to invest in Shares and thereby to
acquire a proprietary interest
<PAGE>
in the Corporation, the Corporation intends that this Plan will
facilitate motivating, retaining and securing Non-Employee Directors of
high caliber and potential.
SECTION III
AVAILABLE SHARES; ADJUSTMENTS
ss.3.1. A total of 30,000 Shares (subject to anti-dilution adjustments provided
in Section 3.2) may be issued pursuant to options granted under this
Plan. Shares subject to options which are unexercised upon termination
of such options shall be available for future options granted under this
Plan. Either authorized and unissued Shares or issued Shares heretofore
or hereafter reacquired by the Corporation may be made available for
purchase under this Plan.
ss.3.2. Appropriate adjustments shall be made in the number and kind of shares
of stock available for the grant of options under this Plan and subject
to outstanding options issued under this Plan and, in the case of
outstanding options at the time of the event leading to the adjustment,
in the per share purchase price of Shares upon exercise, shall be made
to give effect to any mergers, consolidations, acquisitions, stock
splits, stock dividends, or other relevant changes in the capitalization
occurring after the effective date of this Plan or the award of an
option. Subject to Section 6.4, any agreement of merger or consolidation
will include appropriate provisions for protection of the then existing
rights of optionees under this Plan.
SECTION IV
CLASS OF EMPLOYEES ELIGIBLE TO RECEIVE OPTIONS
ss.4.1. Only Non-Employee Directors as of the date of grant are eligible to
receive an option or options under this Plan.
-2-
<PAGE>
SECTION V
STOCK OPTIONS
ss.5.1. Options granted pursuant to this Plan shall be nonqualified or
non-statutory stock options, and not incentive stock options pursuant to
the requirements of Section 422 of the Code.
ss.5.2. Subject to the terms and conditions of this Plan, including adjustments
that may be made in the number of optioned Shares pursuant to 3.2 above,
beginning on April 1, 2000 and on April 1 in each year thereafter so
long as this Plan remains in effect and shares are available hereunder,
each Non-Employee Director in office on such date shall be granted an
option to purchase a certain number of Shares based upon the
consolidated return on average equity (ROE) of Orrstown Financial
Services, Inc. during the preceding year ended December 31 as follows:
<TABLE>
<CAPTION>
Option for Number of
Return on Average Equity Full (no fractional shares)
(ROE) Orrstown Financial Shares @ Current Market
Services, Inc., ROE based Value Pursuant to 5.4
upon Annual Consolidated below that would be equal
Net Income Divided to but not more than the
by Average Daily following combined Example @
Consolidated Equity Market Value $40 Market Value
-------------------------- --------------------------- ----------------
<S> <C> <C>
Below 12% $ 0 0 share options
12% $ 3,000 75 share options
13% $ 5,000 125 share options
14% $ 7,000 175 share options
15% $ 9,000 225 share options
16% $11,000 275 share options
17% $13,000 325 share options
18% $15,000 375 share options
19% $17,000 425 share options
20% $19,000 475 share options
21% & Up Caps @ $20,000 500 share options
</TABLE>
In the event that on any grant date insufficient shares are available
pursuant to 3.1 above, the number of shares for which options are to be
issued shall be adjusted pro rata among all options to be issued on such
date.
ss.5.3. Subject to the terms and conditions of this Plan, each option granted
under this Plan shall be exercisable immediately upon grant. Subject to
the foregoing, each
-3-
<PAGE>
option may be exercised from time to time until the earlier of the
expiration or termination of the option in accordance with this Plan or
the tenth anniversary date of the grant, at which time all unexercised
options shall expire.
ss.5.4. The purchase price of Shares acquired pursuant to an option shall be 100
percent of the "Fair Market Value" of the Shares as of the date of the
grant of the option. The "Fair Market Value" as of any date shall be
determined on a per share basis by the Board of Directors as follows:
(a) If the Shares were traded over-the-counter on the date in
question and the Shares were classified by Nasdaq as a national
market issue (or, in the judgment of the Board of Directors, a
comparable designation), then the Fair Market Value shall be
equal to the average of the high and low sales prices of the
Shares reported in Nasdaq trading for that date or if no
reported sale of Shares shall have occurred on such date, then
on the next preceding day on which there was a reported sale.
(b) If the Shares were traded over-the-counter on the date in
question but the Shares were not classified by Nasdaq as a
national market issue (or, in the judgment of the Board of
Directors, a comparable designation), then the Fair Market Value
shall be equal to the mean between the last reported
representative bid and asked prices quoted by the Nasdaq system
for such date.
(c) If the Shares were traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite transactions
reported for such date.
(d) If none of the above are applicable, then the Fair Market Value
shall equal the average of the average of the daily high bid and
low offer quotations for the Shares reported through the
National Association of Securities Dealers, Inc.'s OTC Bulletin
Board service for the ten (10) trading days immediately
preceding the applicable date (the "Pricing period"). If,
however, no bid or no offer quotation for the Shares is reported
through the OTC Bulletin Board service during the Pricing
Period, then the Fair Market Value will be the price of the last
trade reported for the Shares through the OTC Bulletin Board
service.
(e) If none of the foregoing provisions are applicable, then the
Fair Market Value shall be determined by the Board or Directors
in good faith on such basis as it deems appropriate.
-4-
<PAGE>
ss.5.5. Stock Options shall not be exercisable after the expiration of
ten (10) years after the date they are granted.
ss.5.6. Options granted under this Plan may be exercised by giving
written notice to the Corporation, on such form as the
Corporation shall provide, accompanied by full payment of the
option price for the total number of whole Shares being
purchased. Such payment may be made in any of the following
forms: (i) cash, which may be evidenced by a check, (ii) the
surrender of certificates representing Shares which have already
been owned by the optionee for more than six months, which will
be valued according to their fair market value determined in
accordance with the formula set forth in 5.4 of this Plan, or
(iii) any combination of cash and Shares. Any payment made by
the surrender of currently owned Shares shall be by assignment
in form and substance satisfactory to the Secretary of the
Corporation, including guarantees of signature where the same is
deemed to be necessary or desirable. All exercises of options
shall be subject to the terms and conditions of this Plan,
including 8.6 relating to compliance with applicable federal and
state securities laws. An option may not be exercised for less
than 100 Shares unless the total number of Shares then available
for exercise under the option is less than 100.
ss.5.7. In the event that an optionee retires (either as a result of
reaching mandatory retirement age or under other circumstances
that the Board of Directors, in its discretion, designates as a
"retirement"), dies or becomes permanently disabled, the
optionee or his legal successor shall have the right to exercise
any previously granted options that are then unexpired during
the remainder of the term of such options, subject to the terms
of the option and this Plan. If an optionee's service as a
Director terminates for any other reason, the optionee or his
legal successor shall have the right to exercise any previously
unexpired options for a period of six months after the date of
the event that causes termination of service as a director, but
in no event after the term of the option expires, subject to the
terms of the option and this Plan.
ss.5.8. During his or her lifetime, options under this Plan are
exercisable only by the optionee. Rights and options under this
Plan are not assignable or transferable by an optionee except 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.
SECTION VI
AMENDMENT AND TERMINATION
-5-
<PAGE>
ss.6.1. The Board of Directors may amend this Plan in any respect
whatsoever.
ss.6.2. No termination, modification or amendment of this Plan may,
without the consent of a Non-Employee Director then having an
option under this Plan to purchase stock, adversely affect the
rights of such optionee under such option, subject to the
provisions of this Plan.
ss.6.3. This Plan does not have a specified termination date. The Board
of Directors of the Corporation reserves the right to terminate
or suspend this Plan at any time without notice. Termination or
suspension shall not adversely affect options previously granted
pursuant to this Plan, and the applicable terms of this Plan
shall survive such termination or suspension until all
outstanding options have been exercised in full, forfeited or
completely expired, in accordance with the terms of this Plan.
ss.6.4 Any agreement to which the Corporation is a party which provides
for any merger, consolidation or similar transaction of the
Corporation with or into another corporation whereby the
Corporation is not to be the surviving corporation may provide,
without limitation, for the assumption of outstanding options by
the surviving corporation or its parent, for accelerated vesting
and accelerated expiration, or for an equitable mandatory
settlement of outstanding options in cash based on the
consideration paid to shareholders in such transaction and all
outstanding options shall be subject to such agreement. In any
case where the options are assumed by another corporation,
appropriate equitable adjustments as to the number and kind of
shares or other securities and the per share purchase prices
shall be made.
SECTION VII
LIMITATION ON RESALE
ss.7.1. There shall be no limitation on resale of shares purchased under
this Plan except as are provided under applicable federal or
state laws, rules or regulations.
SECTION VIII
MISCELLANEOUS PROVISIONS
-6-
<PAGE>
ss.8.1. Subject to the authority and responsibility of the Board of
Directors, the Chief Financial Officer of the Corporation, or
another officer of the Corporation or any of its Subsidiaries
designated by the Board of Directors, shall perform ministerial
tasks in connection with the Plan, including calculation of
options to be granted based on the formula set forth in 5.2
above and execution of stock option grants or agreements
consistent with this Plan on behalf of the Corporation.
ss.8.2. No member of the Board of Directors or any officer of the
Corporation shall be liable for any act or omission (whether or
not negligent) taken or omitted in good faith, or for the
exercise of authority or discretion granted in connection with
this Plan. All interpretations of this Plan made in good faith
by the Board of Directors shall be conclusive and binding on all
persons.
ss.8.3. Nothing contained in this Plan or any option granted pursuant to
this Plan shall confer upon any Non-Employee Director the right
to continue as a Director of the Corporation.
ss.8.4. The provisions of this Plan shall, in accordance with its terms,
be binding upon, and inure to the benefit of all successors of
each Non-Employee Director participating in this Plan,
including, without limitation, such Non-Employee Director's
estate and the executors, administrators or trustees thereof,
his heirs and legatees, and any receiver, trustee in bankruptcy
or representative of creditors of such Non-Employee Director.
ss.8.5. The laws of the Commonwealth of Pennsylvania will govern all
matters relating to this Plan except to the extent superseded by
the laws of the United States.
ss.8.6. Notwithstanding anything to the contrary contained in this Plan,
options shall be exercisable only if the Shares subject to the
options are registered under such federal and state securities
laws as the Corporation may deem necessary, or if exemptions
from such registration are deemed to be available; but in no
event shall options be exercisable during any period of time in
which the Corporation deems that exercisability, the offer to
sell the Shares subject to option, or the sale thereof, may
violate a federal, state or securities exchange rule, regulation
or law, or may cause the Corporation to be legally obligated to
issue or sell more Shares than the Corporation is legally
entitled to issue or sell. Further, in the absence of
registration under federal and state securities laws as
referenced above, each optionee, and each optionee obtaining
Shares upon exercise, may be required by the Corporation to
execute such acknowledgments and agreements as may be deemed
necessary or appropriate to secure compliance with exemptions
from registration under federal and state securities law, which
compliance may involve
-7-
<PAGE>
regulation of the manner in which the Shares may be sold or
transferred, and may prohibit the sale of Shares for a period of
time.
ss.8.7 Neither the adoption of the Plan, nor its submission to the
shareholders at any time, shall be taken to impose any
limitations on the powers of the Corporation, its Subsidiaries
or any other of its or their affiliates to issue, grant, award
or assume stock or options, warrants or rights to purchase or
receive stock, otherwise than under this Plan, or to adopt other
stock plans or to impose any requirement of shareholder approval
upon the same.
ss.8.8 The interests of an Non-Employee Director under this Plan are
not subject to the claims of creditors and may not, in any way,
be assigned, alienated or encumbered.
ss.8.9 Any reference contained in this Plan to a particular section or
provision of law, rule or regulations, including, but not
limited to, the Internal Revenue Code of 1986 and the Securities
Exchange Act of 1934, both as amended, shall include any
subsequent enacted or promulgated section or provision of law,
rule or regulation, as the case may be, of similar import.
ss.8.10 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, and to the extent any
provision of this Plan or act by the Board of Directors or any
officer designated by the Board of Directors fails to so comply,
such provision or act shall be deemed null and void, to the
extent permitted by applicable law and deemed advisable by the
Board of Directors. The transactions pursuant to this Plan and
the options granted hereunder are intended to constitute a
formula plan within the meaning of Note (3) to Rule 16b-3 and
all transactions in accordance with this Plan are hereby
approved by the Board of Directors for purposes of the Rule
16b-3(d) or (e), as applicable.
-8-
<PAGE>
SECTION IX
EFFECTIVE DATE
ss.9.1. This Plan shall become effective when the Plan has been adopted
by the Board of Directors of the Corporation. The Corporation's
obligation to offer, sell and deliver its Shares under this Plan
is subject to the approval of any governmental authority
required in connection with the authorized issuance or sale of
such Shares and is further subject to the Corporation receiving,
should it determine to do so, the advice of its counsel that all
applicable laws and regulations have been complied with.
