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EXHIBIT 99.1
CEPHALON, INC.
2000 EQUITY COMPENSATION PLAN
FOR EMPLOYEES AND KEY ADVISORS
The purpose of the Cephalon, Inc. 2000 Equity Compensation Plan for
Employees and Key Advisors (the "Plan") is to provide (i) designated employees
of Cephalon, Inc. (the "Company") and its subsidiaries, and (ii) certain
consultants and advisors who perform valuable services for the Company or its
subsidiaries with the opportunity to receive grants of nonqualified stock
options and stock awards. The Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby
benefiting the Company's shareholders, and will align the economic interests of
the participants with those of the shareholders.
1. ADMINISTRATION
(a) COMMITTEE. The Plan shall be administered by a committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board").
However, the Board may ratify or approve any grants as it deems appropriate. To
the extent that the Board ratifies or approves grants, references in the Plan to
the "Committee" shall be deemed to refer to the Board.
(b) COMMITTEE AUTHORITY. The Committee shall have the sole authority to (i)
determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued grant, and (v) deal with any other matters
arising under the Plan.
(c) COMMITTEE DETERMINATIONS. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. GRANTS
Awards under the Plan may consist of grants of nonqualified stock options
as described in Section 5 ("Nonqualified Stock Options" or "Options") and stock
awards as described in Section 6 ("Stock Awards") (hereinafter collectively
referred to as "Grants"). All Grants shall be subject to the terms and
conditions set forth herein and to such other terms and conditions consistent
with this Plan as the Committee deems appropriate and as are specified in
writing by the Committee to the individual in a grant instrument or an amendment
to the grant instrument (the "Grant Instrument"). The Committee shall approve
the form and provisions of each Grant Instrument. Grants under a particular
Section of the Plan
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need not be uniform as among the grantees.
3. SHARES SUBJECT TO THE PLAN
(a) SHARES AUTHORIZED. Subject to adjustment as described below, the
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is 1,500,000 shares, subject to
adjustment as described below. The shares may be authorized but unissued shares
of Company Stock or reacquired shares of Company Stock, including shares
purchased by the Company on the open market for purposes of the Plan. If and to
the extent Options granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised or if any
Stock Awards are forfeited, the shares subject to such Grants shall again be
available for purposes of the Plan. If shares of Company Stock are used to pay
the exercise price of an Option, only the net number of shares received by the
Grantee pursuant to such exercise shall be considered to have been issued or
transferred under the Plan with respect to such Option, and the remaining number
of shares subject to the Option shall again be available for purposes of the
Plan.
(b) ADJUSTMENTS. If there is any change in the number or kind of shares of
Company Stock outstanding (i) by reason of a stock dividend, spin-off,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spin-off or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the number of shares covered by outstanding Grants,
the kind of shares issued under the Plan, and the price per share or the
applicable market value of such Grants may be appropriately adjusted by the
Committee to reflect any increase or decrease in the number of, or change in the
kind or value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under such
Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding, and conclusive.
4. ELIGIBILITY FOR PARTICIPATION
(a) ELIGIBLE PERSONS. All employees of the Company and its subsidiaries,
including persons who have accepted employment with the Company or a subsidiary,
("Employees"), other than (except as provided below) employees who are officers
or directors of the Company shall be eligible to participate in the Plan.
Employees who are officers or directors of the Company shall not be eligible to
receive Grants except to the extent that such Grants are issued to a person not
previously employed by the Company or a subsidiary as an inducement essential to
the person's entering into an employment contract with the Company. Consultants
and advisors who perform services for the Company or any of its subsidiaries
("Key Advisors") shall be eligible to participate in the Plan if the Key
Advisors render bona fide services and such services are not in connection with
the offer and sale of securities in a capital-raising transaction, and the Key
Advisors do not directly or indirectly promote or maintain a market for the
Company's securities.
(b) SELECTION OF GRANTEES. The Committee shall select the Employees and Key
Advisors to receive Grants and shall determine the number of shares of Company
Stock subject to a particular Grant in such manner as the Committee determines.
Employees and Key Advisors who receive Grants under this Plan shall hereinafter
be referred to as "Grantees."
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(c) PROSPECTIVE EMPLOYEES AND KEY ADVISORS. Options and Stock Awards may be
granted to a prospective Employee or Key Advisor conditioned upon, and the date
of grant shall be no earlier than, the date such person becomes an Employee or
Key Advisor.
5. GRANTING OF OPTIONS
(a) NUMBER OF SHARES. The Committee shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to Employees and Key
Advisors.
(b) TYPE OF OPTION AND PRICE.
(i) All Options shall be Nonqualified Stock Options, which are not
intended to qualify as "incentive stock options" within the meaning of
section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
The Committee may grant Options in accordance with the terms and conditions
herein set forth.
(ii) The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and may be equal
to, greater than, or less than the Fair Market Value (as defined below) of
a share of Company Stock on the date the Option is granted.
(iii) If the Company Stock is publicly traded, then the Fair Market
Value per share shall be determined as follows: (x) if the principal
trading market for the Company Stock is a national securities exchange or
the Nasdaq National Market, the last reported sale price thereof on the
relevant date or (if there were no trades on that date) the latest
preceding date upon which a sale was reported, or (y) if the Company Stock
is not principally traded on such exchange or market, the mean between the
last reported "bid" and "asked" prices of Company Stock on the relevant
date, as reported on Nasdaq or, if not so reported, as reported by the
National Daily Quotation Bureau, Inc. or as reported in a customary
financial reporting service, as applicable and as the Committee determines.
If the Company Stock is not publicly traded or, if publicly traded, is not
subject to reported transactions or "bid" or "asked" quotations as set
forth above, the Fair Market Value per share shall be as determined by the
Committee.
(c) OPTION TERM. The Committee shall determine the term of each Option. The
term of any Option shall not exceed ten years from the date of grant.
(d) EXERCISABILITY OF OPTIONS. Options shall become exercisable in
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument. The Committee
may impose such additional restrictions or conditions on the exercisability of
Options or on the shares of Company Stock issuable upon exercise of the Options
as it shall determine and specify in the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options at any time for
any reason.
(e) GRANTS TO NON-EXEMPT EMPLOYEES. Notwithstanding the foregoing, Options
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, shall have an Exercise Price not less than 85% of the
Fair Market Value of the Company Stock on the date of grant, and may not be
exercisable for at least six months after the date of grant (except that such
Options may become exercisable, as determined by the Board, upon the Grantee's
death, Disability (as defined below) or retirement, or upon a Change of Control
(as defined below) or other circumstances permitted by applicable regulations).
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(f) EXERCISE OF OPTIONS. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company with payment of the Exercise Price. The Grantee shall pay the Exercise
Price for an Option as specified by the Committee (x) in cash, (y) with the
approval of the Committee, by delivering shares of Company Stock owned by the
Grantee and having a Fair Market Value on the date of exercise equal to the
Exercise Price or by attestation (on a form prescribed by the Committee) to
ownership of shares of Company Stock having a Fair Market Value on the date of
exercise equal to the Exercise Price, or (z) by such other method as the
Committee may approve. Shares of Company Stock used to exercise an Option shall
have been held by the Grantee for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. The Grantee
shall pay the Exercise Price and the amount of any withholding tax due (pursuant
to Section 7) at the time of exercise.
6. STOCK AWARDS
The Committee may issue or transfer shares of Company Stock to an Employee
or Key Advisor under a Stock Award, upon such terms as the Committee deems
appropriate. The following provisions are applicable to Stock Awards:
(a) GENERAL REQUIREMENTS. Shares of Company Stock issued or transferred
pursuant to Stock Awards may be issued or transferred for such cash
consideration, if any, and subject to such restrictions, if any, as determined
by the Committee. The Committee may establish conditions under which
restrictions on Stock Awards shall lapse over a period of time or according to
such other criteria as the Committee deems appropriate. The period of time
during which the Stock Award will remain subject to restrictions will be
designated in the Grant Instrument as the "Restriction Period."
(b) NUMBER OF SHARES. The Committee shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Stock Award and the
restrictions applicable to such shares.
(c) REQUIREMENT OF EMPLOYMENT OR SERVICE. If the Grantee ceases to be
employed by, or provide service to, the Company or any of its subsidiaries or
any other entity owned or controlled by the Company, during a period designated
in the Grant Instrument as the Restriction Period, or if other specified
conditions are not met, the Stock Award shall terminate as to all shares covered
by the award as to which the restrictions have not lapsed, and those shares of
Company Stock shall be immediately forfeited and returned to the Company. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.
(d) RESTRICTIONS ON TRANSFER AND LEGEND ON STOCK CERTIFICATE. During the
Restriction Period, a Grantee may not sell, assign, transfer, pledge, or
otherwise dispose of the shares of the Stock Award except to a Successor Grantee
under Section 8(a). Each certificate for Stock Awards shall contain a legend
giving appropriate notice of the restrictions in the Grant. The Grantee shall be
entitled to have the legend removed from the stock certificate covering the
shares subject to restrictions when all restrictions on such shares have lapsed.
The Committee may determine that the Company will not issue certificates for
Stock Awards until all restrictions on such shares have lapsed, or that the
Company will retain possession of certificates for Stock Awards until all
restrictions on such shares have lapsed.
(e) RIGHT TO VOTE AND TO RECEIVE DIVIDENDS. Except as otherwise determined
by the Committee and specified in the Grant Instrument, during the Restriction
Period, the Grantee shall not have the right to vote shares subject to Stock
Awards or to receive any dividends or other distributions paid on such shares,
until all restrictions on such shares have lapsed.
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(f) LAPSE OF RESTRICTIONS. All restrictions imposed on Stock Awards shall
lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Stock Awards, that the restrictions shall lapse
without regard to any Restriction Period.
7. WITHHOLDING OF TAXES
(a) REQUIRED WITHHOLDING. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require that the Grantee or other person receiving
or exercising Grants pay to the Company the amount of any federal, state or
local taxes that the Company is required to withhold with respect to such
Grants, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.
(b) ELECTION TO WITHHOLD SHARES. If the Committee so permits, a Grantee may
elect to satisfy the Company's income tax withholding obligation with respect to
a Grant by having shares withheld up to an amount that does not exceed the
Grantee's minimum applicable withholding tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and may be subject to the prior approval of the
Committee.
8. TRANSFERABILITY OF GRANTS
(a) NONTRANSFERABILITY OF GRANTS. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Nonqualified Stock Options, if permitted in
any specific case by the Committee, pursuant to a domestic relations order (as
defined under the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended or the regulations thereunder). When a Grantee dies, the
personal representative or other person entitled to succeed to the rights of the
Grantee ("Successor Grantee") may exercise such rights. A Successor Grantee must
furnish proof satisfactory to the Company of his or her right to receive the
Grant under the Grantee's will or under the applicable laws of descent and
distribution.
(b) TRANSFER OF NONQUALIFIED STOCK OPTIONS. Notwithstanding the foregoing,
the Committee may provide, in a Grant Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members, or one or more trusts or other
entities for the benefit of or owned by family members, consistent with
applicable securities laws, according to such terms as the Committee may
determine; provided that the Grantee receives no consideration for the transfer
of an Option and the transferred Option shall continue to be subject to the same
terms and conditions as were applicable to the Option immediately before the
transfer.
9. CERTAIN CORPORATE TRANSACTIONS AND CHANGES OF CONTROL
(a) CHANGE OF CONTROL. As used in Section 9(d) below, a "Change of Control"
shall be deemed to have occurred if there is a change in ownership or control of
the Company effected through either of the following transactions:
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(i) the direct or indirect acquisition by any person or related group
of persons (other than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company)
of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange
Act) of securities possessing more than thirty percent (30%) of the
combined voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's shareholders which
the Board does not recommend such shareholders to accept; or
(ii) a change in the composition of the Board over a period of
twenty-four (24) months or less such that a majority of the Board members
ceases, by reason of one or more contested elections for Board membership,
to be comprised of individuals who either (x) have been Board members
continuously since the beginning of such period, or (y) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (x) who were still in
office at the time such election or nomination was approved by the Board.
(b) CORPORATE TRANSACTION. As used in Section 9(d) below, "Corporate
Transaction" shall mean either of the following shareholder-approved
transactions to which the Company is a party:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the combined voting power of the Company's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of more than 75% of the
Company's assets in a single or related series of transactions.
(c) INVOLUNTARY TERMINATION. As used in Section 9(d) below, "Involuntary
Termination" shall mean the termination of the service of any Grantee of the
Company or any successor thereto which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Company or the successor thereto for reasons other than Misconduct (as
defined below), or
(ii) such individual's voluntary resignation, in either case
following:
(A) a change in his or her position with the Company or the
successor thereto which materially reduces his or her level of
responsibility,
(B) a reduction in his or her level of compensation (including
base salary, significant fringe benefits or any non-discretionary and
objective-standard incentive payment or bonus award) by more than ten
percent (10%) in the aggregate; or
(C) a relocation of such individual's place of employment by more
than fifty (50) miles, only if such change, reduction or relocation is
effected by the Company or the successor thereto without the
individual's consent.
For purposes of this definition, the term "Misconduct" means the
commission of any act of fraud, embezzlement or dishonesty by the Grantee,
any unauthorized use or disclosure by such individual of confidential
information or trade secrets of the Company or its successor, or any
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other intentional misconduct by such individual adversely affecting the
business or affairs of the Company or its successor in a material manner.
The foregoing definition shall not be deemed to be inclusive of all the
acts or omissions which the Company or its successor may consider as
grounds for the dismissal or discharge of any Grantee or its successor.
(d) Consequences of Certain Corporate Transactions and Changes of Control:
(i) In the event of any Corporate Transaction, each Option which is at
the time outstanding under this Plan and each Stock Award to which the
restrictions have not lapsed shall automatically accelerate so that each
such Option shall, immediately prior to the specified effective date for
such Corporate Transaction, become fully exercisable with respect to the
total number of shares of Company Stock at the time subject to such Option
and may be exercised for all or any portion of such shares as fully-vested
shares and all restrictions applicable to the shares of Company Stock
subject to such Stock Award shall lapse. However, the vesting of an
outstanding Grant under this Plan shall not so accelerate nor shall the
restrictions so lapse if and to the extent:
(A) such Grant is, in connection with such Corporate Transaction,
either to be assumed by the successor corporation or parent thereof or
to be replaced with an option or stock award for shares of the capital
stock of the successor corporation or parent thereof having comparable
value and terms;
(B) such Grant is to be replaced with a cash incentive option or
award of the successor corporation which preserves the Option spread
or Stock Award value existing at the time of such Corporate
Transaction and provides for subsequent payout in accordance with the
same terms and conditions, including without limitation, the same
vesting schedule applicable to such Grant;
(C) such Grant is to be replaced by a grant under another
incentive program which the Committee determines is reasonably
equivalent in value; or
(D) the acceleration of the vesting period under such Option or
the lapse of restrictions with respect to such Stock Award is subject
to other limitations imposed by the Committee at the time of the
Grant. The determination of comparability under clauses 9(d)(i)(A),
(B) or (C) above shall be made by the Committee, and its determination
shall be final, binding and conclusive.
(ii) Upon a Grantee's cessation of service by reason of an Involuntary
Termination within thirty-six (36) months after a Corporate Transaction in
which his or her outstanding options or grants are assumed or replaced
pursuant to clause 9(d)(i)(A), (B) or (C) above, each such option or grant
under clause 9(d)(i)(A) shall automatically accelerate and become fully
exercisable and all restrictions applicable to such grants shall lapse,
with respect to the total number of shares of stock at the time subject to
such option or grant and the cash incentive program under clause 9(d)(i)(B)
or other incentive program under clause 9(d)(i)(C) shall become fully
vested. In addition, upon a Grantee's cessation of service by reason of an
Involuntary Termination within 36 months after a Change of Control, each
Option shall automatically accelerate and become fully exercisable and all
restrictions applicable to Stock Awards shall lapse, with respect to the
total number of shares of Company Stock at the time subject to such Grant.
The Option as so accelerated shall remain exercisable until the earlier of
the expiration of the option term or the expiration of
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the one (1)-year period measured from the date of such Involuntary
Termination.
(iii) Immediately following the consummation of a Corporate
Transaction, all outstanding Grants under this Plan shall terminate and
cease to remain outstanding, except to the extent assumed by the successor
corporation or its parent company.
(iv) Each outstanding Grant under this Plan that is assumed in
connection with a Corporate Transaction shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply and pertain to the
number and class of securities which would have been issued to the Grantee,
upon consummation of such Corporate Transaction, had (in the case of an
Option) such person exercised the Option immediately prior to such
Corporate Transaction. In the case of an Option, appropriate adjustments
shall also be made to the exercise price payable per share, provided the
aggregate exercise price payable for such securities shall remain the same.
In addition, the class and number of shares available for issuance under
the Plan on both an aggregate and participant basis following the
consummation of such Corporate Transaction shall be appropriately adjusted.
(v) The provisions of Section 9(d)(i) shall not operate as a
limitation on the Committee's discretionary authority, exercisable either
at the time of the Grant or at any time while the Grant remains
outstanding, to provide for the automatic acceleration of one or more
outstanding Options, or the lapse of all restrictions applicable to a Stock
Award upon the occurrence of any change in the Company's organization,
ownership or structure not otherwise within the definition of a Corporate
Transaction or a Change of Control. The Committee also shall have full
power and authority to condition any such option acceleration, restriction
lapse and the termination of any outstanding repurchase rights upon the
Grantee's cessation of service by reason of an Involuntary Termination
within a specified period following any such event. Any Options accelerated
in connection with any such event shall remain fully exercisable until the
expiration or sooner termination of the option term or the surrender of
such option.
(vi) The acceleration or substitution of Grants under this Section 9
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
10. LIMITATIONS ON ISSUANCE OR TRANSFER OF SHARES
No Company Stock shall be issued or transferred in connection with any
Grant hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Grant made to any Grantee hereunder on such Grantee's undertaking in writing
to comply with such restrictions on his or her subsequent disposition of such
shares of Company Stock as the Committee shall deem necessary or advisable as a
result of any applicable law, regulation or official interpretation thereof, and
certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued or
transferred under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations, and
interpretations, including any requirement that a legend be placed thereon.
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11. AMENDMENT AND TERMINATION OF THE PLAN
(a) AMENDMENT. The Board may amend or terminate the Plan at any time.
(b) TERMINATION OF PLAN. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or is extended by the Board.
(c) TERMINATION AND AMENDMENT OF OUTSTANDING GRANTS. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 17(b). The termination of the Plan shall not impair
the power and authority of the Committee with respect to an outstanding Grant.
Whether or not the Plan has terminated, an outstanding Grant may be terminated
or amended under Section 17(b) or may be amended by agreement of the Company and
the Grantee consistent with the Plan.
(d) GOVERNING DOCUMENT. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
12. FUNDING OF THE PLAN
This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Grants under this Plan. In no event shall interest be
paid or accrued on any Grant, including unpaid installments of Grants.
13. RIGHTS OF PARTICIPANTS
Nothing in this Plan shall entitle any Employee, Key Advisor, or other
person to any claim or right to be granted a Grant under this Plan. Neither this
Plan nor any action taken hereunder shall be construed as giving any individual
any rights to be retained by or in the employ of the Company or any other
employment rights.
14. NO FRACTIONAL SHARES
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Grant. The Committee shall determine whether cash, other
awards, or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
15. HEADINGS
Section headings are for reference only. In the event of a conflict between
a title and the content of a Section, the content of the Section shall control.
16. EFFECTIVE DATE OF THE PLAN.
The Plan shall be effective as of December 13, 2000.
17. MISCELLANEOUS
(a) GRANTS IN CONNECTION WITH CORPORATE TRANSACTIONS, CHANGES OF CONTROL
AND OTHERWISE. Nothing contained in this Plan shall be construed to (i) limit
the right of the Committee to make Grants
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under this Plan in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation, firm
or association, including Grants to employees thereof who become Employees of
the Company, or for other proper corporate purposes, or (ii) limit the right of
the Company to grant stock options or make other awards outside of this Plan.
Without limiting the foregoing, the Committee may make a Grant to an employee of
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or Stock Award grant made by such corporation. The terms and conditions
of the substitute grants may vary from the terms and conditions required by the
Plan and from those of the substituted stock incentives. The Committee shall
prescribe the provisions of the substitute grants.
(b) COMPLIANCE WITH LAW. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Company Stock under
Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. The Committee may revoke
any Grant if it is contrary to law or modify a Grant to bring it into compliance
with any valid and mandatory government regulation. The Committee may also adopt
rules regarding the withholding of taxes on payments to Grantees. The Committee
may, in its sole discretion, agree to limit its authority under this Section.
(c) GOVERNING LAW. The validity, construction, interpretation and effect of
the Plan and Grant Instruments issued under the Plan shall be governed and
construed by and determined in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to the conflict of laws provisions thereof.
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