<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 25, 1998
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
FORE SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 25-1628117
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1000 FORE DRIVE
WARRENDALE, PENNSYLVANIA 15086-7502
(Address of Principal Executive Offices) (Zip Code)
BERKELEY NETWORKS, INC. SUBSTITUTE STOCK OPTION PLAN
(Full Title of the Plan)
THOMAS J. GILL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FORE SYSTEMS, INC.
1000 FORE DRIVE
WARRENDALE, PENNSYLVANIA 15086-7502
(Name and Address of Agent for Service)
(724) 742-4444
(Telephone Number, Including Area Code, of Agent for Service)
Copy of all communications to:
CHRISTOPHER H. GEBHARDT
VICE PRESIDENT, CORPORATE COUNSEL AND SECRETARY
FORE SYSTEMS, INC.
1000 FORE DRIVE
WARRENDALE, PENNSYLVANIA 15086-7502
(724) 742-7658
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, PAR VALUE $.01 PER SHARE
BERKELEY NETWORKS, INC. SUBSTITUTE STOCK 618,999 shares $20.0315 $12,399,479 $3,658
OPTION PLAN
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee;
computed in accordance with Rule 457(h) on the basis of the average of the
high and low sales prices for the Common Stock on September 18, 1998 as
reported on The Nasdaq National Market.
===============================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by FORE Systems, Inc. (the "Company")
with the Securities and Exchange Commission (the "Commission") are incorporated
by reference into this Registration Statement on Form S-8 (the "Registration
Statement"):
1. The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998;
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1998;
3. The Company's Current Report on Form 8-K dated September 11,
1998;
4. The Company's Current Report on Form 8-K/A dated September 11,
1998; and
5. The description of the Company's Common Stock, par value $.01
per share ("Common Stock"), contained in the Company's
Registration Statement on Form 8-A under the Securities
Exchange Act of 1934 (the "Exchange Act"), including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Registration Statement, but prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered by this Registration Statement have been sold or which deregisters all
such securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement. Each document incorporated by
reference into this Registration Statement shall be deemed to be a part of this
Registration Statement from the date of the filing of such document with the
Commission until the information contained therein is superseded or updated by
any subsequently filed document which is incorporated by reference into this
Registration Statement or by any document which constitutes part of the
prospectus relating to the Berkeley Networks, Inc. Substitute Stock Option Plan
meeting the requirements of Section 10(a) of the Securities Act of 1933, as
amended (the "Securities Act").
ITEM 4. DESCRIPTION OF SECURITIES.
The class of securities to be offered under this Registration Statement
is registered under Section 12(g) of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares of Common Stock to be issued under this
Registration Statement will be passed upon for the Company by Morgan, Lewis &
Bockius LLP, Pittsburgh, Pennsylvania. As of September 25, 1998, Marlee S.
Myers, a partner of Morgan, Lewis & Bockius LLP, held options to acquire up to
40,000 shares of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of directors
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty, except for liability (a) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the DGCL or (d) for any transaction from which the
director derived an improper personal benefit. Article Eighth of the Company's
Amended and Restated Certificate of Incorporation, as amended, provides that the
personal liability of directors of the Company is eliminated to the fullest
extent permitted by Section 102(b)(7) of the DGCL.
II-1
<PAGE> 3
Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorneys'
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of his being a director or officer of the
corporation if it is determined that he acted in accordance with the applicable
standard of conduct set forth in such statutory provision. Article V of the
Company's Second Amended and Restated By-Laws provides that the Company will
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another entity, against certain liabilities, costs
and expenses. Article V further permits the Company to maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another entity against any liability asserted
against such person and incurred by such person in any such capacity or arising
out of his status as such, whether or not the Company would have the power to
indemnify such person against such liability under the DGCL. The Company
maintains directors' and officers' liability insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------ ---------------------------------------------------------------------------------
<S> <C>
4.1 Amended and Restated Certificate of Incorporation of FORE Systems, Inc. (as
amended by Certificate of Amendment dated May 6, 1996) (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1996).
4.2 Second Amended and Restated By-Laws of FORE Systems, Inc.
(as amended through March 5, 1997) (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1997).
5.1 Opinion of Morgan, Lewis & Bockius LLP as to the legality of the securities
being registered (filed herewith).
23.1 Consent of Morgan, Lewis & Bockius LLP (included in opinion filed as Exhibit
5.1).
23.2 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.3 Consent of PricewaterhouseCoopers LLP (filed herewith).
24.1 Power of Attorney (set forth on the signature page of this Registration
Statement).
99.1 Berkeley Networks, Inc. Substitute Stock Option Plan (filed herewith).
</TABLE>
ITEM 9. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes: (i) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this Registration Statement 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; (ii) 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; and (iii) 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.
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<PAGE> 4
(2) 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.
(3) 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 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 liability (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 Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Borough of Warrendale, Commonwealth of Pennsylvania on
September 25, 1998.
FORE Systems, Inc.
By: /s/ THOMAS J. GILL
-------------------------------------
Thomas J. Gill
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Eric C. Cooper and Thomas J. Gill, and
each of them, his 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 to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documentation in connection therewith, with the Commission, granting unto said
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 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 their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ ERIC C. COOPER Chairman and a Director September 25, 1998
------------------------------
Eric C. Cooper
/s/ THOMAS J. GILL President and Chief Executive Officer (Principal September 25, 1998
------------------------------ Executive Officer) and a Director
Thomas J. Gill
/s/ ROBERT D. SANSOM Senior Vice President and Chief Technical September 25, 1998
------------------------------ Officer and a Director
Robert D. Sansom
/s/ BRUCE E. HANEY Senior Vice President and Chief Financial September 25, 1998
------------------------------ Officer (Principal Financial Officer)
Bruce E. Haney
/s/ GARY J. BRUNNER Vice President, Controller and Treasurer September 25, 1998
------------------------------ (Principal Accounting Officer)
Gary J. Brunner
/s/ JOHN C. BAKER Director September 25, 1998
------------------------------
John C. Baker
Director September 25, 1998
------------------------------
Daniel W. McGlaughlin
Director September 25, 1998
------------------------------
Daniel R. Hesse
/s/ JOHN T. LAMACCHIA Director September 25, 1998
------------------------------
John T. LaMacchia
</TABLE>
<PAGE> 6
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------
5.1 Opinion of Morgan, Lewis & Bockius LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
99.1 Berkeley Networks, Inc. Substitute Stock Option Plan.
<PAGE> 1
EXHIBIT 5.1
MORGAN, LEWIS & BOCKIUS LLP
ONE OXFORD CENTRE
PITTSBURGH, PENNSYLVANIA 15219-1417
September 25, 1998
FORE Systems, Inc.
1000 FORE Drive
Warrendale, PA 15086-7502
Re: FORE Systems, Inc. - Form S-8 Registration Statement Relating to the
Berkeley Networks, Inc. Substitute Stock Option Plan
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Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the above-referenced Registration Statement on Form S-8 (the "Registration
Statement") for filing with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended (the "Act"), and the rules and the
regulations thereunder.
The Registration Statement relates to 618,999 shares of Common Stock, par value
$.01 per share (the "Common Stock"), of FORE Systems, Inc. which will be issued
pursuant to the Berkeley Networks, Inc. Substitute Stock Option Plan (the
"Plan"). We have examined the Company's Amended and Restated Certificate of
Incorporation, as amended, the Company's Second Amended and Restated By-Laws,
minutes and such other documents, and have made such inquiries of the Company's
officers, as we deemed appropriate. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all items submitted to us as
originals, and the conformity with originals of all items submitted to us as
copies.
Based upon the foregoing, it is our opinion that the Company's Common Stock
originally issued by the Company to eligible participants through the Plan, when
issued and delivered as contemplated by the Plan, will be validly issued, fully
paid and nonassessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ MORGAN, LEWIS & BOCKIUS LLP
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<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 22, 1998, which appears on page
24 of the Company's Annual Report on Form 10-K for the year ended March 31,
1998.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 25, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of FORE Systems, Inc. of our report dated June 5, 1998,
except as to Note 9 which is as of August 10, 1998, relating to the financial
statements of Berkeley Networks, Inc., which appears on page 7 of the Current
Report on Form 8-K of FORE Systems, Inc. dated September 11, 1998.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
PricewaterhouseCoopers LLP
San Jose, California
September 25, 1998
<PAGE> 1
EXHIBIT 99.1
BERKELEY NETWORKS, INC.
SUBSTITUTE STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of the Berkeley Networks, Inc. Substitute Stock Option Plan
(the "Plan") is to promote the interests of FORE Systems, Inc. (the "Company")
and the stockholders of the Company by (i) attracting and retaining employees of
outstanding ability; (ii) motivating such persons, by means of
performance-related incentives, to achieve longer-range performance goals; and
(iii) enabling such persons to participate in the long-term growth and financial
success of the Company.
The Plan was adopted in connection with the acquisition of Berkeley
Networks, Inc. ("Berkeley") by the Company pursuant to the Agreement and Plan of
Reorganization, dated as of August 25, 1998, by and among the Company, Fastwire
Acquisition Corporation and Berkeley (the "Reorganization Agreement"). The
Reorganization Agreement provides that all options to purchase shares of the
Common Stock of Berkeley (the "Canceled Options") outstanding immediately prior
to the Effective Date (as such term is defined in the Reorganization Agreement)
shall be canceled and the Company shall substitute in place thereof new options
to purchase that number of shares of the Company's Common Stock, par value $.01
per share (the "Common Stock"), that is equal to the number of shares of
Berkeley Common Stock that were subject to the Canceled Options, multiplied by
the Exchange Ratio (as defined in the Reorganization Agreement).
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") of the
Board of Directors of the Company (the "Board"). The Committee shall at all
times consist of two or more persons, each of whom qualifies as an "outside
director" within the meaning of Section 162(m) or any successor provision of the
Internal Revenue Code of 1986, as amended (the "Code") and applicable Treasury
regulations thereunder, if such qualification is deemed necessary in order for
the grant or the exercise of awards made under the Plan to qualify for any tax
or other material benefit to participants or the Company under applicable law.
The Committee is authorized to interpret the Plan, to prescribe, amend and
rescind rules and regulations to further the purposes of the Plan and to make
all other determinations necessary for the administration of the Plan. All such
actions by the Committee shall be final and binding.
3. SHARES
(a) SHARES AVAILABLE. Subject to adjustment as provided in Section 7,
awards in respect of an aggregate of up to 618,999 shares of the Common Stock
may be made under the Plan. During the term of the Plan, no participant shall be
granted awards in respect of more than 125,000 shares of Common Stock in any
calendar year. The Common Stock to be offered under the Plan shall be authorized
and unissued Common Stock, or issued Common Stock which shall have been
reacquired by the Company and held in its treasury.
(b) SHARES SUBJECT TO TERMINATED AWARDS. The Common Stock covered by any
unexercised portion of terminated stock options granted under the Plan may again
be subject to new awards under the Plan. In the event the purchase price of a
stock option is paid in whole or in part through the delivery of Common Stock,
only the net number of shares of Common Stock issuable in connection with the
exercise of the option shall be counted against the number of shares remaining
available for the grant of awards under the Plan.
4. FAIR MARKET VALUE
For all purposes under the Plan, the term "Fair Market Value" shall mean,
as of any applicable date: (i) if the principal securities market on which the
Common Stock is traded is a national securities exchange or The Nasdaq National
Market ("NNM"), the closing price of the Common Stock on such exchange or NNM,
as the case may be, or if no sale of the Common Stock shall have occurred on
such date, on the next preceding date on which there was a reported sale; or
(ii) if the Common Stock is not traded on a national securities exchange or NNM,
the closing price on such date as reported by The Nasdaq SmallCap Market, or if
no sale of the Common Stock shall have occurred on such
<PAGE> 2
date, on the next preceding date on which there was a reported sale; or (iii) if
the principal securities market on which the Common Stock is traded is not a
national securities exchange, NNM or The Nasdaq SmallCap Market, the average of
the bid and asked prices reported by the National Quotation Bureau, Inc.; or
(iv) if the price of the Common Stock is not so reported, the Fair Market Value
of the Common Stock as determined in good faith by the Committee.
5. AWARDS OF STOCK OPTIONS
(a) AWARDS. The Committee shall have the discretion to grant awards of
stock options under the Plan to employees of the Company or any of its
subsidiaries excluding employees who are officers or directors of the Company
("Awards"). The Committee shall determine and designate from time to time those
individuals who shall receive Awards and the number of shares of Common Stock to
be covered by, and the other terms and conditions of, each Award. In making its
determinations, the Committee shall take into account the present and potential
contributions of the respective individuals to the success of the Company, and
such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan. Each Award shall be evidenced by a
written stock option agreement in such form as the Committee shall approve from
time to time.
(b) DESIGNATION OF AWARDS. Awards may be in the form of stock options which
qualify as "incentive stock options" ("Incentive Stock Options") within the
meaning of Section 422 or any successor provision of the Code, or stock options
which do not so qualify ("Nonqualified Options"). Each Award shall be designated
in the applicable stock option agreement as an Incentive Stock Option or a
Nonqualified Option, as appropriate.
(c) EXERCISE PRICE. Awards shall be granted at an exercise price of not
less than 100% of the Fair Market Value on the date of grant. Incentive Stock
Options granted to a participant who at the time of such grant owns (within the
meaning of Section 424(d) of the Code) more than ten percent of the voting power
of all classes of stock of the Company (a "10% Holder") shall be granted at an
exercise price of not less than 110% of the Fair Market Value on the date of
grant.
(d) TERM AND TERMINATION. The Committee shall determine the term within
which each Award may be exercised, in whole or in part, provided that (i) such
term shall not exceed ten years from the date of grant; (ii) the term of an
Incentive Stock Option granted to a 10% Holder shall not exceed five years from
the date of grant; and (iii) the aggregate Fair Market Value (determined on the
date of grant) of Common Stock with respect to which Incentive Stock Options
granted to a participant under the Plan or any other plan of the Company and its
subsidiaries become exercisable for the first time in any single calendar year
shall not exceed $100,000. Unless otherwise determined by the Committee, all
rights to exercise Awards shall terminate on the first to occur of (i) the
scheduled expiration date as set forth in the applicable stock option agreement;
or (ii) ninety (90) days following the date of termination of employment for any
reason other than the death or permanent disability (as defined in the Code) of
the participant; or (iii) one (1) year following the date of termination of
employment by reason of the participant's death or permanent disability.
(e) OTHER TERMS AND CONDITIONS. The Committee shall have the discretion to
determine terms and conditions, consistent with the Plan, that will be
applicable to Awards. Awards granted to the same or different participants, or
at the same or different times, need not contain similar provisions.
6. ADJUSTMENTS TO REFLECT CAPITAL CHANGES
The number and kind of shares subject to outstanding Awards, the exercise
price applicable thereto and the number and kind of shares available for Awards
subsequently granted under the Plan shall be appropriately adjusted to reflect
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the awards granted under the Plan. The Committee shall
have the power and sole discretion to determine the nature and amount of the
adjustment to be made in each case. The adjustment so made shall be final and
binding on all participants.
7. PAYMENT FOR STOCK
Full payment for shares purchased upon exercise of awards granted under the
Plan shall be made at the time the award is exercised in whole or in part.
Payment of the purchase price shall be made in cash or in such other form as the
Committee may approve, including, without limitation, (i) by the delivery to the
Company by the participant of a promissory note containing such terms as the
Committee may determine; or (ii) by the delivery to the Company by the
participant of shares of Common Stock that have been held by the participant for
at least six months prior to exercise
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<PAGE> 3
of the award, valued at the Fair Market Value of such shares on the date of
exercise; or (iii) pursuant to a cashless exercise arrangement with a broker on
such terms as the Committee may determine; provided, however, that if payment is
made pursuant to clause (i), the par value of the purchased shares shall be paid
in cash. No shares of Common Stock shall be issued to the participant until such
payment has been made, and a participant shall have none of the rights of a
stockholder with respect to options held by such participant.
8. TRANSFERABILITY
Unless otherwise determined by the Committee with respect to Nonqualified
Options, options granted under the Plan shall not be transferable other than by
will or the laws of descent and distribution and are exercisable during a
participant's lifetime only by the participant.
9. WITHHOLDING
The Company shall have the right to deduct from all amounts paid to a
participant in cash as salary, bonus or other compensation any taxes required by
law to be withheld in respect of awards granted under the Plan. In the
Committee's discretion, a participant may be permitted to elect to have withheld
from the shares otherwise issuable to the participant, or to tender to the
Company, the number of shares of Common Stock whose Fair Market Value equals the
amount required to be withheld.
10. CONSTRUCTION OF THE PLAN
The validity, construction, interpretation, administration and effect of
the Plan and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to the conflict of law provisions of such laws.
11. NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT
Except as set forth in Section 6, no person shall have any claim of right
to be granted an award under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of the Company or any of its subsidiaries or as giving any
consultant, adviser or director any right to continue to serve in such capacity.
12. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES
Income recognized by a participant pursuant to the provisions of the Plan
shall not be included in the determination of benefits under any employee
pension benefit plan (as such term is defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974) or group insurance or other benefit
plans applicable to the participant which are maintained by the Company or any
of its subsidiaries, except as may be provided under the terms of such plans or
determined by resolution of the Board.
13. NO STRICT CONSTRUCTION
No rule of strict construction shall be implied against the Company, the
Committee or any other person in the interpretation of any of the terms of the
Plan, any award granted under the Plan or any rule or procedure established by
the Committee.
14. CAPTIONS
All Section headings used in the Plan are for convenience only, do not
constitute a part of the Plan and shall not be deemed to limit, characterize or
affect in any way any provisions of the Plan, and all provisions of the Plan
shall be construed as if no captions have been used in the Plan.
15. SEVERABILITY
Whenever possible, each provision in the Plan and every award at any time
granted under the Plan shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of the Plan or any award at
any time granted under the Plan shall be held to be prohibited by or invalid
under applicable law, then such provision shall be deemed amended to accomplish
the objectives of the provision as originally written to the fullest
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<PAGE> 4
extent permitted by law, and all other provisions of the Plan and every other
award at any time granted under the Plan shall remain in full force and effect.
16. LEGENDS
All certificates for Common Stock delivered under the Plan shall be subject
to such transfer and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange or quotation system upon which the
Common Stock is then listed or quoted and any applicable federal or state
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate references to such restrictions.
17. AMENDMENT
The Board may, by resolution, amend or revise the Plan. The Board may not
modify any options previously granted under the Plan in a manner adverse to the
holders thereof without the consent of such holders, except in accordance with
the provisions of Section 6.
18. EFFECTIVE DATE; TERMINATION OF PLAN
The Plan shall become effective on September 11, 1998. The Plan shall
terminate on September 10, 2008, unless it is earlier terminated by the Board.
Termination of the Plan shall not affect awards previously granted under the
Plan.
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