-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NPXtRGa6lO6UORK2BDTGsQS05lLscCiLbaQwUH1wihSp3CL9Vcd/3O7blrDZGgy3 sw1vgdW6Q9xOe9RHdVU7Lw== 0000950159-04-001093.txt : 20041223 0000950159-04-001093.hdr.sgml : 20041223 20041223161105 ACCESSION NUMBER: 0000950159-04-001093 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041217 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041223 DATE AS OF CHANGE: 20041223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENNSYLVANIA COMMERCE BANCORP INC CENTRAL INDEX KEY: 0001085706 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 251834776 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50961 FILM NUMBER: 041224432 BUSINESS ADDRESS: STREET 1: 100 SENATE AVE CITY: CAMP HILL STATE: PA ZIP: 17001-8599 BUSINESS PHONE: 7179755630 MAIL ADDRESS: STREET 1: 100 SENATE AVE CITY: CAMP HILL STATE: PA ZIP: 17001-8599 8-K 1 commerce8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) December 17, 2004 --------------------------------------------------------- Pennsylvania Commerce Bancorp, Inc. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 000-50961 25-1834776 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 100 Senate Avenue, Camp Hill, Pennsylvania 17011 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (717) 975-5630 ----------------------------- N/A ----------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01. Entry into a Material Definitive Agreement On December 17, 2004, the Board of Directors of Pennsylvania Commerce Bancorp, Inc. amended the Company's 1996 Employee Stock Option Plan and 2001 Directors Stock Option Plan. The amendment modifies the vesting schedules of the plan to be based upon the option holding period. The Employee Stock Option Plan previously included vesting schedules based upon the sooner of years of service or the option holding period. As a result of the amendment, the years-of-service component of the vesting schedule was deleted for stock options awarded after January 1, 2005. The Directors Stock Option Plan previously did not include a vesting schedule. As a result of the amendment, the vesting schedule for the Directors Stock Option Plan will now be the same as the schedule for the Employees Stock Option Plan for stock options awarded after January 1, 2005. Copies of the Amended Stock Option Plans are attached as Exhibits 10.1 and 10.2 to this report. The description of the plans contained in this report is qualified by reference to the plans themselves. Item 9.01. Financial Statements and Exhibits (c) Exhibits Exhibit No. ----------- 10.1 Amended 1996 Employee Stock Option Plan 10.2 Amended 2001 Directors Stock Option Plan SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Pennsylvania Commerce Bancorp, Inc. ------------------------------------- (Registrant) Date: December 23, 2004 /s/ Gary L. Nalbandian ------------------------------------- Gary L. Nalbandian, Chairman and President EXHIBIT INDEX Exhibit No. DESCRIPTION - ---------- ------------ 10.1 Amended 1996 Employee Stock Option Plan 10.2 Amended 2001 Directors Stock Option Plan EX-10 2 exhibit10-1.txt EXHIBIT 10.1 AMENDED 1996 EMPLOYEE STOCK OPTION PLAN OF PENNSYLVANIA COMMERCE BANCORP, INC AS APPROVED IN 2001 1. Purpose of Plan --------------- The purpose of this Plan is to enable Pennsylvania Commerce Bancorp, Inc. (hereinafter referred to as "Commerce") to continue to compete successfully in attracting and retaining key employees with outstanding abilities by making it possible for them to purchase shares of Commerce's Common Stock on terms which will give them a more direct and continuing interest in the future success of Commerce. 2. Definitions ------------ "Commerce" means Pennsylvania Commerce Bancorp, Inc., a Pennsylvania corporation and bank holding company. "Board" means the Board of Directors of Commerce. "Committee" means a committee established by the Board. The Committee shall consist of three or more members of the Board. No member of the Committee may receive Options under the Plan. The Personnel Committee may be the Committee if it meets these qualifications. "Employees" means employees, including officers, regularly employed on a salary basis by Commerce. "Employment with Commerce", or words to that effect, shall include employment by any subsidiary or affiliate of Commerce. "Fair Market Value" of a share of Commerce's Common Stock shall mean its closing sale price on the principal stock exchange on which the stock is traded on the date as of which the value is being determined. If there is no reported sale on that date, the Fair Market Value shall be the closing sale on the next preceding day for which a sale was reported. However, the Committee, in the good faith exercise of its discretion, may determine that the closing sale price does not reflect the true Fair Market Value of a share of Common Stock. If it so determines, the Fair Market Value shall be the average closing sale price on the principal stock exchange on which Commerce's Common Stock is traded during the twenty (20) day period immediately preceding the date on which Fair Market Value is being determined. "ISO" means an incentive stock option described in Section 422 of the Internal Revenue Code of 1986, as amended. "NQSO" means a stock option, which is not described in Section 422 of the Internal Revenue Code of 1986, as amended. "Option" means an option, either in the form of an ISO or NQSO, granted in accordance with the terms of this Plan. "Optionee" means a person to whom an option has been granted under this Plan, which has not expired or been fully exercised or surrendered. "Shares" means shares of Common Stock of Commerce. 3. Limits on Number of Shares -------------------------- The total number of Shares for which Options may be granted under this Plan shall not exceed in the aggregate 527,369 Shares. This number shall be appropriately adjusted if the number of issued Shares shall be increased or reduced by change in par value, combination, or split-up, reclassification, distribution of a dividend payable in stock, or the like. Shares covered by Options, which have expired, or which have been surrendered may again be optioned under this Plan. Options may be granted in the form of ISOs or NQSOs. 4. Adjustment of Options --------------------- The number of Shares optioned from time to time to individual Optionees under the Plan, and the Option prices therefor, shall be appropriately adjusted to reflect any changes in par value, combination, split-up, reclassification, distribution of dividend payable in stock, or the like. 5. Granting of Options ------------------- The Board, or if the Board so determines, the Committee, is authorized to grant Options to selected employees pursuant to this Plan during the calendar year 1996 and in any calendar year thereafter to December 31, 2005. The number of Shares, if any, optioned in each year, the employees to whom Options are granted, and the number of Shares optioned to each employee selected shall be wholly within the discretion of the Board or the Committee. The Board may grant both ISOs and NQSOs to the same employee. Board action on Options and administration of this Plan shall be only upon the advice and recommendation of the Committee if the Board has appointed a Committee. 6. Terms of ISOs ------------- ISOs granted under this Plan shall contain the following terms: (a) The ISO price shall be fixed by the Board or the Committee but shall in no event be less than 100% of the fair market value of the Shares subject to the ISO on the date the ISO is granted. The ISO price, in the case of an Optionee who, at the time the Option is granted, owns more than 10% of the outstanding Shares of Commerce's Common Stock shall be at least 110% of the fair market value of the Shares subject to the ISO on the date the ISO is granted. (b) ISOs shall not be transferable otherwise than by will or by the laws of descent and distribution. No ISO shall be subject, in whole or in part, to attachment, execution or levy of any kind. (c) Each ISO shall expire and all rights under the ISO shall end at the expiration of the exercise period for the ISO, which shall not be more than ten years after the date on which it was granted. Provided, however, that in the case of an Optionee who, at the time the Option is granted, owns more than 10% of the outstanding shares of Commerce's Common Stock, ISOs shall expire no more than five years after the date on which the ISO was granted. (d) ISOs shall be exercisable only by the Optionee during the Optionee's lifetime. ISOs may be exercised only while employed by Commerce or within (i) three years after retirement, or (ii) three months after termination of employment (but in any event not later than the end of the period fixed by the Board or the Committee of the Board in accordance with the provisions of paragraph (c) of Section 6. An ISO is exercisable by retired or terminated Optionees only to the extent the ISO was exercisable by the Optionee on the last day of his or her employment with Commerce. For purposes of this paragraph (d), retirement shall mean termination of employment by an Optionee who has attained age 62. If an Optionee retires due to disability, the ISOs granted to the Optionee shall be exercisable within 12 months of the date of retirement (but in any event not later than the end of the period fixed by the Board or the Committee of the Board in accordance with the provisions of paragraph (c) of this Section 6. (e) If an Optionee dies within a period during which an ISO could have been exercised by the Optionee, the ISO may be exercised within three years after the Optionee's death (but not later than the end of the period fixed by the Board or the Committee of the Board in accordance with the provisions of paragraph (c) of this Section 6) by those entitled under the Optionee's will or the laws of descent and distribution, but only if and to the extent the ISO was exercisable by the Optionee immediately prior to the Optionee's death. (f) If Optionee's employment with Commerce is terminated by Commerce for the misconduct of Optionee, all ISOs granted to the Optionee prior to termination shall be forfeited by Optionee and rendered unexercisable. (g) ISOs may be exercised in whole or in part from time to time, subject to the provisions of this Plan and to such additional or different terms regarding the exercise of the ISOs as the Board or the Committee of the Board may fix at the time of grant. (h) ISOs shall not be granted to any individual pursuant to this Plan, the effect of which would be to permit that individual first to exercise ISOs, in any calendar year, for the purchase of Shares having a fair market value in excess of $100,000 (determined at the time of the grant of the ISOs. Any Optionee may exercise ISOs for the purchase of Shares valued in excess of $100,000 (determined at the grant of the ISOs) in any calendar year, but only if the right to exercise the ISOs shall have first become available in prior calendar years. 7. Terms of NQSOs. --------------- NQSOs granted under this Plan shall contain the following terms: (a) The NQSO price shall be fixed by the Board or the Committee, and may be less than 100% of the fair market of the Shares subject to the NQSO on the date the NQSO is granted. (b) NQSOs shall not be transferable otherwise than by will or by the laws of descent and distribution. No NQSO shall be subject, in whole or in part, to attachment, execution or levy of any kind. (c) Each NQSO shall expire and all rights under the NQSO shall end at the expiration of the exercise period for the NQSO, which shall not be more than ten years after the date on which it was granted. The Board or the Committee shall establish the exercise period for each NQSO, subject in all cases to paragraphs (d), (e) and (f) of this Section 7. (d) NQSOs shall be exercisable only by the Optionee during the Optionee's lifetime. NQSOs may be exercised only while employed by Commerce or within (i) three years after retirement, or (ii) three months after termination of employment (but in any event not later than the end of the period fixed by the Board or the Committee of the Board in accordance with the provisions of paragraph (c) of Section 7). An NQSO is exercisable by retired or terminated Optionees only to the extent the NQSO was exercisable by the Optionee on the last day of his or her employment with Commerce. For purposes of this paragraph (d), retirement shall mean termination of employment by an Optionee who has attained age 62. If an Optionee retires due to disability, the NQSOs granted to the Optionee shall be exercisable within 12 months of the date of retirement (but in any event not later than the end of the period fixed by the Board or the Committee of the Board in accordance with the provisions of paragraph (c) of this Section 7). (e) If an Optionee dies within a period during which an NQSO could have been exercised by the Optionee, the NQSO may be exercised within three years after the Optionee's death (but not later than the end of the period fixed by the Board or the Committee of the Board in accordance with the provisions of paragraph (c) of this Section 7) by those entitled under the Optionee's will or the laws of descent and distribution, but only if and to the extent the NQSO was exercisable by the Optionee immediately prior to the Optionee's death. (f) If Optionee's employment with Commerce is terminated by Commerce for the misconduct of Optionee, all NQSOs granted to the Optionee prior to termination shall be forfeited by Optionee and rendered unexercisable. (g) NQSOs may be exercised in whole or in part from time to time, subject to the provisions of this Plan and to such additional or different terms regarding the exercise of the NQSOs as the Board or the Committee of the Board may fix at the time of grant. 8. Vesting of Options ------------------ (a) Options Granted Prior to January 1, 2005. No Option granted under this Plan may be exercised within one year from the date of the grant of the Option. Options held more than one year may be exercised based upon years of service or upon the Option holding period, whichever is sooner, pursuant to the following schedule: Years of Service Percent Vested ---------------- -------------- Less than 3 years 25% More than 3 years and less than 6 years 50 More than 6 years and less than 8 years 75 More than 8 years 100 Option Holding Period Percent Vested --------------------- -------------- Less than 1 year 0% More than 1 year and less than 2 years 25 More than 2 years and less than 3 years 50 More than 3 years and less than 4 years 75 More than 4 years 100 (b) Options Granted After January 1, 2005. No Option granted under this Plan may be exercised within one year from the date of the grant of the Option. Options held more than one year may be exercised based upon the Option holding period, pursuant to the following schedule: Option Holding Period Percent Vested --------------------- -------------- Less than 1 year 0% More than 1 year and less than 2 years 25 More than 2 years and less than 3 years 50 More than 3 years and less than 4 years 75 More than 4 years 100 9. Exercise Eligibility Period Following Termination of Employment ---------------------------------------------------------------- Options granted under this Plan less than one year prior to date of termination of employment are not exercisable under any circumstances. Options granted at least one year prior to termination of employment must be exercised prior to the expiration date of the Option and within the period set forth below depending upon the reason for termination:
Exercise Eligibility Options Eligible Period for Option Termination Reason for Exercise Tax Treatment ------------------ -------------- ----------------- Retirement 100% of outstanding 3 years from Options retirement date Death while employed 100% of outstanding 3 years from Options date of death Total & permanent 100% of outstanding 1 year from term- disability Options ination date Misconduct None Not applicable Any other reason Any Option 100% vest- 3 months from ed plus the vested termination date portion of the next oldest Option
10. Reorganization of Commerce -------------------------- In the event that Commerce is succeeded by another corporation or bank in a reorganization, merger, consolidation, acquisition of property or stock, separation or liquidation, the successor corporation or bank shall assume the outstanding Options granted under this Plan or shall substitute new Options for them. 11. Delivery of Shares -------------------------- No Shares shall be delivered upon the exercise of an Option until the Option price has been paid in full in cash or, at the discretion of the Board or the Committee, in whole or in part in Commerce's Common Stock owned by the Optionee valued at fair market value on the date of exercise. If required by the Board, no Shares will be delivered upon the exercise of an Option until the Optionee has given Commerce a satisfactory written statement that he is purchasing the Shares for investment and not with a view to the sale or distribution of Shares. 12. Continuation of Employment -------------------------- Neither this Plan nor any Option granted under this Plan shall confer upon any employee any right to continue in the employ of Commerce or limit in any respect the right of Commerce or to terminate the employee's employment at any time. 13. Administration The Board or the Committee may make rules and regulations and establish procedures as it deems appropriate for the administration of this Plan. In the event of a disagreement as to the interpretation of this Plan, any amendment thereto, any rule, regulation or procedure thereunder, or as to any right or obligation arising from or related to this Plan, the decision of the Board or the Committee shall be final and binding upon all persons in interest, including Commerce, Optionees, and shareholders of Commerce. 14. Reservation of Shares ---------------------- Shares delivered upon the exercise of an Option shall, in the discretion of the Board or the Committee, be either authorized but unissued Shares, or previously issued Shares acquired by Commerce through purchase in the open market or otherwise, or a combination of both. Commerce shall be under no obligation to reserve or to retain in its treasury any particular number of Shares at any time, and no particular Shares, whether unissued or held as treasury Shares, shall be identified as those optioned under this Plan. 15. Amendment of Plan ----------------- The Board without further action by the shareholders may amend this Plan from time to time as it deems desirable. However, no amendment shall increase the maximum number of Shares for which Options may be granted, reduce the minimum Option price, extend the maximum Option period, or permit the granting of Options after December 31, 2005. 16. Termination of the Plan ----------------------- The Board may, in its discretion, terminate this Plan at any time prior to December 31, 2005. Termination of the Plan shall not deprive Optionees of Options granted prior to termination of the Plan. 17. Effective Date - Shareholder Approval ------------------------------------- This Plan shall become effective as of January 2, 1996, and Options may be granted at any time on or after that date. However, no Option may be exercised unless this Plan is approved by a vote of the holders of a majority of the outstanding Shares of Commerce's Common Stock at a meeting of shareholders of Commerce held within twelve months after January 2, 1996. EX-10 3 exhibit10-2.txt EXHIBIT 10.2 AMENDED 2001 DIRECTORS STOCK OPTION PLAN PENNSYLVANIA COMMERCE BANCORP, INC. ----------------------------------- 1. Purpose of Plan --------------- The purpose of this Plan is to enable Pennsylvania Commerce Bancorp, Inc. (hereinafter referred to as the "Company") to continue to attract and retain the services of nonemployee directors, directors emeritus, advisory directors, consultants and others with outstanding abilities by making it possible for them to purchase shares of the Company's Common Stock on terms which will give them a direct and continuing interest in the future success of the Company's business. 2. Definitions "Company" means Pennsylvania Commerce Bancorp, Inc., a Pennsylvania business corporation. "Committee of the Board" means a committee established by the Board consisting of three or more members of the Board. The Personnel Committee may be this committee. "Director" for purposes of this Plan means a director of the Company who is not regularly employed on a salary basis by the Company or its subsidiary, Commerce Bank/Harrisburg, N.A. "Eligible Participant" for purposes of this Plan means a Director, advisory director, director emeritus, consultant, or other individual the Board deems beneficial to the Company who is not regularly employed on a salary basis by the Company or its subsidiary, Commerce Bank/Harrisburg, N.A. "Shares" means shares of Common Stock of the Company. "Board" means the Board of Directors of the Company. "Optionee" means a person to whom an option has been granted under this Plan which has not expired or been fully exercised or surrendered. 3. Limits on Options ----------------- The total number of shares for which options may be granted under this Plan shall not exceed in the aggregate 100,000 shares. This number shall be appropriately adjusted if the number of issued shares shall be increased or reduced by change in par value, combination, or split-up, reclassification, distribution of a dividend payable in stock, or the like. The number of shares previously optioned and not theretofore delivered and the option prices therefor shall likewise be appropriately adjusted whenever the number of issued shares shall be increased or reduced by any such procedure after the date or dates on which such shares were optioned. Shares covered by options which have expired or which have been surrendered may again be optioned under this Plan. 4. Adjustment of Options --------------------- The number of shares optioned from time to time to individual Optionees under the Plan, and the option prices therefor, shall be appropriately adjusted to reflect any changes in par value, combination, split-up, reclassification, distribution of dividend payable in stock, or the like. 5. Granting of Options ------------------- The Board, or if the Board so determines, the Committee of the Board, is authorized to grant options to Eligible Participants pursuant to this Plan during the calendar year 2001 and in any calendar year thereafter to December 31, 2010, but not thereafter. The number of shares, if any, optioned in each year, the Optionees to whom options are granted, and the number of shares optioned to each Optionee selected shall be wholly within the discretion of the Board or the Committee of the Board. If the Board acts, however, it shall do so only upon the advice and recommendation of the Committee of the Board upon all matters relating to the granting of options and the administration of this Plan, including determination of the rights and obligations of the Optionees. Any options granted in a given year shall be granted in February of that year. 6. Terms of Stock Options ---------------------- The terms of stock options granted under this Plan shall be as follows: (a) The option price shall be fixed by the Board or the Committee of the Board but shall in no event be less than 100% of the fair market value of the shares subject to the option on the date the option is granted. The fair market value of the shares shall be the average of the high and low sale prices of the Common Stock as reported on the NASDAQ Small Cap Market System on the trading day immediately preceding the date of grant or the closest preceding date if there are no high and low sale prices available on that date. If there are no high and low sale prices available for the Common Stock for the 30 trading days preceding the applicable grant date, then the Board of Directors shall make a determination of the option price on the basis of information which it determines best reflects current fair market value. (b) Options shall not be transferable otherwise than by will or by the laws of descent and distribution. No option shall be subject, in whole or in part, to attachment, execution or levy of any kind. (c) Each option shall expire and all rights thereunder shall end ten (10) years after the date on which it was granted, subject in all cases to earlier expiration as provided in paragraphs (d), (e) and (f) of this Section 6 in the event an Optionee ceases to serve in the capacity to which he has been appointed or dies. (d) During the lifetime of an Optionee, his/her option shall be exercisable only by him/her and only while serving in that capacity to which he has been appointed or within that period of time after he/she otherwise ceases so to serve as determined by the Board of Directors (but in any event not later than the end of the period specified in paragraph (c) of this, Section 6). (e) If an Optionee dies within a period during which his/her option could have been exercised by him, his/her option may be exercised within three months after his/her death (but not later than the end of the period specified in paragraph (c) of this Section 6) by those entitled under his/her will or the laws of descent and distribution, but only if and to the extent the option was exercisable by him/her immediately prior to his/her death. (f) If Optionee is removed as a Director for any of the reasons specified in Section 1726(b) of the Pennsylvania Business Corporation Law of 1988 ("BCL"), or from any other position to which he has been appointed for reasons similar to the reasons specified in Section 1726(b) of the BCL, all options theretofore granted to the Optionee preceding such removal shall be forfeited by Optionee and rendered unexercisable. (g) Subject to the foregoing terms and to such additional or different terms regarding the exercise of the options as the Board or the Committee of the Board may fix at the time of grant, options may be exercised in whole or in part from time to time. 7. Vesting of Options ------------------ No Option granted under this Plan after January 1, 2005 may be exercised within one year from the date of the grant of the Option. Options held more than one year may be exercised based upon the Option holding period, pursuant to the following schedule: 2 Option Holding Period Percent Vested --------------------- -------------- Less than 1 year 0% More than 1 year and less than 2 years 25 More than 2 years and less than 3 years 50 More than 3 years and less than 4 years 75 More than 4 years 100 8. Exercise of Options ------------------ No option granted under this Plan may be exercised before the first to occur of (i) one year from the date of option grant, or (ii) a Change in Control of the Company. Thereafter, options may be exercised in whole, or from time to time in part, for up to the total number of shares then subject to the option, less the number of shares previously purchased by exercise of the option. 9. Change in Control ------------------ For the purposes of this Agreement, a Change in Control with respect to any Optionee shall be deemed to have occurred when any of the following events shall have occurred without the prior written consent of such Optionee: (a) A change in identity of at least four (4) members of the Board of Directors or the addition of four (4) or more new members to the Board of Directors, or any combination of the foregoing, within any two (2) consecutive calendar year periods. (b) A person or group acting in concert as described in Section 13(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") proposes to hold or acquire beneficial ownership within the meaning of Rule 13(d)(3) promulgated under the Exchange Act of a number of voting shares of the Company which constitutes either more than 50%, of the shares which voted in the election of Directors of the Company at the Shareholder's Meeting immediately preceding such determination, or (ii) more than 50% of the Company's outstanding voting shares. The term "proposes to hold or acquire"shall mean the right of a person or group to acquire or merge (whether such right is exercisable immediately or only after the passage of time, or upon the receipt of such regulatory approvals as are required by applicable law) pursuant to an agreement, arrangement or understanding (whether or not in writing) or upon the exercise or conversion of rights, exchange rights, warrants or options, or otherwise. (c) A person or group acting in concert as described in Section 13(d)(2) of the Exchange Act has commenced a tender or exchange offer with respect to the voting shares of the Company or securities convertible or exchangeable into voting shares of the Company. (d) A person or group acting in concert as described in Section 13(d)(2) of the Exchange Act has the right to vote shares of the Company pursuant to any agreement, arrangement or understanding (whether or not in writing), either (i) more than 50% of the shares which voted in the election of Directors of the Company at the Shareholder's Meeting immediately preceding such determination, or (ii) more than 50% of the Company's outstanding voting shares; provided, however, that such person or group acting in concert, shall not be deemed to have acquired such shares if the agreement, arrangement or understanding to vote such securities rises solely from a revocable proxy given in response to a Proxy Solicitation by management of the Company in connection with the Annual Meeting of the Shareholders of the Company. 10. Reorganization of the Company ----------------------------- In the event that the Company is succeeded by another corporation or Company in a reorganization, merger, consolidation, acquisition of property or stock, separation or liquidation, the successor corporation or Company shall assume the outstanding options granted under this Plan or shall substitute new options for them. 3 11. Delivery of Shares ------------------ No shares shall be delivered upon the exercise of an option until the option price has been paid in full in cash or, at the discretion of the Board or the Committee of the Board, in whole or in part in the Company's Common Stock owned by the Optionee valued at fair market value on the date of exercise. If required by the Board, no shares will be delivered upon the exercise of an option until the Optionee has given the Company a satisfactory written statement that he/she is purchasing the shares for investment and not with a view to the sale or distribution of any such shares. 12. Administration -------------- The Board or the Committee of the Board may make such rules and regulations and establish such procedures, as it deems appropriate for the administration of this Plan. In the event of a disagreement as to the interpretation of this Plan or any amendment thereto or any rule, regulation or procedure thereunder or as to any right or obligation arising from or related to this Plan, the decision of the Board or the Committee of the Board (excluding, however, any Optionee(s) affected by such dispute or disagreement) shall be final and binding upon all persons in interest, including the Company and its shareholders. 12. Reservation of Shares --------------------- Shares delivered upon the exercise of an option shall, in the discretion of the Board or the Committee of the Board, be either shares heretofore or hereafter authorized and then unissued, or previously issued shares heretofore or hereafter acquired through purchase in the open market or otherwise, or some of each. The Company shall be under no obligation to reserve or to retain in its treasury any particular number of shares at any time, and no particular shares, whether unissued or held as treasury shares, shall be identified as those optioned under this Plan. 13. Amendment of Plan ----------------- The Board may amend this Plan from time to time as it deems desirable. 14. Termination of the Plan ----------------------- The Board may, in its discretion, terminate this Plan at any time prior to December 31, 2010, but no such termination shall deprive Optionees of their rights under their options. 15. Effective Date -------------- This Plan shall become effective on January 1, 2001, and options hereunder may be granted at any time on or after that date. -----END PRIVACY-ENHANCED MESSAGE-----