ERIE FAMILY LIFE INSURANCE CO
EX-10.49
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<TYPE>EX-10.49
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<DESCRIPTION>EX-10.49
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<P align="center" style="font-size: 10pt"><B>EXHIBIT 10.49</B>



<P align="center" style="font-size: 10pt"><B>ERIE INDEMNITY COMPANY</B><BR>
<U><B>LONG-TERM INCENTIVE PLAN</B></U>



<P align="left" style="font-size: 10pt"><B>SECTION 1. GENERAL</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <U>Purpose</U>. The purposes of the Long-Term Incentive Plan (the &#147;<U>Plan</U>&#148;) are:
(a)&nbsp;to enhance the growth and profitability of Erie Indemnity Company, a Pennsylvania business
corporation (the &#147;<U>Company</U>&#148;), and its subsidiaries and affiliates, including Erie Family
Life Insurance Company, and the Erie Insurance Exchange (collectively, the &#147;<U>Erie Insurance
Group</U>&#148;) by providing the incentive of long-term rewards to key employees who are capable of
having a significant impact on the performance of the Company and its subsidiaries and affiliates;
(b)&nbsp;to attract and retain employees of outstanding competence and ability; and (c)&nbsp;to further align
the interests of such employees with those of the shareholders of the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <U>Administration of the Plan</U>. The Plan shall be administered by the Executive
Compensation and Development Committee (the &#147;<U>Committee</U>&#148;) of the Company&#146;s Board of
Directors (the &#147;<U>Board</U>&#148;) or other committee appointed by the Board, which shall be comprised
of not less than two members of the Board, each of whom at the time of appointment to the Committee
and at all times during service as a member of the Committee shall be both (1)&nbsp;a &#147;non-employee
director&#148; as then defined under Rule&nbsp;16b-3 under the Securities Exchange Act of 1934, as amended
(the &#147;<U>Exchange Act</U>&#148;), or any successor rule and (2)&nbsp;an &#147;outside director&#148; as then defined
in the regulations under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
&#147;<U>Code</U>&#148;), or any successor provision. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to: (i)&nbsp;select Participants after receiving the
recommendations of the management of the Company; (ii)&nbsp;determine the number of Restricted
Performance Shares, as described in Section&nbsp;2 subject to each grant; (iii)&nbsp;determine the time or
times when grants are to be made or are to be effective, including the Performance Period for each
grant; (iv)&nbsp;determine the terms and conditions, including the Performance Goals, subject to which
grants may be made; (v)&nbsp;extend the term of any grant; (vi)&nbsp;prescribe the form or forms of the
instruments evidencing any grants made hereunder, provided that such forms are consistent with the
Plan; (vii)&nbsp;adopt, amend, and rescind such rules and regulations as, in its opinion, may be
advisable for the administration of the Plan; (viii)&nbsp;construe and interpret the Plan and all rules,
regulations, and instruments utilized thereunder; and (ix)&nbsp;make all determinations deemed advisable
or necessary for the administration of the Plan. All determinations by the Committee shall be
final and binding.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <U>Eligibility and Participation</U>. Participation in the Plan shall be limited to
officers (who may also be members of the Board) and other salaried key employees of the Company and
its subsidiaries and affiliates as identified by the Committee to participate in the Plan.
Employees who are granted awards under the Plan are referred to herein as &#147;<U>Participants</U>&#148;.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <U>Shares Available</U>. The aggregate net number of shares of Class&nbsp;A (non-voting)
Common Stock of the Company (the &#147;<U>Common Stock</U>&#148;) which may be paid and as to which grants
of Restricted Performance Shares may be made under the Plan is 1,000,000 shares, subject to
adjustment and substitution as set forth in Section&nbsp;3. The Company or its agent shall repurchase
outstanding shares of Common Stock in order to satisfy the Company&#146;s obligation under the Plan to
pay awards in shares of Common Stock. If shares of Common Stock are forfeited to the Company
pursuant to the restrictions applicable to Restricted Performance Shares or are withheld or
delivered to the Company in satisfaction of a tax withholding obligation, the shares so forfeited,
withheld or delivered shall again be available for purposes of the Plan.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 <U>New Participants</U>. Except as provided in this Section&nbsp;1.5, an employee who is not
a Participant as of the first day of a Performance Period shall not become a Participant for that
Performance Period. New employees of the Company or its subsidiaries and affiliates hired during a
Performance Period, and employees promoted during the Performance Period who were not eligible to
participate in the Plan at the beginning of the Performance Period, may, as determined by the
Committee in its sole discretion, become a Participant during a Performance Period and participate
in the Plan for such Performance Period on a pro-rata basis (based on the number of days in the
Performance Period that such employee is an employee who is deemed eligible to participate in the
Plan); provided, that if the new or promoted employee is a covered employee (as such term is
defined under Section 162(m) of the Code or any successor section thereto and the regulations
thereunder), then the employee shall not be eligible to participate in the Plan unless he or she
becomes a Participant effective not later than 90&nbsp;days after the beginning of the Performance
Period.


<P align="left" style="font-size: 10pt"><B>SECTION 2. RESTRICTED PERFORMANCE SHARES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <U>Restricted Performance Shares</U>. The Committee is authorized to grant Restricted
Performance Shares to Participants on the following terms and conditions:



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <I>Right to Payment of Shares. </I>Restricted Performance Shares shall represent a
right to receive shares of Common Stock based on the achievement, or the level of
achievement, during a specified Performance Period of one or more Performance Goals
established by the Committee at the time of the award.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <I>Terms of Restricted Performance Shares. </I>At the time Restricted Performance
Shares are granted, the Committee shall cause to be set forth in the agreement covering
such award or otherwise in writing (1)&nbsp;the Performance Goals applicable to the award, the
weighting of such goals, and the Performance Period during which the achievement of the
Performance Goals shall be measured, (2)&nbsp;the number of shares of Common Stock which may be
earned by the Participant based on the achievement, or the level of achievement, of the
Performance Goals or the formula by which such amount shall be determined and (3)&nbsp;such
other terms and conditions applicable to the award as the Committee may, in its discretion,
determine to include therein. The terms so established by the Committee shall be objective
such that a third party having knowledge of the relevant facts could determine whether or
not any Performance Goal has been


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<P align="left" style="margin-left:3%; font-size: 10pt">achieved, or the extent of such achievement, and the amount, if any, which has been
earned by the Participant based on such performance.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <I>Performance Goals. </I>&#147;Performance Goals&#148; shall mean one or more preestablished,
objective measures of performance during a specified &#147;<U>Performance Period</U>&#148;, selected
by the Committee in its discretion. Performance Goals may be based upon one or more of the
following objective performance measures and expressed in either, or a combination of,
absolute or relative values: (i)&nbsp;adjusted combined ratio of property and casualty insurance
operations of Erie Insurance Group, (ii)&nbsp;growth in direct written premiums of Erie
Insurance Group, (iii)&nbsp;the statutory or GAAP combined ratio, loss ratio, expense ratio or
dividend ratio of the property and casualty insurance operations of the Erie Insurance
Group, (iv)&nbsp;net income (including net income before or after taxes and net income before
interest, taxes, depreciation and amortization), net income per share and net income per
share growth rate, (v)&nbsp;operating revenue, net premiums written or net premiums earned, (vi)
operating expenses, cost of management operations or underwriting expenses, (vii)&nbsp;cash
flow, (viii)&nbsp;return on capital, shareholders&#146; equity, assets or investments, (ix)&nbsp;stock
price, (x)&nbsp;market share or (xi)&nbsp;gross margins. Performance measures may be based on the
performance of the Erie Insurance Group, the Company or a subsidiary or subsidiaries or
affiliate of the Company, a division, department, business unit or other portion thereof, a
product line or products, or any combination the foregoing and/or upon a comparison of such
performance with the performance of a peer group of corporations or other measure selected
or defined by the Committee at the time of making the award of Restricted Performance
Shares. The Committee may in its discretion also determine to use other objective
performance measures as Performance Goals.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <I>Committee Certification. </I>Following completion of the applicable Performance
Period, and prior to any payment of shares of Common Stock to the Participant for
Restricted Performance Shares, the Committee shall determine, in accordance with the terms
of the Restricted Performance Shares, and certify in writing whether the applicable
Performance Goal or Goals were achieved, or the level of such achievement, and the number
of shares, if any, earned by the Participant based upon such performance. For this
purpose, approved minutes of the meeting of the Committee at which certification is made
shall be sufficient to satisfy the requirement of a written certification.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <I>Maximum Individual Payments. </I>The maximum number of shares of Common Stock which
may be earned under the Plan by any single Participant during any one calendar year shall
be limited to 250,000 shares. The limitation in the preceding sentence shall be
interpreted and applied in a manner consistent with Section 162(m) of the Code.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <I>Termination of Employment.</I>


<P>
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    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(a)&nbsp;&nbsp;</TD>
    <TD><I>Death, Disability or Normal or Early Retirement.</I>
If a Participant ceases to be an employee of the Company, its</TD>
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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD>subsidiaries and affiliates prior to the end of a Performance Period
by reason of death, disability (meaning total and permanent disability
within the meaning of Section&nbsp;22(e)(3) of the Code) or Normal or Early
Retirement (as defined in the Company&#146;s qualified pension plan for
employees), the Participant may receive all or such portion of his or
her award as may be determined by the Committee in its sole
discretion; provided, that the Participant shall not receive less than
the total number of shares of Common Stock earned pursuant to such
Restricted Performance Shares held by such Participant based upon
performance during the reduced Performance Period which is deemed to
end on the last day of the year in which such termination occurs.
Such award will be paid in the form of shares of Common Stock in the
manner provided for in Section&nbsp;2.1(vii).</TD>
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    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(b)&nbsp;&nbsp;</TD>
    <TD><I>Other Terminations. </I>If a Participant ceases to
be an employee of the Company, its subsidiaries and affiliates prior to
the end of a Performance Period for any reason other than death,
disability or Normal or Early Retirement as described in subsection (a),
above, the Participant may receive all or such portion of his or her
award as may be determined by the Committee in its sole discretion;
provided, that a Participant who is terminated for cause (as defined in
such employee&#146;s employment agreement with the Company or its subsidiary
or affiliate, if no such agreement exists, as defined by the Committee)
shall not be entitled to receive payment of any award for any
Performance Period.</TD>
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<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <I>Payment. </I>As soon as reasonably practicable following the Committee&#146;s
determination and certification, as set forth in Section&nbsp;2.1(iv), the Company shall pay to
the Participant the number of shares of Common Stock earned pursuant to the award of
Restricted Performance Shares held by the Participant for the relevant Performance Period.


<P align="left" style="font-size: 10pt"><B>SECTION 3. ADJUSTMENT PROVISIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <U>Adjustments Generally</U>. If a dividend or other distribution shall be declared upon
the Common Stock payable in shares of Common Stock, the number of shares of Common Stock then
subject to any outstanding Restricted Performance Shares, the number of shares of Common Stock
which may be issued under the Plan but not then subject to outstanding Restricted Performance
Shares and the maximum number of shares as to which Restricted Performance Shares may be granted
and as to which shares may be awarded under Section&nbsp;2.1(v), shall be adjusted by adding thereto the
number of shares of Common Stock which would have been distributable thereon if such shares had
been outstanding on the date fixed for determining the shareholders entitled to receive such stock
dividend or distribution.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <U>Recapitalizations, Mergers, Etc</U>. If the outstanding shares of Common Stock shall
be changed into or exchangeable for a different number or kind of shares of stock or other
securities of the Company or another corporation, or cash or other property, whether through
reorganization, reclassification, recapitalization, stock split-up, combination of shares, merger
or consolidation, then there shall be substituted for each share of Common Stock subject to any
then outstanding Restricted Performance Share, and for each share of Common Stock which may be
issued under the Plan but which is not then subject to any outstanding Restricted Performance
Share, the number and kind of shares of stock or other securities (and in the case of outstanding
Restricted Performance Share, the cash or other property) into which each outstanding share of the
Common Stock shall be so changed or for which each such share shall be exchangeable.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <U>Spin-Offs, Liquidations, Etc</U>. If the outstanding shares of the Common Stock shall
be changed in value by reason of any spin-off, split-off or split-up, or dividend in partial
liquidation, dividend in property other than cash, or extraordinary distribution to shareholders of
the Common Stock, the Committee shall make any adjustments to any then outstanding Restricted
Performance Share which it determines are equitably required to prevent dilution or enlargement of
the rights of awardees which would otherwise result from any such transaction.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <U>No Fractional Shares</U>. No adjustment or substitution provided for in this Section
3.1 shall require the Company to pay or sell a fraction of a share of Common Stock or other
security. Accordingly, all fractional shares of Common Stock or other securities which result from
any such adjustment or substitution shall be eliminated and not carried forward to any subsequent
adjustment or substitution.


<P align="left" style="font-size: 10pt"><B>SECTION 4. AMENDMENTS TO AND TERMINATION OF THE PLAN</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <U>Amendment and Termination</U>. The Board may amend, alter, suspend, discontinue or
terminate the Plan without the consent of shareholders or Participants, except that, without the
approval of the shareholders of the Company, no amendment, alteration, suspension, discontinuation
or termination shall be made if shareholder approval is required by any federal or state law or
regulation or by the rules of any stock exchange on which the shares may then be listed, or if the
amendment, alteration or other change materially increases the benefits accruing to Participants,
increases the number of shares available under the Plan or modifies the requirements for
participation under the Plan, or if the Board in its discretion determines that obtaining such
shareholder approval is for any reason advisable; provided, however, that except as provided in
Section&nbsp;5.15, without the consent of the Participant, no amendment, alteration, suspension,
discontinuation or termination of the Plan may materially and adversely affect the rights of such
Participant under any award theretofore granted to him. The Committee may, consistent with the
terms of the Plan, waive any conditions or rights under, amend any terms of, or amend, alter,
suspend, discontinue or terminate, any award theretofore granted, prospectively or retrospectively;
provided, however, that except as provided in Section&nbsp;5.15, without the consent of a Participant,
no amendment, alteration, suspension, discontinuation or termination of any award may materially
and adversely affect the rights of such Participant under any award theretofore granted to him.


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<P align="left" style="font-size: 10pt"><B>SECTION 5. MISCELLANEOUS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Designation of Beneficiary</U>. A Participant may designate, in a writing delivered to
the Company before his death, a person or persons to receive, in the event of his death, any rights
to which he would be entitled under the Plan. Such designation may be made, revoked or changed by
the Participant at any time before the earlier of death or receipt of any unpaid amounts, but such
designation of beneficiary will not be effective and supersede all prior designations until it is
received and acknowledged by the Committee or its delegate. If the Committee has any doubt as to
the proper beneficiary to receive payments hereunder, the Committee shall have the right to
withhold such payments until the matter is finally adjudicated. However, any payment made in good
faith shall fully discharge the Committee, the Company, its subsidiaries, affiliates and the Board
from all further obligations with respect to that payment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <U>No Right to Employment</U>. Nothing contained in the Plan or any award agreement
shall confer, and no grant of an award shall be construed as conferring, upon any Participant any
right to continue in the employ of the Company, its subsidiaries or affiliates or to interfere in
any way with the right of the Company to terminate his employment at any time or increase or
decrease his compensation from the rate in existence at the time of granting of an award.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <U>Nontransferabilit</U>y. A Participant&#146;s rights under the Plan, including the right to
any shares payable, may not be assigned, pledged, or otherwise transferred except, in the event of
a Participant&#146;s death, to his designated beneficiary or, in the absence of such a designation, by
will or the laws of descent and distribution.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <U>Relationship to Other Benefits</U>. No payment under the Plan shall be taken into
account in determining any benefits under any retirement, group insurance, or other employee
benefit plan of the Company. The Plan shall not preclude the shareholders of the Company, the
Board or any committee thereof, or the Company from authorizing or approving other employee benefit
plans or forms or incentive compensation, nor shall it limit or prevent the continued operation of
other incentive compensation plans or other employee benefit plans of the Company or the
participation in any such plans by Participants in the Plan.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <U>Withholding</U>. To the extent required by applicable Federal, state, local or
foreign law, the Participant or his successor shall make arrangements satisfactory to the Company,
in its discretion, for the satisfaction of any withholding tax obligations that arise in connection
with an award. The Company shall not be required to pay any shares of Common Stock or other
payment under the Plan until such obligations are satisfied. The Company is authorized to withhold
from any award granted or any payment due under the Plan, including from a distribution of shares
of Common Stock, amounts of withholding taxes due with respect to an award, or any payment
thereunder, and to take such other action as the Committee may deem necessary or advisable to
enable the Company and Participants to satisfy obligations for the payment of such taxes. This
authority shall include authority to withhold or receive previously owned shares to satisfy such
tax withholding obligations, provided that shares withheld or delivered to satisfy such obligations
in excess of the minimum required statutory withholding rate must have been held for at least six
months to the extent that the Committee so requires.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <U>Unfunded Status of Awards; Creation of Trusts</U>. The Plan is intended to constitute
an &#147;unfunded&#148; plan for incentive and deferred compensation. With respect to any payments not yet
made to a Participant pursuant to an award, nothing contained in the Plan or any award agreement
shall give any such Participant any rights that are greater than those of a general unsecured
creditor of the Company; provided, however, that the Committee may authorize the creation of trusts
or make other arrangements to meet the Company&#146;s obligations under the Plan to deliver shares
pursuant to any award, which trusts or other arrangements shall be consistent with the &#147;unfunded&#148;
status of the Plan.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <U>Deferral</U>. Participants may elect to defer all or a portion (in whole percentages)
of their Restricted Performance Shares for any Performance Period, in accordance with the terms of
a deferral agreement entered into between the Participant and the Company; provided that such
election to defer must be made prior to the commencement of the Performance Period to which such
deferral relates. The Company may require that such deferrals be made in the form of Common Stock
units. No amount in excess of the number of the shares of Common Stock underlying such Restricted
Performance Shares deferred shall be payable to the Participant for such deferral, except for the
dividend equivalent amount for dividends paid on the Company&#146;s outstanding Common Stock during the
deferral period.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <U>Expenses</U>. The expenses of administering the Plan shall be borne by the Company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 <U>Indemnification</U>. Service on the Committee shall constitute service as a member of
the Board so that members of the Committee shall be entitled to indemnification and reimbursement
as directors of the Company pursuant to its Articles of Incorporation, By-Laws, or resolutions of
its Board or shareholders.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10 <U>Tax Litigation</U>. The Company shall have the right to contest, at its expense, any
tax ruling or decision, administrative or judicial, on any issue that is related to the Plan and
that the Company believes to be important to Participants in the Plan and to conduct any such
contest or any litigation arising therefrom to a final decision.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11 <U>No Right to Awards; No Shareholder Rights</U>. No Participant or employee shall have
any claim to be granted any award under the Plan, and there is no obligation for uniformity of
treatment of Participants and employees. No award shall confer on any Participant any of the
rights of a shareholder of the Company unless and until shares of Common Stock are in fact paid to
such Participant in connection with such award.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.12 <U>No Fractional Shares</U>. No fractional shares of Common Stock shall be paid or
delivered pursuant to the Plan or any award. In the event that any award would result in the
issuance of a fractional share of Common Stock, the fractional share shall be rounded up to the
next whole share.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.13 <U>Governing Law</U>. The validity, interpretation, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be governed by the laws of the
Commonwealth of Pennsylvania (without regard to the conflicts of laws thereof).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.14 <U>Severability</U>. If any provision of the Plan or any award is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan


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<P align="left" style="font-size: 10pt">or any award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the intent of the Plan
or award, it shall be deleted and the remainder of the Plan or award shall remain in full force and
effect; provided, however, that, unless otherwise determined by the Committee, the provision shall
not be construed or deemed amended or deleted with respect to any Participant whose rights and
obligations under the Plan are not subject to the law of such jurisdiction or the law deemed
applicable by the Committee.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.15 <U>Certain Restrictions Under Rule&nbsp;16b-3</U>. Upon the effectiveness of any amendment
to Rule&nbsp;16b-3, this Plan and any award agreement for an outstanding award held by a Participant
then subject to Section&nbsp;16 of the Exchange Act shall be deemed to be amended, without further
action on the part of the Committee, the Board or the Participant, to the extent necessary for
awards under the Plan or such award agreement to qualify for the exemption provided by Rule&nbsp;16b-3,
as so amended, except to the extent any such amendment requires shareholder approval.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.16 <U>Registration and Listing Compliance</U>. No award shall be paid and no shares or
other securities shall be distributed with respect to any award in a transaction subject to the
registration requirements of the Securities Act of 1933, as amended, or any state securities law or
subject to a listing requirement under any listing agreement between the Company and any national
securities exchange, and no award shall confer upon any Participant rights to such payment or
distribution until such laws and contractual obligations of the Company have been complied with in
all material respects. Except to the extent required by the terms of an award agreement or another
contract between the Company and the Participant, neither the grant of any award nor anything else
contained herein shall obligate the Company to take any action to comply with any requirements of
any such securities laws or contractual obligations relating to the registration (or exemption
therefrom) or listing of any shares or other securities, whether or not necessary in order to
permit any such payment or distribution.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.17 <U>Stock Certificates</U>. All certificates for shares delivered under the terms of the
Plan shall be subject to such stop-transfer orders and other restrictions as the Committee may deem
advisable under federal or state securities laws, rules and regulations thereunder, and the rules
of any national securities exchange or automated quotation system on which shares of Common Stock
are listed or quoted. The Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions or any other restrictions or
limitations that may be applicable to shares. In addition, during any period in which awards or
shares are subject to restrictions or limitations under the terms of the Plan or any award
agreement, or during any period during which delivery or receipt of an award or shares has been
deferred by the Committee or a Participant, the Committee may require any Participant to enter into
an agreement providing that certificates representing shares payable or paid pursuant to an award
shall remain in the physical custody of the Company or such other person as the Committee may
designate.


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<P align="left" style="font-size: 10pt"><B>SECTION 6. EFFECTIVE DATE AND TERM OF THE PLAN</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <U>Effective Date</U>. The effective date and date of adoption of the Plan shall be
March&nbsp;2, 2004, the date of adoption of the Plan by the Board, provided that the Plan is approved by
a majority of the votes cast at a duly held meeting of shareholders of the Company and any award
granted prior to such shareholder approval shall be subject to and conditioned upon receipt of such
shareholder approval. Notwithstanding anything else contained in the Plan or in any award
agreement, no shares may be distributed pursuant to any award granted under the Plan prior to such
shareholder approval. In the event such shareholder is not obtained, all awards granted under the
Plan shall automatically be deemed void and of no effect. Absent additional shareholder approval,
no Restricted Performance Shares may be granted under the Plan subsequent to the Company&#146;s Annual
Meeting of Shareholders in 2009.



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