Item 5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On December 19, 2017, Patrice E. Merrin
submitted to the Board her resignation as a member of the Board, effective as of the time of the appointment of her replacement
by the Board.
In addition, effective December 19, 2017,
the Board appointed Dave Miller as a director to fill the vacancy resulting from the resignation of Ms. Merrin. The Board also
appointed Mr. Miller to serve on the Finance Committee of the Board concurrently with his appointment to the Board. Mr. Miller
may be appointed to one or more additional Board committees at a later date.
Mr. Miller will receive compensation for
his service on the Board pursuant to the compensation program for the Company’s non-employee directors, as in effect from
time to time during his service on the Board. The Company’s current non-employee director compensation program is described
on pages 21-24 of the Company’s definitive proxy statement dated March 13, 2017. In addition, the Company will enter into
an indemnity agreement with Mr. Miller, in the form approved in principle by the Company’s shareholders and which the Company
has entered into with each of its directors to supplement the indemnification coverage provided by the Company’s Articles
of Incorporation and By-Laws and the Pennsylvania Business Corporation Law. (See Form of Indemnity Agreement between the Company
and individual directors or officers, incorporated by reference to exhibit 10(j) to the Company’s Annual Report on Form 10-K
(Commission file number 1-3610) for the year ended December 31, 1987.)
Confidentiality Agreement
In connection with the appointment of Mr.
Miller to the Board, the Company also entered into a Confidentiality Agreement (the “
Confidentiality Agreement
”)
with Elliott regarding any non-public information that may be received by Elliott following the appointment of Mr. Miller to the
Board.
Pursuant to the Confidentiality Agreement,
Elliott may receive certain confidential information about the Company. Specifically, the Company consents to Mr. Miller disclosing
to Elliott, subject to Elliott’s confidentiality obligations under the Confidentiality Agreement, (i) any information presented
to the Finance Committee of the Board or (ii) any other information specifically approved to be disclosed to Elliott with the prior
consent of the Chairman of the Board. Disclosure of any such information by Mr. Miller will be subject in all cases to his fiduciary
duties to the Company and its shareholders and the Company’s policies, including without limitation, subject to the preceding
sentence, the Company’s Board Confidentiality Policy. Without limiting the foregoing, Mr. Miller is required not to disclose
to Elliott (i) any information regarding Board and committee deliberations, (ii) any confidential or proprietary information of
any third party that either (x) is identified as such to Mr. Miller by or on behalf of the Company or (y) as to which the confidential
or proprietary nature of such information is reasonably apparent, (iii) any legal advice provided by external or internal counsel
to the Company or any of its subsidiaries, or (iv) any other information that may constitute a waiver of the Company’s or
any of its subsidiaries’ attorney-client privilege or attorney work-product privilege that either (x) is identified as such
to Mr. Miller or (y) as to which the risk of waiver is reasonably apparent.
Subject to customary exceptions, Elliott
agrees that the confidential information it receives will be kept confidential and used solely for the purpose of monitoring and
evaluating its investment in the Company.
The Confidentiality Agreement terminates
two (2) years from the date on which the last of (i) Mr. Miller or (ii) any replacement director for Mr. Miller who is a representative
of Elliott, ceases to be a director of the Company, subject to certain exceptions regarding maintaining the confidentiality of
trade secrets.
On December 19, 2017, the Company issued
a press release announcing the appointment of Mr. Miller to the Board. A copy of the press release is filed with this Form 8-K
and attached hereto as Exhibit 99.1.
The information contained in Item 1.01 above
is incorporated by reference herein.