SOUTH JERSEY INDUSTRIES, INC.
1997 STOCK-BASED COMPENSATION PLAN
(As Amended and Restated Effective January 26, 2005)
1. Purpose Of Plan
The purpose of the Plan is to enable the Company to recognize the contributions
made to the Company by employees (including employees who are members of the
Board of Directors) and non-employee directors of the Company by providing such
persons with additional incentive to devote themselves to the future success of
the Company and to improve the ability of the Company to attract, retain and
motivate persons upon whom the Company's sustained growth and financial success
depend, by: (i) providing incentive compensation opportunities competitive with
those of other major companies; (ii) providing performance-related incentives
that motivate superior performance; and (iii) providing such persons with the
opportunity to acquire or increase their ownership interest in the Company and
to thereby acquire a greater stake in the Company and a closer identity with it.
2. Definitions
(a) "Award" means an award of Options, SARs, or Restricted Stock.
(b) "Board" means the board of directors of the Parent Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee described in Paragraph 5.
(e) "Company" means South Jersey Industries, Inc. and each of its
Subsidiary Companies.
(f) "Date of Grant" means the date on which an Option, SAR or
Restricted Stock Award is granted.
(g) "Dividend Equivalent" means the right to receive the equivalent
value (in Shares) of dividends that are paid on Restricted Stock
and reinvested in Shares.
(h) "Eligible Participant" means an employee of the Company or a
director of the Parent Company as determined in accordance with
Paragraph 7.
(i) "Fair Market Value" means on any given date the mean between the
highest and lowest prices of actual sales of Shares on the
principal national securities exchange on which the Shares are
listed on such date or, if there are no such sales on such date,
the mean between the closing bid and asked prices of the Shares
on such exchange on such date.
(j) "Holder" means a person to whom (i) an SAR has been granted
under the Plan, which SAR has not been exercised and has not
expired or terminated, or (ii) a Restricted Stock Award has been
granted, which Award has not become vested or been forfeited.
(k) "Incentive Stock Option" means an Option granted under the Plan,
designated by the Committee at the time of such grant as an
Incentive Stock Option and containing the terms specified herein
for Incentive Stock Options.
(l) "Non-Qualified Option" means an Option granted under the Plan,
designated by the Committee at the time of such grant as a
Non-Qualified Option and containing the terms specified herein
for Non-Qualified Options.
(m) "Option" means any stock option granted under the Plan and
described either in Paragraph 3(a) or 3(b).
(n) "Optionee" means a person to whom an Option has been granted
under the Plan, which Option has not been exercised and has not
expired or terminated.
(o) "Parent Company" means South Jersey Industries, Inc.
(p) "Performance Goal" means the annual consolidated earnings per
share from the Company's continuing operations, or any other
goal that is established at the discretion of the Committee
including, among other things: (i) the price of Shares, (ii) the
market share of the Company (or any business unit thereof),
(iii) sales by the Company (or any business unit thereof),
(iv) return on equity of the Company, or (v) costs of the
Company (or any business unit thereof). The Committee shall have
sole discretion to determine specific targets within each
category of Performance Goals.
(q) "Restriction Period" means the period during which Restricted
Stock awarded under the Plan is subject to forfeiture.
(r) "Restricted Stock" means Shares awarded by the Company under
Paragraph 11 of the Plan and described in Paragraph 3(d).
(s) "SAR" means a stock appreciation right granted under the Plan
and described in Paragraph 3(c).
(t) "Share" or "Shares" means a share or shares of Common Stock of
the Parent Company.
(u) "Subsidiary Companies" means all corporations that, at the time
in question, are subsidiary corporations of the Parent Company
within the meaning of section 425(f) of the Code.
(v) "Ten Percent Shareholder" means a person who on the Date of
Grant owns, either directly or within the meaning of the
attribution rules contained in section 425(d) of the Code, stock
possessing more than ten percent of the total combined voting
power of all classes of stock of his or her employer corporation
or of its parent or subsidiary corporations, as defined
respectively in sections 425(e) and (f) of the Code.
(w) "Value" of a SAR means the excess of the Fair Market Value of
a Share on the date of exercise of such SAR over the Fair Market
Value of a Share on the Date of Grant of such SAR.
3. Rights To Be Granted
Rights that may be granted under the Plan are:
(a) Incentive Stock Options, which give the Optionee the right for
a specified time period to purchase a specified number of Shares
for a price not less than their Fair Market Value on the Date of
Grant;
(b) Non-Qualified Options, which give the Optionee the right for a
specified time period to purchase a specified number of Shares
for a price determined by the Committee on the Date of Grant;
(c) SARs, which give the Holder the right for a specified time
period, without payment to the Company, to receive the Value of
such SARs, to be paid in cash or Shares or a combination of cash
and Shares, the number and amount of which shall be determined
pursuant to Paragraph 8(e) below.
(d) Restricted Stock Awards, which give the Holder a specific number
of Shares which are either (i) awarded upon the Company's
achievement of Performance Goals established by the Committee,
or (ii) awarded, subject to forfeiture if the Company fails to
achieve Performance Goals established by the Committee.
4. Stock Subject To Plan
Not more than 1,000,000 Shares in the aggregate may be delivered pursuant to the
Plan upon exercise of Options or SARs or pursuant to Restricted Stock Awards.
The Shares so delivered may, at the option of the Company, be either treasury
Shares or Shares originally issued for such purpose. If an Option or an SAR
covering Shares terminates or expires without having been exercised in whole or
in part, other Options or SARs may be granted covering the Shares as to which
the Option or SAR was not exercised. If a Restricted Stock Award is forfeited,
other Restricted Stock Awards may be granted covering the Shares which were
forfeited.
5. Administration Of Plan
The Plan shall be administered by the Compensation/Pension Committee of the
Board or such other committee, consisting of two or more directors who, unless
the Board determines otherwise, are "outside directors" (within the meaning of
Section 162(m) of the Code) and "non-employee directors" (within the meaning of
Rule 16b-3(b)(3)(i) under the Securities Exchange Act of 1934) as may be
determined by the Board.
6. Grant of Rights
The Committee may grant Options, SARs, Restricted Stock Awards or all of the
foregoing to Eligible Participants.
7. Eligibility
(a) An Option may be granted to those Eligible Participants who
are designated by the Committee as eligible to receive an
Option.
(b) An Incentive Stock Option shall not be granted to a Ten Percent
Shareholder except on such terms concerning the option price and
period of exercise as are provided in Paragraphs 8(a) and 8(f)
with respect to such a person. A Non-Qualified Option shall not
be granted to a Ten Percent Shareholder.
(c) A Restricted Stock Award may be granted to those Eligible
Participants who are designated by the Committee as eligible to
receive a Restricted Stock Award.
(d) No Eligible Participant may be granted in any calendar year
Awards covering more than 300,000 Shares.
8. Option and SAR Agreements and Terms
All Options and SARs shall be granted within ten years from January 26, 2005
and be evidenced by Option agreements or SARs agreements which shall be executed
on behalf of the Parent Company and by the respective Optionees or Holders. The
terms of each such agreement shall be determined from time to time by the
Committee, consistent, however, with the following:
(a) Option Price. The option price per Share shall be determined
by the Committee but, in the case of Incentive Stock Option,
shall not be less than 100% of the Fair Market Value of such
Share on the Date of Grant. With respect to any Incentive
Stock Option granted to a Ten Percent Shareholder, the option
price per Share shall not be less than 110% of the Fair Market
Value of such Share on the Date of Grant.
(b) Restrictions on Transferability. No Option or SAR shall be
transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the Optionee or
Holder, shall be exercisable only by him or her. Upon the
death of an Optionee or Holder, the person to whom the rights
shall have passed by will or by the laws of descent and
distribution may exercise any Options or SARs only in
accordance with the provisions of Paragraph 8(f).
(c) Payment Upon Exercise of Options. Full payment for Shares
purchased upon the exercise of an Option shall be made in cash
or, at the election of the Optionee and as the Committee may,
in its sole discretion, approve, either (i) by surrendering
Shares with an aggregate Fair Market Value equal to the
aggregate option price, (ii) by delivering such combination of
Shares and cash as the Committee may, in its sole discretion,
approve or (iii) at the election of the Optionee, and if the
Committee, in its sole discretion approves, by surrendering
the Option in exchange for issuance of a number of shares
equal to the difference between the exercise price of the
Option and the Fair Market Value of the Shares subject to the
Option.
(d) Issuance of Certificates Upon Exercise of Options; Payment of
Cash. Only whole Shares shall be issuable upon exercise of
Options. Any right to a fractional Share shall be satisfied in
cash. Upon payment of the option price, a certificate for the
number of whole Shares and a check for the Fair Market Value on
the date of exercise of any fractional Share to which the
Optionee is entitled shall be delivered to such Optionee by the
Parent Company; provided, however, that in the case of the
exercise of a Non-Qualified Option, the Optionee has remitted to
his employer an amount, determined by such employer, necessary
to satisfy applicable federal, state or local tax-withholding
requirements, or made other arrangements with his or her
employer for the satisfaction of such tax-withholding
requirements. The Parent Company shall not be obligated to
deliver any certificates for Shares until such Shares have been
listed (or authorized for listing upon official notice of
issuance) upon each stock exchange upon which outstanding Shares
of such class at the time are listed nor until there has been
compliance with such laws or regulations as the Parent Company
may deem applicable. The Parent Company shall use its best
efforts to effect such listing and compliance.
(e) Issuance of Certificates Upon Exercise of SARs; Payment of Cash.
Upon exercise of an SAR, its Value shall be payable in cash, or
in Shares or such combination of cash and Shares as is selected
by the Holder and approved by the Committee in its sole
discretion. Any Shares that may be due upon exercise of an SAR
shall be delivered to the Holder by the Parent Company and any
payment of cash shall be made by the employer of the Holder. The
employer of the Holder shall deduct from the amount of any cash
so payable an amount necessary to satisfy applicable federal,
state, or local tax-withholding requirements. If no cash is
payable (or if the amount of cash payable is insufficient to
satisfy applicable tax-withholding requirements), no Shares
shall be delivered by the Parent Company to the Holder until the
Holder remits to his or her employer an amount, determined by
such employer, necessary to satisfy applicable federal, state,
or local tax-withholding requirements or makes other
arrangements for the satisfaction of such tax-withholding
requirements. The Parent Company shall not be obligated to
deliver any certificates for Shares until such Shares have been
listed (or authorized for listing upon official notice of
issuance) upon each stock exchange upon which outstanding Shares
of such class at the time are listed nor until there has been
compliance with such laws or regulations as the Parent Company
may deem applicable. The Parent Company shall use its best
efforts to effect such listing and compliance.
(f) Periods of Exercise of Options and SARs. An Option or SAR shall
be exercisable in whole or in part at such time as may be
determined by the Committee and stated in the Option or SAR
agreement; provided, however, that, unless otherwise determined
by the Committee, no Option or SAR shall be exercisable before
one year or after five years from the Date of Grant in the case
of an Option or SAR granted to a Ten Percent Shareholder, or
before one year or after ten years from the Date of Grant in all
other cases, except as provided below:
(i) In the event that an Optionee or Holder ceases to be
employed by the Company for any reason other than retirement,
disability (as determined by the Committee) or death, any
Option or SAR held by such Optionee or Holder shall not be
exercisable after the date the Optionee or Holder ceases to be
employed by the Company unless otherwise determined by the
Committee and set forth in the Option or SAR agreement or a
written amendment thereto; provided, however, that in no event
shall an Option or SAR be exercisable after five years from
the Date of Grant in the case of a Ten Percent Shareholder or
after ten years from the Date of Grant in all other cases;
(ii) If an Optionee or Holder ceases to be employed by the
Company, and if such cessation of employment is due to the
disability (as determined by the Committee) or the retirement
of the Optionee or Holder, he or she shall have the right to
exercise his or her Options or SARs until the last day of the
sixth month following cessation of employment, or such longer
period as the Committee may determine and set out in writing,
even if the date of exercise is within any time period
prescribed by the Plan prior to which such Option or SAR shall
not be exercisable; provided, however, that in no event shall
an Option or SAR be exercisable after five years from the Date
of Grant in the case of a Ten Percent Shareholder or after ten
years from the Date of Grant in all other cases;
(iii) In the event that an Optionee or Holder ceases to be
employed by the Company by reason of his or her death, any
Incentive Stock Option, Non-Qualified Option or SAR held by
such Optionee or Holder shall be exercisable, the person to
whom the rights of the Optionee shall be passed by will or by
the laws of descent and distribution, until the last day of
the twelfth month following the date of the Optionee's or
Holder's death, or such longer period as the Committee may
determine and set out in writing, even if the date of exercise
is within any time period prescribed by the Plan prior to
which such Option or SAR shall not be exercisable; provided,
however, that in no event shall an Option or SAR be
exercisable after five years from the Date of Grant in the
case of a Ten Percent Shareholder or after ten years from the
Date of Grant in all other cases.
(g) Date of Exercise. The date of exercise of an Option or SAR
shall be the date on which written notice of exercise,
addressed to the Parent Company at its main office to the
attention of its Secretary, is hand delivered, telecopied
or mailed, first class postage prepaid; provided, however,
that the Parent Company shall not be obligated to deliver
any certificates for Shares pursuant to the exercise of an
Option or SAR until the Optionee shall have made payment
in full of the option price for such Shares. Each such
exercise shall be irrevocable when given. Each notice of
exercise must (i) specify the Incentive Stock Option,
Non-Qualified Option, SAR, or combination thereof, being
exercised; (ii) must, in the case of the exercise of an
Option, include a statement of preference (which shall not
be binding on the Committee) as to the manner in which payment
to the Parent Company shall be made (Shares or cash or a
combination of Shares and cash); and (iii) must, in the case
of the exercise of an SAR, include a statement of preference
(which shall not be binding on the Committee) as to the manner
in which payment to the Holder shall be made other than only
in cash (Shares or cash or a combination of Shares and cash).
(h) Termination of Employment. For purposes of the Plan, a
transfer of an employee between two employers, each of which
is a Company, shall not be deemed a termination of employment.
(i) Multiple Grants of Incentive Stock Options, Non-Qualified
Options and SARs. The grant, exercise, termination or
expiration of any Incentive Stock Option, Non-Qualified Option
or SAR shall have no effect upon any other Incentive Stock
Option, Non-Qualified Option or SAR held by the same Optionee
or Holder; provided, however, that the Committee may, in its
sole discretion, provide in the Option agreement or SARs
agreement that the exercise of a certain number of SARs is
conditioned upon the exercise of a certain number of Options
or provide that an SAR shall otherwise be attached to Options
granted under the Plan. All SARs which are attached to Options
shall be subject to the following terms:
(A) such SAR shall expire no later than the Option to which it
is attached;
(B) such SAR shall be for an amount no more than the excess of
the Fair Market Value of the Shares subject to the attached
Option on the date such SAR is exercised over the option price
of such Option;
(C) such SAR shall be subject to the same restrictions on
transferability as the Option to which it is attached;
(D) such SAR shall be exercisable only when the Option to
which it attached is eligible to be exercised;
(E) such SAR shall be exercisable only when the Fair Market
Value of the Shares subject to the attached Option exceeds the
option price of such Option; and
(F) such SAR shall expire upon the exercise of the Option to
which it is attached. Upon exercise of an SAR which is
attached to an Option, the Option to which the SAR is attached
shall expire.
9. Limitation on Grant of Incentive Stock Options
The aggregate Fair Market Value (determined as of the time options are granted)
of the Shares for which any employee may be granted Incentive Stock Options that
first become exercisable in any one calendar year under the Plan and any other
plan of his or her employer corporation and its parent and subsidiary
corporations, as defined respectively in Sections 425(e) and (f) of the Code,
shall not exceed $100,000.
10. Rights As Shareholders With Respect to Options and SARs
Neither an Optionee nor a Holder shall have any right as a shareholder with
respect to any Shares subject to his or her Options or SARs until the date of
the issuance of a stock certificate to him or her for such Shares.
11. Restricted Stock Awards
The grant of a Restricted Stock Award shall be subject to the following terms
and conditions:
(a) Grant of Restricted Stock Award. Any Restricted Stock granted
under the Plan shall be evidenced by an agreement executed by
the Company and the Holder, which agreement shall conform to
the requirements of the Plan, and shall specify (i) the number
of Shares subject to the Award, (ii) the Restriction Period
applicable to each Award, (iii) the events that will give rise
to a forfeiture of the Award, (iv) the Performance Goals that
must be achieved in order for the restriction to be removed
from the Award, (v) the extent to which the Holder's right to
receive the Shares under the Award will be forfeited if the
Performance Goals are not met, and (vi) whether the Restricted
Stock is subject to a vesting schedule. The agreement may
contain such other provisions not inconsistent with the terms
of the Plan as the Committee shall deem advisable.
(b) Delivery of Restricted Stock. Upon determination of the number
of shares of Restricted Stock that are to be granted to the
Holder, the Committee shall direct that a certificate or
certificates representing the number of Shares be issued to
the Holder with the Holder designated as the registered owner.
The certificate(s) representing such shares shall be legended
as to restrictions on the sale, transfer, assignment, or
pledge of the Restricted Stock during the Restriction Period
and deposited by the Holder, together with a stock power
endorsed in blank, with the Company.
(c) Dividend Equivalents. Notwithstanding any provision of the
Plan to the contrary, a Holder who has been granted a
Restricted Stock Award pursuant to this Paragraph 11 may, at
the discretion of the Committee, be credited as of dividend
payment dates during the Restriction Period with Dividend
Equivalents with respect to the Shares underlying the
Restricted Stock Award. Such Dividend Equivalents shall be
credited to an account established on behalf of the Holder by
the Company. The Dividend Equivalents credited under this
Paragraph (c) shall be notionally reinvested in Shares and
shall be converted into additional Shares under such formula,
at such time, and subject to such limitations as may be
determined by the Committee.
(d) Receipt of Common Stock. At the end of the Restriction Period,
the Committee shall determine, in light of the terms and
conditions set forth in the Restricted Stock agreement, the
number of shares of Restricted Stock with respect to which the
restrictions imposed hereunder shall lapse. The Restricted
Stock with respect to which the restrictions shall lapse shall
be converted to unrestricted Shares by the removal of the
restrictive legends from the Restricted Stock. Thereafter,
Shares equal to the number of shares of the Restricted Stock
with respect to which the restrictions hereunder shall lapse
shall be delivered to the Holder. The Committee may, in its
sole discretion, modify or accelerate the vesting and delivery
of shares of Restricted Stock.
(e) Termination By Reason of Death, Disability or Retirement.
Unless otherwise determined by the Committee, if a Holder
ceases to be employed by the Company and such cessation of
employment is due to the Holder's death, disability (as
determined by the Committee) or retirement, the vested portion
of the Restricted Stock, if any, shall become nonforfeitable.
The non-vested portion of the Restricted Stock shall be
forfeited as of the date of such termination of employment.
(f) Other Termination. Unless otherwise determined by the
Committee at the time of grant, if a Holder ceases to be
employed by the Company and such cessation of employment is
due to any reason other than for death, disability (as
determined by the Committee), or retirement, any Restricted
Stock with respect to which the Restriction Period has not
expired shall be forfeited.
12. Changes in Capitalization
In the event of a stock dividend, stock split, recapitalization, combination,
subdivision, issuance of rights, or other similar corporate change, the Board
shall make appropriate adjustments in the aggregate number of Shares that may be
covered by Options, SARs or Restricted Stock Awards under the Plan, the number
of Shares subject to, and the option price of, each then-outstanding Option, the
number of then-outstanding SARs and the Fair Market Value of Shares upon which
the Value of such SARs is based, and the number of Shares subject to each
then-outstanding Restricted Stock Award.
13. Mergers, Dispositions and Certain Other Transactions
If, during the term of any Option or SAR, or during the Restricted Period of any
Restricted Stock Award, the Parent Company or any of the Subsidiary Companies
shall be merged into or consolidated with or otherwise combined with or acquired
by another person or entity, or there is a divisive reorganization or a
liquidation or partial liquidation of the Parent Company, the Parent Company may
choose to take no action with regard to the Options, SARs or Restricted Stock
Awards outstanding or, notwithstanding any other provision of the Plan, to take
any of the following courses of action:
(a) Not less than 15 days or more than 60 days prior to any such
transaction, all Optionees and Holders shall be notified that
their Options and SARs shall expire on the 15th day after the
date of such notice, in which event all Optionees and Holders
shall have the right to exercise all of their Options and SARs
prior to such new expiration date; or
(b) The Parent Company shall provide in any agreement with respect
to any such merger, consolidation, combination or acquisition
that the surviving, new or acquiring corporation shall grant
options and stock appreciation rights to the Optionees and
Holders to acquire shares, or stock appreciation rights in
shares in such corporation with respect to which the excess of
the fair market value of the shares of such corporation
immediately after the consummation of such merger,
consolidation, combination or acquisition over the option
price, or the value of such stock appreciation rights, shall
not be greater than the excess of the Fair Market Value of the
Shares over the option price of Options (or, in the case of an
SAR, the Value of such SAR) , immediately prior to the
consummation of such merger, consolidation, combination or
acquisition; or
(c) The Parent Company shall provide that all Restricted Stock
Awards that are outstanding on the date of the merger,
consolidation, combination or acquisition shall become
nonforfeitable or immediately payable in cash; or
(d) The Parent Company shall take such other action as the Board
shall determine to be reasonable under the circumstances in
order to permit Optionees and Holders to realize the value of
rights granted to them under the Plan.
14. Plan Not To Affect Employment
Neither the Plan nor any Award shall confer upon any employee of the Company any
right to continue in the employment of the Company.
15. Interpretation
The Committee shall have the power to interpret the Plan and to make and amend
rules for putting it into effect and administering it. It is intended that the
Incentive Stock Options granted under the Plan shall constitute incentive stock
options within the meaning of section 422A of the Code, that the Non-Qualified
Options and Restricted Stock Awards shall constitute property subject to federal
income tax pursuant to the provisions of section 83 of the Code and that the
Plan shall qualify for the exemption available under Rule 16b-3 (or any similar
rule) of the Securities and Exchange Commission. The provisions of the Plan
shall be interpreted and applied insofar as possible to carry out such intent.
16. Amendments
(a) The Plan may be amended by the Board, but any amendment that
increases the aggregate number of Shares that may be issued
pursuant to the Plan upon exercise of Options or SARs or upon
the grant of a Restricted Stock Award (otherwise than pursuant
to Paragraph 12), that changes the class of Eligible
Participants, or that otherwise requires the approval of the
shareholders of the Parent Company in order to maintain the
exemption available under Rule 16b-3 (or any similar rule) of
the Securities Exchange Act of 1934, shall require the approval
of the holders of such portion of the shares of the capital
stock of the Parent Company present and entitled to vote on such
amendment as is required by applicable state law and the terms
of the Parent Company's Articles of Incorporation, as then in
effect, to make the amendment effective. No outstanding Option,
SAR or Restricted Stock Award shall be affected by any such
amendment without the written consent of the Optionee, Holder,
or other person then entitled to exercise such Option or SAR or
receive Shares pursuant to such Restricted Stock Award.
(b) Subject to the provisions of the Plan, the Committee may amend
any Option agreement, SARs agreement or Restricted Stock
agreement, subject to the consent of the affected Optionee or
Holder if such amendment is not favorable to the Optionee or
Holder or if such amendment has the effect of changing an
Incentive Stock Option to a Non Qualified Option, except that
the consent of the Optionee or Holder shall not be required for
any amendment made pursuant to Paragraph 13 hereof.
17. Compliance with Section 162(m) of the Code
This Plan is intended to comply with Section 162(m) of the Code with respect to
qualified performance-based Awards that may be awarded by the Committee to
Eligible Participants. For this purpose, an Award shall constitute qualified
performance-based compensation to the extent that it is granted by the Committee
on account of the attainment of one or more preestablished, objective
performance goals established by the Committee, the material terms of which are
disclosed to the shareholders of the Parent Company and satisfaction of such
performance goals are certified by the Committee.
18. Securities Laws
The Committee shall have the power to make each Award under the Plan subject to
such conditions as it deems necessary or appropriate to comply with the
then-existing requirements of the Securities Act of 1933 or the Securities
Exchange Act of 1934, including Rule 16b-3 (or any similar rule), of the
Securities and Exchange Commission.
19. Effective Date and Term of Plan
The Plan shall expire no later than January 26, 2015, unless sooner terminated
by the Board. Any Incentive Stock Option granted before the approval of the Plan
by the Parent Company's shareholders shall be expressly conditioned upon, and
shall not be exercisable until, such shareholder approval.
20. General
Each Option, SAR or Restricted Stock Award shall be evidenced by a written
instrument containing such terms and conditions not inconsistent with the Plan
as the Committee may determine. The issuance of Shares on the exercise of an
Option or SAR, or pursuant to a Restricted Stock Award, shall be subject to all
of the applicable requirements of the New Jersey Business Corporation Act and
other applicable laws, including federal or state securities laws, and all
Shares issued under the Plan shall be subject to the terms and restrictions
contained in the Articles of Incorporation of the Parent Company, as amended
from time to time. Among other things, the Optionee or Holder may be required to
deliver an invest-ment representation to the Company in connection with any
exercise of an Option or SAR, or in connection with the receipt of Shares
pursuant to a Restricted Stock Award, or to agree to refrain from selling or
otherwise disposing of the Shares required for a specified period of time or on
specified terms.
21. Indemnification
Service on the Committee shall constitute service as a member of the Board. Each
member of the Committee shall be entitled, without further act on his or her
part, to indemnity from the Parent Company and limitation of liability to the
fullest extent provided by applicable law and by the Parent Company's Articles
of Incorporation and/or By laws in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Awards hereunder in which he or she may be involved by reason of his
or her being or having been a member of the Committee, whether or not he or she
continues to be such member of the Committee at the time of the action, suit or
proceeding.