ATLANTIC ENERGY, INC.
AND SUBSIDIARIES
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE ONE - DEFINITIONS
Whenever used in this document, the following terms shall have
the respective meanings set forth below, unless a different meaning is plainly
required by the context:
1.0 Definitions
1.1 "Annual Base Compensation" means, with respect to a full-time Employee,
the Employee's Base Salary or 2,080 times the Employee's Base Hourly
Rate, whichever is applicable, in effect on the date two months before
the first Offering Commencement Date. "Annual Base Compensation" means,
with respect to a non-full-time Employee, the amount equal to his or
her Base Hourly Rate in effect on the date two months before the first
Offering Commencement Date multiplied by the number of Hours of Service
compensated during the 12-month period immediately preceding the date
two months before the first date of the applicable Offering Period.
1.2 "Base Salary" means the annual salary rate received by an Employee,
whose compensation is determined on a salaried basis, as remuneration
for services performed exclusive of payments for overtime, lump sums in
lieu of "Base Salary" increases, shift premiums, bonuses paid in cash
or stock and other special payments, commissions and other incentive
payments.
1.3 "Base Hourly Rate" means the hourly rate of pay received by an Employee
whose compensation is determined on a non-salaried basis, as
remuneration for services performed, exclusive of payments for
overtime, lump sums in lieu of "Base Hourly Rate" increases, shift
premiums, bonuses paid in cash or stock and other special payments,
commissions and other incentive payments.
1.4 "Board of Directors" means the Board of Directors of Atlantic Energy,
Inc.
1.5 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.6 "Committee" means the Personnel & Benefits Committee, or any successor
committee, of the Board of Directors.
1.7 "Common Stock" means any authorized share of ownership of Atlantic
Energy, Inc. represented by a common stock certificate or any other
appropriate instrument evidencing the same.
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1.8 "Company" means Atlantic Energy, Inc. and any present or future
corporation that (i) would be a subsidiary corporation of Atlantic
Energy, Inc. as that term is defined in ss.423 of the Code and (ii) is
designated as a participant in the Plan by the Committee, or any
successor corporation.
1.9 "Eligible Employee" means any Employee who meets the eligibility
criteria set forth in ss.3.0.
1.10 "Employee" means any person in the employ of an Employer.
1.11 "Employee Account" means the account to which a Participant's payroll
deduction and interest, if any, will be credited.
1.12 "Employer" means Atlantic Energy, Inc. and all of its directly or
indirectly owned subsidiary companies including but not limited to
Atlantic City Electric Company, Atlantic Energy Enterprises, Inc.,
Deepwater Operating Company, Atlantic Generation, Inc., Atlantic
Thermal Systems, Inc., Atlantic Southern Properties, Inc., ATE
Investment, Inc., Atlantic Energy Technology, Inc., Atlantic CNRG
Services, LLC. and CoastalComm, Inc.
1.13 "Hour of Service" means (i) each hour for which an Employee is directly
or indirectly compensated or entitled to compensation by the Employer
for the performance of duties; (ii) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the
Employer on account of a period of time during which no duties are
performed (such as vacation, holidays, sickness, disability, layoff,
jury duty, military duty or leave of absence); (iii) each hour for
which back pay is awarded or agreed to by the Employer without regard
to mitigation. The same Hours of Service shall not be credited both
under (i) or (ii), as the case may be, and (iii).
1.14 "1934 Act" means the Securities Exchange Act of 1934, as amended from
time to time.
1.15 "Offering Commencement Date" means the first day of the Offering
Period.
1.16 "Offering Period" means the 12-month term that an offering under the
Plan exists pursuant to Article Four.
1.17 "Participant" means an Eligible Employee who elects to participate in
the Plan.
1.18 "Plan" means the stock purchase plan know as the "Atlantic Energy, Inc.
and Subsidiaries Employee Stock Purchase Plan" as amended from time to
time.
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1.19 "Purchase Date" means the last day of an Offering Period.
ARTICLE TWO - PURPOSE
2.0 Purpose
The Atlantic Energy, Inc. and Subsidiaries (the "Company")
Employee Stock Purchase Plan (the "Plan") is intended to encourage
equity ownership in the Company by Eligible Employees in order to
increase their proprietary interest in and promote the continued
success of the Company. It is the intention of the Company to have the
Plan qualify as an "employee stock purchase plan" under ss.423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions
of the Plan shall be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of the
Code.
ARTICLE THREE - ELIGIBILITY AND PARTICIPATION
3.0 Eligibility
A regular, full-time Employee shall become an Eligible Employee
upon his or her completion of one Hour of Service that must occur no
later than 14 calendar days prior to the Offering Commencement Date. An
employee who is not a regular, full-time Employee shall become an
Eligible Employee upon completion of 1,000 Hours of Service during the
twelve consecutive-month period commencing on the date he or she first
performs an Hour of Service and ending no later than 14 calendar days
prior to the Offering Commencement Date. If such Employee does not
complete 1,000 Hours of Service during such twelve-month period, then
the Employee would become an Eligible Employee upon completion of 1,000
Hours of Service during a subsequent twelve consecutive-month period.
Approximately 1,500 Employees are eligible to participate in the Plan.
3.1 Participation
An Eligible Employee may become a Participant by completing an
authorization for a payroll deduction on the form provided by the
Company and filing it with the Office of the Treasurer of the Company
on or before the date set therefor by the Committee, which date shall
be prior to the Offering Commencement Date for the Offering Period.
Payroll deductions for an Eligible Employee shall commence in the first
regular pay period following the applicable Offering Commencement Date
and shall end in the pay period immediately preceding the Purchase Date
unless sooner terminated by the Eligible Employee as provided in
Article Eight.
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3.2 Limitations to Participation
Notwithstanding any provisions of the Plan to the contrary, no Employee
shall be granted an option to participate in the Plan: (i) if,
immediately after the grant, such Employee would own Common Stock,
and/or hold options to purchase Common Stock, possessing 5% or more of
the total combined voting power or value of all classes of Common Stock
of the Company, (for purposes of this Section, the rules of ss.423(d)
of the Code shall apply in determining Common Stock ownership of any
Employee); (ii) which permits his or her rights to purchase Common
Stock under all employee stock purchase plans of the Company to accrue
at a rate that exceeds $25,000 in fair market value of the Common Stock
(determined at the time such option is granted) for each calendar year
in which such option is outstanding.
ARTICLE FOUR - OFFERINGS UNDER THE PLAN
4.0 Annual Offerings
The Plan will be implemented in four (4) Offering Periods
beginning on the 15th day of August in each of the years 1996, 1997,
1998 and 1999, with each Offering Period ending on August 14, of the
following year. The maximum number of shares of Common Stock issued in
the respective years shall be:
Maximum Number of
Offering Period Shares to be Issued
- --------------------------------- ---------------------------------------
August 15, 1996 - August 14, 1997 100,000
August 15, 1997 - August 14, 1998 100,000 plus unissued shares from the
prior Offering Period
August 15, 1998 - August 14, 1999 100,000 plus unissued shares from prior
Offering Periods
August 15, 1999 - August 14, 2000 100,000 plus unissued shares from prior
Offering Periods
ARTICLE FIVE - GRANTING OF OPTIONS
5.0 Number of Option Shares
On the Offering Commencement Date a Participant shall be
deemed to have been
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granted an option to purchase a maximum number of shares of Common
Stock of the Company equal to an amount determined as follows: a) a
dollar amount designated by the employee not in excess of 10% of the
Participant's Annual Base Compensation i) divided by 85% of the market
value of the Common Stock of the Company (as defined in ss.5.1 below)
on the applicable Offering Commencement Date or 2) an amount equal to
(i) that percentage of the Participant's Annual Base Compensation that
he or she has elected to have withheld (but not in excess of 10%) (ii)
multiplied by the Participant's Annual Base Compensation, (iii) divided
by 85% of the market value of the Common Stock of the Company (as
defined in ss.5.1 below) on the applicable Offering Commencement Date.
Such method of determination shall be at the discretion of the Company.
5.1 Option Price
The option price of stock purchased with payroll deductions made
during an Offering Period for a Participant therein shall be the lower
of: (i) 85% of the market value of the Common Stock, which is the
average of the high and low selling price of the stock on the Offering
Commencement Date as reported by the "NYSE-Composite Transactions"
published in The Wall Street Journal, or the nearest prior business day
on which trading occurred on the New York Stock Exchange or (ii) 85% of
the market value of the Common Stock, which is the average of the high
and low selling price of the stock on the Purchase Date or the nearest
prior business day on which trading occurred on the New York Stock
Exchange. If the Common Stock of the Company is not admitted to trading
on any of the aforesaid dates for which the high and low selling prices
of the stock are to be determined, then reference shall be made to the
fair market value of the stock on that date, as determined on such
basis as shall be established or specified for the purpose by the
Committee. On December 29, 1995 the closing price of the stock on the
NYSE was $19.25.
ARTICLE SIX - EXERCISE OF OPTION
6.0 Automatic Exercise
Unless a participant gives written notice to the Company as
hereinafter provided, his or her option to purchase shares of Common
Stock through payroll deductions made during any Offering Period will
be deemed to have been exercised automatically on the Purchase Date
applicable to such Offering Period for the purchase of the number of
whole shares of Common Stock which the accumulated payroll deductions
credited to his or her Employee Account at that time will purchase at
the applicable option price (but not in excess of the number of shares
for which options have been granted to the employee pursuant to ss.5.0
hereof), and any excess in his or her Employee Account at that time
will be returned as soon as practicable following the Purchase Date.
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6.1 Fractional Shares
Fractional shares will not be issued under the Plan and any
accumulated payroll deductions that would have been used to purchase
fractional shares will be returned to a Participant as soon as
practicable following the Purchase Date.
6.2 Transferability of Option
During a Participant's lifetime, options held by such Participant
shall be exercisable only by that Participant.
6.3 Delivery of Instrument
Common Stock to be delivered to a Participant under the Plan will
be delivered in "book-entry" form. Such Common Stock may be subject to
certain restrictions as described ss.7.5. As promptly as practicable
after the Purchase Date of each Offering Period, the Company will
provide to each participant an appropriate instrument representing the
stock purchased upon exercise of his or her option. A Participant may
request a common stock certificate to be issued in his or her name by
completing the appropriate authorization.
6.4 Expiration of Option
In no event may any option granted pursuant to the Plan be
exercised after the expiration of (i) three (3) years from the date
such option is granted if the option price is not less than 85% of the
fair market value of the stock at the time of the exercise of the
option, or (ii) 27 months from the date such option is granted if the
option price is not determinable in the manner described in (i) above.
ARTICLE SEVEN - COMMON STOCK OFFERED UNDER THE PLAN
7.0 Stock
The stock offered under the Plan shall consist in whole or in part
of (i) authorized but unissued shares of Common Stock of the Company,
or (ii) shares issued and thereafter acquired by the Company.
7.1 Maximum Number of Shares
The maximum number of shares that shall be issued under the Plan,
subject to adjustment upon changes in capitalization of the Company as
provided in Article Fourteen shall be 100,000 in each Offering Period
plus, beginning with the Offering Period starting on August 15, 1997,
all unissued shares from prior Offering Periods, but
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not to exceed 400,000 shares for all Offering Periods. If the total
number of shares for which options are exercised on any Purchase Date
in accordance with ss.6.0 exceeds the maximum number of shares for the
applicable offering, the Company shall make a prorata allocation of the
shares available for delivery and distribution in as nearly a uniform
manner as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions, plus interest,
credited to each Employee Account shall be returned to him or her as
promptly as possible.
7.2 Effects of Termination by Participants
If an Eligible Employee's participation under the Plan for any
reason ends or is terminated and the shares that are subject to an
option are not purchased, the unpurchased shares of Common Stock shall
again be available for offering under the Plan.
7.3 Participant's Interest in Option Stock
The participant will have no ownership interest in stock covered
by his or her option until such option has been exercised. No
adjustment will be made for dividends or other rights for which the
record date is prior to the date of issuance.
7.4 Registration of Common Stock
Common Stock to be delivered to a participant under the Plan will
be registered in the name of the participant, or, if the participant so
directs, by written notice to the Office of the Treasurer of the
Company prior to the Purchase Date applicable thereto, in the names of
the participant and one such other person as may be designated by the
participant, as joint tenants with rights of survivorship or to the
extent permitted by applicable law.
7.5 Restrictions on Exercise
The Committee may, in its discretion, require that any shares
purchased pursuant to the Plan be subject to certain restrictions
regarding the sale of such shares. Under such restrictions,
Participants may not be permitted to sell, transfer, pledge or assign
shares purchased under the Plan for a period of not more than one year
from the Purchase Date.
The Board of Directors may, in its discretion, require as
conditions to the exercise of any option that the shares of Common
Stock reserved for issuance upon the exercise of the option shall have
been duly listed, upon official notice of issuance, upon a stock
exchange, and that either (i) a Registration Statement under the
Securities Act of 1933, as amended, with respect to said shares, shall
be effective or (ii) the participant shall have represented at the time
of purchase, in form and substance satisfactory to the Company, that it
is his or her intention to purchase the shares for investment and not
for resale or distribution.
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ARTICLE EIGHT - WITHDRAWAL FROM THE PLAN AND TERMINATION OF
EMPLOYMENT
8.0 Withdrawal of Account
A Participant may withdraw payroll deductions credited to his or
her Employee Account under the Plan at any time (except in no event
will withdrawals be permitted in the three business days prior to the
Purchase Date) upon receipt of written notice to the Office of the
Treasurer of the Company. All of the Participant's payroll deductions,
without interest, credited to the Employee Account will be paid
promptly after receipt of notice of withdrawal, and no further payroll
deduction will be made from the Participant's pay during the Offering
Period. As to the Participants who are subject to Section 16 of the
1934 Act, (generally officers of Atlantic Energy, Inc.), the right of
participation in the Plan subsequent to withdrawal shall be governed by
the limitations imposed upon each Participant under the 1934 Act.
8.1 Effect on Subsequent Participation
A Participant's withdrawal during any Offering Period will not
have any effect upon his or her eligibility to participate in any
succeeding Offering Periods or in any similar plan that may hereafter
be adopted by the Company.
8.2 Termination of Employment
Upon termination of a Participant's employment during the Offering
Period for a reason other than retirement or death, participation in
the Plan shall terminate immediately and within a reasonable time
thereafter, the Eligible Employee shall be paid all funds, without
interest, then credited to his or her Employee Account.
8.3 Termination of Employment due to Retirement
Upon termination of a Participant's employment during the Offering
Period due to retirement, the Participant shall have the right to
elect, by written notice given to the Office of the Treasurer, prior to
the earlier of the Purchase Date or the expiration of a period of 90
days commencing from the date of retirement either (i) to withdraw all
of the payroll deductions, without interest, credited to the
Participant's Employee Account under the Plan or (ii) to exercise the
Participant's option for the purchase of Common Stock on the Purchase
Date next following the date of the Participant's retirement for the
purchase of the number of whole shares of Common Stock which the
accumulated payroll deductions, without interest, in the Participant's
Employee Account at the date of the Participant's retirement will
purchase at the applicable option price, and any excess in
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such Employee Account will be returned to the Participant as soon as
practicable.
In the event that no such written notice of election shall be duly
received by the Office of the Treasurer of the Company, the Participant
shall automatically be deemed to have elected, pursuant to (ii) above,
to exercise the Participant's option.
8.4 Termination of Employment due to Death
Upon termination of a Participant's employment during the Offering
Period due to death, the Participant's beneficiary (as defined in
Article Twelve) shall have the right to elect, by written notice given
to the Office of Treasurer, prior to the earlier of the Purchase Date
or the expiration of a period of 90 days commencing from the date of
the Participant's death either (i) to withdraw all of the payroll
deductions, without interest, credited to the Participant's Employee
Account under the Plan, or (ii) to exercise the Participant's option
for the purchase of stock on the Purchase Date next following the date
of the Participant's death for the purchase of the number of whole
shares of stock which the accumulated payroll deductions, without
interest, in the Participant's Employee Account at the date of the
Participant's death will purchase at the applicable option price, and
any excess in such account will be returned to said beneficiary,
without interest.
In the event that no such written notice of election shall be duly
received by the Office of the Treasurer of the Company, the beneficiary
shall automatically be deemed to have elected, pursuant to (ii) above,
to exercise the Participant's option.
8.5 Leave of Absence
If a Participant is granted a leave of absence, such Participant
shall have the right to elect (i) to withdraw without interest, the
balance in his or her Employee Account pursuant to ss.8.0, (ii) to
discontinue contributions to the Plan and forfeit any interest earned
but remain a Participant in the Plan, or (iii) remain a participant in
the Plan during such leave of absence, authorizing deductions to be
made from any payments by the company to the Participant during such
leave of absence.
ARTICLE NINE - PAYROLL DEDUCTIONS
9.0 Amount of Payroll Deduction
An Eligible Employee shall authorize the Employer in writing to
withhold funds from his or her compensation throughout the 12-month
Offering Period not in excess of 10% of the Eligible Employee's Annual
Base Compensation. Such amounts are subject to the limitations set
forth in ss.3.2. Such amounts will be sufficient to accumulate over the
term of the Offering Period the aggregate purchase price of the shares
which the
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Eligible Employee has elected the option to purchase pursuant to the
Plan.
9.1 Employee Account
Funds withheld from a Participant's compensation shall be credited
to the Participant's Employee Account established under the Plan. A
Participant may not make any separate cash payment into such account.
9.2 Changes in Payroll Deduction
A Participant may not increase or decrease the amount withheld
from the Participant's compensation or make other deposits to his or
her Employee Account. A Participant may discontinue participation in
the Plan as provided in Article Eight and only shall be permitted to
withdraw and be paid any funds accumulated in the Employee Account
pursuant to the terms of the Plan.
9.3 Use of Funds
All payroll deductions received or held by the Company under this
Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such payroll deductions.
9.4 Underfunded Status of Employee Account
If for any reason other than that set forth in ss.8.3, ss.8.4 and
ss.8.5 herein, the balance in a Participant's Employee Account on the
Purchase Date is less than the aggregate purchase price of the shares
which the Participant has elected the option to purchase pursuant to
the Plan, the Participant's option will be exercised on the Purchase
Date for the number of whole shares of Common Stock which the
accumulated payroll deductions, without interest, in the Participant's
Employee Account will purchase at the applicable option price, and any
excess will be returned to the Participant as soon as practicable.
ARTICLE TEN - INTEREST
10.0 Payment of Interest
Except as otherwise provided, interest shall be paid during the
term of the Offering Period on funds credited to each Employee Account
at the dividend rate in effect on June 30 in each of the Offering
Periods and made available to depositors holding a share savings
account with the Atlantic City Electric Company Employees' Federal
Credit Union. Interest will be compounded daily on the average daily
balance of each Employee Account beginning on the Offering Commencement
Date and ending on the last business
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day preceding the Purchase Date. Interest will cease to accrue on the
Purchase Date and will be distributed to the Participant as soon as
practicable after the Purchase Date. The Committee may determine that
interest shall be paid on the Employee Account on any other basis the
Committee deems appropriate.
ARTICLE ELEVEN - ADMINISTRATION
11.0 Personnel & Benefits Committee
The Plan shall be administered by the Personnel & Benefits
Committee of the Board of Directors. Members of the Committee shall be
Directors who are disinterested persons under Rule 16(b)(3) promulgated
under the 1934 Act and successor rules. The Committee may employ
agents, attorneys, compensation experts, accountants or other persons
(who also may be Employees of the Employer) and allocate or delegate to
them powers, rights, and duties, all as the Committee may consider
necessary or advisable to properly carry out the administration of the
Plan. The Committee may adopt rules and regulations as it deems
appropriate to assist in administering and enforcing the Plan.
The Committee shall have the discretionary authority to regulate
and interpret the Plan's provisions. The interpretation and
construction by the Committee of any provisions of the Plan, the terms
and conditions of an offering and of Employee participation and any
determination by the Committee pursuant to any provision of the Plan
shall be final and conclusive.
No member of the Board of Directors shall be liable for any action
or determination made in good faith under the Plan.
ARTICLE TWELVE - DESIGNATION OF BENEFICIARY
12.0 Designation of Beneficiary
A Participant may file a written designation of beneficiary who is
to receive any stock and/or cash. Such designation of beneficiary may
be changed by the Participant at any time by written notice to the
Office of the Treasurer. Upon the death of a Participant and upon
receipt by the Company of proof of identity and existence at the
Participant's death of a beneficiary validly designated by the
Participant under the Plan, the Company shall deliver such stock and/or
cash to such beneficiary. In the event of death of a Participant and in
the absence of a beneficiary validly designated under the Plan who is
living at the time of the Participant's death, the Company shall
deliver such stock and/or cash to the any beneficiary designated by the
Participant under the Atlantic City Electric Company Retirement Plan,
("Retirement Plan") or if the Participant is an Employee of an
affiliate any retirement plan of an such affiliate. If no beneficiary
has been designated under the Retirement Plan or any retirement plan of
an affiliate, the Company shall
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deliver such stock and/or cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such stock and/or cash to the spouse or to any
one or more dependents of the Participant as the Company may designate.
No beneficiary shall, prior to the death of the Participant by whom he
or she has been designated, acquire any interest in the stock or cash
credited to the Participant under the Plan.
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ARTICLE THIRTEEN - TRANSFERABILITY AND ASSIGNABILITY
13.0 Restrictions on Transferability and Assignability
Neither payroll deductions plus interest, if any, credited to a
Participant's Employee Account nor any rights with regard to the
exercise of an option to receive stock under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way by the
Participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge or other disposition
shall be without effect, except that the Company may treat such act as
an election to withdraw funds in accordance with ss.8.0. No right of
any Employee to purchase stock pursuant to an offering made under the
Plan shall be subject to any obligation or liability of the Participant
or have a lien imposed upon it. During the lifetime of a Participant,
the shares that he or she is entitled to purchase under the Plan may be
purchased only by the Participant.
Shares purchased pursuant to the Plan by a Participant who is
subject to short swing profit liability under Section 16(b) of the 1934
Act cannot be transferred for at least six months from the date of
acquisition.
ARTICLE FOURTEEN - ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
14.0 Recapitalization
If, while any options are outstanding, the outstanding shares of
Common Stock of the Company have increased, decreased, changed into or
been exchanged for a different number or kind of shares or securities
of the Company through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split or similar
transaction, appropriate and proportionate adjustments may be made by
the Committee in the number and/or kind of shares that are subject to
purchase under outstanding options and on the option exercise price or
prices applicable to such outstanding options. In addition, in any such
event, the number and/or kind of shares that may be offered as
described in Article Four hereof shall also be proportionately
adjusted. No adjustments shall be made for stock dividends.
ARTICLE FIFTEEN - DISSOLUTION OR CHANGE IN CONTROL OF
CORPORATION
15.0 Dissolution or Change in Control
Upon the dissolution or liquidation of the Company, or upon
"Change of Control" as hereinafter defined, the holder of each option
then outstanding under the Plan will thereafter be entitled to receive
at the next Purchase Date upon the exercise of such option
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for each share as to which such option shall be exercised, the cash,
securities and/or property that a holder of one share of the Common
Stock was entitled to receive upon and at the time of such transaction
(which shall in no event be less than 85% of the Fair Market Value, as
required by Section 423 of the Code). The Board of Directors shall take
such steps in connection with such transactions as they shall deem
necessary to assure that the provisions of this ss.15.0 shall
thereafter be applicable in relation to the said cash, securities
and/or property as to which such holder of such option might thereafter
be entitled to receive.
"Change of Control" of the Company shall occur (i) if any "person"
as defined in Section 3(a)(9) of the 1934 Act and as used in Section
13(d) and 14(d) thereof, including a "group" as defined in Section
13(d) of the 1934 Act but excluding the Company and any Subsidiary and
any employee benefit plan sponsored or maintained by the Company or any
Subsidiary (including any trustee of such plan acting as trustee),
directly or indirectly becomes the "beneficial owner," as defined in
Rule 13(d)(3) under the 1934 Act, of securities of the Company
representing 20 percent or more of the combined voting power of the
Company's then outstanding securities; or (ii) when, during any period
of 24 consecutive months during the existence of the Plan, the
individuals who, at the beginning of such period, constitute the Board
of Directors (the "Incumbent Directors") cease for any reason other
than death to constitute at least a majority thereof, provided however
that a director who was not a director at the beginning of such
24-month period shall be deemed to have satisfied such 24-month
requirement (and be an Incumbent Director) if such director was elected
by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors
either actually (because they were directors at the beginning of such
24-month period) or by prior operation of this ss.15.0; or (iii) the
occurrence of a transaction requiring stockholder approval for the
acquisition of the Company by an entity other than the Company or a
subsidiary through purchase of assets, or by merger or otherwise.
ARTICLE SIXTEEN - REQUIRED APPROVALS
16.0 Effective Date
The Plan was adopted by the Board of Directors on February 8, 1996
and shall become effective on April 24, 1996 subject to the approval of
shareholders of the majority vote of the votes cast at the Annual
Meeting of Shareholders to be held on April 24, 1996, at which a quorum
representing the majority of all outstanding voting stock is, either in
person or by proxy, present and voting on the Plan.
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ARTICLE SEVENTEEN - TERMINATION OF AND AMENDMENTS TO THE PLAN
17.0 Termination and Amendments
The Committee may amend, alter, or discontinue or suspend the Plan
or alter or amend any and all terms of participation in an offering
made thereunder at any time but no amendment, alteration,
discontinuance or suspension shall be made that would impair the rights
of a Participant without the Participant's consent or which, without
approval of the Company's stockholders would (i) increase the total
number of shares reserved for the purpose of the Plan or the maximum
number of shares that each Participant can elect to purchase as a
result of participation in any offering under the Plan; (ii) extend the
maximum term of an Offering Period under the Plan beyond 12 months;
(iii) decrease either the option price or change the pricing terms
specified in ss.5.1; (iv) materially expand the requirements as to
eligibility for Employees under the Plan; and (v) materially increase
benefits under the Plan within the meaning of Rule 16(b)(3) under the
1934 Act to the extent that rule is applicable.
ARTICLE EIGHTEEN - RIGHTS TO EMPLOYMENT
18.0 No Employment Rights
The Plan does not, directly or indirectly, create any right for
the benefit of any Employee or class of Employees to purchase any
shares under the Plan, or create in any Employee or class of Employees
any right with respect to continuation of employment by the Company,
and it shall not be deeded to interfere in any way with the Company's
right to terminate or otherwise modify an Employee's employment at any
time.
ARTICLE NINETEEN - EXPENSES
19.0 Expenses
All expenses of administering the Plan shall be borne by the
Company.
ARTICLE TWENTY - CONFORMANCE WITH TAX LAWS
20.0 Section 423
The Plan and all offerings thereunder shall conform to the
requirement of Code ss.423 that governs employee stock purchase plans.
Should any of the terms of the Plan or offerings be found not in
conformity with the terms of Code ss.423, those terms shall be
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invalid and shall be omitted from the Plan or the offering but the
remaining terms of the Plan shall not be affected.
ARTICLE TWENTY-ONE - WITHHOLDING
21.0 Withholding
Any amounts to be paid or shares to be delivered under the Plan
shall be reduced by any sums required to be withheld by the Company
under federal, state and local tax withholding laws.
ARTICLE TWENTY-TWO - GOVERNING LAW
22.0 Applicable Law
The Plan and the terms and conditions of participation in the
Plan, shall be construed and administered according to the laws of the
State of New Jersey to the extent that those laws are not preempted by
the laws of the United States of America.
ARTICLE TWENTY-THREE - OTHER PLANS
23.0 Other Plans
Nothing contained in this Plan shall prevent the Company from
establishing other benefit plans in which Employees thereof may also
participate.
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