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Exhibit 10.8
INRANGE TECHNOLOGIES CORPORATION
2000 STOCK COMPENSATION PLAN
SECTION 1. ESTABLISHMENT, PURPOSES AND EFFECTIVE DATE OF PLAN
1.1. Establishment. INRANGE Technologies Corporation, a Delaware
corporation, has established the 2000 Stock Compensation Plan (the "Plan"). The
Plan permits the awarding of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock and Performance Units.
1.2. Purposes. The purpose of the Plan is to advance the interests of
the Company and its Subsidiaries and divisions by (a) encouraging and providing
for the acquisition of equity interests in the Company by Key Individuals,
thereby increasing the stake in the future growth and prosperity of the Company,
and furthering Key Individuals' identity of interest with those of the Company's
shareholders, and (b) enabling the Company to compete with other organizations
in attracting, retaining, promoting and rewarding the services of Key
Individuals.
1.3. Effective Dates. On June 29, 2000, the Board of Directors of the
Company adopted the Plan, and, on June 29, 2000, General Signal Holding Company,
as sole stockholder of the Company, approved the Plan.
SECTION 2. DEFINITIONS
2.1. Definitions. Whenever used herein, the following terms shall have
their respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means the committee or other entity that
administers the Plan pursuant to the provisions of Section 4.
(d) "Common Stock" means the Class B Common Stock, par value
$0.01 per share, of the Company or such other class of shares or other
securities as may be applicable pursuant to the provisions of
Subsection 5.3.
(e) "Company" means INRANGE Technologies Corporation, a
Delaware corporation.
(f) "Fair Market Value" means, as to any date, the fair market
value of Common Stock determined by such methods or procedures as shall
be established
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from time to time by the Committee or, if not otherwise determined,
fair market value means the closing price of a share of Common Stock as
reported in the "Nasdaq National Market" section of The Wall Street
Journal for such date (or, if no prices are quoted for such date, on
the next preceding date on which such prices of Common Stock are so
quoted).
(g) "Key Individual" means any employee or non-employee
director of, or any consultant or advisor to, the Company, Parent or
any direct or indirect Subsidiary of either of them, including any such
individual, who, in the opinion of the Committee, can contribute
significantly to the growth and profitability of the Company or a
Subsidiary thereof. Key Individuals also may include those individuals
identified by the Committee to be in situations of extraordinary
performance, promotion, retention or recruitment. The awarding of a
grant under this Plan to an individual by the Committee shall be deemed
a determination by the Committee that such individual is a Key
Individual.
(h) "Mature Common Stock" means Common Stock that has been
acquired by the holder thereof on the open market or that has been
acquired pursuant to this Plan or another individual benefit
arrangement of the Company and held for at least six months.
(i) "Options" means the right to purchase stock at a stated
price for a specified period of time. For purposes of the Plan an
Option may be either (a) an "incentive stock option" within the meaning
of Code Section 422, or (b) a "nonqualified stock option" which is
intended not to fall under the provisions of Code Section 422.
(j) "Option Price" means the price at which each share of
Common Stock subject to an Option may be purchased, determined in
accordance with Subsection 7.3.
(k) "Parent" means SPX Corporation, a Delaware corporation.
(l) "Participant" means any individual designated by the
Committee to participate in this Plan pursuant to Subsection 3.1.
(m) "Period of Restriction" means the period during which the
transfer of shares of Restricted Stock is restricted pursuant to
Section 9.
(n) "Restricted Stock" means the Common Stock granted to a
Participant pursuant to Section 9.
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(o) "Stock Appreciation Right" means the right to receive a
cash payment from the Company equal to the excess of the Fair Market
Value of a share of Common Stock at the date of exercise of the Right
over a specified price fixed by the Committee at grant (exercise
price), which shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date of grant. In the case of a Stock
Appreciation Right which is granted in conjunction with an Option, the
specified price shall be the Option Price.
(p) "Subsidiary" means a corporation at least 50% or more of
the voting power of which is owned, directly or indirectly, by the
entity of which such corporation is a Subsidiary.
2.2. Gender and Number. Except when otherwise indicated by the context,
words in the masculine gender when used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
Participants in the Plan shall be selected by the Committee from among
those individuals identified by the Committee as Key Individuals.
SECTION 4. ADMINISTRATION
4.1. Administration. Prior to the date on which the initial public
offering of the shares of Common Stock (the "IPO") is consummated (the "IPO
Effective Date"), the Plan shall be administered by the Board of Directors of
Parent and the Board, or either of them, and, from and after the IPO Effective
Date, the Plan shall be administered by the Compensation Committee of the Board.
If the Committee consists of more than one member, a quorum shall consist of not
fewer than two members of the Committee and a majority of a quorum may authorize
any action. After the consummation of the IPO, the Committee shall consist of at
least one director of the Company and may consist of the entire Board; provided,
however, that (x) for purposes of any award granted under the Plan by the
Committee that is intended to be exempt from the restrictions of Section 16(b)
of the Securities Exchange Act of 1934 (the "Act"), the Committee shall consist
only of directors who qualify as "non-employee directors," as defined in Rule
16b-3 under the Act, and (y) for purposes of any award granted under the Plan by
the Committee that is intended to qualify for the performance-based compensation
exemption to the $1 million deductibility limit under Code Section 162(m), the
Committee shall consist only of directors who qualify as "outside directors," as
defined in Code Section 162(m) and the related regulations. For purposes of the
preceding sentence, if one or more members of the Committee is neither a
non-employee director nor an outside director and is recused or abstains from
voting with respect to an action taken by the Committee, then the
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Committee, with respect to that action, shall be deemed to consist only of the
members of the Committee who are not so recused and who have not abstained from
voting. Subject to applicable law, the Committee may delegate its authority
under the Plan to any other person or persons and may take any action otherwise
proper under the Plan by the unanimous written consent of its members.
The Committee shall hold meetings at such times as may be necessary for
the proper administration of the Plan and shall keep minutes of its meetings.
The Committee may establish such rules and regulations, not inconsistent with
the provisions of the Plan, as it deems necessary to determine eligibility to
participate in the Plan and for the proper administration of the Plan, and may
amend or revoke any rule or regulation so established. The Committee may make
such determinations and interpretations under or in connection with the Plan as
it deems necessary or advisable. All such rules, regulations, determinations and
interpretations shall be binding and conclusive upon all persons claiming any
interest hereunder.
SECTION 5. STOCK SUBJECT TO PLAN
5.1. Number. The total number of shares of Common Stock of the Company
subject to issuance under the Plan, and subject to adjustment upon occurrence of
any of the events indicated in Subsection 5.3, may not exceed 11,530,000. Of
this total number, up to 500,000 shares of Common Stock may be granted to
Participants in the form of Restricted Stock. The shares to be delivered under
the Plan may consist, in whole or in part, of authorized but unissued stock or
treasury stock not reserved for any other purpose. The maximum aggregate number
of shares of Common Stock (including Options, Restricted Stock, Stock
Appreciation Rights and Performance Units to be paid out in shares of Common
Stock) that may be granted in any one fiscal year to a Participant, or that may
vest with respect to awards granted in any one fiscal year to a Participant,
shall be 1,000,000, subject to adjustment upon the occurrence of any of the
events indicated in Subsection 5.3.
5.2. Unused Stock. In the event any shares of Common Stock that are
subject to an Option which, for any reason, expires, terminates or is canceled
as to such shares, or any shares of Common Stock subject to a Restricted Stock
award made under the Plan are reacquired by the Company pursuant to the Plan, or
any Stock Appreciation Right expires unexercised, such shares and rights again
shall become available for issuance under the Plan. Any shares of Common Stock
withheld or tendered to pay withholding taxes pursuant to Subsection 15.2 or
withheld or tendered in full or partial payment of the exercise price of an
Option pursuant to Subsection 7.6 shall again become available for issuance
under the Plan.
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5.3. Adjustment in Capitalization. In the event of any change in the
outstanding shares of Common Stock that occurs after ratification of the Plan by
the shareholders of the Company by reason of a Common Stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change, the aggregate number of shares of Common Stock
subject to each outstanding Option, and its stated Option Price, shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive; provided, however, that fractional shares shall be rounded to the
nearest whole share. In such event, the Committee also shall have discretion to
make appropriate adjustments in the number and type of shares subject to
Restricted Stock grants then outstanding under the Plan pursuant to the terms of
such grants or otherwise. The Committee also shall make appropriate adjustments
in the number of outstanding Stock Appreciation Rights and Performance Units and
the related grant values.
SECTION 6. DURATION OF PLAN
The Plan shall remain in effect, subject to the Board's right to
earlier terminate the Plan pursuant to Section 14 hereof, until all Common Stock
subject to it shall have been purchased or acquired pursuant to the provisions
hereof. However, no Option, Stock Appreciation Right, Restricted Stock or
Performance Unit may be granted under the Plan on or after the tenth anniversary
of the Plan's effective date.
SECTION 7. STOCK OPTIONS
7.1. Grant of Options. Subject to the provisions of Sections 5 and 6,
Options may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Options granted to each Participant. The
Committee also shall determine whether an Option is an incentive stock option
within the meaning of Code Section 422, or a nonqualified stock option. However,
in no event shall the Fair Market Value (determined at the date of grant) of
Common Stock for which incentive stock options become exercisable for the first
time in any calendar year exceed $100,000, computed in accordance with Code
Section 422(b)(7). In addition, no incentive stock option shall be granted to
any person who owns, directly or indirectly, stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company. Nothing
in this Section 7 shall be deemed to prevent the grant of nonqualified stock
options in excess of the maximum established by Code Section 422.
7.2. Option Agreement. Each Option shall be evidenced by an Option
Agreement that shall specify the type of Option granted, the Option Price, the
duration of the Option, the number of shares of Common Stock to which the Option
pertains, and such other provisions as the Committee shall determine. The Option
Agreement shall
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specify whether the Option is intended to be an incentive stock option within
the meaning of Code Section 422, or a nonqualified stock option which is
intended not to fall under the provisions of Code Section 422.
7.3. Option Price. The Option Price shall be determined by the
Committee. However, no Option granted pursuant to the Plan shall have an Option
Price that is less than the Fair Market Value of the Common Stock on the date
the Option is granted.
7.4. Duration of Options. Each option shall expire at such time as the
Committee shall determine at the time it is granted, provided, however, that no
Option shall be exercisable later than the tenth anniversary of its grant date.
7.5. Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for all
Participants.
7.6. Method of Exercise and Payment of Option Price. Options shall be
exercised pursuant to the methods and procedures as shall be established from
time to time by the Committee. The Committee shall determine the acceptable form
or forms and timing of payment of the Option Price. Acceptable forms of paying
the Option Price upon exercise of any Option shall include, but not be limited
to, (a) cash or its equivalent, (b) tendering shares of previously acquired
Common Stock having a Fair Market Value at the time of exercise equal to the
total Option Price, (c) directing the Company to withhold shares of Common
Stock, which may include attesting to the ownership of the equivalent number of
shares of previously-acquired Mature Common Stock having a Fair Market Value at
the time of exercise equal to the total Option Price, (d) other approved
property or (e) by a combination of (a), (b), (c) and/or (d). The proceeds from
such a payment shall be added to the general funds of the Company and shall be
used for general corporate purposes. As soon as practicable, after Option
exercise and payment, the Company shall deliver to the Participant Common Stock
certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name.
7.7. Restrictions on Common Stock Transferability. The Committee shall
impose such restrictions on any shares of Common Stock acquired pursuant to the
exercise of an Option under the Plan as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities law, under
the requirements of any stock exchange upon which such shares of Common Stock
are then listed and under any blue sky or state securities laws applicable to
such shares.
7.8. Termination of Employment Due to Death, Disability or Retirement.
In the event the employment of a Participant is terminated by reason of death,
any outstanding Options shall become immediately fully vested and exercisable
within such period
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following the Participant's death as shall be determined by the Committee, but
in no event beyond the expiration of the term of the Option, by such person or
persons as shall have acquired the Participant's rights under the Option by will
or by the laws of descent and distribution. In the event the employment of a
Participant is terminated by reason of retirement or disability (as such terms
are defined under the applicable rules of the Company), any outstanding Options
shall become immediately fully vested and exercisable within such period after
such date of termination of employment as shall be determined by the Committee,
but in no event beyond the expiration of the term of the Option.
7.9. Termination of Employment Other Than for Death, Disability or
Retirement. If the employment of the Participant terminates for any reason other
than death, disability or retirement, the Participant shall have the right to
exercise the Option within such period after the date of his termination as
shall be determined by the Committee, but in no event beyond the expiration of
the term of the Option and only to the extent that the Participant was entitled
to exercise the Option at the date of his termination of employment. Regardless
of the reasons for termination of employment, incentive stock options must be
exercised within the Code Section 422 prescribed time period in order to receive
the favorable tax treatment applicable thereto.
7.10. Nontransferability of Options. Except as provided in this
Subsection 7.10, no Option granted under the Plan may be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution, and all Options granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant. Under such rules and procedures as the Committee may establish, the
holder of an Option may transfer such Option to members of the holder's
immediate family (i.e., children, grandchildren and spouse) or to one or more
trusts for the benefit of such family members or to partnerships in which such
family members are the only partners, provided that (i) the agreement, if any,
with respect to such Option, expressly so permits or is amended to so permit,
(ii) the holder does not receive any consideration for such transfer, and (iii)
the holder provides such documentation or information concerning any such
transfer or transferee as the Committee may reasonably request. Any Options held
by any transferees shall be subject to the same terms and conditions that
applied immediately prior to their transfer. The Committee may also amend the
agreements applicable to any outstanding Options to permit such transfers. Any
Option not granted pursuant to any agreement expressly permitting its transfer
or amended expressly to permit its transfer shall not be transferable. Such
transfer rights shall in no event apply to any incentive stock option.
7.11. Non-Qualified Replacement Options. The Committee may grant to any
Key Individual a replacement Option to purchase additional shares of Common
Stock equal to the number of shares delivered by the Key Individual and/or
withheld by the
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Company in satisfaction of the exercise price and/or tax withholding obligations
with respect to an Option. The terms of a replacement Option shall be identical
to the terms of the exercised Option, except that the exercise price shall be
not less than the Fair Market Value on the grant date of the replacement Option.
At the discretion of the Committee, the Option Agreement for any Option under
the Plan (including any previously granted and outstanding nonqualified stock
option, where the applicable Option Agreement is appropriately amended) may
provide for the automatic grant of such a replacement Option or for the
automatic grants of multiple replacement Options over the term of the initial
Option.
SECTION 8. STOCK APPRECIATION RIGHTS
8.1. Grant of Stock Appreciation Rights. Subject to the terms and
provisions of this Plan, Stock Appreciation Rights may be granted to
Participants either independent of Options or in conjunction with nonqualified
stock options at any time and from time to time as shall be determined by the
Committee.
8.2. Exercise of Stock Appreciation Rights Granted in Conjunction with
a Nonqualified Option. Stock Appreciation Rights granted in conjunction with a
nonqualified stock option may be exercised at any time during the life of the
related stock option, with a corresponding reduction in the number of shares
available under the Option. Option shares with respect to which the Stock
Appreciation Right shall have been exercised may not again be subject to an
Option under this Plan.
8.3. Exercise of Stock Appreciation Rights Granted Independent of
Options. Stock Appreciation Rights granted independent of Options may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes on the Stock Appreciation Right including, but not limited
to, a corresponding proportional reduction in previously granted Options.
8.4. Payment of Stock Appreciation Right Amount. Upon exercise of a
Stock Appreciation Right, the holder shall be entitled to receive payment of an
amount (subject to Subsection 8.5 below) determined by multiplying:
(a) The difference between the Fair Market Value of a share of
Common Stock at the date of exercise over the price fixed by the
Committee at the date of grant, by
(b) The number of shares with respect to which the Stock
Appreciation Right is exercised.
8.5. Form of Payment. Payment to the Participant, upon the exercise of
a Stock Appreciation Right, will be made in cash.
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8.6. Limit on Appreciation. The Committee, in its sole discretion, may
establish (at the time of grant) a maximum amount per share which will be
payable upon exercise of a Stock Appreciation Right.
8.7. Term of Stock Appreciation Right. The term of a Stock Appreciation
Right granted under the Plan shall not exceed ten years.
8.8. Termination of Employment. In the event that the employment of a
Participant is terminated by reason of death, disability or retirement, or for
any other reason, the exercisability of any outstanding Stock Appreciation
Rights granted in conjunction with an Option shall terminate in the same manner
as specified for their related Options under Subsections 7.8 and 7.9. The
exercisability of any outstanding Stock Appreciation Rights granted independent
of Options also shall terminate in the manner provided under Subsections 7.8 and
7.9.
8.9. Nontransferability of Stock Appreciation Rights. No Stock
Appreciation Right granted under the Plan may be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, all Stock Appreciation Rights granted
to a Participant under the Plan shall be exercisable during his lifetime only by
such Participant.
SECTION 9. RESTRICTED STOCK
9.1. Grant of Restricted Stock. Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may grant shares of
Restricted Stock to such Participants and in such amounts as it shall determine.
It is contemplated that Restricted Stock grants will be made only in
extraordinary situations of performance, promotion, retention or recruitment.
9.2. Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement that shall specify the restriction
period or periods, the number of Restricted Stock shares granted, and such other
provisions as the Committee shall determine.
9.3. Transferability. Except as provided in this Section 9, the shares
of Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated until the termination of the
applicable Period of Restriction or for such period of time as shall be
established by the Committee and as shall be specified in the Restricted Stock
Agreement, or upon earlier satisfaction of other conditions as specified by the
Committee in its sole discretion and set forth in the Restricted Stock
Agreement. All rights with respect to the Restricted Stock granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.
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9.4. Other Restrictions. The Committee shall impose such other
restrictions on any shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable Federal or state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
9.5. Certificate Legend. In addition to any legends placed on
certificates pursuant to Subsection 9.4, each certificate representing shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the shares of stock represented
by this certificate, whether voluntary, involuntary or by operation of
law, is subject to certain restrictions on transfer set forth in the
2000 Stock Compensation Plan of INRANGE Technologies Corporation, rules
and administration adopted pursuant to such plan, and a restricted
stock grant agreement dated _________. A copy of the plan, such rules
and such restricted stock grant agreement may be obtained from the
Secretary of INRANGE Technologies Corporation."
9.6. Removal of Restrictions. Except as otherwise provided in this
Section, shares of Restricted Stock covered by each Restricted Stock grant made
under the Plan shall become freely transferable by the Participant after the
last day of the Period of Restriction. Once the shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Subsection 9.5 removed from his Common Stock certificate.
9.7. Voting Rights. During the Period of Restriction, Participants
holding shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those shares.
9.8. Dividends and Other Distributions. During the Period of
Restriction, Participants holding shares of Restricted Stock granted hereunder
shall be entitled to receive all dividends and other distributions paid with
respect to those shares while they are so held. If any such dividends or
distributions are paid in shares of Common Stock, the shares shall be subject to
the same restrictions on transferability as the shares of Restricted Stock with
respect to which they were paid.
9.9. Termination of Employment Due to Retirement. In the event that a
Participant terminates his employment with the Company because of normal
retirement (as defined under the then established rules of the Company), any
remaining Period of Restriction applicable to the Restricted Stock pursuant to
Subsection 9.3 shall automatically terminate and, except as otherwise provided
in Subsection 9.4, the shares of Restricted Stock shall thereby be free of
restrictions and freely transferable. In the event
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that a Participant terminates his employment with the Company because of early
retirement (as defined under the then established rules of the Company), the
Committee, in its sole discretion, may waive the restrictions remaining on any
or all shares of Restricted Stock pursuant to Subsection 9.3 and add such new
restrictions to those shares of Restricted Stock as it deems appropriate.
9.10. Termination of Employment Due to Death or Disability. In the
event a Participant's employment is terminated because of death or disability
(as defined under the then established rules of the Company), any remaining
Period of Restriction applicable to the Restricted Stock pursuant to Subsection
9.3 shall automatically terminate and, except as otherwise provided in
Subsection 9.4, the shares of Restricted Stock shall thereby be free of
restrictions and fully transferable.
9.11. Termination of Employment for Reasons Other Than Death,
Disability or Retirement. In the event that a Participant terminates his
employment with the Company for any reason other than those set forth in
Subsections 9.9 and 9.10 during the Period of Restrictions, then any shares of
Restricted Stock still subject to restrictions as of the date of such
termination shall automatically be forfeited and returned to the Company;
provided, however, that, in the event of an involuntary termination of the
employment of a Participant by the Company, the Committee, in its sole
discretion, may waive the automatic forfeiture of any or all such shares and may
add such new restrictions to such shares of Restricted Stock as it deems
appropriate.
SECTION 10. PERFORMANCE UNITS
Performance units may be granted subject to such terms and conditions
as the Committee in its discretion shall determine. Performance units may be
granted either in the form of cash units or in share units which are equal in
value to one share of Common Stock or a combination thereof. The Committee shall
establish the performance goals to be attained in respect of the performance
units, the various percentages of performance unit value to be distributed upon
the attainment, in whole or in part, of the performance goals and such other
performance unit terms, conditions and restrictions as the Committee shall deem
appropriate. As soon as practicable after the termination of the performance
period, the Committee shall determine the payment, if any, which is due on the
performance unit in accordance with the terms thereof. The Committee shall
determine, among other things, whether the payment shall be made in the form of
cash or shares of Common Stock, or a combination thereof.
SECTION 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit
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under the Plan is to be paid in case of his death. Each designation will revoke
all prior designations by the same Participant, shall be in a form prescribed by
the Committee, and will be effective only when filed by the Participant in
writing with the Committee during his lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to his estate.
SECTION 12. RIGHTS OF EMPLOYEES
12.1. Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Company.
12.2. Participation. No individual shall have a right to be selected as
a Participant, or, having been so selected, to be selected again as a
Participant.
SECTION 13. MERGER OR CONSOLIDATION
13.1. Treatment of Options and Stock Appreciation Rights. Upon a
dissolution or a liquidation of the Company, each Participant shall have the
right to exercise any unexercised Options or Stock Appreciation Rights, whether
or not then exercisable, subject to the provisions of the Plan immediately prior
to such dissolution or liquidation. If not exercised within a reasonable time
period, of not less than 30 days from the date of such dissolution or
liquidation, as determined by the Committee, all outstanding Options and Stock
Appreciation Rights shall terminate. In the event of a merger or consolidation
in which the Company is not the surviving corporation, unless the Option
Agreement applicable to an Option provides for the accelerated exercisability of
such Option in connection with such event, each Participant shall be offered a
firm commitment whereby the resulting or surviving corporation will tender to
the Participant new Options and Stock Appreciation Rights in the surviving
corporation, with terms and conditions, both as to number of shares and
otherwise, which will substantially preserve to the Participant the rights and
benefits of the Options and Stock Appreciation Rights outstanding hereunder.
13.2. Treatment of Restricted Stock. In the event of a dissolution or a
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving corporation, all restrictions shall lapse on the shares of
Restricted Stock granted under the Plan and thereafter such shares shall be
freely transferable by the Participant, subject to applicable Federal or state
securities laws.
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SECTION 14. AMENDMENT, MODIFICATION AND TERMINATION OF PLAN
The Board may at any time terminate, and from time to time may amend or
modify, the Plan; provided, however, that no such action of the Board, without
approval of the shareholders, may:
(a) Increase the total amount of Common Stock which may be
issued under the Plan, except as provided in Subsections 5.1 and 5.3.
(b) Change the provisions of the Plan regarding the Option
Price except as permitted by Subsection 5.3.
(c) Materially increase the cost of the Plan or materially
increase the benefits to Participants.
(d) Extend the period during which Options, Stock Appreciation
Rights, Restricted Stock or Performance Units may be granted.
(e) Extend the maximum period after the date of grant during
which Options or Stock Appreciation Rights may be exercised.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options, Stock Appreciation Rights or Restricted Stock
previously granted under the Plan, without the consent of the Participants.
SECTION 15. TAX WITHHOLDING
15.1. Tax Withholding. The Company, as appropriate, shall have the
right to deduct from all payments any Federal, state or local taxes required by
law to be withheld with respect to such payments.
15.2. Stock Withholding. With respect to withholding required upon the
exercise of nonqualified stock options, or upon the lapse of restrictions on
Restricted Stock, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding required, in whole or in part, by having
the Company withhold shares of Common Stock having a value equal to the amount
required to be withheld. Participants may also elect to satisfy all or a portion
of the tax withholding (up to the maximum legally permissible withholding
amount) by (a) tendering shares of previously acquired Common Stock having a
value equal to the amount of tax to be withheld or (b) by directing the Company
to withhold shares of Common Stock, including attesting to the ownership of
Mature Common Stock having a value equal to the amount of tax to be withheld (in
the manner provided in Subsection 7.6). The value of the shares to be withheld,
tendered or attested is to be determined by such methods or procedures as shall
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be established from time to time by the Committee. All elections shall be
irrevocable and shall be made in writing, signed by the Participant, and shall
satisfy such other requirements as the Committee shall deem appropriate.
SECTION 16. INDEMNIFICATION
Each person who is or shall have been a member of the Committee or of
the Board shall be indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit or
proceeding to which he may be a party or in which he may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the Company's approval,
or paid by him in satisfaction of any judgment in any such action, suit or
proceeding against him, provided he shall give the Company an opportunity, at
its expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or Bylaws, as a matter
of law or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
SECTION 17. REQUIREMENTS OF LAW
17.1. Requirements of Law. The granting of Options, Stock Appreciation
Rights, Restricted Stock or Performance Units, and the issuance of shares of
Common Stock with respect to an Option exercise or Performance Unit award, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.
17.2. Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of New
Jersey.
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