As filed with the Securities and Exchange Commission on April 18, 1997
Registration No. 33-__________
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VALLEY NATIONAL BANCORP
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2477875
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation of organization)
1455 VALLEY ROAD
WAYNE, NEW JERSEY 07470
(Address, including zip code, of principal executive offices)
1996 INCENTIVE STOCK OPTION PLAN
(FOR VALLEY EMPLOYEES WHO WERE FORMER MIDLAND EMPLOYEES)
(Full title of the plan)
GERALD H. LIPKIN, CHAIRMAN, PRESIDENT & CEO
VALLEY NATIONAL BANCORP
1455 VALLEY ROAD
WAYNE, NEW JERSEY 07470
(201) 305-8800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
With a copy to:
RONALD H. JANIS, ESQ.
PITNEY, HARDIN, KIPP & SZUCH
P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962
(201) 966-6300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount Proposed maximum Proposed Amount of
Securities to to be offering price aggregate registration
be registered registered (1) per unit (2) offering price (2) fee
- ------------------------- ----------------------- ----------------------- ------------------------ -----------------------
<S> <C> <C> <C> <C>
Common Stock, 229,500 $9.40 $2,157,300 $653.72
No Par Value
- ------------------------- ----------------------- ----------------------- ------------------------ -----------------------
</TABLE>
- ---------------------
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, such indeterminate number of shares as may
become subject to options under the 1996 Incentive Stock Option Plan as a
result of the anti-dilution provisions thereof.
(2) Calculated pursuant to Rule 457(h)(1) based on the actual exercise price
per share of the registrant's common stock under the underlying stock
options.
<PAGE>
PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. Plan Information.
Not filed with this Registration Statement.
ITEM 2. Registrant Information and Employee Plan Annual
Information.
Not filed with this Registration Statement.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
The following documents filed by Valley National Bancorp (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated by reference in this Registration Statement:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
2. The Company's Current Report on Form 8-K filed with the
Commission on March 13, 1997.
3. The description of the Company's common stock contained in the
Registration Statement on Form 8-A registering the Company's
common stock, and any amendment or report filed for the purpose
of updating such description.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, prior
to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, hereby are incorporated herein by reference and shall be
deemed a part hereof from the date of filing of such documents.
ITEM 4. Description of Securities.
Not applicable.
<PAGE>
ITEM 5. Interests of Named Experts and Counsel.
Certain legal matters relating to the issuance of the
shares of the Company's Common Stock offered hereby have been passed upon by
Pitney, Hardin, Kipp & Szuch, counsel to the Company. Attorneys in the law
firm of Pitney Hardin, Kipp & Szuch beneficially own 4014 shares of the
Company's Common Stock as of April 17, 1997.
The report of KPMG Peat Marwick LLP, independent certified
public accountants, dated January 22, 1997, relating to the consolidated
statements of financial condition of the Company and its subsidiaries as of
December 31, 1996 and 1995 and the related consolidated statements of income,
changes in shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1996, which report appears in the December
31, 1996 Annual Report on Form 10-K of the Company, is incorporated herein by
reference upon authority of said firm as experts in accounting and auditing.
ITEM 6. Indemnification of Directors and Officers.
INDEMNIFICATION. Article VI of the certificate of
incorporation of the Company provides that the corporation shall indemnify
its present and former officers, directors, employees, and agents and persons
serving at its request against expenses, including attorney's fees,
judgments, fines or amounts paid in settlement, incurred in connection with
any pending or threatened civil or criminal proceeding to the full extent
permitted by the New Jersey Business Corporation Act. The Article also
provides that such indemnification shall not exclude any other rights to
indemnification to which a person may otherwise be entitled, and authorizes
the corporation to purchase insurance on behalf of any of the persons
enumerated against any liability whether or not the corporation would have
the power to indemnify him under the provisions of Article VI.
The New Jersey Business Corporation Act empowers a
corporation to indemnify a corporate agent against his expenses and
liabilities incurred in connection with any proceeding (other than a
derivative lawsuit) involving the corporate agent by reason of his being or
having been a corporate agent if (a) the agent acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and (b) with respect to any criminal proceeding, the
corporate agent had no reasonable cause to believe his conduct was unlawful.
For purposes of the Act, the term "corporate agent" includes any present or
former director, officer, employee or agent of the corporation, and a person
serving as a "corporate agent" at the request of the corporation for any
other enterprise.
With respect to any derivative action, the corporation is
empowered to indemnify a corporate agent against his expenses (but not his
liabilities) incurred in connection with any proceeding involving the
corporate agent by reason of his being or having been a corporate agent if
the agent acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation. However, only the
court in which the proceeding was brought can empower a corporation to
indemnify a corporate agent against expenses with respect to any claim, issue
or matter as to which the agent was adjudged liable for negligence or
misconduct.
The corporation may indemnify a corporate agent in a
specific case if a determination is made by any of the following that the
applicable standard of conduct was met: (i) the Board of Directors, or a
committee thereof, acting by a majority vote of a quorum consisting of
disinterested directors; (ii) by independent legal counsel, if there is not a
quorum of disinterested directors or if the disinterested quorum empowers
counsel to make the determination; or (iii) by the shareholders.
A corporate agent is entitled to mandatory indemnification
to the extent that the agent is successful on the merits or otherwise in any
proceeding, or in defense of any claim, issue or matter in the proceeding. If
a corporation fails or refuses to indemnify a corporate agent, whether the
indemnification is permissive or mandatory, the agent may apply to a court to
grant him the requested indemnification. In advance of the final disposition
of a proceeding, the corporation may pay an agent's expenses if the agent
agrees to repay the expenses unless it is ultimately determined he is
entitled to indemnification.
LIMITATION ON LIABILITY. Article VII of the certificate of
incorporation of the Company provides:
A director or officer of the Corporation shall not be
personally liable to the Corporation or its shareholders for damages
for breach of any duty owed to the Corporation or its shareholders,
except that this provision shall not relieve a director or officer
from liability for any breach of duty based upon an act or omission
(i) in breach of such person's duty of loyalty to the Corporation or
its shareholders, (ii) not in good faith or involving a knowing
violation of law, or (iii) resulting in receipt by such person of an
improper personal benefit. If the New Jersey Business Corporation
Act is amended after approval by the shareholders of this provision
to authorize corporate action further eliminating or limiting the
personal liability of directors or officers, then the liability of a
director and/or officer of the Corporation shall be eliminated or
limited to the fullest extent permitted by the New Jersey Business
Corporation Act as so amended.
Any repeal or modification of the foregoing paragraph by
the shareholders of the Corporation or otherwise shall not adversely
affect any right or protection of a director or officer of the
Corporation existing at the time of such repeal or modification.
The New Jersey Business Corporation Act, as it affects exculpation, has not
been changed since the adoption of this provision by the Company in 1987.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
5 Opinion of Pitney, Hardin, Kipp & Szuch, as to the legality
of the securities being registered.
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of Pitney, Hardin, Kipp & Szuch (included in
Exhibit 5 hereto).
99 1996 Incentive Stock Option Plan.
ITEM 9. Undertakings.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
(b) That, for purposes of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
2. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof.
3. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant
in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Township of Wayne, State of New Jersey, on
the ___ day of April, 1997.
VALLEY NATIONAL BANCORP
By: /S/ GERALD H. LIPKIN
-----------------------------
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Title Date
/S/ GERALD H. LIPKIN Chairman, President, April 15, 1997
-------------------- Chief Executive Officer
Gerald H. Lipkin and Director
/S/ PETER SOUTHWAY Vice Chairman, April 15, 1997
--------------------- and Director
Peter Southway
/S/ SAM P. PINYUH Executive Vice President April 15, 1997
---------------------- and Director
Sam P. Pinyuh
/S/ ALAN D. ESKOW Corporate Secretary and April 15, 1997
---------------------- Senior Vice President
Alan D. Eskow (Principal Accounting
Officer)
/S/ ANDREW B. ABRAMSON Director April 15, 1997
----------------------
Andrew B. Abramson
/S/ PAMELA BRONANDER Director April 15, 1997
----------------------
Pamela Bronander
/S/ JOSEPH COCCIA, JR. Director April 15, 1997
----------------------
Joseph Coccia, Jr.
/S/ AUSTIN C. DRUKKER Director April 15, 1997
----------------------
Austin C. Drukker
Director April 15, 1997
----------------------
Willard L. Hedden
/S/ GRAHAM O. JONES Director April 15, 1997
----------------------
Graham O. Jones
/S/ WALTER H. JONES, III Director April 15, 1997
------------------------
Walter H. Jones, III
/S/ GERALD KORDE Director April 15, 1997
----------------------
Gerald Korde
/S/ JOLEEN MARTIN Director April 15, 1997
----------------------
Joleen Martin
/S/ ROBERT E. MCENTEE Director April 15, 1997
----------------------
Robert E. McEntee
/S/ WILLIAM MCNEAR Director April 15, 1997
----------------------
William McNear
/S/ ROBERT RACHESKY Director April 15, 1997
----------------------
Robert Rachesky
/S/ BARNETT RUKIN Director April 15, 1997
----------------------
Barnett Rukin
/S/ RICHARD F. TICE Director April 15, 1997
----------------------
Richard F. Tice
/S/ LEONARD VORCHEIMER Director April 15, 1997
----------------------
Leonard Vorcheimer
/S/ JOSEPH L. VOZZA Director April 15, 1997
----------------------
Joseph L. Vozza
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
5 Opinion of Pitney, Hardin, Kipp & Szuch
23(a) Consent of KPMG Peat Marwick LLP
99 1996 Incentive Stock Option Plan
Exhibit 5
PITNEY, HARDIN, KIPP & SZUCH
P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962-1945
April 18, 1997
Valley National Bancorp
1455 Valley Road
Wayne, New Jersey 07470
Re: Registration Statement on Form S-8
of Shares of Common Stock issuable
pursuant to options granted under the
1996 Incentive Stock Option Plan
We have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by Valley National Bancorp (the
"Company") with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended (the "Act"), of
shares of common stock of the Company, no par value (the "Shares") issuable
pursuant to options granted under the 1996 Incentive Stock Option Plan (the
"Plan").
We have also examined originals, or copies certified or
otherwise identified to our satisfaction, of the Plan, the Certificate of
Incorporation and By-laws of the Company, as currently in effect, and
relevant resolutions of the Board of Directors of the Company; and we have
examined such other documents as we deemed necessary in order to express the
opinion hereinafter set forth.
In our examination of such documents and records, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and conformity with the originals of all
documents submitted to us as copies.
Based on the foregoing, we are of the opinion that, when
the Registration Statement has become effective under the Act, and the Shares
shall have been duly issued in the manner contemplated by the Registration
Statement and the Plan, the Shares will be legally issued, fully paid and
non-assessable.
The foregoing opinion is limited to the federal laws of the
United States and the laws of the State of New Jersey, and we are expressing
no opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to use of this opinion as an Exhibit to
the Registration Statement. In giving such consent, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Act, or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
PITNEY, HARDIN, KIPP & SZUCH
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Valley National Bancorp
We consent to incorporation by reference herein and to the reference to our firm
under the heading "Interest of Named Experts and Counsel" in the Registration
Statement on Form S-8 of Valley National Bancorp of our report dated January 22,
1997, relating to the consolidated statements of financial condition of Valley
National Bancorp and subsidiaries as of December 31, 1996 and 1995 and the
related consolidated statements of income, changes in shareholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1996, which report appears in the December 31, 1996 Annual Report on Form 10-K
of Valley National Bancorp.
/S/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Short Hills, New Jersey
April 17, 1997
Exhibit 99
[The following plan was assumed by Valley National
Bancorp ("Valley") in connection with the merger of
Midland Bancorporation, Inc. into Valley pursuant
to the Amended and Restated Agreement and Plan of
Merger dated as of September 13, 1996.]
MIDLAND BANCORPORATION, INC.
1996 Incentive Stock Option Plan
------------------------------------------------------------------------------
1. Purpose
The purpose of the Midland Bancorporation, Inc.'s (the "Company") 1996
Stock Option Plan (the "Plan") is to advance the interests of the Company and
its shareholders by providing those key employees of the Company, upon whose
judgment, initiative and efforts the successful conduct of the business of the
Company largely depends, with additional incentive to perform in superior
manner. A purpose of the Plan is also to attract people of experience and
ability to the service of the Company.
2. Definitions
A. Board of Directors or Board: means the Board of Directors of
the Company.
B. Change in Control: for purposes of this Plan, a Change in
Control of the Company shall mean an ----------------- event of
a nature that; (1) any "person" (as the term is used in
Sections 13(d) and 14(d) of the Exchange Act) who is not now
presently but becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) directly or indirectly, of
securities of the Company representing 25% or more of the
Company's outstanding securities except for any securities
purchased by any tax-qualified employee benefit plan of the
Company; or (2) individuals who constitute the Board on the
date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose
election was a approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board, or whose
nomination for election by the Company's stockholders was
approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause,
considered as though he was a member of the Incumbent Board; or
(3) filing is made for regulatory approval to implement a plan
or reorganization, merger, consolidation, sale of all or
substantially all the assets of the Company or similar
transaction occurs in which the Company is not the resulting
entity or such plan, merger, consolidation, sale or similar
transaction occurs in which the Company is not the resulting
entity or such plan, merger consolidation, sale or similar
transaction occurs; or (4) a proxy statement soliciting proxies
from shareholders of the Company, by someone other than the
current management of the Company or similar transaction with
one or more corporations as a result of which the outstanding
shares of the class of securities then subject to the plan or
transaction are exchanged for or converted into cash or
property or securities not issued by the Company shall be
distributed; or (5) a tender offer is made for 25% or more of
the voting securities of the Company.
C. Committee: means the Compensation Committee of the Company's
Board of Directors or another committee appointed by the
Company's Board of Directors to administer this Plan.
D. Company: means Midland Bancorporation, Inc., and Midland Bank
and Trust Company, a wholly owned subsidiary of Midland
Bancorporation, Inc.
E. Date of Grant: means the date an Option is granted by the
Committee.
F. Disability: means the permanent and total inability by reason
of mental or physical infirmity, or both, of an employee to
perform the work customarily assigned to him. Additionally, a
medical doctor selected or approved by the Board of Directors
must advise the Committee that it is either not possible to
determine when such Disability will terminate or that it
appears probable that such Disability will be permanent during
the remainder of said Participant's lifetime.
G. Fair Market Value: for purposes of the 1996 Stock Option Plan,
when used in connection with Common Stock on a certain date,
Fair Market Value means the average of the high and low prices
of known trades of the Common Stock on such date, or if the
Common Stock was not traded on such date, on the next preceding
day on which the Common Stock was traded thereon.
H. Non-qualified Stock Option: means an Option granted by the
Committee to a Participant.
I. Normal Retirement: means retirement at the normal or early
retirement date as set fort in any tax-qualified
retirement/pension plan of the Company.
J. Options: means Non-qualified Stock Options granted under
Section 7.
K. Participant: means an employee of the Company or its affiliates
chosen by the Committee to participate in the Plan.
L. Plan Year(s): means a calendar year or years commencing on or
after January 1, 1996.
M. Termination for Cause: means the termination upon an
intentional failure to perform stated duties, breach of a
fiduciary duty involving personal dishonesty which results in
material loss to the Company or one of its affiliates, or
willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final
cease-and-desist order which results in material loss to the
Company.
3. Administration
The plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it sees necessary for the proper administration of the Plan and
to make determinations and interpretations in connection with the Plan it sees
as necessary advisable. All determinations and interpretations made by the
Committee shall be binding and conclusive on all participants in the Plan and on
their legal representatives and beneficiaries.
4. Types of Awards
Only Non-qualified Stock Options may be granted under the Plan as
defined below in paragraph 7.
5. Stock Subject to the Plan
Subject to adjustment as provided in Section 13, the maximum number of
shares reserved for purchase pursuant to the exercise of Options granted under
the Plan shall not exceed 10,150 of the shares of Common Stock of the Company,
par value $15.00 per share, subject to adjustments pursuant to Section 12. These
may be either authorized but unissued shares or shares previously issued and
reacquired by the Company. Options for more than 5,000 share may be granted to
any one individual under this Plan.
6. Eligibility
Officers and other employees of the Company shall be eligible to
receive Options under the Plan. Directors who are not employees or officers of
the Company shall not be eligible to receive Options under the Plan.
7. Non-qualified Stock Options
7.1 Grant of Non-qualified Stock Options
The Committee may, from time to time, grant Non-qualified Stock Options
to eligible employees and, upon such terms and conditions as the Committee may
determine, grant Non-qualified Options in exchange for and upon surrender of
previously granted Options under this Plan. Options granted under this Plan are
subject to the following terms and conditions.
(a) Price. The purchase price per share of Common Stock deliverable
upon the exercise of each Option shall determined by the
Committee on the date the Option is granted. The purchase price
shall not be less than 100% of the Fair Market Value of the
Company's Common Stock on the Date of Grant and in no event
below the par value of the Common Stock on the Date of Grant.
Shares may be purchased only upon full payment of the purchase
price. Payment of the purchase price may be made, in whole or
in part, through the surrender of shares of the Common Stock of
the Company at the Fair Market Value of such shares on the date
of surrender determined in the manner described in Section
2(G).
(b) Terms of Options. The term during which each Option may be
exercised shall be determined by the Committee, but in no event
shall an Option be exercisable in whole or in part more than 15
years from the Date of Grant. The Committee shall determine the
date on which each Option shall become exercisable in
installments. The shares comprising each installment may be
purchased in whole or in part at any time after such
installment because purchasable. The Committee may, in its sole
discretion, accelerate the time in which any Option may be
exercised in whole or in part. Notwithstanding the above, in
the event of a Change of Control of the Company, all Options
shall become immediately exercisable. In addition, in the event
of a Change in Control, the Company shall have the right but
not the obligation to cause the Participant to surrender all or
part of Options held by the Participant in exchange for a cash
payment per share of Common Stock covered by the Options in an
amount equal to the difference between the Fair Market Value of
a share of Common Stock on the date of Change of Control and
the purchase price per share pursuant to the Option.
(c) Termination of Employment. Unless otherwise determined by the
Committee at the time an Option is granted, upon the
termination of a Participant's employment or service to the
Company for any reason other than Disability, Normal
Retirement, Change in Control, death or Termination for Cause,
the Participant's Options shall be exercisable only as to those
shares which were immediately purchasable by the Participant at
the date of termination and only for a period of one year
following termination. Notwithstanding any provision set forth
herein or contained in any Agreement relating to the award of
an Option, in the event of Termination for Cause, all rights
under the Participant's Options shall expire upon termination.
Unless otherwise determined by the Committee at the time an
Option is granted, in the event of the death, Disability, or
cessation of employment or service to the Company due to Change
in Control or Normal Retirement of any Participant, all Options
held by the Participant, whether or not exercisable at such
time shall be exercisable by the Participant or his legal
representatives or beneficiaries of the Participant for one
year (eighteen months in the case of death of the Participant)
or such longer period as determined by the Committee following
the date of the Participant's death, Normal Retirement or
cessation of employment or service to the Company due to
Disability or Change in Control, provided that in no event
shall the period extend beyond the expiration of the Option
term.
8. Surrender Option
In the event of a Participant's termination of employment or service to
the Company, as a result of death, disability or Normal Retirement, the
Participant (or the Participant's personal Representative(s), custodian(s),
heir(s), or devisee(s)), may, in a form acceptable to the Committee make
application to surrender all or part of Options held by such Participant in
exchange for a cash payment per share of the Common Stock covered by the Options
in an amount equal to the difference between the Fair Market Value per share of
the Common Stock on the date of termination of employment or service and the
purchase price per share pursuant to the Option. Whether the Committee accepts
such application or determines to make payment, in whole or part, is within its
absolute and sole discretion, it being expressly understood that the Committee
is under no obligation to any Participant whatsoever to make such payments. In
the event that the Committee accepts such application and the Company determines
to make payment, such payment shall be in lieu of the exercise of the underlying
Option and such Option shall cease to be exercisable.
In addition, in the event of a Change in Control, the Company shall
have the right but not the obligation to cause the Participant to surrender all
or part of the Options held by the Participant in exchange for a cash payment
per share of the Common Stock covered by the Options in an amount equal to the
Fair Market Value per share on the date of Change of Control and the purchase
price per share pursuant to the Option.
9. Rights of a Shareholder: Nontransferability
No Participant shall have any rights as a shareholder with respect to
any shares covered by a Option until the date of issuance of a stock certificate
for such shares. Nothing in this Plan or in any Option granted confers on any
person any right to continue in the employ of the Company or to continue to
perform services for the Company or interferes in any way with the right of the
Company to terminate a Participant's services as an officer or other employee at
any time.
No Award under the Plan shall be transferable by the Participant other
than by will or the laws of descent and distribution and may only be exercised
during his lifetime by the Participant, or by a guardian or legal
representative.
10. Agreement with Grantees
Each Option will be evidenced by a written agreement, executed by the
Participant and the Company which describes the conditions for receiving the
Options including the Date of Grant, the purchase price, applicable periods for
exercise, and any other terms and conditions as may be required by the Board of
Directors or applicable law.
11. Designation of Beneficiary
A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any Options to which the
Participant would then be entitled. Such designation will be made upon forms
supplied by and delivered to the Company and may be revoked in writing. If a
Participant fails effectively to designate a beneficiary, then the Participant's
estate will be deemed to be the beneficiary.
12. Dilution and Other Adjustments
In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or stock split, recapitalization,
merger, consolidation, spin-off, reorganization, combination or exchange of
shares, or other similar corporate change, or other increase or decrease in such
shares without receipt or payment of consideration by the Company, the Committee
will make such proportionate adjustments to previously granted Options, to
prevent dilution or enlargement of the rights of the Participant, including any
or all of the following:
(a) proportionate adjustments in the aggregate number of kind of
shares of Common Stock for which Options may be granted under
the plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Options already made under the Plan;
(c) adjustments in the purchase price of outstanding Options.
No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Option.
13. Tax Withholding
There shall be, deducted from each distribution of cash and/or Common
Stock under the Plan the amount required by any governmental authority to be
withheld for income tax purposes.
14. Amendment of the Plan
The Board of Directors may at any time, from time to time, modify or
amend the plan in any respect subject to obtaining any shareholder approval
required by applicable law. No such termination, modification or amendment may
affect the rights of a Participant under an outstanding Option.
15. Effective Date of Plan
This Plan was approved by the Board of Directors of the Company on May
28, 1996 and shall be effective as of that date.
16. Termination of the Plan
The right to grant Options under the Plan will terminate upon the
earlier of five (5) years after the Effective Date of the Plan or the exercise
of Options equivalent to the maximum number of shares reserved under the Plan as
set forth in Section 5. The Board of Directors has the right to suspend or
terminate the Plan at any time, provided that no such action will, without the
consent of a Participant, adversely affect his rights under a previously granted
Option.
17. Applicable Law
The Plan will be administered and interpreted in accordance with the
laws of the State of New Jersey.
