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Exhibit 10.3
 
SOUTH JERSEY INDUSTRIES, INC.
 
1997 STOCK-BASED COMPENSATION PLAN
 
(As Amended and Restated Effective January 1, 2012)
 
1.             Purpose Of Plan
 
The purpose of the Plan is to enable the Company to recognize the contributions
made to the Company by employees (including employees who are members of the
Board of Directors) and non-employee directors of the Company by providing such
persons with additional incentive to devote themselves to the future success of
the Company and to improve the ability of the Company to attract, retain and
motivate persons upon whom the Company’s sustained growth and financial success
depend, by: (i) providing incentive compensation opportunities competitive with
those of other major companies; (ii) providing performance-related incentives
that motivate superior performance; and (iii) providing such persons with the
opportunity to acquire or increase their ownership interest in the Company and
to thereby acquire a greater stake in the Company and a closer identity with it.
 
2.             Definitions
 
(a)           “Award” means an award of Options, SARs, or Restricted Stock.
 
(b)           “Board” means the board of directors of the Parent Company.
 
(c)           “Code” means the Internal Revenue Code of 1986, as amended.
 
(d)           “Committee” means the committee described in Paragraph 5.
 
(e)           “Company” means South Jersey Industries, Inc. and each of its
SubsidiaryCompanies.
 
(f)           “Date of Grant” means the date on which an Option, SAR or
Restricted Stock Award is granted.
 
(g)          “Dividend Equivalent” means the right to receive the equivalent
value (in Shares) of dividends that are paid on Restricted Stock and reinvested
in Shares.
 
(h)          “Eligible Participant” means an employee of the Company or a
director of the Parent Company as determined in accordance with Paragraph 7.
 
(i)           “Fair Market Value” means on any given date the mean between the
highest and lowest prices of actual sales of Shares on the principal national
securities exchange on which the Shares are listed on such date or, if there are
no such sales on such date, the mean between the closing bid and asked prices of
the Shares on such exchange on such date.
 
 
 

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(j)            “Holder” means a person to whom (i) an SAR has been granted under
the Plan, which SAR has not been exercised and has not expired or terminated, or
(ii) a Restricted Stock Award has been granted, which Award has not become
vested or been forfeited.
 
(k)           “Incentive Stock Option” means an Option granted under the Plan,
designated by the Committee at the time of such grant as an Incentive Stock
Option and containing the terms specified herein for Incentive Stock Options.
 
(l)            “Non-Qualified Option” means an Option granted under the Plan,
designated by the Committee at the time of such grant as a Non-Qualified Option
and containing the terms specified herein for Non-Qualified Options.
 
(m)          “Option” means any stock option granted under the Plan and
described either in Paragraph 3(a) or 3(b).
 
(n)           “Optionee” means a person to whom an Option has been granted under
the Plan, which Option has not been exercised and has not expired or terminated.
 
(o)           “Parent Company” means South Jersey Industries, Inc.
 
(p)           “Performance Goal” means the annual consolidated earnings per
share from the Company’s continuing operations, or any other goal that is
established at the discretion of the Committee including, among other things:
(i) the price of Shares, (ii) the market share of the Company (or any business
unit thereof), (iii) sales by the Company (or any business unit thereof), (iv)
return on equity of the Company, (v) costs of the Company (or any business unit
thereof), or (vi) the Company’s total shareholder return and earnings per share
growth as measured against comparable returns/earnings of peer companies.  The
Committee shall have sole discretion to determine specific targets within each
category of Performance Goals.
 
 
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(q)           “Qualifying Termination” means with respect to a Holder of a
Restricted Stock Award either the (i) termination by the Holder of his or her
employment with the Company for Good Reason following a Change of Control, or
(ii) termination of the Holder’s employment by the Company for other than Cause
following a Change of Control.  For this purpose “Good Reason” shall mean any of
the following: (1) the assignment to the Holder by the Company, without the
Holder’s express written approval, of duties inconsistent with the Holder’s
position, duties, responsibilities, titles, offices or status with the Company
immediately prior to a Change of Control of the Company, or any removal of the
Holder from or any failure to re-elect the Holder to any such positions; (2) a
material reduction in the Holder’s base salary as in effect on the Date of Grant
or as the same is increased from time to time during the Restriction Period of
any Restricted Stock Award; (3) the failure to continue in effect any benefit
plan or arrangement in which the Holder is participating immediately prior to a
Change of Control, or the taking of any action by the Company which would
adversely affect the Holder’s participation in and/or materially reduce the
Holder’s benefits under any such benefit plan or arrangement or which would
deprive the Holder of any material fringe benefit enjoyed by the Holder
immediately prior to a Change of Control; (4) a relocation of the Parent
Company’s corporate headquarters to a location more than 50 miles outside of
Folsom, New Jersey, or the Holder’s relocation to any place more than 50
miles from the location at which the Holder performed the Holder’s duties except
for required travel by the Holder on the Company’s business to an extent
substantially consistent with the Holder’s business travel obligations
immediately prior to a Change of Control; (5) a material breach of the Holder’s
then current Employment Agreement with the Company (if any) by the Company; or
(6) any purported termination of the Holder’s employment which is not effected
pursuant to a Notice of Termination, as specified under the Holder’s then
current Employment Agreement with the Company (if any). Notwithstanding the
foregoing, for any of the foregoing acts (or failure to act) to constitute “Good
Reason,” the Holder must object in writing to the Company within 90 days
following initial notification of the occurrence or proposed occurrence of the
act (or failure to act), and which act (or failure to act) is not then rescinded
or otherwise remedied by the Board within 30 days after delivery of such notice
and the Holder actually resigns from employment within 30 days after the
expiration of the foregoing 30-day cure period.  If the Holder’s resignation
occurs after such time, the resignation shall not be treated as a Qualifying
Termination.  For this purpose “Cause” shall mean any of the following reasons:
(1) the willful and continued failure by the Holder to substantially perform his
or her duties hereunder other than any such failure resulting from the Holder’s
incapacity due to physical or mental illness or injury; (2) the conviction of
the Holder of a crime under state or federal law and the Board or one of its
committees is unable to conclude in good faith (and in its sole discretion) that
the Holder had no reasonable cause to believe that the activities of which he or
she was convicted were unlawful and that such conviction will not materially
impair his or her ability to discharge his or her duties; (3) the willful
engaging by the Holder in misconduct which is materially injurious to the
Company, monetarily or otherwise; or (4) the continued inability of the Holder
to perform his or her duties by reason of alcoholism or drug abuse even after
appropriate rehabilitation services have been made available to him or her. For
this purpose “Change of Control” shall mean any of the events described in the
first sentence of Paragraph 13 of the Plan.
 
(r)           “Restriction Period” means the period during which Restricted
Stock awarded under the Plan is subject to forfeiture.
 
(s)           “Restricted Stock” means Shares awarded by the Company under
Paragraph 11 of the Plan and described in Paragraph 3(d).
 
 
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(t)           “SAR” means a stock appreciation right granted under the Plan and
described in Paragraph 3(c).
 
(u)           “Share” or “Shares” means a share or shares of Common Stock of the
Parent Company.
 
(v)           “Subsidiary Companies” means all corporations that, at the time in
question, are subsidiary corporations of the Parent Company within the meaning
of section 425(f) of the Code.
 
(w)          “Ten Percent Shareholder” means a person who on the Date of Grant
owns, either directly or within the meaning of the attribution rules contained
in section 425(d) of the Code, stock possessing more than ten percent of the
total combined voting power of all classes of stock of his or her employer
corporation or of its parent or subsidiary corporations, as defined respectively
in sections 425(e) and (f) of the Code.
 
(x)           “Value” of a SAR means the excess of the Fair Market Value of a
Share on the date of exercise of such SAR over the Fair Market Value of a Share
on the Date of Grant of such SAR.
 
3.             Rights To Be Granted
 
Rights that may be granted under the Plan are:
 
(a)           Incentive Stock Options, which give the Optionee the right for a
specified time period to purchase a specified number of Shares for a price not
less than their Fair Market Value on the Date of Grant;
 
(b)           Non-Qualified Options, which give the Optionee the right for a
specified time period to purchase a specified number of Shares for a price
determined by the Committee on the Date of Grant;
 
(c)           SARs, which give the Holder the right for a specified time period,
without payment to the Company, to receive the Value of such SARs, to be paid in
cash or Shares or a combination of cash and Shares, the number and amount of
which shall be determined pursuant to Paragraph 8(e) below.
 
(d)           Restricted Stock Awards, which give the Holder a specific number
of Shares which are either (i) awarded upon the Company’s achievement of
Performance Goals established by the Committee, or (ii) awarded, subject to
forfeiture if the Company fails to achieve Performance Goals established by the
Committee.
 
4.             Stock Subject To Plan
 
Not more than 1,000,000 Shares in the aggregate may be delivered pursuant to the
Plan upon exercise of Options or SARs or pursuant to Restricted Stock
Awards.  The Shares so delivered may, at the option of the Company, be either
treasury Shares or Shares originally issued for such purpose.  If an Option or
an SAR covering Shares terminates or expires without having been exercised in
whole or in part, other Options or SARs may be granted covering the Shares as to
which the Option or SAR was not exercised.  If a Restricted Stock Award is
forfeited, other Restricted Stock Awards may be granted covering the Shares
which were forfeited.
 
 
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5.             Administration Of Plan
 
The Plan shall be administered by the Compensation/Pension Committee of the
Board or such other committee, consisting of two or more directors who, unless
the Board determines otherwise, are “outside directors” (within the meaning of
Section 162(m) of the Code) and “non-employee directors” (within the meaning of
Rule 16b-3(b)(3)(i) under the Securities Exchange Act of 1934) as may be
determined by the Board.
 
6.             Grant of Rights
 
The Committee may grant Options, SARs, Restricted Stock Awards or all of the
foregoing to Eligible Participants.
 
7.             Eligibility
 
(a)           An Option may be granted to those Eligible Participants who are
designated by the Committee as eligible to receive an Option.
 
(b)           An Incentive Stock Option shall not be granted to a Ten Percent
Shareholder except on such terms concerning the option price and period of
exercise as are provided in Paragraphs 8(a) and 8(f) with respect to such a
person.  A Non-Qualified Option shall not be granted to a Ten Percent
Shareholder.
 
(c)           A Restricted Stock Award may be granted to those Eligible
Participants who are designated by the Committee as eligible to receive a
Restricted Stock Award.
 
(d)           No Eligible Participant may be granted in any calendar year Awards
covering more than 300,000 Shares.
 
8.             Option and SAR Agreements and Terms
 
All Options and SARs shall be granted within ten years from January 26, 2005 and
be evidenced by Option agreements or SARs agreements which shall be executed on
behalf of the Parent Company and by the respective Optionees or Holders.  The
terms of each such agreement shall be determined from time to time by the
Committee, consistent, however, with the following:
 
(a)           Option Price. The option price per Share shall be determined by
the Committee but, in the case of Incentive Stock Option, shall not be less than
100% of the Fair Market Value of such Share on the Date of Grant.  With respect
to any Incentive Stock Option granted to a Ten Percent Shareholder, the option
price per Share shall not be less than 110% of the Fair Market Value of such
Share on the Date of Grant.
 
 
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(b)           Restrictions on Transferability. No Option or SAR shall be
transferable otherwise than by will or the laws of descent and distribution and,
during the lifetime of the Optionee or Holder, shall be exercisable only by him
or her. Upon the death of an Optionee or Holder, the person to whom the rights
shall have passed by will or by the laws of descent and distribution may
exercise any Options or SARs only in accordance with the provisions of Paragraph
8(f).
 
(c)           Payment Upon Exercise of Options.  Full payment for Shares
purchased upon the exercise of an Option shall be made in cash or, at the
election of the Optionee and as the Committee may, in its sole discretion,
approve, either (i) by surrendering Shares with an aggregate Fair Market Value
equal to the aggregate option price, (ii) by delivering such combination of
Shares and cash as the Committee may, in its sole discretion, approve or (iii)
at the election of the Optionee, and if the Committee, in its sole discretion
approves, by surrendering the Option in exchange for issuance of a number of
shares equal to the difference between the exercise price of the Option and the
Fair Market Value of the Shares subject to the Option.
 
(d)           Issuance of Certificates Upon Exercise of Options; Payment of
Cash.  Only whole Shares shall be issuable upon exercise of Options.  Any right
to a fractional Share shall be satisfied in cash.  Upon payment of the option
price, a certificate for the number of whole Shares and a check for the Fair
Market Value on the date of exercise of any fractional Share to which the
Optionee is entitled shall be delivered to such Optionee by the Parent Company;
provided, however, that in the case of the exercise of a Non-Qualified Option,
the Optionee has remitted to his employer an amount, determined by such
employer, necessary to satisfy applicable federal, state or local
tax-withholding requirements, or made other arrangements with his or her
employer for the satisfaction of such tax-withholding requirements.  The Parent
Company shall not be obligated to deliver any certificates for Shares until such
Shares have been listed (or authorized for listing upon official notice of
issuance) upon each stock exchange upon which outstanding Shares of such class
at the time are listed nor until there has been compliance with such laws or
regulations as the Parent Company may deem applicable.  The Parent Company shall
use its best efforts to effect such listing and compliance.
 
(e)           Issuance of Certificates Upon Exercise of SARs; Payment of
Cash.  Upon exercise of an SAR, its Value shall be payable in cash, or in Shares
or such combination of cash and Shares as is selected by the Holder and approved
by the Committee in its sole discretion.  Any Shares that may be due upon
exercise of an SAR shall be delivered to the Holder by the Parent Company and
any payment of cash shall be made by the employer of the Holder.  The employer
of the Holder shall deduct from the amount of  any cash so payable an amount
necessary to satisfy applicable federal, state, or local tax-withholding
requirements.  If no cash is payable (or if the amount of cash payable is
insufficient to satisfy applicable tax-withholding requirements), no Shares
shall be delivered by the Parent Company to the Holder until the Holder remits
to his or her employer an amount, determined by such employer, necessary to
satisfy applicable federal, state, or local tax-withholding requirements or
makes other arrangements for the satisfaction of such tax-withholding
requirements.  The Parent Company shall not be obligated to deliver any
certificates for Shares until such Shares have been listed (or authorized for
listing upon official notice of issuance) upon each stock exchange upon which
outstanding Shares of such class at the time are listed nor until there has been
compliance with such laws or regulations as the Parent Company may deem
applicable.  The Parent Company shall use its best efforts to effect such
listing and compliance.
 
 
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(f)           Periods of Exercise of Options and SARs.  An Option or SAR shall
be exercisable in whole or in part at such time as may be determined by the
Committee and stated in the Option or SAR agreement; provided, however, that,
unless otherwise determined by the Committee, no Option or SAR shall be
exercisable before one year or after five years from the Date of Grant in the
case of an Option or SAR granted to a Ten Percent Shareholder, or before one
year or after ten years from the Date of Grant in all other cases, except as
provided below:
 
(i)           In the event that an Optionee or Holder ceases to be employed by
the Company for any reason other than retirement, disability (as determined by
the Committee) or death, any Option or SAR held by such Optionee or Holder shall
not be exercisable after the date the Optionee or Holder ceases to be employed
by the Company unless otherwise determined by the Committee and set forth in the
Option or SAR agreement or a written amendment thereto; provided, however, that
in no event shall an Option or SAR be exercisable after five years from the Date
of Grant in the case of a Ten Percent Shareholder or after ten years from the
Date of Grant in all other cases;
 
(ii)           If an Optionee or Holder ceases to be employed by the Company,
and if such cessation of employment is due to the disability (as determined by
the Committee) or the retirement of the Optionee or Holder, he or she shall have
the right to exercise his or her Options or SARs until the last day of the sixth
month following cessation of employment, or such longer period as the Committee
may determine and set out in writing, even if the date of exercise is within any
time period prescribed by the Plan prior to which such Option or SAR shall not
be exercisable; provided, however, that in no event shall an Option or SAR be
exercisable after five years from the Date of Grant in the case of a Ten Percent
Shareholder or after ten years from the Date of Grant in all other cases;
 
(iii)           In the event that an Optionee or Holder ceases to be employed by
the Company by reason of his or her death, any Incentive Stock Option,
Non-Qualified Option or SAR held by such Optionee or Holder shall be
exercisable, the person to whom the rights of the Optionee shall be passed by
will or by the laws of descent and distribution, until the last day of the
twelfth month following the date of the Optionee’s or Holder’s death, or such
longer period as the Committee may determine and set out in writing, even if the
date of exercise is within any time period prescribed by the Plan prior to which
such Option or SAR shall not be exercisable; provided, however, that in no event
shall an Option or SAR be exercisable after five years from the Date of Grant in
the case of a Ten Percent Shareholder or after ten years from the Date of Grant
in all other cases.
 
 
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(g)           Date of Exercise.  The date of exercise of an Option or SAR shall
be the date on which written notice of exercise, addressed to the Parent Company
at its main office to the attention of its Secretary, is hand delivered,
telecopied or mailed, first class postage prepaid; provided, however, that the
Parent Company shall not be obligated to deliver any certificates for Shares
pursuant to the exercise of an Option or SAR until the Optionee shall have made
payment in full of the option price for such Shares.  Each such exercise shall
be irrevocable when given.  Each notice of exercise must (i) specify the
Incentive Stock Option, Non-Qualified Option, SAR, or combination thereof, being
exercised; (ii) must, in the case of the exercise of an Option, include a
statement of preference (which shall not be binding on the Committee) as to the
manner in which payment to the Parent Company shall be made (Shares or cash or a
combination of Shares and cash); and (iii) must, in the case of the exercise of
an SAR, include a statement of preference (which shall not be binding on the
Committee) as to the manner in which payment to the Holder shall be made other
than only in cash (Shares or cash or a combination of Shares and cash).
 
(h)           Termination of Employment.  For purposes of the Plan, a transfer
of an employee between two employers, each of which is a Company, shall not be
deemed a termination of employment.
 
(i)           Multiple Grants of Incentive Stock Options, Non-Qualified Options
and SARs. The grant, exercise, termination or expiration of any Incentive Stock
Option, Non-Qualified Option or SAR shall have no effect upon any other
Incentive Stock Option, Non-Qualified Option or SAR held by the same Optionee or
Holder; provided, however, that the Committee may, in its sole discretion,
provide in the Option agreement or SARs agreement that the exercise of a certain
number of SARs is conditioned upon the exercise of a certain number of Options
or provide that an SAR shall otherwise be attached to Options granted under the
Plan.  All SARs which are attached to Options shall be subject to the following
terms:
 
(A)           such SAR shall expire no later than the Option to which it is
attached;
 
 
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(B)           such SAR shall be for an amount no more than the excess of the
Fair Market Value of the Shares subject to the attached Option on the date such
SAR is exercised over the option price of such Option;
 
(C)           such SAR shall be subject to the same restrictions on
transferability as the Option to which it is attached;
 
(D)           such SAR shall be exercisable only when the Option to which it
attached is eligible to be exercised;
 
(E)           such SAR shall be exercisable only when the Fair Market Value of
the Shares subject to the attached Option exceeds the option price of such
Option; and
 
(F)           such SAR shall expire upon the exercise of the Option to which it
is attached. Upon exercise of an SAR which is attached to an Option, the Option
to which the SAR is attached shall expire.
 
9.             Limitation on Grant of Incentive Stock Options
 
The aggregate Fair Market Value (determined as of the time options are granted)
of the Shares for which any employee may be granted Incentive Stock Options that
first become exercisable in any one calendar year under the Plan and any other
plan of his or her employer corporation and its parent and subsidiary
corporations, as defined respectively in Sections 425(e) and (f) of the Code,
shall not exceed $100,000.
 
10.           Rights As Shareholders With Respect to Options and SARs
 
Neither an Optionee nor a Holder shall have any right as a shareholder with
respect to any Shares subject to his or her Options or SARs until the date of
the issuance of a stock certificate to him or her for such Shares.
 
11.           Restricted Stock Awards
 
The grant of a Restricted Stock Award shall be subject to the following terms
and conditions:
 
(a)           Grant of Restricted Stock Award. Any Restricted Stock granted
under the Plan shall be evidenced by an agreement executed by the Company and
the Holder, which agreement shall conform to the requirements of the Plan, and
shall specify (i) the number of Shares subject to the Award, (ii) the
Restriction Period applicable to each Award, (iii) the events that will give
rise to a forfeiture of the Award, (iv) the Performance Goals that must be
achieved in order for the restriction to be removed from the Award, (v) the
extent to which the Holder’s right to receive the Shares under the Award will be
forfeited if the Performance Goals are not met, and (vi) whether the Restricted
Stock is subject to a vesting schedule. The agreement may contain such other
provisions not inconsistent with the terms of the Plan as the Committee shall
deem advisable.
 
 
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(b)           Delivery of Restricted Stock.  Upon determination of the number of
shares of Restricted Stock that are to be granted to the Holder, the Committee
shall direct that a certificate or certificates representing the number of
Shares be issued to the Holder with the Holder designated as the registered
owner. The certificate(s) representing such shares shall be legended as to
restrictions on the sale, transfer, assignment, or pledge of the Restricted
Stock during the Restriction Period and deposited by the Holder, together with a
stock power endorsed in blank, with the Company.
 
(c)           Dividend Equivalents.  Notwithstanding any provision of the Plan
to the contrary, a Holder who has been granted a Restricted Stock Award pursuant
to this Paragraph 11 may, at the discretion of the Committee, be credited as of
dividend payment dates during the Restriction Period with Dividend Equivalents
with respect to the Shares underlying the Restricted Stock Award.  Such Dividend
Equivalents shall be credited to an account established on behalf of the Holder
by the Company. The Dividend Equivalents credited under this Paragraph (c) shall
be notionally reinvested in Shares and shall be converted into additional Shares
under such formula, at such time, and subject to such limitations as may be
determined by the Committee.
 
(d)           Receipt of Common Stock.  At the end of the Restriction Period,
the Committee shall determine, in light of the terms and conditions set forth in
the Restricted Stock agreement, the number of shares of Restricted Stock with
respect to which the restrictions imposed hereunder shall lapse. The Restricted
Stock with respect to which the restrictions shall lapse shall be converted to
unrestricted Shares by the removal of the restrictive legends from the
Restricted Stock.  Thereafter, Shares equal to the number of shares of the
Restricted Stock with respect to which the restrictions hereunder shall lapse
shall be delivered to the Holder. The Committee may, in its sole discretion,
modify or accelerate the vesting and delivery of shares of Restricted Stock.
 
(e)           Termination By Reason of Death, Disability or Retirement.  Unless
otherwise determined by the Committee, if a Holder ceases to be employed by the
Company and such cessation of employment is due to the Holder’s death,
disability (as determined by the Committee) or retirement, the vested portion of
the Restricted Stock, if any, shall become nonforfeitable. The non-vested
portion of the Restricted Stock shall be forfeited as of the date of such
termination of employment.
 
(f)            Other Termination.  Unless otherwise determined by the Committee
at the time of grant, if a Holder ceases to be employed by the Company and such
cessation of  employment is due to any reason other than for death, disability
(as determined by the Committee), retirement, or Qualifying Termination, any
Restricted Stock with respect to which the Restriction Period has not expired
shall be forfeited.
 
 
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12.           Changes in Capitalization
 
In the event of a stock dividend, stock split, recapitalization, combination,
subdivision, issuance of rights, or other similar corporate change, the Board
shall make appropriate adjustments in the aggregate number of Shares that may be
covered by Options, SARs or Restricted Stock Awards under the Plan, the number
of Shares subject to, and the option price of, each then-outstanding Option, the
number of then-outstanding SARs and the Fair Market Value of Shares upon which
the Value of such SARs is based, and the number of Shares subject to each
then-outstanding Restricted Stock Award.
 
13.           Mergers, Dispositions and Certain Other Transactions
 
Effective January 1, 2012, notwithstanding any provision of this Plan to the
contrary, if, during the Restriction Period of any Restricted Stock Award, the
Parent Company or any of the Subsidiary Companies shall be merged into or
consolidated with or otherwise combined with or acquired by another person or
entity, or there is a divisive reorganization or a liquidation or partial
liquidation of the Parent Company, then all Restricted Stock Awards shall become
nonforfeitable and immediately payable in cash upon the Qualifying Termination
of the Holder, to the extent then still outstanding.  Except as otherwise
provided in the foregoing sentence of this Paragraph 13, if, during the term of
any Option or SAR, or during the Restriction Period of any Restricted Stock
Award, the Parent Company or any of the Subsidiary Companies shall be merged
into or consolidated with or otherwise combined with or acquired by another
person or entity, or there is a divisive reorganization or a liquidation or
partial liquidation of the Parent Company, the Parent Company may choose to take
no action with regard to the Options, SARs or Restricted Stock Awards
outstanding or, notwithstanding any other provision of the Plan, to take any of
the following courses of action:
 
(a)           Not less than 15 days or more than 60 days prior to any such
transaction, all Optionees and Holders shall be notified that their Options and
SARs shall expire on the 15th day after the date of such notice, in which event
all Optionees and Holders shall have the right to exercise all of their Options
and SARs prior to such new expiration date; or
 
(b)           The Parent Company shall provide in any agreement with respect to
any such merger, consolidation, combination or acquisition that the surviving,
new or acquiring corporation shall grant options and stock appreciation rights
to the Optionees and Holders to acquire shares, or stock appreciation rights in
shares in such corporation with respect to which the excess of the fair market
value of the shares of such corporation immediately after the consummation of
such merger, consolidation, combination or acquisition over the option price, or
the value of such stock appreciation rights, shall not be greater than the
excess of the Fair Market Value of the Shares over the option price of Options
(or, in the case of an SAR, the Value of such SAR) , immediately prior to the
consummation of such merger, consolidation, combination or acquisition; or
 
 
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(c)           The Parent Company shall provide that all Restricted Stock Awards
that are outstanding on the date of the merger, consolidation, combination or
acquisition shall become nonforfeitable or immediately payable in cash; or
 
(d)           The Parent Company shall take such other action as the Board shall
determine to be reasonable under the circumstances in order to permit Optionees
and Holders to realize the value of rights granted to them under the Plan.
 
14.           Plan Not To Affect Employment
 
Neither the Plan nor any Award shall confer upon any employee of the Company any
right to continue in the employment of the Company.
 
15.           Interpretation
 
The Committee shall have the power to interpret the Plan and to make and amend
rules for putting it into effect and administering it. It is intended that the
Incentive Stock Options granted under the Plan shall constitute incentive stock
options within the meaning of section 422A of the Code, that the Non-Qualified
Options and Restricted Stock Awards shall constitute property subject to federal
income tax pursuant to the provisions of section 83 of the Code and that the
Plan shall qualify for the exemption available under Rule 16b-3 (or any similar
rule) of the Securities and Exchange Commission. The provisions of the Plan
shall be interpreted and applied insofar as possible to carry out such intent.
 
16.           Amendments
 
(a)           The Plan may be amended by the Board, but any amendment that
increases the aggregate number of Shares that may be issued pursuant to the Plan
upon exercise of Options or SARs or upon the grant of a Restricted Stock Award
(otherwise than pursuant to Paragraph 12), that changes the class of Eligible
Participants, or that otherwise requires the approval of the shareholders of the
Parent Company in order to maintain the exemption available under Rule 16b-3 (or
any similar rule) of the Securities Exchange Act of 1934, shall require the
approval of the holders of such portion of the shares of the capital stock of
the Parent Company present and entitled to vote on such amendment as is required
by applicable state law and the terms of the Parent Company’s Articles of
Incorporation, as then in effect, to make the amendment effective.  No
outstanding Option, SAR or Restricted Stock Award shall be affected by any such
amendment without the written consent of the Optionee, Holder, or other person
then entitled to exercise such Option or SAR or receive Shares pursuant to such
Restricted Stock Award.
 
 
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(b)           Subject to the provisions of the Plan, the Committee may amend any
Option agreement, SARs agreement or Restricted Stock agreement, subject to the
consent of the affected Optionee or Holder if such amendment is not favorable to
the Optionee or Holder or if such amendment has the effect of changing an
Incentive Stock Option to a Non Qualified Option, except that the consent of the
Optionee or Holder shall not be required for any amendment made pursuant to
Paragraph 13 hereof.
 
17.           Compliance with Section 162(m) of the Code
 
This Plan is intended to comply with Section 162(m) of the Code with respect to
qualified performance-based Awards that may be awarded by the Committee to
Eligible Participants. For this purpose, an Award shall constitute qualified
performance-based compensation to the extent that it is granted by the Committee
on account of the attainment of one or more preestablished, objective
performance goals established by the Committee, the material terms of which are
disclosed to the shareholders of the Parent Company and satisfaction of such
performance goals are certified by the Committee.
 
18.           Securities Laws
 
The Committee shall have the power to make each Award under the Plan subject to
such conditions as it deems necessary or appropriate to comply with the
then-existing requirements of the Securities Act of 1933 or the Securities
Exchange Act of 1934, including Rule 16b-3 (or any similar rule), of the
Securities and Exchange Commission.
 
19.           Effective Date and Term of Plan
 
The Plan shall expire no later than January 26, 2015, unless sooner terminated
by the Board. Any Incentive Stock Option granted before the approval of the Plan
by the Parent Company’s shareholders shall be expressly conditioned upon, and
shall not be exercisable until, such shareholder approval.
 
20.           General
 
Each Option, SAR or Restricted Stock Award shall be evidenced by a written
instrument containing such terms and conditions not inconsistent with the Plan
as the Committee may determine. The issuance of Shares on the exercise of an
Option or SAR, or pursuant to a Restricted Stock Award, shall be subject to all
of the applicable requirements of the New Jersey Business Corporation Act and
other applicable laws, including federal or state securities laws, and all
Shares issued under the Plan shall be subject to the terms and restrictions
contained in the Articles of Incorporation of the Parent Company, as amended
from time to time.  Among other things, the Optionee or Holder may be required
to deliver an investment representation to the Company in connection with any
exercise of an Option or SAR, or in connection with the receipt of Shares
pursuant to a Restricted Stock Award, or to agree to refrain from selling or
otherwise disposing of the Shares required for a specified period of time or on
specified terms.
 
 
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21.           Indemnification
 
Service on the Committee shall constitute service as a member of the Board. Each
member of the Committee shall be entitled, without further act on his or her
part, to indemnity from the Parent Company and limitation of liability to the
fullest extent provided by applicable law and by the Parent Company’s Articles
of Incorporation and/or By laws in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Awards hereunder in which he or she may be involved by reason of his
or her being or having been a member of the Committee, whether or not he or she
continues to be such member of the Committee at the time of the action, suit or
proceeding.
 
 
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