ex41tos805380_08142008.htm


    Exhibit
4.1

    SL
INDUSTRIES, INC.

     

    2008
INCENTIVE STOCK PLAN

     

    1.           Purpose of the
Plan.

     

    This 2008
Incentive Stock Plan (the “Plan”) is intended as an incentive, to retain in the
employ of and as directors, officers, consultants, advisors and employees to SL
Industries, Inc., a New Jersey corporation (the “Company”) and any Subsidiary of
the Company, within the meaning of Section 424(f) of the United States Internal
Revenue Code of 1986, as amended (the “Code”), persons of training, experience
and ability, to attract new directors, officers, consultants, advisors and
employees whose services are considered valuable, to encourage the sense of
proprietorship and to stimulate the active interest of such persons in the
development and financial success of the Company and its
Subsidiaries.

     

    Certain
options granted pursuant to the Plan may constitute incentive stock options
within the meaning of Section 422 of the Code (the “Incentive Options”) while
certain other options granted pursuant to the Plan may be nonqualified stock
options (the “Nonqualified Options”).  Incentive Options and
Nonqualified Options are hereinafter referred to collectively as
“Options.”

     

    The
Company intends that the Plan meet the requirements of Rule 16b-3 (“Rule 16b-3”)
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and that transactions of the type specified in subparagraphs (c) to (f)
inclusive of Rule 16b-3 by officers and directors of the Company pursuant to the
Plan will be exempt from the operation of Section 16(b) of the Exchange
Act.  Further, the Plan may satisfy the performance-based compensation
exception to the limitation on the Company’s tax deductions imposed by Section
162(m) of the Code with respect to those Options for which qualification for
such exception is intended.  In all cases, the terms, provisions,
conditions and limitations of the Plan shall be construed and interpreted
consistent with the Company’s intent as stated in this Section 1.

     

    2.           Administration of the
Plan.

     

    The Board
of Directors of the Company (the “Board”) shall appoint and maintain as
administrator of the Plan a Committee (the “Committee”) consisting of two or
more directors who are “Non-Employee Directors” (as such term is defined in Rule
16b-3) and “Outside Directors” (as such term is defined in Section 162(m) of the
Code), which shall serve at the pleasure of the Board.  The Committee,
subject to Sections 3 and 5 hereof, shall have full power and authority to
designate recipients of Options, stock appreciation rights (“Stock Appreciation
Rights”), restricted stock (“Restricted Stock”) and other equity incentives or
stock or stock based awards (“Equity Incentives”) and to determine the terms and
conditions of respective Option, Stock Appreciation Rights, Restricted Stock and
Equity Incentives agreements (which need not be identical) and to interpret the
provisions and supervise the administration of the Plan. The Committee shall
have the authority, without limitation, to designate which Options granted under
the Plan shall be Incentive Options and which shall be Nonqualified
Options.  To the extent any Option does not qualify as an Incentive
Option, it shall constitute a separate Nonqualified Option.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Subject
to the provisions of the Plan, the Committee shall interpret the Plan and all
Options, Stock Appreciation Rights, Restricted Stock and Equity Incentives
granted under the Plan, shall make such rules as it deems necessary for the
proper administration of the Plan, shall make all other determinations necessary
or advisable for the administration of the Plan and shall correct any defects or
supply any omission or reconcile any inconsistency in the Plan or in any
Options, Stock Appreciation Rights, Restricted Stock or Equity Incentives
granted under the Plan in the manner and to the extent that the Committee deems
desirable to carry into effect the Plan or any Options, Stock Appreciation
Rights, Restricted Stock or Equity Incentives. The act or determination of a
majority of the Committee shall be the act or determination of the Committee and
any decision reduced to writing and signed by all of the members of the
Committee shall be fully effective as if it had been made by a majority at a
meeting duly held.  Subject to the provisions of the Plan, any action
taken or determination made by the Committee pursuant to this and the other
Sections of the Plan shall be conclusive on all parties.

     

    In the
event that for any reason the Committee is unable to act or if the Committee at
the time of any grant, award or other acquisition under the Plan does not
consist of two or more Non-Employee Directors, or if there shall be no such
Committee, then the Plan shall be administered by the Board, and references
herein to the Committee (except in the proviso to this sentence) shall be deemed
to be references to the Board, and any such grant, award or other acquisition
may be approved or ratified in any other manner contemplated by subparagraph (d)
of Rule 16b-3; provided, however, that grants
to the Company’s Chief Executive Officer or to any of the Company’s other four
most highly compensated officers that are intended to qualify as
performance-based compensation under Section 162(m) of the Code may only be
granted by the Committee.

     

    3.           Designation of Optionees and
Grantees.

     

    The
persons eligible for participation in the Plan as recipients of Options (the
“Optionees”), Stock Appreciation Rights, Restricted Stock or Equity Incentives
(respectively, the “Grantees”) shall include directors, officers and employees
of, and consultants and advisors to, the Company or any Subsidiary; provided
that Incentive Options may only be granted to employees of the Company and the
Subsidiaries.  In selecting Optionees and Grantees, and in determining
the number of shares to be covered by each Option, Stock Appreciation Right,
Restricted Stock or Equity Incentive granted to Optionees or Grantees, the
Committee may consider any factors it deems relevant, including without
limitation, the office or position held by the Optionee or Grantee or the
Optionee or Grantee’s relationship to the Company, the Optionee or Grantee’s
degree of responsibility for and contribution to the growth and success of the
Company or any Subsidiary, the Optionee or Grantee’s length of service,
promotions and potential. An Optionee or Grantee who has been granted an Option,
Stock Appreciation Right, Restricted Stock or Equity Incentive hereunder may be
granted an additional Option or Options, Stock Appreciation Right(s), Restricted
Stock or Equity Incentive(s) if the Committee shall so determine.

     

    
      
         

      

      
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    4.           Stock Reserved for the
Plan.

     

    Subject
to adjustment as provided in Section 10 hereof, a total of 315,000 shares of the
Company’s Common Stock, $0.20 par value per share (the “Stock”), shall be
subject to the Plan.  The maximum number of shares of Stock that may
be subject to Options and Stock Appreciation Rights granted under the Plan to
any individual in any calendar year shall not exceed 315,000 and the method of
counting such shares shall conform to any requirements applicable to
performance-based compensation under Section 162(m) of the Code, if
qualification as performance-based compensation under Section 162(m) of the Code
is intended.  The shares of Stock subject to the Plan shall consist of
unissued shares, treasury shares or previously issued shares held by any
Subsidiary of the Company, and such amount of shares of Stock shall be and is
hereby reserved for such purpose.  Any of such shares of Stock that
may remain unsold and that are not subject to outstanding Options at the
termination of the Plan shall cease to be reserved for the purposes of the Plan,
but until termination of the Plan the Company shall at all times reserve a
sufficient number of shares of Stock to meet the requirements of the
Plan.  Should any Option, Stock Appreciation Right, Restricted Stock,
or Equity Incentives expire or be canceled prior to its exercise or vesting in
full or should the number of shares of Stock to be delivered upon the exercise
or vesting in full of an Option, Stock Appreciation Right, Restricted Stock, or
Equity Incentives be reduced for any reason, the shares of Stock theretofore
subject to such Option, Stock Appreciation Right, Restricted Stock, or Equity
Incentives may be subject to future Options under the Plan, except in the case
of an Option or Stock Appreciation Right where such reissuance is inconsistent
with the provisions of Section 162(m) of the Code where qualification as
performance-based compensation under Section 162(m) of the Code is
intended.

     

    5.           Terms and Conditions of
Options.

     

    Options
granted under the Plan shall be subject to the following conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Committee shall deem desirable:

     

    (a)           Option
Price.  The purchase price of each share of Stock purchasable
under an Option shall be determined by the Committee at the time of grant, but
shall not be less than 100% of the Fair Market Value (as defined below) of such
share of Stock on the date the Option is granted; provided, however, that with
respect to an Optionee who, at the time an Incentive Option is granted, owns
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or of any
Subsidiary, the purchase price per share of Stock under an Incentive Option
shall be at least 110% of the Fair Market Value per share of Stock on the date
of grant. The exercise price for each Option shall be subject to adjustment as
provided in Section 10 below.  “Fair Market Value” means the closing
price of publicly traded shares of Stock on the business day immediately prior
to the grant on the principal securities exchange on which shares of Stock are
listed (if the shares of Stock are so listed), or on the NASDAQ Stock Market (if
the shares of Stock are regularly quoted on the NASDAQ Stock Market), or, if not
so listed or regularly quoted, the mean between the closing bid and asked prices
of publicly traded shares of Stock in the over-the-counter market, or, if such
bid and asked prices shall not be available, as reported by any nationally
recognized quotation service selected by the Company, or as determined by the
Committee in a manner consistent with the provisions of the Code. Anything in
this Section 5(a) to the contrary notwithstanding, in no event shall the
purchase price of a share of Stock be less than the minimum price permitted
under the rules and policies of any national securities exchange on which the
shares of Stock are listed.

     

    
      
         

      

      
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    (b)           Option
Term.  The term of each Option shall be fixed by the Committee,
but no Option shall be exercisable more than ten years after the date such
Option is granted and in the case of an Incentive Option granted to an Optionee
who, at the time such Incentive Option is granted, owns (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or of any Subsidiary, no such Incentive
Option shall be exercisable more than five years after the date such Incentive
Option is granted.

     

    (c)           Exercisability.  Subject
to Section 5(e) hereof, Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the
Committee.

     

    Upon the
occurrence of a “Change in Control” (as hereinafter defined), the Committee may
accelerate the vesting and exercisability of outstanding Options, in whole or in
part, as determined by the Committee in its sole discretion.  In its
sole discretion, the Committee may also determine that, upon the occurrence of a
Change in Control, each outstanding Option shall terminate within a specified
number of days after notice to the Optionee thereunder, and each such Optionee
shall receive, with respect to each share of Company Stock subject to such
Option, an amount equal to the excess of the Fair Market Value of such shares
immediately prior to such Change in Control over the exercise price per share of
such Option; such amount shall be payable in cash, in one or more kinds of
property (including the property, if any, payable in the transaction) or a
combination thereof, as the Committee shall determine in its sole
discretion.

     

    For
purposes of the Plan, a Change in Control shall be deemed to have occurred
if:

     

    (i)           a
tender offer (or series of related offers) shall be made and consummated for the
ownership of 50% or more of the outstanding voting securities of the Company,
unless as a result of such tender offer more than 50% of the outstanding voting
securities of the surviving or resulting corporation shall be owned in the
aggregate by the stockholders of the Company (as of the time immediately prior
to the commencement of such offer), any employee benefit plan of the Company or
its Subsidiaries, and their affiliates;

     

    
      
         

      

      
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    (ii)           the
Company shall be merged or consolidated with another corporation, unless as a
result of such merger or consolidation more than 50% of the outstanding voting
securities of the surviving or resulting corporation shall be owned in the
aggregate by the stockholders of the Company (as of the time immediately prior
to such transaction), any employee benefit plan of the Company or its
Subsidiaries, and their affiliates;

     

    (iii)           the
Company shall sell substantially all of its assets to another corporation that
is not wholly owned by the Company, unless as a result of such sale more than
50% of such assets shall be owned in the aggregate by the stockholders of the
Company (as of the time immediately prior to such transaction), any employee
benefit plan of the Company or its Subsidiaries and their affiliates;
or

     

    (iv)           a
Person (as defined below) shall acquire 50% or more of the outstanding voting
securities of the Company (whether directly, indirectly, beneficially or of
record), unless as a result of such acquisition more than 50% of the outstanding
voting securities of the surviving or resulting corporation shall be owned in
the aggregate by the stockholders of the Company (as of the time immediately
prior to the first acquisition of such securities by such Person), any employee
benefit plan of the Company or its Subsidiaries, and their
affiliates.

     

    For
purposes of this Section 5(c), ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the Exchange
Act.  In addition, for such purposes, “Person” shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; however, a Person shall not include (A) the Company or
any of its Subsidiaries; (B) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Subsidiaries; (C) an
underwriter temporarily holding securities pursuant to an offering of such
securities; or (D) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company.

     

    (d)           Method of
Exercise.  Options to the extent then exercisable may be
exercised in whole or in part at any time during the option period, by giving
written notice to the Company specifying the number of shares of Stock to be
purchased, accompanied by payment in full of the purchase price, in cash, or by
check or such other instrument as may be acceptable to the
Committee.  As determined by the Committee, in its sole discretion, at
or after grant, payment in full or in part may be made at the election of the
Optionee (i) in the form of Stock owned by the Optionee (based on the Fair
Market Value of the Stock on the trading day before the Option is exercised)
which is not the subject of any pledge or security interest, (ii) in the form of
shares of Stock withheld by the Company from the shares of Stock otherwise to be
received with such withheld shares of Stock having a Fair Market Value on the
date of exercise equal to the exercise price of the Option, or (iii) by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any shares surrendered to the
Company is at least equal to such exercise price and except with respect to (ii)
above, such method of payment will not cause a disqualifying disposition of all
or a portion of the Stock received upon exercise of an Incentive Option. An
Optionee shall have the right to dividends and other rights of a stockholder
with respect to shares of Stock purchased upon exercise of an Option at such
time as the Optionee (i) has given written notice of exercise and has paid in
full for such shares and (ii) has satisfied such conditions that may be imposed
by the Company with respect to the withholding of taxes.

     

    
      
         

      

      
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    (e)           Limit on Value of Incentive
Option.  The aggregate Fair Market Value, determined as of the
date the Incentive Option is granted, of Stock for which Incentive Options are
exercisable for the first time by any Optionee during any calendar year under
the Plan (and/or any other stock option plans of the Company or any Subsidiary)
shall not exceed $100,000.

     

    (f)           Incentive Option
Shares.  A grant of an Incentive Option under this Plan shall
provide that (a) the Optionee shall be required as a condition of the exercise
to furnish to the Company any payroll (employment) tax required to be withheld,
and (b) if the Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any share or
shares of Stock issued to him upon exercise of an Incentive Option granted under
the Plan within the two-year period commencing on the day after the date of the
grant of such Incentive Option or within a one-year period commencing on the day
after the date of transfer of the share or shares to him pursuant to the
exercise of such Incentive Option, he shall, within 10 days after such
disposition, notify the Company thereof and immediately deliver to the Company
any amount of United States federal, state and local income tax withholding
required by law.

     

    6.           Terms and Conditions of Stock
Appreciation Rights.

     

    Stock
Appreciation Rights shall granted with an exercise price that is not less than
100% of the Fair Market Value (as defined in Section 5(a) herein) of a share of
Common Stock on the date the Stock Appreciation Right is granted and shall be
exercisable at such time or times and subject to such other terms and conditions
as shall be determined by the Committee.  Unless otherwise provided,
Stock Appreciation Rights shall become immediately exercisable and shall remain
exercisable until expiration, cancellation or termination of the
award.  Such rights may be exercised in whole or in part by giving
written notice to the Company.  Stock Appreciation Rights to the
extent then exercisable may be exercised for payment in cash, shares of Common
Stock or a combination of both, as the Committee shall deem desirable, equal to:
(i) the excess of the Fair Market Value as defined in Section 5(a) herein of a
share of Common Stock on the date of exercise over (ii) the exercise price of
such Stock Appreciation Right.

     

    7.           Terms and Conditions of Restricted
Stock.

     

    Restricted
Stock may be granted under this Plan aside from, or in association with, any
other award and shall be subject to the following conditions and shall contain
such additional terms and conditions (including provisions relating to the
acceleration of vesting of Restricted Stock upon a Change of Control), not
inconsistent with the terms of the Plan, as the Committee shall deem
desirable:

     

    (a)           Grantee
rights.  A Grantee shall have no rights to an award of
Restricted Stock unless and until Grantee accepts the award within the period
prescribed by the Committee and, if the Committee shall deem desirable, makes
payment to the Company in cash, or by check or such other instrument as may be
acceptable to the Committee.  After acceptance and issuance of a
certificate or certificates, as provided for below, the Grantee shall have the
rights of a stockholder with respect to Restricted Stock subject to the
non-transferability and forfeiture restrictions described in section 7(d)
below.

     

    
      
         

      

      
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    (b)           Issuance of
certificates.  The Company shall issue in the Grantee’s name a
certificate or certificates for the shares of Common Stock associated with the
award promptly after the Grantee accepts such award.

     

    (c)           Delivery of
certificates.  Unless otherwise provided, any certificate or
certificates issued evidencing shares of Restricted Stock shall not be delivered
to the Grantee until such shares are free of any restrictions specified by the
Committee at the time of grant.

     

    (d)           Forfeitability,
Non-transferability of Restricted Stock.  Shares of Restricted
Stock are forfeitable until the terms of the Restricted Stock grant have been
satisfied.  Shares of Restricted Stock are not transferable until the
date on which the Committee has specified such restrictions has
lapsed.  Unless otherwise provided, distributions of additional shares
or property in the form of dividends or otherwise in respect of shares of
Restricted Stock shall be subject to the same restrictions as such shares of
Restricted Stock.

     

    (e)           Change of
Control.  Upon the occurrence of a Change in Control, the
Committee may accelerate the vesting of outstanding Restricted Stock, in whole
or in part, as determined by the Committee in its sole discretion.

     

    8.           Other Equity Incentives or Stock
Based Awards.

     

    The
Committee may grant Equity Incentives (including the grant of unrestricted
shares) to such key persons, in such amounts and subject to such terms and
conditions, as the Committee shall in its discretion determine, subject to the
provisions of the Plan.  Such awards may entail the transfer of actual
shares of Common Stock to Plan participants, or payment in cash or otherwise of
amounts based on the value of shares of Common Stock.

     

    9.           Term of Plan.

     

    No
Option, Stock Appreciation Rights, Restricted Stock or Equity Incentives shall
be granted pursuant to the Plan on the date which is ten years from the
effective date of the Plan, but Options, Stock Appreciation Rights or Equity
Incentives theretofore granted may extend beyond that date.

     

    10.           Capital Change of the
Company.

     

    In the
event of any merger, reorganization, consolidation, recapitalization, stock
dividend, or similar type of corporate restructuring affecting the Stock, the
Committee shall make an appropriate and equitable adjustment in the number and
kind of shares reserved for issuance under the Plan and in the number and option
price of shares subject to outstanding Options granted under the Plan, to the
end that after such event each Optionee’s proportionate interest shall be
maintained as immediately before the occurrence of such event. The Committee
shall, to the extent feasible, make such other adjustments as may be required
under the tax laws so that any Incentive Options previously granted shall not be
deemed modified within the meaning of Section 424(h) of the
Code.  Appropriate adjustments shall also be made in the case of
outstanding Stock Appreciation Rights and Restricted Stock granted under the
Plan.

     

    
      
         

      

      
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    11.           Purchase for
Investment.

     

    Unless
the Options and shares covered by the Plan have been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or the Company has
determined that such registration is unnecessary, each person exercising or
receiving Options, Stock Appreciation Rights, Restricted Stock or Equity
Incentives under the Plan may be required by the Company to give a
representation in writing that he is acquiring the securities (if issued) for
his own account for investment and not with a view to, or for sale in connection
with, the distribution of any part thereof.

     

    12.           Taxes.

     

    (a)           The
Company may make such provisions as it may deem appropriate, consistent with
applicable law, in connection with any Options, Stock Appreciation Rights,
Restricted Stock or Equity Incentives granted under the Plan with respect to the
withholding of any taxes (including income or employment taxes) or any other tax
matters.

     

    (b)           If
any Grantee, in connection with the acquisition of Restricted Stock, makes the
election permitted under section 83(b) of the Code (that is, an election to
include in gross income in the year of transfer the amounts specified in section
83(b)), such Grantee shall notify the Company of the election with the Internal
Revenue Service pursuant to regulations issued under the authority of Code
section 83(b).

     

    (c)           If
any Grantee shall make any disposition of shares of Stock issued pursuant to the
exercise of an Incentive Option under the circumstances described in section
421(b) of the Code (relating to certain disqualifying dispositions), such
Grantee shall notify the Company of such disposition within 10 days
hereof.

     

    13.           Effective Date of
Plan.

     

    The Plan
shall be effective on May 14, 2008; provided, however, that if, and only if,
certain options are intended to qualify as Incentive Stock Options, the Plan
must subsequently be approved by majority vote of the Company’s stockholders no
later than March 31, 2009, and further, that in the event certain Option grants
hereunder are intended to qualify as performance-based compensation within the
meaning of Section 162(m) of the Code, the requirements as to shareholder
approval set forth in Section 162(m) of the Code are satisfied.

     

    14.           Amendment and Termination, Section
409A of the Code.

     

    The Board
may amend, suspend, or terminate the Plan, except that no amendment shall be
made that would impair the rights of any Optionee or Grantee under any Option,
Stock Appreciation Right, Restricted Stock or Equity Incentive theretofore
granted without the Optionee or Grantee’s consent, and except that no amendment
shall be made which, without the approval of the stockholders of the Company
would:

     

    (a)           materially
increase the number of shares that may be issued under the Plan, except as is
provided in Section 10;

     

    
      
         

      

      
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    (b)           materially
increase the benefits accruing to the Optionees or Grantees under the
Plan;

     

    (c)           materially
modify the requirements as to eligibility for participation in the
Plan;

     

    (d)           decrease
the exercise price of an Incentive Option to less than 100% of the Fair Market
Value per share of Stock on the date of grant thereof or the exercise price of a
Nonqualified Option to less than 100% of the Fair Market Value per share of
Stock on the date of grant thereof; or

     

    (e)           extend
the term of any Option beyond that provided for in Section 5(b).

     

    (f)           The
Committee may amend the terms of any Option, Stock Appreciation Right,
Restricted Stock or Equity Incentive theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights of any Optionee or
Grantee without the Optionee or Grantee’s consent.  The Committee may
also substitute new Options, Stock Appreciation Rights or Restricted Stock for
previously granted Options, Stock Appreciation Rights or Restricted Stock
including options granted under other plans applicable to the participant and
previously granted Options having higher option prices, upon such terms as the
Committee may deem appropriate.

     

    It is the
intention of the Board that the Plan comply strictly with the provisions of
Section 409A of the Code and Treasury Regulations and other Internal Revenue
Service guidance promulgated thereunder (the “Section 409A Rules) and the
Committee shall exercise its discretion in granting Options, Stock Appreciation
Rights or Restricted Stock hereunder (and the terms of such grants),
accordingly.  The Plan and any grant of an Option, Stock Appreciation
right or Restricted Stock hereunder may be amended from time to time (without,
in the case of an Award, the consent of the Participant) as may be necessary or
appropriate to comply with the Section 409A Rules.

     

    15.           Government
Regulations.

     

    The Plan,
and the grant and exercise of Options, Stock Appreciation Rights, Restricted
Stock and Equity Incentives hereunder, and the obligation of the Company to sell
and deliver shares under such Options, Stock Appreciation Rights, Restricted
Stock and Equity Incentives shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies, national
securities exchanges and interdealer quotation systems as may be
required.

     

    16.           General
Provisions.

     

    (a)           Certificates.  All
certificates for shares of Stock delivered under the Plan shall be subject to
such stop transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, or other securities commission having jurisdiction, any
applicable Federal or state securities law, any stock exchange or interdealer
quotation system upon which the Stock is then listed or traded and the Committee
may cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions.

     

    
      
         

      

      
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    (b)           Employment
Matters.  The adoption of the Plan shall not confer upon any
Optionee or Grantee of the Company or any Subsidiary any right to continued
employment or, in the case of an Optionee or Grantee who is a director,
continued service as a director, with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of any of its employees, the service of
any of its directors or the retention of any of its consultants or advisors at
any time.

     

    (c)           Limitation of
Liability.  No member of the Board or the Committee, or any
officer or employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company in respect of any such action,
determination or interpretation.

     

    (d)           Registration of
Stock.  Notwithstanding any other provision in the Plan, no
Option may be exercised unless and until the Stock to be issued upon the
exercise thereof has been registered under the Securities Act and applicable
state securities laws, or are, in the opinion of counsel to the Company, exempt
from such registration in the United States.  The Company shall not be
under any obligation to register under applicable federal or state securities
laws any Stock to be issued upon the exercise of an Option granted hereunder in
order to permit the exercise of an Option and the issuance and sale of the Stock
subject to such Option, although the Company may in its sole discretion register
such Stock at such time as the Company shall determine.  If the
Company chooses to comply with such an exemption from registration, the Stock
issued under the Plan may, at the direction of the Committee, bear an
appropriate restrictive legend restricting the transfer or pledge of the Stock
represented thereby, and the Committee may also give appropriate stop transfer
instructions with respect to such Stock to the Company’s transfer
agent.

     

    (e)           Non-transferability.  Options
and Stock Appreciation Rights granted hereunder are not transferable and may be
exercised solely by the Optionee or Grantee during his lifetime or after his
death by the person or persons entitled thereto under his will or the laws of
descent and distribution.  The Committee, in its sole discretion, may
permit a transfer of a Nonqualified Option to (i) a trust for the benefit of the
Optionee or (ii) a member of the Optionee’s immediate family (or a trust for his
or her benefit).  Any attempt to transfer, assign, pledge or otherwise
dispose of, or to subject to execution, attachment or similar process, any
Option or Stock Appreciation Right contrary to the provisions hereof shall be
void and ineffective and shall give no right to the purported
transferee.

     

    (f)           No rights as a
Stockholder.  No Optionee or Grantee (or other person having
the right to exercise such award) shall have any of the rights of a stockholder
of the Company with respect to shares subject to such award until the issuance
of a stock certificate to such person for such shares.  Except as
otherwise provided herein, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) for which the record date is prior to the
date such stock certificate is issued.

     

    
      
         

      

      
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    (g)           Termination by
Death.  Unless otherwise determined by the Committee, if any
Optionee or Grantee’s employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option or Stock Appreciation Right
may thereafter be exercised, to the extent then exercisable (or on such
accelerated basis as the Committee shall determine at or after grant), by the
legal representative of the estate or by the legatee of the Optionee or Grantee
under the will of the Optionee or Grantee, for a period of one year after the
date of such death or until the expiration of the stated term of such Option or
Stock Appreciation Right as provided under the Plan, whichever period is
shorter.

     

    (h)           Termination by Reason of
Disability.  Unless otherwise determined by the Committee, if
any Optionee or Grantee’s employment with or service to the Company or any
Subsidiary terminates by reason of total and permanent disability, any Option or
Stock Appreciation Right held by such Optionee or Grantee may thereafter be
exercised, to the extent it was exercisable at the time of termination due to
Disability (or on such accelerated basis as the Committee shall determine at or
after grant), but may not be exercised after 60 days after the date of such
termination of employment or service or the expiration of the stated term of
such Option or Stock Appreciation Right, whichever period is shorter; provided,
however, that, if the Optionee or Grantee dies within such 60-day period, any
unexercised Option or Stock Appreciation Right held by such Optionee or Grantee
shall thereafter be exercisable to the extent to which it was exercisable at the
time of death for a period of one year after the date of such death or for the
stated term of such Option or Stock Appreciation Right, whichever period is
shorter.

     

    (i)           Termination by Reason of
Retirement.  Unless otherwise determined by the Committee, if
any Optionee or Grantee’s employment with or service to the Company or any
Subsidiary terminates by reason of Normal or Early Retirement (as such terms are
defined below), any Option or Stock Appreciation Right held by such Optionee or
Grantee may thereafter be exercised to the extent it was exercisable at the time
of such Retirement (or on such accelerated basis as the Committee shall
determine at or after grant), but may not be exercised after 60 days after the
date of such termination of employment or service or the expiration of the
stated term of such Option or Stock Appreciation Right, whichever period is
shorter; provided, however, that, if the Optionee or Grantee dies within such
60-day period, any unexercised Option or Stock Appreciation Right held by such
Optionee or Grantee shall thereafter be exercisable, to the extent to which it
was exercisable at the time of death, for a period of one year after the date of
such death or for the stated term of such Option or Stock Appreciation Right,
whichever period is shorter.

     

    For
purposes of this paragraph (i), “Normal Retirement” shall mean retirement from
active employment with the Company or any Subsidiary on or after the normal
retirement date specified in the applicable Company or Subsidiary pension plan
or if no such pension plan, age 65, and “Early Retirement” shall mean retirement
from active employment with the Company or any Subsidiary pursuant to the early
retirement provisions of the applicable Company or Subsidiary pension plan or if
no such pension plan, age 55.

     

    
      
         

      

      
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    (j)           Other
Termination.  Unless otherwise determined by the Committee, if
any Optionee or Grantee’s employment with or service to the Company or any
Subsidiary terminates for any reason other than death, Disability or Normal or
Early Retirement, the Option or Stock Appreciation Right shall thereupon
terminate, except that the portion of any Option or Stock Appreciation Right
that was exercisable on the date of such termination of employment or service
may be exercised for the lesser of 30 days after the date of termination or the
balance of such Option or Stock Appreciation Right’s term if the Optionee or
Grantee’s employment or service with the Company or any Subsidiary is terminated
by the Company or such Subsidiary without cause or for good reason by the
Optionee or Grantee (the determination as to whether termination was for cause
or for good reason to be made by the Committee). The transfer of an Optionee or
Grantee from the employ of or service to the Company to the employ of or service
to a Subsidiary, or vice versa, or from one Subsidiary to another, shall not be
deemed to constitute a termination of employment or service for purposes of the
Plan.

     

    
      	
              SL
      INDUSTRIES, INC.

            
	
              March
      31, 2008

            


    

     

     

     

    
 

    
      
         

      

      
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