Unassociated Document


    STERLING
BANKS, INC.

    2008
DIRECTOR STOCK OPTION PLAN

    (AS
AMENDED)

     

    1. Purpose. The purpose of this
2008 Director Stock Option Plan (the “Plan”) of Sterling Banks, Inc., a New
Jersey corporation (the “Company”), is to encourage stock ownership by the
directors of the Company to provide an incentive for the directors to contribute
to the growth and prosperity of the Company, and to assist the Company in
attracting and retaining directors through the grant of options to purchase
shares of the Company’s common stock to all directors of the Company who are not
employees of the Company.  Except where the context otherwise
requires, the term “Company” shall include any of the Company’s present or
future parent or subsidiary corporations as defined in Sections 424(e) or (f) of
the Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the “Code”).

     

    2. Definitions.

     

    (a) “Affiliate” means (i) any
entity in which the Company, directly or indirectly, owns 50% or more of the
combined voting power, as determined by the Committee, (ii) any “parent
corporation” of the Company (as defined in Section 424(e) of the Code), (iii)
any “subsidiary corporation” of any such parent corporation (as defined in
section 424(f) of the Code) of the Company and (iv) any trades or businesses,
whether or not incorporated which are members of a controlled group or are under
common control (as defined in Sections 414(b) or (c) of the Code) with the
Company.

     

    (b) “Option Agreement” means a
written or electronic agreement setting forth the terms and provisions
applicable to an Option granted under the Plan. Each Option Agreement is subject
to the terms and conditions of the Plan.

     

    (c) “Board” means the Board of
Directors of the Company.

     

    (d) “Change of Control” shall be
deemed to have occurred upon any of the following events:

     

    (i) any
“person” (as defined in Section 3(a)(9) of the Exchange Act, and as modified in
Section 13(d) and 14(d) of the Exchange Act) other than (i) the Company or any
of its subsidiaries, (ii) any employee benefit plan of the Company or any of its
subsidiaries, (iii) any Affiliate, (iv) a company owned, directly or indirectly,
by shareholders of the Company in substantially the same proportions as their
ownership of the Company or (v) an underwriter temporarily holding securities
pursuant to an offering of such securities, becomes the “beneficial owner” (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing more than 50% of the shares of voting
stock of the Company then outstanding;

     

    (ii) the
consummation of any merger, organization, business combination or consolidation
of the Company or one of its subsidiaries with or into any other entity, other
than a merger, reorganization, business combination or consolidation which would
result in the holders of the voting securities of the Company outstanding
immediately prior thereto holding securities which represent immediately after
such merger, reorganization, business combination or consolidation more than 50%
of the combined voting power of the voting securities of the Company or the
surviving company or the parent of such surviving company;

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iii) the
consummation of a sale or disposition by the Company of all or substantially all
of the Company’s assets, other than a sale or disposition if the holders of the
voting securities of the Company outstanding immediately prior thereto hold
securities immediately thereafter which represent more than 50% of the combined
voting power of the voting securities of the acquirer, or parent of the
acquirer, of such assets;

     

    (iv) the
shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company; or

     

    (v) individuals
who, as of the Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose election
by the Board, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an election contest with respect to the election or removal of
directors or other solicitation of proxies or consents by or on behalf of a
person other than the Board.

     

    (e) “Code” means the Internal
Revenue Code of 1986, as amended, and any successor Code, and related rules,
regulations and interpretations.

     

    (f) “Committee” means the
Compensation Committee of the Board, or such other committee designated by the
Board, which is authorized to administer the Plan under Section 3 hereof, and
shall be composed of only Non-Employee Directors. The members of the Committee
shall also meet the “independence” requirements of the Nasdaq Stock Market, Inc.
or such other “independence” definition applicable to the Company’s reports to
the Securities and Exchange Commission. The number of persons who shall serve on
the Committee shall be specified from time to time by the Board; however, in no
event shall there be fewer than two members of the Committee. The Committee will
be composed in a manner such that the Plan will qualify under Rule 16b-3 with
regard to Options to persons who are subject to Section 16 of the Exchange Act
and will be comprised only of outside directors as defined in Treasury
Regulation Section 1.162-27(e)(3). If at any time the Committee has fewer than
two members or the Committee otherwise ceases to exist, then the Plan shall be
administered by the Board, and all references herein to the Committee shall
refer to the Board.

     

    (g) “Common Stock” means Common
Stock of the Company, $2.00 par value per share,

     

    (h) “Company” means Sterling
Banks, Inc.

     

    (i) “Director” means a member of
the Board.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (j) “Disability” means an
inability to perform the Non-Employee Director material services for the Company
for a period of 90 consecutive days or a total of 180 days, during any 365-day
period, in either case as a result of incapacity due to mental or physical
illness, which is determined to be total and permanent.  A
determination of Disability shall be made by a physician satisfactory to both
the Participant (or his guardian) and the Company, provided that if the
Non-Employee Director (or his guardian) and the Company do not agree on a
physician, the Non-Employee Director and the Company shall each select a
physician and these two together shall select a third physician, whose
determination as to Disability shall be final, binding and conclusive with
respect to all parties. Notwithstanding the above, eligibility for disability
benefits under any policy for long-term disability benefits provided to the
Participant by the Company shall conclusively establish the Participant’s
disability.

     

    (k) “Effective Date” means the
date that the Plan is approved by the shareholders of the Company.

     

    (l) “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.

     

    (m) “Fair Market Value” means, on
any date, the average of the high and low sales prices of the Common Stock on
the principal national securities exchange, which includes the Nasdaq Stock
Market, Inc., or other market on which such Common Stock is listed or admitted
to trading or if not traded on that date, then on the date last traded; or if
such Common Stock is not so listed or admitted to trading, the arithmetic mean
of the per share closing bid price and per share closing asked price on such
date as quoted on any other system of Nasdaq or such other market in which such
prices are regularly quoted; or if there have been no published bid or asked
quotations, the Committee shall, in good faith and in accordance with Section
422 of the Code, establish the method for determining the Fair Market Value of
the Common Stock.

     

    (n) “Non-Employee Director” means
a member of the Board who is not, and who has not been during the last three
fiscal years been, an employee or executive officer of the Company or any
Subsidiary.

     

    (o) “Option” or “Stock Option” means any
option to purchase shares of Stock granted pursuant to Section 7.

     

    (p) “Participant” means any
individual to whom an Option is granted under the Plan.

     

    (q) “Plan” means this Plan, which
shall be known as the “Sterling Banks, Inc. 2008 Director Stock Option
Plan.”

     

    (r) “Rule 16b-3” means Rule 16b-3
promulgated under the Exchange Act, as amended, or any successor
rule.

     

    (s)  “Stock” means the
Common Stock, $2.00 par value per share, of the Company, subject to adjustments
pursuant to Section 5.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (t) “Subsidiary” means any
corporation or other entity (other than the Company) in (i) which the Company
has at least a 50 percent interest, either directly or indirectly or (ii) of
which it has a right to elect or appoint 50% or more of the board of directors
or other governing body.

     

    3. Administration.

     

    (a) The Plan
shall be administered by the Committee. The Committee shall have the authority
to:

     

    (i) construe
and interpret the terms and conditions of the Plan and any Option issued under
the Plan (and any Option Agreement relating thereto) in its sole discretion and
to otherwise supervise the administration of the Plan;

     

    (ii) promulgate,
amend and rescind rules relating to the implementation of the Plan;

     

    (iii) make all
determinations necessary or advisable for the administration of the Plan,
including the selection of Non-Employee Directors who shall be granted Options,
the number of shares of Common Stock to be subject to each Option, the Option
price or the vesting or duration of Options;

     

    (iv) accelerate
at any time the exercisability or vesting of all or any portion of any
Option;

     

    (v) determine
and modify from time to time the terms and conditions, including restrictions,
not inconsistent with the terms of the Plan, of any Option, which terms and
conditions may differ among individual Options and Participants, and to approve
the form of written instruments evidencing the Options;

     

    (vi) subject
to the provisions of Section 8, extend at any time the period in which Stock
Options may be exercised;

     

    (vii) determine
whether Options will be granted alone or in combination or in tandem with other
Options; and

     

    (viii) determine
whether cash will be paid or Options will be granted in replacement of, or as
alternatives to, other grants under the Plan or any other incentive or
compensation plan of the Company, a Subsidiary or an acquired business unit;
and

     

    (ix) approve
in advance each particular Option to be granted hereunder in a manner which will
cause the Option to be exempt from Section 16(b) of the Exchange Act by virtue
of Rule 16b-3.

     

    (b) Subject
to the requirements of applicable law, the Committee may correct any defect,
supply any omission, or reconcile any inconsistency in the Plan, any Option, or
any Option Agreement; take any and all other actions it deems necessary or
advisable for the proper administration of the Plan; designate persons other
than members of the Committee to carry out its responsibilities; and prescribe
such conditions and limitations as it may deem appropriate; except that the Committee may
not delegate its authority with regard to the selection for participation of, or
the granting of Options to, persons subject to the reporting or other provisions
of Section 16 of the Exchange Act. Any determination, decision, or action of the
Committee in connection with the construction, interpretation, administration,
or application of the Plan shall be final, conclusive and binding upon all
persons validly claiming under or through persons participating in the
Plan.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) The
Committee may at any time, and from time to time amend or cancel any outstanding
Option, but only with the consent of the person to whom the Option was
granted.

     

    4. Eligibility.  Participants
under the Plan will be Non-Employee Directors of the Company and its
Subsidiaries as are selected from time to time by the Committee in its sole
discretion.  Any Non-Employee Director is eligible to become a
Participant in the Plan; provided that no Director while a member of the
Committee shall receive any Options under any stock plan of the Company unless
Options are granted equally to all Non-Employee Directors
hereunder.

     

    5. Shares
Available.  Subject to Section 5(a) and 5(b) of the Plan, the
maximum aggregate number of shares of Common Stock available for Option grants
shall be 100,000. Shares of Common Stock subject to an unexercised and expired
or terminated Option shall be available for an Option subsequently granted in
accordance with the Plan.

     

    (a) Changes in Stock. Subject to
Section 5(b) hereof, if, as a result of any reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar change in the Company’s capital stock, the outstanding shares of Stock
are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Stock or other securities, or, if, as
a result of any merger or consolidation, sale of all or substantially all of the
assets of the Company, the outstanding shares of Stock are converted into or
exchanged for securities of the Company or any successor entity (or a parent or
subsidiary thereof), the Committee shall make an appropriate or proportionate
adjustment in (i) the number of Stock Options that can be granted to any one
individual Participant, (ii) the number and kind of shares or other securities
subject to any then outstanding Options under the Plan, and (iii) the price for
each share subject to any then outstanding Stock Options under the Plan, without
changing the aggregate exercise price (i.e., the exercise price
multiplied by the number of Stock Options) as to which such Stock Options
remain exercisable. The Committee shall also make equitable or proportionate
adjustments in the number of shares subject to outstanding Options and the
exercise price and the terms of outstanding Options to take into consideration
cash dividends paid other than in the ordinary course or any other extraordinary
corporate event. The adjustment by the Committee shall be final, binding and
conclusive. No fractional shares of Stock shall be issued under the Plan
resulting from any such adjustment, but the Committee in its discretion may make
a cash payment in lieu of fractional shares.

     

    (b) Change in
Control.  Unless otherwise provided in the Option or a written
agreement with a Non-Employee Director, in the event of a Change in
Control:

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i) the Board
or the Committee may accelerate vesting and the time at which all Options then
outstanding may be exercised so that those types of Options may be exercised in
full for a limited period of time on or before a specified date fixed by the
Board or the Committee, after which specified date all unexercised Options and
all rights of Participants thereunder shall terminate, or the Board or Committee
may accelerate vesting and the time at which Options may be exercised so that
those types of Options may be exercised in full for their then remaining
term.

     

    Notwithstanding
the above provisions of this Section 5(b), the Board or the Committee shall not
be required to take any action described in the preceding provisions of this
Section 5(b), and any decision made by the Board or the Committee, in its sole
discretion, not to take some or all of the actions described in the preceding
provisions of this Section 5(b) shall be final, binding and conclusive with
respect to the Company and all other interested persons.

     

    (ii) Right of Cash-Out. If
approved by the Board prior to or within thirty (30) days after such time as a
Change in Control shall be deemed to have occurred, the Board shall have the
right for a forty-five (45) day period immediately following the date that the
Change in Control is deemed to have occurred to require all, but not less than
all, Participants to transfer and deliver to the Company all Options previously
granted to the Participants in exchange for an amount equal to the “cash value”
(defined below) of the Options.  Such right shall be exercised by
written notice to all Participants. For purposes of this Section 5(b)(ii), the
cash value of an Option shall equal the sum of (i) the cash value of all
benefits to which the Participant would be entitled upon settlement or exercise
of any Option which is not an Option and (ii) in the case of any Option that is
an Option, the excess of the “market value” (defined below) per share over the
option price, multiplied by the number of shares subject to such Option. For
purposes of the preceding sentence, “market value” per share shall mean the
higher of (x) the average of the Fair Market Value per share of Common Stock on
each of the five trading days immediately following the date a Change in Control
is deemed to have occurred or (y) the highest price, if any, offered in
connection with the Change in Control. The amount payable to each Participant by
the Company pursuant to this Section 5(b)(ii) shall be in cash or by certified
check and shall be reduced by any taxes required to be withheld.

     

    (c) Substitute Options. In
connection with a merger or consolidation of an entity with the Company or the
acquisition by the Company of property or stock of an entity, the Board or the
Committee may grant Options in substitution for any options or other stock or
stock-based awards granted by such entity or an Affiliate
thereof.  Substitute Options may be granted on such terms as the Board
or the Committee deems appropriate in the circumstances, notwithstanding any
limitations on Options contained in the Plan.  Substitute Options
shall not count against the overall share limit set forth in Section 5, except
as may be required by reason of Section 422 and related provisions of the
Code.

     

    6. Term.  The Plan
will become effective upon approval of the Plan by the Company’s shareholders at
the next annual meeting of shareholders and shall continue in effect until the
10th
anniversary thereof.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7. Grant;
Exercise Price.

     

    (a) On
September 2 following
each annual meeting of shareholders of the Company after the effective date of
the Plan, each eligible Non-Employee Director of the Company shall receive an
Option to purchase shares of Common Stock of the Company in an amount to be
determined by the Committee.

     

    (b) The
exercise price to be paid for each share of Common Stock deliverable upon
exercise of each Option granted under the Plan shall not be less than one
hundred percent (100%) of the Fair Market Value per share on the date of grant
of such Option.

     

    8. Terms and Conditions of
Options.  Options shall be in such form as the Committee may
from time to time approve, and may contain such additional terms and conditions,
not inconsistent with the Plan as the Committee shall deem
desirable.  The term of each Option shall be fixed by the Committee.
However, no Option shall be exercisable more than ten years after the Stock
Option is granted, and no Option shall be exercisable for less than 100
shares.  Options may be exercised by a Participant in whole or in
part, at any time.

     

    9. Manner of Exercise. In order
to exercise an Option, the person or persons entitled to exercise such Option
shall deliver to the Company payment in full for (i) the shares being purchased
and (ii) unless other arrangements have been made with the Committee, any
required withholding taxes. The payment of the exercise price for each Option
shall either be (x) in cash or by certified check payable and acceptable to the
Company, or (y) with the consent of the Committee, which consent may be granted
or withheld in the Committee’s sole discretion, and upon compliance with such
instructions as the Committee, by delivery of Common Stock having a fair market
value equal to the exercise price, or (z) by any other means set forth in the
Participant’s Option Agreement that is consistent with applicable laws,
regulations or rules.

     

    10. Proceeds. The proceeds
received from the sale of shares of Common Stock pursuant to the exercise of
Options exercised under the Plan will be used for general corporate
purposes.

     

    11. Options not Transferable.
Except as provided below, no Option granted hereunder shall be
transferable other than by will or by the laws of descent and
distribution.  Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of, or to subject to execution, attachment or similar process,
any Option granted hereunder, or any right thereunder, contrary to the
provisions hereof, shall be void and ineffective, shall give no right to the
purported transferee and shall, at the sole discretion of the Committee, result
in forfeiture of the Option with respect to the shares involved in such
attempt.

     

    With
respect to a specific Option, in accordance with rules and procedures
established by the Committee from time to time, the Participant (or his
guardian) may transfer, for estate planning purposes, all or part of such Option
to one or more immediate family members or related family trusts or partnerships
or similar entities as determined by the Committee. Any Option that is
transferred in accordance with the provisions of this Section 11 may only be
exercised by the person or persons who acquire a proprietary interest in the
Options pursuant to the transfer.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    12. Adjustment of Options. In the
event that at any time after the Effective Date the outstanding shares of Common
Stock are changed into or exchanged for a different number or kind of shares or
other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares, Change of Control, or the like, the Board or the Committee shall make
appropriate and equitable adjustments to all Options then outstanding as
provided in Sections 5(a) and 5(b).

     

    13. Option
Repricing.  Only with concurrent shareholder approval, the
Committee, in its absolute discretion, may grant to holders of outstanding
Options, in exchange for the surrender and cancellation of such Options, new
Options having exercise prices lower (or higher with any required consent) than
the exercise price provided in the Options so surrendered and canceled and
containing such other terms and conditions as the Committee may deem
appropriate.

     

    14. Exercise of Stock Options upon
Termination of Services.  Subject to Section 19, stock options
granted to Participants may permit the exercise of options upon the
Participant’s cessation of a service relationship within the following periods,
or such shorter periods as determined by the Committee at the time of
grant:

     

    (a) If on
account of death, Disability or retirement (as defined from time to time by
Company policy), at any time until the expiration date of the Option to exercise
the Option with respect to all or any part of the number of shares which were
purchasable by such Participant at the date of such termination.

     

    (b) If for
any other reason except death, Disability or retirement (as defined from time to
time by Company policy, stock options may be exercised within six (6) months of
such termination.  After such expiration of such six-month period, the
Option shall terminate.

     

    15. Designation of Beneficiary.
Each Participant to whom an Option has been made under the Plan may
designate a beneficiary or beneficiaries to exercise any Option or receive any
payment under any Option payable on or after the Participant’s death. Any such
designation shall be on a form provided for that purpose by the Committee and
shall not be effective until received by the Committee. If no beneficiary has
been designated by a deceased Participant, or if the designated beneficiaries
have predeceased the Participant, the beneficiary shall be the Participant
estate.

     

    16. Tax
Withholding.  The exercise of each Option shall be subject to
the condition that if at any time the Company shall determine in its discretion
that the satisfaction of withholding tax or other withholding liabilities is
necessary or desirable as a condition of, or in connection with, the exercise or
the delivery or purchase of shares pursuant to the Option, then in any such
events, the exercise shall not be effective unless such withholding shall have
been paid by the Participant.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    17. Amendments to the Plan. The
Board may amend, suspend or terminate the Plan or any portion thereof at any
time provided that (i) to the extent required by Section 162(m) of the Code, no
Option granted to a Participant that is intended to comply with Section 162(m)
after the date of such amendment shall become exercisable, realizable or vested,
as applicable to such Option, unless and until such amendment shall have been
approved by the Company’s shareholders if required by Section 162(m) (including
the vote required under Section 162(m)); and (ii) if, and for so long as, the
Company’s securities are traded on Nasdaq, no amendment that would require
shareholder approval under the rules of Nasdaq may be made effective unless and
until such amendment shall have been approved by the Company’s shareholders.
Unless otherwise specified in the amendment, any amendment to the Plan adopted
in accordance with this Section 17 shall apply to, and be binding on the holders
of, all Options outstanding under the Plan at the time the amendment is adopted,
provided the Board determines that such amendment does not materially and
adversely affect the rights of Participants under the Plan. No Option shall be
made that is conditioned upon shareholder approval of any amendment to the
Plan.

     

    18. General
Provisions.

     

    (a) Shares of
Stock shall not be issued pursuant to the exercise of any Option granted
hereunder unless the exercise of such Option and the issuance and delivery of
such shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act and the
requirements of any stock exchange upon which the Stock may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

     

    (b) The
Committee may require each person acquiring shares of Stock pursuant to an
Option to represent to and agree with the Company in writing that such person is
acquiring the Stock without a view to distribution thereof. The certificates for
such Stock may include any legend that the Committee deems appropriate to
reflect any restrictions on transfer.

     

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

     

    (d) No
provision in the Plan or any Option or Option Agreement shall be construed to
confer upon any individual the right to remain in the service of the Company or
any Subsidiary or to interfere in any way with any contractual or other right or
authority of the Company either to increase or decrease the compensation or
other payment to any individual at any time, or to terminate any relationship
between any individual and the Company. In addition, notwithstanding anything
contained in the Plan to the contrary, unless otherwise stated in the applicable
Option Agreement, no Option granted under the Plan shall be affected by any
change of duties or positions of the Participant, so long as such Participant
continues to be a Director of the Company or Subsidiary. The obligation of the
Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amount in trust or escrow for payment to any
Participant or beneficiary under the terms of the Plan.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (e) The
adoption of the Plan shall not be deemed to give any Non-Employee Director the
right to be selected as a Participant or to be granted an Option. There is no
obligation for uniformity of treatment of Participants, or holders or
beneficiaries of Options, and the terms and conditions of Options need not be
the same with respect to each recipient.

     

    (f) No
Participant shall have any rights as a shareholder of the Corporation until he
or she acquires an unconditional right under an Option to have shares of Stock
issued to him or her.

     

    (g) Option
exercises and sales of Stock underlying options under the Plan, shall be subject
to the Company’s insider trading policies and procedures as in effect from time
to time.

     

    (h) In the
event of any inconsistency or conflict between the terms of the Plan and an
Option, the terms of the Plan shall govern.

     

    (i) If any
provision of the Plan or any Option is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction or as to any Participant or Option,
or would disqualify the Plan or any Option under any law deemed applicable by
the Board or the Committee, such provision shall be construed or deemed amended
as necessary to conform to the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Board or the
Committee, materially altering the intent of the Plan or the Option, such
provision shall be stricken as to such jurisdiction, Participant or Option, and
the remainder of the Plan and any such Option shall remain in full force and
effect.

     

    (j) Neither
the Board, nor the Company nor the Committee makes any commitment or guarantee
that any federal, state or local tax treatment will apply or be available to any
person participating or eligible to participate hereunder.

     

    19. Exemptions from Section 16(b)
Liability. It is the intent of the Company that the grant of any Options
to or other transaction by a Participant who is subject to Section 16 of the
Exchange Act shall be exempt from Section 16(b) of the Exchange Act pursuant to
an applicable exemption (except for transactions acknowledged by the Participant
in writing to be non-exempt). Accordingly, if any provision of this Plan or any
Option Agreement does not comply with the requirements of Rule 16b-3 as then
applicable to any such transaction, such provision shall be construed or deemed
amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 so that such Participant shall avoid liability under Section 16(b) of
the Exchange Act.

     

    20. Indemnification. Neither the
Board nor the Committee, nor any member of either or any delegate thereof, shall
be liable for any act, omission, interpretation, construction or determination
made in good faith in connection with the Plan, and the members of the Board and
the Committee (and any delegate thereof) shall be entitled in all cases to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including, without limitation, reasonable attorneys’ fees)
arising or resulting therefrom to the fullest extent permitted by law and/or
under the Company’s articles or bylaws or any directors’ and officers’ liability
insurance coverage which may be in effect from time to time and/or any
indemnification agreement between such individual and the Company.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    21. Governing Law.  The
Plan and all determinations made and actions taken thereunder shall be governed
by and construed in accordance with the laws of the State of New Jersey, without
giving effect to the conflict of laws principles thereof.