EXHIBIT 4.3


  


Amended and Restated Warwick Valley Telephone
Company

2008 Long-Term Incentive Plan 


 


1.
Purpose 


The purpose of the Warwick Valley Telephone
Company Amended and Restated 2008 Long-Term Incentive Plan (the “Plan”) is to assist the Company and its Affiliates
in attracting, motivating and retaining selected individuals to serve as employees, directors, consultants and advisors of the
Company and its Affiliates by providing incentives to such individuals through the ownership and performance of the Company’s
common stock.


 


2.
Definitions 


(a) “Affiliate” means
any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the relevant time
each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the
total combined voting power of all classes of stock in one of the other corporations in the chain.


(b) “Award” means an Option,
Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Performance Award granted under the Plan.


(c) “Award Agreement”
means the written or electronic document or agreement evidencing the grant of an Award by the Company.


(d) “Board” means the
board of directors of the Company.


(e) “Cause” means the
occurrence of any of the following, unless a different definition of “Cause” is set forth in the applicable Award Agreement
or an employment agreement between the applicable Participant and the Company:


(i) the Participant’s continued failure
to substantially perform the Participant’s assigned duties (other than as a result of total or partial incapacity due to
physical or mental illness) for a period of ten (10) days following written notice by the Company to the Participant of such failure;


(ii) the Participant’s engagement in
conduct detrimental to the interests of the Company or any of its Affiliates, including without limitation, fraud, embezzlement,
theft or dishonesty in the course of the Participant’s employment or service to the Company and its Affiliates;


(iii) the Participant’s conviction
of, or plea of guilty or nolo contendere to (A) a felony; or (B) a crime, other than a felony, which involves, as determined in
the good faith judgment and sole discretion of the Board, moral turpitude, a breach of trust or a breach of fiduciary duty owed
to the Company or any of its Affiliates;


(iv) the Participant’s disclosure of
trade secrets or confidential information of the Company or any of its Affiliates; or


(v) the Participant’s breach of any
policy of the Company of any of its Affiliates that applies to the Participant or any agreement with the Company or any of its
Affiliates in respect of confidentiality, nondisclosure, non-competition or otherwise.


(f) “Change in Control”
means the occurrence of any of the following events, unless a different definition of “Change in Control” is set forth
in the applicable Award Agreement or an employment agreement between the applicable Participant and the Company:


  



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(i) Any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”) becomes the beneficial owner (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either (A) the then outstanding common shares
of the Company (the “Outstanding Company Common Shares”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that such beneficial ownership shall not constitute a Change in Control if it occurs as
a result of any of the following acquisitions of securities: (I) any acquisition directly from the Company; (II) any acquisition
by the Company or any Affiliate; (III) any acquisition by any employee benefit plan (or related trust) sponsored or maintained
by the Company or any Affiliate; (IV) any acquisition by an underwriter temporarily holding Company securities pursuant to an
offering of such securities; (V) any acquisition by an individual, entity or group that is permitted to, and actually does, report
its beneficial ownership on Schedule 13G (or any successor schedule); provided that, if any such individual, entity or group subsequently
becomes required to or does report its beneficial ownership on Schedule 13D (or any successor schedule), then, for purposes of
this paragraph, such individual, entity or group shall be deemed to have first acquired, on the first date on which such individual,
entity or group becomes required to or does so report, beneficial ownership of all of the Outstanding Company Common Stock and
Outstanding Company Voting Securities beneficially owned by it on such date; or (VI) any acquisition by any corporation pursuant
to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described
in clauses (A), (B) and (C) of Section 2(f)(iii) are satisfied. Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the “Subject Person”) became the beneficial owner of more than 50% of the
Outstanding Company Common Shares or Outstanding Company Voting Securities as a result of the acquisition of Outstanding Company
Common Shares or Outstanding Company Voting Securities by the Company which, by reducing the number of Outstanding Company Common
Shares or Outstanding Company Voting Securities, increases the proportional number of shares beneficially owned by the Subject
Person; provided, that if a Change in Control would be deemed to have occurred (but for the operation of this sentence) as a result
of the acquisition of Outstanding Company Common Shares or Outstanding Company Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the beneficial owner of any additional Outstanding Company Common
Shares or Outstanding Company Voting Securities which increases the percentage of the Outstanding Company Common Shares or Outstanding
Company Voting Securities beneficially owned by the Subject Person, then a Change in Control shall then be deemed to have occurred;
or 


(ii) Individuals who, as of the date of this
Agreement, 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 date hereof whose election, or nomination for
election by the Company’s shareholders, 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 either an actual or threatened election contest or
other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board, including by reason
of agreement intended to avoid or settle any such actual or threatened contest or solicitation; or


(iii) The consummation of a reorganization,
merger, statutory share exchange, consolidation, or similar corporate transaction involving the Company or any of its direct or
indirect Subsidiaries (each a “Business Combination”) in each case, unless, following such Business Combination, (A)
the Outstanding Company Common Shares and the Outstanding Company Voting Securities immediately prior to such Business Combination,
continue to represent (either by remaining outstanding or being converted into voting securities of the resulting or surviving
entity or any parent thereof) more than 50% of the then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation
resulting from Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the
Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no
Person (excluding the Company, any employee benefit plan (or related trust) of the Company, an Affiliate or such corporation resulting
from such Business Combination or any parent or a subsidiary thereof, and any Person beneficially owning, immediately prior to
such reorganization, merger or consolidation, directly or indirectly, 25% or more of the Outstanding Company Common Shares or Outstanding
Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 25% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such Business Combination (or any parent thereof) or the combined
voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors,
and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination
(or any parent thereof) were members of the Incumbent Board at the time of the execution of the initial agreement or action of
the Board providing for such Business Combination; or


  



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(iv) The consummation of the sale, lease,
exchange or other disposition of all or substantially all of the assets of the Company, unless such assets have been sold, leased,
exchanged or disposed of to a corporation with respect to which following such sale, lease, exchange or other disposition (A) more
than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation (or any parent thereof) entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Shares and Outstanding Company Voting Securities immediately prior to such
sale, lease, exchange or other disposition in substantially the same proportions as their ownership immediately prior to such sale,
lease, exchange or other disposition of such Outstanding Company Common Shares and Outstanding Company Voting Shares, as the case
may be, (B) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or an Affiliate of
such corporation or a subsidiary thereof and any Person beneficially owning, immediately prior to such sale, lease, exchange or
other disposition, directly or indirectly, more than 50% of the Outstanding Company Common Shares or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock of such corporation (or any parent thereof) and the combined voting power of the then outstanding voting
securities of such corporation (or any parent thereof) entitled to vote generally in the election of directors, and (C) at least
a majority of the members of the board of directors of such corporation (or any parent thereof) were members of the Incumbent Board
at the time of the execution of the initial agreement or action of the Board providing for such sale, lease, exchange or other
disposition of assets of the Company; or


(v) a complete liquidation or dissolution
of the Company.


In addition, if the Change in Control constitutes
a payment event with respect to any Award that provides for the deferral of compensation subject to Section 409A of the Code, to
the extent required, the transaction or event described in this Section 2(f) must also qualify as a change in control event within
the meaning of Section 409A of the Code, and the Treasury Regulations promulgated and other official guidance issued thereunder.


(g) “Code” means the Internal
Revenue Code of 1986, as amended from time to time.


(h) “Committee” means
the Compensation Committee of the Board or any successor committee of the Board designated by the Board to administer the Plan.
The Committee shall consist of not less than such number of Directors as shall be required to permit Awards granted under the Plan
to qualify under Rule 16b-3 of the Exchange Act. Each member of the Committee shall be (i) a “non-employee director”
within the meaning of Rule 16b-3 of the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m)
of the Code, and (iii) an “independent director” for purpose of the NASDAQ rules and regulations.


(i) “Company” means Warwick
Valley Telephone Company, a New York corporation.


(j) “Covered Employee”
means an employee of the Company or its Affiliates who is a “covered employee” within the meaning of Section 162(m)
of the Code.


(k) “Director” means a
non-employee member of the Board.


(l) “Eligible Person”
means any employee, Director, consultant or advisor providing services to the Company or an Affiliate whom the Committee determines
to be an Eligible Person. An Eligible Person must be an individual.


(m) “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.


  



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(n) “Fair Market Value”
means, with respect to any property other than Shares, the market value of such property determined by such methods or procedures
as established from time to time by the Committee. The Fair Market Value of Shares as of any date shall be the per Share closing
price of the Shares as reported on NASDAQ on that date (or if there were no reported prices on such date, on the last preceding
date on which the prices were reported) or, if the Company is not then listed on NASDAQ, on such other principal securities exchange
on which the Shares are traded, and if the Company is not listed on NASDAQ or any other securities exchange, the Fair Market Value
of Shares shall be determined by the Committee in its sole discretion using appropriate criteria.


(o) “Good Reason” means
the occurrence of any of the following, unless a different definition of “Good Reason” is set forth in the applicable
Award Agreement or an employment agreement between the applicable Participant and the Company:


(i) a material diminution in the Participant’s
base compensation;


(ii) a material diminution in the Participant’s
authority, duties or responsibilities;


(iii) a material diminution in the budget
over which the Participant retains authority;


(iv) a material change in the geographic
location at which the Participant is required to perform services; or


(v) the Company or any of its Affiliates
breaches the agreement under which the Participant provides services in any material respect.


Notwithstanding the foregoing, the events
described in subsections (i) through (v) of this Section 2(o) shall constitute Good Reason only if the Participant provides written
notice to the Company within ninety (90) days of the initial existence of the event constituting Good Reason and the Company fails
to cure such event within thirty (30) days after receipt from the Participant of such written notice.


(p) “Incentive Stock Option”
means a stock option granted under Section 5 that is intended to meet the requirements of Section 422 of the Code.


(q) “Limitations” has
the meaning set forth in Section 9(e).


(r) “NASDAQ” means the
NASDAQ Stock Market.


(s) “Non-Qualified Stock Option”
means a stock option granted under Section 5 that is not intended to be an Incentive Stock Option.


(t) “Option” means an
Incentive Stock Option or a Non-Qualified Stock Option.


(u) “Participant” means
an Eligible Person who receives an Award under the Plan.


(v) “Performance Award”
means any Award of Performance Cash or Performance Shares granted pursuant to Section 8.


(w) “Performance Cash”
means any cash incentives granted pursuant to Section 8 that will be paid to the Participant upon the achievement of such performance
goals as the Committee shall establish.


(x) “Performance Period”
means that period established by the Committee during which any performance goals specified by the Committee with respect to such
Award are to be measured.


(y) “Performance Share”
means any grant pursuant to Section 8 of a unit valued by reference to a designated number of Shares, which value will be paid
to the Participant upon achievement of such performance goals as the Committee shall establish.


(z) “Restricted Stock”
means any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such other
restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and
the right to receive any dividends).


  



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(aa) “Restricted Stock Unit”
means an Award that is valued by reference to a Share, which value may be paid to the Participant by delivery of such property
as the Committee shall determine, including without limitation, cash or Shares, or any combination thereof, and that has such restrictions
as the Committee, in its sole discretion, may impose.


(bb) “Shares” means the
shares of common stock of the Company, par value $0.01 per share.


(cc) “Stock Appreciation Right”
means the right granted to a Participant pursuant to Section 6.


(dd) “Substitute Awards”
means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted,
or the right or obligation to make future awards, in each case by a company acquired by the Company or any Affiliate or with which
the Company or any Affiliate combines.


(ee) “Vesting Period”
has the meaning set forth in Section 7(a).


 


3.
Available Shares


(a) Aggregate Shares Available. Subject
to adjustment as provided in Section 11(b), a total of 1,100,000 Shares shall be authorized for issuance under the Plan. Shares
to be issued under the Plan may be either authorized but unissued Shares, or Shares that have been reacquired by the Company and
designated as treasury shares.


(b) Accounting for Awards.


(i) For purposes of this Section 3, if an
Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award
relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards
under the Plan.


(ii) If any Shares subject to an Award are
forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for cash or otherwise does not
result in the issuance of all or a portion of the Shares subject to such Award, such Shares shall, to the extent of such forfeiture,
expiration, termination, cash settlement or non-issuance, again be available for issuance under the Plan.


(iii) In the event that (1) any Option or
other Award granted hereunder is exercised through the tendering of Shares (either actually or by attestation) or by the withholding
of Shares by the Company, or (2) withholding tax liabilities arising from such Option or other Award are satisfied by the tendering
of Shares (either actually or by attestation) or by the withholding of Shares by the Company, then the Shares so tendered or withheld
shall be available for issuance under the Plan. Upon the exercise of a Stock Appreciation Right settled in Shares, the gross number
of shares covered by the portion of the Award so exercised will cease to be available under the Plan.


 


4.
Eligibility and Administration


(a) Eligibility. Any Eligible Person
shall be eligible to be designated a Participant. In determining which Eligible Persons shall receive an Award and the terms of
any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Persons, their present
and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem
relevant. Notwithstanding the foregoing, an Incentive Stock Option may only be granted to an employee and an Incentive Stock Option
may not be granted to an employee of an Affiliate unless such Affiliate is also a “subsidiary corporation” of the Company
within the meaning of Section 424(f) of the Code.


(b) Administration.


(i) The Plan shall be administered by the
Committee. The Committee shall have full power and authority, subject to the provisions of the Plan to: (1) select the Eligible
Persons to receive Awards; (2) determine the type or types of Awards, not inconsistent with the provisions of the Plan, to be granted
to each Participant; (3) determine the number of Shares to be covered by each Award; (4) determine the terms and conditions, not
inconsistent with the provisions of the Plan, of any Award; (5) determine whether, to what extent and under what circumstances
Awards may be settled in cash, Shares or other property; (6) determine whether, to what extent and under what circumstances any
Award shall be canceled or suspended; (7) interpret and administer the Plan and any Award Agreement; (8) correct any defect, supply
any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the Committee shall deem
desirable to carry it into effect; (9) establish such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; (10) determine whether any Award (other than an Option or Stock Appreciation Right)
will have dividend equivalents; and (11) make any other determination and take any other action that the Committee deems necessary
or desirable for administration of the Plan. Decisions of the Committee shall be final, conclusive and binding on all persons or
entities, including the Company, any Participant, and any Affiliate. Notwithstanding the foregoing, any action or determination
by the Committee specifically affecting or relating to an Award to a director shall require the prior approval of the Board.


 



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(ii) Other than pursuant to Section 11(b),
the Committee may not, without the approval of the Company’s shareholders, (a) lower the exercise price of an Option or the
strike price of a Stock Appreciation Right after it is granted, (b) cancel an Option or Stock Appreciation Right in exchange for
cash or another Award (other than in connection with Substitute Awards), or (c) take any other action with respect to an Option
or Stock Appreciation Right that would be treated as a repricing under the NASDAQ rules and regulations.


(iii) The Committee may delegate its powers
and duties under the Plan to one or more directors (including a director who is also an officer of the Company) or a committee
of directors, subject to such terms, conditions and limitations as the Committee may establish in its sole discretion; provided,
however, that the Committee shall not delegate its powers and duties under the Plan (1) with regard to officers or directors of
the Company or any Affiliate who are subject to Section 16 of the Exchange Act or (2) in such a manner as would cause the Plan
not to comply with the requirements of Section 162(m) of the Code. In addition, the Committee may authorize one or more officers
of the Company to grant Awards under the Plan, to the extent permitted by applicable law; provided, however, that such officers
shall not be authorized to grant Awards to officers or directors of the Company or any Affiliate who are subject to Section 16
of the Exchange Act.


(iv) Notwithstanding anything to the contrary
contained herein, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers
and duties of the Committee under the Plan, unless the exercise of such powers and duties by the Board would cause the Plan not
to comply with the requirements of Section 162(m) of the Code, Section 16 of the Exchange Act, the NASDAQ rules and regulations
or other pertinent laws.


 


5.
Options


(a) Grant. Options may be granted
hereunder to Participants either alone or in addition to other Awards granted under the Plan. Any Option shall be subject to the
terms and conditions of this Section and to such additional terms and conditions, not inconsistent with the provisions of the Plan,
as the Committee shall deem desirable. The receipt of an Option pursuant to the Plan shall impose no obligation on the recipient
to exercise such Option.


(b) Exercise Price. Other than in
connection with Substitute Awards, the exercise price per Share of each Option shall not be less than 100 percent of the Fair Market
Value of one Share on the date of grant of such Option.


(c) Term. The term of each Option
shall be fixed by the Committee in its sole discretion; provided that no Option shall be exercisable after the expiration of ten
years from the date the Option is granted.


(d) Exercise.


(i) Vested Options granted under the Plan
shall be exercised by the Participant (or by the Participant’s executors, administrators, guardian or legal representative,
as may be provided in an Award Agreement) as to all or part of the Shares covered thereby, by giving notice of exercise to the
Company or its designated agent, specifying the number of Shares to be purchased. The notice of exercise shall be in such form,
made in such manner, and in compliance with such other requirements consistent with the provisions of the Plan as the Committee
may prescribe from time to time.


 



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(ii) Unless otherwise provided in an Award
Agreement, full payment of an Option’s exercise price shall be made at the time of exercise and shall be made (1) in cash
or cash equivalents (including certified check or bank check or wire transfer of immediately available funds), (2) by tendering
previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value), (3) with the consent of
the Committee, by withholding Shares otherwise issuable in connection with the exercise of the Option, (4) through any other method
specified in an Award Agreement, or (5) any combination of any of the foregoing. The notice of exercise, accompanied by such payment,
shall be delivered to the Company at its principal business office or such other office as the Committee may from time to time
direct, and shall be in such form, containing such further provisions consistent with the provisions of the Plan, as the Committee
may from time to time prescribe. In no event may any Option be exercised for a fraction of a Share. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the date of such issuance. Except for Substitute Awards,
or as may be set forth in an Award Agreement with respect to the retirement, death or disability of a Participant or a Change in
Control of the Company, Options granted to employees of the Company or any Affiliate will not be exercisable before the expiration
of one year from the date the Option is granted (but may become exercisable pro rata over such time).


(e) Incentive Stock Options. The Committee
may grant Incentive Stock Options to any employee of the Company or any Affiliate, subject to the requirements of Section 422 of
the Code. Solely for purposes of determining whether Shares are available for the grant of Incentive Stock Options under the Plan,
the maximum aggregate number of Shares that may be issued pursuant to “incentive stock options” granted under the Plan
shall be 1,100,000 Shares, subject to adjustments provided in Section 11(b).


 


6.
Stock Appreciation Rights


(a) Grant. Stock Appreciation Rights
may be granted hereunder to Participants in conjunction with all or part of any Option granted under the Plan, or at any subsequent
time during the term of such Option, or without regard to any Option, in each case upon such terms and conditions as the Committee
may establish in its sole discretion. The receipt of a Stock Appreciation Right pursuant to the Plan shall impose no obligation
on the recipient to exercise such Stock Appreciation Right.


(b) Strike Price. Other than in connection
with Substitute Awards, the strike price per Share of any Stock Appreciation Right shall not be less than 100 percent of the Fair
Market Value of one Share on the date of grant of such Stock Appreciation Right.


(c) Term. The term of each Stock Appreciation
Right shall be fixed by the Committee in its sole discretion; provided that no Stock Appreciation Right shall be exercisable after
the expiration of ten years from the date the Stock Appreciation Right is granted.


(d) Exercise.


(i) Except for Substitute Awards, or as may
be set forth in an Award Agreement with respect to the retirement, death or disability of a Participant or a Change in Control
of the Company, Stock Appreciation Rights granted to employees of the Company or any Affiliate will not be exercisable before the
expiration of one year from the date the Stock Appreciation Right is granted (but may become exercisable pro rata over such time).


(ii) Vested Stock Appreciation Rights granted
under the Plan shall be exercised by the Participant (or by the Participant’s executors, administrators, guardian or legal
representative, as may be provided in an Award Agreement) as to all or part of the Shares covered thereby, by giving notice of
exercise to the Company or its designated agent, specifying the number of Shares so exercised. The notice of exercise shall be
in such form, made in such manner, and in compliance with such other requirements consistent with the provisions of the Plan as
the Committee may prescribe from time to time.


(iii) Upon the exercise of a Stock Appreciation
Right, the holder shall have the right to receive with respect to each Share so exercised the excess of the Fair Market Value of
one Share on the date of exercise over the per-Share strike price of the Stock Appreciation Right. Upon the exercise of a Stock
Appreciation Right, the Committee shall determine in its sole discretion whether payment shall be made in cash, in whole Shares
or other property, or any combination thereof.


 



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7.
Restricted Stock and Restricted Stock Units


(a) Grant. Awards of Restricted Stock
and of Restricted Stock Units may be issued to Participants either alone or in addition to other Awards granted under the Plan,
and such Restricted Stock Awards and Restricted Stock Unit Awards shall also be available as a form of payment of Performance Awards
and other earned cash-based incentive compensation. A Restricted Stock Award or Restricted Stock Unit Award shall be subject to
vesting restrictions imposed by the Committee covering a period of time specified by the Committee (the “Vesting Period”).
The Committee has absolute discretion to determine whether any consideration (other than services) is to be received by the Company
or any Affiliate as a condition precedent to the issuance of Restricted Stock or Restricted Stock Units.


(b) Rights of Holders of Restricted Stock.
Unless otherwise provided in the Award Agreement, beginning on the date of grant of the Restricted Stock Award, the Participant
shall become a shareholder of the Company with respect to all Shares subject to the Award Agreement and shall have all of the rights
of a shareholder, including the right to vote such Shares and the right to receive distributions made with respect to such Shares.
Except as otherwise provided in an Award Agreement, any Shares or any other property (other than cash) distributed as a dividend
or otherwise with respect to any Restricted Stock Award as to which the restrictions have not yet lapsed shall be subject to the
same restrictions as such Restricted Stock Award.


(c) Rights of Holders of Restricted Stock
Units. A Participant receiving a Restricted Stock Unit Award shall not possess voting rights or the right to receive cash dividends
with respect to such Award. Except as otherwise provided in an Award Agreement, any Shares or any other property (other than cash)
distributed as a dividend or otherwise with respect to any Restricted Stock Unit Award as to which the restrictions have not yet
lapsed shall be subject to the same restrictions as such Restricted Stock Unit Award.


(d) Minimum Vesting Period. Except
for Substitute Awards, or as may be set forth in an Award Agreement with respect to the retirement, death or disability of a Participant
or a change of control of the Company, or special circumstances determined by the Committee, such as the achievement of performance
objectives (which shall have a minimum Vesting Period of one year), Restricted Stock Awards and Restricted Stock Unit Awards subject
solely to the continued employment of employees of the Company or an Affiliate shall have a Vesting Period of not less than three
years from date of grant (but permitting pro rata vesting over such time); provided that such restrictions shall not be applicable
to (i) grants to new hires to replace forfeited awards from a prior employer, or (ii) grants of Restricted Stock or Restricted
Stock Units in payment of Performance Awards and other earned cash-based incentive compensation. Subject to the foregoing minimum
Vesting Period requirements, the Committee may, in its sole discretion and subject to the limitations imposed under Section 162(m)
of the Code and the regulations thereunder in the case of a Restricted Stock Award or Restricted Stock Unit Award intended to comply
with the performance-based exception under Section 162(m) of the Code, waive the forfeiture period and any other conditions set
forth in any Award Agreement subject to such terms and conditions as the Committee shall deem appropriate. The minimum Vesting
Period requirements of this Section shall not apply to Restricted Stock Awards or Restricted Stock Unit Awards granted to directors
or any consultant or advisor who provides services to the Company or an Affiliate.


 


8.
Performance Awards


(a) Grant. Performance Awards in the
form of Performance Cash or Performance Shares, as determined by the Committee in its sole discretion, may be granted hereunder
to Participants, for no consideration or for such minimum consideration as may be required by applicable law, either alone or in
addition to other Awards granted under the Plan. The performance goals to be achieved for each Performance Period shall be conclusively
determined by the Committee and may be based upon the criteria set forth in Section 9(b).


(b) Terms and Conditions. The performance
criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee
upon the grant of each Performance Award; provided, however, that a Performance Period shall not be shorter than 12 months. The
amount of the Award to be distributed shall be conclusively determined by the Committee.


 



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(c) Payment. Except as may be provided
in an Award Agreement with respect to the retirement, death or disability of a Participant or a change of control of the Company,
Performance Awards will be distributed only after the end of the relevant Performance Period. Performance Awards may be paid in
cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee. Performance Awards may be paid
in a lump sum or in installments following the close of the Performance Period or, in accordance with procedures established by
the Committee, on a deferred basis subject to the requirements of Section 409A of the Code.


 


9.
Section 162(m) Qualifying Performance-Based Compensation


(a) Covered Employees. Notwithstanding
any other provision of the Plan, if the Committee determines at the time a Restricted Stock Award, a Restricted Stock Unit Award
or a Performance Award is granted to a Participant who is, or is likely to be, as of the end of the tax year in which the Company
would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that this Section
9 is applicable to such Award.


(b) Performance Criteria. If the Committee
determines that a Restricted Stock Award, a Restricted Stock Unit or a Performance Award is intended to be subject to this Section
9, the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable,
shall be subject to the achievement of one or more objective performance goals established by the Committee in its sole discretion,
which shall be based on the attainment of specified levels of one or any combination of the following: net sales; revenue; revenue
growth or product revenue growth; operating income (before or after taxes); pre- or after-tax income (before or after allocation
of corporate overhead and bonus); earnings per share; net income (before or after taxes); return on equity; total shareholder return;
return on assets or net assets; appreciation in and/or maintenance of the price of the Shares or any other publicly-traded securities
of the Company; market share; gross profits; earnings (including earnings before taxes, earnings before interest and taxes or earnings
before interest, taxes, depreciation and/or amortization); economic value-added models or equivalent metrics; comparisons with
various stock market indices; reductions in costs; cash flow or cash flow per share (before or after dividends); return on capital
(including return on total capital or return on invested capital); cash flow return on investment; improvement in or attainment
of expense levels or working capital levels; operating margins, gross margins or cash margin; year-end cash; debt reductions; shareholder
equity; market share; regulatory achievements; and implementation, completion or attainment of measurable objectives with respect
to research, development, products or projects, production volume levels, acquisitions and divestitures and recruiting and maintaining
personnel. Such performance goals also may be based solely by reference to the Company’s performance or the performance of
a Affiliate, division, business segment or business unit of the Company, or based upon the relative performance of other companies
or upon comparisons of any of the indicators of performance relative to other companies. The Committee may also exclude charges
related to an event or occurrence which the Committee determines should appropriately be excluded, including (1) restructurings,
discontinued operations, extraordinary items, and other unusual or non-recurring charges, (2) an event either not directly related
to the operations of the Company or not within the reasonable control of the Company’s management, or (3) the cumulative
effects of tax or accounting changes in accordance with US generally accepted accounting principles. Such performance goals shall
be set by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m)
of the Code and the regulations thereunder.


(c) Adjustments. Notwithstanding any
provision of the Plan, with respect to any Restricted Stock Award, Restricted Stock Unit Award or Performance Award that is subject
to this Section 9, the Committee may adjust downwards, but not upwards, the amount payable pursuant to such Award, and the Committee
may not waive the achievement of the applicable performance goals, except in the case of the death or disability of the Participant
or as otherwise determined by the Committee in special circumstances.


(d) Restrictions. The Committee shall
have the power to impose such other restrictions on Awards subject to this Section as it may deem necessary or appropriate to ensure
that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)
of the Code.


 



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(e) Limitations on Grants to Individual
Participants. Subject to adjustment as provided in Section 11(b), no Participant may be granted (i) Options or Stock Appreciation
Rights during any calendar year with respect to more than 100,000 Shares or (ii) Restricted Stock Awards, Restricted Stock Unit
Awards or Performance Awards in any calendar year that are intended to comply with the performance-based exception under Section
162(m) of the Code and are denominated in Shares with respect to more than 60,000 Shares (the “Limitations”). In addition
to the foregoing, the maximum dollar value payable to any Participant in any calendar year with respect to Performance Awards that
are intended to comply with the performance-based exception under Section 162(m) of the Code and are denominated in cash is $2,000,000.
If an Award is cancelled, the cancelled Award shall continue to be counted toward the applicable Limitations.


 


10.
Generally Applicable Provisions


(a) Award Agreements. The terms of
an Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the
Committee and not inconsistent with the Plan. The terms of Awards need not be the same with respect to each type of Award or each
Participant.


(b) Transferability of Awards. No
Award and no Shares subject to Awards that have not been issued or as to which any applicable restriction, performance or deferral
period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent
and distribution, and such Award may be exercised during the life of the Participant only by the Participant or the Participant’s
guardian or legal representative.


(c) Termination of Employment. The
Committee shall determine and set forth in each Award Agreement whether any Awards granted in such Award Agreement will continue
to be exercisable, and the terms of such exercise, on and after the date that a Participant ceases to be employed by or to provide
services to the Company or any Affiliate (including as a Director), whether by reason of death, disability, voluntary or involuntary
termination of employment or services, or otherwise. The date of termination of a Participant’s employment or services will
be determined by the Committee, which determination will be final.


(d) Dividend Equivalents. Subject
to the provisions of the Plan and any Award Agreement, the recipient of an Award (other than an Option or Stock Appreciation Right)
may, if so determined by the Committee, be entitled to receive, currently or on a deferred basis, cash, stock or other property
dividends, or cash payments in amounts equivalent to cash, stock or other property dividends on Shares with respect to the number
of Shares covered by the Award, as determined by the Committee, in its sole discretion. The Committee may provide that any such
amounts or dividend equivalents shall be deemed to have been reinvested in additional Shares or otherwise reinvested and may provide
that any such amounts or dividend equivalents are subject to the same vesting or performance conditions as the underlying Award.


(e) Tax Withholding. The Company shall
have the right to make all payments or distributions pursuant to the Plan to a Participant net of any applicable federal, state
and local taxes required to be paid or withheld as a result of (i) the grant of any Award, (ii) the exercise of an Option or Stock
Appreciation Right, (iii) the delivery of Shares or cash, (iv) the lapse of any restrictions in connection with any Award or (v)
any other event occurring pursuant to the Plan. The Company or any Affiliate shall have the right to withhold from wages or other
amounts otherwise payable to such Participant such withholding taxes as may be required by law, or to otherwise require the Participant
to pay such withholding taxes. If the Participant shall fail to make such tax payments as are required, the Company or its Affiliates
shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such
Participant or to take such other action as may be necessary to satisfy such withholding obligations. The Committee shall be authorized
to establish procedures for election by Participants to satisfy such obligation for the payment of such taxes by tendering previously
acquired Shares (either actually or by attestation, valued at their then Fair Market Value), or by directing the Company to retain
Shares (up to the Participant’s minimum required tax withholding rate or such other rate that will not trigger a negative
accounting impact) otherwise deliverable in connection with the Award.


 



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11.
Miscellaneous


(a) Amendment and Termination of the Plan.
The Board may, from time to time, alter, amend, suspend or terminate the Plan as it shall deem advisable, subject to any requirement
for shareholder approval imposed by applicable law, including the rules and regulations of the principal securities market on which
the Shares are traded; provided that the Board may not amend the Plan in any manner that would result in noncompliance with Rule
16b-3 of the Exchange Act; and further provided that the Board may not, without the approval of the Company’s shareholders,
amend the Plan to (i) increase the number of Shares that may be the subject of Awards under the Plan (except for adjustments pursuant
to Section 11(b), (ii) expand the types of Awards available under the Plan, (iii) materially expand the class of persons eligible
to participate in the Plan, (iv) increase the maximum permissible term of any Option specified by Section 5(c) or the maximum permissible
term of a Stock Appreciation Right specified by Section 6(c), (v) expand the permissible performance criteria under Section 9(b),
or (vi) amend any provision of Section 5(b), Section 6(b), Section 7(d) or Section 9(e). The Board may not, without the approval
of the Company’s shareholders, take any other action with respect to an Option or Stock Appreciation Right that may be treated
as a repricing under the rules and regulations of the principal securities market on which the Shares are traded, including a reduction
of the exercise price of an Option or the grant price of a Stock Appreciation Right or the exchange of an Option or Stock Appreciation
Right for cash or another Award. In addition, no amendments to, or termination of, the Plan shall in any way impair the rights
of a Participant under any Award previously granted without such Participant’s consent.


(b) Adjustments. In the event of any
merger, reorganization, consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property, other
than a regular cash dividend), stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure
affecting the Shares or the value thereof, such adjustments and other substitutions shall be made to the Plan and to Awards as
the Committee, in its sole discretion, deems equitable or appropriate taking into consideration the accounting and tax consequences,
including such adjustments in the aggregate number, class and kind of securities that may be delivered under the Plan, the maximum
number of Shares that may be issued as Restricted Stock Awards and Restricted Stock Unit Awards, the Limitations, the maximum number
of Shares that may be issued as Incentive Stock Options and, in the aggregate or to any one Participant, in the number, class,
kind and exercise or strike price of securities subject to outstanding Awards granted under the Plan (including, if the Committee
deems appropriate, the substitution of similar options to purchase the shares of, or other awards denominated in the shares of,
another company) as the Committee may determine to be appropriate in its sole discretion; provided, however, that the number of
Shares subject to any Award shall always be a whole number.


(c) No Right to Awards or to Continued
Employment or Service. Nothing in the Plan nor the grant of an Award hereunder shall confer upon any employee or Director the
right to continue in the employment or service of the Company or any Affiliate or affect any right that the Company or any Affiliate
may have to terminate the employment or service of (or to demote or to exclude from future Awards under the Plan) any such employee
or Director at any time for any reason. Except as specifically provided by the Committee, the Company shall not be liable for the
loss of existing or potential profit from an Award granted in the event of termination of an employment or other relationship.
No employee or Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity
of treatment of employees or Participants under the Plan.


(d) Substitute Awards. Notwithstanding
any other provision of the Plan, the terms of Substitute Awards may vary from the terms set forth in the Plan to the extent the
Committee deems appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are
granted.


(e) Cancellation of Award. Notwithstanding
anything to the contrary contained herein, an Award Agreement may provide that the Award shall be canceled if the Participant,
without the consent of the Company, while employed by the Company or any Affiliate or after termination of such employment or service,
establishes a relationship with a competitor of the Company or any Affiliate or engages in activity that is in conflict with or
adverse to the interest of the Company or any Affiliate, as determined by the Committee in its sole discretion. The Committee may
provide in an Award Agreement that if within the time period specified in the Agreement the Participant establishes a relationship
with a competitor or engages in an activity referred to in the preceding sentence, the Participant will forfeit any gain realized
on the vesting or exercise of the Award and must repay such gain to the Company.


  



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(f) Stop Transfer Orders. All certificates
for Shares delivered under the Plan pursuant to any Award 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,
any stock exchange upon which the Shares are then listed, and any applicable federal or state securities law, and the Committee
may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.


(g) Nature of Payments. All Awards
made pursuant to the Plan are in consideration of services performed or to be performed for the Company or any Affiliate, division
or business unit of the Company. Any income or gain realized pursuant to Awards under the Plan and any Stock Appreciation Rights
constitute a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under
applicable law, as compensation for purposes of any of the employee benefit plans of the Company or any Affiliate except as may
be determined by the Committee or by the Board or board of directors of the applicable Affiliate.


(h) Other Plans. Nothing contained
in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval
if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.


(i) Severability. If any provision
of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction,
such provision shall (i) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or
enforceable and as so limited shall remain in full force and effect, and (ii) not affect any other provision of the Plan or part
thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such
unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under the
Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful
or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or
benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum
payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under the Plan.


(j) Unfunded Status of the Plan. The
Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet
made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than
those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver the Shares or payments in lieu of or with respect to Awards
hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of
the Plan.


(k) Governing Law. The Plan and all
determinations made and actions taken thereunder, to the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of New York, without reference to principles of conflict of laws, and construed accordingly.


(l) Effective Date of Plan; Termination
of Plan. The Plan shall be effective on the later to occur of: (i) the date of the approval of the Plan by the shareholders
of the Company; (ii) the approval by or consent to the Plan by the New York Public Service Commission; (iii) the approval by or
consent to the Plan by the New Jersey Public Utilities Board; and (iv) the satisfaction by the Company of the requirements of any
other regulatory authority necessary for the Plan to become effective. The Plan shall be null and void and of no effect if the
foregoing conditions are not fulfilled and in such event each Award shall, notwithstanding any of the preceding provisions of the
Plan, be null and void and of no effect. Awards may be granted under the Plan at any time and from time to time on or prior to
the tenth anniversary of the effective date of the Plan, on which date the Plan will expire except as to Awards then outstanding
under the Plan. Such outstanding Awards shall remain in effect until they have been exercised or terminated, or have expired.


 



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(m) Compliance with Section 409A of the
Code. The Plan and the Awards granted hereunder are intended to comply with or be exempt from the requirements of Section 409A
of the Code and shall be construed and interpreted in accordance with such intent. To the extent that an Award or the payment,
settlement or deferral thereof is subject to Section 409A of the Code, the Award shall be granted, paid, settled or deferred in
a manner that will comply with Section 409A of the Code, including regulations or other guidance issued with respect thereto, except
as otherwise determined by the Committee. Any provision of the Plan or an applicable Award Agreement that would cause the grant
of an Award or the payment, settlement or deferral thereof to fail to satisfy the requirements of Section 409A of the Code may
be amended by the Committee on a timely basis in any manner that the Committee determines to be necessary or appropriate to exempt
the Award from Section 409A of the Code or comply with the requirements of Section 409A of the Code, which may be made on a retroactive
basis, in accordance with regulations and other guidance issued under Section 409A of the Code.


(n) Captions. The captions in the
Plan are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of
the provisions contained herein.


(o) Effect of Change in Control.


(i) Vesting of Awards. Except as otherwise
provided in the related Award Agreement, if a Participant’s employment or services with the Company and its Affiliates is
terminated by the Company or any of its Affiliates without Cause or by the Participant for Good Reason, in each case, within the
twelve (12) month period following a Change in Control, then any outstanding Awards then held by the Participant which are unexercisable
or otherwise unvested or subject to lapse restrictions shall be deemed exercisable or otherwise vested or no longer subject to
lapse restrictions, as applicable, as of the date of such termination.


(ii) Additional Terms Applicable to Awards.
Except as otherwise provided in the related Award Agreement, in the event of a Change in Control, the Board may, but shall not
be obligated to: (A) provide for the cancellation of an Option or Stock Appreciation Right in exchange for a cash payment equal
to the excess, if any, of (1) the Fair Market Value of the Shares subject to the Option or Stock Appreciation Right, over (2) the
aggregate exercise or strike price of such Option or Stock Appreciation Right; (B) provide for the cancellation of any unvested
Restricted Stock in exchange for a cash payment equal to the Fair Market Value of the Shares underlying such Restricted Stock;
(C) provide for the issuance of Substitute Awards that will substantially preserve the otherwise applicable terms of any affected
Awards previously granted under this Plan as determined by the Board in its sole discretion, and provided that such issuance would
not cause the Award to violate Section 409A of the Code; (D) provide that for a period of fifteen (15) days prior to the Change
in Control, any Option or Stock Appreciation Right shall be exercisable as to all Shares subject thereto and that, upon the occurrence
of the Change in Control, such Option or Stock Appreciation Right shall terminate and be of no further force and effect.


* * * * *


 








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