Document:

ex10-1.htm

    Exhibit
10.1

    
       

      Gyrodyne
Company of America, Inc.

      Amended
and Restated

      Incentive
Compensation Plan

      As
of February 2, 2010

      

      Gyrodyne
Company of America, Inc., a corporation organized under the laws of the State of
New York, hereby amends and restates its Incentive Compensation Plan, originally
adopted on June 25, 1999.

      

      
        	
                1.

              	
                Definitions.

              

      

       

      (a)           “Administrative
Committee” means the Board of Directors of the Company, unless the Board shall
elect from among its members a committee to administer the Plan.

       

      (b)           “Base
Date FMV” means (A) for Participants who became such on or prior to December 31,
2009, $15.3875, and (B) for any Participant who became such following December
31, 2009, the average closing market price of the Common Stock on the Nasdaq
Stock Market for the ten trading days ending on the trading day prior to the
date such Participant became such.

       

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

       

      (d)           “Change
in Control” means (i) a tender offer or exchange offer made and consummated for
ownership of Common Stock representing 30% or more of the combined voting power
of the Company’s outstanding securities; (ii) one or more sales or transfers by
the Company during the twelve-month period ending on the date of the most recent
transfer of assets having a total gross fair market value equal to or more than
90% of the total gross fair market value of all of the assets of the Company
immediately before such transfer or transfers; or (iii)  any merger,
share exchange or consolidation of the Company with another entity other than a
merger where the Company’s shareholders immediately before the merger own
immediately following the merger at least 70% of the combined voting power of
the Company’s outstanding securities, and, in each case, such transaction is not
consummated with a “Related Person” to the Company, as such term is defined in
Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”).

       

      (e)           “Closing
Date FMV” shall mean (i) in the event a Change in Control is effected by a cash
purchase of Common Stock, the price per share paid by the acquirer; (ii) in the
event a Change in Control is effected with consideration other than cash or
involving the sale of Company assets, the per share value to the target
shareholders of the transaction as determined by an investment banking firm selected by the Company;
provided, however, that for purposes of calculating an Incentive Compensation
Payment with respect to a Payment Event for a Participant who is no longer an
employee or member of the Board on the date of such Payment Event, Closing Date
FMV shall be the lesser of (A) the amount determined in clauses (i) or (ii)
above, or (B) the average closing market price of the Common Stock on the Nasdaq
Stock Market for the ten trading days ending on the trading day prior to the
date of departure of the withdrawn Participant.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (f)           “Common
Stock” means shares of the common stock of the Company.

       

      (g)           “Company”
means Gyrodyne Company of America, Inc.

       

      (h)           
“Establishment Date” means June 25, 1999.

       

      (i)           “ICR
Pool” means, for each Participant, an amount equal to the product of (x)
Closing Date FMV minus Base Date FMV for such Participant and (y) the number of
ICR Units in the Plan determined in accordance with Sections 6 and 12
hereof.

       

      (j)           “ICR
Unit” means the unit used under the Plan to compute the incentive compensation
to be paid to Participants  and which is equivalent to one share of
Common Stock for the purposes of this Plan and for no other
purpose.

       

      (k)           “Incentive
Compensation Payments” means the payments to be made to
Participants.

       

      (l)           “Incentive
Compensation Rights” or “ICRs” are the rights created under the terms of the
Plan.

       

      (m)           “Other
Eligible Employee” means any individual who is employed by the Company and who
is not the President, the Executive Vice-President, or a Vice President of the
Company or an Other Management Employee.

       

      (n)           “Other
Management Employee” means any management employee of the Company who is not the
President, the Executive Vice President or a Vice President of the
Company.

       

      (o)           “Participant”
means any individual who has been granted ICRs by the Administrative
Committee.

       

      (p)           “Payment
Event” means a Change in Control or an Excess Dividend.

       

      (q)           “Plan”
means this Incentive Compensation Plan.

       

      
        	
                2.

              	
                Purpose.

              

      

       

      The
purpose of the Plan is to promote the shareholder point of view among employees
and members of the Board and encourage Participants to support a Change in
Control and/or asset dispositions followed by cash distributions, in each case
that would maximize shareholder value.

      

      
        	
                3.

              	
                Eligibility.

              

      

       

      All
employees of the Company and all members of the Board are eligible to be
approved for ICR grants under the terms of the Plan.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                4.

              	
                Granting of
      ICRs.

              

      

       

      The
Administrative Committee has, effective June 25, 1999, awarded ICRs to all
employees having at least one year of employment with the Company, and all
members of the Board on that date.

      

      Employees
and members of the Board assuming positions described in Section 5(c) below
after June 25, 1999 may be granted ICRs by majority vote of the Administrative
Committee.

      

      
        	
                5.

              	
                Incentive Compensation
      Payments.

              

      

       

      Participants
will be entitled to receive Incentive Compensation Payments under the following
circumstances:

       

      (a)           Change in
Control.  In the event of a Change in Control, Incentive
Compensation Payments shall be calculated in accordance with the percentage
weights set forth in (c) below and subject to the provisions of such
sub-section, and shall be paid to Participants (A) within 10 days after the
consummation of a Change in Control with respect to transactions referred to in
clauses (i) or (iii) of the definition of Change in Control herein, or (B) in
proportion to and contemporaneously with payments received by the Company in
transactions referred to in clause (ii) of such definition.  Upon
payment in full of the Incentive Compensation Payments hereunder, all
outstanding ICRs shall be canceled and no further payments shall be made to
Participants under the Plan.

       

      (b)           Dividend Distribution From
Asset Disposition.  If the Company receives proceeds from the
disposition of assets during any twelve-month period in an aggregate dollar
amount greater than or equal to 15% of the total gross fair market value of all
the assets of the Company immediately before such disposition or dispositions,
and within twelve months following such last disposition the Company pays a
dividend to the shareholders in excess of the income from operations (“Excess
Dividend”), then there shall be an allocation and payment to the Participants
equal, in the aggregate, to the product of the Excess Dividend per share paid
and the number of ICR Units in the Plan (the “Disposition
Dividend”).  Notwithstanding the foregoing, the amount of the
Disposition Dividend may not exceed the aggregate amount of Incentive
Compensation Payments that would have been paid pursuant to Section 5(a) had
there been a Change in Control consummated on the date of the payment of the
Excess Dividend.

       

      
        An
individual Participant’s share of the Disposition Dividend will equal (x) the
Disposition Dividend, multiplied by (y) a fraction, the numerator of which is
the Participant’s Incentive Compensation Payment that would be paid if a Change
in Control were consummated on the date of the payment of the Excess Dividend,
and the denominator of which is the total dollar amount that would be paid to
all Participants if a Change in Control were consummated on the date of the
payment of the Excess Dividend.  For illustrative purposes only, if a
Disposition Dividend equals $1,000,000 and a hypothetical Change in Control
consummated on that date would result in a total payment to Participants of
$4,400,000 and an individual Incentive Compensation Payment to such Participant
is equal to $440,000, then the Participant would receive an Incentive
Compensation Payment equal to $100,000 ($440,000 divided by $4,400,000
multiplied by $1,000,000).

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c)           Percentage Weights (as of
February 2, 2010) and Computation of Incentive Compensation
Payments.

       

      
        	
                CLASS

              	
                %
      of

                Total

                by Class

              	
                Participants

                in Class

              	
                Individual

                Participant

                Percentage

                Weight

              
	 
      	 
      	 
      	 
      
	
                1.      President
      & CEO

              	
                18.5

              	
                1

              	
                18.5

              
	
                2.      Executive
      V.P.

              	
                13.5

              	
                1

              	
                13.5

              
	
                3.      V.P.
      & Comptroller

              	
                3.5

              	
                1

              	
                3.5

              
	
                4.      Other
      Mgt. Employees

              	
                7.0

              	
                2

              	
                3.5

              
	
                5.      Other
      Eligible Employees

              	
                1.0

              	
                2

              	
                .5

              
	
                6.      Non-Employee
      Directors

              	
                52.5

              	
                7

              	
                7.5

              
	
                7.      Chairman
      of the Board

              	
                4.0

              	
                1

              	
                4.0

              

      

      

      An
individual Participant’s Incentive Compensation Payment will equal the product
of (x) Individual Participant Percentage Weight and (y) the ICR
Pool.

      

      The
Administrative Committee may not effectuate changes in the percentages set forth
above; provided, however, that the Individual Participant Percentage Weight
shall be subject to adjustment for any increase or decrease in the number of
Participants in such Participant’s class.

      

      The
Individual Participant Percentage Weight for Board members shall be
cumulative.  For example, a Chairman of the Board who held no other
position would have an Individual Participant Percentage Weight of
11.5%.

      

      
        	
                6.

              	
                Number of ICR
      Units.

              

      

       

      Subject
to adjustment under Section 12, the initial number of ICR Units shall be fixed
at 100,000.

       

      
        	
                7.

              	
                Vesting

              

      

       

       All
current Participants shall immediately vest with respect to their Individual
Participant Percentage Weight.

       

      
        	
                8.

              	
                Treatment of
      Payment.

              

      

       

      Incentive
Compensation Payments shall be treated as compensation, and, accordingly, the
Company shall have the right to deduct from any payment to be made pursuant to
this Plan, or to otherwise require direct payment from the
Participant,  of any Federal, state or local taxes as and when such
may be required by law to be withheld or to be paid.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                9.

              	
                Duties of Administrative
      Committee.

              

      

       

      The
Administrative Committee shall award ICRs and administer, construe and interpret
the Plan. No member of the Administrative Committee shall be liable for any act
done or determination made in good faith.  The construction and
interpretation by the Administrative Committee of any provision of this Plan
shall be final and conclusive.

      

      
        	
                10.

              	
                Discontinuance of
      Plan.

              

      

       

      The Board may discontinue the Plan at any time, provided
that such discontinuance shall not affect the right to receive Incentive
Compensation Payments by any Participant with respect to ICRs that vested prior
to the date of discontinuance.

      

      
        	
                11.

              	
                Limitation of
      Rights.

              

      

       

      Nothing
in this Plan shall be construed to:

      

      (a)           Give
any employee or director of the Company any right to be awarded any ICR other
than in the sole discretion of the Administrative Committee;

       

      (b)           Give
a Participant any rights whatsoever with respect to shares of Common
Stock;

       

      (c)           Limit
in any way the right of the Company to terminate a Participant’s employment with
the Company at any time; or

       

      (d)           Be
evidence of any agreement or understanding, expressed or implied, that the
Company will employ a Participant in any particular position or at any
particular rate of remuneration or for any particular period of
time.

       

      
        	
                12.

              	
                Adjustment in Number of ICR
      Units.

              

      

       

      In the
event of any stock dividend on the Common Stock,  any split-up or
combination of shares of the Common Stock, appropriate adjustment shall be made
by the Administrative Committee in the aggregate number of ICR Units which may
be fixed under this Plan.

      

      
        	
                13.

              	
                Nonalienation of
      Benefits.

              

      

       

      No right
or benefit under this Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge the same shall be
void.  No right or benefit hereunder shall in any manner be liable for
or subject to the debts, contracts, liabilities, or torts of the Participant
entitled to such benefits.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                14. 

              	
                Section 409A of the
      Code.

              

      

      

      Although
the Company does not guarantee the particular tax treatment of an ICR granted
under this Plan, ICRs granted under this Plan are intended to comply with, or be
exempt from, the applicable requirements of Section 409A of the Code and this
Plan and any ICR hereunder shall be limited, construed and interpreted in
accordance with such intent. In no event whatsoever shall the Company, or a
member of its Board or the Administrative Committee be liable for any additional
tax, interest or penalties that may be imposed on a Participant by Section 409A
of the Code or any damages for failing to comply with Section 409A of the
Code.

       

      
        	
                15. 

              	
                Beneficiary
      Designation.

              

      

       

      Each
Participant shall designate, in a writing signed by such Participant, a
beneficiary to receive Incentive Compensation Payments (pursuant to Section 5
above) in the event of the death of such Participant.AUTOMATIC DATA PROCESSING, INC.

        

        2000 STOCK OPTION PLAN

        (originally effective as of August 10, 1999, as amended effective as of August 31, 2001, 

        as further amended on May 14, 2002, as amended and restated as of August 11, 2003, 

        as further amended and restated as of January 27, 2005, 

        and as further amended on January 26, 2007,

        and as further amended on November 2, 2009)

          

        

        Automatic Data Processing, Inc., a Delaware corporation (the “Company”), hereby formulates and adopts the following amended and restated 2000 Stock Option Plan (the “Plan”) for employees of the Company and its Subsidiaries (as defined in Paragraph 5) and non-employee directors of the
        Company:

        

        1. PURPOSE. The purpose of the Plan is to secure for the Company the benefits of the additional incentive inherent in the ownership of common stock, par value $.10, of the Company (“Common Stock”) by selected employees of the Company and its Subsidiaries, and non-employee directors of the Company, who,
        in the judgment of the Committee (as defined in Paragraph 2), are important to the success and the growth of the business of the Company and its Subsidiaries, and to help the Company and its Subsidiaries secure and retain the services of such persons.

        

        2. ADMINISTRATION. Except to the extent required in order to qualify for exemptive relief under Rule 16b-3 or its successor provision under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or to satisfy the requirements for performance-based compensation under Section 162(m) of the
        Internal Revenue Code of 1986, as amended (the “Code”), in which case the Board of Directors of the Company (the “Board of Directors”), or a committee appointed by the Board of Directors which satisfies the requirements of such provisions shall administer the Plan (and all applicable provisions of the Plan, including any reference herein to the “Committee”, shall be construed accordingly), the Plan shall be administered by the Compensation Committee
        of the Board of Directors (the “Committee”). The Committee shall select one of its members as Chairman and shall make such rules and regulations as it shall deem appropriate concerning the holding of its meetings and transaction of its business. Any member of the Committee may be removed at any time either with or without cause by resolution adopted by the Board of Directors, and any vacancy on the Committee may at any time be filled by resolution adopted by the Board of
        Directors.

        

        Subject to the express provisions of the Plan, the Committee shall have plenary authority to interpret the Plan, to prescribe, amend and rescind the rules and regulations relating to it and to make all other determinations deemed necessary and advisable for the administration of the Plan. The determinations of the
        Committee shall be conclusive.

        

        3. STOCK SUBJECT TO OPTIONS. Subject to the adjustment provisions of Paragraph 13 below, a maximum of 71,750,000 shares of Common Stock may be made subject to Options (as defined below) granted under the Plan. In addition, subject to the adjustment provisions of Paragraph 13 below, no person may be granted Options
        under the Plan during any of the Company’s fiscal years with respect to more than 500,000 shares of Common Stock.

        

        If, and to the extent that, Options granted under the Plan shall terminate, expire or be canceled for any reason without having been exercised, new Options may be granted in respect of the shares covered by such terminated, expired or canceled Options. The granting and terms of such new Options shall comply in all
        respects with the provisions of the Plan.

        

        Shares sold upon the exercise of any Option granted under the Plan may be shares of authorized and unissued Common Stock, shares of issued Common Stock held in the Company’s treasury, or both. 

        

        There shall be reserved at all times for sale under the Plan a number of shares of Common Stock, of either authorized and unissued shares of Common Stock, shares of Common Stock held in the Company’s treasury, or both, equal to the maximum number of shares that may be purchased pursuant to Options granted or
        that may be granted under the Plan.

        

        4. GRANT OF OPTIONS. The Committee shall have the authority and responsibility, within the limitations of the Plan, to determine the employees and the non-employee directors to whom Options are to be granted, whether Options granted to employees shall be “incentive stock options” (“Incentive
        Options”), within the meaning of Section 422(b) of the Code, or Options which are not Incentive Options (“Nonqualified Options” and together with Incentive Options, “Options,” individually, an “Option”), the number of shares that may be purchased under each Option and the Option price.

        

        In determining the officers, key employees and non-employee directors to whom Options shall be granted and the number of shares to be covered by each such Option, the Committee shall take into consideration the individual’s present and potential contribution to the success of the Company and its Subsidiaries
        (as defined below) and such other factors as the Committee may deem proper and relevant.

        

        5. PERSONS ELIGIBLE. Incentive Options may be granted to any key employee of the Company or any of its Subsidiaries. Nonqualified Options may be granted to any key employee of the Company or any of its Subsidiaries or Affiliates and to any non-employee director of the Company. Options may be granted to employees
        and non-employee directors who hold or have held Options under this Plan or any similar or other awards under any other plan of the Company or any of its Subsidiaries or Affiliates. Employees who are also officers or directors of the Company or any of its Subsidiaries or Affiliates shall not by reason of such offices be ineligible as recipients of Options. 

        

        For purposes of the Plan, a “Subsidiary” of the Company shall mean any “subsidiary corporation” as such term is defined in Section 424(f) of the Code. An entity shall be deemed a Subsidiary of the Company only for such periods as the requisite ownership relationship is maintained.
        

        

        For purposes of the Plan, an “Affiliate” of the Company shall mean any corporation, partnership, or other entity controlled by the Company.

        

        Any employee who would own, directly or indirectly, immediately after the granting of an Option to such person, more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries shall only be eligible to receive an Incentive Option under the Plan if it satisfies the
        requirements of Section 422(c)(5) of the Code.

        

        A person receiving an Option pursuant to the Plan is hereinafter referred to as an “Optionee”.

        

        6. PRICE. The exercise price of each share of Common Stock purchasable under any Option granted pursuant to the Plan shall not be less than the Fair Market Value (as defined below) thereof at the time the Option is granted. In no event shall the Committee cause or permit, without the prior approval of the
        Company’s stockholders, any Options granted pursuant to the Plan to be repriced, replaced, or re-granted through cancellation, or to otherwise lower the exercise price of a previously granted Option.

        

        For purposes of the Plan, “Fair Market Value” of a share of Common Stock means the closing price of a share of Common Stock on the New York Stock Exchange Composite Tape on the date in question. If shares of Common Stock are not traded on the New
        York Stock Exchange on such date, “Fair Market Value” of a share of Common Stock shall be determined by the Committee in its sole discretion.

        

        7. DURATION OF OPTIONS. Options granted hereunder shall become exercisable, in whole or in part, all as the Committee in its discretion may provide upon the granting thereof.

        

        Notwithstanding any provision of the Plan to the contrary, except as otherwise provided in the applicable award agreement, the unexercised portion of any Option granted under the Plan shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the
        following:

        

        (a) The expiration of 10 years (or, in the case of an Incentive Option, five years, in the case of an Optionee described in Section 422(c)(5) of the Code) from the date on which such Option was granted;

        

        (b) The expiration of 60 days (or such longer period as the Committee may provide in the event of the Optionee’s Permanent and Total Disability (as defined in Section 22(a)(3) of the Code) from the date of termination of the Optionee’s employment or service with the Company or any of its Subsidiaries;
        provided, however, that if the Optionee shall die during such 60-day period (or such longer period as the Committee may provide in the event of the Optionee’s Permanent and Total Disability) the provisions of subparagraph (c) below shall apply;

        

        (c) The expiration of six months after the appointment and qualification of the executor or administrator of the Optionee’s estate or 12 months after the date of the Optionee’s death, whichever occurs earlier, if such death occurs either during employment by, or service with, the Company or any of its
        Subsidiaries or during the 60-day period (or such longer period as the Committee may provide in the event of the Optionee’s Permanent and Total Disability) following the date of termination of such employment or service; and

        

        (d) In whole or in part, at such earlier time or upon occurrence of such earlier event as the Committee in its discretion may provide upon the granting of such Option.

        

        The Committee may determine whether any given leave of absence constitutes a termination of employment or service. Options granted under the Plan shall not be affected by any change of employment or service so long as the Optionee continues to be an employee of the Company or any of its Subsidiaries or
        non-employee director of the Company.

        

        8. EXERCISE OF OPTIONS. Options shall be exercisable by the Optionee (or the Optionee’s executor or administrator), as to all or part of the shares covered thereby, by the giving of written notice of the exercise thereof to the Company at its principal business office, directed to the attention of its
        Secretary. The Company shall cause certificates for the shares so purchased to be delivered to the Optionee (or the Optionee’s executor or administrator) at the Company’s principal business office, against payment in full of the purchase price, which payment may be made (i) in cash, check, cash equivalent and/or shares of Common Stock valued at the Fair Market Value at the time the Option is exercised
        (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of shares of Common Stock in lieu of actual delivery of such shares to the Company); provided, that such shares of Common Stock are not subject to any pledge or other security
        interest, (ii) pursuant to a “net exercise” procedure effected by withholding the minimum number of shares of Common Stock otherwise deliverable in respect of an Option that are needed to pay the
        exercise price and all applicable required withholding taxes or (iii) by such
        other method as the Committee may permit in its sole discretion, including without limitation: (A) in other property having a fair market value on the date of exercise equal to the exercise price or (B) if there is
        a public market for the shares of Common Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the shares of Common Stock otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the
        exercise price. Notwithstanding the foregoing, shares of the Company’s Common Stock may not be used by Canadian Optionees to pay the
        exercise price of the shares being purchased pursuant to the exercise of an Option.

        

        9. NONTRANSFERABILITY OF OPTIONS. No Option or any right evidenced thereby shall be transferable in any manner other than by will or the laws of descent and distribution, and, during the lifetime of an Optionee, only the Optionee (or the Optionee’s court-appointed legal representative) may exercise an
        Option.

        

        10. RIGHTS OF OPTIONEE. Neither the Optionee nor the Optionee’s executor or administrator shall have any of the rights of a stockholder of the Company with respect to the shares subject to an Option until certificates for such shares shall actually have been issued upon the due exercise of such Option. No
        adjustment shall be made for any cash dividend or other right for which the record date is prior to the date of such due exercise and full payment for such shares has been made therefor. 

        

        11. RIGHT TO TERMINATE EMPLOYMENT OR SERVICE. Nothing in the Plan or in any Option shall confer upon any Optionee the right to continue in the employment or service of the Company or any of its Subsidiaries or affect the right of the Company or any of its Subsidiaries to terminate an Optionee’s employment at
        any time, subject, however, to the provisions of any agreement of employment between the Company or any of its Subsidiaries and the Optionee.

        

        12. NONALIENATION OF BENEFITS. No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the
        same shall be void. To the extent permitted by applicable law, no right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such benefits.

        

        13. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. In the event of any stock split, stock dividend, stock change, reclassification, recapitalization or combination of shares which changes the character or amount of Common Stock prior to exercise of any portion of an Option theretofore granted under the Plan, such
        Option, to the extent that it shall not have been exercised, shall entitle the Optionee (or the Optionee’s executor or administrator) upon its exercise to receive in substitution such number and kind of shares as the Optionee would be entitled to receive if the Optionee had actually owned the stock subject to such Option at the time of the occurrence of such change and the Options shall be subject to such adjustments, as determined by the Committee, as to the number, price or kind
        of stock as determined to be equitable; provided, however, that if the change is of such a nature that the Optionee, upon exercise of the Option, would receive property other than shares of stock, then the Committee shall make an appropriate adjustment in the Option to provide that the Optionee (or the Optionee’s executor or administrator) shall acquire upon exercise only shares of stock of such number and kind as the Committee, in its sole judgment, shall deem equitable; and,
        provided further, that the Committee may make such adjustment individually with respect to each Optionee, and need not treat all Optionees uniformly. The Committee shall also make appropriate adjustment in the number of shares subject to Options under the Plan and the maximum number of shares to be granted to any person in any fiscal year as determined to be equitable.

        

        In the event that any transaction (other than a change specified in the preceding paragraph) described in Section 424(a) of the Code affects the Common Stock subject to any unexercised Option, the Board of the surviving or acquiring corporation shall make such similar adjustment as is permissible and
        appropriate.

        

        If any such change or transaction shall occur, the number and kind of shares for which Options may thereafter be granted under the Plan shall be adjusted to give effect thereto.

        

        14. PURCHASE FOR INVESTMENT. Whether or not the Options and shares covered by the Plan have been registered under the Securities Act of 1933, as amended, each person exercising an Option under the Plan may be required by the Company to give a representation in writing that such person is acquiring such shares for
        investment and not with a view to, or for sale in connection with, the distribution of any part thereof.

        

        The Company will endorse any necessary legend referring to the foregoing restriction upon the certificate or certificates representing any shares issued or transferred to the Optionee upon the exercise of any Option granted under the Plan.

        

        15. FORM OF AGREEMENTS WITH OPTIONEES. Each Option granted pursuant to the Plan shall be in writing and shall have such form, terms and provisions, not inconsistent with the provisions of the Plan, as the Committee shall provide for such Option. Each Optionee shall be notified promptly of such grant, and a written
        agreement shall be promptly executed and delivered by the Company and the Optionee.

        

        16. TERMINATION AND AMENDMENT OF PLAN AND OPTIONS. Unless the Plan shall theretofore have been terminated as hereinafter provided, Options may be granted under the Plan at any time, and from time to time, prior to the tenth anniversary of the Effective Date (as defined below), on which date the Plan will expire,
        except as to Options then outstanding under the Plan. Such Options shall remain in effect until they have been exercised, have expired or have been canceled.

        

        The Plan may be terminated or modified at any time by the Board of Directors; provided, however, that any such modification shall comply with all applicable laws, applicable stock exchange listing requirements, and applicable requirements for exemption (to the extent necessary) under Rule 16b-3 under the Exchange
        Act.

        

        No termination, modification or amendment of the Plan, without the consent of the Optionee, may adversely affect the rights of such person with respect to such Option. With the consent of an Optionee and subject to the terms and conditions of the Plan, the Committee may amend outstanding award agreements with such
        Optionee.

        

        17. EFFECTIVE DATE OF PLAN. The Plan originally became effective on August 10, 1999, the date of its adoption by the Board of Directors (the “Effective Date”). 

        

        18. GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company with respect to Options granted under the Plan shall be subject to all applicable laws, rules and regulations and such approvals by any governmental agency as may be required, including, without limitation, the effectiveness of any registration
        statement required under the Securities Act of 1933, as amended, and the rules and regulations of any securities exchange on which the Common Stock may be listed.

        

        19. WITHHOLDING. The Company’s obligation to deliver shares of Common Stock in respect of any Option granted under the Plan shall be subject to all applicable federal, state, local and foreign tax withholding requirements. Federal, state, local and foreign withholding taxes due upon the exercise of any
        Option (or upon any disqualifying disposition of shares of Common Stock subject to an Incentive Option), in the Committee’s sole discretion, may be paid in shares of Common Stock (including the withholding of shares subject to an Option) upon such terms and conditions as the Committee may determine. Notwithstanding the foregoing, shares of the Company’s Common Stock may not be used by Canadian Optionees to pay any taxes due upon the exercise of any Option.

        

        20. SEPARABILITY. If any of the terms or provisions of the Plan conflict with the requirements of Rule 16b-3 under the Exchange Act and/or Section 422 of the Code, then such terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 under the Exchange Act
        and/or Section 422 of the Code. With respect to Incentive Options, if the Plan does not contain any provision required to be included herein under Section 422 of the Code, such provision shall be deemed to be incorporated herein with the same force and effect as if such provision had been set out at length herein; provided, further, that to the extent any Option which is intended to qualify as an Incentive Option cannot so qualify such Option, to the extent, shall be deemed to be a
        Nonqualified Option for all purposes of the Plan.

        

        21. NON-EXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the Board of Directors nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitation on the power of the Board of Directors to adopt such other incentive arrangements as it may deem
        desirable, including, without limitation, the granting of stock options and the awarding of stock and cash otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

        

        22. EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION. By acceptance of an Option, each Optionee shall be deemed to have agreed that such grant is special incentive compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the amount of any payment under
        any pension, retirement or other employee benefit plan of the Company or any of its Subsidiaries. In addition, each beneficiary of a deceased Optionee shall be deemed to have agreed that such Option will not affect the amount of any life insurance coverage, if any, provided by the Company on the life of the Optionee which is payable to such beneficiary under any life insurance plan covering employees of the Company or any of its Subsidiaries.

        

        23. GOVERNING LAW. The Plan shall be governed by, and construed in accordance with, the laws of the State of New Jersey.

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