-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A26d027XiPb4RjfQS/9WoPU0Tsm6AgMSExbQfUTV3cyr/oGTNv1HLL+y7vgjGFdn hdKtyGB8/DDgo0ZUwGrwQQ== 0000910662-02-000009.txt : 20020413 0000910662-02-000009.hdr.sgml : 20020413 ACCESSION NUMBER: 0000910662-02-000009 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20020118 EFFECTIVENESS DATE: 20020118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALL CORP CENTRAL INDEX KEY: 0000075829 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 111541330 STATE OF INCORPORATION: NY FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-76976 FILM NUMBER: 2512504 BUSINESS ADDRESS: STREET 1: 2200 NORTHERN BLVD CITY: EAST HILLS STATE: NY ZIP: 11548 BUSINESS PHONE: 5164845400 MAIL ADDRESS: STREET 1: 2200 NORTHERN BLVD CITY: EAST HILLS STATE: NY ZIP: 11548 S-8 1 frms8.txt FORM S-8 FOR 2001 SOP FOR NON-EMPLOYEE DIRECTORS Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ---------------------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 P A L L C O R P O R A T I O N (Exact name of registrant as specified in its charter) New York 11-1541330 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 2200 Northern Boulevard East Hills, New York 11548 (Address of Principal Executive Offices) PALL CORPORATION 2001 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS (Full title of the plan) Mary Ann Bartlett, Secretary Pall Corporation 2200 Northern Boulevard East Hills, New York 11548 (Name and address of agent for service) (516) 484-5400 (Telephone number, including area code, of agent for service) ____________ Copy to: CARTER, LEDYARD & MILBURN 2 Wall Street New York, New York 10005-2072 Attention: Heywood Shelley, Esq. ____________
CALCULATION OF REGISTRATION FEE ======================================================================================================================== Proposed Proposed Amount of Title of securities Amount to be maximum offering maximum aggregate registration to be registered registered price per share offering price fee ________________________________________________________________________________________________________________________ Common Stock, $.10 par value 72,000 shs. $24.27 (1) $1,747,440(1) $160.77 Common Stock, $.10 par value 328,000 shs. $23.15 (2) 7,593,200 698.57 ------- --------- ------ Totals 400,000 shs. -- $9,340,640 $859.34 ======= ========== ======= Common Share Purchase Rights 400,000 rights -- (3) -- (3) None ________________________________________________________________________________________________________________________
(1) Calculated pursuant to Rule 457(h) on the basis of the price at which outstanding options under the Plan may be exercised. (2) Calculated pursuant to Rule 457(h) and (c) on the basis of the average of the high and low prices ($23.57 and $22.73) of a share of the Common Stock as reported for New York Stock Exchange composite transactions on January 15, 2002. (3) Included in the offering price of the Common Stock being registered hereby. Until the Distribution Date, as defined in the Rights Agreement providing for the Common Share Purchase Rights, such Rights will be transferable only with the Common Stock and will be evidenced by the certificates evidencing the Common Stock. - -------------------------------------------------------------------------------- This Registration Statement shall become effective immediately upon filing as provided in Rule 462(a) under the Securities Act of 1933. 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The Registrant is incorporating by reference into this Registration Statement the following documents filed by it with the Commission (Commission File No. 1-4311): (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended July 28, 2001; (b) The Registrant's Quarterly Report on Form 10-Q for the quarterly period ended October 27, 2001; and (c) The descriptions of the Common Stock and the Common Share Purchase Rights of the Registrant contained in the Amendments No. 1, both dated April 20, 1999, to the Registrant's Registration Statements on Form 8-A, both dated September 10, 1992, for the registration of the Common Stock and the Common Share Purchase Rights pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), and any updates of such descriptions contained in any registration statement, report or amendment thereto of the Registrant hereafter filed under the Exchange Act. In addition, all documents subsequently filed by the Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered hereby have been sold, or which deregisters all such securities then remaining unsold, shall be deemed to be incorporated by reference in and made a part of this Registration Statement from the date of filing of such documents. Item 4. Description of Securities. Not required. The Common Stock and Common Share Purchase Rights are registered under Section 12(b) of the Exchange Act. Item 5. Interests of Named Experts and Counsel. Carter, Ledyard & Milburn, counsel for the Registrant, has given the opinion being filed as Exhibit 5 to this Registration Statement as to the legality of the securities being registered hereby. Heywood Shelley, counsel to Carter, Ledyard & Milburn, is a director of the Registrant and the owner of 10,000 outstanding shares of the Registrant's Common Stock. In addition, Mr. Shelley holds options granted by the Registrant to purchase an additional 17,500 shares of Common Stock under the Registrant's stock option plans. 3 Item 6. Indemnification of Directors and Officers. Reference is made to Sections 721 through 725 of the Business Corporation Law of the State of New York, the Registrant's jurisdiction of incorporation, which provides for indemnification of directors and officers under certain circumstances. Consistent with the above provisions, Section 7.02 of the Registrant's Bylaws provides as follows: "Indemnification. The Corporation shall indemnify any person made or threatened to be made a party to any action or proceeding, whether civil or criminal (and whether or not by or in the right of the corporation or of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise), by reason of the fact that such person, his testator or intestate, is or was a director or officer of the corporation or served any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity at the request of the corporation, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, provided that (i) no indemnification may be made to or on behalf of any person if a judgment or other final adjudication adverse to such person establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled; (ii) no indemnification shall be required in connection with the settlement of any pending or threatened action or proceeding, or any other disposition thereof except a final adjudication, unless the corporation has consented to such settlement or other disposition, and (iii) the corporation shall not be obligated to indemnify any person by reason of the adoption of this Section 7.02 if and to the extent such person is entitled to be indemnified under a policy of insurance as such policy would apply in the absence of the adoption of this Section 7.02. "Reasonable expenses, including attorneys' fees, incurred in defending any action or proceeding, whether threatened or pending, shall be paid or reimbursed by the corporation in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of the person seeking indemnification to repay such amount to the corporation to the extent, if any, such person is ultimately found not to be entitled to indemnification. "Notwithstanding any other provision hereof, no amendment or repeal of this Section 7.02, or any other corporate action or agreement which prohibits or otherwise limits the right of any person to indemnification or advancement or reimbursement of expenses hereunder, shall be effective as to any person until the 60th day following notice to such person of such action, and no such amendment or repeal or other corporate action or agreement shall deprive any person of any right hereunder arising out of any alleged or actual act or omission occurring prior to such 60th day. 4 "The corporation is hereby authorized, but shall not be required, to enter into agreements with any of its directors, officers or employees providing for rights to indemnification and advancement and reimbursement of reasonable expenses, including attorneys' fees, to the extent permitted by law, but the corporation's failure to do so shall not in any manner affect or limit the rights provided for by this Section 7.02 or otherwise. "For purposes of this Section 7.02, the term 'the corporation' shall include any legal successor to the corporation, including any corporation which acquires all or substantially all of the assets of the corporation in one or more transactions. For purposes of this Section 7.02, the corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the corporation or any subsidiary thereof also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan, and excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be considered fines. "The rights granted pursuant to or provided by the foregoing provisions of this Section 7.02 shall be in addition to and shall not be exclusive of any other rights to indemnification and expenses to which any such person may otherwise be entitled by law, contract or otherwise." The Registrant has policies insuring its officers and directors against certain civil liabilities, including liabilities under the Securities Act of 1933. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. The index to exhibits appears on the page immediately following the signature pages of this Registration Statement. 5 Item 9. Undertakings. (1) The undersigned Registrant hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933, unless the information required to be included in such post-effective amendment is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act and incorporated herein by reference; (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement, unless the information required to be included in such post-effective amendment is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act and incorporated herein by reference; (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (d) That, for the purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (2) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the 6 provisions described in Item 6 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Village of East Hills, State of New York, on the 18th day of January, 2002. PALL CORPORATION By:/s/ Jeremy Hayward-Surry ------------------------- Jeremy Hayward-Surry President POWER OF ATTORNEY Each person whose signature appears below hereby constitutes Jeremy Hayward-Surry, Gilbert P. Weiner and Mary Ann Bartlett, and each of them singly, his true and lawful attorneys-in-fact with full power to execute in the name of such person, in the capacities stated below, and to file, such one or more amendments to this Registration Statement as the Registrant deems appropriate, and generally to do all such things in the name and on behalf of such person, in the capacities stated below, to enable the Registrant to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission thereunder, and hereby ratifies and confirms the signature of such person as it may be signed by said attorneys-in-fact, or any one of them, to any and all amendments to this Registration Statement. _________________________ Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and the above power of attorney have been signed on January 18, 2002, by the following persons in the capacities indicated. 8 Signature Title --------- ----- /s/Eric Krasnoff - -------------------------------------- Chairman and Chief Executive Eric Krasnoff Officer (Principal Executive Officer) and Director /s/John Adamovich, Jr. - -------------------------------------- Chief Financial Officer, John Adamovich, Jr. Group Vice President and Treasurer (Principal Financial Officer) /s/Lisa Kobarg - -------------------------------------- Chief Corporate Accountant Lisa Kobarg (Principal Accounting Officer) Director - -------------------------------------- Abraham Appel /s/Daniel J. Carroll, Jr. Director - -------------------------------------- Daniel J. Carroll, Jr. /s/John H.F. Haskell, Jr. Director - -------------------------------------- John H.F. Haskell, Jr. /s/Ulric Haynes, Jr. Director - -------------------------------------- Ulric Haynes, Jr. 9 Signature Title --------- ----- /s/Jeremy Hayward-Surry Director - -------------------------------------- Jeremy Hayward-Surry /s/Edwin W. Martin, Jr. Director - -------------------------------------- Edwin W. Martin, Jr. /s/Katharine L. Plourde Director - -------------------------------------- Katharine L. Plourde /s/Heywood Shelley Director - -------------------------------------- Heywood Shelley /s/Edward L. Snyder Director - -------------------------------------- Edward L. Snyder /s/Edward Travaglianti Director - -------------------------------------- Edward Travaglianti /s/James D. Watson Director - -------------------------------------- James D. Watson 10 EXHIBIT INDEX Exhibit No. - ---------- 4(a)* Rights Agreement dated as of November 17, 1989, between the Registrant and United States Trust Company of New York, as Rights Agent, filed as Exhibit I to the Registrant's Registration Statement on Form 8-A (Commission File No. 1-4311) dated September 10, 1992, for the registration of the Common Share Purchase Rights pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the "Form 8-A") 4(b)* Amendment No. 1, dated as of April 20, 1999, to the above Rights Agreement, which Amendment was filed as Exhibit III to Amendment No. 1, dated April 20, 1999, to the Form 8-A 5 Opinion of Carter, Ledyard & Milburn 23(a) Consent of Carter, Ledyard & Milburn (included in Exhibit 5) 23(b) Consent of KPMG LLP 24 Powers of Attorney (included in the signature page of this Registration Statement) 99 Pall Corporation 2001 Stock Option Plan for Non-Employee Directors ______________________ * Incorporated herein by reference. 11 EX-5 4 ex5.txt OPINION OF CLM E X H I B I T 5 - - - - - - - CARTER, LEDYARD & MILBURN Counsellors at Law 2 Wall Street New York, New York 10005 --------- (212) 732-3200 Fax (212) 732-3232 January 18, 2002 Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Pall Corporation ---------------- Ladies and Gentlemen: We have acted as counsel for Pall Corporation, a New York corporation (the "Corporation"), in connection with the adoption of its 2001 Stock Option Plan for Non-Employee Directors (the "Plan"). The Plan provides for the sale upon the exercise of options of up to an aggregate of 400,000 shares (the "Shares") of the common stock, $.10 par value per share, of the Corporation and up to an aggregate of 400,000 common share purchase rights (the "Rights"). The Shares may be either authorized but unissued or reacquired shares. Each of the 400,000 Rights will be issued in connection with the issuance of one of the Shares and prior to the Distribution Date (as defined in the Rights Agreement providing for the common share purchase rights), will be transferable with and only with, and will be evidenced by the certificate evidencing, such Share. We have examined the originals, or copies certified or otherwise identified to our satisfaction, of such corporate records and such other documents as we have deemed relevant as a basis for our opinion hereinafter expressed. Based on the foregoing, we are of the opinion that up to 400,000 previously unissued Shares and Rights which may be the subject of options under the Plan, when paid for in accordance with the terms of the Plan and the options granted thereunder, will be legally issued, and the Shares will be fully-paid and non-assessable. Securities and Exchange Commission -2- We hereby consent to the filing of this opinion as an exhibit to the Corporation's Form S-8 Registration Statement for the Shares and Rights. Very truly yours, /s/CARTER, LEDYARD & MILBURN SVB/VMS:lrh EX-23.B 5 ex23b.txt CONSENT OF KPMG LLP E X H I B I T 23(b) - - - - - - - Consent of Independent Auditors Board of Directors Pall Corporation: We consent to the incorporation by reference in the registration statement on Form S-8 of Pall Corporation, covering the registration of 400,000 shares of its common stock and 400,000 of its common share purchase rights authorized for issuance under its 2001 Stock Option Plan for Non-Employee Directors, of our reports dated August 29, 2001 relating to the consolidated financial statements and related schedule of Pall Corporation and subsidiaries as of July 28, 2001 and July 29, 2000 and for each of the years in the three-year period ended July 28, 2001. Such financial statements and related schedule and our reports thereon are incorporated by reference or appear in the annual report on Form 10-K of Pall Corporation for the fiscal year ended July 28, 2001. /s/KPMG LLP Melville, New York January 17, 2002 EX-99 6 ex99.txt 2001 SOP FOR NON-EMPLOYEE DIRECTORS E X H I B I T 99 - - - - - - - PALL CORPORATION 2001 Stock Option Plan for Non-Employee Directors Section 1. Purpose The purpose of this Pall Corporation 2001 Stock Option Plan for Non-Employee Directors (the "Plan") is to secure for Pall Corporation (the "Company") and its stockholders the benefits of the incentive inherent in increased common stock ownership by the members of the Board of Directors of the Company (the "Board") who are not employees of the Company or any of its subsidiaries. Section 2. Administration The Plan shall be administered by the Compensation Committee of the Board (the "Committee"). The Committee shall have all the powers vested in it by the terms of the Plan. However, the Board, not the Committee, shall have the sole power and authority (within the limitations described herein) to prescribe the form of the document embodying and evidencing stock options granted under the Plan ("Options"). The Committee shall, subject to the provisions of the Plan, have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Committee in the administration of the Plan, as described herein, shall be final and conclusive. The Committee may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or the Secretary or any other officer of the Company to execute and deliver documents in connection with the Plan, including Options granted under the Plan. No member of the Committee shall be liable for anything done or omitted to be done by such member or by any other member of the Committee in connection with the Plan, except for his or her own willful misconduct or as expressly provided by statute. Section 3. Amount of Stock The stock which may be issued and sold under the Plan shall be the Common Stock of the Company ("Common Stock") of a total number not exceeding 400,000 shares, subject to adjustment as provided in Section 6 hereof. The stock to be issued may be either authorized and unissued shares or reacquired shares. In the event that Options granted under the Plan shall terminate or expire without having been exercised in full, new Options may be granted covering the shares not purchased under such lapsed Options. 1 Section 4. Eligibility and Grant of Options As used herein, the term "Granting Date" means the fifth day of January in each year during which the Plan is in effect beginning with the year 2002 except that if said date is not a day on which trading takes place on the New York Stock Exchange, the Granting Date shall be the first day after January 5th on which trading does take place on said Exchange. Each member of the Board who is not an employee of the Company or any of its subsidiaries at the time when Options are to be granted under the ensuing provisions of this Section 4 (a "Non-Employee Director") shall automatically, by virtue of the Plan and without any action by the Committee or the Board, be granted an Option as follows: (a) On each Granting Date, each Non-Employee Director who was elected a director of the Company by shareholders at the annual meeting of shareholders next preceding such Granting Date for the first time (i.e., disregarding any previous election of such person by the Board) shall be granted an Option on 12,000 shares (an "Initial Grant"). (b) On the Granting Date in 2002 and in every second year thereafter (e.g., 2004, 2006, etc.), each person who is a Non-Employee Director on such Granting Date and who is not entitled to an Initial Grant under Section 4(a) on such Granting Date shall be granted an Option on 7,500 shares. Section 5. Terms and Conditions of Options Each Option granted under the Plan shall be evidenced by an instrument in such form as the Board shall prescribe from time to time in accordance with the Plan and all applicable laws and regulations and shall be subject to the following terms and conditions and those set forth elsewhere in the Plan, which terms and conditions shall be deemed incorporated in each Option by reference to the provisions of the Plan: (a) The Option exercise price shall be the Fair Market Value (as defined in Section 7(a) hereof) of the shares of Common Stock subject to such Option on the date the Option is granted (the "date of grant") but in no event less than the par value of the shares. (b) No part of an Option may be exercised (i) before the first anniversary of the date of grant or (ii) after the tenth anniversary of the date of grant. The minimum number of shares with respect to which an Option may be exercised in part at one time shall be the lesser of (i) 100 or (ii) the number of shares remaining available under the Option. Subject to the foregoing and to the ensuing provisions of this Section 5, an Option may be exercised as follows: 2 (i) at any time or times from the first anniversary of the date of grant to the date preceding the second anniversary, both such dates inclusive, for any number of shares up to 25 percent of the number of shares covered thereby; (ii) at any time or times from the second anniversary of the date of grant to the date preceding the third anniversary, both such dates inclusive, as to any number of shares which, when added to the shares as to which such Option has theretofore been exercised, will not exceed 50 percent of the number of shares covered thereby; (iii) at any time or times from the third anniversary of the date of grant to the date preceding the fourth anniversary, both such dates inclusive, as to any number of shares which, when added to the shares as to which such Option has theretofore been exercised, will not exceed 75 percent of the shares covered thereby; and (iv) at any time or times from the fourth anniversary of the date of grant to the tenth anniversary, both such dates inclusive, as to any number of shares which, when added to the shares as to which the Option has theretofore been exercised, will not exceed the total number of shares covered thereby. (c) The Option shall not be transferable by the optionee otherwise than by will or the laws of descent and distribution, and shall be exercisable during the optionee's lifetime only by the optionee, or if a legal guardian or other legal representative is appointed for an optionee, by such guardian or representative, except that an Option in its entirety (or the entire portion thereof remaining after any partial exercise thereof) is transferable to any "family member" of the optionee, as the term "family member" is defined, at the time of any such proposed transfer, in the General Instructions to Form S-8 promulgated by the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933 as amended (the "Securities Act"). It is a condition to any such transfer to a family member that (i) not less than 20 days before any such transfer, or such shorter period as the Committee may authorize in a particular case, the optionee has notified the Secretary of the Company of his or her intention to make such transfer and (ii) such transfer complies with the requirements of said General Instructions to Form S-8 which are conditions to the registration under the Securities Act on said Form S-8 of the issuance and sale to the transferee of the shares issuable upon exercise of the Option, including but not limited to the provision of said General Instructions that Form S-8 is not available for the exercise of Options transferred "for value" as defined therein. (For the information of optionees, at the time of adoption of this Plan said General Instructions to Form S-8 define "family member" as follows: "For purposes of this form, 'family member' includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the employees [sic] household (other than a tenant or employee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the employee) control the management of assets, and any other entity in which these persons (or the employee) own 3 more than fifty percent of the voting interests." In the event that the Commission should change that definition prior to any proposed transfer, the definition as so changed shall apply and govern.) (d) No Option or any part of an Option shall be exercisable: (i) unless written notice of exercise, in form satisfactory to the Committee, is given to the Company; and (ii) unless the person exercising the Option makes payment to the Company in full in United States dollars by cash or check of such amount as is sufficient to satisfy the Company's obligation, if any, to withhold federal, state and local taxes by reason of such exercise or makes such other arrangement satisfactory to the Committee as will enable the Company to satisfy any such obligation. (e) At the time notice of exercise of an Option is given pursuant to Section 5(d)(i) hereof, the person exercising the Option shall either (I) make full payment in United States dollars by cash or check of the Option exercise price of the shares being acquired (sometimes hereinafter called the "purchase price") or (II) if the person exercising the Option is the individual to whom the Option was granted and at the time of exercise such individual is a member of the Board, such optionee may elect to pay the purchase price on an installment payment basis on the following terms and conditions: (A) The installments payable shall be the minimum amounts required to be paid by Regulation U of the Board of Governors of the Federal Reserve System as in effect as of the date of exercise of the Option or any successor regulation (hereinafter "Regulation U") or such greater installment payments as the Board may prescribe. (B) The optionee shall not be required to pay interest to the Company on the unpaid balance of the purchase price. (C) The unpaid balance of the purchase price shall be immediately payable in full upon demand made by the Company to the optionee (or, if the optionee has died, to the legal representatives of his or her estate or the successor owner of the stock, hereinafter collectively "Optionee's Successors"). (D) The shares for which the Option is exercised shall be issued to and registered in the name of the optionee but shall be endorsed by the optionee in blank (either on the certificate or on a separate stock power) and held by the Company as collateral security for the unpaid balance of the purchase price. Neither the optionee nor the Optionee's Successors shall be permitted to sell, withdraw, pledge or otherwise dispose of all or any part of such collateral except at a time when such sale, withdrawal, pledge or other disposition is permitted by Regulation U. Subject to compliance with 4 the immediately preceding sentence, the optionee (and the Optionee's Successors) shall have the right at any time and from time to time to withdraw part or all of the shares from the collateral so held by the Company upon payment of the unpaid balance of the purchase price of the shares withdrawn. For purposes of determining such unpaid balance, each payment made otherwise than to obtain withdrawal of shares under the immediately preceding sentence shall be applied pro rata to all shares which at the time of such payment are held by the Company as collateral for the payment of the balance of the purchase price. Upon default by the optionee (or the Optionee's Successors) in the making of any payment due under the foregoing provisions of this Section 5(e), the Company shall have with respect to the collateral all of the rights of a secured party under the Uniform Commercial Code as in effect in the State of New York. In addition, upon a default in the making of any payment due under these installment-payment provisions, the Company shall have the right, but not the obligation, to give written notice to the optionee (or the Optionee's Successors) to the effect that if such payment is not received by the Company by the payment date specified in such notice, which date shall be not less than 21 days after the date of giving of such notice, (i) the Company shall have the right to retain and cancel the shares held as collateral, crediting against the payment due the Fair Market Value (as defined in Section 7(a) hereof) of such shares on the payment date specified in such notice and (ii) the optionee (and the Optionee's Successors) shall be and remain liable for any balance due after such crediting. (E) The optionee (and the Optionee's Successors) shall be entitled, from the date of exercise of such Option, to all of the rights of a shareholder, including the right to vote the shares and (subject to the rights of the Company pursuant to subparagraph (D) next above in the event of a payment default) to receive and retain all dividends paid thereon. (f) Except as limited by Section 7(c) hereof, the Board is authorized in its discretion, and with the consent of the optionee, to make amendments, not in conflict with the Plan or any applicable law or regulation, in the terms of any Option granted under the Plan. (g) In addition to the methods of payment of the Option exercise price authorized by Section 5(e) hereof, the person exercising the Option, at his or her election, shall have the right to make payment at the time of exercise by delivering to the Company shares of Common Stock of the Company having a total Fair Market Value (as defined in Section 7(a) hereof) equal to the Option exercise price, or a combination of cash and such shares having a total Fair Market Value equal to the Option exercise price, provided, however, that all shares so delivered must have been beneficially owned by the person exercising the Option for at least six months prior to the Option exercise date and, upon request, the Company shall be given satisfactory proof of such beneficial ownership. Certificates representing shares delivered to the Company pursuant to this paragraph shall be duly endorsed or accompanied by appropriate stock powers, in either case with signature guaranteed if so required by the Company. 5 (h) If at the time of the death of an optionee an Option granted under the Plan has not been fully exercised and is outstanding, the optionee's estate or any person who has acquired the right to exercise the Option by bequest or inheritance or by reason of the optionee's death or by transfer during the optionee's lifetime to a "family member" in accordance with Section 5(c) hereof may, until the date one year after the date of the optionee's death and not thereafter (but in no event after the tenth anniversary of the date of grant), exercise the Option with respect to the number of shares as to which the optionee could have exercised it at the time of his or her death. (i) If an optionee ceases to be a member of the Board for any reason other than death or removal from the Board for cause in accordance with law, then, except as provided in the next sentence hereof, the Option shall thereafter be exercisable until the date one year after the date on which the optionee ceases to be a member of the Board and not thereafter (but in no event after the tenth anniversary of the date of grant) and only with respect to the number of shares as to which the optionee could have exercised the Option at the time that he or she ceased to be a member of the Board. Notwithstanding the immediately preceding sentence, if at the time that an optionee ceases to be a member of the Board he or she has been a member of the Board for at least two full three-year terms (six years, more or less, depending on the dates of annual meetings, which vary somewhat from year to year), the Option shall continue to vest in accordance with the vesting schedule set forth in Section 5(b) and shall remain outstanding and exercisable until the tenth anniversary of the date of grant (subject to the provisions of Section 5(h) if the optionee shall die prior to such tenth anniversary). Section 6. Adjustment in the Event of Change in Stock If the Company effects any stock split, stock dividend, combination, exchange of shares or similar capital adjustment, the aggregate number and kind of shares available under the Plan, the number, kind and price of shares subject to outstanding Options and the number of shares constituting an Option grant under Section 4 hereof, shall be appropriately and equitably adjusted so as to reflect such change, all as determined by the Board. Section 7. Miscellaneous Provisions (a) As used in the Plan, "Fair Market Value" means the arithmetic mean of the highest and lowest sales prices of the Common Stock on the date of grant or other date as of which the Common Stock is to be valued hereunder, as reported in New York Stock Exchange Composite Transactions. If no sale shall be reported in New York Stock Exchange Composite Transactions for the valuation date in question, Fair Market Value shall be determined by the Committee in accordance with Treasury Regulations applicable to incentive stock options. (b) Nothing in the Plan or in any Option granted under the Plan shall confer any rights on any director to continue as a director of the Company or shall interfere in any way with the right of the Company or its shareholders to remove such person as a director in 6 accordance with applicable law. If a director shall be removed for cause in accordance with law, any Option held by such person shall automatically terminate as of the date of such removal. (c) It is the intent of the Company that the Plan comply in all respects with Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended and that any ambiguities or inconsistencies in the Plan be interpreted to give effect to such intention. The Committee may adopt rules and regulations under, and amend, the Plan in furtherance of such intent. Anything elsewhere in the Plan to the contrary notwithstanding, neither the Board nor the Committee shall have the power to amend the Plan in any way or take any other action which would cause the Plan to fail to qualify as or be disqualified as a "formula plan" under and for purposes of Rule 16b-3 and the instructions thereto. (d) Any director has the right to waive the granting of Options to him or her on the next Granting Date on which an Option would be granted to such director, by notice to the Secretary of the Company given prior to such Granting Date. Section 8. Change in Control (a) In the event of a "Change in Control" of the Company (as defined in Section 8(b) hereof), Options outstanding under the Plan on the date on which the Change in Control occurs shall become exercisable in full on said date (i.e., to the extent that any such Option or portion thereof is not yet exercisable on the date on which the Change in Control occurs, the right to exercise such Option as to all or any part of the shares covered thereby shall be accelerated). (b) A "Change in Control" for purposes of the Plan shall mean the occurrence of any of the following: (i) the "Distribution Date" as defined in Section 3 of the Rights Agreement dated as of November 17, 1989 between the Company and United States Trust Company of New York as Rights Agent, as amended by Amendment No. 1 thereto dated April 20, 1999, and as the same may have been further amended or extended to the time in question or in any successor agreement (the "Rights Agreement"); or (ii) any event described in Section 11(a)(ii)(B) of the Rights Agreement; or (iii)any event described in Section 13 of the Rights Agreement, or (iv) the date on which the number of duly elected and qualified directors of the Company who were not either elected by the Board or nominated by the Board or its Nominating Committee for election by the shareholders shall equal or exceed one-third of the total number of directors of the Company as fixed by its by-laws; provided, however, that no Change in Control shall be deemed to have occurred, and no rights 7 arising upon a Change in Control pursuant to Section 8(a) shall exist, to the extent that the Board so determines by resolution adopted prior to the Change in Control. Any such resolution may be rescinded or countermanded by the Board at any time. Section 9. Amendment Except as provided in Section 7(c) hereof, the Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable, including, but not limited to, amendments necessary to qualify for any exemption or to comply with applicable law or regulations; provided, however, that the Plan may not, without further approval by the shareholders of the Company, be amended to increase the total number of shares of Common Stock which may be issued upon the exercise of Options granted under the Plan above the number set forth in Section 3 hereof as said number may have been adjusted pursuant to Section 6 hereof. No amendment of the Plan shall alter or impair any of the rights or obligations of any optionee, without his or her consent, with respect to any Option theretofore granted under the Plan. Section 10. Termination The Plan shall terminate upon the earlier of the following dates or events to occur: (a) upon the adoption of a resolution of the Board terminating the Plan; or (b) on a Granting Date if on said date the number of shares remaining available for grant of Options under the Plan is not sufficient for the making of the grants required by Section 4 hereof to be made on such Granting Date. No termination of the Plan shall alter or impair any of the rights or obligations of any optionee, without his or her consent, with respect to any Option theretofore granted under the Plan. Section 11. Shareholder Approval The Plan shall be submitted to the shareholders of the Company for their approval at the 2001 annual meeting of shareholders. The shareholders shall be deemed to have approved the Plan if it is approved at said meeting, including any adjournment thereof, in accordance with the Business Corporation Law of the State of New York. If the shareholders do not approve the Plan at said meeting, including any adjournment thereof, the Plan shall thereupon terminate and shall be of no further force or effect. [Note: This Plan was adopted by the Board of Directors on July 17, 2001, subject to approval by shareholders, and was approved by shareholders at the annual meeting on November 14, 2001.] 8 -----END PRIVACY-ENHANCED MESSAGE-----