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EXHIBIT 10.3 AMENDED AND RESTATED
BAYONNE BANCSHARES, INC. 1995 STOCK OPTION PLAN
(AS ASSUMED BY RICHMOND COUNTY FINANCIAL CORP.)
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AMENDED AND RESTATED BAYONNE BANCSHARES, INC.
1995 STOCK OPTION PLAN
(AS ASSUMED BY RICHMOND COUNTY FINANCIAL CORP.)
1. PURPOSE
The purpose of the Amended and Restated Bayonne Bancshares, Inc. 1995
Stock Option Plan (the "Plan") is to advance the interests of Bayonne
Bancshares, Inc. (the "Company") and its shareholders by providing Employees and
Outside Directors of the Company and its Affiliates, including First Savings
Bank of New Jersey, S.L.A. (the "Bank"), upon whose judgment, initiative and
efforts the successful conduct of the business of the Company and its Affiliates
largely depends, with an additional incentive to perform in a superior manner as
well as to attract people of experience and ability.
2. DEFINITIONS
"AFFILIATE" "parent corporation" or "subsidiary corporation" of the Bank
or the Company, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"AWARD" means an Award of Non-statutory Stock Options, Incentive Stock
Options, and/or Limited Rights granted under the provisions of the Plan.
"BENEFICIARY" means the person or persons designated by a Recipient to
receive any benefits payable under the Plan in the event of such Recipient's
death. Such person or persons shall be designated in writing on forms provided
for this purpose of the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate.
"BOARD OF DIRECTORS" means the Board of Directors of the Bank and the
Company, as applicable.
"CHANGE IN CONTROL" means a change in control of the Company or the Bank
of a nature that (i) would be required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Sections 13 or 15(d) of the Exchange Act; (ii) results in a "change of control"
or "acquisition of control" within the meaning of the regulations promulgated by
the Office of Thrift Supervision ("OTS") (or its predecessor agency) found at 12
C.F.R. Part 574, as in effect on the date hereof; PROVIDED, HOWEVER, that in
applying the definition of change in control as set forth under such regulations
the Board of Directors shall substitute its judgment for that of the OTS; or
(iii) without limitation Change in Control shall be deemed to have occurred at
such time as (A) any "person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Bank
or the Company representing 20% or more of the Bank's or the Company's
outstanding securities except for any securities of the Bank purchased by the
Company and any securities purchased by any tax-qualified employee benefit plan
of the Bank; or (B) individuals who constitute the Board of Directors on the
date hereof (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the date hereof whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board, or whose nomination for
election by the Company's stockholders was approved by a nominating committee
serving under the Incumbent Board, shall be, for purposes of this clause (B),
considered as though he were a member of the Incumbent Board; or (C) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Bank or the Company or similar transaction occurs in which the
Bank or Company is not the resulting entity; or (D) a solicitation of
shareholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or Bank or similar transaction with one or more
corporations, as a result of which the outstanding shares of the class of
securities then subject to the plan are exchanged for or converted into cash or
property or securities not issued by the Bank or the Company; or (E) a tender
offer is made for 20% or more of the voting securities of the Bank or the
Company.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the Committee designated by the Board of Directors,
pursuant to Section 3 herein, to administer the Plan.
"COMMON STOCK" means the common stock of the Company , par value $0.10 per
share.
"COMPANY" means Bayonne Bancshares, Inc.
"DATE OF GRANT" means the actual date on which an Award is granted by the
Committee.
"DIRECTOR" means a member of the Boards of Directors of the Company or its
Affiliates.
"DIRECTOR EMERITUS" means a former Director of the Bank, who in
recognition of his past contributions to the Bank, has been titled as a director
emeritus of the Bank.
"DISABILITY" means the permanent and total inability by reason of mental
or physical infirmity, or both, of an employee to perform the work customarily
assigned to him. Additionally, a medical doctor selected or approved by the
Board of Directors must advise the Committee that it is either not possible to
determine when such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of such employee's
lifetime.
"EMPLOYEE" means any person who is currently employed by the Bank or the
Company or an Affiliate, including officers.
"FAIR MARKET VALUE" means, when used in connection with the Common Stock
on a certain date, the reported closing price of the Common Stock as reported by
the National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market (as published by THE WALL STREET JOURNAL, if published) on the
date prior to such date, or if the Common Stock was not traded on such date, on
the next preceding day on which the Common Stock was traded thereon; PROVIDED,
HOWEVER, that if the Common Stock is not reported on the Nasdaq National Market,
Fair Market Value shall mean the average sale price of all shares of Common
Stock sold during the 30-day period immediately preceding the date on which such
stock option was granted, and if no shares of stock have been sold within such
30-day period, the average sale price of the last three sales of Common Stock
sold during the 90-day period immediately preceding the date on which such stock
option was granted. In the event Fair Market Value cannot be determined in the
manner described above, then Fair Market Value shall be determined by the
Committee. The Committee shall be authorized to obtain an independent appraisal
to determine the Fair Market Value of the Common Stock.
"INCENTIVE STOCK OPTION" means an Option granted by the Committee to an
Employee Participant, which Option is designated as an Incentive Stock Option
pursuant to Section 8.
"LIMITED RIGHT" means the right to receive an amount of cash based upon
the terms set forth in Section 9.
"NON-STATUTORY STOCK OPTION" means an Option granted by the Committee to
(i) an Outside Director or (ii) to any other Participant and such option is
either (A) not designated by the Committee as an Incentive Stock Option, or (B)
fails to satisfy the requirements of an Incentive Stock Option as set forth in
Section 422 of the Code and the regulations thereunder.
"NORMAL RETIREMENT" means, for an Employee, retirement at the normal or
early retirement date as set forth in the Bank's Employee Stock Ownership Plan,
or any successor plan. For an Outside Director, Normal Retirement means
retirement from service on the Boards of Directors of the Company or an
Affiliate.
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"OPTION" means Award granted under Section 7 or Section 8.
"OUTSIDE DIRECTOR" means a Director who is not also an Employee.
"PARTICIPANT" means an Outside Director or an Employee of the Bank or the
Company or an Affiliate chosen by the Committee to participate in the Plan.
"TERMINATION FOR CAUSE" means the termination of employment caused by the
individual's personal dishonesty, willful misconduct, any breach of a fiduciary
duty involving personal profit or intentional failure to perform stated duties,
or willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, any of which
results in material loss to the Bank, the Company, or an Affiliates.
3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall
consist of two or more disinterested directors of the Company, who shall be
appointed by the Board of Directors of the Company. A member of the Board of
Directors shall be deemed to be "disinterested" only if he satisfies such
requirements as the Securities and Exchange Commission may establish for
non-employee directors administering plans intended to qualify for exemption
under Rule 16b-3 (or its successor) under the Exchange Act. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable. All determinations and interpretations made by
the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
4. TYPES OF AWARDS
Awards under the Plan may be granted in any one or a combination of (a)
Incentive Stock Options as defined in Section 7; (b) Non-statutory Stock Options
as defined in Section 8; and (c) Limited Rights as defined herein in Section 9.
5. STOCK SUBJECT TO THE PLAN
There shall be 398,307 shares available for Awards under this Plan. Of
those shares no more than 270, 851 shares shall be available in connection with
the grant of Incentive Stock Options. The shares of Common Stock represented by
Options granted pursuant to this Plan may be either authorized but unissued
shares or shares previously issued and reacquired by the Company. To the extent
that Options together with any related rights granted under the Plan terminate,
expire or are cancelled without having been exercised or, in the case of Limited
Rights exercised for cash, new Awards may be made with respect to these shares.
Option Awards granted to Employees and Outside Directors shall be subject to the
individual and aggregate limitations imposed by the Office of Thrift Supervision
regulations, as applicable.
6. ELIGIBILITY
Officers and other Employees of the Company and its Affiliates shall be
eligible to receive Incentive Stock Options, Non-statutory Stock Options and/or
Limited Rights under the Plan. Outside Directors shall not be eligible to
receive Incentive Stock Options under the Plan. Outside Directors shall be
eligible to receive only Non-statutory Stock Options.
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7. NON-STATUTORY STOCK OPTIONS
7.1 GRANT OF NON-STATUTORY STOCK OPTIONS
(a) Grants. The Committee may, from time to time, grant Non-statutory
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Stock Options to eligible Employees and Outside Directors upon such terms and
conditions as the Committee may determine. Non-statutory Stock Options granted
under this Plan are subject to the terms and conditions set forth in this
Section 7.
(b) Option Agreement. Each Option shall be evidenced by a written option
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agreement between the Company and the Award recipient specifying the number of
shares of Common Stock that may be acquired through its exercise and containing
such other terms and conditions that are not inconsistent with the terms of this
grant. The maximum number of shares subject to a Non-statutory Option that may
be awarded under the Plan to any Employee shall be 117,320.
(c) Price. The purchase price per share of Common Stock deliverable upon
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the exercise of each Non- statutory Stock Option shall be determined by the
Committee on the date the Option is granted. Except as provided below, such
purchase price shall not be less than 100% of the Fair Market Value of the
Company's Common Stock on the date the Option is granted. The purchase price per
share of Common Stock deliverable upon the exercise of each Non-statutory Stock
Option granted in exchange for and upon surrender of previously granted awards
shall be not less than 100% of the Fair Market Value of the Company's Common
Stock on the date the Option is granted, but in no event may the purchase price
of any Non-statutory Stock Option be less than the par value of the Common
Stock. Shares may be purchased only upon full payment of the purchase price.
Payment of the purchase price may be made, in whole or in part, through the
surrender of shares of the Common Stock of the Company at the Fair Market Value
of such shares determined in the manner described in Section 2.
(d) Manner of Exercise. Unless otherwise specified by the Committee,
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Non-statutory Stock Options granted under the Stock Option Plan shall vest in a
Participant at the rate of twenty percent (20%) per year commencing from the
Date of Grant. The vested Option may be exercised from time to time, in whole or
in part, by delivering a written notice of exercise to the President or Chief
Executive Officer of the Company . Such notice is irrevocable and must be
accompanied by full payment of the purchase price in cash or shares of
previously acquired Common Stock of the Company at the Fair Market Value of such
shares determined on the exercise date by the manner described in Section 2
hereof.
(e) Terms of Options. The term during which each Non-statutory Stock
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Option may be exercised shall be determined by the Committee, but in no event
shall a Non-statutory Stock Option be exercisable in whole or in part more than
10 years and one day from the Date of Grant. The Non-statutory Options awarded
to Employees shall be exercisable in installments, as determined by the
Committee. The Committee shall determine the date on which each installment
shall become exercisable. The shares comprising each installment may be
purchased in whole or in part at any time after such installment becomes
exercisable. The Committee, in its sole discretion, may accelerate the time at
which any Non-statutory Stock Option awarded to Employees and Outside Directors
may be exercised in whole or in part. Notwithstanding the above, in the event of
a Change in Control of the Bank or the Company, all Non-statutory Stock Options
shall become immediately exercisable.
(f) Termination of Employment or Service. Upon the termination of an
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Employee's employment or upon termination of an Outside Director's service for
any reason other than Disability, death, Normal Retirement or Termination for
Cause, the Employee's or Outside Director's Non-statutory Stock Options shall be
exercisable only as to those shares that were immediately purchasable by the
Employee or Outside Directors at the date of termination and only for a period
of one (1) year following termination. For purposes of determining the date of
termination of an Outside Director's service, service as a Director Emeritus of
the Bank following termination from the Board of Directors will not cause a
Participant to incur a termination of service and such Participant will continue
to vest in his Award until termination of service as a Director Emeritus. In the
event of Termination for Cause, all rights under his Non-statutory
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Stock Options shall expire upon termination. In the event of the death or
Disability of any Employee or Outside Director, all Non-statutory Stock Options
held by such Employee or Outside Director, whether or not exercisable at such
time, shall be exercisable by such person or his legal representatives or
beneficiaries for one (1) year following the date of his death or cessation of
employment or service, as applicable, PROVIDED that in no event shall the period
extend beyond the expiration of the Non-statutory Stock Option term. In the
event of Normal Retirement, all Non-statutory Stock Options held by an Employee,
whether or not exercisable at such time, shall be exercisable for one (1) year
following the date of the Participant's retirement, provided, however, that in
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the event the Employee continues in service as a director of the Company or an
Affiliate, following his Normal Retirement, the Participant's Award will
continue to vest during his tenure as a Director pursuant to his original
vesting schedule. Notwithstanding the above, all Non- statutory Options held by
a Participant whose employment as an Employee or service as an Outside Director
terminates following a Change in Control of the Bank or the Company shall be
deemed earned as of the last day of employment or service with the Company or an
Affiliate and shall be exercisable for one (1) year following such termination
of employment or service.
8. INCENTIVE STOCK OPTIONS
8.1 GRANT OF INCENTIVE STOCK OPTIONS
The Committee, from time to time, may grant Incentive Stock Options to
eligible Employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) Option Agreement. Each Option shall be evidenced by a written option
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agreement between the Bank and the Employee specifying the number of shares of
Common Stock that may be acquired through its exercise and containing such other
terms and conditions that are not inconsistent with the terms of this grant.
(b) Price. The purchase price per share of Common Stock deliverable upon
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the exercise of each Incentive Stock Option shall be not less than 100% of the
Fair Market Value of the Company's Common Stock on the date the Incentive Stock
Option is granted. However, if an Employee owns stock possessing more than 10%
of the total combined voting power of all classes of Common Stock of the Company
(or under Section 424(d) of the Code, is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company or its Affiliates by reason of the ownership of such classes of common
stock directly or indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendant of such Employee or by or for any corporation, partnership,
estate or trust or which such employee is a shareholder, partner or
beneficiary), the purchase price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall not be less than 110% of the Fair
Market Value of the Company's Common Stock on the date the Incentive Stock
Option is granted. Shares may be purchased only upon payment of the full
purchase price. Payment of the purchase price may be made, in whole or in part,
through the surrender of shares of the Common Stock of the Company. If
previously acquired shares of Common Stock are tendered in payment of all or
part of the exercise price, the value of such shares shall be determined as of
the date of exercise of the Incentive Stock Option.
(c) Manner of Exercise. Unless otherwise determined by the Committee,
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Incentive Stock Options granted under the Stock Option Plan shall vest in a
Participant at the rate of twenty percent (20%) per year commencing from the
date of grant. The vested Option may be exercised from time to time, in whole or
in part, by delivering a written notice of exercise to the President or Chief
Executive Officer of the Company , PROVIDED, HOWEVER, that no Options shall be
exercisable prior to approval of the Plan by stockholders. Such notice is
irrevocable and must be accompanied by full payment of the purchase price in
cash or shares of previously acquired Common Stock of the Company. . If
previously acquired shares of Common Stock are tendered in payment of all or
part of the exercise price, the Fair Market Value of such shares shall be
determined as of the date of such exercise of the Incentive Stock Option.
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(d) Amount of Options. Incentive Stock Options may be granted to any
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eligible Employee in such amounts as determined by the Committee; PROVIDED that
the amount granted is consistent with the terms of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). Notwithstanding the above, the
maximum number of shares that may be subject to an Incentive Stock Option
awarded under the Plan to any Employee shall be 117,320. In granting Incentive
Stock Options, the Committee shall consider the position and responsibilities of
the eligible Employee, the length and value of his or her service to the or the
Company, the compensation paid to the Employee and the Committee's evaluation of
the performance of the or the Company according to measurements that include,
among others, key financial ratios, levels of classified assets, and independent
audit findings. In the case of an option intended to qualify as an Incentive
Stock Option, the aggregate Fair Market Value (determined as of the time the
option is granted) of the Common Stock with respect to which Incentive Stock
Options granted are exercisable for the first time by the Participant during any
calendar year (under all plans of the Participant's employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. The provisions of
this Section 8.1(d) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder.
(e) Term of Options. The term during which each Incentive Stock Option may
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be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock option be exercisable in whole or in part more than 10 years
from the Date of Grant. If any Employee, at the time an Incentive Stock Option
is granted to him, owns Common Stock representing more than 10% of the total
combined voting power of the Company or its Affiliates (or, under Section 424(d)
of the Code, is deemed to own Common Stock representing more than 10% of the
total combined voting power of all such classes of Common Stock, by reason of
the ownership of such classes of Common Stock, directly or indirectly, by or for
any brother, sister, spouse, ancestor or lineal descendent of such Employee, or
by or for any corporation, partnership, estate or trust of which such Employee
is a shareholder, partner or beneficiary), the Incentive Stock Option granted to
him or her shall not be exercisable after the expiration of five years from the
Date of Grant. No Incentive Stock Option granted under this Plan is transferable
except by will or the laws of descent and distribution and is exercisable during
his lifetime only by the Employee to which it is granted.
The Committee shall determine the date on which each Incentive Stock
Option shall become exercisable and may provide that an Incentive Stock Option
shall become exercisable in installments. The shares comprising each installment
may be purchased in whole or in part at any time after such installment becomes
purchasable, provided that the amount able to be first exercised in a given year
is consistent with the terms of Section 422 of the Code. To the extent required
by Section 422 of the Code, the aggregate fair market value (determined at the
time the Option is granted) of the Common Stock for which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar
year (under all plans of the Bank and its Affiliates) shall not exceed $100,000.
The Committee, in its sole discretion, may accelerate the time at which any
Incentive Stock Option may be exercised in whole or in part; PROVIDED that it is
consistent with the terms of Section 422 of the Code. Notwithstanding the above,
in the event of a Change in Control of the Bank or Company, all Incentive Stock
Options shall become immediately exercisable unless the fair market value of the
amount exercisable as a result of a Change in Control shall exceed $100,000
(determined as of the date of grant). In such event, the first $100,000 of
Incentive Stock Options (determined as of the date of grant) shall be
exercisable as Incentive Stock Options and any excess shall be exercisable as
Non-statutory Stock Options.
(f) Termination of Employment. Upon the termination of an Employee's
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employment for any reason other than Normal Retirement, Disability, Change in
Control, death or Termination for Cause, his or her Incentive Stock Options
shall be exercisable only as to those shares which were immediately purchasable
by him at the date of termination and only for a period of three (3) months
following termination. In the event of Termination for Cause all rights under
his or her Incentive Stock Options shall expire upon termination.
In the event of death, Disability, termination in the event of a Change in
Control or Normal Retirement, all Incentive Stock Options held by an Employee,
whether or not exercisable at such time, shall be exercisable by such Employee
or his legal representatives or beneficiaries for one (1) year following the
date of his or her death or cessation of employment; PROVIDED, HOWEVER, that, in
the case of Normal Retirement or termination in the event of a Change in
Control, such Options shall not be eligible for treatment as Incentive Stock
Options in the event such Options are
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exercised more than three (3) months following the date of the termination in
the event of a Change in Control; PROVIDED, FURTHER, that, upon a Participant's
Normal Retirement, any such Options which are not eligible for treatment as
Incentive Stock Options by operation of Section 422(d) of the Code (or any
successor provision) shall be treated as Non-statutory Stock Options. In no
event shall the exercise period extend beyond the expiration of the Incentive
Stock Option term.
(g) Compliance with Code. The Options granted under this Section 8 of the
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Plan are intended to qualify as Incentive Stock Options within the meaning of
Section 422 of the Code, but the Company makes no warranty as to the
qualification of any Option as an incentive stock option within the meaning of
Section 422 of the Code. If an Option granted hereunder fails for whatever
reason to comply with the provisions of Section 422 of the Code and such failure
is not or cannot be cured, such Option shall be a Non-statutory Stock Option.
9. LIMITED RIGHTS
9.1 GRANT OF LIMITED RIGHTS
The Committee may grant a Limited Right simultaneously with the grant of
any Option to any Employee of the Company or an Affiliate, with respect to all
or some of the shares covered by such Option. Limited Rights granted under this
Plan are subject to the following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be exercisable in
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whole or in part before the expiration of six (6) months from the date of grant
of the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control of the Bank.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.
Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall promptly
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receive from the Company an amount of cash equal to the difference between the
Fair Market Value on the Date of Grant of the related Option and the Fair Market
Value of the underlying shares on the date the Limited Right is exercised,
multiplied by the number of shares with respect to which such Limited Right is
being exercised. In the event of a Change in Control in which pooling accounting
treatment is a condition to the transaction, the Limited Right shall be
exercisable solely for shares of stock of the Company, or in the event of a
merger transaction, for shares of the acquiring corporation, or its parent, as
applicable. The number of shares to be received on the exercise of such Limited
Right shall be determined by dividing the amount of cash that would have ben
available under the first sentence above by the Fair Market Value at the time of
exercise of the shares underlying the Option subject to the Limited Right.
10. SURRENDER OF OPTION
In the event of a Participant's termination of employment or termination
of service as a result of death or Disability, the Participant (or his personal
representative(s), heir(s), or devisee(s)) may, in a form acceptable to the
Committee, make application to surrender all or part of the Options held by such
Participant in exchange for a cash payment from the Company of an amount equal
to the difference between the Fair Market Value of the Common Stock on the date
of termination of employment and the exercise price per share of the Option on
the Date of Grant. Whether
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the Company accepts such application or determines to make payment, in whole or
in part, is within its absolute and sole discretion, it being expressly
understood that the Company is under no obligation to any Participant whatsoever
to make such payments. In the event that the Company accepts such application
and determines to make payment, such payment shall be in lieu of the exercise of
the underlying Option and such Option shall cease to be exercisable.
11. RIGHTS OF A SHAREHOLDER; NON-TRANSFERABILITY
An optionee shall have no rights as a shareholder with respect to any
shares covered by a Non-statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate his or her services as an officer or other employee at
any time.
No Award under the Plan shall be transferable by the optionee other than
by will or the laws or descent and distribution and may only be exercised during
his or her lifetime by the optionee, or by a guardian or legal representative.
The designation of a beneficiary does not constitute a transfer of an Award.
12. DESIGNATION OF BENEFICIARY
A Participant, with the consent of the Committee, may designate a person
or persons to receive, in the event of death, any Option or Limited Rights Award
to which he or she would then be entitled. Such designation will be made upon
forms supplied by and delivered to the Company and may be revoked in writing. If
a Participant fails effectively to designate a Beneficiary, then his estate will
be deemed to be the Beneficiary.
13. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company , the Committee will
make such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
covered by Awards already made under the Plan;
(c) subject to 422 of the Code , adjustments in the purchase price of
outstanding Incentive and/or Non- statutory Stock Options, or any Limited
Rights attached to such Options.
No such adjustments, however, may change materially the value of benefits
available to a Participant under a previously granted Award.
14. WITHHOLDING
There may be deducted from each distribution of cash and/or Common Stock
under the Plan the amount of tax required by any governmental authority to be
withheld.
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15. AMENDMENT OF THE PLAN
The Board of Directors may at any time, and from time to time, modify or
amend the Plan and Award Agreements in any respect; PROVIDED, HOWEVER, that if
necessary to continue to qualify the Plan under the Securities and Exchange
Commission Rule 16b-3, the approval by a majority of the shares represented in
person or by proxy at an annual or special meeting of the Company shall be
required for any such modification or amendment that:
(a) increases the maximum number of shares for which options may be
granted under the Plan (SUBJECT, HOWEVER, to the provisions of Section 13
hereof);
(b) reduces the exercise price at which Awards may be granted (SUBJECT,
HOWEVER, to the provisions of Sections 8.1(a) and 13 hereof);
(c) extends the period during which options may be granted or exercised
beyond the times originally prescribed (SUBJECT, HOWEVER, to the
provisions of Section 8.1(a) hereof); or
(d) changes the persons eligible to participate in the Plan.
Failure to ratify or approve amendments or modifications to subsections
(a) through (d) of this Section 15 by shareholders shall be effective only as to
the specific amendment or modification requiring such ratification. Other
provisions, sections, and subsections of this Plan will remain in full force and
effect.
No such termination, modification or amendment may affect the rights of a
Participant under an outstanding Award.
16. APPROVAL BY STOCKHOLDERS
The Plan was approved by stockholders of the Bank. No Options were granted
pursuant to the Plan prior to such stockholder approval. Any amendments to the
Plan shall be subject to the provisions of Section 15 hereof.
17. EFFECTIVE DATE OF PLAN
The Plan shall become effective upon the date adopted by the Board of
Directors, following the approval of stockholders (the "Effective Date").
18. TERMINATION OF THE PLAN
The right to grant Awards under the Plan will terminate upon the earlier
of ten (10) years after the Effective Date of the issuance of Common Stock or
the date on which the exercise of Options or related rights equaling the maximum
number of shares reserved under the Plan occurs as set forth in Section 5
hereof. The Board of Directors has the right to suspend or terminate the Plan at
any time; PROVIDED that no such action will, without the consent of a
Participant, affect adversely his rights under a previously granted Award.
19. APPLICABLE LAW
The Plan will be administered in accordance with the laws of the State of
New Jersey and federal law, to the extent applicable.
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