Exhibit 10 (B)
PEAPACK-GLADSTONE FINANCIAL CORPORATION
1998 Stock Option Plan
1. Purpose
The purpose of the Peapack-Gladstone Financial Corporation's (the
"Corporation") 1998 Stock Option Plan (the "Plan") is to advance the
interests of the Company and its shareholders by providing those key
employees of the Corporation, upon whose judgment, initiative and efforts
the successful conduct of the business of the Corporation largely depends,
with additional incentive to perform in superior manner. A purpose of the
Plan is also to attract people of experience and ability to the service of
the Corporation.
2. Definitions
A. Board of Directors or Board: means the board of directors of the
Corporation.
B. Change in Control: for purposes of this Plan, a Change in Control of
the Company shall mean an event of a nature that; (1) any "person"
(as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) who is not now presently but becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of
the Company's outstanding securities except for any securities
purchased by any tax-qualified employee benefit plan of the Company;
or (2) individuals who constitute the Board 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 the same Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (2),
considered as though he were a member of the Incumbent Board; or (3)
filing is made for regulatory approval to implement a plan of
reorganization, merger, consolidation, sale of all or substantially
all the assets of the Company or similar transaction in which the
Company is not the resulting entity or such plan, merger
consolidation, sale or similar transaction occurs; or (4) a proxy
statement soliciting proxies from 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 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 or transaction are
exchanged for or converted into cash or property or securities not
issued by the Company shall be distributed; or (5) a tender offer is
made for 25% or more of the voting securities of the Company.
C. Committee: means a committee consisting of those members of the
Compensation Committee of the Board of Directors who are
non-employee members of the Board of Directors, all of whom are (i)
"disinterested directors" as such term is defined under Rule 16b-3
("Rule 16b-3") under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), as promulgated by the Securities and
Exchange Commission and (ii) "outside directors" within the meaning
of Section 162(m) of the Internal Revenue Code, subject to any
transition rules applicable to the definition of outside director.
D. Date of Grant: means the date an Option is granted by the Committee.
E. 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
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not possible to determine when such Disability will terminate or
that it appears probable that such Disability will be permanent
during the remainder of said Participant's lifetime.
F. Fair Market Value: for purposes of the 1998 Stock Option Plan when
used in connection with Common Stock on a certain date, Fair Market
Value means the average of the high and low prices of known trades
of the Common Stock on the relevant 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.
G. Incentive Stock Option: means an Option granted by the Committee to
a Participant, which Option is designated as an Incentive Stock
Option pursuant to Section 8.
H. Non-qualified Stock Option: means an Option granted by the Committee
to a Participant and which is not designated by the Committee as an
Incentive Stock Option.
I. Normal Retirement: means retirement at the normal or early
retirement date as set forth in any tax-qualified retirement/pension
plan of the Company.
J. Option: means the grant of Incentive Stock Options or Non-qualified
Stock Options granted under Section 7 or Section 8.
K. Participant: means an employee of the Company or its affiliates
chosen by the Committee to participate in the Plan.
L. Plan Year(s): means the part of the year beginning with the date the
plan is approved by a majority of the shareholders and ending on
December 31, 1998, and calendar years thereafter.
M. Termination for Cause: means the termination upon an intentional
failure to perform stated duties, breach of a fiduciary duty
involving personal dishonesty or willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order.
3. Administration
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules
and regulations as it sees necessary for the proper administration of the
Plan and to make determinations and interpretations in connection with the
Plan it sees as necessary or advisable. All awards to the proxy executives
shall be approved in writing by the Committee. 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
successors in interest.
4. Types of Awards
Awards under the Plan may be granted in any one or a combination of:
(a) Non-qualified Stock Options;
(b) Incentive Stock Options; and
as defined below in paragraphs 7 and 8 of the Plan.
5. Stock Subject to the Plan
Subject to adjustment as provided in Section 14, the maximum number of
shares reserved for purchase pursuant to the exercise of options granted
under the Plan shall not exceed 65,000 of the shares of Common Stock of
the Company, no par value per share, subject to adjustments pursuant to
this Section 5. These shares of Common Stock may be either authorized but
unissued shares or shares previously issued and reacquired by the Company.
No more than 6,500 shares may be granted to any one individual under this
Plan in any one year, subject to adjustment as provided in Section 14.
Shares subject to any unexercised portion of a terminated, canceled or
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expired option granted hereunder, and pursuant to which a Participant
never acquired benefits of ownership, including payment of a stock
dividend (but excluding voting rights), may again be subjected to grant
and awards under the Plan.
6. Eligibility
Officers and other employees of the Company shall be eligible to receive
Incentive Stock Options and Non-qualified Stock Options under the Plan.
Directors who are not employees or officers of the Company shall not be
eligible to receive Options under the Plan.
7. Non-qualified Stock Options
7.1 Grant of Non-qualified Stock Options.
The Committee may, from time to time, grant Non-qualified Stock Options to
eligible employees and, upon such terms and conditions as the Committee
may determine, grant Non-qualified options in exchange for and upon
surrender of previously granted Options under this Plan. Non-qualified
Stock Options granted under this Plan are subject to the following terms
and conditions.
(a) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Non-qualified Stock Option shall determined by
the Committee on the date the option is granted. The purchase price
shall not be less than 100% of the Fair Market Value of the
Company's Common Stock on the Date of Grant and in no event below
the par value of the Common Stock on the Date of Grant. 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 on the date of surrender determined in
the manner described in Section 2(i).
(b) Terms of Options. The terms during which each Non-qualified Stock
Option may be exercised shall be determined by the Committee, but in
no event shall a Non-qualified Stock Option be exercisable in whole
or in part more than 10 years from the Date of Grant. The Committee
shall determine the date on which each Non-qualified Stock Option
shall become exercisable and may provide that a Non-qualified 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. The Committee
may, in its sole discretion, accelerate the time at which any
Non-qualified Stock Option may be exercised in whole or in part.
Notwithstanding the above, in the event of a Change in Control of
the Company, all Non-qualified Stock Options shall become
immediately exercisable.
(c) Termination of Employment. Unless otherwise determined by the
Committee at the time a Stock Option is granted, upon the
termination of a Participant's service for any reason other than
Disability, Normal Retirement, Change in Control, death or
Termination for Cause, the Participant's Non-qualified Stock Options
shall be exercisable only as to those shares which were immediately
purchasable by the Participant at the date of termination and only
for a period of three years following termination. Notwithstanding
any provision set forth herein or contained in any Agreement
relating to the award of a Stock Option, in the event of Termination
for Cause, all rights under the Participant's Non-qualified Stock
Options shall expire upon termination. Unless otherwise determined
by the Committee at the time a Stock Option is granted, in the event
of the death, Disability, termination due to Change in Control or
Normal Retirement of any Participant, all Non-qualified Stock
Options held by the Participant, whether or not exercisable at such
time, shall be exercisable by the Participant or his legal
representatives or successors in interest of the Participant for
three years or such longer period as determined by the Committee
following the date of the Participant's death, Normal Retirement or
cessation of employment due to Disability or Change in Control,
provided that in no event shall the period extend beyond the
expiration of the Non-qualified Stock Option term.
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8. Incentive Stock Options
8.1 Grant of Incentive Stock Options.
The Committee may, from time to time, 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) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Incentive Stock Option shall not be less than
100% of the Fair Market Value of the Company's Common Stock on the
Date of Grant and in no event below the par value of the Common
Stock on the Date of Grant. However, if a Participant owns stock
possessing more than 10% of the total combined voting power of all
classes of Common Stock of the Company, the purchase price per share
of Common Stock deliverable upon the exercise of each Incentive
Stock Options shall not be less than 110% of the Fair Market Value
of the Company's Common Stock on the Date of Grant. 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 at the Fair
Market Value of such shares on the date of surrender determined in
the manner described in Section 2(i).
(b) Amounts of Options. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Committee.
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, if any) shall not exceed $100,000. The provisions of
this Section 8.1(b) shall be construed and applied in accordance
with Section 422(d) of the Code and the regulations, if any,
promulgated thereunder. To the extent an award under this Section
8.1 exceeds this $100,000 limit, the portion of the award in excess
of such limit shall be deemed a Non-qualified Option.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no
event shall an Incentive Stock Options be exercisable in whole or in
part more than 10 years from the Date of Grant. If at the time an
Incentive Stock is granted to any employee, the employee owns Common
Stock representing more than 10% of the total combined voting power
of the Company (or, under Section 425(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 such employee
shall not be exercisable after the expiration of five years from the
Date of Grant. No Incentive Stock Option granted under the Plan is
transferable except by will or the laws of descent and distribution
and is exercisable in his lifetime only by the employee to whom 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. The Committee may, in its
sole discretion, accelerate the time at which any Incentive Stock
Option may be exercised in whole or in part. In the event of a
Change in Control of the Company, all Incentive Stock Options shall
become immediately exercisable.
(d) Termination of Employment. Upon the termination of a Participant's
service for any reason other than Disability, Normal Retirement,
Change in Control, death or Termination for Cause, the Participant's
Incentive Stock Options shall be exercisable only as to those shares
which were immediately purchasable by the Participant at the date of
termination and only for a period of three
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months following termination. In the event of Termination for Cause
all rights under the Participant's Incentive Stock Options shall
expire upon termination.
In the event of death or Disability of any employee, all Incentive
Stock Options held by such Participant, whether or not exercisable
at such time, shall be exercisable by the Participant or the
Participant's legal representatives or beneficiaries for three years
following the date of the Participant's death or cessation of
employment due to Disability. Upon termination of the Participant's
service due to Normal Retirement, or a Change in Control, all
Incentive Stock Options held by such Participant, whether or not
exercisable at such time, shall be exercisable for a period of three
months following the date of Participant's cessation of employment.
In no event shall the exercise period extend beyond the expiration
of the Incentive Stock Option term.
(e) Compliance with Code. The options granted under this Section 8 of
the Plan are intended to qualify as incentive stock options within
the meaning of Section 4212 of the Code, but the Company makes no
warranty as to the qualifications of any option as an incentive
stock options within the meaning of Section 422 of the Code.
9. Surrender Option
In the event of a Participant's termination of employment as a result of
death, disability or Normal Retirement, the Participant (or the
Participant's legal representative or successor(s) in interest) may, in a
form acceptable to the Committee make application to surrender all or part
of 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 the
Committee accepts such application or determines to make payment, in whole
or part, is within its absolute and sole discretion, it being expressly
understood that the Committee is under no obligation to any Participant
whatsoever to make such payments. In the event that the Committee accepts
such application and the Company 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.
10. Rights of a Shareholder: Nontransferablility
No Participant shall have any rights as a shareholder with respect to any
shares covered by a Non-qualified and/or Incentive Stock Option until the
date of issuance of a stock certificate for such shares. Nothing in this
Plan or in any Option granted confers on any person any right to continue
in the employ of the Company or to continue to perform services for the
Company or interferes in any way with the right of the Company to
terminate a Participant's services as an officer or other employee at any
time.
No Option under the Plan shall be transferable by the optionee other than
by will or the laws of descent and distribution and may only be exercised
during his lifetime by the optionee, or by a guardian or legal
representative.
11. Rights of a Shareholder: Transferability.
No Option under the Plan shall be transferable or assignable, or payable
to or exercisable by, anyone other than the Participant to whom it was
granted, except (i) by will or by the laws of descent and distribution,
(ii) as a result of the disability of a Participant or (iii) that the
Committee (in the form of an Option Agreement or otherwise) may permit
transfers of Options by gift or otherwise to a member of a Participant's
immediate family and/or trusts whose beneficiaries are members of the
Participant's immediate family, or to such other persons or entities as
may be approved by the Committee. Notwithstanding the foregoing, in no
event shall Incentive Stock Options be transferable or assignable other
than by will or by the laws of descent and distribution.
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12. Agreement with Grantees
Each grant of Options, will be evidenced by a written agreement, executed
by the Participant and the Company which describes the conditions for
receiving the Options including the date of grant, the purchase price if
any, applicable periods, and any other terms and conditions as may be
required by the Board of Directors or applicable securities law.
13. Designation of Beneficiary
A Participant may, with the consent of the Committee, designate a person
or persons to receive, in the event of death, any Options to which the
Participant 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 the Participant's estate will be deemed to be the beneficiary.
14. 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 proportionate adjustments to
previously granted Options, to prevent dilution or enlargement of the
rights of the Participant, including any or all of the following:
(a) proportionate adjustments in the aggregate number of 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 Options already granted under the Plan;
(c) adjustments in the purchase price of outstanding Incentive and/or
Non-qualified Stock Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Options.
15. Tax Withholding
There shall be deducted from each distribution of cash and/or Common Stock
under the Plan the amount required by any governmental authority to be
withheld for income tax purposes.
16. Amendment of the Plan
The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect subject to obtaining any shareholder
approval required by applicable New Jersey and Federal banking law;
provided further that if it has been determined to continue to qualify the
Plan under Rule 16b-3, shareholder approval shall be required for any such
modification or amendment is required in order to qualify under 16B-3,
including any modifications or amendments which:
(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 Options may be granted (subject,
however, to the provisions of Section 13 hereof):
(c) extends the period during which Options may be granted or exercised
beyond the times originally prescribed; or
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(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 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 Option.
17. Effective Date of Plan
This Plan was approved by the Board of Directors on February 12, 1998 and,
subject to first obtaining approval at the 1998 Annual Meeting of the
Shareholders of the Company by the affirmative vote of a majority of the
shares of Common Stock of the Company entitled to vote at the 1998 Annual
Meeting.
18. Termination of the Plan
The right to grant Options under the Plan will terminate upon the earlier
of ten (10) years after the Effective Date of the Plan or the issuance of
Common Stock or the exercise of Options equivalent to the maximum number
of shares reserved under the Plan as set forth in Section 5. 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,
adversely affect his rights under a previously granted Option.
19. Applicable Law
The Plan will be administered in accordance with the laws of the State of
New Jersey and applicable Federal law.
20. Compliance with Section 16
If this Plan is qualified under Rule 16b-3, with respect to persons
subject to Section 16 of the Exchange Act, transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provisions of the
Plan or action by the Committee fail to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the
Committee.
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PEAPACK-GLADSTONE FINANCIAL CORPORATION
1998 Stock Option Plan for Outside Directors,
as amended and restated as of January 1, 2001
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1. Purpose
The purpose of the Peapack-Gladstone Corporation (the "Company") 1998
Stock Option Plan for Outside Directors (the "Directors' Option Plan" or
the "Plan") is to promote the growth and profitability of the Company by
providing Outside Directors of the Company with an incentive to achieve
long-term objectives of the Company and to attract and retain non-employee
directors of outstanding competence by providing such Outside Directors
with an opportunity to acquire an equity interest in the Company.
2. Grant of Options
(a) The Plan will be administered by the Compensation Committee of the
Board of Directors (the "Committee"). The Committee shall consist solely
of two or more Non-Employee Directors, as such term is defined in Rule
16b-3(b)(3) of the Exchange Act. The Committee may, from time to time,
recommend the grant of options to the Outside Directors (for purposes of
this Directors' Option Plan, the term "Outside Director" shall mean a
member of the Board of Directors of the Company not also serving as an
employee of the Company) under this Plan in such numbers and upon such
terms as it deems appropriate, but all grants must be approved by the
Company's Board of Directors.
(b) Option Price. The purchase price per share of the Common Stock
deliverable upon exercise of such option shall equal the Fair Market Value
of the Common Stock on the date of the grant of this option as determined
under paragraph (d) of this Section 2 and in no event below the par value
of the Common Stock on the Date of Grant.
(c) Ineligibility. An option under the Directors' Option Plan shall not be
granted to any Outside Director who at any previous time was an employee
of the Company and in such capacity was eligible to receive any options to
purchase Common Stock.
(d) Fair Market Value. For purposes of the Directors' Option Plan, when
used in connection with Common Stock on a certain date, Fair Market Value
means the average of the high and low prices of known trades of the Common
Stock on the relevant 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.
3. Terms and Conditions
(a) Option Agreement. Each option shall be evidenced by a written option
agreement between the Company and the recipient specifying the number of
shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions which are not inconsistent with
the terms of this grant.
(b) Vesting. Each option granted pursuant to Section 2(a) hereof shall
become exercisable in five annual installments of twenty percent (20%).
The first installment of options granted pursuant to Section 2(a) shall
vest one year from the date of grant and the remaining four annual
installments will vest on successive anniversary dates, but only if the
optionee continues to serve as an Outside Director at such applicable
vesting date, unless otherwise provided in this Plan.
(c) Manner of Exercise. The option when exercisable may be exercised from
time to time in whole or in part, by delivering a written notice of
exercise to the President of the Company signed by the recipient. Such
notice is irrevocable and must be accompanied by full payment of the
exercise price (as determined in Section 2(b) hereof) 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(d) above.
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(d) Transferability. Each option granted hereby may be exercised only by
the recipient to whom it is issued, or in the event of the Outside
Director's death, his or her legal representative or successor(s) in
interest pursuant to the terms of section 3(e) hereof.
(e) Termination of Service. Upon the termination of a recipient's service
for any reason other than disability, Change in Control, death or removal
for cause, the participant's stock options shall be exercisable only as to
those shares which were immediately purchasable by the recipient at the
date of termination. In the event of death or disability of any recipient,
all stock options held by such recipient, whether or not exercisable at
such time, shall become immediately exercisable by the recipient or the
recipient's legal representatives or beneficiaries. Upon termination of
the recipient's service due to a Change in Control, all stock options held
by such recipient, whether or not exercisable at such time, shall become
immediately exercisable. However, shares of Common Stock acquired through
the exercise of options granted under Section 2 may not be sold or
otherwise disposed of for a period of one year from the Date of Grant of
the option. For purposes of this plan the following terms are defined:
(i) "Change in Control" for purposes of this Plan, a "Change in
Control" of the Company shall mean an event of a nature that; (1)
any "person" (as the term is used in Sections 13(d) and 14(d) of the
Exchange Act) who is not now presently but becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more
of the Company's outstanding securities except for any securities
purchased by any tax-qualified employee benefit plan of the Company;
or (2) individuals who constitute the Board 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 the same Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (2),
considered as though he were a member of the Incumbent Board; or (3)
filing is made for regulator approval to implement a plan of
reorganization, merger, consolidation, sale of all or substantially
all the assets of the Company or similar transaction occurs in which
the Company is not the resulting entity or such plan, merger,
consolidation, sale or similar transaction occurs; or (4) a proxy
statement soliciting proxies from 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 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 or transaction are
exchanged for or converted into cash or property or securities not
issued by the Company shall be distributed; or (5) a tender offer is
made for 25% or more of the voting securities of the Company.
(ii) "Disability" means the permanent and total inability by reason
of mental or physical infirmity, or both, of an Outside Director to
perform the work customarily assigned to him. Additionally, a
medical doctor selected or approved by the Board of Directors must
advise the Board 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 said
recipient's lifetime.
(f) Termination of Option. Each option shall expire upon the earlier of
(i) one hundred and twenty (120) months following the date of grant, or
(ii) three (3) years following the date on which the Outside Director
ceases to serve in such capacity for any reason other than removal for
cause. If the Outside Director dies before fully exercising any portion of
an option then exercisable, such option may be exercised by such Outside
Director's beneficiary, personal representative(s), heir(s) or devisee(s)
at any time within the three (3) year period following his or her death;
provided, however, that in no event shall the option be exercisable more
than one hundred and twenty (120) months after the date of its grant. If
the Outside Director is removed for cause, all options awarded to him
shall expire upon such removal.
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4. Common Stock Subject to the Directors' Option Plan
The shares which shall be issued and delivered upon exercise of options
granted under the Directors' Option Plan may be either authorized and
unissued shares of Common Stock or authorized and issued shares of Common
Stock held by the Company as treasury stock. The number of shares of
Common Stock reserved for issuance under the Directors' Option Plan shall
not exceed 35,000 shares of the Common Stock of the Company, no par value
per share, subject to adjustments pursuant to this Section 4. Any shares
of Common Stock subject to an option which for any reason either
terminates unexercised or expires, shall again be available for issuance
under the Directors' Option Plan.
In the event of any change or changes in the outstanding Common Stock of
the Company by reason of any stock dividend or split, recapitalization,
reorganization, merger, consolidation, spin-off, combination or any
similar corporate change, or other increase or decrease in such shares
effected without receipt or payment of consideration by the Company, the
number of shares of Common Stock which may be issued under the Directors'
Option Plan, the number of shares of Common Stock to options granted under
this Directors' Option Plan and the option price of such options, shall be
automatically and proportionately adjusted to prevent dilution or
enlargement of the rights granted to recipient under the Directors' Option
Plan.
5. Effective Date of the Plan; Shareholder Ratification
This Plan was approved by the Board of Directors on February 12, 1998 and,
subject to first obtaining approval at the 1998 Annual Meeting of
Shareholders of the Company by the affirmative vote of at least 66 2/3% of
the shares of Common Stock of the Company entitled to vote at the 1998
Annual Meeting, when accepted by the New Jersey Department of Banking.
This Plan is amended and restated effective as of January 1, 2001.
6. Termination of the Plan
The right to grant options under the Directors' Option Plan will terminate
automatically upon the earlier of ten years after the Effective Date of
the Plan or the issuance of 35,000 shares of Common Stock (the maximum
number of shares of Common Stock reserved for under this Plan) subject to
adjustment pursuant to Section 4 hereof.
7. Amendment of the Plan
The Directors' Option Plan may be amended from time to time by the Board
of Directors of the Company provided that Section 2 and 3 hereof shall not
be amended more than once every six months other than to comport with the
Internal Revenue Code of 1986, as amended, or the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder. Except
as provided in Section 4 hereof, rights and obligations under any option
granted before an amendment shall not be altered or impaired by such
amendment without the written consent of the optionee. If the Directors'
Option Plan is subject to 17 C.F.R. ss.240.16(b)-3 ("Rule 16(b)-3") of the
rules and regulations promulgated under the Securities Exchange Act of
1934 and an amendment would require shareholder approval under such Rule
16(b)-3 or as otherwise may be required under applicable New Jersey and
federal banking law, then subject to the discretion of the Board of
Directors of the Company, such amendment shall be presented to
shareholders for ratification, provided, however, that the failure to
obtain shareholder ratification shall not affect the validity of this Plan
as so amended and the options granted thereunder.
8. Applicable Law
The Plan will be administered in accordance with the laws of the State of
New Jersey and applicable federal law.
9. Compliance with Section 16
If this Plan is qualified under Rule 16b-3, transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent that any provision of the
Plan fails to so comply, such provision shall be deemed null and void, to
the extent permitted by law.
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