Exhibit 10(a)
TO: Robert D. O'Donnell
FROM: Howard M. Schoor, Chairman
SUBJECT: Employment Agreement
Community Bank of New Jersey/Robert D. O'Donnell
DATE: April 23, 1998
At the regularly scheduled Board of Directors meeting of the Community Bank of
New Jersey on this date. The Directors have approved the Outline Summary of
Employment Agreement dated April 22, 1998. This Agreement should be attached to
the Employment Agreement dated April 21, 1998 which documents will constitute
the basis of a definitive employment agreement which is to be prepared in final
form. In all cases where the Outline Summary of Employment Agreement dated April
22, 1998 differs from those terms, conditions and provisions of the April 21,
1998 Employment Agreement, the Outline Summary of Employment Agreement dated
April 22, 1998 shall prevail and provide the agreed upon terms and basis for the
final employment agreement.
The Board of Directors of the Community Bank of New Jersey are extremely excited
and enthusiastic about your hiring and we look forward to a mutually
advantageous business relationship and friendship developed around your
Presidency and being Chief Executive Officer of the Community Bank of New
Jersey.
Very truly yours,
/s/ Howard M. Schoor
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Howard M. Schoor
AGREED TO AND ACCEPTED BY:
/s/ Robert D. O'Donnell
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Robert D. O'Donnell
April 21, 1998
Re: Employment Agreement
This letter, when countersigned where indicated below, will constitute the
agreement, intending to be legally bound hereby, of each of The Community Bank
of New Jersey ("Bank" or sometimes herein as the "Company") and you, Robert D
O'Donnell (sometimes herein "Bob" or "you") concerning the terms and conditions
of your employment with the Company, as more fully set forth herein.
1. Engagement and Duties. You shall be engaged as the President and Chief
Executive Officer and you agree to perform the duties and services incident to
those positions or such other or further duties and services of a similar nature
as may be reasonably required of you by the Board of Directors of the Bank and
as more fully described in Exhibit "A"
You shall devote your full business time, attention, energies and best efforts
to the performance of your duties hereunder and to the promotion of the business
and interests of the Bank and of any of Bank's affiliated companies; provided
that the foregoing shall not be construed, however, as preventing you from
investing your assets in such form or manner as will not require your services
in the operations of the business in which such investment is made and provided
further that such business is not in competition with the Bank, or, if in
competition, such business has a class of securities registered under the
Securities Exchange Act of 1934 and your interest therein is solely that of an
investor owning not more than 5% of any class of the outstanding equity
securities of such business. It is understood that you presently own
approximately 2% of the issued and outstanding capital stock of Amboy National
Bank and that you shall be permitted to own such stock during the term of your
employment under this Agreement.
2. Term. The term of your employment under this Agreement shall commence on July
1, 1998 ("Commencement Date") and, subject to the earlier termination of your
employment in accordance with Section 4 below, the term of your employment shall
continue for an initial period of three (3) years thereafter ("Term"), provided
that unless either party gives to the other party written notice of its
respective intention to terminate your employment under this Agreement effective
as of the end of the then current Term (which notice must be furnished, if at
all, on or before ten (10) days prior to each anniversary of the Commencement
Date), the Term of your employment under this Agreement shall effective as of
each anniversary date of the commencement Date be automatically be extended for
one (1)
additional year to provide for a new term of three (3) following each
such anniversary date. Each twelve (12) month period during the Term of your
employment with the Bank hereunder is sometimes referred to herein as an
"Employment Year."
3. Compensation and Fringe Benefits, In full consideration for your services
under this Agreement, Company shall pay to you the following compensation
amounts:
1. Base Compensation Amount. You shall be paid base compensation at the
rate of not less than $151,000 per Employment Year (the "Base
Compensation"). Such Base Compensation shall be paid in installments
in accordance with the Bank's regular payroll practices and such Base
Compensation amount shall be reviewed by and subject to increase, at
the discretion of the Board of Directors of the Bank, not less often
than annually effective as of the commencement of each fiscal year of
the Company(commencing with the Bank's fiscal year beginning January
1, 1999), provided that in the event that Company's regularly prepared
financial statements with respect to a completed fiscal year reflects
positive "After Tax Net Profits" (as such term is defined in
Subsection b.ii. below), your Base Compensation amount hereunder shall
be increased by, at a minimum, ten (10%) percent, effective as of the
commencement of any such immediately succeeding fiscal year.
b. Bonus Compensation.
i. In addition to your Base Compensation, you shall be entitled to
receive and the Bank shall pay to you bonus compensation ("Bonus
Compensation"), on or about March 15 of each year ("Payment
Year") with respect to Bank's fiscal year ending the preceding
December 31 ("Measurement Year"). The Bonus Compensation shall be
in an amount equal to five (5%) percent of the Bank's "After Tax
Net Profits" (as hereafter defined) for such Measurement Year,
such After Tax Net Profits to be determined prior to the
calculation of the Bonus Amount with respect to such Measurement
Year; provided that in no event shall the Bonus Amount to which
you are entitled to receive with respect to a Measurement Year
exceed the Base Compensation amount paid to you by Bank with
respect to such Measurement Year.
ii. For purposes of this Agreement, the Bank's After Tax Net Profits
shall be the amount determined by the Bank's outside regularly
engaged independent certified public accountants in connection
with
the preparation of Bank's regularly prepared audited financial
statements for each such Measurement Year and the calculation of
the Bonus Compensation amount resulting shall, absent manifest
error, be final, finding and conclusive upon the parties.
iii. The Bank's After Tax Net Profits for purposes of determining the
Bonus Amount hereunder for any Measurement Year during which you
do not work a full twelve (12) months (eg. with respect to the
first and last Employment Years of the Term), shall be prorated,
based upon a fraction, the numerator of which is the number of
full calendar months during such Measurement Year during which
you are actively engaged hereunder, and the denominator of which
is twelve (12).
iv. "Bank" and "you" shall have dialog towards determining a stock
alternative in lieu of of monetary payment of the Bonus
Compensation.
c. Fringe Benefits.
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i. You shall be entitled to participate in all insurance, vacation
and other fringe benefit programs (including without limitation,
paid time off for sick days and personal days) of the Bank to the
extent and on at least the same terms and conditions as are
accorded to other senior executive employees of the Bank,
provided, however, that nothing contained herein shall be deemed
to require grants or awards to you under any benefit plans which
provide for awards or grants at the discretion of the Board of
Directors or of any committee or administrator and that
entitlement to vacations, vehicle allowance and certain insurance
benefits shall be governed solely by clauses (ii), (iii) and
(iv), respectively, of this subparagraph (c) below.
ii. You shall be entitled during each Employment Year to vacation of
at least one (1) calendar month without loss of or reduction of
your compensation amounts hereunder. Any portion of your vacation
which is not used during an Employment Year shall not be
forfeited but shall "accrue" and "carry forward", provided that
in no event shall you be entitled to accrue and carry forward
more than twelve (12) months of accrued but unused vacation time.
iii. The Bank shall furnish to you or pay on your behalf the full
premium cost for you and your spouse to participate in all
medical and dental insurance programs offered by the New Jersey
Banker's Association. In addition to such medical
and dental insurance, the Bank shall obtain, concurrently with
the execution of this Agreement, and maintain in force
continuously throughout the Term of your employment at Banks sole
expense, including premiums, (A) term insurance on your life
providing proceeds in the event of your death of not less than
200% of the Base Compensation from time to time in effect
hereunder, payable to such beneficiary or beneficiaries as you
may designate from time to time and (B) disability insurance
providing for long-term disability benefits to you (commencing
not more than ninety (90) days following the onset of any such
disability) of not less than 75% of the sum of your average Base
Compensation and Bonus Compensation amounts payable hereunder
with respect to the twenty-four (24) month period preceding the
onset of any such disability for the duration of such disability.
Bank's obligations under this Subsection are subject to the
condition that you cooperate in taking all actions reasonably
requested to obtain and maintain such insurance. In the event of
the termination of your employment with the Bank for any reason
whatsoever, at your election, the Bank shall, for no
consideration, transfer ownership of such life and disability
policies to you or to your designee.
(1) Bank may, in its sole discretion and the Bank's own
expense, apply for and procure in its own name and for
its own benefit life insurance on your life in any
amount or amounts considered advisable by the Bank and
you agree to submit to any medical or other examination
and execute and deliver such applications or other
instruments as may be reasonably necessary to
effectuate such insurance.
iv. You shall be entitled to an automobile allowance of a
minimum amount of $500 per month during the Term of your
employment and Bank shall issue to you a credit card so that
all gasoline expenses incurred by you in connection with
such automobile shall be paid for by the Bank.
d. Business Expenses. The Bank will pay, or reimburse you for, all
ordinary and reasonable out-of-pocket business expenses incurred
by you in connection with your performance of services on behalf
of Bank upon the presentation, if requested by Bank, of an
itemized account and written proof of such expense.
4. "Bank" shall review the provisions of its existing stock option plans and
its ability to issue you stock options. It is the intent of the "bank" if
permitted by the stock option plan and by law, to provide "you" with grants
of stock options of up to 50,000 shares.
5. Termination of Emplovment.
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a. Bank acknowledges and agrees that except as specifically set forth
in Sections 4.a.i. through 4 a.iv. below, Bank shall not have the right to
terminate your employment during the Term. In the event of the first to occur of
any of the following events, your employment under this Agreement shall
terminate effective as of the following dates("Termination Date"):
i. Death. In the event of your death during the Term of the
agreement, the Term of your employment shall terminate effective
as of the close of the calendar months of your death.
ii. Disability. If by reason of a physical or mental illness you are
unable to perform the majority of your duties hereunder
("Disability") for a period of four (4) consecutive months,
Company may, at its option elect to terminate the Term of your
employment under this Agreement effective upon the expiration or
such four (4) month period. During at least the first ninety (90)
days during the continuance of any such disability, you shall
continue to be entitled to receive your full compensation amounts
hereunder, reduced dollar for dollar by the proceeds received by
you under any disability received continuation insurance, if any,
paid for by bank and referred to in Section 3c.iii. Above. You
agree, in the event of any dispute as to your disability under
this Section, to submit to a physical or other examination by a
licensed physician selected by the Bank and reasonably acceptable
to you, the cost of which examination shall be paid by the Bank.
In the event of any dispute between Bank and you regarding the
existence of any such disability, such dispute shall be resolved
by arbitration as set forth in Section 6 below.
iii. Termination For Cause. The "Bank" and "you" shall develop
appropriate language for Termination and effects of Termination
and shall incorporate same in expanded employment agreement.
6. Miscellaneous. This Agreement shall be governed by the laws of the
State of New Jersey and this Agreement and
the Stock Option Agreement referred to above sets forth the entire
understanding between the parties hereto with respect to the subject
matter hereof and supersedes and is instead of all other employment
arrangements between you and the Bank. This Agreement shall be binding
upon and shall inure to the benefit of the respective heirs,
representatives, successors and assigns of the parties hereto,
including without limitation, any person or entity succeeding to the
affairs of the Company. This Agreement cannot be changed, modified or
terminated except upon written amendment duly executed by the parties
hereto.
Very truly yours,
The Community Bank of New Jersey
/s/ Howard M. Schoor
--------------------------------
AGREED TO AND ACCEPTED BY:
/s/ Robert D. O'Donnell
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Robert D. O'Donnell
OUTLINE SUMMARY OF EMPLOYMENT AGREEMENT 4/22/98
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1. Position - President and Chief Executive Officer
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2. Term - Commencement Date July 1, 1998 for a term of three (3) years ending
June 30, 2001
3a. Base Compensation
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o $151,000 through December 1998
o Provided the Bank has an "After Tax Net Profit", said amount shall increase
a minimum of 10% for each subsequent year.
b. Bonus Compensation.
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o Shall be a minimum of 5% of the Bank's "After Tax Net Profit" provided that
in no event shall said amount exceed the base compensation for that year -
payable March 15. For any partial year, bonus shall be pro-rated.
o Bonus compensation may, if mutually agreed upon, be made with capital stock
of the Bank subject to regulatory approval.
c. Fringe Benefits
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o Insurance, vacation and other fringe benefits as accorded other senior
executive employees of the Bank.
o Vacation - One calendar month. Must take two (2) consecutive weeks (if
required). May accrue balance, to a maximum of twelve (12) months. No more
than two (2) months may be taken in any calendar year.
o Medical and Dental Insurance Program for employee and wife as offered by
NJBA.
o Term life of not less than 200% of base compensation.
o Disability insurance of 75% of base and bonus compensation.
o Auto allowance of $500/month.
o Reimbursement of reasonable out-of-pocket business expenses.
4. Stock Options.
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o 75,000 shares
-40,000 shares at 85% (based upon average trading price for the ten(10)
trading days prior to May 11, 1998)
-35,000 shares at 100%(based upon average trading price for the ten (10)
trading days prior to May 11, 1998)
-Vesting 20%/ year
-Full accelerated vesting on termination or change of control
o Termination - For any reason except death, dishonesty or committing a
felon, severance shall be eighteen (18) months of base and bonus
compensation paid in installments in accordance with the Bank's regular
payroll practices.
o Upon change of control (even if offered a position) two (2) years of base
and bonus compensation, paid as a lump sum. Employee must stay on during
regulatory and shareholder approval time.
/s/ Howard M. Schoor
--------------------
AGREED TO AND ACCEPTED BY:
/s/ Robert D. O'Donnell
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Robert D. O'Donnell
EXHIBIT 10(b)
THE COMMUNITY BANK OF NEW JERSEY
1997 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
SECTION 1. Purpose
The Community Bank of New Jersey 1997 Stock Option Plan For
Non-Employee Directors (the "Plan") is hereby established to foster and promote
the long-term success of The Community Bank of New Jersey (the "Bank") and its
shareholders by providing directors who are not employees with an equity
interest in the Bank. The Plan will assist the Bank in attracting and retaining
the highest quality of experienced persons as directors and in aligning the
interests of non-employee directors of the Bank more closely with the interests
of the Bank's shareholders.
SECTION 2. Definitions
Capitalized terms not specifically defined elsewhere herein shall have
the following meanings:
"Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations promulgated thereunder.
"Bank" shall mean The Community Bank of New Jersey and any present or
future subsidiary corporations of The Community Bank of New Jersey (as defined
in Section 424 of the Code) or any successor to such corporations.
"Board" shall mean the Board of Directors of the Bank.
"Cause" shall mean a Non-Employee Director (i) being convicted of a
crime, other than a traffic violation, (ii) being the subject of a final,
non-appealable order by any regulatory agency involving a breach of duty owed to
the Bank by such Non-Employee Director, or (iii) habitual abuse of alcohol or
drugs.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
"Common Stock" or "Stock" shall mean the common stock, $5 per share par
value, of the Bank.
"Disability" shall mean permanent and total disability which if the
Non-Employee Director were an employee of the Bank would be treated as a total
disability under the terms of the Bank's long-term disability plan for employees
as in effect from time to time.
"Fair Market Value" means, with respect to shares of Common Stock, the
fair market value as determined by the Board in good faith and in a manner
established by the Board from time to time, taking into account such factors as
the Board shall deem relevant, including the book value of the Common Stock and,
to the extent there is a trading market for the Common Stock, the market value
of the Common Stock.
"Non-Employee Director" shall mean a member of the Board who
is not a common law employee of the Bank.
"Plan" shall mean The Community Bank of New Jersey 1997 Stock
Option Plan for Non-Employee Directors.
"Stock Option" or "Option" shall mean a right to purchase Common Stock
of the Bank granted to a Non-Employee Director pursuant to the Plan which is not
intended to be an incentive stock option under Section 422 of the Code.
SECTION 3. Administration
(a) The Plan shall be administered by the Board which shall hold meetings
at such times as may be necessary for the proper administration of the Plan. Any
action of the Board with respect to the administration of the Plan shall be
taken by a majority vote, or by unanimous written consent of its members.
(b) Subject to the express terms and conditions set forth herein, the
Board shall have the power from time to time:
(i) to construe and interpret the Plan and the Stock Options
granted thereunder and to establish, amend and revoke rules, regulations,
guidelines and practices for the administration of the Plan as it shall from
time to time consider advisable, including, but not limited to, correcting any
defect or supplying any omission, or reconciling any inconsistency in the Plan
or in any Stock Option, in the manner and to the extent it shall deem necessary
or advisable to make the Plan fully effective; provided, however, that the Board
shall have no discretion with respect to designating (x) the recipient of a
Stock Option, (y) the number of shares of Common Stock that are subject to a
Stock Option, or (z) the exercise price for a Stock Option. All decisions and
determinations by the Board in the exercise of this power shall be final and
binding upon the Bank and the Non-Employee Directors; and
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(ii)to exercise such powers and to perform such acts as are deemed
necessary or advisable to promote the best interests of the Bank with respect to
the Plan.
(c) The Board may employ such legal counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent.
SECTION 4. Eligibility and Participation
Each Non-Employee Director of the Bank shall participate in the Plan.
SECTION 5. Common Stock Subject to Plan
(a) The maximum number of shares of Common Stock that may be made subject
to Stock Options granted pursuant to the Plan is 45,000, subject to adjustments
pursuant to Section 9. The Bank shall reserve such number of shares of Common
Stock for the purposes of the Plan, out of its authorized but unissued Common
Stock or out of Common Stock held in the Bank's treasury, or partly out of each,
as shall be determined by the Board. No fractional shares of Common Stock shall
be issued with respect to Stock Options granted under the Plan.
(b) If any Stock Option in respect of shares of Common Stock expires or is
canceled without having been fully exercised, the number of shares subject to
such Stock Option but as to which such Stock Option was not exercised prior to
its expiration or cancellation may again be available for the grant of Stock
Options under the Plan.
SECTION 6. Grant of Stock Options
(a) On the date upon which this Plan is adopted by the Board or a
Non-Employee Director is first appointed or elected a member of the Bank's Board
of Directors, whichever is earlier, he shall receive grant of a Non-Qualified
Stock Option to purchase 5,000 shares of Common Stock, subject to Section 13
hereof. All Stock Options granted under the Plan shall be non-statutory options
not entitled to special tax treatment under Section 422 of the Code.
(b) The grant of any Stock Option shall be evidenced by a written agreement
which shall state the number of shares of Common Stock that are subject to the
Stock Option, the exercise price, the term of the Stock Option, and other terms,
as the Board may deem appropriate, that are not inconsistent with requirements
of this Plan.
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SECTION 7. Terms and Conditions
(a) The purchase price of the shares of Common Stock subject to each Stock
Option shall be the greater of $11.00 per share or 100% of the Fair Market Value
of such Common Stock (or the par value of such shares, if higher) on the day
such Stock Option is granted. All Stock Options shall have a term of ten (10)
years from the date of grant, subject to earlier termination pursuant to the
terms set forth herein.
(b) In the event a Non-Employee Director's membership on the Board ceases
by reason of his Disability or death, all Stock Options then held by such
Non-Employee Director shall immediately become exercisable and may remain
exercisable until the expiration of their original term.
(c) In the event a Non-Employee Director's membership on the Board ceases
for Cause, all Stock Options then held by such Non- Employee Director, whether
or not exercisable, shall immediately terminate.
(d) In the event a Non-Employee Director's membership on the Board ceases
for any reason other than death, Disability or Cause, all Stock Options then
held and exercisable by such Non-Employee Director will remain exercisable until
the expiration of their original term.
(e) If a Non-Employee Director becomes an employee of the Bank or any of
its subsidiaries, the Non-Employee Director shall be treated as continuing in
service for purposes of this Plan, but shall not be eligible to receive future
grants hereunder while an employee. If the Non-Employee Director's service as an
employee terminates without his again becoming a Non-Employee Director, the
provisions of this Section 7 shall apply as if such termination of employment
were the termination of the Non-Employee Director's membership on the Board.
(f) Subject to the terms of this Plan, Stock Options granted pursuant to
this Plan shall be subject to the following vesting schedule, and no Stock
Option granted hereunder shall be exercisable until such time as it shall have
vested: on the first anniversary of the date of grant of any Stock Option, such
Stock Option shall be exercisable for one-third (1/3) of the shares of Common
Stock covered thereby; on the second anniversary of the date of grant of any
Stock Option, such Stock Option shall be exercisable for two-thirds (2/3) of the
shares of Common Stock covered thereby; and on and after the third anniversary
of the date of grant of any Stock Option, such Stock Option shall be exercisable
for all shares of Common Stock covered thereby.
(g) Except as otherwise provided in this Section 7, no Stock Option granted
under the Plan shall be assignable or transferable by the Non-Employee Director,
and any attempt to disposition thereof shall be null and void and of no effect.
Nothing contained in this Section 7 shall prevent transfers of Stock Options to
members of the immediate family of the Non-Employee Director, or any trust or
benefit plan established for the benefit of such immediate family member of a
Non-Employee Director, nor shall anything in this Section 7 prevent transfers by
will or by the applicable laws of descent and distribution. For purposes of this
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Section, "Immediate Family" shall mean a Non-Employee Director's spouse, parents
or offspring.
SECTION 8. Exercise of Option
(a) Any Stock Option may be exercised in whole or in part at any time
subsequent to such Stock Option becoming exercisable, during the term of such
Stock Option; provided, however, that each partial exercise shall be for whole
shares of Common Stock only.
(b) Options may be exercised by written notice of exercise accompanied by
payment of the exercise price in full for the purchased shares of Common Stock,
along with any amounts which the Bank is required to withhold under federal,
state or local law, in cash or by certified or cashier's check payable to the
Bank. Upon receipt of such notice and payment of the exercise price, the Bank
shall make application to the New Jersey Department of Banking to issue the
shares for which the Option is being exercised.
(c) In the event that the Stock Option or portion thereof shall be
exercised pursuant to Section 7 by any person or persons other than the
Non-Employee Director, appropriate proof shall be provided of the right of such
person or persons to exercise the Stock Option or portion thereof.
SECTION 9. Capital Adjustments and Corporate Reorganizations
(a) If, through or as a result of any merger, consolidation, sale of all or
substantially all of the assets of the Bank, reorganization, recapitalization,
reclassification, stock dividend, stock split, split up, spin-off, combination,
exchange of shares, reverse stock split, or other similar transaction, (i) the
outstanding shares of Common Stock are increased or deceased or are exchanged
for a different number or kind of shares or other securities of the Bank, or
(ii) additional shares or new or different shares or other securities of the
Bank or other non-cash assets are distributed with respect to such shares of
Common Stock or other securities, an appropriate and proportionate adjustment
shall automatically be made in (x) the maximum number and kind of shares of
Common Stock reserved for issuance under the Plan, (y) the number and kind of
shares or other securities subject to the
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outstanding Options under the Plan, and (z) the purchase price for each share of
Common Stock subject to any then outstanding Options under the Plan, without
changing the aggregate purchase price (except for any change resulting from
rounding off of share quantities or price) as to which such Options remain
exercisable. No fractional shares will be issued under the Plan on account of
any such adjustment.
(b) In the event of a consolidation, merger, reorganization or sale of all
or substantially all of the assets of the Bank in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Bank
(collectively an "Extraordinary Event"), the following rules shall apply: (i)
upon the announcement of a proposed Extraordinary Event, all outstanding Stock
Options shall immediately become exercisable, whether or not previously vested
under Section 7(f), (ii) holders of Options shall continue to have the right to
exercise their unexercised but currently exercisable Options on or before the
day before the date of consummation of the Extraordinary Event, (iii) if any
Option holders shall not have exercised their Options on or before the date of
such consummation and if, under the terms of the Extraordinary Event holders of
the Common Stock of the Bank will receive upon consummation thereof payment in
cash, securities or other property (the "Event Payment") for each share
surrendered in the Extraordinary Event (the "Event Price"), then an Event
Payment equal to the difference between (A) the Event Price times the number of
shares of Common Stock subject to each Non- Employee Director's outstanding
Options (to the extent then exercisable at prices not in excess of the Event
Price) and (B) the aggregate exercise price of all such outstanding Options
shall be made to each Non-Employee Director in exchange for the termination of
such Options, (iv) notwithstanding the foregoing provisions of clause (iii), if
the Extraordinary Event involves an exchange by the acquiring party solely of
its voting securities in a reorganization pursuant to which holders of the
Bank's Common Stock will not recognize gain or loss on the exchange of such
securities until such holders dispose of the new voting securities acquired in
such exchange, then the acquiring party shall have the right to provide that
such Options shall be assumed, or equivalent options shall be substituted by the
acquiring or succeeding corporation (or an affiliate thereof); provided that the
Non-Employee Director shall not, as a result of such provision, be required to
recognize gain or loss on the exchange of Options, and (v) in the unlikely event
any Options shall remain outstanding after giving effect to the foregoing
provisions such Options shall terminate on the date the Extraordinary Event is
consummated.
SECTION 10. General Provisions Applicable to Options
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To the extent permitted by applicable law, upon the issuance of shares of
Common Stock in respect of an Option exercised by a Non-Employee Director, such
number of shares issuable shall be reduced by the number of shares necessary to
satisfy such Non- Employee Director's federal, and where applicable, state
withholding tax obligations. For withholding tax purposes, the value of the
shares of Common Stock shall be the Fair Market Value on the date the
withholding obligation is incurred. To the extent such reduction is not
permitted under law, such Non-Employee Director shall be required to pay all
applicable taxes. The Bank may, to the extent permitted by law, deduct any such
tax obligations from any payment of any kind otherwise due to the Non- Employee
Director.
SECTION 11. Other Provisions
(a) The validity, interpretation and administration of the Plan and any
rules, regulations, determinations or decisions made thereunder, and the rights
of any and all persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with the laws of the
State of New Jersey, to the extent such state laws are not preempted by any laws
of the United States.
(b) As used herein, the masculine gender shall include the feminine gender.
(c) The headings in the Plan are for reference purposes only and shall not
affect the meaning or interpretation of the Plan.
(d) All notices or other communications made or given pursuant to this Plan
shall be in writing and shall be sufficiently made or given if hand-delivered or
mailed by certified mail, addressed to any Non-Employee Director at the address
contained in the records of the Bank, or to the Bank at its principal office.
(e) Nothing in this Plan or in any Stock Option granted hereunder shall
confer upon any Non-Employee Director any right to continue to serve as a
director of the Bank or shall interfere with or restrict in any way the right,
which right is hereby expressly reserved, to remove any Non-Employee Director as
a director in accordance with the by-laws and certificate of incorporation of
the Bank and applicable law.
(f) The obligation of the Bank to sell or deliver shares of Common Stock
with respect to Stock Options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
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(g) The Plan is intended to comply with N.J.A.C. ss.3:4-2 and any successor
provision thereto and the Board shall interpret and administer the provisions of
the Plan or any Stock Option in a manner consistent therewith. Any provisions
inconsistent with such provision of N.J.A.C. shall be inoperative and shall not
affect the validity of the Plan.
(h) All expenses and costs incurred in connection with the operation of the
Plan shall be borne by the Bank.
(i) The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Bank. Nothing in this Plan shall be construed
to limit the right of the Bank to establish, alter or terminate any other forms
of incentives, benefits or compensation for directors of the Bank, including,
without limitation, conditioning the right to receive other incentives, benefits
or compensation on a director not participating in this Plan; or to grant or
assume options otherwise than under this Plan in connection with any proper
corporate purpose, including, without limitation, the grant or assumption of
stock options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock, or assets of any
corporation, firm or association.
(j) Holders of Stock Options under the Plan shall have no rights as
shareholders of the Bank unless and until certificates for shares of Common
Stock of Common Stock are registered in their names in satisfaction of a
properly exercised Stock Option.
(k) The terms of the Plan shall be binding upon the Bank, the Non-Employee
Directors and their successors and assigns.
SECTION 12. Amendment or Termination of the Plan
The Board may amend, suspend or terminate the Plan or any portion thereof
at any time, provided that no amendment shall affect the rights of any holder of
any outstanding Stock Option and further provided that no amendment may increase
the number of shares subject to this Plan, change the exercise price for any
option as provided under Section 7(a) hereof, or expand the parties eligible to
participate in the Plan without shareholder approval, and no amendment may cause
the Plan to fail to comply with the provisions of Rule 16b-3 under the Act, or
any successor or replacement regulation.
SECTION 13. Effective Date and Term of the Plan
This Plan shall become effective upon its approval by the holders of
two-thirds (2/3) of the Stock of the Bank entitled to vote and the approval of
the Plan by the Commissioner of the Department of Banking and Insurance pursuant
to Section 27.51
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of the Banking Act of 1948, as amended. Prior to such approval,
Options granted under the Plan are expressly subject to such approval. Options
may not be granted under the Plan after the tenth anniversary of the day before
such shareholder approval.
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EXHIBIT 10(c)
THE COMMUNITY BANK OF NEW JERSEY
1997 STOCK OPTION PLAN
Section 1. Purpose
The Community Bank of New Jersey 1997 Stock Option Plan (the "Plan") is
hereby established to foster and promote the long-term success of The Community
Bank of New Jersey (the "Bank") and its shareholders by providing directors,
including directors who are employees of the Bank, with an equity interest in
the Bank. The Plan will assist the Bank in attracting and retaining the highest
quality of experienced persons as directors and in aligning the interests of
such persons more closely with the interests of the Bank's shareholders by
encouraging such parties to maintain an equity interest in the Bank.
Section 2. Definitions
Capitalized terms not specifically defined elsewhere herein shall have
the following meaning:
"Act" means the Securities Exchange Act of 1934, as amended from time
to time, and any rules and regulations promulgated thereunder.
"Bank" means The Community Bank of New Jersey and any present or future
subsidiary corporations of The Community Bank of New Jersey (as defined in
Section 424 of the Code) or any successor to such corporations.
"Board" means the Board of Directors of the Bank.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
"Common Stock" or "Stock" means the common stock, $5.00 per share par
value, of the Bank.
"Disability" shall mean, with respect to a Director who is also an
employee, a permanent disability which qualifies as total disability under the
terms of the Bank's Long-Term Disability Plans and, with respect to a Director
who is not an employee, permanent and total disability which if the Director
were an employee of the Bank would be treated as a total disability under the
term of the Bank's long-term disability plan for employees as in effect from
time to time; provided, however, with respect to a
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Participant who has been granted an Incentive Stock Option such term shall have
the meaning set forth in Section 422(c)(6) of the Code.
"Fair Market Value" means, with respect to shares of Common Stock, the
fair market value as determined by the Board in good faith and in a manner
established by the Board from time to time, taking into account such factors as
the Board shall deem relevant, including the book value of the Common Stock and,
to the extent there is an established trading market for the Common Stock, the
market value of the Common Stock.
"Incentive Stock Option" means an option to purchase shares of Common
Stock granted to a Participant under the Plan which is intended to meet the
requirements of Section 422 of the Code.
"Non-Qualified Stock Option" means an option to purchase shares of
Common Stock granted to a Participant under the Plan which is not intended to be
an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Qualified
Stock Option granted hereunder.
"Participant" means a member of the Board of Directors of the Bank
selected by the Board to receive an Option under the Plan.
"Plan" means The Community Bank of New Jersey 1997 Stock
Option Plan.
"Termination for Cause" means termination because of Participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule regulation (other than traffic violations or similar
offenses) or final cease and desist order issued by any regulatory agency having
jurisdiction over the Participant or the Bank.
Section 3. Administration
(a) The Plan shall be administered by the Board. Among other things,
the Board shall have authority, subject to the terms of the Plan, to grant
Options, to determine the individuals to whom and the time or times at which
Options may be granted, to determine whether such Options are to be Incentive
Options or Non-Qualified Stock Options (subject to the requirements of the Code,
which provide that only employees may receive Incentive Options), to determine
the terms and conditions of any Option granted hereunder, including whether to
impose any vesting period, and the exercise price thereof, subject to the
requirements of this Plan.
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(b) Subject to the other provisions of the Plan, the Board shall have
authority to adopt, amend, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from
time to time consider advisable, to interpret the provisions of the Plan and any
Option and to decide all disputes arising in connection with the Plan. The Board
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any option agreement in the manner and to the extent it shall
deem appropriate to carry the Plan into effect, in its sole and absolute
discretion. The Board's decision and interpretations shall be final and binding.
Any action of the Board with respect to the administration of the Plan shall be
taken pursuant to a majority vote or by the unanimous written consent of its
members.
(c) The Board may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent.
Section 4. Eligibility and Participation
Members of the Board of Directors of the Bank, whether or not employees
of the Bank, shall be eligible to participate in the Plan. The Participants
under the Plan shall be selected from time to time by the Board, in its sole
discretion, from among those eligible, and the Board shall determine in its sole
discretion the numbers of shares to be covered by the Option or Options granted
to each Participant. Options intended to qualify as Incentive Stock Options
shall be granted only to persons who are eligible to receive such options under
Section 422 of the Code; i.e., Directors who are also employees of the Bank.
Section 5. Shares of Stock Available for Options
(a) The maximum number of shares of Common Stock which may be issued
and purchased pursuant to Options granted under the Plan is 59,000, subject to
the adjustments as provided in Section 5 and Section 9, to the extent
applicable. If an Option granted under this Plan expires or terminates before
exercise or is forfeited for any reason, without a payment in the form of Common
Stock being granted to the Participant, the shares of Common Stock subject to
such Option, to the extent of such expiration, termination or forfeiture, shall
again be available for subsequent Option grant under Plan. Shares of Common
Stock issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.
(b) In the event that the Board determines, in its sole discretion,
that any stock dividend, stock split, reverse stock
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split or combination, extraordinary cash dividend, creation of a class of equity
securities, recapitalization, reclassification, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Stock at a price substantially below Fair
Market Value, or other similar transaction affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be granted or made available under the Plan to Participants, the
Board shall have the right to proportionately and appropriately adjust equitably
any or all of (i) the maximum number and kind of shares of Common Stock in
respect of which Options may be granted under the Plan to Participants, (ii) the
number and kind of shares of Common Stock subject to outstanding Options held by
Participants, and (iii) the exercise price with respect to any Options held by
Participants, without changing the aggregate purchase price as to which such
Options remain exercisable, and if considered appropriate, the Board may make
provision for a cash payment with respect to any outstanding Options held by a
Participant, provided that no adjustment shall be made pursuant to this Section
if such adjustment would cause the Plan to fail to comply with Section 422 of
the Code with regard to any Incentive Stock Options granted hereunder or fail to
comply with the requirements of Rule 16b-3 under the Act or any successor or
replacement regulation. No fractional Shares shall be issued on account of any
such adjustment.
(c) Any adjustments under this Section will be made by the Board, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive.
Section 6. Non-Qualified Stock Options
6.1 Grant of Non-Qualified Stock Options.
Subject to the provisions hereof, the Board may, from time to time,
grant Non-Qualified Stock Options to Participants upon such terms and conditions
as the Board may determine, and may grant Non-Qualified Stock Options in
exchange for and upon surrender of previously granted Options under this Plan.
NonQualified 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 be determined by the
Board on the date the option is granted. To the extent such grant is to a
Director who is not an employee of the Bank, the purchase price shall not be
less than one hundred percent (100%) of the Fair Market Value of the Common
Stock on the date of grant or the par value of the Common Stock,
-4-
whichever is greater. To the extent such grant is to a Director of the Bank who
is also an employee of the Bank, such purchase price shall not be less than 85%
of the Fair Market Value or the par value of the Common Stock, whichever is
greater. Shares may be purchased only upon full payment of the purchase price.
(b) Terms of Options. The term during which each NonQualified Stock
Option may be exercised shall be determined by the Board, but in no event shall
a Non-Qualified Stock Option be exercisable in whole or in part more than ten
(10) years from the date of grant.
(c) Termination of Service. Except as provided herein, unless otherwise
determined by the Board, upon the termination of the service of a Participant
who is not an employee on the Board for any reason other than Disability, death
or Termination for Cause, the Participant's Non-Qualified Stock Options shall be
exercisable only as to those shares which were immediately exercisable by the
participant at the date of termination and only for the remaining term of such
Non-Qualified Stock Option. In the event of death or termination of service of a
Participant who is not an employee on the Board as a result of Disability 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 beneficiaries of the Participant for the remaining term
of such Non-Qualified Stock Option. Upon the termination of the service of a
Participant who is a common law employee of the Bank on the Board for any reason
other than Disability, death or Termination for Cause, the Participant's
Non-Qualified Stock Options shall be exercised only as to those shares which
were immediately exercisable by the Participant at the date of termination and
only for a period of three months following termination. In the event of death
or termination of service of Participant who is a common law employee of the
Bank as a result of Disability of any such Participant, all Non-Qualified Stock
Options held by such Participant, whether or not exercisable at such time, shall
be exercisable by the Participant or his legal representatives or beneficiaries
of the Participant for one year or such longer period as is determined by the
Board following the date of the Participant's death or termination of service
due to Disability, provided and in no event shall the period extend beyond the
expiration of the Non-Qualified Stock Option term. Notwithstanding any other
provisions set forth herein to the contrary nor any provision contained in any
agreement relating to the award of an option, in the event of a Termination for
Cause, all rights under a Participant's Non-Qualified Stock Options shall expire
upon such Termination for Cause.
(d) Transferability. Except as provided for hereunder, no Option
granted under the Plan shall be assignable or transferable by a Participant, and
any attempted disposition thereof shall be
-5-
null and void and of no effect. A Participant may transfer or assign an Option
granted hereunder to an immediate family member or trust or benefit plan
established for an immediate family member. For terms of this provision, the
term "immediate family member" means a Participant's spouse, parents and
offspring. Nothing contained herein shall be deemed to prevent transfers by will
or by the applicable laws of descent and distribution.
Section 7. Incentive Stock Options
7.1 Grant of Incentive Stock Options.
The Board may, from time to time, grant Incentive Stock Options to
members of the Board of Directors who are also employees of the Bank. 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 be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock on the date
of grant. However, if a Participant owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of Common Stock, the
purchase price per share of Common Stock deliverable upon the exercise of each
Incentive Stock Option shall not be less than one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant or the par value
of the Common Stock, whichever is greater. Shares may be purchased only upon
payment of the full purchase price.
(b) Amounts of Options. Incentive Stock Options may be granted to any
Director who is also an employee of the Bank in such amounts as determined by
the Board. 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
first becomes exercisable) 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 shall not exceed $100,000. The provisions of this
Section 7.1(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 is in excess of such limit, it shall be deemed a Non-Qualified Stock
Option. The Board shall have discretion to redesignate options granted as
Incentive Stock Options as Non- Qualified options.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Board, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than ten (10)
years from the date of grant.
-6-
If at the time an Incentive Stock Option is granted to an employee, the employee
owns Common Stock representing more than ten percent (10%) of the total combined
voting power of the Bank (or, under Section 422(d) of the Code, is deemed to own
Common Stock representing more than ten percent (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.
(d) Termination of Service. Except as provided in Section 7.1(e)
hereof, upon the termination of a Participant's service for any reason other
than Disability, death or Termination for Cause, the Participant's Incentive
Stock Options which are then exercisable at the date of termination may only be
exercised by the Participant for a period of three months following termination.
Notwithstanding any provisions set forth herein nor contained in any Agreement
relating to an award of an Option, in the event of Termination for Cause all
rights under the Participant's Incentive Stock Options shall expire immediately
upon termination.
Unless otherwise determined by the Board, in the event of death or
termination of service as a result of Disability of any Participant, 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 of the Participant for one year following the
date of the participant's death or termination of employment as a result of
Disability. In no event shall the exercise period extend beyond the expiration
of the Incentive Stock Option term.
(e) Transferability. No Incentive Option granted under the Plan shall
be assignable or transferable by a Participant, except pursuant to the laws of
descent and distribution, and any attempted distribution shall be null and void
and of no effect.
(f) Compliance with Code. The options granted under this Section 7 of
the Plan are intended to qualify as incentive stock options within the meaning
of Section 422 of the Code, but the Bank makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code. A Participant shall notify the Board in writing in the
event that he disposes of Common Stock acquired upon exercise of an Incentive
Stock Option within the two-year period following the date the Incentive Stock
Option was granted or within the one-year period following the date he received
Common Stock upon
-7-
the exercise of an Incentive Stock Option and shall comply with any other
requirements imposed by the Bank in order to enable the Bank to secure the
related income tax deduction to which it will be entitled in such event under
the Code.
Section 8. Extension
The Board may, in its sole discretion, extend the dates during which
all or any particular Option or Options granted under the Plan may be exercised;
provided, however, that no such extension shall be permitted if it would cause
Incentive Stock Options issued under the Plan to fail to comply with Section 422
of the Code.
Section 9. General Provisions Applicable to Options
(a) Each Option under the Plan shall be evidenced by a writing
delivered to the Participant specifying the terms and conditions thereof and
containing such other terms and conditions not inconsistent with the provisions
of the Plan as the Board considers necessary or advisable to achieve the
purposes of the Plan or comply with applicable tax and regulatory laws and
accounting principles.
(b) Each Option may be granted alone, in addition to or in relation to
any other Option. The terms of each Option need not be identical, and the Board
need not treat Participants uniformly. Except as otherwise provided by the Plan
or a particular Option, any determination with respect to an Option may be made
by the Board at the time of grant or at any time thereafter.
(c) In the event of a consolidation, reorganization, merger or sale of
all or substantially all of the assets of the Bank in each case in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity or in the event of a
liquidation of the Bank, the Board will provide for any one or more of the
following actions, as to outstanding options: (i) provide that such options
shall be assumed, or equivalent options shall be substituted, by the acquiring
or succeeding corporation (or an affiliate thereof), provided that any such
options substituted for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, (ii) upon written notice to the Participants,
provide that all unexercised options will terminate immediately prior to the
consummation of such transaction unless exercised (to the extent then
exercisable) by the Participant within a specified period following the date of
such notice, (iii) in the event of a merger under the terms of which holders of
the Common Stock of the Bank will receive upon consummation thereof a cash
payment for each share surrendered in the merger
8
(the "Merger Price"), make or provide for a cash payment to the Participants
equal to the difference between (A) the Merger Price times the number of shares
of Common Stock subject to such outstanding Options (to the extent then
exercisable at prices not in excess of the Merger Price) and (B) the aggregate
exercise price of all such outstanding Options in exchange for the termination
of such Options, and (iv) provide that all or any outstanding Options shall
become exercisable in full immediately prior to such event.
(d) The Participant shall pay to the Bank, or make provision
satisfactory to the Board for payment of, any taxes required by law to be
withheld in respect of Options under the Plan no later than the date of the
event creating the tax liability. In the Board's sole discretion, a Participant
may elect to have such tax obligations paid, in whole or in part, in shares of
Common Stock, including shares retained from the Option creating the tax
obligation. For withholding tax purposes, the value of the shares of Common
Stock shall be the Fair Market Value on the date the withholding obligation is
incurred. The Bank may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Participant.
(e) For purposes of the Plan, the following events shall not be deemed
a termination of employment of a Participant:
(i) a transfer to the employment of the Bank from a
subsidiary or from the Bank to a subsidiary, or from one
subsidiary to another, or
(ii) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Bank, if the
Participant's right to reemployment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of
absence was granted or if the Board otherwise so provides in writing.
(f) The Board may at any time, and from time to time, amend, modify or
terminate the Plan or any outstanding Option held by a Participant, including
substituting therefor another Option of the same or a different type or changing
the date of exercise or realization, provided that the Participant's consent to
each action shall be required unless the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant, and further provided that no amendment increasing the
number of shares subject to the Plan, decreasing the exercise price for any
option provided for under the Plan or a change in the parties eligible to
participate in the Plan may be effectuated without the approval of the
shareholders of the Bank; provided, however, that no such amendment or
modification will be effective if such
-9-
amendment or modification would cause the Plan to fail to comply with the
requirements of Rule 16b-3 under the Act or any successor or replacement
regulation.
-10-
Section 10. Miscellaneous
(a) No person shall have any claim or right to be granted an Option,
and the grant of an Option shall not be construed as giving a Participant the
right to continued employment or service on the Bank's Board. The Bank expressly
reserves the right at any time to dismiss a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable Option.
(b) Nothing contained in the Plan shall prevent the Bank from adopting
other or additional compensation arrangements.
(c) Subject to the provisions of the applicable Option, no Participant
shall have any rights as a shareholder (including, without limitation, any
rights to receive dividends, or non cash distributions with respect to such
shares) with respect to any shares of Common Stock to be distributed under the
Plan until he or she becomes the holder thereof.
(d) Notwithstanding anything to the contrary expressed in this Plan,
any provisions hereof that vary from or conflict with any applicable Federal or
State securities laws (including any regulations promulgated thereunder) shall
be deemed to be modified to conform to and comply with such laws.
(e) No member of the Board shall be liable for any action or
determination taken or granted in good faith with respect to this Plan nor shall
any member of the Board be liable for any agreement issued pursuant to this Plan
or any grants under it. Each member of the Board shall be indemnified by the
Bank against any losses incurred in such administration of the Plan, unless his
action constitutes serious and willful misconduct.
(f) This Plan shall become effective upon its approval by the holders
of two-thirds (2/3) of the Common Stock of the Bank entitled to vote and the
approval of the Plan by the Commissioner of the Department of Banking and
Insurance pursuant to Section 27.51 of the Banking Act of 1948, as amended.
Prior to such approval, Options may be granted under the Plan expressly subject
to such approval.
(g) Options may not be granted under the Plan more than ten (10) years
after approval of the Plan by the Bank's Shareholders, but then outstanding
Options may extend beyond such date.
(h) To the extent that State laws shall not have been preempted by any
laws of the United States, the Plan shall be construed, regulated, interpreted
and administered according to the other laws of the State of New Jersey.
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EXHIBIT 10(d)
THE COMMUNITY BANK OF NEW JERSEY
1997 EMPLOYEE STOCK OPTION PLAN
Section 1. Purpose
The Community Bank of New Jersey 1997 Stock Option Plan (the "Plan") is
hereby established to foster and promote the long-term success of The Community
Bank of New Jersey (the "Bank") and its shareholders by providing officers and
employees of the Bank with an equity interest in the Bank. The Plan will assist
the Bank in attracting and retaining the highest quality of experienced persons
as officers and employees and in aligning the interests of such persons more
closely with the interests of the Bank's shareholders by encouraging such
parties to maintain an equity interest in the Bank.
Section 2. Definitions
Capitalized terms not specifically defined elsewhere herein shall have
the following meaning:
"Act" means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations promulgated thereunder.
"Bank" means The Community Bank of New Jersey and any present or future
subsidiary corporations of The Community Bank of New Jersey (as defined in
Section 424 of the Code) or any successor to such corporations.
"Board" means the Board of Directors of the Bank.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
"Common Stock" or "Stock" means the common stock, $5.00 per share par
value, of the Bank.
"Disability" shall mean a permanent disability which qualifies as total
disability under the terms of the Bank's Long- Term Disability Plans; provided,
however, with respect to a Participant who has been granted an Incentive Stock
Option such term shall have the meaning set forth in Section 422(c)(6) of the
Code.
"Fair Market Value" means, with respect to shares of Common Stock, the
fair market value as determined by the Board in good
faith and in a manner established by the Board from time to time, taking into
account such factors as the Board shall deem relevant, including the book value
of the Common Stock and, to the extent there is an established trading market
for the Common Stock, the market value of the Common Stock.
"Incentive Stock Option" means an option to purchase shares of Common
Stock granted to a Participant under the Plan which is intended to meet the
requirements of Section 422 of the Code.
"Non-Employee Director" shall mean a member of the Board who is not
also a common law employee of the Bank.
"Non-Qualified Stock Option" means an option to purchase shares of
Common Stock granted to a Participant under the Plan which is not intended to be
an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Qualified Stock
Option granted hereunder.
"Participant" means an employee of the Bank selected by the Board to
receive an Option under the Plan.
"Plan" means The Community Bank of New Jersey 1997 Employee
Stock Option Plan.
"Termination for Cause" means termination because of Participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule regulation (other than traffic violations or similar
offenses) or final cease and desist order issued by any regulatory agency having
jurisdiction over the Participant or the Bank.
Section 3. Administration
(a) The Plan shall be administered by the Board. Among other things,
the Board shall have authority, subject to the terms of the Plan, to grant
Options, to determine the individuals to whom and the time or times at which
Options may be granted, to determine whether such Options are to be Incentive
Options or Non-Qualified Stock Options (subject to the requirements of the
Code), to determine the terms and conditions of any Option granted hereunder,
including whether to impose any vesting period, and the exercise price thereof,
subject to the requirements of this Plan.
(b) Subject to the other provisions of the Plan, the Board shall have
authority to adopt, amend, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from
time to time consider
-2-
advisable, to interpret the provisions of the Plan and any Option and to decide
all disputes arising in connection with the Plan; provided, however, that the
Board shall have no authority to take any step which would cause the Plan to
fail to comply with Rule 16b-3 under the Act or any successor or replacement
regulation. The Board may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any option agreement in the manner and to
the extent it shall deem appropriate to carry the Plan into effect, in its sole
and absolute discretion. The Board's decision and interpretations shall be final
and binding. Any action of the Board with respect to the administration of the
Plan shall be taken pursuant to a majority vote or by the unanimous written
consent of its members.
(c) The Board may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent.
Section 4. Eligibility and Participation
Officers and employees of the Bank shall be eligible to participate in
the Plan. The Participants under the Plan shall be selected from time to time by
the Board, in its sole discretion, from among those eligible, and the Board
shall determine in its sole discretion the numbers of shares to be covered by
the Option or Options granted to each Participant.
Section 5. Shares of Stock Available for Options
(a) The maximum number of shares of Common Stock which may be issued
and purchased pursuant to Options granted under the Plan is 50,000, subject to
the adjustments as provided in Section 5 and Section 9, to the extent
applicable. If an Option granted under this Plan expires or terminates before
exercise or is forfeited for any reason, without a payment in the form of Common
Stock being granted to the Participant, the shares of Common Stock subject to
such Option, to the extent of such expiration, termination or forfeiture, shall
again be available for subsequent grant under Plan. Shares of Common Stock
issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
(b) In the event that the Board determines, in its sole discretion,
that any stock dividend, stock split, reverse stock split or combination,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reclassification, reorganization, merger, consolidation,
split-up, spin-off, combination, exchange of shares, warrants or rights offering
to purchase Common Stock at a price substantially below Fair Market
-3-
Value, or other similar transaction affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be granted or made available under the Plan to Participants, the
Board shall have the right to proportionately and appropriately adjust equitably
any or all of (i) the maximum number and kind of shares of Common Stock in
respect of which Options may be granted under the Plan to Participants, (ii) the
number and kind of shares of Common Stock subject to outstanding Options held by
Participants, and (iii) the exercise price with respect to any Options held by
Participants, without changing the aggregate purchase price as to which such
Options remain exercisable, and if considered appropriate, the Board may make
provision for a cash payment with respect to any outstanding Options held by a
Participant, provided that no adjustment shall be made pursuant to this Section
if such adjustment would cause the Plan to fail to comply with Section 422 of
the Code with regard to any Incentive Stock Options granted hereunder or with
Rule 16b-3 under the Act. No fractional Shares shall be issued on account of any
such adjustment.
(c) Any adjustments under this Section will be made by the Board, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive.
Section 6. Non-Qualified Stock Options
6.1 Grant of Non-Qualified Stock Options.
Subject to the provisions hereof, the Board may, from time to time,
grant Non-Qualified Stock Options to Participants upon such terms and conditions
as the Board may determine, and may grant Non-Qualified Stock Options in
exchange for and upon surrender of previously granted Options under this Plan.
NonQualified 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 be determined by the
Board on the date the option is granted; provided, however, that such purchase
price shall not be less than 85% of the Fair Market Value or the par value of
the Common Stock, whichever is greater. Shares may be purchased only upon full
payment of the purchase price.
(b) Terms of Options. The term during which each NonQualified Stock
Option may be exercised shall be determined by the Board, but in no event shall
a Non-Qualified Stock Option be exercisable in whole or in part more than ten
(10) years from the date of grant.
-4-
(c) Termination of Service. Except as provided herein, unless otherwise
determined by the Board, upon the termination of a Participant's service as an
employee for any reason other than Disability, death or Termination for Cause,
the Participant's Non-Qualified Stock Options shall be exercisable only as to
those shares which were immediately exercisable by the participant at the date
of termination and only for a period of three months following termination.
Notwithstanding any provision set forth herein nor contained in any Agreement
relating to the award of an Option, in the event of Termination for Cause, all
rights under the Participant's Non-Qualified Stock Options shall expire upon
termination. In the event of death or termination of service as a result of
Disability 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 beneficiaries of the Participant
for one year or such longer period as determined by the Board following the date
of the Participant's death or termination of service due to Disability, provided
that in no event shall the period extend beyond the expiration of the
Non-Qualified Stock Option term.
(d) Transferability. Except as provided for hereunder, no Option
granted under the Plan shall be assignable or transferable by a Participant, and
any attempted disposition thereof shall be null and void and of no effect. A
Participant may transfer or assign an Option granted hereunder to an immediate
family member or trust or benefit plan established for an immediate family
member. For terms of this provision, the term "immediate family member" means a
Participant's spouse, parents and offspring. Nothing contained herein shall be
deemed to prevent transfers by will or by the applicable laws of descent and
distribution.
Section 7. Incentive Stock Options
7.1 Grant of Incentive Stock Options.
The Board 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 be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock on the date
of grant. However, if a Participant owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of Common Stock, the
purchase price per share of Common Stock deliverable upon the exercise of each
Incentive Stock Option shall not be less than one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant or the par value
of the
-5-
Common Stock, whichever is greater. Shares may be purchased only upon payment of
the full purchase price.
(b) Amounts of Options. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Board. 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 first becomes exercisable) 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 shall
not exceed $100,000. The provisions of this Section 7.1(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 is in excess of such
limit, it shall be deemed a NonQualified Stock Option. The Board shall have
discretion to redesignate options granted as Incentive Stock Options as
NonQualified options.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Board, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than ten (10)
years from the date of grant. If at the time an Incentive Stock Option is
granted to an employee, the employee owns Common Stock representing more than
ten percent (10%) of the total combined voting power of the Bank (or, under
Section 422(d) of the Code, is deemed to own Common Stock representing more than
ten percent (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.
(d) Termination of Employment. Except as provided in Section 7.1(e)
hereof, upon the termination of a Participant's service for any reason other
than Disability, death or Termination for Cause, the Participant's Incentive
Stock Options which are then exercisable at the date of termination may only be
exercised by the Participant for a period of three months following termination.
Notwithstanding any provisions set forth herein nor contained in any Agreement
relating to an award of an Option, in the event of Termination for Cause all
rights under the Participant's Incentive Stock Options shall expire immediately
upon termination.
Unless otherwise determined by the Board, in the event of death or
termination of service as a result of Disability of any Participant, all
Incentive Stock Options held by such
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Participant, whether or not exercisable at such time, shall be exercisable by
the Participant or the Participant's legal representatives or beneficiaries of
the Participant for one year following the date of the participant's death or
termination of employment as a result of Disability. In no event shall the
exercise period extend beyond the expiration of the Incentive Stock Option term.
(e) Transferability. No Incentive Stock Option granted under the Plan
shall be assignable or transferable by a Participant, except pursuant to the
laws of descent and distribution, and any attempted disposition of an Incentive
Stock Option shall be void and of no effect.
(f) Compliance with Code. The options granted under this Section 7 of
the Plan are intended to qualify as incentive stock options within the meaning
of Section 422 of the Code, but the Bank makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code. A Participant shall notify the Board in writing in the
event that he disposes of Common Stock acquired upon exercise of an Incentive
Stock Option within the two-year period following the date the Incentive Stock
Option was granted or within the one-year period following the date he received
Common Stock upon the exercise of an Incentive Stock Option and shall comply
with any other requirements imposed by the Bank in order to enable the Bank to
secure the related income tax deduction to which it will be entitled in such
event under the Code.
Section 8. Extension
The Board may, in its sole discretion, extend the dates during which
all or any particular Option or Options granted under the Plan may be exercised;
provided, however, that no such extension shall be permitted if it would cause
Incentive Stock Options issued under the Plan to fail to comply with Section 422
of the Code.
Section 9. General Provisions Applicable to Options
(a) Each Option under the Plan shall be evidenced by a writing
delivered to the Participant specifying the terms and conditions thereof and
containing such other terms and conditions not inconsistent with the provisions
of the Plan as the Board considers necessary or advisable to achieve the
purposes of the Plan or comply with applicable tax and regulatory laws and
accounting principles.
(b) Each Option may be granted alone, in addition to or in relation to
any other Option. The terms of each Option need not be identical, and the Board
need not treat Participants
-7-
uniformly. Except as otherwise provided by the Plan or a particular Option, any
determination with respect to an Option may be made by the Board at the time of
grant or at any time thereafter.
(c) In the event of a consolidation, reorganization, merger or sale of
all or substantially all of the assets of the Bank in each case in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity or in the event of a
liquidation of the Bank, the Board will provide for any one or more of the
following actions, as to outstanding options: (i) provide that such options
shall be assumed, or equivalent options shall be substituted, by the acquiring
or succeeding corporation (or an affiliate thereof), provided that any such
options substituted for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, (ii) upon written notice to the Participants,
provide that all unexercised options will terminate immediately prior to the
consummation of such transaction unless exercised (to the extent then
exercisable) by the Participant within a specified period following the date of
such notice, (iii) in the event of a merger under the terms of which holders of
the Common Stock of the Bank will receive upon consummation thereof a cash
payment for each share surrendered in the merger (the "Merger Price"), make or
provide for a cash payment to the Participants equal to the difference between
(A) the Merger Price times the number of shares of Common Stock subject to such
outstanding Options (to the extent then exercisable at prices not in excess of
the Merger Price) and (B) the aggregate exercise price of all such outstanding
Options in exchange for the termination of such Options, and (iv) provide that
all or any outstanding Options shall become exercisable in full immediately
prior to such event.
(d) The Participant shall pay to the Bank, or make provision
satisfactory to the Board for payment of, any taxes required by law to be
withheld in respect of Options under the Plan no later than the date of the
event creating the tax liability. In the Board's sole discretion, a Participant
may elect to have such tax obligations paid, in whole or in part, in shares of
Common Stock, including shares retained from the Option creating the tax
obligation. For withholding tax purposes, the value of the shares of Common
Stock shall be the Fair Market Value on the date the withholding obligation is
incurred. The Bank may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Participant.
(e) For purposes of the Plan, the following events shall not be deemed
a termination of employment of a Participant:
-8-
(i) a transfer to the employment of the Bank from a
subsidiary or from the Bank to a subsidiary, or from one
subsidiary to another, or
(ii) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Bank, if the
Participant's right to reemployment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of
absence was granted or if the Board otherwise so provides in writing.
(f) The Board may at any time, and from time to time, amend, modify or
terminate the Plan or any outstanding Option held by a Participant, including
substituting therefor another Option of the same or a different type or changing
the date of exercise or realization, provided that the Participant's consent to
each action shall be required unless the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant, and further provided that no amendment increasing the
number of shares subject to the Plan, decreasing the exercise price for any
option provided for under the Plan or a change in the parties eligible to
participate in the Plan may be effectuated without the approval of the
shareholders of the Bank; further provided, however, that the Board shall not
adopt any such amendment or modification if such amendment or modification shall
cause the Plan to fail to comply with Rule 16b-3 under the Act or any successor
or replacement regulation.
Section 10. Miscellaneous
(a) No person shall have any claim or right to be granted an Option,
and the grant of an Option shall not be construed as giving a Participant the
right to continued employment or service on the Bank's Board. The Bank expressly
reserves the right at any time to dismiss a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable Option.
(b) Nothing contained in the Plan shall prevent the Bank from adopting
other or additional compensation arrangements.
(c) Subject to the provisions of the applicable Option, no Participant
shall have any rights as a shareholder (including, without limitation, any
rights to receive dividends, or non cash distributions with respect to such
shares) with respect to any shares of Common Stock to be distributed under the
Plan until he or she becomes the holder thereof.
(d) Notwithstanding anything to the contrary expressed in this Plan,
any provisions hereof that vary from or conflict with
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any applicable Federal or State securities laws (including any regulations
promulgated thereunder) shall be deemed to be modified to conform to and comply
with such laws.
(e) No member of the Board shall be liable for any action or
determination taken or granted in good faith with respect to this Plan nor shall
any member of the Board be liable for any agreement issued pursuant to this Plan
or any grants under it. Each member of the Board shall be indemnified by the
Bank against any losses incurred in such administration of the Plan, unless his
action constitutes serious and willful misconduct.
(f) This Plan shall become effective upon its approval by the holders
of two-thirds (2/3) of the Common Stock of the Bank entitled to vote and the
approval of the Plan by the Commissioner of the Department of Banking and
Insurance pursuant to Section 27.51 of the Banking Act of 1948, as amended.
Prior to such approval, Options may be granted under the Plan expressly subject
to such approval.
(g) Options may not be granted under the Plan more than ten (10) years
after approval of the Plan by the Bank's Shareholders, but then outstanding
Options may extend beyond such date.
(h) To the extent that State laws shall not have been preempted by any
laws of the United States, the Plan shall be construed, regulated, interpreted
and administered according to the other laws of the State of New Jersey.
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EXHIBIT 10(e)
THE COMMUNITY BANK OF NEW JERSEY
1998 EMPLOYEE STOCK OPTION PLAN
Section 1. Purpose
The Community Bank of New Jersey 1998 Stock Option Plan (the "Plan") is
hereby established to foster and promote the long-term success of The Community
Bank of New Jersey (the "Bank") and its shareholders by providing officers and
employees of the Bank with an equity interest in the Bank. The Plan will assist
the Bank in attracting and retaining the highest quality of experienced persons
as officers and employees and in aligning the interests of such persons more
closely with the interests of the Bank's shareholders by encouraging such
parties to maintain an equity interest in the Bank.
Section 2. Definitions
Capitalized terms not specifically defined elsewhere herein shall have
the following meaning:
"Act" means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations promulgated thereunder.
"Bank" means The Community Bank of New Jersey and any present or future
subsidiary corporations of The Community Bank of New Jersey (as defined in
Section 424 of the Code) or any successor to such corporations.
"Board" means the Board of Directors of the Bank.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
"Common Stock" or "Stock" means the common stock, $5.00 per share par
value, of the Bank.
"Disability" shall mean a permanent disability which qualifies as total
disability under the terms of the Bank's Long- Term Disability Plans; provided,
however, with respect to a Participant who has been granted an Incentive Stock
Option such term shall have the meaning set forth in Section 422(c)(6) of the
Code.
"Fair Market Value" means, with respect to shares of Common Stock, the
fair market value as determined by the Board in good
-1-
faith and in a manner established by the Board from time to time, taking into
account such factors as the Board shall deem relevant, including the book value
of the Common Stock and, to the extent there is an established trading market
for the Common Stock, the market value of the Common Stock.
"Incentive Stock Option" means an option to purchase shares of Common
Stock granted to a Participant under the Plan which is intended to meet the
requirements of Section 422 of the Code.
"Non-Qualified Stock Option" means an option to purchase shares of
Common Stock granted to a Participant under the Plan which is not intended to be
an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Qualified
Stock Option granted hereunder.
"Participant" means an employee of the Bank selected by the Board to
receive an Option under the Plan.
"Plan" means The Community Bank of New Jersey 1998 Employee
Stock Option Plan.
"Termination for Cause" means termination because of Participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule regulation (other than traffic violations or similar
offenses) or final cease and desist order issued by any regulatory agency having
jurisdiction over the Participant or the Bank.
Section 3. Administration
(a) The Plan shall be administered by the Board. Among other things,
the Board shall have authority, subject to the terms of the Plan, to grant
Options, to determine the individuals to whom and the time or times at which
Options may be granted, to determine whether such Options are to be Incentive
Options or Non-Qualified Stock Options (subject to the requirements of the
Code), to determine the terms and conditions of any Option granted hereunder,
including whether to impose any vesting period, and the exercise price thereof,
subject to the requirements of this Plan.
(b) Subject to the other provisions of the Plan, the Board shall have
authority to adopt, amend, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from
time to time consider advisable, to interpret the provisions of the Plan and any
Option and to decide all disputes arising in connection with the Plan; provided,
however, that the Board shall have no authority to take
-2-
any step which would cause the Plan to fail to comply with Rule 16b-3 under the
Act or any successor or replacement regulation. The Board may correct any defect
or supply any omission or reconcile any inconsistency in the Plan or in any
option agreement in the manner and to the extent it shall deem appropriate to
carry the Plan into effect, in its sole and absolute discretion. The Board's
decision and interpretations shall be final and binding. Any action of the Board
with respect to the administration of the Plan shall be taken pursuant to a
majority vote or by the unanimous written consent of its members.
(c) The Board may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent.
Section 4. Eligibility and Participation
Officers and employees of the Bank shall be eligible to participate in
the Plan. The Participants under the Plan shall be selected from time to time by
the Board, in its sole discretion, from among those eligible, and the Board
shall determine in its sole discretion the numbers of shares to be covered by
the Option or Options granted to each Participant.
Section 5. Shares of Stock Available for Options
(a) The maximum number of shares of Common Stock which may be issued
and purchased pursuant to Options granted under the Plan is 50,000, subject to
the adjustments as provided in Section 5 and Section 9, to the extent
applicable. If an Option granted under this Plan expires or terminates before
exercise or is forfeited for any reason, without a payment in the form of Common
Stock being granted to the Participant, the shares of Common Stock subject to
such Option, to the extent of such expiration, termination or forfeiture, shall
again be available for subsequent grant under Plan. Shares of Common Stock
issued under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
(b) In the event that the Board determines, in its sole discretion,
that any stock dividend, stock split, reverse stock split or combination,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reclassification, reorganization, merger, consolidation,
split-up, spin-off, combination, exchange of shares, warrants or rights offering
to purchase Common Stock at a price substantially below Fair Market Value, or
other similar transaction affects the Common Stock such that an adjustment is
required in order to preserve the benefits or potential benefits intended to be
granted or made available
-3-
under the Plan to Participants, the Board shall have the right to
proportionately and appropriately adjust equitably any or all of (i) the maximum
number and kind of shares of Common Stock in respect of which Options may be
granted under the Plan to Participants, (ii) the number and kind of shares of
Common Stock subject to outstanding Options held by Participants, and (iii) the
exercise price with respect to any Options held by Participants, without
changing the aggregate purchase price as to which such Options remain
exercisable, and if considered appropriate, the Board may make provision for a
cash payment with respect to any outstanding Options held by a Participant,
provided that no adjustment shall be made pursuant to this Section if such
adjustment would cause the Plan to fail to comply with Section 422 of the Code
with regard to any Incentive Stock Options granted hereunder or with Rule 16b-3
under the Act. No fractional Shares shall be issued on account of any such
adjustment.
(c) Any adjustments under this Section will be made by the Board, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive.
Section 6. Non-Qualified Stock Options
6.1 Grant of Non-Qualified Stock Options.
Subject to the provisions hereof, the Board may, from time to time,
grant Non-Qualified Stock Options to Participants upon such terms and conditions
as the Board may determine, and may grant Non-Qualified Stock Options in
exchange for and upon surrender of previously granted Options under this Plan.
NonQualified 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 be determined by the
Board on the date the option is granted; provided, however, that such purchase
price shall not be less than 85% of the Fair Market Value or the par value of
the Common Stock, whichever is greater. Shares may be purchased only upon full
payment of the purchase price.
(b) Terms of Options. The term during which each NonQualified Stock
Option may be exercised shall be determined by the Board, but in no event shall
a Non-Qualified Stock Option be exercisable in whole or in part more than ten
(10) years from the date of grant.
(c) Termination of Service. Except as provided herein, unless otherwise
determined by the Board, upon the termination of
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a Participant's service as an employee for any reason other than Disability,
death or Termination for Cause, the Participant's Non-Qualified Stock Options
shall be exercisable only as to those shares which were immediately exercisable
by the participant at the date of termination and only for a period of three
months following termination. Notwithstanding any provision set forth herein nor
contained in any Agreement relating to the award of an Option, in the event of
Termination for Cause, all rights under the Participant's Non-Qualified Stock
Options shall expire upon termination. In the event of death or termination of
service as a result of Disability 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 beneficiaries
of the Participant for one year or such longer period as determined by the Board
following the date of the Participant's death or termination of service due to
Disability, provided that in no event shall the period extend beyond the
expiration of the Non-Qualified Stock Option term.
(d) Transferability. Except as provided for hereunder, no Option
granted under the Plan shall be assignable or transferable by a Participant, and
any attempted disposition thereof shall be null and void and of no effect. A
Participant may transfer or assign an Option granted hereunder to an immediate
family member or trust or benefit plan established for an immediate family
member. For terms of this provision, the term "immediate family member" means a
Participant's spouse, parents and offspring. Nothing contained herein shall be
deemed to prevent transfers by will or by the applicable laws of descent and
distribution.
Section 7. Incentive Stock Options
7.1 Grant of Incentive Stock Options.
The Board 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 be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock on the date
of grant. However, if a Participant owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of Common Stock, the
purchase price per share of Common Stock deliverable upon the exercise of each
Incentive Stock Option shall not be less than one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant or the par value
of the Common Stock, whichever is greater. Shares may be purchased only upon
payment of the full purchase price.
-5-
(b) Amounts of Options. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Board. 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 first becomes exercisable) 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 shall
not exceed $100,000. The provisions of this Section 7.1(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 is in excess of such
limit, it shall be deemed a NonQualified Stock Option. The Board shall have
discretion to redesignate options granted as Incentive Stock Options as
NonQualified options.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Board, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than ten (10)
years from the date of grant. If at the time an Incentive Stock Option is
granted to an employee, the employee owns Common Stock representing more than
ten percent (10%) of the total combined voting power of the Bank (or, under
Section 422(d) of the Code, is deemed to own Common Stock representing more than
ten percent (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.
(d) Termination of Employment. Except as provided in Section 7.1(e)
hereof, upon the termination of a Participant's service for any reason other
than Disability, death or Termination for Cause, the Participant's Incentive
Stock Options which are then exercisable at the date of termination may only be
exercised by the Participant for a period of three months following termination.
Notwithstanding any provisions set forth herein nor contained in any Agreement
relating to an award of an Option, in the event of Termination for Cause all
rights under the Participant's Incentive Stock Options shall expire immediately
upon termination.
Unless otherwise determined by the Board, in the event of death or
termination of service as a result of Disability of any Participant, 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 of the Participant for one year
-6-
following the date of the participant's death or termination of employment as a
result of Disability. In no event shall the exercise period extend beyond the
expiration of the Incentive Stock Option term.
(e) Transferability. No Incentive Stock Option granted under the Plan
shall be assignable or transferable by a Participant, except pursuant to the
laws of descent and distribution, and any attempted disposition of an Incentive
Stock Option shall be void and of no effect.
(f) Compliance with Code. The options granted under this Section 7 of
the Plan are intended to qualify as incentive stock options within the meaning
of Section 422 of the Code, but the Bank makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code. A Participant shall notify the Board in writing in the
event that he disposes of Common Stock acquired upon exercise of an Incentive
Stock Option within the two-year period following the date the Incentive Stock
Option was granted or within the one-year period following the date he received
Common Stock upon the exercise of an Incentive Stock Option and shall comply
with any other requirements imposed by the Bank in order to enable the Bank to
secure the related income tax deduction to which it will be entitled in such
event under the Code.
Section 8. Extension
The Board may, in its sole discretion, extend the dates during which
all or any particular Option or Options granted under the Plan may be exercised;
provided, however, that no such extension shall be permitted if it would cause
Incentive Stock Options issued under the Plan to fail to comply with Section 422
of the Code.
-7-
Section 9. General Provisions Applicable to Options
(a) Each Option under the Plan shall be evidenced by a writing
delivered to the Participant specifying the terms and conditions thereof and
containing such other terms and conditions not inconsistent with the provisions
of the Plan as the Board considers necessary or advisable to achieve the
purposes of the Plan or comply with applicable tax and regulatory laws and
accounting principles.
(b) Each Option may be granted alone, in addition to or in relation to
any other Option. The terms of each Option need not be identical, and the Board
need not treat Participants uniformly. Except as otherwise provided by the Plan
or a particular Option, any determination with respect to an Option
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may be made by the Board at the time of grant or at any time thereafter.
(c) In the event of a consolidation, reorganization, merger or sale of all or
substantially all of the assets of the Bank in each case in which outstanding
shares of Common Stock are exchanged for securities, cash or other property of
any other corporation or business entity or in the event of a liquidation of the
Bank, the Board will provide for any one or more of the following actions, as to
outstanding options: (i) provide that such options shall be assumed, or
equivalent options shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof), provided that any such options
substituted for Incentive Stock Options shall meet the requirements of Section
424(a) of the Code, (ii) upon written notice to the Participants, provide that
all unexercised options will terminate immediately prior to the consummation of
such transaction unless exercised (to the extent then exercisable) by the
Participant within a specified period following the date of such notice, (iii)
in the event of a merger under the terms of which holders of the Common Stock of
the Bank will receive upon consummation thereof a cash payment for each share
surrendered in the merger (the "Merger Price"), make or provide for a cash
payment to the Participants equal to the difference between (A) the Merger Price
times the number of shares of Common Stock subject to such outstanding Options
(to the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such outstanding Options in exchange for
the termination of such Options, and (iv) provide that all or any outstanding
Options shall become exercisable in full immediately prior to such event.
(d) The Participant shall pay to the Bank, or make provision
satisfactory to the Board for payment of, any taxes required by law to be
withheld in respect of Options under the Plan no later than the date of the
event creating the tax liability. In the Board's sole discretion, a Participant
may elect to have such tax obligations paid, in whole or in part, in shares of
Common Stock, including shares retained from the Option creating the tax
obligation. For withholding tax purposes, the value of the shares of Common
Stock shall be the Fair Market Value on the date the withholding obligation is
incurred. The Bank may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Participant.
(e) For purposes of the Plan, the following events shall not be deemed
a termination of employment of a Participant:
(i) a transfer to the employment of the Bank from a
subsidiary or from the Bank to a subsidiary, or from one
subsidiary to another, or
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(ii) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Bank, if the
Participant's right to reemployment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of
absence was granted or if the Board otherwise so provides in writing.
(f) The Board may at any time, and from time to time, amend, modify or
terminate the Plan or any outstanding Option held by a Participant, including
substituting therefor another Option of the same or a different type or changing
the date of exercise or realization, provided that the Participant's consent to
each action shall be required unless the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant, and further provided that no amendment increasing the
number of shares subject to the Plan, decreasing the exercise price for any
option provided for under the Plan or a change in the parties eligible
to participate in the Plan may be effectuated without the approval of the
shareholders of the Bank; further provided, however, that the Board shall not
adopt any such amendment or modification if such amendment or modification shall
cause the Plan to fail to comply with Rule 16b-3 under the Act or any successor
or replacement regulation.
Section 10. Miscellaneous
(a) No person shall have any claim or right to be granted an Option,
and the grant of an Option shall not be construed as giving a Participant the
right to continued employment or service on the Bank's Board. The Bank expressly
reserves the right at any time to dismiss a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable Option.
(b) Nothing contained in the Plan shall prevent the Bank from adopting
other or additional compensation arrangements.
(c) Subject to the provisions of the applicable Option, no Participant
shall have any rights as a shareholder (including, without limitation, any
rights to receive dividends, or non cash distributions with respect to such
shares) with respect to any shares of Common Stock to be distributed under the
Plan until he or she becomes the holder thereof.
(d) Notwithstanding anything to the contrary expressed in this Plan,
any provisions hereof that vary from or conflict with any applicable Federal or
State securities laws (including any regulations promulgated thereunder) shall
be deemed to be modified to conform to and comply with such laws.
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(e) No member of the Board shall be liable for any action or
determination taken or granted in good faith with respect to this Plan nor shall
any member of the Board be liable for any agreement issued pursuant to this Plan
or any grants under it. Each member of the Board shall be indemnified by the
Bank against any losses incurred in such administration of the Plan, unless his
action constitutes serious and willful misconduct.
(f) This Plan shall become effective upon its approval by the holders
of two-thirds (2/3) of the Common Stock of the Bank entitled to vote and the
approval of the Plan by the Commissioner of the Department of Banking and
Insurance pursuant to Section 27.51 of the Banking Act of 1948, as amended.
Prior to such approval, Options may be granted under the Plan expressly subject
to such approval.
(g) Options may not be granted under the Plan more than ten (10) years
after approval of the Plan by the Bank's Shareholders, but then outstanding
Options may extend beyond such date.
(h) To the extent that State laws shall not have been preempted by any
laws of the United States, the Plan shall be construed, regulated, interpreted
and administered according to the other laws of the State of New Jersey.
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EXHIBIT 10(f)
COMMUNITY BANK OF NEW JERSEY
1999 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose and Effect of Plan
The purpose of the Community Bank of New Jersey 1999 Employee Stock
Purchase Plan is to secure for the Bank and its stockholders the benefits of the
incentive inherent in the ownership of Common Stock by present and future
employees of the Bank and its Subsidiaries. The Plan conforms to the provisions
of Rule 16b-3 of the Act and is intended to comply with the terms of Code
Section 423.
2. Shares Reserved for the Plan
There shall be reserved for issuance and purchase by employees under
the Plan an aggregate of 100,000 shares of Common Stock, subject to adjustment
as provided in Section 13. Shares subject to the Plan shall be authorized but
unissued shares. Shares needed to satisfy the requirements of the Plan will be
acquired from directly from the Bank.
3. Definitions
Where indicated by initial capital letters, the following terms shall
have the following meanings:
a. Act: The Securities Exchange Act of 1934.
b. Agent: Registrar & Transfer Company acting in a fiduciary capacity,
or an agent selected by the Bank, from time to time, to act in a fiduciary
capacity, on behalf of the Participating Employees with respect to the
administration and implementation of the Plan in the manner described herein.
c. Bank: The Community Bank of New Jersey, a New Jersey chartered
commercial bank, and any successor by merger, consolidation or otherwise.
d. Base Compensation: The total gross earnings of an Eligible Employee,
including overtime, commissions, cash bonuses, and miscellaneous income and
includes
salary reduction contributions pursuant to elections under a plan subject to
Code sections 125 or 401(k).
e. Board: The Board of Directors of the Bank.
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f. Code: The Internal Revenue Code of 1986, as amended, or any
subsequently enacted federal revenue law. A reference to a particular section of
the Code shall include a reference to any regulations issued under that section
and to the corresponding section of any subsequently enacted federal revenue
law.
g. Committee: The committee established pursuant to Section 4 to be
responsible for the general administration of the Plan.
h. Common Stock: The Bank's common stock, $5.00 per share par value.
i. Eligible Employee: Any employee of the Bank or its Subsidiaries that
meets the eligibility requirements of Section 5.
j. Enrollment Form: The form filed with the Committee authorizing
payroll deductions pursuant to Section 6.
k. Fair Market Value: "Fair Market Value" means, with respect to shares
of Common Stock, the fair market value as determined by the Committee in good
faith and in a manner established by the Committee from time to time; provided,
however, that if the shares of Common Stock are last sale reported over the
counter securities, then the "fair market value" of such shares on any date
shall be the average of the high and low prices reported in the consolidated
reporting system, or the average of the bid and asked prices (if the shares of
Common Stock are over the counter securities), on the business day immediately
preceding the date in question, as reported on the NASDAQ system. The Fair
Market Value will be determined as of the quarter end prior to any Investment
Date.
l. Insider: An Eligible Employee who is subject to Section 16 of the
Act and the rules and regulations promulgated thereunder.
m. Investment Account: the account established for each Participating
Employee to hold Common Stock purchased under the Plan pursuant to Section 7.
n. Investment Date: The twentieth day of the first month of each
calender quarter, commencing with the quarter after which this Plan first become
effective or, where such day falls on a weekend or bank or stock exchange
holiday, the following business day.
o. Parent: Any corporation (other than the Bank) in an unbroken chain
of corporations ending with the Bank if, as of an Investment Date, each of the
corporations other than the Bank owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
p. Participating Employee: Eligible Employees who elect to participate
in the Plan by filing an Enrollment Form pursuant to Section 6.
q. Payroll Deduction Account: The account established for a
Participating Employee to hold payroll deductions and voluntary contributions
pursuant to Section 6.
r. Plan: The "Community Bank of New Jersey 1999 Employee Stock Purchase
Plan," as set forth herein and as amended from time to time.
s. Purchase Price: The price for each whole and fractional share of
Common Stock, which shall be the greater of 90% of the Fair Market Value or the
par value of such whole or fractional share.
t. Subsidiary or Subsidiaries: Any corporation (other than the Bank) in
an unbroken chain of corporations beginning with the Bank if, as of an
Investment Date, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
4. Administration of the Plan
The Plan shall be administered by the Committee, consisting of not less
than two members appointed by the Board. The Board, from time to time, may
appoint members previously appointed and may fill vacancies, however caused, in
the Committee.
Subject to the express provisions of the Plan, the Committee shall have
the authority to take any and all actions (including directing the Agent as to
the acquisition of shares) necessary to implement the Plan and to interpret the
Plan, to prescribe, mend and rescind rules and regulations relating to it, and
to make all other determinations necessary or advisable in administering the
Plan. All of such determinations shall be final and binding upon all persons. A
quorum of the Committee shall consist of a majority of its members and the
Committee may act by vote of a majority of its members at a meeting at which a
quorum is present, or without a meeting by a written consent to the action taken
signed by all members of the Committee. The Committee may request advice or
assistance or employ such other persons as are necessary for proper
administration of the Plan.
5. Eligible Employees
All employees of the Bank or its Subsidiaries who are employed on a
full time basis will become eligible to become Participating Employees after
they have completed at least twenty six (26) weeks of service, each week
consisting of at least 20 or more hours of work, with the Bank or its
Subsidiaries. An employee shall cease to be an Eligible and/or Participating
Employee on the first day of the month following any given month in which such
employee did not work at least 20 hours per week.
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No director of the Bank or of any Subsidiary who is not an employee
shall be eligible to participate in the Plan.
6. Election to Participate
Each Eligible Employee may become a Participating Employee effective on
the first day of any month following the date he or she becomes an Eligible
Employee by filing with the Committee an Enrollment Form authorizing specified
regular payroll deductions from his or her Base Compensation; provided, however,
that the election of any Insider to become a Participating Employee shall,
except as provided in the next paragraph, be irrevocable, and shall not take
effect until the first day of the seventh calendar month following the filing of
an Enrollment Form by such Insider. Such regular payroll deductions shall be in
the minimum amount of $10.00 per pay period, and may not exceed an amount equal
to 10% of total pay period Compensation. In addition, during any calender
quarter, a Participating Employee may make voluntary contributions in addition
to regular payroll deductions. Such voluntary contributions must be in an amount
of at least $100.00 per calender quarter, and will be combined with all regular
payroll deductions in determining whether the limitation set forth in paragraph
9 has been met. All regular payroll deductions and voluntary contributions shall
be credited to the Payroll Deduction Account that the Bank has established in
the name of the Participating Employee.
A Participating Employee may, at any time, withdraw from the Plan and
cease to be a Participating Employee by delivering to the Bank a notice of
withdrawal in such form as the Bank provides. An employee who has ceased to be a
Participating Employee may not again become a Participating Employee during the
same calendar quarter. A Participating Employee may increase or decrease his or
her payroll deduction by filing a new Enrollment Form not less than fourteen
(14) days prior to the first day of month to be effective for the period
commencing on the first day of the second and fourth calendar quarters.
Notwithstanding the foregoing, the election of an Insider Participating Employee
to withdraw from the Plan or to increase or decrease his or her payroll
deduction in accordance with the two preceding sentences will not become
effective until the first day of a calendar quarter next arising after the lapse
of six (6) months from the Bank's receipt of such Inside Participating
Employee's written notice of withdrawal, on the one hand, or new Enrollment
Form, on the other.
A Participating Employee selling or withdrawing all of the shares of
Common Stock in his or her Investment Account shall cease to be a Participating
Employee and shall not become a Participating Employee until a new election is
made pursuant to Section 6.
Enrollment Forms must be filed with the Committee not less than
fourteen (14) days prior to the first day of any month to be effective and /or
included in the period commencing with the second or fourth calendar quarter,
unless a shorter period of time is prescribed by the Committee. An Enrollment
Form not filed within the prescribed filing period shall be effective on the
first day of the following six month period.
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7. Methods of Purchase and Investment Accounts
Each Participating Employee having eligible funds in his or her Payroll
Deduction Account on an Investment Date shall be deemed, without any further
action, to have purchased the number of whole and fractional shares which the
eligible funds in his or her Payroll Deduction Account could purchase at the
Purchase Price. All whole and fractional shares purchased (rounded to the
nearest thousandth) shall be maintained by the Agent in separate Investment
Accounts for Participating Employees. Expenses incurred in the purchase of
shares and the expenses of the Agent shall be paid by the Bank. No interest will
be paid to Participating Employees on funds held in a Payroll Deduction Account
pending the purchase of shares of Common Stock.
8. Stock Purchases
The Agent shall acquire shares of Common Stock for Participating
Employees as of each Investment Date from the Bank's authorized but unissued
shares of stock using total payroll deduction amounts received by the Agent on
or before the last day of the quarter preceding the applicable Investment Date
for all Participating Employees.
9. Limitations on Purchases
No Participating Employee may purchase during any one calendar year
under the Plan (or under any other plan qualified under Code Section 423) shares
of Common Stock having a Fair Market Value (determined by reference to the Fair
Market Value on each date of purchase) in excess of $10,000.
A Participating Employee's Payroll Deduction Account may not be used to
purchase Common Stock on any Investment Date to the extent that after such
purchase the Participating Employee would own (or be considered as owning within
the meaning of Code Section 424(d)) stock possessing five percent (5%) or more
of the total combined voting power of the Bank or its Parent or Subsidiary. For
this purpose, stock which the Participating Employee may purchase under any
outstanding option shall be treated as owned by such Participating Employee. As
of the first Investment Date on which this paragraph limits a Participating
Employee's ability to purchase Common Stock, the employee shall cease to be a
Participating Employee.
10. Title of Accounts
The Agent shall maintain an Investment Account for each Participating
Employee. Each Investment Account shall be in the name of the Participating
Employee or if he or she so indicates on his or her Enrollment Form, in his or
her name jointly with a member of his or her family, with right of survivorship.
A Participating Employee who is a resident of a jurisdiction which does not
recognize such a joint tenancy may have an Investment Account in
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his or her name as tenant in common with a member of his or her family, without
right of survivorship.
11. Right as a Shareholder
A Participating Employee shall have the right at any time to obtain a
certificate for the full shares of Common Stock credited to his or her
Investment Account.
If a Participating Employee ceases to be such, the Participating
Employee may elect to have a certificate for the full shares of Common Stock
credited to his or her Investment Account forwarded to him or her. In either
event, the Agent will sell any fractional interest held in is or her Investment
Account and remit the proceeds of such sale, less selling expenses, to him or
her.
As a condition of participation in the Plan, each Participating
Employee agrees to notify the Bank if he or she sells or otherwise disposes of
any of his or her shares of Common Stock within two (2) years of the Investment
Date on which such shares were purchased.
12. Rights Not Transferable
Rights under the Plan are not transferable by a Participating Employee
otherwise than by will or the laws of descent and distribution, and are
exercisable only by the Participating Employee during his or her lifetime.
13. Changes in Capital Structure
In the event of a stock dividend, stock split or combination of shares,
recapitalization or merger in which the Bank is the surviving corporation or
other change in the Bank's capital stock (including, but not limited to, the
creation or issuance to shareholders generally of rights, options or warrants
for the purchase of common stock or preferred stock to the Bank), the number and
kind of shares of stock or securities of the Bank to be subject to the Plan, the
maximum number of shares or securities which may be delivered under the Plan,
the selling price and other relevant provisions shall be appropriately adjusted
by the Committee, whose determination shall be binding on all persons.
If the Bank is a party to a consolidation or a merger in which the Bank
is not the surviving corporation, a transaction that results in the acquisition
of substantially all the Bank's outstanding stock by a single person or entity,
or a sale or transfer of substantially all of the Bank's assets, the Committee
may take such actions with respect to the Plan as the Committee deems
appropriate.
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Notwithstanding anything in the Plan to the contrary, the Committee may
take the foregoing actions without the consent of any Participating Employee,
and the Committee's determination shall be conclusive and binding on all persons
for all purposes.
14. Retirement, Termination and Death
In the event of a Participating Employee's retirement or termination of
employment, or if a Participating Employee ceases to be such pursuant to Section
5 or otherwise, the amount of his or her Payroll Deduction Account shall be
refunded o him or her and, unless otherwise elected, certificates will be issued
for full shares held. If a Participating Employee elects to have his or her
shares sold, he or she will receive the proceeds of the sale, less selling
expenses. In the event of his or her death, the amount in his or her Payroll
Deduction Account and all shares in his or her Investment Account shall be
delivered to the beneficiary designated by the Participating Employee in a
writing filed with the Bank. If no beneficiary has been designated, or if the
designated beneficiary doe not survive the Participating Employee, such amount
and all shares shall be delivered to his or her estate.
15. Amendment of the Plan
The Board may at any time, or from time to time, amend the Plan in any
respect.
16. Termination of the Plan
The Plan and all rights of employees hereunder shall terminate:
(a) on the Investment Date that Participating Employees become
entitled to purchase a number of shares greater than the number of
reserved shares remaining available for purchase; or
(b) at any date determined by the Board, in its discretion.
In the event that the Plan terminates under circumstances described in
(a) above, reserved shares remaining as of the termination date shall be issued
to Participating Employees on a pro rata basis. Upon termination of the Plan,
all amounts in an employee's Payroll Deduction Account that are not used to
purchase Common Stock, plus any interest accrued thereon, will be refunded.
17. Government and Other Regulations
The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and the Bank's obligation to sell and deliver shares upon the
exercise of rights to purchase shares, shall be subject to all applicable
federal, state and foreign laws, rules and regulations, and to such
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approvals by any regulatory or government agency as may, in the opinion of
counsel for the Bank, be required.
18. Indemnification of Committee
Service on the Committee shall constitute service as a director of the
Bank so that members of the Committee shall be entitled to indemnification and
reimbursement as directors of the Bank pursuant to its Certificate of
Incorporation and Bylaws.
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