Attachment B Pursuant
to Instruction 3 to
Item 10 of Schedule 14A
1996
BROAD NATIONAL BANCORPORATION
DIRECTORS NON-STATUTORY STOCK OPTION PLAN
BROAD NATIONAL BANCORPORATION, a corporation organized
and existing under the laws of the State of New Jersey (the
"Company"), hereby formulates and adopts, subject to the approval
of the holders of a majority of the issued and outstanding shares
of common stock of the Company ("Broad National Common Stock")
voting in person or by proxy at a duly constituted meeting of the
stockholders of the Company, a non-statutory stock option plan
for members of the Board of Directors of the Company
("Directors") as follows:
1. Purpose of Plan. The purpose of this 1996 Broad
National Bancorporation Directors Non-Statutory Stock Option Plan
(the "Plan") is to enable Directors to participate in the
ownership of the Company, and to provide additional incentive for
such Directors to promote the success of its business through
sharing in the future growth of such business.
2. Effective Date of Plan. The provisions of this Plan
shall become effective on the date the Plan is adopted by the
Board of Directors of the Company (the "Board of Directors"),
subject to the requirement that the Plan is approved by the
holders of a majority of the shares of Broad National Common
Stock voting in person or by proxy at a duly constituted meeting
of the stockholders of the Company within twelve (12) months from
the date the Plan is adopted by the Board of Directors. The
granting of an option under this Plan (the "Granting Date") shall
be deemed to occur on the date of each annual meeting of the
Board of Directors.
3. Eligibility. Options to purchase shares of Broad
National Common Stock shall be granted under this Plan to those
Directors serving as Directors following the annual meeting of
the stockholders of the Company beginning with the first annual
meeting of the Board of Directors occurring after December 31,
1996.
4. Shares Subject to the Plan. Options granted under this
Plan shall be granted solely with respect to shares of Broad
National Common Stock. Subject to any adjustments made pursuant
to the provisions of Section 11, the aggregate number of shares
of Broad National Common Stock which may be issued upon exercise
of the options which will be granted under this Plan shall not
exceed seventy five thousand (75,000) shares.
(a) On the date of each annual meeting of the Board of
Directors following the annual meeting of the stockholders of the
Company, commencing with the first annual meeting of the Board of
Directors occurring after December 31, 1996, the Company shall
grant to each Director serving as a Director immediately
following such annual meeting (whether or not such Director was
also serving as a Director on the date the Plan was adopted) an
option to purchase five hundred (500) shares of Broad National
Common Stock.
(b) The shares to be delivered upon exercise of the
options granted under this Plan shall be made available, at the
discretion of the Board of Directors, from either the authorized
but unissued shares of Broad National Common Stock or any
treasury shares of Broad National Common Stock held by the
Company.
Any option granted hereby shall first become exercisable
upon the later of (i) the expiration of two (2) years from the
Granting Date or (ii) the date on which the Company shall have
paid a cash dividend with respect to its Common Stock in each of
two (2) consecutive calendar years during the term of the option.
Each option granted hereunder shall expire upon the expiration of
the period provided in Section 7 of the Plan. If any option
granted under this Plan shall expire or terminate for any reason
without having been exercised in full, such option shall expire
as to the unpurchased shares, and the unpurchased shares subject
to such option shall be added to the number of shares otherwise
available for options which may be granted in accordance with the
terms of this Plan.
5. Option Agreement. Each option granted under this Plan
shall be evidenced by a stock option agreement which shall be
signed by an officer of the Company and by the Director to whom
the option is granted (the "optionee"). The terms of said stock
option agreement shall be in accordance with the provisions of
this Plan. Each stock option agreement shall constitute a
binding contract between the Company and the optionee, and every
optionee, upon the execution of a stock option agreement, shall
be bound by the terms and restrictions of this Plan and such
stock option agreement.
6. Option Price. The price at which shares of Broad
National Common Stock may be purchased under an option granted
pursuant to this Plan shall be equal to the greater of (i) the
par value thereof, or (ii) 100 percent of the fair market value
of such shares on the Granting Date. The fair market value of
shares of Broad National Common Stock for purposes of this Plan
shall be the mean between the highest and lowest selling prices
of such shares on the Granting Date. If there are no sales on
the Granting Date, but there are sales on dates within a
reasonable period of time (ten days) both before and after the
Granting Date, the fair market value shall be equal to the
weighted average of the means between the highest and lowest
selling prices for such shares on the nearest date before and the
nearest date after the Granting Date. If there are no sales
within a reasonable period of time both before and after the
Granting Date, the fair market value shall be the mean between
the bona fide bid and asked prices on the Granting Date, and if
none, the fair market value shall be the weighted average of the
means between the bona fide bid and asked prices on the nearest
trading date before and the nearest trading date after the
Granting Date, provided both such nearest dates are within a
reasonable period of time (ten days) from the Granting Date. Any
such selling prices or bid and asked quotations shall be
determined from the reports of the exchange or automated
quotation system on which shares of Broad National Common Stock
are principally dealt, if any, and if none, as such selling
prices or bid and asked quotations are reported on any composite
listing of any combined exchanges, if any.
7. Period and Exercise of Option.
(a) Period--Subject to the provisions of Sections 8
and 9 hereof with respect to the death or termination of status
as a Director, the period during which each option granted under
this Plan may be exercised shall expire ten (10) years from the
Granting Date of such option. In the event the Company shall not
be the surviving corporation in any merger, consolidation, or
reorganization, or in the event of acquisition by another
corporation of all or substantially all of the assets of the
Company, every option outstanding hereunder may be assumed (with
appropriate changes) by the surviving, continuing, successor or
purchasing corporation, as the case may be, subject to any
applicable provisions of the Code or replaced with new options of
comparable value (in accordance with Section 424(a) of the Code).
In the event (i) that such surviving, continuing, successor or
purchasing corporation, as the case may be, does not assume or
replace the outstanding options hereunder, or (ii) of liquidation
or dissolution of the Company, each optionee shall have the
right, within a period commencing 30 days immediately prior to
and ending on the day immediately prior to such merger,
consolidation, reorganization or acquisition by another
corporation of all or substantially all of the assets of the
Company or the liquidation or dissolution of the Company, to
exercise the optionee's outstanding options to the extent of all
or any part of the aggregate number of shares subject to such
option(s). In the event of a "Change of Control" (as defined
below) the time at which options granted under this Plan may be
exercised by the optionee shall be accelerated so as to be
immediately exercisable. For purposes of this paragraph (a)
"Change of Control" shall mean a change in control of a nature
that would be required to be reported in response to item 6(e) of
Schedule 14A of Regulation 14A (in effect on the date hereof)
promulgated under the Securities Exchange Act of 1934, as in
effect on the date hereof; provided, however, that, without
limitation, such a Change of Control shall be deemed to occur
when either (i) a person (other than a current stockholder, or a
director nominated or selected by the Board of Directors or an
officer elected by the Board of Directors) acquires beneficial
ownership (as defined by Securities and Exchange Commission Rule
13d-3) of 25 percent or more of the combined voting power of the
Company's voting securities, or (ii) less than a majority of the
directors are persons who were either nominated or selected by
the Board of Directors.
(b) Exercise--Any option granted under this Plan may
be exercised by the optionee (or by a person acting under Section
9 below) only by (i) delivering to the Company written notice of
the number of shares with respect to which the optionee is
exercising his or her option right, (ii) paying in full the
option price of the purchased shares, and (iii) if the shares to
be purchased have not been registered under the applicable
securities laws and if necessary, in the opinion of counsel for
the Company to secure an exemption from such registration,
furnishing to the Company such representation or agreement in
writing signed by the optionee (or person) as shall be necessary
in the opinion of such counsel to secure such exemption. Subject
to the limitations of this Plan and the terms and conditions of
the respective stock option agreement, each option granted under
this Plan shall be exercisable in whole or in part commencing at
such time as is specified under Section 4 above.
(c) Payment for shares--Payment for shares of Broad
National Common Stock purchased pursuant to an option granted
under this Plan may be made either in cash or in other shares of
Broad National Common Stock (such other shares of Broad National
Common Stock shall be valued for this purpose at 100 percent of
the fair market value (as defined in Section 6 hereof) of such
shares on the date that payment of the option price is made).
(d) Delivery of certificates--As soon as practicable
after receipt by the Company of the notice and representation
described in subsection (b), and of payment in full of the option
price for all of the shares being purchased pursuant to an option
granted under this Plan, a certificate or certificates
representing such shares of stock shall be registered in the name
of the optionee and shall be delivered to the optionee. No
certificate for fractional shares of stock shall be issued by the
Company, however, but in lieu thereof the Company shall
distribute at such time to the optionee who otherwise would have
been entitled to receive a fractional share an amount in cash
equal to the value of said fractional share determined by
multiplying the fraction by the mean of the high and low bid
prices of Broad National Common Stock on the date on which the
Company receives the notice and representation described in
subsection (b). Neither any optionee, nor the legal
representative, legatee or distributee of any optionee, shall be
deemed to be a holder of any shares of stock subject to an option
granted under this Plan unless and until the certificate or
certificates for such shares have been issued.
(e) Limitations on exercise--Except as provided in
Sections 8 and 9 hereof, no option granted under this Plan shall
be exercised unless the optionee is at the time of such exercise
a Director.
8. Termination of Status. If an optionee shall cease to
be a Director for any reason other than death, any option or
unexercised portion thereof granted to him under this Plan which
is otherwise exercisable shall terminate unless it is exercised
within thirty (30) days of the date on which such optionee ceases
to be a Director, and in any event no later than the expiration
date of such option as specified in the respective stock option
agreement. Nothing in this Plan or in any stock option agreement
shall be construed as an obligation on the part of the Company or
its stockholders to continue the status of such optionee as a
Director.
9. Death of Optionee. In the event of the death of an
optionee while he is a Director (or within thirty (30) days of
the date on which such optionee ceases to be a Director) any
option or unexercised portion thereof granted to him under this
Plan which is otherwise exercisable may be exercised by the
person or persons to whom such optionee's rights under the option
pass by operation of the optionee's will or the laws of descent
and distribution, at any time within a period of one (1) year
following the death of the optionee (but in no event later than
the expiration date of the option as specified in the respective
stock option agreement).
10. Nontransferability of Options. Each option granted
under this Plan shall not be transferable or assignable by the
optionee other than by will or the laws of descent and
distribution, and during the lifetime of the optionee may be
exercised only by said optionee.
11. Adjustments upon Changes in Capitalization. In the
event of any change in the capital structure of the Company,
including but not limited to a change resulting from a stock
dividend, stock split, reorganization, merger, consolidation,
liquidation or any combination or exchange of shares, the number
of shares of Broad National Common Stock subject to this Plan and
the number of such shares subject to each option granted
hereunder shall be correspondingly adjusted. The option price
for which shares of Broad National Common Stock may be purchased
pursuant to an option granted under this Plan shall also be
adjusted so that there will be no change in the aggregate
purchase price payable upon the exercise of any option.
12. Amendment and Termination of Plan. The Plan will
expire on December 19, 2006, except as to options then
outstanding under the Plan, which options shall remain in effect
until they have been exercised or have expired. A majority of
the members of the Board of Directors may at any time before such
date amend, modify or terminate the Plan; provided, however, that
no such amendment, modification or termination shall be effective
without obtaining the further approval of the holders of a
majority of the issued and outstanding shares of Broad National
Common Stock voting in person or by proxy at a duly constituted
meeting of the stockholders of the Company; and provided further,
that the Plan shall not be amended more than once every six
months, other than to comport with changes in the law. No
amendment, modification or termination of this Plan may adversely
affect the rights of any optionee under any then outstanding
option granted hereunder without the consent of such optionee.
13. Governing Law. This Plan and the rights of all persons
claiming hereunder shall be construed and determined in
accordance with the laws of the State of New Jersey.
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