Exhibit 99
[The following plan was assumed by Valley National
Bancorp ("Valley") in connection with the merger of
Lakeland First Financial Group, Inc. into Valley pursuant
to the Amended and Restated Agreement and Plan of
Merger dated as of April 21, 1995.]
1986 STOCK OPTION AND INCENTIVE PLAN
(FOR VALLEY EMPLOYEES WHO WERE FORMER LAKELAND EMPLOYEES)
1. PURPOSE OF THE PLAN. The Plan shall be known as the
Lakeland First Financial Group, Inc., Succasunna, New Jersey 1986
Stock Option and Incentive Plan (the "Plan"). The purpose of the
Plan is to attract and retain the best available personnel as
officers and employees and to provide additional incentive to
employees of Lakeland First Financial Group, Inc. (the
"Corporation"), Lakeland Savings Bank, SLA (the "Bank") or any
present or future parent or subsidiary of the Corporation or the
Bank to promote the success of the business. The Plan is
intended to provide for the grant of both "Incentive Stock
Options", within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended (the "Code"), and Non-Incentive
Stock Options. Each and every one of the provisions of the Plan
relating to Incentive Stock Options shall be interpreted to
conform to the requirements of Section 422A of the Code.
2. DEFINITIONS. As used herein, the following definitions
shall apply.
(a) "Award" means the grant by the Committee of an
Incentive Stock Option, a Non-incentive Stock Option, a Stock
Appreciation Right or Restricted Stock or any combination
thereof, as provided in the Plan.
(b) "Bank" shall mean Lakeland Savings Bank, SLA.
(c) "Board" shall mean the Board of Directors of the
Corporation.
(d) "Common Stock" shall mean common stock, par value
$0.10 per share, of the Corporation.
(e) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(f) "Committee" shall mean the Stock Option Committee
appointed by the Board in accordance with paragraph 4(a) of the
Plan.
(g) "Continuous Employment" or "Continuous Status as
an Employee" shall mean the absence of any interruption or
termination of employment by the Corporation, the Bank or any
present or future Parent or Subsidiary of the Corporation or the
Bank. Employment shall not be considered interrupted in the case
of sick leave, military leave or any other leave of absence
approved by the Corporation or the Bank or in the case of
transfers between payroll locations of the Corporation, or
between the Corporation, the Bank, their Parents or Subsidiaries
or a successor.
(h) "Conversion" shall mean the Bank's mutual-to-
stock Conversion pursuant to the Regulations of the Federal
Savings and Loan Insurance Corporation and the New Jersey
Department of Banking.
(i) "Corporation" shall mean Lakeland First Financial
Group, Inc.
(j) "Effective Date" shall mean the date specified in
Section 15 hereof.
(k) "Employee" shall mean any person employed on a
full-time basis by the Corporation, the Bank or any present or
future Parent or Subsidiary of the Corporation or the Bank.
(l) "Incentive Stock Option" means an option to
purchase Shares granted by the Committee pursuant to Section 7
hereof which is subject to the limitations and restrictions of
Section 7 hereof and is intended to qualify under Section 422A of
the Code.
(m) "Non-incentive Stock Option" means an option to
purchase Shares granted by the Committee pursuant to Section 8 or
by the Board pursuant to Section 4 hereof, which option is not
intended to qualify under Section 422A of the Code.
(n) "Option" shall mean an Incentive or Non-Incentive
Stock Option granted pursuant to this Plan.
(o) "Optioned Stock" shall mean stock subject to an
Option granted pursuant to the Plan.
(p) "Optionee" shall mean any person who receives an
Option.
(q) "Parent" shall mean any present or future
corporation which would be a "parent corporation" as defined in
Subsections 425(e) and (g) of the Code.
(r) "Participant" means any director, officer or key
employee of the Corporation, the Bank or any Parent or Subsidiary
of the Corporation or the Bank or any other person providing a
service to the Corporation or the Bank or any Parent or
Subsidiary who is selected by the Committee to receive an Award.
(s) "Plan" shall mean the Lakeland First Financial
Group, Inc. 1986 Stock Option and Incentive Plan.
(t) "Related" means (i) In the case of a Stock
Appreciation Right, a Stock Appreciation Right which is granted
in connection with, and to the extent exercisable, in whole or in
part, in lieu of, an Option and (ii) in the case of an Option, an
Option with respect to which and to the extent a Stock
Appreciation Right is exercisable, in whole or in part, in lieu
thereof has been granted.
(u) "Restricted Stock" shall mean Shares which have
been awarded to a Participant by the Committee, subject to the
restrictions referred to in Section 13 hereof, so long as such
restrictions are in effect.
(v) "Stock Appreciation Right" means a stock
appreciation right with respect to Shares granted by the
Committee pursuant to Section 12 hereof.
(w) "Share" shall mean one share of the Common Stock
of the Corporation.
(x) "Subsidiary" shall mean any present or future
corporation which would be a "subsidiary corporation" as defined
in Subsections 425(f) and (g) of the Code.
3. SHARES SUBJECT TO THE PLAN. Except as otherwise
required by the provisions of Section 13 hereof, the aggregate
number of Shares with respect to which Awards may be made
pursuant to the Plan shall not exceed 368,910 shares. (Total
number of Awards which may still be made pursuant to the Plan as
of July 7, 1989 were 363,069, as adjusted for stock splits and
stock dividends. 5,841 awards had been already granted and
exercised.) Such Shares may either be authorized but unissued or
treasury shares.
Shares which are subject to Stock Appreciation Rights and
related Options shall be counted only once in determining whether
the maximum number of Shares with respect to which Awards may be
granted under the Plan has been exceeded. An Award shall not be
considered to have been made under the Plan with respect to any
Option or Stock Appreciation Right which terminates and new
Awards may be granted under the Plan with respect to the number
of Shares as to which such termination has occurred.
4. ADMINISTRATION OF THE PLAN.
(a) (i) Composition of the Committee. Except as
indicated in paragraph 4(9)(ii) below, the Plan shall be adminis-
tered by the Committee consisting of three directors of the
Corporation appointed by the Board. Officers, directors, key
employees and other persons who are designated by the Committee
shall be eligible to receive Awards under the Plan, and all
persons designated as members of the Committee shall be
"disinterested persons" within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934. A "disinterested person" is
an administrator who at the time he exercises discretion in
administering the Plan is not eligible and has not at any time
within one year prior thereto been eligible for selection as a
person to whom stock options or stock appreciation rights may be
granted pursuant to any Plan of the Corporation, the Bank or any
of their affiliates.
(ii) For the purpose of granting Awards to directors,
the selection of any director to whom Awards may be granted, as
well as the number of shares subject to Awards, must be
determined by a disinterested committee, as defined in Rule 16b-3
under the Securities Exchange Act of 1934.
(b) Powers of the Committee. The Committee is
authorized (but only to the extent not contrary to the express
provisions of the Plan or to resolutions adopted by the Board) to
interpret the Plan to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the form and
content of Awards to be issued under the Plan and to make other
determinations necessary or advisable for the administration of
the Plan, and shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to
time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at any
meeting at which a quorum is present shall be deemed the action
of the Committee. In no event may the Committee revoke
outstanding Awards without the consent of the Participant.
The President of the Corporation and such other
officers as shall be designated by the Committee are hereby
authorized to execute instruments evidencing Awards on behalf of
the Corporation and to cause them to be delivered to the Parti-
cipants.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be
final and conclusive on all persons affected thereby.
5. ELIGIBILITY. Awards may be granted to officers,
directors, key employees and other persons of the Corporation,
the Bank, or any of their present or future Parent or Subsidiary
corporations. The Committee shall from time to time determine
the officers, directors, key employees and other persons who
shall be granted Options or Awards under the Plan, the number to
be granted to each such officers, directors, key employees and
other persons under the Plan, and whether Options granted to each
such Employee under the Plan shall be Incentive and/or Non-
Incentive Stock Options. In selecting Participants and in
determining the number of shares of Common Stock to be granted to
each such Participant pursuant to each Award granted under the
Plan, the Committee may consider the nature of the services
rendered by each such Participant, each such Participant's
current and potential contribution to the Corporation, the Bank,
or any of their Parent or Subsidiaries and such other factors as
the Committee may, in its sole discretion, deem relevant.
Officers, directors, key employees or other persons who have been
granted an Award may, if otherwise eligible, be granted
additional Options or Awards.
The aggregate fair market value (determined as of the date
the Option is granted) of the Shares for which any Employee may
be granted Options in any calendar year (under all Incentive
Stock Option plans, as defined in Section 422A of the Code, of
the Corporation or any of their present or future parent or
subsidiary Corporation) prior to December 31, 1986 shall not
exceed $100,000, plus any unused limit carryover to such year, as
defined in Section 422A(c) of the Code. The aggregate fair market
value (determined as of the date the Option is granted) of the
shares with respect to which Incentive Stock Options granted
after December 31, 1986 are exercisable for the first time by an
Employee during any calendar year shall not exceed $100,000.
Notwithstanding the prior provisions of this Section 5, the
Committee may grant Options in excess of the foregoing
limitations, provide said Options shall be clearly and
specifically designated as not being Incentive Stock Options, as
defined in Section 422A of the Code.
6. TERM OF PLAN. The Plan shall continue in effect for a
term of ten (10) years from the Effective Date, unless sooner
terminated pursuant to Section 18. No Option shall be granted
under the Plan after ten (10) years from the Effective Date.
7. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS.
Incentive Stock Options maybe granted only to Participants who
are Employees. Each Incentive Stock Option granted pursuant to
the Plan shall be evidenced by an instrument in such form as the
Committee shall from time to time approve. Each and every
Incentive Stock Option granted pursuant to the Plan shall comply
with, and be subject to, the following terms and conditions:
(a) Option Price.
(i) The price per share at which each Incentive
Stock Option granted under the Plan may be exercised shall not,
as to any particular Incentive Stock Option, be less than the
fair market value of the Common Stock at the time such Incentive
Stock Option is granted. For such purposes, if the Common Stock
is traded otherwise than on a national securities exchange at the
time of the granting of an Option, then the price per share of
the Optioned Stock shall be not less than the mean between the
bid and asked price on the date the Incentive Stock Option is
granted or, if there be no bid and asked price on said date, then
on the next prior business day on which there was a bid and asked
price. If no such bid and asked price is available, then the
price per share shall be determined by the Committee. If the
Common Stock is listed on a national securities exchange at the
time of the granting an Incentive Stock Option, then the price
per share shall be not less than the average of the highest and
lowest selling price on such exchange on the date such Incentive
Stock Option is granted or, if there were no sales on said date,
then the price shall be not less than the mean between the bid
and asked price on such date.
(ii) In the case of an Employee who owns Common
Stock representing more than ten percent (10%) of the outstanding
Common Stock at the title the Incentive Stock Option is granted,
the Incentive Stock Option price shall not be less than one
hundred and ten percent (110%) of the fair market value of the
Common Stock at the time the Incentive Stock Option is granted.
(b) Payment.
Full payment for each share of Common Stock
purchased upon the exercise of any Incentive Stock Option granted
under the Plan shall be made at the time of exercise of each such
Incentive Stock Option and shall be paid in cash (in United
States Dollars), Common Stock or a combination of cash and Common
Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at its fair-market value at the
date of exercise. The Corporation shall accept full or partial
payment in Common Stock only to the extent permitted by
applicable law. No shares of Common Stock shall be issued until
full payment therefor has been received by the Corporation, and
no Optionee shall have any of the rights of a shareholder of the
Corporation until shares of Common Stock are issued to him.
(c) Term of Incentive Stock Option.
The term of each Incentive Stock Option granted
pursuant to the Plan shall be not more than ten (10) years from
the date each such Incentive Stock Option is granted, provided
that in the case of an Employee who owns stock representing more
than 10% of the Common Stock outstanding at the time the
Incentive Stock Option is granted, the term of the Incentive
Stock Option shall not exceed five (5) years.
(d) Exercise Generally.
Except as otherwise provided in Section 9 hereof,
no Incentive Stock Option may be exercised unless the optionee
shall have been in the employ of the Corporation, the Bank or any
of their Parents or Subsidiaries at all times during the period
beginning with the date of grant of any such Incentive Stock
Option and ending on the date three (3) months prior to the date
of exercise of any such Incentive Stock Option. The Committee,
may impose additional conditions upon the right of an Optionee to
exercise any Incentive Stock Option granted hereunder which are
not inconsistent with the terms of the Plan or the requirements
for qualification as an Incentive Stock Option under Section 422A
of the Code.
(e) Serial Exercise.
No Incentive Stock Option granted pursuant to the
Plan prior to December 31, 1986 shall be exercised by any
Optionee while there is outstanding (as such term is defined in
Section 422A of the Code) any Incentive Stock Option which was
granted prior to the date of grant of such Incentive Stock Option
to such Optionee, whether pursuant to the Plan or any other plan
of the Corporation, the Bank, or any of their Parents or
Subsidiaries in the event that any additional Incentive Stock
Option is granted at a later date pursuant to the Plan to any
Optionee the instrument evidencing any such additional Incentive
Stock Option shall include the following provisions:
"This Incentive Stock Option is not exercisable while
there is outstanding (within the meaning of Section
422A(c)(7) of the Internal Revenue Code of 1986, as
amended) any Incentive Stock Option which was granted
prior to the date of the grant hereof to the holder of
this stock option to purchase shares of common stock
of Lakeland First Financial Group, Inc. or any of its
subsidiaries."
(f) Transferability.
Any Incentive Stock Option granted pursuant to
the Plan shall be exercised during any Optionee's lifetime only
by the Optionee to whom it was granted and shall not be
assignable or transferable otherwise than by will or by the laws
of descent and distribution.
8. TERMS AND CONDITIONS OF NON-INCENTIVE STOCK OPTIONS.
Each Non-Incentive Stock Option granted pursuant to the Plan
shall be evidenced by an instrument in such form as the committee
shall from time to time approve. Each and every Non-Incentive
Stock Option granted pursuant to the Plan shall comply with and
be subject to the following terms and conditions:
(a) Options Granted to Directors in Conversion.
7,000 Non-incentive Stock Options were granted to
each director who was not an Employee immediately upon completion
of the Conversion at a price equal to the fair market value of
the stock on such date, which price will be equal to the price
indicated on the Bank's final Conversion Offering Circular. (As
of July 7, 1989, the 7,000 Non-Incentive Stock Options originally
granted at the completion of the Conversion at the fair market
value of the common stock, when adjusted for a three for two
stock split and two 10% stock dividends had become Non-Incentive
Stock Options for 12,705 shares at a price of $6.89 per share.)
10,000 Non-Incentive Stock Options were granted
to each director who is not an Employee on August 2, 1988 at a
price equal to the fair market value of the stock on such date,
which price will equal the average between the highest and the
lowest selling price reported by a national securities exchange
on such date, or if there are no sales reported on said date,
then the price shall equal the mean between the bid and the ask
price on such date or on the next prior business day on which
there was a reported bid and an ask price. (As of July 7, 1989,
the 10,000 Non-Incentive Stock Options granted to each non-
employee director on August 2, 1988, when adjusted for a 10%
stock dividend, had become 11,000 Non-Incentive Stock Options at
a price of $16.25 per share.)
(b) Option Price.
The exercise price per share of Common Stock for
each Non-incentive Stock Option granted pursuant to the Plan
shall be such price as the Committee may determine in its sole
discretion.
(c) Payment.
Full payment for each share of Common Stock
purchased upon the exercise of any Non-Incentive Stock Option
granted under the Plan shall be made at the time of exercise of
each such Non-Incentive Stock Option and shall be paid in cash
(in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial
payment of the exercise price shall be valued at its fair market
value at the date of exercise. The Corporation shall accept full
or partial payment in Common Stock only to the extent permitted
by applicable law. No shares of Common Stock shall be issued
until full payment therefor has been received by the Corporation
and no Optionee shall have any of the rights of a shareholder of
the Corporation until the shares of Common Stock are issued to
him.
(d) Term.
The term of each Non-Incentive Stock Option
granted pursuant to the Plan shall be not more than ten (10)
years from the date each such Non-Incentive Stock Option is
granted, provided that, in the case of an Employee who owns stock
representing more than 10% of the Common Stock at the time the
Incentive Stock Option is granted, the term of the Non-Incentive
Stock Option shall not exceed five (5) years.
(e) Exercise Generally.
The Committee may impose additional conditions
upon the right of any Participant to exercise any Non-Incentive
Stock Option granted hereunder which are not inconsistent with
the terms of the Plan.
(f) Transferability.
Any Non-Incentive Stock Option granted pursuant
to the Plan shall be exercised during any Optionee's lifetime
only by the Optionee to whom it was granted and shall not be
assignable or transferable otherwise than by will or by the laws
of descent and distribution.
9. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR
DEATH ON INCENTIVE STOCK OPTIONS.
(a) Termination of Employment.
In the event that any Optionee's employment by
the Corporation, the Bank, or any of their Parents or
Subsidiaries shall terminate for any reason, other than Permanent
and Total Disability (as such term is defined in Section
105(d)(4) of the Code) or death, all of any such Optionee's
Incentive Stock Options, and all of any such Optionee's rights to
purchase or receive shares of Common Stock pursuant thereto, as
the case may be, shall automatically terminate on the date of
such termination of employment. However, no termination of an
Optionee's Incentive Stock Options shall occur if, and to the
extent that, the Committee authorizes the Optionee to exercise
any such Incentive Stock Options at any time prior to the earlier
of (i) the respective expiration dates of any such Incentive
Stock Options or (ii) the expiration of not more than three (3)
months after the date of such termination of employment, but only
if, and to the extent that, the Optionee was entitled to exercise
any such Incentive Stock Options at the date of such termination
of employment. In the event that a Parent or Subsidiary ceases
to be a Parent or Subsidiary of the Corporation or the Bank, the
employment of all of its employees who are not immediately
thereafter employees of the Corporation or the Bank shall be
deemed to terminate upon the date such Parent or Subsidiary so
ceases to be a Parent or Subsidiary of the Corporation or the
Bank.
(b) Disability.
In the event that any Optionee's employment by
the Corporation, the Bank or any of their Parents or Subsidiaries
shall terminate as the result of the Permanent and Total
disability of such Optionee, such Optionee may exercise any
Incentive Stock Options granted to him pursuant to the Plan at
any time prior to the earlier of (i) the respective expiration
dates of any such Incentive Stock Options or (ii) the date which
is one (1) year after the date of such termination of employment,
but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of such
termination of employment.
(c) Death.
In the event of the death of any Optionee, any
Incentive Stock Options granted to any such Optionee may be
exercised by the person or persons to whom the Optionee's rights
under any such Incentive Stock Options pass by will or by the
laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the
earlier of (i) the respective expiration dates of any such
Incentive Stock Options or (ii) the date which is six (6) months
after the date of death of such Optionee (or such later period
not exceeding one (1) year to which the Committee may, in its
discretion, extend such period), but only if, and to the extent
that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section
9(c) any Incentive Stock Option held by an Optionee shall be
considered exercisable at the date of his death if the only
unsatisfied condition precedent to the exercisability of such
Incentive Stock Option at the date of death is the passage of a
specified period of time.
(d) Incentive Stock Options Deemed Exercisable.
For purposes of Sections 9(a), 9(b) and 9(c)
above, any Incentive Stock Option held by any Optionee shall be
considered exercisable at the date of the termination of his
employment if, but for the requirement of serial exercise set
forth in Section 7(e) hereof, any such Incentive Stock Option
would have been exercisable at such date of termination of
employment. Any exercise of any Incentive Stock Option granted
pursuant to the Plan which is considered exercisable pursuant to
this Section 9(d) shall nevertheless be subject to the provisions
and restrictions contained in Section 7(e) hereof.
(e) Termination of Incentive Stock Options.
To the extent that any Incentive Stock Option
granted under the Plan to any Optionee whose employment by the
Association terminates shall not have been exercised within the
applicable period set forth in this Section 9, any such Incentive
Stock Option, and all rights to purchase or receive shares of
Common Stock pursuant thereto, as the case may be, shall
terminate on the last day of the applicable period.
10. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR
DEATH ON NON-INCENTIVE STOCK OPTIONS. The terms and conditions
of Non-Incentive Stock Options relating to the effect of the
termination of an Optionee's employment, disability of an
Optionee or his death shall be such terms and conditions as the
Committee shall, in its sole discretion, determine at the time of
termination.
11. RIGHT OF REPURCHASE AND RESTRICTIONS ON DISPOSITION.
The Committee, in its sole discretion, may include, as a term of
any Incentive Stock Option or Non-Incentive Stock Option, the
right (the "Repurchase Rights"), but not the obligation, to
repurchase all or any amount of the Shares acquired by an
Optionee pursuant to the exercise of any such Options. The
intent of the Repurchase Right is to encourage the continued
employment of the Optionee. The Repurchase Right shall provide
for, among other things, a specified duration of the Repurchase
Right, a specified price per Share to be paid upon the exercise
of the Repurchase Right and a restriction on the disposition of
the Shares by the Optionee during the period of the Repurchase
Right. The Repurchase Right may permit the Corporation to
transfer or assign such right to another party. The Corporation
may exercise the Repurchase Right only to the extent permitted by
applicable law.
12. STOCK APPRECIATION RIGHTS. A Stock Appreciation Right
shall, upon its exercise, entitle the Participant to whom such
Stock Appreciation Right was granted to receive a number of
Shares or cash or combination thereof, as the Committee in its
discretion shall determine, the aggregate value of which (i.e.,
the sum of the amount of cash and/or the fair market value of
such Shares on the date of exercise) shall equal (as nearly as
possible, it being understood that the Corporation shall not
issue any fractional shares) the amount by which the fair market
value per Share on the date of such exercise shall exceed the
exercise price of such Stock Appreciation Right, multiplied by
the number of Shares with respect to which such Stock
Appreciation Right shall have been exercised. A Stock
Appreciation Right may be related to an Option or may be granted
independently of any Option as the Committee shall determine
whether and to what extent a Related Stock Appreciation Right
shall be granted with respect thereto; provided, however and
notwithstanding any other provision of the Plan, that if the
Related Option is an Incentive Stock Option, the Related Stock
Appreciation Right shall satisfy all the restrictions and
limitations of Section 7 hereof as if such Related Stock
Appreciation Right were an Incentive Stock Option. In the case
of a Related Option, such Related Option shall cease to be
exercisable to the extent of the Shares with respect to which the
Related Stock Appreciation Right was exercised. Upon the
exercise or termination of a Related Option, any Related Stock
Appreciation Right shall terminate to the extent to the Shares
with respect to which the Related Option was exercised or
terminated.
13. TERMS AND CONDITIONS OF RESTRICTED STOCK. The
Committee shall have full and complete authority, subject to the
limitations of the Plan, to grant awards of Restricted Stock and,
in addition to the terms and conditions contained in paragraphs
(a) through (f) of this Section 13, to provide such other terms
and conditions (which need not be identical among Participants)
in respect of such Awards, and the vesting thereof, as the
Committee shall determine and provide in the agreement referred
to in paragraph (d) of this Section.
(a) At the time of an award of Restricted Stock, the
Committee shall establish for each Participant a Restricted
Period during which or at the expiration of which, as the
Committee shall determine and provide in the agreement referred
to in paragraph (d) of this Section, the Shares awarded as
Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered by the Participant, except as hereinafter
provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c), (d) and (e) of this
Section 13 and Section 14 hereof, the Participant as owner of
such shares shall have all the rights of a stockholder including
but not limited to the right to receive all dividends paid on
such shares and the right to vote such shares. The Committee
shall have the authority, in its discretion, to accelerate the
time at which any or all of the restrictions shall lapse with
respect to any shares of Restricted Stock prior to the expiration
of the Restricted Period with respect thereto, or to remove any
or all of such restrictions, whenever it may determine that such
action is appropriate by reason of changes in applicable tax or
other laws or other changes in circumstances occurring after the
commencement of such Restricted Period.
(b) Except as provided in Section 14(b) hereof, if a
Participant ceases to maintain continuous employment with the
Corporation, the Bank or any of their Parents or Subsidiaries for
any reason (other than death, total or partial disability or
normal or early retirement) unless the Committee shall otherwise
determine and provide in the agreement referred to in paragraph
(d) of this Section, all shares of Restricted Stock theretofore
awarded to such Participant and which at the time of such
termination of continuous employment are subject to the
restrictions imposed by paragraph (a) of this Section shall upon
such termination of continuous employment be forfeited and
returned to the Corporation. Unless the Committee or Board shall
have provided in the agreement referred to in paragraph (d) of
this Section for a ratable lapse of restrictions with respect to
an award of shares of Restricted Stock during the Restricted
Period, if a Participant ceases to maintain continuous employment
with the Corporation, the Bank or any of their Parents or
Subsidiaries by reason of death, total or partial disability or
normal or early retirement, such portion of such shares of
Restricted Stock awarded to such Participant which at the time of
such termination of continuous employment are subject to the
restrictions imposed by paragraph (a) of this Section as shall be
equal to the portion of the Restricted Period with respect to
such shares which shall have elapsed at the time of such termi-
nation of continuous employment shall be free of restrictions and
shall not be forfeited.
(c) Each certificate issued in respect of shares of
Restricted Stock awarded under the Plan shall be registered in
the name of the Participant and deposited by the Participant,
together with a stock power endorsed in blank, with the
Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the
shares of stock represented hereby are subject to the
terms and conditions (including forfeiture) contained
in the Lakeland First Financial Group, Inc. 1986 Stock
Option and Incentive Plan and an Agreement entered
into between the registered owner and Lakeland First
Financial Group, Inc. Copies of such Plan and
Agreement are on file in the offices of the Secretary
of Lakeland First Financial Group, Inc., 250 Route 10,
Succasunna, New Jersey 07876."
(d) At the time of an award of shares of Restricted
Stock, the Participant shall enter into an Agreement with the
Corporation in a form specified by the Committee or the Board,
agreeing to the terms and conditions of the award and such other
matters as the Committee, in its sole discretion, shall
determine.
(e) At the time of an award of shares of Restricted
Stock, the Committee, in its discretion, may determine that the
payment to the Participant of dividends declared or paid on such
shares by the Corporation or Specified Portion thereof, shall be
deferred until the earlier to occur of (i) the lapsing of the
restrictions imposed under paragraph (a) of this Section or (ii)
the forfeiture of such shares under paragraph (b) of this
Section, and shall be held by the Corporation for the account of
the Participant until such time. In the event of such deferral,
there shall be credited at the end of each year (or portion
thereof) interest on the amount of the account at the beginning
of the year at a rate per annum as the Committee, in its
discretion, may determine. Payment of deferred dividends,
together with interest accrued thereon as aforesaid, shall be
made upon the earlier to occur of the events specified in (i) and
(ii) of the immediately proceeding sentence.
(f) At the expiration of the restrictions imposed by
paragraph (a) of this Section, the Corporation shall redeliver to
the Participant (or where the relevant provision of paragraph (b)
of this Section applies in the case of a deceased Participant, to
his legal representative, beneficiary or heir) the certificate(s)
and stock power deposited with it pursuant to paragraph (c) of
this Section and the Shares represented by such certificate(s)
shall be free of the restrictions referred to in paragraph (a) of
this Section.
14. RECAPITALIZATION, MERGER, CONSOLIDATION, CHANGE IN
CONTROL AND SIMILAR TRANSACTIONS.
(a) Adjustment.
Subject to any required action by the share-
holders of the Corporation, the aggregate number of shares of
Common Stock for which stock options may be granted hereunder,
the number of shares of Common Stock covered by each outstanding
Option, and the exercise price per share of Common Stock of each
such Option, shall all be proportionately adjusted for any
increase or decrease in the number of issued and outstanding
shares of Common Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in
the number of such shares of Common Stock effected without the
receipt of consideration by the Corporation.
(b) Change in Control.
All outstanding Options shall become immediately
exercisable in the event of a change in control or imminent
change in control of the Corporation, as determined by the Com-
mittee. For purposes of this Section, "change in control" shall
mean: (i) the execution of an agreement for the sale of all, or a
material portion, of the assets of the Corporation; (ii) the
execution of an agreement for a merger or recapitalization of the
Corporation or any merger or recapitalization whereby the
Corporation is not the surviving entity; (iii) a change of
control of the Corporation, as otherwise defined or determined by
the Federal Home Loan Bank Board or regulations promulgated by
it; or (iv) the acquisition, directly or indirectly, of the
beneficial ownership (within the meaning of that term as it is
used in Section 13(d) of Securities Exchange Act of 1934 and the
rules promulgated thereunder) of twenty-five percent (25%) or
more of the outstanding voting securities of the Corporation, by
any person, trust, entity or group for the purposes of this
Section, "imminent change in control" shall refer to any offer or
announcement, oral or written, by any person or persons acting as
a group, to acquire control of the Corporation.
(c) Extraordinary Corporate Action.
Subject to any required action by the share-
holders of the Corporation, in the event of any Change in
Control, recapitalization, merger, consolidation, exchange of
shares, spinoff, reorganization, tender offer, liquidation or
other extraordinary corporate action or event, the Committee, in
its sole discretion, shall have the power, prior or subsequent to
such action or event to:
(i) appropriately adjust the number of shares of
Common Stock subject to each Option, the exercise price per share
of Common Stock, and the consideration to be given or received by
the Association upon the exercise of any outstanding Option;
(ii) cancel any or all previously granted
Options, provided that appropriate consideration is paid to the
Optionee in connection therewith; and/or
(iii) make such other adjustments in connection
with the Plan as the Committee in its sole discretion, or the
Board, acting pursuant to Section 4(a)(ii), deems necessary,
desirable, appropriate or advisable; provided, however, that no
action shall be taken by the Committee which would cause
Incentive Stock Options granted pursuant to the Plan to fail to
meet the requirements of Section 422A of the Code.
Except as expressly provided in Section 13(a) and
13(b) hereof, no Optionee shall have any rights by reason of the
occurrence of any of the events described in this Section 13.
(d) Acceleration.
The Committee shall at all times have the power
to accelerate the exercise date of Options previously granted
under the Plan. In no event, however, will such action permit
Participants to exercise Incentive Stock Options in an order
other than provided in Section 7(e).
15. TIME OF GRANTING OPTIONS. The date of grant of an
Option under the Plan shall, for all purposes, be the date on
which the Committee makes the determination of granting such
Option. Notice of the determination shall be given to each
Employee to whom an Option is so granted within a reasonable time
after the date of such grant.
16. EFFECTIVE DATE. The Plan became effective upon the
completion of the Bank's Conversion from mutual to stock form.
Options were granted prior to ratification of the Plan by the
stockholders were subject to such stockholder ratification of the
Plan.
17. APPROVAL BY SHAREHOLDERS. The Plan was approved by
stockholders of the Bank on October 25, 1987, a date within
twelve (12) months after the date it became effective.
18. MODIFICATION OF OPTIONS. At any time and from time to
time, the Board may authorize the Committee to direct the
execution of an instrument providing for the modification of any
outstanding Option, provided no such modification, extension or
renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on him by the grant of a new
Option at such time, or shall not materially decrease the
Optionee's benefits under the Option without the consent of the
holder of the Option, except as otherwise permitted under Section
18 hereof.
19. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Action by the Board.
The Board may alter, suspend or discontinue the
Plan, except that no action of the Board may increase (other than
as provided in Section 13) the maximum number of shares permitted
to be optioned under the Plan, materially increase the benefits
accruing to participants under the Plan or materially modify the
requirements for eligibility for participation in the Plan unless
such action of the Board shall be subject to approval or ratifi-
cation by the shareholders of the Corporation.
(b) Change in Applicable Law.
Notwithstanding any other provision contained in
the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part
of any previously granted Incentive and/or Non-Incentive Stock
Option unlawful or subject the Corporation to any penalty, the
Committee may restrict any such exercise without the consent of
the Optionee or other holder thereof in order to comply with any
such law, rule or regulation or to avoid any such penalty.
20. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not
be issued with respect to any Option granted under the Plan
unless the issuance and delivery of such Shares shall comply with
all relevant provisions of law, including without limitation, the
Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder any applicable state securities law and
the requirements of any stock exchange upon which the Shares may
then be listed.
The inability of the Corporation to obtain from any
regulatory body or authority deemed by the Corporation's counsel
to be necessary to the lawful issuance and sale of any Shares
hereunder shall relieve the Corporation of any liability in
respect of the non-issuance or sale of such Shares.
As a condition to the exercise of an Option, the
Corporation may require the person exercising the Option to make
such representations and warranties as may be necessary to assure
the availability of an exemption from the registration
requirements of federal or state securities law.
21. RESERVATIONS OF SHARES. During the term of the Plan,
the Corporation will reserve and keep available a number of
Shares sufficient to satisfy the requirements of the Plan.
22. UNSECURED OBLIGATION. No Participant under the Plan
shall have any interest in any fund or special asset of the
Corporation by reason of the Plan or the grant of any Incentive
or Non-Incentive Stock Option to him under the Plan. No trust
fund shall be created in connection with the Plan or any grant of
any Incentive or Non-Incentive Stock Option hereunder and there
shall be no required funding of amounts which may become payable
to any participant.
23. WITHHOLDING TAX. The Corporation shall have the right
to deduct from all amounts paid in cash with respect to the
exercise of a Stock Appreciation Right under the Plan any taxes
required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to
receive Shares pursuant to the exercise of an Option of Stock
Appreciation Right pursuant to the Plan, the Corporation shall
have the right to require the Participant or such other person to
pay the Corporation the amount of taxes which the Corporation is
required to withhold with respect to such shares, or, in lieu
thereof, to retain, or sell without notice, a number of such
Shares sufficient to cover the amount required to be withheld.
24. GOVERNING LAW. The Plan shall be governed by and
construed in accordance with the laws of the State of New Jersey,
except to the extent that Federal law shall be deemed to apply.
Exhibit A
RESOLUTIONS
Amendment
to the
Lakeland First Financial Group, Inc.
1986 Stock Option and Incentive Plan
1. Revision to the Plan by addition of a Subparagraph 8(g) to
read as follows:
8(g). Options Granted to Directors. Exercisability
following Death.
Non-Incentive Stock Options granted in accordance with the
Plan to each director who is not otherwise an Employee shall
in the event of such person's death remain exercisable for a
period of two years thereafter by the personal
representative of his estate or person or persons to whom
his rights under such Option shall have passed by will or by
laws of descent and distribution to the extent that such
Options were exercisable as of the date of death, but in no
event later than the date on which the Option would
otherwise expire.