EXHIBIT 4(A)
CARNEGIE BANCORP
1995 DIRECTORS STOCK OPTION PLAN
SECTION 1. PURPOSE
The Carnegie Bancorp 1995 Director Stock Option Plan (the "Plan") is hereby
established to foster and promote the long-term success of Carnegie Bancorp (the
"Corporation") and its shareholders by providing directors with an equity
interest in the Corporation. The Plan will assist the Corporation in attracting
and retaining the highest quality of experienced persons as directors and in
aligning the interests of such directors more closely with the interests of the
Corporation's shareholders.
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.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
"Committee" means the Stock Option Committee of the Board (or any successor
committee of the Board responsible for administering the Plan), which shall
consist of two or more directors to administer the Plan and perform the
functions set forth herein. The Committee may consist of the entire Board.
"Common Stock" or "Stock" means the common stock, no par value, of the
Corporation.
"Corporation" means Carnegie Bancorp and any present or future subsidiary
corporations of Carnegie Bancorp (as defined in Section 424 of the Code) or any
successor to such corporations.
"Disability" shall mean permanent and total disability which if the
Director were an employee of the Corporation would be treated as a total
disability under the term of the Corporation's
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long-term disability plan for employees as in effect from time to time;
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 Committee in good faith and in a manner
established by the Committee from time to time; provided, however, so long as
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 closing
price reported in the consolidated reporting system, on the business day
immediately preceding the date in question, as reported on the NASDAQ system.
"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.
"Participant" means a member of the Board of Directors of the Corporation
or its subsidiaries selected by the Committee to receive an Option under the
Plan.
"Plan" means the Carnegie Bancorp 1995 Director Stock Option Plan.
"Retirement" means termination of employment in accordance with the
retirement provisions of any retirement or pension plan maintained by the
Corporation or any of its subsidiaries.
SECTION 3. ADMINISTRATION
(a) The Plan shall be administered by the Committee. Among other things,
the Committee 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, and to determine the terms and conditions of any Option
granted hereunder, and the exercise price thereof.
(b) Subject to the other provisions of the Plan, the Committee shall have
authority to adopt, amend, alter and repeal such administrative rules,
guidelines and practices governing the
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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 Committee 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 Committee's decision
and interpretations shall be final and binding. Any action of the Committee 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 Committee 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 Corporation shall be eligible to
participate in the Plan. The Participants under the Plan shall be selected from
time to time by the Committee, in its sole discretion, from among those
eligible, and the Committee 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.
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 154,000, subject to the
adjustments as provided in Section 5 and Section 7, 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 Committee determines, in its sole discretion,
that any stock dividend, stock split, reverse stock split or combination,
extraordinary cash dividend, creation of a
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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 Committee 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 remains exercisable, and if considered
appropriate, the Committee 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. No fractional Shares shall be issued on account of
any such adjustment.
(c) Any adjustments under this Section will be made by the Committee, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive.
SECTION 6. OPTIONS
(a) Subject to Federal and state statutes then applicable and the
provisions of the Plan, the Committee may grant Incentive Stock Options to
directors who are also officers of the Corporation and Non-Qualified Stock
Options to all directors and determine the number of shares to be covered by
each Option, the Option price therefor, the term of the Option, and the other
conditions and limitations applicable to the exercise of the Option. The terms
and conditions of Incentive Stock Options shall be subject to and comply with
Section 422 of the Code. Anything in the Plan to the contrary notwithstanding,
no term of the Plan relating to Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted to the
Committee under the Plan be so exercised, so as to disqualify the Plan, or
without the consent of the Participant, any Incentive Stock Option granted under
the Plan pursuant to Section 422 of the Code.
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(b) The Option price per share of Common Stock purchasable under an Option
shall not be less than 100% of the Fair Market Value of the Common Stock on the
date of grant. If the Participant owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Corporation or any
subsidiary or parent corporation of the Corporation and an Incentive Stock
Option is granted to such Participant, the Option price shall be not less than
110% of Fair Market Value of the Common Stock on the date of grant.
(c) No Option shall be exercisable more than ten (10) years after the date
the Option is granted. If a Participant owns or is deemed to own (by reason of
the attribution rules of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Corporation or any
subsidiary or parent corporation of the Corporation and an Incentive Stock
Option is granted to such Participant, such Option shall not be exercisable
after the expiration of five (5) years from the date of grant.
(d) No shares of Common Stock shall be delivered pursuant to any exercise
of an Option until payment in full of the Option price therefor is received by
the Corporation. Such payment may be made in whole or in part in cash or by
certified or bank check or, to the extent permitted by the Committee at or after
the grant of the Option, by delivery of shares of Common Stock owned by the
Participant valued at their Fair Market Value on the date of delivery, or such
other lawful consideration as the Committee may determine.
(e) Unless otherwise determined by the Committee at the time of grant of an
Option, with a regard to any Option granted to a director who is also an officer
of the Corporation, in the event such Participant's employment with the
Corporation terminates by reason of death or Disability, any Option granted to
such Participant which is then outstanding may be exercised at any time prior to
the expiration of the term of such Option or within twelve (12) months following
the Participant's termination of employment by reason of death or Disability,
whichever period is shorter.
(f) Unless otherwise determined by the Committee at the time of grant of an
Option, with regard to any Option granted to a director who is also an officer
of the Corporation, in the event the Participant's employment with the
Corporation terminates for any reason other than death or Disability, any Option
granted to such Participant which is then outstanding may be exercised until the
expiration of the term of such Option, or
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in the case of the Participant's termination of employment for reasons other
than death, Disability or Retirement, within one (1) month of such termination,
or in the case of the Participant's Retirement, within three (3) months of such
Retirement, whichever period is shorter.
(g) In the event the membership on the Board of a director who is not also
an officer of the Corporation ceases all Options then held and exercisable by
such director may be exercised at any time prior to the expiration of the stated
term of such Option.
(h) No Option shall be transferable by the Participant otherwise than by
will or by the laws of descent and distribution, and all Options shall be
exercisable during the Participant's lifetime only by the Participant or the
Participant's appointed guardian or legal representative. A Participant shall
notify the Committee 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 Corporation in order to enable the Corporation to secure the related income
tax deduction to which it will be entitled in such event under the Code.
(i) The Committee may in its sole discretion, (i) accelerate the date or
dates on which all or any particular Option or Options granted under the Plan
may be exercised or (ii) 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 the Plan to fail to
comply with Section 422 of the Code.
(j) The aggregate Fair Market Value of shares of Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by a
Participant who is an employee of the Corporation during one calendar year
(under all plans of the Corporation and its parent and subsidiary corporations)
shall not exceed the sum of One Hundred Thousand Dollars ($100,000.00). Such
aggregate Fair Market Value shall be determined as of the date such Option is
granted.
SECTION 7. 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
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not inconsistent with the provisions of the Plan as the Committee 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 Committee
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 Committee 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 Corporation 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 Corporation, the Committee may, in its discretion, 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 Corporation 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 Corporation, or make provision
satisfactory to the Committee 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 Committee's sole discretion, a
Participant (other than a Section 16 Participant, who shall be subject to the
following sentence) may elect to have such tax obligations paid,
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in whole or in part, in shares of Common Stock, including shares retained from
the Option creating the tax obligation. With respect to Section 16 Participants,
upon the issuance of shares of Common Stock in respect of an Option, such number
of shares issuable shall be reduced by the number of shares necessary to satisfy
such Section 16 Participant'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. The Corporation 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 Corporation from a subsidiary
or from the Corporation 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 Corporation, 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 Committee otherwise so provides in writing.
(f) The Committee 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, changing
the date of exercise or realization, and converting an Incentive Stock Option to
a Non-Qualified Stock Option, provided that the Participant's consent to each
action shall be required unless the Committee determines that the action, taking
into account any related action, would not materially and adversely affect the
Participant.
SECTION 8. 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 Corporation's Board of Directors. The
Corporation 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.
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(b) Nothing contained in the Plan shall prevent the Corporation 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 of Directors or the Committee 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 of Directors or the Committee be
liable for any agreement issued pursuant to this Plan or any grants under it.
Each member of the Board of Directors and the Committee shall be indemnified by
the Corporation against any losses incurred in such administration of the Plan,
unless his action constitutes serious and willful misconduct.
(f) Subject to the approval of the shareholders of the Corporation, the
Plan shall be effective on June 25, 1995. Prior to such approval, Options may be
granted under the Plan expressly subject to shareholder approval.
(g) The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that no amendment shall be granted without
shareholder approval if such approval is necessary to comply with any applicable
tax laws or regulatory requirement.
(h) Options may not be granted under the Plan after June 24, 2005, but then
outstanding Options may extend beyond such date.
(i) 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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