EXHIBIT 4(B)
CARNEGIE BANCORP
1995 EMPLOYEE STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Carnegie Bancorp 1995 Employee Stock Option Plan is to
enable Carnegie Bancorp (the "Corporation") to attract, retain and motivate its
key employees and to enable key employees to participate in the long-term growth
of the Corporation by providing for or increasing the proprietary interests of
such persons in the Corporation thereby assisting the Corporation to achieve its
long-range goals.
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, each of whom shall be a "disinterested person"
within the meaning of Rule 16b-3(c) under the Act, to administer the Plan and
perform the functions set forth herein.
"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" means total disability as determined in accordance with the
terms of the Corporation's long-term disability plan (or, if the Corporation has
no such plan, its retirement plan) as in effect from time to time; provided,
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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 person selected by the Committee to receive an Option
under the Plan.
"Plan" means the Carnegie Bancorp 1995 Employee 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 operation of the Plan as it shall from
time to time consider advisable, to interpret the provisions of the Plan and any
Option
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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
Officers and other key employees of the Corporation (excluding officers and
employees who are also directors) who are from time to time responsible for the
management, growth and protection of the business 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 11,530, 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
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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
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 or with Rule 16b-3 of 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 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 and
Non-Qualified Stock Options 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 with respect to Incentive Stock Options, and shall be the price
determined by the Committee, which may be less than, equal to or greater than
the Fair Market Value of the Common Stock on the date of grant but in no event
less than 85% of the Fair Market Value of the Common Stock, with respect to
Non-Qualified Stock Options. 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, in the event a 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, 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
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which is then outstanding may be exercised until to the expiration of the term
of such Option, or 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) 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.
(h) 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 or with Rule 16b-3 of the Act.
(i) 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) Notwithstanding any other provision of the Plan, in order to qualify
for the exemption provided by Rule 16b-3 of the Act, any Common Stock acquired
by a Participant subject to Section 16 of the Act (a "Section 16 Participant")
upon exercise of an Option may not be sold for six (6) months after the date of
grant of the Option. The Committee shall have no authority to
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take any action if the authority to take such action, or the taking of such
action, would disqualify the Plan from the exemption provided by Rule 16b-3 of
the Act.
(b) 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 Committee considers necessary or advisable to achieve the purposes of the
Plan or comply with applicable tax and regulatory laws and accounting
principles.
(c) 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.
(d) 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, arrange
for any one or more of the following actions to be taken, 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.
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(e) The Committee may grant Options under the Plan in substitution for
options held by employees of another corporation who become employees of the
Corporation, or a subsidiary of the Corporation, as the result of a merger or
consolidation of the employing corporation with the Corporation or a subsidiary
of the Corporation, or as a result of the acquisition by the Corporation, or one
of its subsidiaries, of property or stock of the employing corporation. The
Corporation may direct that substitute options be granted on such terms and
conditions as the Committee considers appropriate in the circumstances.
(f) 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, 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.
(g) 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.
For purposes of the Plan, employees of a subsidiary of the Corporation
shall be deemed to have terminated their employment on the date on which such
subsidiary ceases to be a subsidiary of the Corporation.
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(h) 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. 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.
(b) Nothing contained in the Plan shall prevent the Corporation from
adopting other or additional compensation arrangements for its employees.
(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
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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, including any requirements for exemptive
relief under Section 16(b) of the Act.
(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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