EXHIBIT 4(A)
1ST BERGEN BANCORP
1996 AMENDED AND RESTATED
INCENTIVE STOCK OPTION PLAN
1. PURPOSE
The purpose of the 1st Bergen Bancorp (the "Company") 1996 Amended and
Restated Incentive Stock Option Plan (the "Plan") is to advance the interests of
the Company and its shareholders by providing those key employees of the Company
and its Affiliates, including South Bergen Savings Bank, upon whose judgment,
initiative and efforts the successful conduct of the business of the Company and
its Affiliates largely depends, with an additional incentive to perform in a
superior manner. A purpose of the Plan is also to attract people of experience
and ability to the service of the Company and its Affiliates.
2. DEFINITIONS
(a) "Affiliate" means (i) a member of a controlled group of corporations
of which the Company is a member, and (ii) an unincorporated trade or business
which is under common control with the Company as determined in accordance with
Section 414(c) of the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations issued thereunder. For purposes hereof, a "controlled group
of corporations" shall mean a controlled group of corporations as defined in
Section 1563(a) of the Code determined without regard to Section 1563(a)(4) and
(e)(3)(C).
(b) "Award" means a grant of Non-statutory Stock Options or Incentive
Stock Options under the provisions of this Plan.
(c) "Board of Directors" or "Board" means the Board of
Directors of the Company.
(d) "Change in Control" means
(1) a reorganization, merger, consolidation or sale of all or
substantially all of the assets of the Company, or a similar
transaction in which the Company is not the resulting entity;
or
(2) individuals who constitute the Incumbent Board (as
herein defined) of the Company cease for any
reason to constitute a majority thereof;
(3) the occurrence of a change in control within the
meaning of 12 C.F.R. ss. 574.4; or
(4) (a) an event of a nature that would be required to be reported
in response to Item I of the Current Report on Form 8-K, as in
effect on the date
hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), or results in a
change in control of the Company within the meaning of the
Home Owners' Loan Act of 1933 and the Rules and Regulations
promulgated by the Office of Thrift Supervision or its
predecessor agency, as in effect on the date hereof; or
(5) Without limitation, a change in control shall be deemed to
have occurred at such time as (i) any "person" (as the term is
used in Section 13(d) and 14(d) of the Exchange Act) other
than the Company and excluding the trustee of any employee
benefit plan sponsored by the Company or the Bank or any such
plan itself, is or becomes a "beneficial owner" (as defined in
Rule 13-d under the Exchange Act) directly or indirectly, of
securities of the Company representing 25% or more of the
Company's outstanding securities ordinarily having the right
to vote at the election of directors; or
(6) A proxy statement soliciting proxies from stockholders of the
Company is disseminated by someone other than the current
management of the Company, seeking stockholder approval of a
plan of reorganization, merger or consolidation of the Company
or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of
securities then subject to the plan or transaction are
exchanged or converted into cash or property or securities not
issued by the Company;
(7) A tender offer is made for 25% or more of the voting
securities of the Company and the shareholders owning
beneficially or of record 25% or more of the outstanding
securities of the Company have tendered or offered to sell
their shares pursuant to such tender offer and such tendered
shares have been accepted by the tender offeror.
For these purposes, "Incumbent Board" means the Board of
Directors on the effective date of this Plan, provided that
any person becoming a director subsequent to the date hereof
whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by stockholders was
approved by the same nominating committee serving under an
Incumbent Board, shall be considered as though he were a
member of the Incumbent Board.
(e) "Committee" means a committee consisting of those members of the
Compensation/Benefits Committee of the Company who are non-employee members of
the Board of Directors, all of whom are "disinterested persons" as such term is
defined under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, as
promulgated by the Securities and Exchange Commission.
(f) "Common Stock" means the Common Stock of the Company,
no par value per share.
(g) "Date of Grant" means the date an Award granted by the Committee is
effective pursuant to the terms hereof.
(h) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform the work
customarily assigned to him. Additionally, a medical doctor selected or approved
by the Board of Directors must advise the Committee that it is either not
possible to determine when such Disability will terminate or that it appears
probable that such Disability will be permanent during the remainder of said
participant's lifetime.
(i) "Fair Market Value" means, with respect to shares of Common Stock, the
fair market value as determined by the Committee in good faith and in a manner
established by the Committee from time to time; provided, however, that if the
shares of Common Stock are last sale reported over the counter securities, then
the "fair market value" of such shares on any date shall be the average closing
price for such securities for the five (5) trading days immediately preceding
the date in question, as reported on the Nasdaq National Market System.
(j) "Incentive Stock Option" means an Option granted by the Committee to a
Participant, which Option is designated by the Committee as an Incentive Stock
Option pursuant to Section 8 and is intended to qualify as an Incentive Stock
Option Plan under Section 422 of the Code.
(k) "Non-statutory Stock Option" means an Option granted by the Committee
to a Participant pursuant to Section 7, which is not designated by the Committee
as an Incentive Stock Option or which is redesignated by the Committee under
Section 8.1(6) as a Non-statutory Stock Option.
(l) "Option" means Award granted under Section 7 or 8.
(m) "Participant" means an employee of the Company or its affiliates
chosen by the Committee to participate in the Plan.
(n) "Plan Year(s)" means a calendar year or years commencing on or after
January 1, 1996.
(o) "Retirement" means retirement at the normal or early retirement date
as set forth in any tax-qualified or non-tax
qualified retirement plan of the Company or as determined under any retirement
policy of the Company.
(p) "Section 16" means Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder.
(q) "Termination for Cause" means termination because of Participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule regulation (other than traffic violations or similar
offenses) or final cease and desist order.
3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to select participants, to
determine the amount of Awards, to establish the terms and conditions of such
Awards, to establish such rules and regulations as it deems necessary for the
proper administration of the Plan, subject to Subsection 8, to impose a vesting
schedule and to make whatever determinations and interpretations in connection
with the Plan it sees as necessary or advisable. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
Participants in the plan and on their legal representatives and beneficiaries.
4. TYPES OF AWARDS
Awards under the Plan may be granted in any one or a combination of
Non-statutory Stock Options and/or Incentive Stock Options.
5. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 14, the maximum number of
shares reserved hereby for purchase pursuant to the exercise of options granted
under the Plan shall not exceed 222,180 shares of Common Stock of the Company.
These shares of Common Stock may be either authorized but unissued shares or
shares previously issued and reacquired by the Company. To the extent that
options granted under the Plan terminate, expire or are canceled without having
been exercised, new awards may be made with respect to these shares.
6. ELIGIBILITY
Officers and other employees of the Company or its affiliates shall be
eligible to receive Awards and Directors who are not employees or officers of
the Company or its affiliates shall not be eligible to receive Awards under the
Plan.
7. NON-STATUTORY STOCK OPTIONS
7.1 Grant of Non-statutory Stock Options.
The Committee may, from time to time, grant Non-statutory Stock Options to
eligible employees and upon such terms and conditions as the Committee may
determine, and may grant Non-statutory Stock Options in exchange for and upon
surrender of previously granted Awards under this Plan. Non-statutory Stock
Options granted under this Plan are subject to the following terms and
conditions:
(a) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Non-statutory Stock Option shall be determined by the
Committee on the date the option is granted. Such purchase price shall not be
less than one hundred percent (100%) of the Fair Market Value of the Company's
Common Stock on the Date of Grant. Shares may be purchased only upon full
payment of the purchase price. Payment of the purchase price may be made, in
whole or in part, through the surrender of shares of the Common Stock of the
Company at the Fair Market Value of such shares on the date of surrender.
(b) Terms of Options. The term during which each Non-statutory Stock
Option may be exercised shall be determined by the Committee, but in no event
shall a Non-statutory Stock Option be exercisable in whole or in part more than
ten (10) years from the Date of Grant.
(c) Termination of Employment. Except as provided in Section 7.1(d)
hereof, unless otherwise determined by the Committee, upon the termination of a
Participant's service for any reason other than Disability, death or Termination
for Cause, the Participant's Non-statutory Stock Options shall be exercisable
only as to those shares which were immediately exercisable by the participant at
the date of termination and only for a period of three months following
termination. Notwithstanding any provision set forth herein nor contained in any
Agreement relating to the award of an Option, in the event of Termination for
Cause, all rights under the Participant's Non- statutory Stock Options shall
expire upon termination. In the event of death or termination of service as a
result of Disability of any Participant, all Non-statutory Stock Options held by
the Participant, whether or not exercisable at such time, shall be exercisable
by the Participant or his legal representatives or beneficiaries of the
Participant for one year or such longer period as determined by the Committee
following the date of the Participant's death or termination of employment due
to Disability, provided that in no event shall the period extend beyond the
expiration of the Non-statutory Stock Option term.
(d) Exception for Retirement. Notwithstanding the general rule contained
in Section 7.1(c) above, all options which have become fully vested under the
terms of Section 9 hereof held by a Recipient whose employment with the Company
or an Affiliate
terminates due to Retirement may be exercised for the lesser of (i) the
remaining term of the option, or (ii) twelve (12) months. Any Incentive Stock
Option exercised more than three (3) months after a Participant's retirement
will be treated as a Non- statutory Stock Option.
8. INCENTIVE STOCK OPTIONS
8.1 Grant of Incentive Stock Options.
The Committee may, from time to time, grant Incentive Stock Options to
eligible employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Incentive Stock Option shall be not less than one hundred
percent (100%) of the Fair Market Value of the Company's Common Stock on the
Date of Grant. However, if a Participant owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of Common Stock
of the Company, the purchase price per share of Common Stock deliverable upon
the exercise of each Incentive Stock Option shall not be less than one hundred
ten percent (110%) of the Fair Market Value of the Company's Common Stock on the
Date of Grant. Shares may be purchased only upon payment of the full purchase
price. Payment of the purchase price may be made, in whole or in part, through
the surrender of shares of the Common Stock of the Company at the Fair Market
Value of such shares on the date of surrender.
(b) Amounts of Options. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Committee. In the case of
an option intended to qualify as an Incentive Stock Option, the aggregate Fair
Market Value (determined as of the time the option is granted) of the Common
Stock with respect to which Incentive Stock Options granted are exercisable for
the first time by the Participant during any calendar year shall not exceed
$100,000. The provisions of this Section 8.1(b) shall be construed and applied
in accordance with Section 422(d) of the Code and the regulations, if any,
promulgated thereunder. To the extent an award is in excess of such limit, it
shall be deemed a Non-statutory Stock Option. The Committee shall have
discretion to redesignate options granted as Incentive Stock Options as
Non-statutory options.
(c) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than ten (10)
years from the Date of Grant. If at the time an Incentive Stock Option is
granted to an employee, the employee owns Common Stock representing more than
ten percent (10%) of the total combined voting power of the Company (or, under
Section 422(d) of the
Code, is deemed to own Common Stock representing more than ten percent (10%) of
the total combined voting power of all such classes of Common Stock, by reason
of the ownership of such classes of Common Stock, directly or indirectly, by or
for any brother, sister, spouse, ancestor or lineal descendent of such employee,
or by or for any corporation, partnership, estate or trust of which such
employee is a shareholder, partner or beneficiary), the Incentive Stock Option
granted to such employee shall not be exercisable after the expiration of five
years from the Date of Grant. No Incentive Stock Option granted under this Plan
is transferable except by will or the laws of descent and distribution and is
exercisable in his lifetime only by the Participant to whom it is granted.
(d) Termination of Employment. Except as provided in Section 8.1(e)
hereof, upon the termination of a Participant's service for any reason other
than Disability, death or Termination for Cause, the Participant's Incentive
Stock Options shall be exercisable by the Participant at the date of termination
and only for a period of three months following termination. Notwithstanding any
provisions set forth herein nor contained in any Agreement relating to an award
of an Option, in the event of Termination for Cause all rights under the
Participant's Incentive Stock Options shall expire immediately upon termination.
Unless otherwise determined by the Committee, in the event of death or
termination of service as a result of Disability of any Participant, all
Incentive Stock Options held by such Participant, whether or not exercisable at
such time, shall be exercisable by the Participant or the participant's legal
representatives or beneficiaries of the Participant for one year following the
date of the participant's death or termination of employment as a result of
Disability. In no event shall the exercise period extend beyond the expiration
of the Incentive Stock Option term.
(e) Exception for Retirement. Notwithstanding the general rule contained
in Section 8.1(d) above, all options which have become fully vested under the
terms of Section 9 hereof held by a Participant whose employment with the
Company or an Affiliate terminates due to Retirement may be exercised for the
lesser of (i) the remaining term of the option or (ii) twelve (12) months. Any
Incentive Stock Option exercised more than three (3) months after a
Participant's Retirement will be treated as a Non-statutory Stock Option.
(f) Compliance with Code. The options granted under this Section 8 of the
Plan are intended to qualify as incentive stock options within the meaning of
Section 422 of the Code, but the Company makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code.
9. VESTING REQUIREMENTS
Notwithstanding anything contained in Section 3 hereof, in compliance with
the regulations of the Office of Thrift Supervision ("OTS"), all options granted
hereunder, whether under Section 7 or Section 8, shall be subject to the
following minimum vesting schedule:
All options shall be subject to a five-year vesting schedule, vesting
twenty percent (20%) a year, with vesting commencing on the first anniversary of
the date of grant. By the fifth anniversary of the date of grant, all options
shall have vested; provided, however, that in the event of a Participant's
Disability, death or Retirement, or in the event of the occurrence of a Change
In Control, all options then held by such Participant or his estate shall become
immediately exercisable for the terms set forth in Sections 7 and 8 hereof.
The Committee shall have the authority in its discretion, to impose
greater vesting requirements than those set forth above.
10. SURRENDER OPTION
In the event of a Participant's termination of employment as a result of
death, disability or Retirement, the Participant (or the Participant's personal
representative(s), heir(s), or devisee(s)) may, in a form acceptable to the
Committee, make application to surrender all or part of options held by such
Participant in exchange for a cash payment from the Company of an amount equal
to the difference between the Fair Market Value of the Common Stock on the date
of termination of employment and the exercise price per share of the option on
the Date of Grant. Although it is anticipated that the Committee will not
unreasonably object to such an application, whether the Committee accepts such
application or determines to make payment, in whole or part is within its
absolute and sole discretion, it being expressly understood that the Committee
is under no obligation to any Participant whatsoever to make such payments. In
the event that the Committee accepts such application and the Company determines
to make payment, such payment shall be in lieu of the exercise of the underlying
option and such option shall be canceled.
11. RIGHTS OF A SHAREHOLDER: NONTRANSFERABILITY
No Participant shall have any rights as a shareholder with respect to any
shares covered by a Non-statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate a
Participant's services as an officer or other employee at any time.
No Award under the Plan shall be transferable by the Participant other
than by will or the laws of descent and distribution and may only be exercised
during his lifetime by the Participant or by a guardian or legal representative.
12. AGREEMENT WITH GRANTEES
Each Award of Options will be evidenced by a written agreement, executed
by the Participant and the Company which describes the conditions for receiving
the Awards including the date of Award, the exercise price, applicable vesting
and exercise periods, and any other terms and conditions as may be required by
the Board of Directors or applicable securities law.
13. DILUTION AND OTHER ADJUSTMENTS
a) In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or split, recapitalization,
combination or exchange of shares, or other similar corporate change, or other
increase or decrease in such shares without receipt or payment of consideration
by the Company, the Committee will make such adjustments to previously granted
Awards, to prevent dilution or enlargement of the rights of the Participant,
including any or all of the following:
(a) adjustments in the aggregate number or kind of shares
of Common Stock which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan; and/or
(c) adjustments in the purchase price of outstanding Incentive and/or
Non-statutory Stock Options, or any limited rights attached to such
options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award.
b) In the event of a consolidation, reorganization, merger or sale of all
or substantially all of the assets of the Company 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 Company,
the Committee and the Board of Directors will take 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, or (ii) in the event of a merger under the terms of
which holders of the Common Stock of the Company 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.
14. TAX WITHHOLDING
The Participant shall pay to the Company, 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 Participant subject to Section 16, 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 Participants subject to Section 16, 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 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 Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Participant.
15. AMENDMENT OF THE PLAN
The Committee may at any time, and from time to time, modify or amend the
Plan in any respect; provided that shareholder approval shall be required for
any such modification or amendment which:
(a) materially increases the maximum number of shares for which options
may be granted under the Plan (subject, however, to the provisions
of Section 13 hereof);
(b) reduces the exercise price at which Awards may be
granted (subject, however, to the provisions of Section
13 hereof);
(c) extends the period during which options may be granted
or exercised beyond the times originally prescribed; or
(d) changes the persons eligible to participate in the
Plan.
Failure to ratify or approve amendments or modifications to subsections
(a) through (d) of this Section by shareholders shall be effective only as to
the specific amendment or modification requiring such ratification. Other
provisions, sections, and subsections of this Plan will remain in full force and
effect.
No such termination, modification or amendment may affect the rights of a
Participant under an outstanding Award.
16. APPROVAL AND EFFECTIVE DATE OF PLAN
The Plan will be effective as of April 1, 1997.
17. TERMINATION OF THE PLAN
The right to grant Awards under the Plan will terminate ten (10) years
after the Effective Date of the Plan. The Board of Directors has the right to
suspend or terminate the Plan at any time, provided that no such action will,
without the consent of a Participant, adversely affect his rights under a
previously granted Award.
18. APPLICABLE LAW
In the absence of controlling Federal law, the Plan will be administered
in accordance with the laws of the State of New Jersey.
19. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provisions of the Plan or action by the Committee fail to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
Notwithstanding any other provision of the Plan, in order to qualify for
the exemption provided by Rule 16b-3 of the Exchange Act, any Common Stock
acquired by a Participant subject to Section 16 upon exercise of an Option may
not be sold for six (6) months after the date of grant of the Option.