CENTER BANCORP, INC.
1999 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of Plan.
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The name of this plan is the Center Bancorp, Inc. 1999 Stock Incentive
Plan (the "Plan"). The purpose of the Plan is to enable Center Bancorp, Inc.
(the "Company") and other members of the Group (as defined below) to retain and
attract executives and other key employees who contribute to the success of the
Company and the Group by their ability and industry, and to enable such
individuals to participate in the long-term success and growth of the Company by
giving them a proprietary interest in the Company.
SECTION 2. Definitions.
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As used in this Plan the following terms have the meanings stated. The
singular includes the plural, and the masculine gender includes the feminine and
neuter genders, and vice versa, as the context requires. The word "person"
includes any natural person and any corporation, firm, partnership or other form
of association.
(a) "Award Date" means the date on which an Incentive is awarded as
specified by the Committee.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
(d) "Committee" means a committee of two or more members of the Board,
to which the Board has delegated the authority to administer the Plan under
Section 3.
(e) "Common Stock" means the common stock, no par value, of the
Company.
(f) "Company" means Center Bancorp, Inc. and any successor thereto.
(g) "Disability" means a permanent and total disability as defined in
Section 22 of the Code.
(h) "Fair Market Value" has the meaning stated in Section 8.12.
(i) "Group" means the Company, each parent corporation to the Company,
and each of the Company's subsidiaries, as these terms are defined in Sections
424(e) and 424(f) of the Code.
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(j) "Incentive Stock Option" means a stock option intended to qualify
as an incentive stock option under Section 422 of the Code.
(k) "Incentives" mean the economic incentives listed in Section 5.04
that may be awarded under this Plan.
(l) "Non-Employee Director" shall have the meaning set forth in Rule
16b-3(b)(3) as promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, or any successor definition adopted
by the Commission.
(m) "Non-Statutory Stock Option" means any Stock Option other than an
Incentive Stock Option.
(n) "Outside Director" means a director who (a) is not a current
employee of the Company or any member of an affiliated group which includes the
Company; (b) is not a former employee of the Company who receives compensation
for prior services (other than benefits under a tax-qualified retirement plan)
during the taxable year; (c) has not been an officer of the Company; (d) does
not receive remuneration from the Company, either directly or indirectly, in any
capacity other than as a director, except as otherwise permitted under Code
Section 162(m) and regulations thereunder. For this purpose remuneration
includes any payment in exchange for goods or services. This definition shall be
further governed by the provisions of Code Section 162(m) and regulations
promulgated thereunder.
(o) "Participant" means an employee or director of any member of the
Group to whom an Incentive has been awarded.
(p) "Plan" means this Center Bancorp, Inc. 1999 Stock Incentive Plan,
as the same may be amended from time to time.
(q) "Qualified Person" means a Participant's legal guardian or legal
representative or a deceased Participant's heir or legatee who has a legal right
to or in respect of an Incentive of that Participant.
(r) "Restricted Stock Award" means an award of Shares by the Company to
the Participant at a price that may be below Fair Market Value, or without
payment to the Company, but which are subject to restrictions on sale and other
transfer and are subject to forfeiture.
(s) "Share" means a share of Common Stock.
(t) "Stock Option" means an Incentive Stock Option or a Non-Statutory
Stock Option.
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SECTION 3. Administration.
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3.01. The Committee. The Plan shall be administered by a Committee
consisting of not less than two persons appointed by the Board from among its
members. A person may serve on the Committee only if he or she is a Non-Employee
Director and an Outside Director. Committee members shall serve at the pleasure
of the Board.
The Committee shall have the power and authority to grant to eligible
employees, pursuant to the terms of the Plan, Stock Options and Restricted Stock
Awards.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of the
Group to whom Stock Options and/or Restricted Stock
Awards may from time to time be granted hereunder;
(ii) to determine whether and to what extent Incentive
Stock Options, Non-Statutory Stock Options and
Restricted Stock Awards, or a combination of the
foregoing, are to be granted hereunder; and
(iii) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award
granted hereunder (including, but not limited to, any
restriction on any Stock Option or Restricted Stock
Award and/or the Shares relating thereto).
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and
Participants.
SECTION 4. Eligibility.
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4.01. Designation of Employees. All employees of any member of the
Group, including officers and directors who are employees, are eligible to
receive Incentives under the Plan. Directors and officers who are not employees
of any member of the Group may not receive Incentives under the Plan.
4.02. Participants. The Committee may consider any factor in selecting
Participants and in determining the type and amount of their Incentives,
including, but not limited to, (a) the current or anticipated financial
condition of the Group, (b) the contributions by the Participant to the Group
and (c) the other compensation provided to the Participant. The Committee's
award of an Incentive to a person in any year shall not require the Committee to
award any Incentive to that person in any other year.
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SECTION 5. Shares Subject to the Plan.
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5.01. Number of Shares. Subject to Section 8.07, the aggregate number
of Shares which may be issued under the Plan shall not exceed 179,000 Shares.
5.02. Expiration and Cancellation. If an Incentive granted under the
Plan expires, is terminated or is otherwise canceled before exercise, that
Incentive and the related shares of Common Stock shall not apply toward the
limits provided in Section 5.01. If Shares issued or awarded under this Plan are
forfeited, canceled, terminated or reacquired by the Company, those forfeited,
canceled, terminated or reacquired Shares shall not apply toward the limits
provided in Section 5.01 and shall be available again for the grant of
Incentives.
5.03. Maintenance of Stock. Shares issued under the Plan shall be
authorized and unissued shares or shares of treasury stock. The Company shall
always maintain the number of such Shares at least equal to a number of Shares
for which Incentives have been granted and remain outstanding and unexercised.
5.04. Types of Incentive. Incentives may be granted in any one or any
combination of the following forms: (a) Non-Statutory Stock Options (Section 6);
(b) Incentive Stock Options (Section 6); and (c) Restricted Stock Awards
(Section 7).
SECTION 6. Stock Options.
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Each Stock Option granted under this Plan shall be subject to the
following terms and conditions:
6.01. Price. The option price per share shall be determined by the
Committee; provided, however, that the option price shall not be less than the
Fair Market Value on the Award Date of the Common Stock subject to the Stock
Option.
6.02. Number. The number of Shares subject to the Stock Option shall be
determined by the Committee.
6.03. Duration and time for exercise. The Award Date of a Stock Option
shall be the date specified by the Committee, provided that such date shall not
be before the date on which the Stock Option is actually awarded. The term of
each Stock Option shall be determined by the Committee but shall not exceed ten
(10) years from the date of grant. Each Stock Option shall become exercisable at
such time or times and in such amount or amounts during its term as shall be
determined by the Committee at the time of grant. The Committee may accelerate
the exercisability of any Stock Option. Unless otherwise specified by the
Committee, once a Stock Option becomes exercisable, whether in full or in part,
it shall remain so exercisable until its expiration, forfeiture, termination or
cancellation.
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6.04. Exercise. A Stock Option may be exercised, in whole or in part,
by giving written notice to the Company (Attention: Chief Financial Officer) at
its principal office or to such transfer agent as the Company may designate. The
notice shall identify the Incentive being exercised and shall contain such other
information and terms as the Committee may require. The notice shall be
accompanied by full payment of the purchase price for the Shares (a) in United
States dollars in cash or by check, (b) at the discretion of the Committee, by
delivery of previously acquired Shares having a Fair Market Value equal on the
date of exercise to the cash exercise price of the Stock Option, or (c) at the
discretion of the Committee, by a combination of (a) and (b) above. As soon as
practicable after receipt of the written notice, the Company shall deliver to
the person exercising the Stock Option one or more certificates for the Shares.
6.05. Incentive Stock Options. Notwithstanding anything in this Plan to
the contrary, the following additional provisions shall apply to the grant of
Incentive Stock Options:
(a) The aggregate Fair Market Value on the Award Date of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by any Participant during any calendar year (under all plans of the Group) shall
not exceed $100,000;
(b) All Incentive Stock Options must be granted within ten (10) years
from the date on which the Plan was adopted by the Board;
(c) Unless exercised sooner, each Incentive Stock Option shall expire
no later than ten (10) years after the Award Date for that Incentive Stock
Option;
(d) No Incentive Stock Option shall be granted to any Participant who,
at the time that option is granted, owns (within the meaning of Section 422 of
the Code) stock having more than 10% of the total combined voting power of all
classes of stock of the Company or any member of the Group, unless the option
price is equal to at least 110% of the Fair Market Value of the Shares subject
to the option on the Award Date and the option is not exercisable later than
five years from the Award Date;
(e) Each Incentive Stock Option agreement referred to in Section 8.05
shall contain or be deemed to contain all provisions required in order to
qualify those Stock Options as incentive stock options under Section 422 of the
Code, and the provisions of this Plan shall be interpreted and construed to
effect such treatment under that Section.
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SECTION 7. Restricted Stock Awards.
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Restricted Stock Awards shall be subject to the following terms and
conditions:
7.01. Number of Shares. The number of Shares to be issued by the
Company to a Participant under a Restricted Stock Award shall be determined by
the Committee.
7.02. Sale Price. The Committee shall determine the prices, if any, at
which Shares issued under a Restricted Stock Award shall be sold to a
Participant, which prices may vary from time to time and among Participants and
which may be below the Fair Market Value of Shares at the date of sale. The
Shares of restricted stock awarded at a price must be paid for (a) in United
States Dollars in cash or by check, (b) at the discretion of the Committee, by
delivery of Shares having a Fair Market Value equal on the purchase date to the
purchase price or (c) at the discretion of the Committee, by a combination of
(a) and (b) above.
7.03. Restrictions. All Shares issued under a Restricted Stock Award
shall be subject to such restrictions as the Committee may determine, which may
include, but not be limited to, any or all of the following:
(a) a prohibition against the sale, transfer, pledge, encumbrance or
other disposition of the Shares. Such a prohibition shall lapse at the time or
times that the Committee may determine (whether, for example, in annual or more
frequent installments, at the time of the death, disability or retirement of the
Participant, or otherwise); and
(b) a requirement that the Participant forfeit all or any part of those
Shares if the Participant's employment is terminated during any period in which
those Shares are subject to restrictions or if the Participant fails to satisfy
performance criteria approved by the Committee.
7.04. Certificates. Shares issued under a Restricted Stock Award shall
be registered in the name of the Participant and held in the custody of the
Company until the restrictions thereon lapse. Each certificate for those Shares
shall bear a legend in substantially the following form:
"The transfer of this certificate and the shares of Common
Stock represented by it is subject to the terms and conditions
(including conditions of forfeiture) contained in the Center
Bancorp, Inc. 1999 Stock Incentive Plan (the "Plan") and an
agreement entered into between the registered owner and Center
Bancorp, Inc. (the "Company"). Copies of the Plan and
agreement are on file in the office of the Secretary of the
Company."
7.05. End of Restrictions. After the restrictions have expired,
certificates evidencing the Shares shall be delivered to the Participant free of
the legend. The Shares, however, shall remain subject to any other restrictions
stated in this Plan or in the agreement providing for that Incentive.
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7.06. Stockholder Rights. Subject to the terms and conditions of the
Plan and any other restrictions determined by the Board and set forth in the
agreement for the Restricted Stock Award, each Participant who receives Shares
under a Restricted Stock Award shall have all of the rights of a stockholder
during any period in which the Shares are subject to restrictions, including,
but not limited to, the right to vote the Shares. Dividends on the Shares paid
in cash or property shall be paid to the Participant. Dividends payable in
Shares or other stock, however, shall be paid in restricted Shares subject to
all provisions of this Section 7.
SECTION 8. General.
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8.01. Effective date. This Plan shall be effective as of the date of
its approval by the shareholders of the Company. If shareholder approval is not
obtained within one year following the date the Plan is adopted by the Board,
the Plan and any Incentives awarded thereunder shall be void ab initio.
8.02. Duration. Unless the Plan is terminated earlier, the Plan shall
terminate ten (10) years from the date on which the Plan is approved by
shareholders of the Company. No Incentive or other rights under the Plan shall
be granted thereafter. The Board, without further approval of the Company's
stockholders, may at any time before that date terminate the Plan. After
termination of the Plan, no further Incentives may be granted under the Plan.
Stock Options granted before any such termination shall continue to be
exercisable in accordance with the terms of the Option. Restricted Stock Awards
granted before any such termination shall continue to vest in accordance with
the terms of the Award.
8.03. Non-transferability of Incentives; Exercise by Participant. No
Incentive may be sold, pledged, assigned, encumbered, disposed of or otherwise
transferred other than by will or the laws of descent and distribution. The
Company shall not be required to recognize any attempted disposition by any
Participant or Qualified Person. During a Participant's lifetime, such
Participant's Stock Options are only exercisable by such Participant.
8.04. Effects of Death, Disability, Termination of Employment.
Notwithstanding any provision to the contrary herein or in any Incentive
Agreement, the following provisions shall apply with respect to Stock Options
held by a Participant at the termination of such Participant's employment with
members of the Group in the event that such Participant's employment terminates
as a result of death or Disability:
(a) If such employment terminates as a result of death, the
Participant's estate shall have the right to exercise the
Participant's Stock Options for a period ending on the earlier
of the expiration dates of such Stock Options or one year from
the date of termination of employment, provided that such
Stock Options shall be exercisable by such estate only to the
extent exercisable on the date of termination of employment.
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(b) If such employment terminates as a result of Disability,
the Participant shall have the right to exercise his Stock
Options for a period ending on the earlier of the expiration
dates of such Stock Options or one year from the date that the
Participant is notified that he will no longer be employed by
any member of the Group (the "Notification Date"), provided
that such Stock Options shall be exercisable by the
Participant after termination of employment only to the extent
exercisable on the Notification Date.
(c) If such employment terminates for any reason other than
death or Disability, the Participant shall have the right to
exercise his Stock Options for a period ending on the earlier
of the expiration dates of such Stock Options or ninety days
from the date of termination of employment, provided that such
Stock Options shall be exercisable by the Participant after
termination of employment only to the extent exercisable on
the date of termination of employment.
8.05. Incentive Agreements. The terms of each Incentive shall be stated
in an agreement between the Company and the Participant in a form approved by
the Committee. The Participant must execute and deliver the agreement to the
Company as a condition to the effectiveness of the Incentive. All such
agreements may contain all terms and conditions as the Committee considers
advisable that are not inconsistent with the Plan, including, but not limited
to, transfer restrictions, rights of first refusal, forfeiture provisions,
representations and warranties of the Participant and provisions to ensure
compliance with all applicable laws, regulations and rules as provided in
Section 8.06.
8.06. Compliance with Law. The Company may determine, in its sole
discretion, that it is necessary or desirable to list, register or qualify (or
to update any listing, registration or qualification of) any Incentive or the
Shares issuable or issued under any Incentive or this Plan on any securities
exchange or under any federal or state securities law, or to obtain consent or
approval of any governmental body as a condition of, or in connection with, the
award of any Incentive, the issuance of Shares under any Incentive or this Plan,
or the removal of any restrictions imposed on such Shares. If the Company makes
such a determination, the Incentive shall not be awarded or the Shares shall not
be issued or the restrictions shall not be removed, as applicable, in whole or
in part, unless and until the listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company. The Company's obligation to sell or issue Shares
under an Incentive is subject to compliance with all applicable laws and
regulations. The Committee, in its sole discretion, shall determine whether the
sale and issue of Shares is in compliance with all applicable laws and
regulations.
8.07. Adjustment. If the outstanding Shares of Common Stock are
increased or decreased or changed into or exchanged for a different number or
kind of securities of the Company or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split, combination of securities or dividend payable in corporate securities,
then an appropriate adjustment shall be made by the Board in the number, kind
and/or price of Shares for which Incentives may be granted under the Plan. In
addition, the Board shall make appropriate adjustment in the number, kind and/or
price of Shares as to which outstanding Incentives, or portions thereof then
unexercised, shall be exercisable. In the event of any such adjustment, the
exercise price of any Stock Option, the performance objectives, restrictions or
other terms and conditions of any Incentive and the Shares issuable under any
Incentive shall be adjusted as and to the extent appropriate, in the sole and
absolute discretion of the Board, to provide each Participant with substantially
the same relative rights before and after such adjustment to the extent
practical.
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8.08. Withholding.
(a) The Company shall have the right to withhold from any payments made
under the Plan or to collect as a condition to any award, payment or issuance of
Shares under the Plan any taxes required to be withheld by Federal, state or
local law. Whenever a Participant is required to pay to the Company an amount
required to be withheld under applicable tax laws in connection with a
distribution of Shares or upon exercise of a Stock Option, the Participant may
satisfy this obligation in whole or in part by electing (the "Election") to have
the Company withhold from the distribution that number of Shares having a value
equal to the amount required to be withheld. The value of the Shares to be
withheld shall be based on the Fair Market Value of the Shares on the date on
which the amount of tax to be withheld is determined ("Tax Date").
(b) Each Election must be made before the Tax Date. The Committee may
disapprove any Election, may suspend or terminate the right to make Elections,
or may provide with respect to any Incentive that the right to make an Election
shall not apply to that Incentive. An Election is irrevocable.
8.09. No Right to Continued Employment. No Participant under the Plan
shall have any right to continue in the employ of the Company or any member of
the Group for any period of time because of his or her participation in the
Plan.
8.10. No Right as Stockholder. No Participant or Qualified Person shall
have the rights of a stockholder with respect to the Shares covered by an
Incentive unless a stock certificate is issued to that person for the Shares. No
adjustment shall be made for cash dividends or similar rights for which the
record date is before the date on which such stock certificate is issued.
8.11. Amendment of the Plan. The Board may amend the Plan from time to
time in such respects as the Board deems advisable. No such amendment, however,
shall (a) change or impair an Incentive without the consent of the Participant
or Qualified Person holding that Incentive, or (b) without the prior approval of
the Company stockholders (i) increase the limits provided in Section 5.01
(except by adjustment under Section 8.07), (ii) change the class of persons
eligible to receive Incentives under the Plan, or (iii) make any other change
that requires approval of the Company stockholders under applicable law or to
preserve the treatment of the Incentive Stock Options as such under Section 422
of the Code.
8.12. Definition of Fair Market Value. Whenever "Fair Market Value" of
Common Stock is to be determined for purposes of this Plan, it shall be
determined as follows:
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(a) If the Common Stock is publicly traded at the time Fair
Market Value is to be determined under the Plan, "Fair Market Value" shall mean
the average of the highest and lowest sales prices on the date of determination
on the over-the-counter market as reported by NASDAQ or, if the Common Stock is
then traded on a national securities exchange, the average of the highest and
lowest sales prices on that date on the principal national securities exchange
on which it is so traded; or
(b) If the Common Stock is not publicly traded at the time
Fair Market Value is to be determined under the Plan, "Fair Market Value" shall
be determined in good faith from time to time by the Committee.
8.13. Acceleration; Exercise. Notwithstanding anything to the contrary
set forth in the Plan, in the event that (x) the Company should adopt a plan of
reorganization pursuant to which (i) it shall merge into, consolidate with, or
sell substantially all of its assets to, any other corporation or entity or (ii)
any other corporation or entity shall merge into the Company in a transaction in
which the Company shall become a wholly-owned subsidiary of another entity, or
(y) the Company should adopt a plan of complete liquidation, then (I) all Stock
Options granted hereunder shall be fully exercisable upon consummation of such
event and (II) the Company may give a Participant written notice thereof
requiring such Participant either (a) to exercise his or her Stock Options
within thirty days after receipt of such notice, including all installments
whether or not they would otherwise be exercisable at that date, (b) in the
event of a merger or consolidation in which shareholders of the Company will
receive shares of another corporation, to agree to convert his or her Stock
Options into comparable options to acquire such shares, (c) in the event of a
merger or consolidation in which shareholders of the Company will receive cash
or other property (other than capital stock), to agree to convert his or her
Stock Options into such consideration (in an amount representing the
appreciation over the exercise price of such Stock Options) or (d) to surrender
such Stock Options or any unexercised portion thereof.
8.14 Investment Letter. If required by the Committee, each Participant
shall agree to execute a statement directed to the Company, upon each and every
exercise by such Participant of any Stock Options, that shares issued thereby
are being acquired for investment purposes only and not with a view to the
distribution thereof, and containing an agreement that such shares will not be
sold or transferred unless either (1) registered under the Securities Act of
1933 and all applicable state securities laws, or (2) exempt from such
registration in the opinion of Company counsel. If required by the Committee,
certificates representing shares of Common Stock issued upon exercise of Stock
Options shall bear a restrictive legend summarizing the restrictions on
transferability applicable thereto.
8.15. Fractional and Minimum Shares. In no event shall a fraction of a
Share be purchased or issued under the Plan without Board approval. The
Committee may specify a minimum number of Shares for which each Stock Option
must be exercised.
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8.16. Application of Funds. The proceeds received by the Company from
the sale of Shares under the Plan shall be used for general corporate purposes.
8.17. Other Incentives and Plans. Nothing in this Plan shall prohibit
any member of the Group from establishing other employee incentives and plans.
8.18. Governing Law. The validity and construction of the Plan and of
each agreement evidencing Incentives shall be governed by the laws of the State
of New Jersey, excluding the conflict-of-laws principles thereof.
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