CENTER
BANCORP, INC.
AMENDED
AND RESTATED
2003
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1.
Purpose
of the Plan
.
The
purpose of this Amended aand Restated Stock Option Plan ("Plan"), to be known
as
the "Center Bancorp Non-Employee Director Stock Option Plan", is to attract
qualified personnel to accept positions of responsibility as outside directors
with Center Bancorp, Inc., a New Jersey corporation ("Company"), and to provide
incentives for qualified persons to remain on the Board of the Company as
outside directors.
2.
Definitions
.
As used
in the Plan, unless the context requires otherwise, the following terms shall
have the following meanings:
(a)
"Anniversary Date" shall mean, for each member of the Board, March 1 of each
calendar year, provided that such director has served continuously on the Board
during the six months immediately preceding such date and was not an employee
of
the Company or any of its subsidiaries during such six month period.
(b)
"Board" shall mean the Board of Directors of the Company.
(c)
"Committee" shall mean a committee of the Board designated by the Board and
consisting solely of members of the Board who are not Outside Directors. If
all
members of the Board are Outside Directors, the Committee shall consist of
the
entire Board.
(d)
"Common Stock" shall mean the Company's common stock, no par value, or if,
pursuant to the adjustment provisions of Section 11 hereof, another security
is
substituted for the Common Stock, such other security.
(e)
"Fair
Market Value" shall mean the fair market value of the Common Stock on the
Anniversary Date or other relevant date. If on such date the Common Stock is
listed on a stock exchange or is quoted on the automated quotation system of
NASDAQ, the Fair Market Value shall be the closing sale price (or if such price
is unavailable, the average of the high bid price and the low asked price)
on
such date. If no such closing sale price or bid and asked prices are available,
the Fair Market Value shall be determined in good faith by the Committee in
accordance with generally accepted valuation principles and such other factors
as the Committee reasonably deems relevant.
(f)
"Option" shall mean the right, granted pursuant to Section 7 of the Plan, to
purchase one or more shares of Common Stock.
(g)
"Optionee" shall mean a person to whom an option has been granted under the
Plan.
(h)
“Outside Director” shall mean a director who is not an employee of the Company
or its subsidiaries.
(i)
“Retirement” shall mean a director’s resignation from, or the act of foregoing
election to, the Board as a result of any mandatory retirement provisions
applicable to such director.
3.
Stock
Subject to the Plan
.
There
will be reserved for use upon the exercise of Options granted from time to
time
under the Plan an aggregate of 500,000 shares of Common Stock, subject to
adjustment as provided in Section 11 hereof for events occurring subsequent
to
the date on which the Plan was initially adopted. The Committee shall determine
from time to time whether all or part of such 500,000 shares shall be authorized
but unissued shares of Common Stock or issued shares of Common Stock which
shall
have been reacquired by the Company and which are held in its treasury. If
any
Option granted under the Plan should expire or terminate for any reason without
having been exercised in full, the unpurchased shares shall become available
for
the grant of Options under the Plan.
4.
Administration
of the Plan
.
The
Plan shall be administered by the Committee. Subject to the provisions of the
Plan, the Committee shall have full discretion:
(a)
To
determine the exercise price of Options granted hereunder in accordance with
Section 7 hereof;
(b)
To
interpret the Plan;
(c)
To
promulgate, amend and rescind rules and regulations relating to the Plan,
provided, however, that no such rules or regulations shall be inconsistent
with
any of the terms of the Plan;
(d)
To
subject any Option to such additional restrictions and conditions (not
inconsistent with the Plan) as may be specified when granting the Option;
and
(e)
To
make all other determinations in connection with the administration of the
Plan
5.
Eligibility
.
The
only persons who shall be eligible to receive Options under the Plan shall
be
persons who, on the date such Options are to be granted hereunder, have not
been
an employee of the Company or any of its subsidiaries during the six months
preceding such date.
6.
Term
.
No
Option shall be granted under the Plan after June 1, 2014.
7.
Grant
of Stock Options
.
The
following provisions shall apply with respect to Options granted
hereunder:
(a)
Automatic
Grants
.
The
Company shall grant to each member of the Board an Option to purchase three
thousand (3,000) shares of Common Stock (subject to adjustment pursuant to
Section 11 hereof for events occurring subsequent to the date on which the
Plan
was initially adopted) on each of such director’s Anniversary Dates during the
term of this Plan. It is understood that directors who are employees of the
Company or any of its subsidiaries cannot receive Options hereunder unless
and
until they have ceased such employment for a period of at least six months.
(b)
Option
Price
.
The
price at which shares of Common Stock shall be purchased upon exercise of an
Option granted hereunder shall be equal to the Fair Market Value of such shares
on the date of grant of such Option.
(c)
Expiration
.
Except
as otherwise provided in Section 10 hereof, each Option granted hereunder shall
cease to be exercisable ten years after the date on which it is
granted.
8.
Exercise
of Options
.
Unless
the exercise date of an Option granted hereunder is accelerated pursuant to
Section 12 hereof, the following provisions shall apply with respect to the
exercise of such Option:
(a)
during the first year after the date of grant, such Option shall not be
exercisable; and
(b)
during the second year after the date of grant, such Option may be exercised
as
to up to 25% of the shares of Common Stock initially covered thereby;
and
(c)
during the third year after the date of grant, such Option may be exercised
as
to up to 50% of the shares of Common Stock initially covered thereby (provided
that the provisions of paragraph (b) above shall not have been violated);
and
(d)
during the fourth year after the date of grant, such Option may be exercisable
as to up to 75% of the shares of Common Stock initially covered thereby
(provided that the provisions of paragraphs (b) and (c) above shall not have
been violated); and
(e)
such
Option may be exercised in its entirety or as to any portion thereof at any
time
during the fifth year after the date of grant and thereafter until the term
of
such Option expires or otherwise ends.
9.
Method
of Exercise
.
To the
extent permitted by Section 8 hereof, Optionees may exercise their Options
from
time to time by giving written notice to the Company. The date of exercise
shall
be the date on which the Company receives such notice. Such notice shall be
on a
form furnished by the Company and shall state the number of shares to be
purchased and the desired closing date, which date shall be at least fifteen
days after the giving of such notice, unless an earlier date shall have been
mutually agreed upon. At the closing, the Company shall deliver to the Optionee
(or other person entitled to exercise the Option) at the principal office of
the
Company, or such other place as shall be mutually acceptable, a certificate
or
certificates for such shares against payment in full of the Option price for
the
number of shares to be delivered, such payment to be by a certified or bank
cashier's check and/or, if permitted by the Committee in its discretion, by
transfer to the Company of capital stock of the Company having a Fair Market
Value (as determined pursuant to Section 2(f)) on the date of exercise equal
to
the excess of the purchase price for the shares purchased over the amount (if
any) of the certified or bank cashier's check. If the Optionee (or other person
entitled to exercise the Option) shall fail to accept delivery of and pay for
all or any part of the shares specified in his or her notice when the Company
shall tender such shares to such Optionee, such Optionee’s right to exercise the
Option with respect to such unpurchased shares may be terminated.
10.
Termination
of Board Status
.
In the
event that an Optionee ceases to serve on the Board for any reason other than
cause, death, disability, resignation or Retirement, such Optionee's Options
shall automatically terminate three months after the date on which such service
terminates, but in any event not later than the date on which such Options
would
terminate pursuant to Section 7(c). In the event that an Optionee resigns or
is
removed from the Board by means of a resolution which recites that the Optionee
is being removed solely for cause, such Optionee's Options shall automatically
terminate on the date such removal is effective. In the event that an Optionee
ceases to serve on the Board by reason of death, disability or Retirement,
an
Option exercisable by such Optionee shall terminate one year after the date
of
death, disability or Retirement of the Optionee, but in any event not later
than
the date on which such Options would terminate pursuant to Section 7(c). During
such time after death, an Option may only be exercised by the Optionee's
personal representative, executor or administrator, as the case may be. No
exercise permitted by this Section 10 shall entitle an Optionee or such
Optionee’s personal representative, executor or administrator to exercise any
portion of any Option beyond the extent to which such Option is exercisable
pursuant to Section 8 hereof on the date such Optionee ceases to serve on the
Board.
11.
Changes
in Capital Structure
.
In the
event that, by reason of a stock dividend, recapitalization, reorganization,
merger, consolidation, reclassification, stock split-up, combination of shares,
exchange of shares, or comparable transaction, the outstanding shares of Common
Stock of the Company are hereafter increased or decreased, or changed into
or
exchanged for a different number or kind of shares or other securities of the
Company or of any other corporation, then appropriate adjustments shall be
made
by the Committee to the number and kind of shares reserved for issuance under
the Plan upon the grant and exercise of Options and the number and kind of
shares subject to the automatic grant provisions of Section 7(a). In addition,
the Board shall make appropriate adjustments to the number and kind of shares
subject to outstanding Options, and the purchase price per share under
outstanding Options shall be appropriately adjusted consistent with such change.
In no event shall fractional shares be issued or issuable pursuant to any
adjustment made under this Section 11. The determination of the Committee as
to
any such adjustment shall be final and conclusive.
12.
Mandatory
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 with 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 Options granted hereunder shall
be
deemed fully exercisable fifteen days prior to the scheduled consummation of
such event and (II) the Company may give an Optionee written notice thereof
requiring such Optionee either (a) to exercise his or her Options within thirty
days after receipt of such notice, including all installments whether or not
they would otherwise be exercisable at the 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 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 Options into such
consideration (in an amount representing the appreciation over the exercise
price of such Options) or (d) to surrender such Options or any unexercised
portion thereof.
13.
Option
Grant
.
Each
grant of an Option under the Plan will be evidenced by a document in such form
as the Committee may from time to time approve. Such document will contain
such
provisions as the Committee may in its discretion deem advisable, including
without limitation additional restrictions or conditions upon the exercise
of an
Option, provided that such provisions are not inconsistent with any of the
provisions of the Plan. The Committee may require an Optionee, as a condition
to
the grant or exercise of an Option or the issuance or delivery of shares upon
the exercise of an Option or the payment therefor, to make such representations
and warranties and to execute and deliver such notices of exercise and other
documents as the Committee may deem consistent with the Plan or the terms and
conditions of the option agreement. Not in limitation of any of the foregoing,
in any such case referred to in the preceding sentence the Committee may also
require the Optionee to execute and deliver documents (including the investment
letter described in Section 14) containing such representations, warranties
and
agreements as the Committee or counsel to the Company shall deem necessary
or
advisable to comply with any exemption from registration under the Securities
Act of 1933, as amended, any applicable State securities laws, and any other
applicable law, regulation or rule.
14.
Investment
Letter
.
If
required by the Committee, each Optionee shall agree to execute a statement
directed to the Company, upon each and every exercise by such Optionee of any
Options, that shares issued thereby are being acquired for investment purposes
only and not with a view to the redistribution thereof, and containing an
agreement that such shares will not be sold or transferred unless either (1)
registered under the Securities Act of 1933, as amended, 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 Options
shall bear a restrictive legend summarizing the restrictions on transferability
applicable thereto.
15.
Requirements
of Law
.
The
granting of Options, the issuance of shares upon the exercise of an Option,
and
the delivery of shares upon the payment therefor shall be subject to compliance
with all applicable laws, rules, and regulations. Without limiting the
generality of the foregoing, the Company shall not be obligated to sell, issue
or deliver any shares unless all required approvals from governmental
authorities and stock exchanges shall have been obtained and all applicable
requirements of governmental authorities and stock exchanges shall have been
complied with.
16.
Tax
Withholding
.
The
Company, as and when appropriate, shall have the right to withhold any federal,
state, or local taxes required by law to be withheld.
17.
Nonassignability
.
No
Option shall be assignable or transferable by an Optionee except by will or
the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Internal Revenue Code of 1986, as amended (the "Code"),
or Title I of the Employee Retirement Income Security Act ("ERISA") or the
rules
thereunder, in which event the terms of this Plan, including all restrictions
and limitations set forth herein, shall continue to apply to the transferee.
Except as otherwise provided in the immediately preceding sentence, during
an
Optionee's lifetime, no person other than the Optionee may exercise his or
her
Options.
18.
Optionee's
Rights as Shareholder and Board Member
.
An
Optionee shall have no rights as a shareholder of the Company with respect
to
any shares subject to an Option until the Option has been exercised and the
certificate with respect to the shares purchased upon exercise of the Option
has
been duly issued and registered in the name of the Optionee. Nothing in the
Plan
shall be deemed to give an Optionee any right to a continued position on the
Board nor shall it be deemed to give any person any other right not specifically
and expressly provided in the Plan.
19.
Termination
and Amendment
.
The
Board may at any time terminate or amend the Plan as it may deem advisable,
except that (i) the provisions of this Plan relating to the amount of shares
covered by Options, the exercise price of Options or the timing of Option grants
or exercises shall not be amended more than once every six months, other than
to
comport with changes in the Code, ERISA or the rules thereunder, (ii) no such
termination or amendment shall adversely affect any Optionee with respect to
any
right which has accrued under the Plan in regard to any Option granted prior
to
such termination or amendment, and (iii) no such amendment shall be effective
without approval of the stockholders of the Company if the effect of such
amendment is to (a) materially increase the number of shares of Common Stock
authorized for issuance pursuant to the Plan (otherwise than pursuant to Section
11) or (b) materially increase the number of shares of Common Stock subject
to
Options (otherwise than pursuant to Section 11) Any termination of this Plan
will terminate the obligation of the Company to grant any Option scheduled
to be
granted after the date of such termination.
20.
Shareholder
Approval
.
Any
Options granted hereunder shall be subject to the condition that the
stockholders of the Company approved this Plan at the Company's 2004 Annual
Meeting of Shareholders.
21.
Sunday
or Holiday
.
In the
event that the time for the performance of any action or the giving of any
notice is called for under the Plan within a period of time which ends or falls
on a Sunday or legal holiday, such period shall be deemed to end or fall on
the
next date following such Sunday or legal holiday which is not a Sunday or legal
holiday.