Exhibit 10

 

PEAPACK-GLADSTONE FINANCIAL CORPORATION

2012 LONG-TERM STOCK INCENTIVE PLAN

 

(Adopted by Directors January 19, 2012)

(Approved by Shareholders April 24, 2012)

(Amended by Directors March 21, 2013, Approved by Shareholders April 23, 2013)

(Amended by Directors March 20, 2014, Approved by Shareholders April 22, 2014)

(Amended by Directors March 26, 2015)

(Amended by Directors March 16, 2016, Approved by Shareholders April __, 2016)

 

1.       Purpose. The purpose of the Plan is to provide additional incentive to
those officers and key employees of the Company and its Subsidiaries, and
certain members of the Board of Directors of the Company whose substantial
contributions are essential to the continued growth and success of the Company’s
business in order to strengthen their commitment to the Company and its
Subsidiaries, to motivate such officers, employees and Directors to faithfully
and diligently perform their assigned responsibilities and to attract and retain
competent and dedicated individuals whose efforts will result in the long-term
growth and profitability of the Company. To accomplish such purposes, the Plan
provides that the Company may grant Incentive Stock Options, Nonqualified Stock
Options, Restricted Stock Awards, Restricted Stock Units, Stock Appreciation
Rights and Cash-Based Awards.

2.       Definitions. For purposes of this Plan:

(a)       “Agreement” means the written agreement between the Company and a
Grantee evidencing the grant of an Option or Award and setting forth the terms
and conditions thereof.

(b)       “Award” means a grant of Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, or a Cash-Based Award or any combination of the
foregoing.

(c)       “Bank” means Peapack-Gladstone Bank, a Subsidiary.

(d)       “Board” means the Board of Directors of the Company.

(e)       “Cash-Based Award” means any right granted under Section 10.

(f)       “Cause” means an intentional failure to perform stated duties, breach
of a fiduciary duty involving personal dishonesty, or willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order. Notwithstanding anything else herein to the
contrary, in the event that an employee or Director is terminated or removed for
Cause, or resigns at a time when Cause exists, or if, following termination,
resignation or removal it is determined that Cause existed at the time of such
termination, resignation or removal, then any and all Options and Awards will
automatically be terminated and void as of the date that Cause arose, and no
notice to that effect is required in order to effect that result.

(g)       “Change in Capitalization” means any increase, reduction, change or
exchange of Shares for a different number or kind of shares or other securities
of the Company by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, issuance of warrants or rights, extraordinary
cash dividend, stock dividend, stock split or reverse stock split, combination
or exchange of shares, repurchase of shares, change in corporate structure or
otherwise.

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(h)       “Change in Control” means an event of a nature that: (1) any “person”
(as the term is used in Sections 13(d) and 14(d) of the Exchange Act) who is not
now presently but becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the Company’s outstanding securities except for any
securities purchased by any tax-qualified employee benefit plan of the Company;
or (2) individuals who constitute the Board on the date hereof (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof, 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 the Company’s
stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (2), considered as though
he were a member of the Incumbent Board; or (3) consummation of regulatory
approval to implement a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Company or similar transaction in
which the Company is not the resulting entity or such plan, merger,
consolidation, sale or similar transaction occurs; or (4) a proxy statement
soliciting proxies from shareholders of the Company shall be distributed 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, and, following such
distribution, the outstanding shares of the class of securities then subject to
the plan or transaction are exchanged for or converted into cash or property or
securities not issued by the Company; or (5) a tender offer is made for 25% or
more of the voting securities of the Company.

(i)       “Code” means the Internal Revenue Code of 1986, as amended.

(j)       “Committee” means a committee consisting solely of two (2) or more
directors who are Non-Employee Directors (as defined in Rule 16b-3 of the
Exchange Act as it may be amended from time to time) of the Company and outside
directors as defined pursuant to Section 162(m) of the Code (as it may be
amended from time to time) appointed by the Board to administer the Plan and to
perform the functions set forth herein. Directors appointed by the Board to the
Committee shall have the authority to act notwithstanding the failure to be so
qualified.

(k)       “Company” means Peapack-Gladstone Financial Corporation, a New Jersey
corporation.

(l)       “Director” means a member of the Board who is not also serving as an
employee of the Company.

(m)       “Disability” means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee or Director to perform the
work customarily assigned to him. Additionally, a medical doctor selected or
approved by the Board 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 the individual’s
lifetime.

(n)       “Eligible Employee” means any officer or other key employee of the
Company or a Subsidiary designated by the Committee as eligible to receive
Options or Awards subject to the conditions set forth herein.

(o)       “Escrow Agent” means the escrow agent under the Escrow Agreement,
designated by the Committee. The Bank may be appointed as the Escrow Agent.

(p)       “Escrow Agreement” means an agreement between the Company, the Escrow
Agent and a Grantee, in the form specified by the Committee, under which shares
of Restricted Stock awarded pursuant hereto shall be held by the Escrow Agent
until either (a) the restrictions relating to such shares expire and the shares
are delivered to the Grantee or (b) the Company reacquires the shares pursuant
hereto and the shares are delivered to the Company.

(q)       “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(r)       “Fair Market Value” means the fair market value of the Shares as
determined by the Committee in its sole discretion using a method that complies
with Section 409A of the Code; provided, however, that (A) if the Shares are
listed on NASDAQ, the New York Stock Exchange or other national securities
exchange, Fair Market Value on any date shall be the last sale price reported
for the Shares on such exchange on such date or on the last date preceding such
date on which a sale was reported, or (B) if the Shares are then traded in an
over-the-counter market, Fair Market Value on any date shall be the mean of the
high bid and low asked prices for the Shares in such over-the-counter market for
such date or on the last date preceding such date on which high bid and low
asked prices exist.

(s)       “Grantee” means a person to whom an Option or Award has been granted
under the Plan.

(t)       “Incentive Stock Option” means an Option within the meaning of Section
422 of the Code.

(u)       “Nonqualified Stock Option” means an Option which is not an Incentive
Stock Option.

(v)       “Option” means an Incentive Stock Option, a Nonqualified Stock Option,
or either or both of them.

(w)       “Parent” means any corporation in an unbroken chain of corporations
ending with the Company, if each of the corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock of one of the other corporations in such chain.

(x)       “Plan” means the Peapack-Gladstone Financial Corporation 2012
Long-Term Stock Incentive Plan as set forth in this instrument and as it may be
amended from time to time.

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(y)       “Restricted Stock” means Shares issued or transferred to an Eligible
Employee or Director which may be subject to restrictions as provided in Section
8 hereof.

(z)       “Restricted Stock Unit” means a right to receive one Share upon the
satisfaction of terms and conditions as provided in Section 9 hereof, including
without limitation the satisfaction of specified performance or other criteria.
Restricted Stock Units represent an unfunded and unsecured obligation of the
Company, except as otherwise provided by the Committee.

(aa)       “Retirement” means the retirement from active employment of an
employee or officer, but only if such person meets all of the following
requirements: (i) he has a minimum combined total of years of service to the
Company or any Subsidiary (excluding service to any acquired company) and age
equal to eighty (80), (ii) he is age sixty-two (62) or older, and (iii) he
provides six (6) months prior written notice to the Company of the retirement.
For Directors, the term “Retirement” shall mean the date on which the Director
ceases to be a member of the Board after both attaining age sixty (60) and
completing at least ten (10) years of service on the Board.

(bb)       “Shares” means the common stock, no par value, of the Company
(including any new, additional or different stock or securities resulting from a
Change in Capitalization).

(cc)       “Stock Appreciation Right” means a right to receive all or some
portion of the increase in the value of shares of Common Stock as provided in
Section 7 hereof.

(dd)       “Subsidiary” means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

(ee)       “Ten-Percent Shareholder” means an Eligible Employee, who, at the
time an Incentive Stock Option is to be granted to him, owns (within the meaning
of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company, a
Parent or a Subsidiary within the meaning of Section 422(b)(6) of the Code.

3.       Administration.

(a)       The Plan shall be administered by the Committee which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep minutes of its meetings. A majority of the
Committee shall constitute a quorum and a majority of a quorum may authorize any
action. Each member of the Committee shall be a Non-Employee Director (as
defined in Rule 16b-3 of the Exchange Act as it may be amended from time to
time) and an outside director as defined pursuant to Section 162(m) of the Code
as it may be amended from time to time. No failure to be so qualified shall
invalidate any Option or Award or any action or inaction under the Plan. No
member of the Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan, the Options or
the Awards, and all members of the Committee shall be fully indemnified by the
Company with respect to any such action, determination or interpretation.

Subject to the express terms and conditions set forth herein, the Committee
shall have the power from time to time:

(1)       to determine those Eligible Employees to whom Options shall be granted
under the Plan and the number of Incentive Stock Options and/or Nonqualified
Options to be granted to each Eligible Employee and to prescribe the terms and
conditions (which need not be identical) of each Option, including the purchase
price per share of each Option;

(2)       to select those Eligible Employees to whom Awards shall be granted
under the Plan and to determine the number of shares of Restricted Stock,
Restricted Stock Units and/or Stock Appreciation Rights to be granted pursuant
to each Award and the amount or value of Cash-Based Awards, the terms and
conditions of each Award, including the restrictions or performance criteria
relating to such shares, units or rights, the purchase price per share, if any,
of Restricted Stock or Restricted Stock Units and whether Stock Appreciation
Rights will be granted alone or in conjunction with an Option;

(3)       to construe and interpret the Plan and the Options and Awards granted
thereunder and to establish, amend and revoke rules and regulations for the
administration of the Plan, including, but not limited to, correcting any defect
or supplying any omission, or reconciling any inconsistency in the Plan or in
any Agreement, in the manner and to the extent it shall deem necessary or
advisable to make the Plan fully effective, and all decisions and determinations
by the Committee in the exercise of this power shall be final and binding upon
the Company or a Subsidiary and Grantees;

(4)       to determine the duration and purposes for leaves of absence which may
be granted to a Grantee without constituting a termination of employment or
service for purposes of the Plan; and

(5)       generally, to exercise such powers and to perform such acts as are
deemed necessary or advisable to promote the best interests of the Company with
respect to the Plan.

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Subject to the terms and conditions set forth herein, the Committee may, from
time to time, recommend the grant of Options and Awards to the Directors in such
numbers and upon such terms as it deems appropriate, but all such grants must be
approved by the Company’s Board of Directors.

4.       Stock Subject to Plan; Individual Award Limits.

(a)       The maximum number of Shares that may be issued or transferred
pursuant to all Options and Awards under this Plan is 1,200,000, of which not
more than 200,000 Shares may be issued or transferred pursuant to Options,
Restricted Stock Awards, Restricted Stock Unit Awards and/or Stock Appreciation
Rights to any one Eligible Employee during any one calendar year. Not more than
10,000 Shares may be issued or transferred pursuant to Options and/or Awards to
any Director during any one calendar year. The maximum number of Shares that may
be issued or transferred pursuant to Incentive Stock Options shall be 200,000.
Upon a Change in Capitalization after the adoption of this Plan by the Board,
the Shares shall be adjusted to the number and kind of Shares of stock or other
securities existing after such Change in Capitalization. The maximum aggregate
amount of any Cash-Based Awards that may be paid to any one Grantee in any one
calendar year shall be $2 million dollars.

(b)       Whenever any outstanding Option or portion thereof expires, is
cancelled or is otherwise terminated (other than by exercise of the Option or
any related Stock Appreciation Right), the shares of Common Stock allocable to
the unexercised portion of such Option may again be the subject of Options and
Awards hereunder.

(c)       Whenever any Shares subject to an Award or Option are (i) resold to
the Company, (ii) retained by the Company upon exercise of an Award or Option in
order to satisfy the exercise price for such Award or Option or any withholding
or other taxes due with respect to such Option or Award, or (iii) forfeited for
any reason pursuant to the terms of the Plan, such Shares may again be the
subject of Options and Awards hereunder.

5.       Eligibility. Subject to the provisions of the Plan, the Committee (or,
with respect to Directors, the Board) shall have full and final authority to
select those Eligible Employees who will receive Options and/or Awards, but no
person shall receive any Options or Awards unless he or she is an employee of
the Company or a Subsidiary, or a Director, at the time the Option or Award is
granted.

6.       Stock Options. The Committee (or, with respect to Directors, the Board)
may grant Options in accordance with the Plan, the terms and conditions of which
shall be set forth in an Agreement. Each Option and Option Agreement shall be
subject to the following conditions:

(a)       Purchase Price. The purchase price or the manner in which the purchase
price is to be determined for Shares under each Option shall be set forth in the
Agreement, provided that the purchase price per Share under each Incentive Stock
Option shall not be less than 100% of the Fair Market Value of a Share at the
time the Option is granted (110% in the case of an Incentive Stock Option
granted to a Ten-Percent Shareholder) and under each Nonqualified Stock Option
shall not be less than 100% of the Fair Market Value of a Share at the time the
Option is granted. Incentive Stock Options cannot be granted to Directors.

(b)       Duration. Options granted hereunder shall be for such term as the
Committee shall determine, provided that (i) no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years from the date it is granted
(five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Shareholder) and (ii) no Nonqualified Stock Option shall be
exercisable after the expiration of ten (10) years and one (1) day from the date
it is granted.

(c)       Non-Transferability. No Option granted hereunder shall be transferable
by the Grantee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such Grantee
only by the Grantee or his guardian or legal representative. The terms of such
Option shall be binding upon the beneficiaries, executors, administrators, heirs
and successors of the Grantee.

(d)       Stock Options; Vesting. Each Option shall be exercisable in such
installments (which need not be equal) and at such times as may be designated by
the Committee or the Board as set forth in the Option Agreement. Unless
otherwise provided in the Agreement, to the extent not exercised, installments
shall accumulate and be exercisable, in whole or in part, at any time after
becoming exercisable, but not later than the date the Option expires. Upon the
death, Disability or Retirement of a Grantee, all Options shall become
immediately exercisable, provided, however, that the Committee shall have the
authority to grant Options that do not become immediately exercisable in the
event of the death, Disability or Retirement of a Grantee by including such
provision in the Option Agreement evidencing such Option. Notwithstanding the
foregoing, the Committee (or, with respect to Directors, the Board) may
accelerate the exercisability of any Option or portion thereof at any time.

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(e)       Method of Exercise. The exercise of an Option shall be made only by a
written notice delivered in person or by mail (including electronic mail) to the
Secretary of the Company at the Company’s principal executive office, specifying
the number of Shares to be purchased and accompanied by payment therefor, as
well as for any required tax withholding, and otherwise in accordance with the
Agreement pursuant to which the Option was granted. The purchase price for any
Shares purchased pursuant to the exercise of an Option and required tax
withholding shall be paid in full upon such exercise in cash, by check, or, at
the discretion of the Committee and upon such terms and conditions as the
Committee shall approve, by transferring Shares to the Company or by having
Shares that would otherwise have been delivered to the Grantee upon exercise of
an Option withheld by the Company. Any Shares transferred to or withheld by the
Company as payment of the purchase price or tax withholding under an Option
shall be valued at their Fair Market Value on the day preceding the date of
exercise of such Option. If requested by the Committee, the Grantee shall
deliver the Agreement evidencing the Option and the Agreement evidencing any
related Stock Appreciation Right to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
Grantee.

(f)       Rights of Grantees. No Grantee shall be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Grantee, and (iii) the Grantee’s
name shall have been entered as a shareholder of record on the books of the
Company. Thereupon, the Grantee shall have full voting, dividend and other
ownership rights with respect to such Shares.

(g)       Termination of Employment. In the event that a Grantee who is not a
Director ceases to be employed by the Company or any Subsidiary, any outstanding
Options held by such Grantee shall, unless the Option Agreement evidencing such
Option provides otherwise, terminate as follows:

(1)       If the Grantee’s termination of employment is due to his death or
Disability, the Options shall become fully vested and shall be exercisable for a
period of three years following such termination of employment, and shall
thereafter terminate;

(2)       If the Grantee’s termination of employment is by the Grantee (other
than due to the Grantee’s Retirement), the Option shall terminate on the date of
the termination of employment;

(3)       If the termination of employment is due to the Grantee’s Retirement,
the Option shall become fully vested and shall be exercisable for 90 days (three
years for an Option designated initially as a Nonqualified Stock Option); and

(4)       If the Grantee’s termination of employment is for any other reason,
the Option (to the extent exercisable at the time of the Grantee’s termination
of employment) shall be exercisable for a period of ninety (90) days following
such termination of employment, and shall thereafter terminate.

Notwithstanding the foregoing, the Committee may provide, either at the time an
Option is granted or thereafter, that the Option may be exercised after the
periods provided for in this Section 6(g), but in no event beyond the term of
the Option. Notwithstanding anything to the contrary in this Section 6(g), no
Option shall be exercisable beyond the term of the Option.

(h)       Termination of Service for Directors. Unless otherwise provided in the
Option Agreement, upon the termination of a Director’s service as a member of
the Board for any reason other than Retirement, Disability, Change in Control or
death, the Director’s Options shall be exercisable only as to those Shares which
were immediately exercisable by the Director at the date of termination. Unless
otherwise provided in the Option Agreement, in the event of the death,
Retirement or Disability of a Director, all Options held by the Director shall
become immediately exercisable; and upon termination of the Director’s service
due to or within 12 months after a Change in Control, all Options held by the
Director shall become immediately exercisable. Options granted to a Director
shall expire and no longer be exercisable upon the earlier of (i) one hundred
twenty (120) months following the date of grant, or (ii) three (3) years
following the date on which the Director ceases to serve as a Director (for any
reason other than Cause).

7.       Stock Appreciation Rights. The Committee may, in its discretion, either
alone or in connection with the grant of an Option, grant Stock Appreciation
Rights in accordance with the Plan, the terms and conditions of which shall be
set forth in an Agreement. If granted in connection with an Option, a Stock
Appreciation Right shall cover the same shares covered by the Option (or such
lesser number of shares as the Committee may determine) and shall, except as
provided in this Section 7, be subject to the same terms and conditions as the
related Option.

(a)       Time of Grant. A Stock Appreciation Right may be granted:

(i)       at any time if unrelated to an Option; or

(ii)       if related to an Option, at the time of grant of the Option.

(b)       Stock Appreciation Rights Related to an Option.

(1)       Payment. A Stock Appreciation Right granted in connection with an
Option shall entitle the holder thereof, upon exercise of the Stock Appreciation
Right or any portion thereof, to receive payment of an amount computed pursuant
to Section 7(b)(3).

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(2)       Exercise. A Stock Appreciation Right granted in connection with an
Option shall be exercisable at such time or times and only to the extent that
the related Option is exercisable, and will not be transferable except to the
extent the related Option may be transferable. A Stock Appreciation Right
granted in connection with an Incentive Stock Option shall be exercisable only
if the Fair Market Value of a Share on the date of exercise exceeds the purchase
price specified in the related Incentive Stock Option.

(3)       Amount Payable. Upon the exercise of a Stock Appreciation Right
related to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (A) the excess of the Fair Market Value of a Share on
the date of exercise of such Stock Appreciation Right over the per Share
purchase price under the related Option, by (B) the number of Shares as to which
such Stock Appreciation Right is being exercised. Notwithstanding the foregoing,
the Committee may limit in any manner the amount payable with respect to any
Stock Appreciation Right by including such a limit in the Agreement evidencing
the Stock Appreciation Right at the time it is granted.

(4)       Treatment of Related Options and Stock Appreciation Rights Upon
Exercise. Except as provided in Section 7(b)(5), (A) upon the exercise of a
Stock Appreciation Right granted in connection with an Option, the Option shall
be cancelled to the extent of the number of Shares as to which the Stock
Appreciation Right is exercised and (B) upon the exercise of an Option granted
in connection with a Stock Appreciation Right, the Stock Appreciation Right
shall be cancelled to the extent of the number of Shares as to which the Option
is exercised.

(5)       Simultaneous Exercise of Stock Appreciation Right and Option. The
Committee may provide, either at the time a Stock Appreciation Right is granted
in connection with a Nonqualified Stock Option or thereafter during the term of
the Stock Appreciation Right, that upon exercise of such Option, the Stock
Appreciation Right shall automatically be deemed to be exercised to the extent
of the number of Shares as to which the Option is exercised. In such event, the
Grantee shall be entitled to receive the amount described in Section 7(b)(3) (or
some percentage of such amount if so provided in the Agreement evidencing the
Stock Appreciation Right), in addition to the Shares acquired pursuant to the
exercise of the Option. The inclusion in an Agreement evidencing a Stock
Appreciation Right of a provision described in this Section 7(b)(5) may be in
addition to and not in lieu of the right to exercise the Stock Appreciation
Right as otherwise provided herein and in the Agreement.

(c)       Stock Appreciation Rights Unrelated to an Option. The Committee may
grant to Eligible Employees (and the Board may grant to Directors) Stock
Appreciation Rights unrelated to Options. Stock Appreciation Rights unrelated to
Options shall contain such terms and conditions as to exercisability, vesting
and duration as the Committee or the Board shall determine, but in no event
shall they have a term of greater than ten (10) years. Upon the death,
Disability or Retirement of a Grantee, all Stock Appreciation Rights shall
become immediately exercisable provided, however, that the Committee or Board
shall have the authority to grant Stock Appreciation Rights that do not become
immediately exercisable in the event of the death, Disability or Retirement of a
Grantee by including such provision in the Agreement evidencing such Stock
Appreciation Right. Unless otherwise provided in the Agreement, upon the death
or Disability of a Grantee, the exercisable portion of Stock Appreciation Rights
held by that Grantee shall be exercisable for a period of one (1) year following
such termination of employment or service, and shall thereafter terminate; and
upon the Retirement of a Grantee, the exercisable portion of Stock Appreciation
Rights held by that Grantee shall be exercisable for a period of ninety (90)
days following such Retirement, and shall thereafter terminate. The amount
payable upon exercise of such Stock Appreciation Rights shall be determined in
accordance with Section 7(b)(3), except that “Fair Market Value of a Share on
the date of the grant of the Stock Appreciation Right” shall be substituted for
“purchase price under the related Option.”

(d)       Method of Exercise. Stock Appreciation Rights shall be exercised by a
Grantee only by a written notice delivered in person or by mail to the Secretary
of the Company at the Company’s principal executive office, specifying the
number of Shares with respect to which the Stock Appreciation Right is being
exercised. If requested by the Committee, the Grantee shall deliver the
Agreement evidencing the Stock Appreciation Right being exercised and the
Agreement evidencing any related Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreements to
the Grantee.

(e)       Form of Payment. Payment of the amount determined under Sections
7(b)(3) or 7(c), may be made solely in whole shares of Common Stock in a number
determined at their Fair Market Value on the date of exercise of the Stock
Appreciation Right or, alternatively, at the sole discretion of the Committee,
solely in cash, or in a combination of cash and Shares as the Committee deems
advisable. If the Committee decides to make full payment in Shares, and the
amount payable results in a fractional Share, payment for the fractional Share
will be made in cash.

8.       Restricted Stock. The Committee (or, with respect to Directors, the
Board) may grant Awards of Restricted Stock which shall be evidenced by an
Agreement between the Company and the Grantee. Each Agreement shall contain such
restrictions, terms and conditions as the Committee or Board may require and
(without limiting the generality of the foregoing) such Agreements may require
that an appropriate legend be placed on Share certificates. Awards of Restricted
Stock shall be subject to the following terms and provisions:

(a)       Rights of Grantee. Shares of Restricted Stock granted pursuant to an
Award hereunder shall be issued in the name of the Grantee as soon as reasonably
practicable after the Award is granted and the purchase price, if any, is paid
by the Grantee; provided, that the Grantee has executed an Agreement evidencing
the Award, an Escrow Agreement, appropriate blank stock powers and any other
documents which the Committee, in its absolute discretion, may require as a
condition to the issuance of such Shares. If a Grantee shall fail to execute the
Agreement evidencing a Restricted Stock Award, an Escrow Agreement or
appropriate blank stock powers or shall fail to pay the purchase price, if any,
for the Restricted Stock, the Award shall be null and void. Shares issued in
connection with a Restricted Stock Award, together with the stock powers, shall
be deposited with the Escrow Agent. Except as restricted by the terms of the
Agreement, upon the delivery of the Shares to the Escrow Agent, the Grantee
shall have all of the rights of a shareholder with respect to such Shares,
including the right to vote the shares and to receive, subject to Section 8(d),
all dividends or other distributions paid or made with respect to the Shares.

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(b)       Non-Transferability. Until any restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 8(c), such Shares shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated, nor shall they
be delivered to the Grantee. Upon the termination of employment of the Grantee,
all of such Shares with respect to which restrictions have not lapsed shall be
resold by the Grantee to the Company at the same price paid by the Grantee for
such Shares or shall be forfeited and automatically transferred to and
reacquired by the Company at no cost to the Company if no purchase price had
been paid for such Shares. The Committee may also impose such other restrictions
and conditions on the Shares as it deems appropriate.

(c)       Lapse of Restrictions.

(1)       Restrictions, if any, upon Shares of Restricted Stock awarded
hereunder shall lapse at such time or times and on such terms, conditions and
satisfaction of performance criteria as the Committee (or, when applicable, the
Board) may determine; provided, however, that the restrictions upon such Shares
shall lapse only if the Grantee on the date of such lapse is then and has
continuously been an employee of the Company or a Subsidiary (or a member of the
Board) from the date the Award was granted, or unless the Committee sets a later
date for the lapse of such restrictions.

(2)       In the event of termination of employment (or termination of service
as a Director) as a result of death, Disability or Retirement of a Grantee, all
restrictions upon Shares of Restricted Stock awarded to such Grantee shall
thereupon immediately lapse, provided, however, that the Committee or Board
shall have the authority to grant Awards the restrictions on which do not lapse
in the event of the termination of employment or service as a result of the
death, Disability or Retirement of a Grantee by including such provision in the
Agreement evidencing such Award.

(3)       The Committee or Board may also decide at any time in its absolute
discretion and on such terms and conditions as it deems appropriate, to remove
or modify the restrictions upon Shares of Restricted Stock awarded hereunder.

(d)       Treatment of Cash Dividends. At the time of an Award of Shares of
Restricted Stock, the Committee may, in its discretion, determine that the
payment to the Grantee of cash dividends, or a specified portion thereof,
declared or paid on Shares of Restricted Stock by the Company, shall be deferred
until the earlier to occur of (i) the lapsing of the restrictions, if any,
imposed upon such Shares, in which case such cash dividends shall be paid over
to the Grantee, or (ii) the forfeiture of such Shares under Section 8(b) hereof,
in which case such cash dividends shall be forfeited to the Company, and such
dividends shall be held by the Company for the account of the Grantee until such
time. In the event of such deferral, interest may be credited on the amount of
any such cash dividends held by the Company for the account of the Grantee from
time to time at such rate per annum as the Committee, in its discretion, may
determine. Payment of deferred cash dividends, together with any interest
accrued thereon as aforesaid, shall be made upon the earlier to occur of the
events specified in (i) and (ii) of the immediately preceding sentence, in the
manner specified therein.

(e)       Delivery of Shares. When any restrictions imposed hereunder and in the
Plan expire or have been cancelled with respect to one or more shares of
Restricted Stock, the Company shall notify the Grantee and the Escrow Agent of
same. The Escrow Agent shall then return the certificate covering the Shares of
Restricted Stock to the Company and upon receipt of such certificate the Company
shall deliver to the Grantee (or such Grantee’s legal representative,
beneficiary or heir) a certificate for a number of shares of Common Stock,
without any legend or restrictions (except those required by any federal or
state securities laws), equivalent to the number of Shares of Restricted Stock
for which restrictions have been cancelled or have expired (or alternatively, an
applicable book entry shall be made for uncertificated Shares). If applicable, a
new certificate covering Shares of Restricted Stock previously awarded to the
Grantee which remain restricted shall be issued to the Grantee and held by the
Escrow Agent and the Agreement, as it relates to such shares, shall remain in
effect. Notwithstanding the foregoing, if requested by the Grantee, the
Committee or the Board, in its discretion, has the right to cancel Shares of
Restricted Stock to be delivered to the Grantee having a Fair Market Value, on
the day preceding the date of vesting of the Restricted Stock, equal to the
aggregate required tax withholding in connection with such vesting, and to apply
the value of such Shares of Restricted Stock as payment for the Grantee’s
aggregate required tax withholding for the vesting of any Shares of Restricted
Stock.

(f)       Unrestricted Shares. Notwithstanding anything to the contrary in this
Plan, the Committee shall have the right to grant Awards of Restricted Stock to
employees of the Company that are not evidenced by an Agreement, which are fully
vested as of the grant date of the Award and which do not contain a restrictive
legend. The amount of any aggregate Awards under this Section 8(f) shall not
exceed 10,000 shares and any individual Award under this Section 8(f) shall not
exceed 5 shares.

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9.       Restricted Stock Units. The Committee (or, with respect to Directors,
the Board) may grant Awards of Restricted Stock Units which shall be evidenced
by an Agreement between the Company and the Grantee. Each Agreement shall
contain such restrictions, terms and conditions as the Committee or Board may
require. Awards of Restricted Stock Units shall be subject to the following
terms and provisions:

(a)       Rights of Grantee. Restricted Stock Units granted pursuant to an Award
hereunder shall be issued in the name of the Grantee as soon as reasonably
practicable after the Award is granted and the purchase price, if any, is paid
by the Grantee, provided that the Grantee has executed an Agreement evidencing
the Award and any other documents which the Committee, in its absolute
discretion, may require as a condition to the issuance of such Restricted Stock
Units. If a Grantee shall fail to execute the Agreement evidencing a Restricted
Stock Unit Award or shall fail to pay the purchase price, if any, for the
Restricted Stock Units, the Award shall be null and void. The Grantee shall not
have any of the rights of a shareholder with respect to Restricted Stock Units,
subject to Section 9(d).

(b)       Non-Transferability. Until any restrictions upon the Restricted Stock
Units awarded to a Grantee shall have lapsed in the manner set forth in Section
9(c), such Restricted Stock Units shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated. Upon the
termination of employment of the Grantee, all of such Restricted Stock Units
with respect to which restrictions have not lapsed shall be forfeited at no cost
to the Company if no purchase price had been paid for such Restricted Stock
Units. The Committee may also impose such other restrictions and conditions on
the Restricted Stock Units as it deems appropriate.

(c)       Lapse of Restrictions.

(1)       Restrictions upon Restricted Stock Units awarded hereunder shall lapse
at such time or times and on such terms, conditions and satisfaction of
performance criteria as the Committee (or, when applicable, the Board) may
determine; provided, however, that the restrictions upon such Restricted Stock
Units shall lapse only if the Grantee on the date of such lapse is then and has
continuously been an employee of the Company or a Subsidiary (or a member of the
Board) from the date the Award was granted, or unless the Committee sets a later
date for the lapse of such restrictions.

(2)       In the event of termination of employment (or termination of service
as a Director) as a result of death, Disability or Retirement of a Grantee, all
restrictions upon Restricted Stock Units awarded to such Grantee shall thereupon
immediately lapse, provided, however, that the Committee or Board shall have the
authority to grant Awards of Restricted Stock Units the restrictions on which do
not lapse in the event of the termination of employment or service as a result
of the death, Disability or Retirement of a Grantee by including such provision
in the Agreement evidencing such Award.

 

(3)       The Committee or Board may also decide at any time in its absolute
discretion and on such terms and conditions as it deems appropriate, to remove
or modify the restrictions upon Restricted Stock Units awarded hereunder.

 

(d)       Treatment of Cash Dividends. At the time of an Award of Restricted
Stock Units, the Committee may, in its discretion, determine to provide the
Grantee with the right to receive cash Dividend Equivalents with respect to the
Restricted Stock Units subject to the Award, or a specified portion thereof. A
“Dividend Equivalent” is an amount equal to the cash dividend payable per Share,
if any, multiplied by the number of Shares then underlying the Award with
respect to any cash dividends declared or paid by the Company while the Award is
outstanding. Any such Dividend Equivalents shall be credited to the Grantee at
the time the Company pays any cash dividend on its Shares. Until such time as
the Dividend Equivalents vest or are forfeited, interest may be credited on the
amount of such Dividend Equivalents held by the Company for the account of the
Grantee from time to time at such rate per annum as the Committee, in its
discretion, may determine. Any Dividend Equivalents credited to the Grantee
shall vest at the same time as the underlying Restricted Stock Units, and
payment of credited Dividend Equivalents, together with any interest accrued
thereon, shall be made at the time when the underlying Restricted Stock Units
convert to Shares. In the event any Restricted Stock Units are forfeited under
Section 9(c) hereof, any Dividend Equivalents credited to Grantee with respect
to such forfeited Restricted Stock Units and any interest accrued thereon shall
be forfeited to the Company, and the Grantee shall have no rights and the
Company shall have no liability as to such Dividend Equivalents or interest.

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(e)       Delivery of Shares. When the restrictions imposed hereunder and in the
Plan expire or have been cancelled with respect to one or more of the Restricted
Stock Units granted under the Plan, the Company shall notify the Grantee of
same. The Company shall then deliver to the Grantee (or such Grantee’s legal
representative, beneficiary or heir) a certificate for a number of Shares,
without any legend or restrictions (except those required by any federal or
state securities laws), equivalent to the number of Restricted Stock Units for
which restrictions have been cancelled or have expired (or alternatively, an
applicable book entry shall be made for uncertificated Shares). Notwithstanding
the foregoing, if requested by the Grantee, the Committee or the Board, in its
discretion, has the right to cancel Shares to be delivered to the Grantee having
a Fair Market Value, on the day preceding the date of vesting of the Restricted
Stock Units, equal to the aggregate required tax withholding in connection with
such vesting, and to apply the value of such Shares as payment for the Grantee’s
aggregate required tax withholding for the vesting of any Restricted Stock
Units.

(f)       Compliance with Section 409A of the Code. Restricted Stock Units are
intended to comply with Section 409A of the Code and provisions of the Plan and
Awards shall be interpreted in a manner intended to be consistent with Section
409A.

10.       Cash-Based Awards. The Committee is hereby authorized to grant
Cash-Based Awards to Grantees denominated in cash in such amounts and subject to
such terms and conditions as the Committee may determine. Each such Cash-Based
Award shall specify a payment amount, payment range or a value determined with
respect to the Fair Market Value of the Shares, as determined by the Committee.
The Committee may designate Cash-Based Awards as “performance-based
compensation” under Code Section 162(m) by conditioning the Award or the lapse
of restrictions on the achievement of performance goals in accordance with
Section 11(a) and by administering the Award to otherwise comply with the
requirements of Section 11 and Code Section 162(m). The Committee is authorized
at any time during or after a Performance Period to exercise negative discretion
to reduce or eliminate a Cash-Based Award of any Grantee for any reason in its
discretion, including, without limitation, changes in the position or duties of
any Grantee with the Company or any Subsidiary during or after a Performance
Period, whether due to any termination of employment (including death,
disability, retirement, voluntary termination or termination with or without
cause) or otherwise.

11.       Performance Goals

 

(a)       If, at the time of grant, the Committee intends a Restricted Stock
Award, Restricted Stock Unit Award or Cash-Based Award to qualify as “other
performance based compensation” within the meaning of Code Section 162(m), the
Committee must establish performance goals for the applicable Performance Period
no later than 90 days after the Performance Period begins (or by such other date
as may be required under Code Section 162(m)). Such performance goals must be
based on one or more of the criteria described in Section 11(b). “Performance
Period” means the period selected by the Committee during which performance is
measured for purpose of determining the extent to which an award of Restricted
Stock, Restricted Stock Units or a Cash-Based Award has been earned.

(b)       A performance goal described in Section 11(a) shall be based on one or
more of the following criteria: earnings, earnings growth, earnings per share,
stock price (including growth measures and total shareholder return),
improvement of financial ratings, internal rate of return, market share, cash
flow, operating income, operating margin, net profit after tax, earnings before
or after deduction for all or any portion of interest, taxes, depreciation, or
amortization, whether or not on a continuing operations or an aggregate or per
share basis, gross profit, operating profit, cash generation, revenues, asset
quality, return on equity, return on assets, return on operating assets, cost
saving levels, efficiency ratio, net income, marketing-spending efficiency, core
non-interest income, change in working capital, return on capital, book value or
tangible book value, or shareholder return. The performance goals may be
described in terms of objectives that are related to the individual Grantee or
objectives that are Company-wide or related to a Subsidiary, division,
department, region, branch, function or business unit and may, but need not be,
measured on an absolute or cumulative basis or on the basis of percentage of
improvement over time, measured in terms of Company performance (or performance
of the applicable Subsidiary, division, department, region, branch, function or
business unit) or measured relative to selected peer companies or a market
index. Any performance goals that are financial metrics, may be determined in
accordance with Generally Accepted Accounting Principles (“GAAP”), or may be
adjusted when established to include or exclude any items otherwise includable
or excludable under GAAP. For any Award not intended to meet the requirements of
Code Section 162(m), the Committee may establish performance goals based on any
other performance criteria it deems appropriate. These performance goals are
subject to approval by shareholders at the Company’s 2016 annual meeting, and
once approved, should be submitted for re-approval by the Company’s shareholders
no later than the 2021 annual shareholder meeting, and thereafter, once every
five years.

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(c)       When the Committee determines whether a performance goal has been
satisfied for any period, the Committee may include or exclude unusual,
infrequently occurring or non-recurring charges, asset write downs, losses from
discontinued operations, restatements and accounting changes and other unplanned
special charges such as restructuring expenses, acquisitions, acquisition or
disposition expenses, including expenses related to goodwill and other
intangible assets, stock offerings, stock repurchases and loan loss provisions;
provided that in the case of an Award intended to qualify for the exemption from
the limitation on deductibility imposed by Code Section 162(m), such inclusion
or exclusion shall be made in compliance with Code Section 162(m).

(d)       If the Committee determines that a performance goal has been satisfied
and the satisfaction of such goal was intended to meet the requirements of Code
Section 162(m), the Committee shall certify that the goal has been satisfied in
accordance with the requirements set forth under Code Section 162(m).

12.       Effect of a Change in Control. Notwithstanding anything herein to the
contrary (with the exception of Sec. 6(h)), the provisions of this Section 12
shall apply in the case of a Change in Control of the Company, unless otherwise
provided by the Committee in the Agreement and as supplemented by Section 14.

(a)       Awards Assumed or Substituted by Surviving Entity. With respect to
Options and Awards assumed by the surviving entity or otherwise equitably
converted or substituted in connection with a Change in Control: if within two
years after the effective date of the Change in Control, a Grantee’s employment
is terminated without Cause or the Grantee resigns for Good Reason, then (i) all
of the Grantee’s outstanding Options and Stock Appreciation Rights shall become
fully vested and exercisable and shall remain exercisable for three years
following such termination, provided no Option or Stock Appreciation Right shall
be exercisable beyond the term of the Option or Stock Appreciation Right, (ii)
all time-based vesting restrictions on his or her outstanding Awards shall
lapse, and (iii) unless otherwise provided in the Agreement, the payout level
under all of the Grantee’s performance-based that were outstanding immediately
prior to effective time of the Change in Control shall be determined and deemed
to have been earned as of the date of termination based upon an assumed
achievement of all relevant performance goals at the target level, or at a level
in excess of target in the Committee’s discretion, and there shall be a pro rata
payout to such Grantee within sixty (60) days following the date of termination
of employment based upon the length of time within the performance period that
has elapsed prior to the date of termination of employment. With regard to each
Award or Option, a Grantee shall not be considered to have resigned for Good
Reason unless either (i) the Agreement provides for a Good Reason termination or
(ii) the Grantee is party to an employment, severance or similar agreement with
the Company or a Subsidiary that includes provisions in which the Grantee is
permitted to resign for Good Reason. To the extent that this provision causes
Incentive Stock Options to no longer satisfy the requirements of Code Section
422, the affected Options shall be deemed to be Nonqualified Stock Options.

 

(b)       Awards not Assumed or Substituted by Surviving Entity. Upon the
occurrence of a Change in Control, and except with respect to any Options or
Awards assumed by the surviving entity or otherwise equitably converted or
substituted in connection with the Change in Control: (i) outstanding Options
and Stock Appreciation Rights shall become fully vested and exercisable, (ii)
time-based vesting restrictions on outstanding Awards shall lapse, and (iii)
unless otherwise provided in the Agreement, the target payout opportunities
attainable under outstanding performance-based Awards shall be deemed to have
been earned as of the effective date of the Change in Control based upon an
assumed achievement of all relevant performance goals at the target level, or at
a level in excess of target in the Committee’s discretion, and there shall be a
pro rata payout to Grantees within sixty (60) days following the Change in
Control based upon the length of time within the performance period that has
elapsed prior to the Change in Control. To the extent that this provision causes
Incentive Stock Options to no longer satisfy the requirements of Code Section
422, the affected Options shall be deemed to be Nonqualified Stock Options.

 

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(c)       Definitions.

 

(1)       A surviving entity will be deemed to have “assumed by the surviving
entity or otherwise equitably converted or substituted” an Award or Option under
this Plan if the surviving entity substitutes an Award or Option under this Plan
or an award or stock option under a plan of the surviving entity having
equivalent value to and terms and conditions no less favorable than the original
Award or Option, or otherwise assumes the obligations under and/or equitably
adjusts such original Award or Option. The Committee or the Board shall have
sole authority to determine whether the proposed assumption of an Award or
Option by a surviving entity meets the requirements listed in this Section
12(c)(1).

 

(2)       “Good Reason” (or a similar term denoting constructive termination)
has the meaning, if any, assigned such term in the employment, severance or
similar agreement, if any, between a Grantee and the Company or a Subsidiary;
provided, however, if there is no such employment, severance or similar
agreement in which such term is defined, “Good Reason” shall have the meaning,
if any, given such term in the applicable Agreement. If not defined in either
such document, the term “Good Reason” as used herein shall not apply to a
particular Award.

 

13.       Adjustment Upon Changes in Capitalization.

(a)       In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to the maximum
number and class of shares of stock with respect to which Options or Awards may
be granted under the Plan, the number and class of shares as to which Options or
Awards have been granted under the Plan, and the purchase price therefor, if
applicable.

(b)       Any such adjustment in the Shares or other securities subject to
outstanding Incentive Stock Options (including any adjustments in the purchase
price) shall be made in such manner as not to constitute a modification as
defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code.

(c)       If, by reason of a Change in Capitalization, a Grantee of an Award
shall be entitled to new, additional or different shares of stock or securities,
such new additional or different shares shall thereupon be subject to all of the
conditions, restrictions and performance criteria which were applicable to the
Shares or units pursuant to the Award prior to such Change in Capitalization.

 

14.       Effect of Certain Transactions. Upon the occurrence or in anticipation
of any corporate event or transaction involving the Company (including, without
limitation, any merger, consolidation, reorganization, recapitalization,
combination or exchange of shares, liquidation or dissolution, sale or
disposition of all or substantially all of the Company’s assets, or any Change
in Capitalization), the Committee may, in its sole discretion, notwithstanding
Section 12 hereunder, provide (i) that Options or Awards will be settled in cash
rather than stock or in unrestricted shares of stock of the surviving entity,
(ii) that Options or Awards will become immediately vested and non-forfeitable
and exercisable (in whole or in part) and will be cancelled after a designated
period of time to the extent not then exercised, (iii) that Options or Awards
will be assumed by another party to a transaction or otherwise be equitably
converted or substituted in connection with such transaction, (iv) that
outstanding Options or Awards may be settled by payment in cash or cash
equivalents equal to the excess of the fair market value of the underlying
stock, as of a specified date associated with the transaction (or the per share
transaction price), over the exercise or base price of the Option or Award and
those Options or Awards not eligible for payment shall be cancelled, (v) that
performance targets and performance periods for performance-based Awards and
Options will be modified, consistent with Code Section 162(m) where applicable,
or (vi) any combination of the foregoing. The Committee’s determination need not
be uniform and may be different for different Grantees whether or not such
Grantees are similarly situated.

 

15.       Termination and Amendment of the Plan. The Plan shall terminate on the
day preceding the tenth anniversary of its effective date and no Option or Award
may be granted thereafter. The Board may sooner terminate or amend the Plan at
any time, and from time to time; provided, however, that, except as provided in
Sections 13 and 14 hereof, no amendment shall be effective unless approved by
the shareholders of the Company in accordance with applicable law and
regulations at an annual or special meeting held within twelve months before or
after the date of adoption of such amendment, where approval of such amendment
is required under applicable laws, policies or regulations or applicable listing
or other requirements of the national securities exchange upon which the Shares
are then listed, including amendments that will:

(a)       increase the number of Shares as to which Options or Awards may be
granted under the Plan;

(b)       change the class of persons eligible to participate in the Plan; or

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(c)       materially extend the term of the Plan.

Except as otherwise provided herein, rights and obligations under any Option or
Award granted before any amendment of the Plan shall not be altered or impaired
by such amendment, except with the consent of the Grantee.

16.       Non-Exclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.

17.       Limitation of Liability. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:

(a)       give any person any right to be granted an Option or Award other than
at the sole discretion of the Committee or the Board;

(b)       give any person any rights whatsoever with respect to Shares except as
specifically provided in the Plan;

(c)       limit in any way the right of the Company to terminate the employment
or service of any person at any time; or

(d)       be evidence of any agreement or understanding, expressed or implied,
that the Company will employ any person in any particular position at any
particular rate of compensation or for any particular period of time.

18.       Regulations and Other Approvals; Governing Law.

(a)       This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of New Jersey
without giving effect to the choice of law principles thereof, except to the
extent that such law is preempted by federal law.

(b)       The obligation of the Company to sell or deliver Shares with respect
to Options and Awards granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

(c)       The Plan is intended to comply with Rule 16b-3 promulgated under the
Exchange Act and Section 162(m) of the Code (each as amended from time to time)
and the Committee shall interpret and administer the provisions of the Plan or
any Agreement in a manner consistent therewith to the extent necessary. Any
provisions inconsistent with such Rule or Section shall be inoperative but shall
not affect the validity of the Plan or any grants thereunder.

(d)       Except as otherwise provided in Section 15, the Board may make such
changes as may be necessary or appropriate to comply with the rules and
regulations of any government authority or to obtain for Eligible Employees
granted Incentive Stock Options the tax benefits under the applicable provisions
of the Code and regulations promulgated thereunder.

(e)       Each Option and Award is subject to the requirement that, if at any
time the Committee determines, in its absolute discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions unacceptable to the Committee.

(f)       In the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended, and is not otherwise exempt from such
registration, such Shares shall be restricted against transfer to the extent
required by the Securities Act of 1933, as amended, or regulations thereunder,
and the Committee may require any individual receiving Shares pursuant to the
Plan, as a condition precedent to receipt of such Shares (including upon
exercise of an Option), to represent to the Company in writing that the Shares
acquired by such individual are acquired for investment only and not with a view
to distribution.

19.       Miscellaneous.

(a)       Multiple Agreements. The terms of each Option or Award may differ from
other Options or Awards granted under the Plan at the same time, or at some
other time. The Committee may also grant more than one Option or Award to a
given Eligible Employee during the term of the Plan, either in addition to, or
in substitution for, one or more Options or Awards previously granted to that
Eligible Employee. The grant of multiple Options and/or Awards may be evidenced
by a single Agreement or multiple Agreements, as determined by the Committee.

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(b)       Withholding of Taxes. The Company shall have the right to deduct from
any distribution of cash to any Grantee an amount equal to the federal, state
and local income taxes and other amounts required by law to be withheld with
respect to any Option or Award. Notwithstanding anything to the contrary
contained herein, if a Grantee is entitled to receive Shares upon exercise of an
Option or pursuant to an Award, the Company shall have the right to require such
Grantee, prior to the delivery of such Shares, to pay to the Company the amount
of any federal, state or local income taxes and other amounts which the Company
is required by law to withhold. A Grantee who is an Eligible Employee may be
permitted, in the Committee’s discretion, to satisfy any amounts required to be
withheld by the Company under applicable federal, state and local tax laws in
effect from time to time, by electing to have the Company withhold a portion of
the Shares to be delivered for the payment of such taxes. The Agreement
evidencing any Incentive Stock Options granted under this Plan shall provide
that if the Grantee makes a disposition, within the meaning of Section 424(c) of
the Code and regulations promulgated thereunder, of any Share or Shares issued
to him or her pursuant to his or her exercise of the Incentive Stock Option
within the two-year period commencing on the day after the date of grant of such
Option or within the one-year period commencing on the day after the date of
transfer of the Share or Shares to the Grantee pursuant to the exercise of such
Option, he or she shall, within ten (10) days of such disposition, notify the
Company thereof.

(c)       Designation of Beneficiary. Each Grantee may, with the consent of the
Committee, designate a person or persons to receive in the event of his/her
death, any Option or Award or any amount payable pursuant thereto, to which
he/she would then be entitled. Such designation will be made upon forms supplied
by and delivered to the Company and may be revoked in writing. If a Grantee
fails effectively to designate a beneficiary, then his/her estate will be deemed
to be the beneficiary.

(d)       Section 409A Compliance. The Plan is intended to be administered and
interpreted in a manner consistent with the requirements, where applicable, of
Section 409A of the Code. Where reasonably possible and practicable, the Plan
shall be administered in a manner to avoid the imposition on Grantees in the
Plan of immediate tax recognition and additional taxes pursuant to Section 409A.
Notwithstanding the foregoing, neither the Company, the Board nor the Committee
shall have any liability to any person in the event Section 409A applies to any
such Award or Option in a manner that results in adverse tax consequences for
the Grantee or any of his/her beneficiaries or transferees.

(e)       Recoupment. To the extent required by applicable law (including,
without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and
regulations of any securities exchange or inter-dealer quotation service on
which the Shares are listed or quoted, or if so required pursuant to a written
policy adopted by the Company, Options and Awards shall be subject (including on
a retroactive basis) to clawback, forfeiture or similar requirements.

 

20.       Effective Date. The effective date of the Plan shall be the date of
its adoption by the Board, subject only to the approval by the affirmative vote
of a majority of the votes cast at a meeting of shareholders at which a quorum
is present to be held within twelve (12) months of such adoption. No Options or
Awards shall vest hereunder unless such shareholder approval is obtained.

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