EXHIBIT A

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SOMERSET HILLS BANCORP
 
Nonstatutory Stock Option Agreement
Granted Under 2007 Equity Incentive Plan
 
 
1.           Grant of Option.
 
This agreement evidences the grant by Somerset Hills Bancorp, a New Jersey
corporation (the “Company”), on            , 200[ ] (the “Grant Date”)
to [                  ], an [employee], [consultant], [director] of the Company
(the “Participant”), of an option to purchase, in whole or in part, on the terms
provided herein and in the Company’s 2007 Equity Incentive Plan (the “Plan”), a
total of [                  ] shares (the “Shares”) of common stock, without par
value per share, of the Company (“Common Stock”) at $[          ] per
Share.  Unless earlier terminated, this option shall expire at 5:00 p.m.,
Eastern time, on [_______] (the “Final Exercise Date”).
 
It is intended that the option evidenced by this agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the
“Code”).  Except as otherwise indicated by the context, the term “Participant”,
as used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms. Defined terms used herein
and not otherwise defined shall have the meanings ascribed to them under the
Plan, which is incorporated into and made a part of this Agreement.
 
 
2.           Vesting Schedule.
 
This option will become exercisable (“vest”) as follows:
 
DATE
NUMBER OF SHARES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Notwithstanding the foregoing, upon the occurrence of a Change In Control Event,
this option shall immediately become exercisable for all Shares listed under
Section 1.
 
The right of exercise shall be cumulative so that to the extent the option is
not exercised in any period to the maximum extent permissible it shall continue
to be exercisable, in whole or
 

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in part, with respect to all Shares for which it is vested until the earlier of
the Final Exercise Date or the termination of this option under Section 3 hereof
or the Plan.
 
 
3.           Exercise of Option.
 
 
(a)           Form of Exercise.  Each election to exercise this option shall be
in writing in the form attached hereto as Exhibit A, signed by the Participant,
and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan.  The
Participant may purchase less than the number of shares covered hereby, provided
that no partial exercise of this option may be for any fractional share.
 
 
(b)           Continuous Relationship with the Company Required.  Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the Grant Date, an employee or officer or director of, or
consultant or advisor to, the Company or any other entity the employees,
officers, directors, consultants, or advisors of which are eligible to receive
option grants under the Plan (an “Eligible Participant”).
 
 
(c)           Termination of Relationship with the Company.  If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), providedthat this option shall be exercisable only to the extent that the
Participant was entitled to exercise this option on the date of such
cessation.  Notwithstanding the foregoing, if the Participant, prior to the
Final Exercise Date, violates the non-competition or confidentiality provisions
of any employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon written notice to the Participant from
the Company describing such violation.
 
 
(d)           Exercise Period Upon Death or Disability.  If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for “cause” as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant (or in the case of death by an authorized transferee), providedthat
this option shall be exercisable only to the extent that this option was
exercisable by the Participant on the date of his or her death or disability,
and further provided that this option shall not be exercisable after the Final
Exercise Date.
 
 
(e)           Discharge for Cause.  If the Participant, prior to the Final
Exercise Date, is discharged by the Company for “cause” (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge.  “Cause” shall mean willful misconduct by the
Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination
shall be conclusive.
 

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4.           Withholding.
 
 
No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
 
 
5.           Nontransferability of Option.
 
 
An Option granted hereunder may only be transferred or assigned by a Participant
to an (i) immediate family member, (ii) a trust, benefit plan or similar
arrangement established for the benefit of a Participant or one or more
immediate family members, or (iii) to a limited liability company, partnership,
limited partnership or similar entity consisting of, at the time of transfer or
assignment, the Participant and one or more immediate family members.  For
purposes of this provision, the term "immediate family member" means a
Participant's spouse, parents, children (whether biological, by adoption or by
marriage) grandchildren and great grandchildren.  Except as permitted under this
Section 5, and except for transfers undertaken pursuant to will or by the laws
of decent and distribution, Options granted hereunder shall not be transferable
or assignable.
 
 
Provisions of the Plan.
 
 
This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
 
 
IN WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer.  This option shall take effect as
a sealed instrument.
 

 
SOMERSET HILLS BANCORP
 
Dated:  ________________                      
By:
      
Name:
     
Title:
 

 

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PARTICIPANT’S ACCEPTANCE
 
The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof.  The undersigned hereby acknowledges receipt of a copy of
the Company’s 2007 Equity Incentive Plan.
 

 
PARTICIPANT:
   
 
   
Address:
 
     
 
 

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EXHIBIT A
 
NOTICE OF STOCK OPTION EXERCISE
 
Date: _____
 
_____________________
_____________________
_____________________
 
Attention:  Treasurer

Dear Sir or Madam:
 
I am the holder of a Stock Option granted to me under the Somerset Hills Bancorp
(the “Company”) 2007 Equity Incentive Plan on _________ for the purchase of
__________ shares of Common Stock of the Company at a purchase price of
$__________ per share.
 
I hereby exercise my option to purchase _________ shares of Common Stock (the
“Shares”), for which I have enclosed__________in the amount of ________.  Please
register my stock certificate as follows:
 

 
Name(s):
       
 
   
Address:
 
   
Tax I.D. #:
           
Very truly yours,
_____________________________
(Signature)