Exhibit 10.2

 

 

Name:

________________________

No. of Options: _________________

 

1ST CONSTITUTION BANCORP

2006 DIRECTORS STOCK PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

 

This NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made this ______
day of ______________, 200__ (the “Award Date”) between 1ST CONSTITUTION
BANCORP, a New Jersey corporation (the “Company”) and ___________________ (the
“Participant”). Capitalized terms used in this Agreement but not defined upon
their first usage shall have the meanings ascribed to them in the Company’s 2006
Directors Stock Plan, as it may be amended from time to time (the “Plan”).

 

1.        Grant of Option. The Company hereby grants to the Participant the
right and option (the “Option”) to purchase _____ shares of the Company’s common
stock, no par value (the “Shares”) at a price of $[no less than FMV of Award
Date] per share (the “Option Price”) pursuant to the Plan, subject to the terms
and conditions of the Plan and this Agreement. The Option shall expire on
______________________ (the “Expiration Date”).

 

2.        Type of Option. This Option will not be treated by the Company as an
“incentive stock option” as defined in Section 422 of the Internal Revenue Code
of 1986, as amended.

 

3.        Incorporation by Reference of the Plan. The Plan is hereby
incorporated by reference into this Agreement. The Participant hereby
acknowledges receipt of a copy of the Plan and represents and warrants to the
Company that the Participant has read and understands the terms and conditions
of the Plan. The execution of this Agreement by the Participant constitutes the
Participant’s acceptance of and agreement to the terms and conditions of the
Plan and this Agreement.

 

4.        Vesting of Option. Unless the Company’s Board of Directors (the
“Board”) provides for earlier vesting, the Option shall vest in accordance with
the following schedule:

 

 

Percentage of Options

Scheduled Vesting Date

 

 

________________

Immediately

 

 

________________

____ anniversary of Award Date

 

________________

____ anniversary of Award Date

 

5.        Exercise. The Participant may exercise some or all of the Option by
delivering to the Company, a completed notice of exercise in the form attached
to this Agreement, together with payment in full of the aggregate exercise price
and, if applicable, withholding taxes.

 

6.        Form of Payment. Payment of the aggregate Exercise Price and, if
applicable, withholding taxes, may be made in one of the following methods:

 

(a)    Cash, certified or bank cashier’s check.

 

(b)    Shares of the Company’s Common Stock duly endorsed for transfer to the
Company with signature guaranteed, which may be (i) shares which were received
by the Participant upon exercise of one or more nonqualified stock options, but
only if such shares had been held by the Participant for at least six months, or
(ii) shares which were received by the Participant upon the vesting of one or
more shares of restricted stock of the Company, but only if and to the extent
that such shares had been held by the Participant for at least six months after
vesting, or (iii) shares otherwise owned by the Participant.

 

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(c)

Pursuant to a cashless exercise program, if one is established by the Board.

 

 

7.

Effect of Termination of Service.

 

(a)    Termination of Service Upon Death, Disability or Retirement. Upon
termination of the Participant’s service as a Director by reason of death,
disability (as determined by the Board), or [retirement at or after age ____],
all unvested Options shall become fully vested and exercisable, and may be
exercised by the Participant, the Participant’s estate, beneficiary, or
representative, as the case may be, for a period of one (1) year after the date
of termination of service or until the Expiration Date, whichever is sooner.

 

(b)    Termination of Service For Other Reasons. Upon termination of the
Participant’s service as a Director prior to the Expiration Date for any reason
other than death, disability, or retirement, then (I) all unvested Options shall
expire and terminate upon the date of termination of service, and (II) all
vested Options may be exercised by the Participant for a period of three (3)
years after the date of termination of service or until the Expiration Date,
whichever is sooner.

 

8.        No Shareholder Rights. The Participant shall not have any rights as a
shareholder of the Company with respect to any Shares which may be purchased by
exercise of this Option unless and until the Option is duly and fully exercised.

 

9.        Limits on Transferability. The Option shall not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, other than by will
or the laws of descent and distribution, or as otherwise permitted by the Board.

 

10.      Tax Withholding Obligations. In order to satisfy any withholding or
similar tax requirements relating to the Options, the Company has the right to
deduct or withhold from any payroll or other payment to a Participant, or
require the Participant to remit to the Company, an appropriate payment or other
provision, which may include the withholding of Shares.

 

11.      Change in Control. Upon a Change in Control, all non-forfeited,
unvested Options shall become fully exercisable and vested, subject to
compliance with legal and other requirements.

 

12.      Trading Black Out Policies. The Participant agrees to abide by all
trading “black out” policies established from time to time by the Company.

 

13.      No Service Rights. Nothing in this Agreement will confer upon the
Participant any right to continued service as a Director.

 

14.      Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
principals of conflicts of laws, and applicable provisions of federal law.

 

 

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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date
and year first above written.

 

 

1ST CONSTITUTION BANCORP

 

 

 

 

By:________________________________

 

[Name]

 

 

 

 

 

PARTICIPANT:

 

 

 

 

______________________________________

 

[NAME]

 

 

 

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NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION

 

 

Date: _____________________

 

1st Constitution Bancorp

P.O. Box 634

2650 Route 130 North

Cranbury, New Jersey 08512

Attention: Secretary

 

 

Re:

1st Constitution Bancorp (the “Company”) 2006 Directors Stock Plan

 

I hereby exercise the option (“Option”) granted pursuant to the attached
Nonqualified Stock Option Agreement (the “Agreement”) to acquire ____ shares of
the Company’s Common Stock (the “Shares”) at the exercise price of $____ per
share, for an aggregate exercise price of $_______.

 

 

My enclosed form of payment is (check one):

 

 

_____

cash in the amount of $______

 

 

_____

certified or bank cashier’s check in the amount of $_____

 

_____

by surrender of shares of the Company’s Common Stock with a value of $_____
represented by certificate number_____, duly endorsed for transfer to the
Company with signature guaranteed, which may be (i) shares which were received
by the Participant upon exercise of one or more nonqualified stock options, but
only if such shares had been held by the Participant for at least six months, or
(ii) shares which were received by the Participant upon the vesting of one or
more shares of restricted stock of the Company, but only if and to the extent
that such shares had been held by the Participant for at least six months after
vesting, or (iii) shares otherwise owned by the Participant.

 

As a condition to this Option exercise, I hereby agree to satisfy all applicable
federal, state and local income and employment tax withholding obligations
associated with this Option exercise, and herewith deliver to the Company the
full amount of such obligations (or have made arrangements acceptable to the
Company to satisfy such obligations).

 

Please make a notation on the Agreement to evidence the exercise of the Option
as set forth in this Notice and return the Agreement, if any Options remain
thereunder, along with a certificate representing the Shares to me at the
address below:

 

 

________________________________

 

Name:

 

 

________________________________

 

________________________________

 

 

(PRINT ADDRESS)

 

 

 

 

 

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