ex10-1.htm


    Exhibit
10.1


    PENNSYLVANIA
COMMERCE BANCORP, INC.

    AMENDED
2006 EMPLOYEE STOCK OPTION PLAN

    


    


    
      	
              1.

            	
              Purpose of
      Plan

            


    

    


    The
purpose of this Plan is to enable Pennsylvania Commerce Bancorp, Inc.
(hereinafter referred to as “Commerce”) to continue to compete successfully in
attracting and retaining key employees with outstanding abilities by making it
possible for them to purchase shares of Commerce's common stock on terms which
will give them a more direct and continuing interest in the future success of
Commerce.

    


    
      	
              2.

            	
              Definitions

            


    

    


    "Commerce" means
Pennsylvania Commerce Bancorp, Inc., a Pennsylvania corporation and bank holding
company.

    


    "Board" means the
Board of Directors of Commerce.

    


    "Committee" means a
committee established by the Board.  The Committee shall consist of
three or more members of the Board.  No member of the Committee may
receive Options under the Plan.  The Compensation Committee may be the
Committee if it meets these qualifications.

    


    "Employees" means
employees, including officers, regularly employed on a salary basis by
Commerce.  “Employment with Commerce”, or words to that effect, shall
include employment by any subsidiary or affiliate of Commerce.

    


    “Fair Market Value” of
a share of Commerce's common stock shall mean its closing sale price on the
principal stock exchange on which the stock is traded on the date as of which
the value is being determined. If there is no reported sale on that date, the
Fair Market Value shall be the closing sale on the next preceding day for which
a sale was reported

    


    “ISO” means an
incentive stock option described in Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

    


    “NQSO” means a stock
option, which is not described in Section 422 of the Code.

    


    “Option” means an
option, either in the form of an ISO or NQSO, granted in accordance with the
terms of this Plan.

    


    "Optionee" means a
person to whom an option has been granted under this Plan.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Option Price” means
the per share exercise price of the shares of Commerce common stock covered by
each option.

    


    "Shares" means shares
of common stock of Commerce.

    


    
      	
              3.

            	
              Aggregate Number of
      Shares

            


    

    


    The total
number of Shares for which Options may be granted under this Plan shall not
exceed in the aggregate 500,000 shares, subject to appropriate adjustment if the
number of issued shares shall be increased or reduced by change in par value,
combination, or split-up, reclassification, distribution of a dividend payable
in stock, or similar corporate action.  Shares covered by Options,
which have expired, which have been cancelled or otherwise surrendered may again
be available for option under this Plan.  Options may be granted in
the form of ISOs or NQSOs.

    


    
      	
              4.

            	
              Adjustment of
      Options

            


    

    


    The
number of Shares optioned from time to time to individual Optionee’s under the
Plan, and the Option Prices therefore, shall be appropriately adjusted to
reflect any changes in par value, combination, split-up, reclassification,
distribution of dividend payable in stock, or the like.

    


    
      	
              5.

            	
              Granting of
      Options

            


    

    


    The
Board, or if the Board so determines, the Committee, is authorized to grant
Options to selected employees pursuant to this Plan during the calendar year
2006 and in any calendar year thereafter to December 31, 2015.  The
number of Shares, if any, optioned in each year, the employees to whom Options
are granted, and the number of Shares optioned to each employee selected shall
be wholly within the discretion of the Board or the Committee.  The
Board may grant both ISOs and NQSOs to the same employee. Board action on
Options and administration of this Plan shall be only upon the advice and
recommendation of the Committee if the Board has appointed a
Committee.

    


    
      	
              6.

            	
              Terms of
      ISOs

            


    

    


    ISOs
granted under this Plan shall contain the following terms:

    


    
      	
               
      

            	
              (a)

            	
              The
      ISO price shall be fixed by the Board or the Committee but shall in no
      event be less than 100% of the fair market value of the Shares subject to
      the ISO on the date the ISO is granted.  The ISO price, in the
      case of an Optionee who, at the time the Option is granted, owns more than
      10% of the outstanding Shares of Commerce's common stock shall be at least
      110% of the fair market value of the Shares subject to the ISO on the date
      the ISO is granted.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (b)

            	
              ISOs
      shall not be transferable otherwise than by will or by the laws of descent
      and distribution.  No ISO shall be subject, in whole or in part,
      to attachment, execution or levy of any
kind.

            


    

    


    
      
        	 	
                (c)

              	
                Each
      ISO shall expire and all rights under the ISO shall end at the expiration
      of the exercise period for the ISO, which shall in no event be extended
      beyond its original term and shall not be more than ten years after the
      date on which it was granted.  Provided, however, that in the
      case of an Optionee who, at the time the Option is granted, owns more than
      10% of the outstanding shares of Commerce's common stock, ISOs shall
      expire no more than five years after the date on which the ISO was
      granted.

              


      

    

    


    
      	
               
      

            	
              (d)

            	
              ISOs
      shall be exercisable only by the Optionee during the Optionee’s
      lifetime.  ISOs may be exercised only while employed by Commerce
      or within (i) three years after retirement, or (ii) three months after
      termination of employment (but in any event not later than the end of the
      period fixed by the Board or the Committee of the Board in accordance with
      the provisions of paragraph (c) of Section 6).  In all other
      respects, an ISO is exercisable by retired or terminated Optionee’s only
      to the extent the ISO was exercisable by the Optionee on the last day of
      his or her employment with Commerce.  For purposes of this
      paragraph (d), retirement shall mean termination of employment by an
      Optionee who has attained age 62.  If an Optionee retires due to
      disability, the ISOs granted to the Optionee shall be exercisable within
      12 months of the date of retirement (but in any event not later than the
      end of the period fixed by the Board or the Committee of the Board in
      accordance with the provisions of paragraph (c) of this Section
      6).

            


    

    


    
      	
               
      

            	
              (e)

            	
              If
      an Optionee dies within a period during which an ISO could have been
      exercised by the Optionee, the ISO may be exercised within three years
      after the Optionee’s death (but not later than the end of the period fixed
      by the Board or the Committee of the Board in accordance with the
      provisions of paragraph (c) of this Section 6) by those entitled under the
      Optionee’s will or the laws of descent and distribution, but only if and
      to the extent the ISO was exercisable by the Optionee immediately prior to
      the Optionee’s death.

            


    

     

    
      	
               
      

            	
              (f)

            	
              If
      Optionee's employment with Commerce is terminated by Commerce due to the
      misconduct of Optionee, as determined in the reasonable judgment of
      management of Commerce, all ISOs granted to the Optionee prior to
      termination shall be forfeited by Optionee and rendered
      unexercisable.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (g)

            	
              ISOs
      may be exercised in whole or in part from time to time, subject to the
      provisions of this Plan and to such additional or different terms
      regarding the exercise of the ISOs as the Board or the Committee of the
      Board may fix at the time of grant.

            


    

    


    
      	
               
      

            	
              (h)

            	
              ISOs
      shall not be granted to any individual pursuant to this Plan, the effect
      of which would be to permit that individual first to exercise ISOs, in any
      calendar year, for the purchase of Shares having a fair market value in
      excess of $100,000 (determined at the time of the grant of the
      ISOs).  Any Optionee may exercise ISOs for the purchase of
      Shares valued in excess of $100,000 (determined at the grant of the ISOs)
      in any calendar year, but only if the right to exercise the ISOs shall
      have first become available in prior calendar
  years.

            


    

    


    
      	
               
      

            	
              (i)

            	
              An
      ISO shall be automatically converted to an NQSO in the event all
      requirements of Section 422 of the Code are not
  met.

            


    

    


    7.           Terms of
NQSOs.

    


    
      	
               
      

            	
              NQSOs
      granted under this Plan shall contain the following
  terms:

            


    

    


    
      	
               
      

            	
              (a)

            	
              The
      NQSO price shall be fixed by the Board or the Committee, and may not be
      less than 100% of the fair market value of the Shares subject to the NQSO
      on the date the NQSO is granted.

            


    

    


    
      	
               
      

            	
              (b)

            	
              NQSOs
      shall not be transferable otherwise than by will or by the laws of descent
      and distribution.  No NQSO shall be subject, in whole or in
      part, to attachment, execution or levy of any
  kind.

            


    

    


    
      
        	
                 
      

              	
                (c)

              	
                Each
      NQSO shall expire and all rights under the NQSO shall end at the
      expiration of the exercise period for the NQSO, which shall in no event be
      extended beyond its original term and shall not be more than ten years
      after the date on which it was granted.  The Board or the
      Committee shall establish the exercise period for each NQSO, subject in
      all cases to paragraphs (d), (e) and (f) of this Section
  7.

              


      

    

    


    
      
        	
                 
      

              	
                (d)

              	
                NQSOs
      shall be exercisable only by the Optionee during the Optionee’s
      lifetime.  NQSOs may be exercised only while employed by
      Commerce or within (i) three years after retirement, or (ii) three months
      after termination of employment (but in any event not later than the end
      of the period fixed by the Board or the Committee of the Board in
      accordance with the provisions of 

              


         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        	 	 	paragraph
      (c) of Section 7).  In all other respects, an NQSO is
      exercisable by retired or terminated Optionees only to the extent the NQSO
      was exercisable by the Optionee on the last day of his or her employment
      with Commerce.  For purposes of this paragraph (d), retirement
      shall mean termination of employment by an Optionee who has attained age
      62.  If an Optionee retires due to disability, the NQSOs granted
      to the Optionee shall be exercisable within 12 months of the date of
      retirement (but in any event not later than the end of the period fixed by
      the Board or the Committee of the Board in accordance with the provisions
      of paragraph (c) of this Section
7).


      

    

    


    
      	
               
      

            	
              (e)

            	
              If
      an Optionee dies within a period during which an NQSO could have been
      exercised by the Optionee, the NQSO may be exercised within three years
      after the Optionee’s death (but not later than the end of the period fixed
      by the Board or the Committee of the Board in accordance with the
      provisions of paragraph (c) of this Section 7) by those entitled under the
      Optionee’s will or the laws of descent and distribution, but only if and
      to the extent the NQSO was exercisable by the Optionee immediately prior
      to the Optionee’s death.

            


    

    


    
      	
               
      

            	
              (f)

            	
              If
      Optionee's employment with Commerce is terminated by Commerce due to the
      misconduct of Optionee, as determined in the reasonable judgment of
      management of Commerce, all NQSOs granted to the Optionee prior to
      termination shall be forfeited by Optionee and rendered
      unexercisable.

            


    

    


    
      	
               
      

            	
              (g)

            	
              NQSOs
      may be exercised in whole or in part from time to time, subject to the
      provisions of this Plan and to such additional or different terms
      regarding the exercise of the NQSOs as the Board or the Committee of the
      Board may fix at the time of grant.

            


    

    


    
      	
              8.

            	
              Vesting of
      Options

            


    

    


    No Option
granted under this Plan may be exercised within one year from the date of the
grant of the Option.  Options held more than one year may be exercised
based upon the Option holding period, pursuant to the following
schedule:

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	 
      	
                Option Holding
      Period

              	
                Percent Vested

              
	 
      	 
      	 
      
	 
      	
                Less
      than 1 year

              	
                  0%

              
	 
      	
                More
      than 1 year and less than 2 years

              	
                 25

              
	 
      	
                More
      than 2 years and less than 3 years

              	
                 50

              
	 
      	
                More
      than 3 years and less than 4 years

              	
                 75

              
	 
      	
                More
      than 4 years

              	
                100

              


      

    

    


    


    
      	
              9.

            	
              Exercise Eligibility
      Period Following Termination of
  Employment

            


    

    


    Options
granted under this Plan less than one year prior to date of termination of
employment are not exercisable under any circumstances.  Options
granted at least one year prior to termination of employment must be exercised
prior to the expiration date of the Option and within the period set forth below
depending upon the reason for termination:

    


    
      
        	 
      	 
      	
                Options
      Eligible

              	
                Exercise
      Eligibility

              
	 
      	
                Termination Reason

              	
                for
      Exercise 

              	
                Period

              
	 
      	 
      	 
      	 
      
	 
      	
                Retirement

              	
                100%
      of outstanding

              	
                3
      years from

              
	 
      	 
      	
                Options

              	
                retirement
      date

              
	 
      	 
      	 
      	 
      
	 
      	
                Death
      while employed

              	
                100%
      of outstanding

              	
                3
      years from

              
	 
      	 
      	
                Options

              	
                date
      of death

              
	 
      	 
      	 
      	 
      
	 
      	
                Total
      & permanent

              	
                100%
      of outstanding

              	
                1
      year from termination

              
	 
      	
                disability

              	
                Options

              	
                date

              
	 
      	 
      	 
      	 
      
	 
      	
                Misconduct

              	
                None

              	
                Not
      applicable

              
	 
      	 
      	 
      	 
      
	 
      	
                Any
      other reason

              	
                Any
      Option 100% vested

              	
                3
      months from

              
	 
      	 
      	
                plus
      the vested portion

              	
                termination
      date

              
	 
      	 
      	
                of
      the next oldest Option

              	 
      


      

    

    


    
      	
              10.

            	
              Reorganization of
      Commerce

            


    

    


    In the
event that Commerce is succeeded by another corporation or bank in a
reorganization, merger, consolidation, acquisition of property or stock,
separation or liquidation, the successor corporation or bank shall assume the
outstanding Options granted under this Plan or shall substitute new Options for
them.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              11.

            	
              Delivery of
      Shares

            


    

    


    No Shares
shall be delivered upon the exercise of an Option until the Option price has
been paid in full in cash or, at the discretion of the Board or the Committee,
in whole or in part in Commerce's common stock owned by the Optionee valued at
fair market value on the date of exercise.  If required by the Board,
no Shares will be delivered upon the exercise of an Option until the Optionee
has given Commerce a satisfactory written statement that he is purchasing the
Shares for investment and not with a view to the sale or distribution of
Shares.

    


    
      	
              12.

            	
              Continuation of
      Employment

            


    

    


    Neither
this Plan nor any Option granted under this Plan shall confer upon any employee
any right to continue in the employ of Commerce or limit in any respect the
right of Commerce or to terminate the employee’s employment at any
time.

    


    
      	
              13.

            	
              Administration

            


    

    


    The Board
or the Committee may make rules and regulations and establish procedures as it
deems appropriate for the administration of this Plan.  In the event
of a disagreement as to the interpretation of this Plan, any amendment thereto,
any rule, regulation or procedure thereunder, or as to any right or obligation
arising from or related to this Plan, the decision of the Board or the Committee
shall be final and binding upon all persons in interest, including Commerce,
Optionees, and shareholders of Commerce.

    


    
      	
              14.

            	
              Reservation of
      Shares

            


    

    


    Shares
delivered upon the exercise of an Option shall, in the discretion of the Board
or the Committee, be either authorized but unissued Shares, or previously issued
Shares acquired by Commerce through purchase in the open market or otherwise, or
a combination of both.  Commerce shall be under no obligation to
reserve or to retain in its treasury any particular number of Shares at any
time, and no particular Shares, whether unissued or held as treasury Shares,
shall be identified as those optioned under this Plan.

    


    
      	
              15.

            	
              Amendment of
      Plan

            


    

    


    The Board
without further action by the shareholders may amend this Plan from time to time
as it deems desirable.  However, no such amendment shall increase the
maximum number of Shares for which Options may be granted, reduce the minimum
Option Price, extend the maximum Option period, or permit the granting of
Options after December 31, 2015.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    
      	
              16.

            	
              Termination of the
      Plan

            


    

    


    The Board
may, in its discretion, terminate this Plan at any time prior to December 31,
2015.  Termination of the Plan shall not deprive Optionees of Options
granted prior to termination of the Plan.

    


    
      	
              17.

            	
              Effective Date -
      Shareholder Approval

            


    

    


    This Plan
shall become effective as of January 1, 2006, subject to approval by the holders
of a majority of the shares casting a vote at a meeting of shareholders of
Commerce where a quorum is present.