Document:

Exhibit 10.1

    EXHIBIT
      10.1

     

    STERLING
      BANK

     

    1994
      EMPLOYEE STOCK OPTION PLAN

     

    1.  Purpose
      of the Plan.

     

    This
      Sterling Bank 1994 Employee Stock Option Plan (the “Plan”) is intended to
      encourage stock ownership by certain key employees of Sterling Bank (the “Bank”)
      so that such employees may increase their proprietary interest in the success
      of
      the Bank and be encouraged to remain in the employ of the Bank. It is further
      intended that options issued pursuant to the Plan (the “Options”) shall
      constitute “incentive stock options” within the meaning of Section 422 of the
      Internal Revenue Code (the “Code”).

     

    2.  Administration:Option
      Grant.

     

    (a)  As
      specified herein, the Plan shall be administered by the members of the Board
      of
      Directors (the “Board”) who are “disinterested persons” as such term is defined
      in Rule 16(b)-3(c)2(i) under the Securities Exchange Act of 1934, as amended,
      and by a stock option committee (the “Committee”) appointed by the Board. The
      Committee shall consist of not less than two members of the Bank’s Board who are
“disinterested persons”. The Board may from time to time remove members from, or
      add members to, the Committee. Vacancies on the Committee, however caused,
      shall
      be filled by the Board; provided, however, that any individual appointed to
      the
      Committee shall be a Director who is a “disinterested person.” The Committee
      shall hold meetings at such times and places as it may determine. If the
      Committee consists of three or more members, the Committee shall select one
      of
      its members as Chairman. Acts by a majority of the Committee at a meeting at
      which a quorum is present, or acts reduced to or approved in writing by a
      majority of the members of the Committee, shall be the valid acts of the
      Committee. No person while a member of the Committee shall receive a
      discretionary grant or award under any stock plan of the Bank.

     

    (b)  The
      Committee shall from time to time in its discretion make recommendations to
      the
      Board with respect to the employees to be granted Options and the amount of
      stock subject to such Options. The Board shall have the final authority to
      grant
      Options under this Plan.

     

    (c)  The
      Committee shall be authorized to interpret the Plan and the Options granted
      thereunder, to establish, amend and rescind such rules and regulations as it
      deems necessary for the proper administration of the Plan, and to make all
      other
      determinations necessary or advisable for its administration. The Committee
      shall have the final authority to determine these matters. The interpretation
      and construction by the Committee of any provisions of the Plan or of any Option
      granted under it shall be final. No member of the Board or the Committee shall
      be liable for any action or determination made in good faith or with respect
      to
      the Plan or any Option granted thereunder.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.  Eligibility.

     

    The
      persons who shall be eligible to receive Options shall be the management
      employees (including such employees
      who may be members of the Board) of the Bank, but excluding persons who may
      own
      10% or more of the Bank’s Common Stock then outstanding. An Option holder
      (“Optionee”) may hold more than one Option but only on the terms and subject to
      the restrictions hereinafter set forth.

     

    4.  Shares
      of Stock Subject to the Plan.

     

    There
      will be reserved for use upon the exercise of Options to be granted under this
      Plan (subject to the provisions of Section 5(g) of this Plan) an aggregate
      of
      30,000 shares of common stock of the Bank (“Common Stock”), par value $10.00 per
      share, which shares may be in whole or in part, as the Board shall from time
      to
      time determine, authorized but unissued shares of Common Stock or issued shares
      of Common Stock which shall have been reacquired by the Bank. Shares delivered
      under the Plan shall be fully paid and non-assessable.

     

    5.  Terms
      and Conditions of Options.

     

    When
      the
      Board shall have granted Options, Notices of Grant of Stock Option shall be
      given to such Optionees in such form as the Committee shall from time to time
      approve, which Notices shall comply with and be subject to the following terms
      and conditions:

     

    (a)  Number
      of Shares.
      Each
      Notice of Grant of Stock Option shall state the number of shares to which it
      pertains.

     

    (b)  Option
      Price.
      Each
      Notice of Grant of Stock Option shall state the option price, which shall not
      be
      less than 100% of the fair market value of the shares of Common Stock of the
      Bank on the date of the granting of the Option. During such time as the Common
      Stock is not listed upon an established stock exchange or traded in the
      over-the-counter market, the fair market value per share shall be determined
      by
      the Board by relying upon whatever evidence it deems appropriate which may
      include, but need not be limited to, recent sales of the Common Stock, opinions
      of professional appraisers and recent sales of comparable shares of other
      companies. If the Common Stock is traded in the over-the-counter market, such
      fair market value shall be the mean between the dealer “bid” and “ask” prices of
      the Common Stock in the over-the-counter market on the day the option is
      granted, as reported by the National Association of Securities Dealers, Inc.
      If
      the Common Stock is listed upon an established stock exchange or exchanges,
      such
      fair market value shall be deemed to be the highest closing price of the Common
      Stock on such stock exchange or exchanges on the day the option is granted
      or,
      if no sale of the Bank’s Common Stock shall have been made on any stock exchange
      on that day, on the next preceding day on which there was a sale of such stock.
      Subject to the foregoing, the Board in fixing the option price shall have full
      authority and discretion.

     

    (c)  Medium
      and Time of Payment.
      Unless
      otherwise specified in the option grant pursuant to Section 7 hereof, the option
      price shall be payable in United States dollars upon the exercise of the Option
      and may be paid in cash or by check.

     

     

    
      
        
        

      

      
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    (d)  Term
      and Exercise of Options.
      Each
      Notice of Grant of Stock Option shall state the date on which the Option shall
      expire, as determined by the Board; provided, however, that no Option shall
      be
      exercisable after ten (10) years from the date on which it is granted. Options
      may be exercised by an Optionee only while he or she is employed by the Bank
      except as otherwise provided in Sections 5(e) and 5(f) hereof.

     

    The
      Notice of Grant of Stock Option, as determined by the Board, may provide that
      the Option shall be exercisable in installments rather than exercisable
      immediately in full, but the Board may provide, in the case of an Option not
      immediately exercisable in full, for the acceleration of the time at which
      the
      Option may be exercised.

     

    During
      the lifetime of the Optionee, an Option shall be exercisable only by him or
      her,
      shall not be assignable or transferable by him or her, and no other person
      shall
      acquire any rights therein. To the extent not exercised, installments shall
      accumulate and be exercisable, in whole or in part, in any subsequent period
      but
      not later than the expiration date of the Option.

     

    (e)  Termination
      of Employment Except By Death or Disability.
      In the
      event that the employment of an Optionee shall terminate by retirement or for
      any other reason, any unexercised Option, including any installments under
      Section 5(d) for which Optionee’s right to exercise had not yet accrued, shall
      be fully exercisable by Optionee (or his or her executor or administrator)
      at
      any time within three (3) months after the date of termination of employment;
      provided, that no Option shall be exercisable after the expiration of its
      term.

     

    (f)  Death
      or Disability.
      If the
      Optionee shall die or become permanently disabled while in the employ of the
      Bank, any unexercised Option, including any installments under Section 5(d)
      for
      which Optionee’s right to exercise had not yet accrued, shall be fully
      exercisable at any time within twelve (12) months after the Optionee’s death or
      disability (as the case may be), by the executors or administrators of the
      Optionee or by any person or persons who shall have acquired the Option directly
      from the Optionee by bequest or inheritance, or by the Optionee, respectively;
      provided, that no Option shall be exercisable after the expiration of its term.
      No Option shall be transferable by the Optionee otherwise than by will or the
      laws of descent and distribution.

     

    (g)  Recapitalization.
      Subject
      to any required action by the stockholders, the number of shares of Common
      Stock
      covered by the Plan and by each outstanding Option, and the price per
      share
      thereof in each such Option, shall be proportionately adjusted for any increase
      or decrease in the number of issued shares of Common Stock of the Bank resulting
      from a subdivision or consolidation of shares or the payment of a stock dividend
      (but only on the Common Stock) or any other increase or decrease in the number
      of such shares effected without receipt of consideration by the
      Bank.

     

    Subject
      to any required action by the stockholders, if the Bank shall be the surviving
      corporation in any merger or consolidation, each outstanding Option shall
      pertain to and apply to the securities to which a holder of the number of shares
      of Common Stock subject to the Option would have been entitled. A dissolution
      or
      liquidation of the Bank or a merger or consolidation in which the Bank is not
      the surviving corporation, shall cause each outstanding Option to terminate,
      provided that each Optionee shall, in such event, have the right immediately
      Prior to such dissolution or liquidation, or merger or consolidation in which
      the Bank is not the surviving corporation, to exercise his Option in whole
      or in
      part without regard to any installment provisions of Section 5(d) hereof.
      Notwithstanding the above provisions, an Option will not terminate if assumed
      by
      the surviving or acquiring corporation, or its parent, upon a merger or
      consolidation under circumstances which are not deemed a modification of the
      Option within the meaning of Sections 425(a) and 425(h)(3)(A) of the
      Code.

     

     

    
      
        
        

      

      
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    In
      the
      event of a change in the Common Stock of the Bank as presently constituted,
      which is limited to a change of all of its authorized shares with par value
      into
      the same number of shares with a different par value or without par value,
      the
      shares resulting from any such change shall be deemed to be the Common Stock
      within the meaning of the Plan.

     

    To
      the
      extent that the foregoing adjustments relate to stock or securities of the
      Bank,
      such adjustments shall be made by the Committee, whose determination in that
      respect shall be final, binding and conclusive, provided that each Option
      granted pursuant to this Plan shall not be adjusted in a manner that causes
      the
      Option to fail to continue to qualify as an “incentive stock option” within the
      meaning of Section 422 of the Code.

     

    Except
      as
      hereinbefore expressly provided in this Section 5(g), the Optionee shall have
      no
      rights by reason of any subdivision or consolidation of shares of stock of
      any
      class or the payment of any stock dividend or any other increase or decrease
      in
      the number of shares of stock of any class or by reason of any dissolution,
      liquidation, merger or consolidation or spin-off of assets or stock of another
      corporation, and any issue by the Bank of shares of stock of any class, or
      securities convertible into shares of any class, shall not affect, and no
      adjustment by reason thereof shall be made with respect to, the number or price
      of shares of Common Stock subject to the Option.

     

    The
      grant
      of an Option pursuant to the Plan shall not affect in any way the right or
      power
      of the Bank to make adjustments, reclassifications, reorganizations or changes
      of its capital or business structure or to merge or to consolidate or to
      dissolve, liquidate or sell, or transfer all or any part of its business or
      assets.

     

    (h)  Rights
      as a Stockholder.
      An
      Optionee or a transferee of an Option shall have no rights as a stockholder
      with
      respect to any shares covered by the Option until the date of the issuance
      of
      such shares. No adjustment shall be made for dividends (ordinary or
      extraordinary, whether in cash, securities or other property) or distributions
      or other rights for which the record date is prior to the date such stock is
      issued, except as provided in Section 5(g) hereof.

     

    (i)  Modification,
      Extension and Renewal of Options.
      Subject
      to the terms and conditions and within the limitations of the Plan, the Board
      may modify, extend or renew outstanding Options granted under the Plan, or
      accept the surrender of outstanding Options (to the extent not theretofore
      exercised). Notwithstanding the foregoing, however, no modification of an Option
      shall, without the consent of the Optionee, alter or impair any rights or
      obligations under any Option theretofore granted under the Plan.

     

     

    
      
        
        

      

      
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    (j)  Investment
      Purpose.
      Each
      Option under the Plan shall be granted on the condition that the purchases
      of
      stock thereunder shall be for investment purposes and not with a view to resale
      or distribution, except that in the event the stock subject to such Option
      is
      registered under the Securities Act of 1933, as amended, or in the event a
      resale of such stock without such registration would otherwise be permissible,
      such condition shall be inoperative if, in the opinion of counsel for the Bank,
      such condition is not required under the Securities Act of 1933 or any other
      applicable law, regulation or rule of any governmental agency.

     

    (k)  Other
      Provisions.
      The
      Notice of Grant of Stock Option shall contain such other provisions, including,
      without limitation, restrictions upon the exercise of the Option or the transfer
      of the shares received upon an exercise, as the Committee and the Board shall
      deem advisable. Any Notice of Grant of Stock Option shall contain such
      limitations and restrictions upon the exercise of the Option as shall be
      necessary in order that such option will be an “incentive stock option” as
      defined in Section 422 of the Code or to conform to any change in the
      law.

     

    6.  Annual
      Limitation Per Employee.

     

    The
      aggregate fair market value (determined as of the time the Option is granted
      under the Plan) of the stock for which any employee may be granted incentive
      stock options which are first exercisable in any calendar year (under all such
      plans of the Bank) shall not exceed $100,000.

     

    7.  Permissible
      Provisions.

     

    In
      addition to the other powers granted to the Committee and the Board under this
      Plan, the Committee and the Board shall have the discretion to include in any
      Option grant the right of the Optionee to make payment for the exercise of
      Options by delivery of Common Stock having a fair market value equal to the
      option price.

     

    8.  Effective
      Date and Term of Plan; Stockholder Approval.

     

    This
      Plan
      shall not become effective until and unless it has been adopted by
      the
      Board
      and approved at a meeting of the Bank’s stockholders by the vote of the holders
      of at least two-thirds (2/3) of the shares of the Bank’s Common Stock entitled
      to vote and a copy of the Plan has been filed with the Department of Banking
      in
      accordance with the New Jersey Banking Act of 1948, as amended. The effective
      date of the Plan shall be the date of stockholder approval of the Plan, and
      the
      Plan shall have a term of five (5) years from the effective date.

     

    9.  Indemnification
      of Committee.

     

    In
      addition to such other rights of indemnification as they may have as Directors
      or as members of the Committee, the members of the Committee and the Board
      shall
      be indemnified by the Bank against the reasonable expenses, including attorneys’
fees actually and necessarily incurred in connection with the defense of any
      action, suit or proceeding, or in connection with any appeal therein, to which
      they or any of them may be a party by reason of any action taken or failure
      to
      act under or in connection with the Plan or any Option granted thereunder,
      and
      against all amounts paid by them in settlement thereof (provided such settlement
      is approved by independent legal counsel selected by the Bank) or paid by them
      in satisfaction of a judgment in any such action, suit or proceeding except
      in
      relation to matters as to which it shall be adjudged in such action, suit or
      proceeding that such Board or Committee member is liable for negligence or
      misconduct in the performance of his duties; provided that within sixty (60)
      days after institution of any such action suit or proceeding the Board or
      Committee member shall in writing offer the Bank the opportunity, at its own
      expense, to handle and defend the same.

     

     

    
      
        
        

      

      
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    10.  Amendment
      of the Plan.

     

    The
      Board
      of the Bank may, insofar as permitted by law, from time to time, with respect
      to
      any shares at the time not subject to Options, suspend or discontinue the Plan
      or revise or amend it in any respect whatsoever except that, without approval
      of
      the stockholders, no such revision or amendment shall change the number of
      shares subject to the Plan, change the designation of the class of employees
      eligible to receive Options, decrease the price at which Options may be granted,
      or remove the administration of the Plan from the Committee. Furthermore, the
      Plan may not, without the approval of the stockholders, be amended in any manner
      that will cause Options issued under it to fail to meet the requirements of
      “incentive stock options” as defined in Section 422 of the Code.

     

    11.  Application
      of Funds.

     

    The
      proceeds received by the Bank from the sale of Common Stock pursuant to Options
      will be used for general corporate purposes.

     

    12.  No
      Obligation
      to Exercise Option.

     

    The
      granting of an Option shall impose no obligation upon the Optionee to exercise
      such Option.

     

    13.  Continued
      Employment.

     

    The
      grant
      of an Option pursuant to the Plan shall not be construed to imply or to
      constitute evidence of any agreement, express or implied, on the part of the
      Bank to continue to employ an employee or not to alter the responsibilities,
      duties or authority of any employee.

     

     

     6Exhibit 10.2

    EXHIBIT
      10.2

     

    STERLING
      BANK

     

    1998
      EMPLOYEE STOCK OPTION PLAN

     

    1.  Purpose
      of
      the Plan.

     

    This
      Sterling Bank 1998 Employee Stock Option Plan (the “Plan’) is intended to
      encourage stock ownership by certain key employees of Sterling Bank (the “Bank’)
      so that such employees may increase their proprietary interest in the success
      of
      the Bank and be encouraged to remain in the employ of the Bank. It is further
      intended that options issued pursuant to the Plan (the “Options’) shall
      constitute “incentive stock options” within the meaning of Section 422 of the
      Internal Revenue Code (the “Code’),

     

    2.  Administration;
      Option Grant.

     

    (a)  As
      specified herein, the Plan shall be administered by the members of the Board
      of
      Directors (the “Board”) who are “disinterested persons” as such term is defined
      in Rule 16b-3(c)(2)(i) under the Securities Exchange Act of 1934, as amended,
      and by a stock option committee (the “Committee”) appointed by the Board. The
      Committee shall consist of not less than two members of the Bank’s Board who are
      disinterested persons”. The Board may from time to time remove members from, or
      add members to, the Committee. Vacancies on the Committee, however caused,
      shall
      be filled by the Board; provided, however, that any individual appointed to
      the
      Committee shall be a Director who is a “disinterested person.” The Committee
      shall hold meetings at such times and places as it may determine. If the
      Committee consists of three or more members, the Committee shall select one
      of
      its members as Chairman. Acts by a majority of the Committee at a meeting at
      which a quorum is present, or acts reduced to or approved in writing by a
      majority of the members of the Committee, shall be the valid acts of the
      Committee. No person while a member of the Committee shall receive a
      discretionary grant or award under any stock plan of the Bank.

     

    (b)  The
      Committee shall from time to time in its discretion make recommendations to
      the
      Board with respect to the employees to be granted Options and the amount of
      stock subject to such Options. The Board shall have the final authority to
      grant
      Options under this Plan.

     

    (c)  The
      Committee shall be authorized to interpret the Plan and the Options granted
      thereunder, to establish, amend and rescind such rules and regulations as it
      deems necessary for the proper administration of the Plan, and to make all
      other
      determinations necessary or advisable for its administration. The Committee
      shall have the final authority to determine these matters. The interpretation
      and construction by the Committee of any provisions of the Plan or of any Option
      granted under it shall be final. No member of the Board or the Committee shall
      be liable for any action or determination made in good faith or with respect
      to
      the Plan or any Option granted thereunder.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.  Eligibility.

     

    The
      persons who shall be eligible to receive Options shall be the management
      employees (including such employees who may be members of the Board) of the
      Bank, but excluding persons who may own 10% or more of the Bank’s Common Stock
      then outstanding. An Option holder (the “Optionee”) may hold more than one
      Option but only on the terms and subject to the restrictions hereinafter set
      forth.

     

    4.  Shares
      of Stock Subject
      to
      the Plan.

     

    There
      will be reserved for use upon the exercise of Options to be granted under this
      Plan (subject to the provisions of Section 5(g) of this Plan) an aggregate
      of
      70,000 shares of common stock of the Bank (“Common Stock’), par value $2.00 per
      share, which shares may be in whole or in part, as the Board shall from time
      to
      time determine, authorized but unissued shares of Common Stock or issued shares
      of Common Stock which shall have been reacquired by the Bank. Shares delivered
      under the Plan shall be fully paid and non-assessable.

     

    5.  Terms
      and Conditions of Options.

     

    When
      the
      Board shall have granted Options, Notices of Grant of Stock Option shall be
      given to such Optionees in such form as the Committee shall from time to time
      approve, which Notices shall comply with and be subject to the following terms
      and conditions:

     

    (a)  Number
      of Shares.
      Each
      Notice of Grant of Stock Option shall state the number of shares to which it
      pertains.

     

    (b)  Option
      Price.
      Each
      Notice of Grant of Stock Option shall state the option price, which shall not
      be
      less than 100% of the fair market value of the shares of Common Stock of the
      Bank on the date of the granting of the Option. During such time as the Common
      Stock is not listed upon an established stock exchange or traded in the
      over-the-counter market, the fair market value per share shall be determined
      by
      the Board by relying upon whatever evidence it deems appropriate which may
      include, but need not be limited to, recent sales of the Common Stock, opinions
      of professional appraisers and recent sales of comparable shares of other
      companies. If the Common Stock is traded in the over-the-counter market, such
      fair market value shall be the mean between the dealer “bid” and “ask” prices of
      the Common Stock in the over-the-counter market on the day the option is
      granted, as reported by the National Association of Securities Dealers, Inc.
      If
      the Common Stock is listed upon an established stock exchange or exchanges,
      such
      fair market value shall be deemed to be the highest closing price of the Common
      Stock on such stock exchange or exchanges on the day the option is granted
      or,
      if no sale of the Bank's Common Stock shall have been made on any stock exchange
      on that day, on the next preceding day on which there was a sale of such stock.
      Subject to the foregoing, the Board in fixing the option price shall have full
      authority and discretion.

     

    (c)  Medium
      and Time of Payment.
      Unless
      otherwise specified in the option grant pursuant to Section 7 hereof, the option
      price shall be payable in United States dollars upon the exercise of the Option
      and may be paid in cash or by check.

     

     

    
      
        
        

      

      
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    (d)  Term
      and Exercise of Options.
      Each
      Notice of Grant of Stock Option shall state the date on which the Option shall
      expire, as determined by the Board; provided, however, that no Option shall
      be
      exercisable after ten (10) years from the date on which it is granted. Options
      may be exercised by an Optionee only while he or she is employed by the Bank
      except as otherwise provided in Sections 5(e) and 5(f) hereof.

     

    The
      Notice of Grant of Stock Option, as determined by the Board, may provide that
      the Option shall be exercisable in installments rather than exercisable
      immediately in full, but the Board may provide, in the case of an Option not
      immediately exercisable in full, for the acceleration of the time at which
      the
      Option may be exercised.

     

    During
      the lifetime of the Optionee, an Option shall be exercisable only by him or
      her,
      shall not be assignable or transferable by him or her, and no other person
      shall
      acquire any rights therein. To the extent not exercised, installments shall
      accumulate and be exercisable, in whole or in part, in any subsequent period
      but
      not later than the expiration date of the Option.

     

    (e)  Termination
      of Employment Except By Death or Disability.
      In the
      event that the employment of an Optionee shall terminate by retirement or for
      any other reason, any unexercised Option, including any installments under
      Section 5(d) for which Optionee’s right to exercise had not yet accrued, shall
      be fully exercisable by Optionee (or his or her executor or administrator)
      at
      any time within three (3) months after the date of termination of employment;
      provided, that no Option shall be exercisable after the expiration of its
      term.

     

    (f)  Death
      or Disability.
      If the
      Optionee shall die or become permanently disabled while in the employ of the
      Bank, any unexercised Option, including any installments under Section 5(d)
      for
      which Optionee’s right to exercise had not yet accrued, shall be fully
      exercisable at any time within twelve (12) months after the Optionee’s death or
      disability (as the case may be), by the executors or administrators of the
      Optionee or by any person or persons who shall have acquired the Option directly
      from the Optionee by bequest or inheritance, or by the Optionee, respectively;
      provided, that no Option shall be exercisable after the expiration of its term.
      No Option shall be transferable by the Optionee otherwise than by will or the
      laws of descent and distribution.

     

    (g)  Recapitalization.
      Subject
      to any required action by the shareholders, the number of shares of Common
      Stock
      covered by the Plan and by each outstanding Option, and the price per share
      thereof in each such Option, shall be proportionately adjusted for any increase
      or decrease in the number of issued shares of Common Stock of the Bank resulting
      from a subdivision or consolidation of shares or the payment of a stock dividend
      (but only on the Common Stock) or any other increase or decrease in the number
      of such shares effected without receipt of consideration by the
      Bank.

     

    Subject
      to any required action by the shareholders, if the Bank shall be the surviving
      corporation in any merger or consolidation, each outstanding Option shall
      pertain to and apply to the securities to which a holder of the number of shares
      of Common Stock subject to the Option would have been entitled. A dissolution
      or
      liquidation of the Bank or a merger or consolidation in which the Bank is not
      the surviving corporation, shall cause each outstanding Option to terminate,
      provided that each Optionee shall, in such event, have the right immediately
      prior to such dissolution or liquidation, or merger or consolidation in which
      the Bank is not the surviving corporation, to exercise his Option in whole
      or in
      part without regard to any installment provisions of Section 5(d) hereof
      Notwithstanding the above provisions, an Option will not terminate if assumed
      by
      the surviving or acquiring corporation, or its parent upon a merger or
      consolidation under circumstances which are not deemed a modification of the
      Option within the meaning of Sections 425(a) and 425(h)(3)(A) of the
      Code.

     

     

    
      
        
        

      

      
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    In
      the
      event of a change in the Common Stock of the Bank as presently constituted,
      which is limited to a change of all of its authorized shares with par value
      into
      the same number of shares with a different par value or without par value,
      the
      shares resulting from any such change shall be deemed to be the Common Stock
      within the meaning of the Plan.

     

    To
      the
      extent that the foregoing adjustments relate to stock or securities of the
      Bank,
      such adjustments shall be made by the Committee, whose determination in that
      respect shall be final, binding and conclusive, provided that each Option
      granted pursuant to this Plan shall not be adjusted in a manner that causes
      the
      Option to fail to continue to qualify as an “incentive stock option” within the
      meaning of Section 422 of the Code.

     

    Except
      as
      hereinbefore expressly provided in this Section 5(g), the Optionee shall have
      no
      rights by reason of any subdivision or consolidation of shares of stock of
      any
      class or the payment of any stock dividend or any other increase or decrease
      in
      the number of shares of stock of any class or by reason of any dissolution,
      liquidation, merger or consolidation or spin-off of assets or stock of another
      corporation, and any issue by the Bank of shares of stock of any class, or
      securities convertible into shares of any class, shall not affect, and no
      adjustment by reason thereof shall be made with respect to, the number or price
      of shares of Common Stock subject to the Option.

     

    The
      grant
      of an Option pursuant to the Plan shall not affect in any way the right or
      power
      of the Bank to make adjustments, reclassifications, reorganizations or changes
      of its capital or business structure or to merge or to consolidate or to
      dissolve, liquidate or sell, or transfer all or any part of its business or
      assets.

     

    (h)  Rights
      as a Shareholder.
      An
      Optionee or a transferee of an Option shall have no rights as a shareholder
      with
      respect to any shares covered by the Option until the date of the issuance
      of
      such shares. No adjustment shall be made for dividends (ordinary or
      extraordinary, whether in cash, securities or other property) or distributions
      or other rights for which the record date is prior to the date such stock is
      issued, except as provided in Section 5(g) hereof.

     

    (i)  Modification
      Extension and Renewal of Options.
      Subject
      to the terms and conditions and within the limitations of the Plan, the Board
      may modify, extend or renew outstanding Options granted under the Plan, or
      accept the surrender of outstanding Options (to the extent not theretofore
      exercised). Notwithstanding the foregoing, however, no modification of an Option
      shall, without the consent of the Optionee, alter or impair any rights or
      obligations under any Option theretofore granted under the Plan.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (j)  Investment
      Purpose.
      Each
      Option under the Plan shall be granted on the condition that the purchases
      of
      stock thereunder shall be for investment purposes and not with a view to resale
      or distribution, except that in the event the stock subject to such Option
      is
      registered under the Securities Act of 1933, as amended, or in the event a
      resale of such stock without such registration would otherwise be permissible,
      such condition shall be inoperative if, in the opinion of counsel for the Bank,
      such condition is not required under the Securities Act of 1933 or any other
      applicable law, regulation or rule of any governmental agency.

     

    (k)  Other
      Provisions.
      The
      Notice of Grant of Stock Option shall contain such other provisions, including,
      without limitation, restrictions upon the exercise of the Option or the transfer
      of the shares received upon an exercise, as the Committee and the Board shall
      deem advisable. Any Notice of Grant of Stock Option shall contain such
      limitations and restrictions upon the exercise of the Option as shall be
      necessary in order that such option will be an “incentive stock option” as
      defined in Section 422 of the Code or to conform to any change in the
      law.

     

    6.  Annual
      Limitation Per Employee.

     

    The
      aggregate fair market value (determined as of the time the Option is granted
      under the Plan) of the stock for which any employee may be granted incentive
      stock options which are first exercisable in any calendar year (under all such
      plans of the Bank) shall not exceed $100,000.

     

    7.  Permissible
      Provisions.

     

    In
      addition to the other powers granted to the Committee and the Board under this
      Plan, the Committee and the Board shall have the discretion to include in any
      Option grant the right of the Optionee to make payment for the exercise of
      Options by delivery of Common Stock having a fair market value equal to the
      option price.

     

    8.  Effective
      Date and Term
      of
      Plan; Shareholder Approval.

     

    This
      Plan
      shall not become effective until and unless it has been adopted by the Board
      and
      approved
      at a
      meeting of the Bank's shareholders by the vote of the holders of at least
      two-thirds (2/3) of the shares of the Bank’s Common Stock entitled to vote and a
      copy of the Plan has been filed with the Department of Banking in accordance
      with the New Jersey Banking Act of 1948, as amended. The effective date of
      the
      Plan shall be the date of shareholder approval of the Plan, and the Plan shall
      have a term of five (5) years from the effective date.

     

    9.  Indemnification
      of Committee.

     

    In
      addition to such other rights of indemnification as they may have as Directors
      or as members of the Committee, the members of the Committee and the Board
      shall
      be indemnified by the Bank against the reasonable expenses, including attorneys’
fees actually and necessarily incurred in connection with the defense of any
      action, suit or proceeding, or in connection with any appeal therein, to which
      they or any of them may be a party by reason of any action taken or failure
      to
      act under or in connection with the Plan or any Option granted thereunder,
      and
      against all amounts paid by them in settlement thereof (provided such settlement
      is approved by independent legal counsel selected by the Bank) or paid by them
      in satisfaction of a judgment in any such action, suit or proceeding except
      in
      relation to matters as to which it shall be adjudged in such action, suit or
      proceeding that such Board or Committee member is liable for negligence or
      misconduct in the performance of his duties; provided that within sixty (60)
      days after institution of any such action suit or proceeding the Board or
      Committee member shall in writing offer the Bank the opportunity, at its own
      expense, to handle and defend the same.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    10.  Amendment
      of the Plan.

     

    The
      Board
      of the Bank may, insofar as permitted by law, from time to time, with respect
      to
      any shares at the time not subject to Options, suspend or discontinue the Plan
      or revise or amend it in any respect whatsoever except that, without approval
      of
      the shareholders, no such revision or amendment shall change the number of
      shares subject to the Plan, change the designation of the class of employees
      eligible to receive Options, decrease the price at which Options may be granted,
      or remove the administration of the Plan from the Committee. Furthermore, the
      Plan may not, without the approval of the shareholders, be amended in any manner
      that will cause Options issued under it to fail to meet the requirements of
      “incentive stock options” as defined in Section 422 of the Code.

     

    11.  No
      Obligation to Exercise Option.

     

    The
      granting of an Option shall impose no obligation upon the Optionee to exercise
      such Option.

     

    12.  Continued
      Employment.

     

    The
      grant
      of an Option pursuant to the Plan shall not be construed to imply or to
      constitute evidence of any agreement, express or implied, on the part of the
      Bank to continue to employ an employee or not to alter the responsibilities,
      duties or authority of any employee.

     

     

     6

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