Document:

PROPOSED AMENDMENT TO
                         THE BANK OF THE SOMERSET HILLS
                         1998 COMBINED STOCK OPTION PLAN

SECTION 6. EXERCISE PERIOD OF EMPLOYEE OPTIONS

     (b) An Employee Option shall terminate immediately, and no rights
thereunder may be exercised, if the person to whom it is granted ceases to be
employed by the Bank, except that:

     (iii) if the employment of the Key Employee is terminated by reason of his
retirement in accordance with the terms of the Bank's retirement plans or with
the consent of the Committee or is involuntarily terminated other than for
cause, the Key Employee's rights under the Employee Option may be exercised as
to all shares of Common Stock covered thereby at any time within three (3)
months after termination of employment, OR AS SUCH TIME PERIOD MAY BE EXTENDED
BY THE COMMITTEE IN ITS DISCRETION. Termination for cause shall mean termination
of employment by reason of habitual alcohol or drug abuse; commission of a
felony, fraud, or willful misconduct; the unauthorized disclosure of any Bank
data, secret, or financial information, that has resulted, or is likely to
result, in damage to the Bank, all as the Board in its sole and absolute
discretion shall determine.

SECTION 8. TERMS AND CONDITIONS OF OPTIONS TO SERVICE PROVIDERS

     (d) If a Service Provider dies, the Service Provider's Options shall be
exercisable by either his executor or administrator or, if not so exercised, by
the legatees or the distributees of his estate, only during the twelve (12)
months following his death. If a Director's membership on the Board terminates
for any reason other than death, such Director's Options shall be exercisable
only during the three (3) months following the date of termination, OR AS SUCH
TIME PERIOD MAY BE EXTENDED BY THE COMMITTEE IN ITS DISCRETION.

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                         THE BANK OF THE SOMERSET HILLS

                         1998 COMBINED STOCK OPTION PLAN

     SECTION 1. PURPOSE

     The Bank of the Somerset Hills ("the Bank") 1998 Combined Stock Option Plan
(the "Plan") is intended to attract and retain the Bank's Service Providers and
to motivate them to participate in the long term growth of the Bank by providing
for or increasing the proprietary interests of such persons in the Bank, thereby
assisting the Bank to achieve its long-range goals.

     SECTION 2. DEFINITIONS

     Capitalized terms not specifically defined elsewhere herein shall have the
following meanings:

     "Act" shall mean the New Jersey Bank Officers and Employees' Stock Option
Plan Act.

     "Bank" shall mean The Bank of the Somerset Hills and any present or future
parent or subsidiary corporations (as defined in Section 424 of the Code) or any
successor to the Bank or to such corporations.

     "Board" shall mean the Board of Directors of the Bank.

     "Code" shall mean the Internal Revenue Code of 1986, as am ended from time
to time and the regulations promulgated thereunder.

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     "Committee" shall mean the Board or any committee or group of people
selected by the Board to administer the Plan and perform the functions set forth
herein.

     "Common Stock" or "Stock" shall mean the common stock, $5.00 par value per
share, of the Bank.

     "Director" shall mean a member of the Board or a member of an advisory or
business development committee of the Bank.

     "Disability" shall mean permanent and total disability, as defined in
Section 22(e)(3) of the Code.

     "Employee Option" shall mean an Incentive Stock Option granted to an
Optionee who is a Key Employee of the Bank.

     "Fair Market Value" shall mean, with respect to shares of Common Stock, the
fair market value as determined in good faith by the Committee and in a manner
established by the Committee from time to time using any reasonable method of
valuation; provided, that in the event the shares of Common Stock are listed for
trading on a national or regional securities exchange (including the NASDAQ
National Market System), the "fair market value" of such shares shall be, on any
date, the average closing sale price for the Common Stock for the last five (5)
market trading days prior to the day of determination.

     "Incentive Stock Option" or "ISO" shall mean an option

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to purchase shares of Common Stock granted to a Key Employee under the Plan,
which is intended to meet the requirements of Section 422 of the Code as of the
date of grant.

     "Key Employees" shall mean an employee (including executive officers and
directors who are also employees of the Bank) of the Bank who, in the judgment
of the Committee, are considered important to the future of the Bank.

     "Non-Qualified Stock Option" shall mean an option to purchase shares of
Common Stock granted to a Service Provider under the Plan, which is not intended
to be an ISO.

     "Option" shall mean an ISO or a Non-Qualified Stock Option.

     "Option Agreement" shall mean a written or electronic agreement between the
Bank and an Optionee evidencing the terms and conditions of an individual option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

     "Optionee" shall mean a Key Employee or Service Provider selected by the
Committee to receive an Option under the Plan.

     "Plan" shall mean The Bank of the Somerset Hills 1998 Combined Stock Option
Plan.

     "Securities Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder, and any
successor provisions thereto.

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     "Service Provider" shall mean a Key Employee or Director.

     As used herein, the masculine gender shall include the feminine gender.

     SECTION 3. ADMINISTRATION

     (a) The Plan shall be administered by the Committee. Among other things,
the Committee shall have authority, subject to the terms of this Plan,
including, without limitation, the provisions governing participation in this
Plan by Directors, to grant Options, to determine the individuals to whom and
the time or times at which Options may be granted, and to determine the terms
and conditions of any Option granted hereunder.

     (b) Subject to the provisions of this Plan, the Committee shall have
authority to adopt, alter, and repeal such administrative rules, guidelines, and
practices governing the operation of this Plan as it shall from time to time
consider advisable, to interpret the provisions of this Plan and any Option, and
to decide all disputes arising in connection with this Plan. The Committee's
decision and interpretations shall be final and binding. Any action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by the unanimous written consent of its members.

     (c) Subject to the provisions of this Plan and applicable requirements of
Federal and state law, the Committee

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shall have authority, in its discretion, to take the following actions:

     (i) to determine the Service Providers to be granted Non-Qualified Stock
Options under this Plan;

     (ii) to determine the number of shares subject to each Option;

     (iii) to determine the time or times at which Options will be granted;

     (iv) to determine the Key Employees to be granted Employee Options under
this Plan;

     (v) to determine the Option price of the shares subject to each Option,
which price shall be not less than the minimum for Employee Options and
Non-Qualified Stock Options, respectively, specified in Sections 7 and 8 of this
Plan with respect to Employee Options;

     (vi) to determine or change the time or times when each Option becomes
exercisable and the duration of the exercise period; provided, however, that no
Option, including Non-Qualified Stock Options granted to Service Providers
pursuant to this Plan, shall be exercisable until (i) two-thirds of the holders
of shares of Common Stock of the Bank entitled to vote at a meeting of the
Bank's stockholders, voting as a single class, shall have approved the Plan; and
(ii) the Bank shall have fully complied with the other terms and provisions of
the Act;

     (vii) to prescribe the form or forms of the instruments

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evidencing any Options granted under this Plan (which forms shall be consistent
with this Plan but need not be identical to one another);

     (ix) to adopt, amend, and rescind such rules and regulations as it
determines are necessary or advisable in the administration of this Plan;

     (x) to construe and interpret this Plan, the rules and regulations, and the
instruments evidencing Options granted under this Plan and to make all other
determinations deemed necessary or advisable for the administration of this
Plan;

     (xi) to delegate such administrative functions as it deems appropriate; and

     (xii) in general, to exercise full and final authority (consistent with
this Plan) over all matters relating to the Plan, the powers denominated above
being by way of example and not of limitation.

     Any interpretation, determination, or other action made or taken by the
Committee shall be final, binding, and conclusive.

     (d) No member of the Committee shall be personally liable to the Bank or
its stockholders for damages for any action taken or determination made in good
faith. The members of the Committee shall be indemnified by the Bank for any
acts or omissions in connection with the Plan to the full extent permitted by
the Bank's Certificate of Incorporation and New Jersey law.

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     SECTION 4. SHARES OF STOCK AVAILABLE FOR OPTIONS

     (a) The aggregate number of shares of Common Stock for which Non-Qualified
Stock Options may be granted under this Plan shall be 75,000 shares of Common
Stock, subject to adjustment as provided in Section 16 of this Plan. The
aggregate number of shares of Common Stock for which Employee Options may be
granted under this Plan shall be 150,000 shares of Common Stock, subject to
adjustment as provided in Section 16 of this Plan. Such shares shall be reserved
for Options granted under this Plan.

     (b) The shares transferred by the Bank upon the exercise of Options under
this Plan shall consist of authorized but unissued shares of Common Stock.

     (c) The aggregate number of shares of Common Stock that may be issued or
purchased under this Plan pursuant to the exercise of Non-Qualified Stock
Options shall not exceed 5% of the outstanding shares of Common Stock of the
Bank at the time of the adoption of the Plan, subject to adjustment as provided
as in Section 16 of this Plan. The aggregate number of shares of Common Stock
that may be issued or purchased under this Plan pursuant to the exercise of
Non-Qualified Stock Options when taken together with the number of shares of
Common Stock that may be issued or purchased under any other plan of the Bank
pursuant

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to the exercise of Non-Qualified Stock Options shall not exceed 10% of the
outstanding shares of Common Stock of the Bank at the time of adoption of this
Plan, subject to adjustment as provided in Section 16 of this Plan.

     (d) If an Option granted under this Plan shall expire or terminate for any
reason without having been fully exercised, then the unexercised portion of such
Option shall again be available for the grant under this Plan.

     (e) All Options granted hereunder shall be clearly identified as either an
ISO or as a Non-Qualified Stock Option.

     SECTION 5. ELIGIBILITY AND PARTICIPATION

     (a) All Service Providers to the Bank shall be eligible to participate in
this Plan to the extent provided herein. Non-Qualified Stock Options may be
granted to Service Providers. Incentive Stock Options may be granted only to Key
Employees.

     (b) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Common Stock to which Incentive Stock Options are exercisable for the first time
by the Optionee during any calendar year (under all plans of the Bank) exceeds
$100,000, such Options shall be treated as Non-Qualified Stock Options. For
purposes of this Section 5(b), Incentive Stock Options shall be taken into
account in the order

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in which they were granted. The Fair Market Value of the shares of Common Stock
shall be determined as of the time the Incentive Stock Option with respect to
such shares is granted.

     SECTION 6. EXERCISE PERIOD OF EMPLOYEE OPTIONS

     (a) Except as herein provided, each Employee Option granted hereunder shall
be exercisable for such period as the Committee shall determine at the time of
grant; provided, however, that (i) such period may not commence until at least
six months following the date of grant, except in the event of the death,
Disability, retirement in accordance with the Bank's retirement plans, or
involuntary termination of employment other than for cause of the Key Employee
before the expiration of such period; and (ii) the Bank shall have fully
complied with the terms and provisions of the Act and the Securities Act.
Options shall be subject to earlier termination as hereinafter provided.

     (b) An Employee Option shall terminate immediately, and no rights
thereunder may be exercised, if the person to whom it is granted ceases to be
employed by the Bank, except that:

     (i) subject to the limitations on exercisability set forth in this Section
6 of this Plan, if the Key Employee dies while in the employ of the Bank, the
Key Employee's rights under the Employee Option may be exercised as to all
shares of Common Stock covered thereby by his legal representative or by the
person or persons to whom such rights under the Option shall pass by will

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or by the laws of descent and distribution, at any time within twelve (12)
months following his death;

     (ii) if the employment of the Key Employee is terminated because of
Disability, the Key Employee's rights under the Employee Option may be exercised
as to all shares of Common Stock covered thereby by the Key Employee or his
guardian or other legal representative, at any time within twelve (12) months
following termination of his employment because of Disability;

     (iii) if the employment of the Key Employee is terminated by reason of his
retirement in accordance with the terms of the Bank's retirement plans or with
the consent of the Committee or is involuntarily terminated other than for
cause, the Key Employee's rights under the Employee Option may be exercised as
to all shares of Common Stock covered thereby at any time within three (3)
months after termination of employment. Termination for cause shall mean
termination of employment by reason of habitual alcohol or drug abuse;
commission of a felony, fraud, or willful misconduct; the unauthorized
disclosure of any Bank data, secret, or financial information, that has
resulted, or is likely to result, in damage to the Bank, all as the Board in its
sole and absolute discretion shall determine.

     (c) Notwithstanding anything contained in this Section 6 to the contrary,
no Employee Option shall be exercisable by anyone after the expiration of the
term of such

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Option as determined by the Committee at the date of grant of such Option.

     SECTION 7. TERM AND OPTION PRICE OF EMPLOYEE OPTIONS

     (a) The terms and conditions of Incentive Stock Options shall be subject to
and comply with Section 422 of the Code. Anything in this Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted to the Committee under this Plan be so exercised, so as to disqualify
this Plan or, without the consent of the Key Employee, any Incentive Stock
Option granted under the Plan pursuant to Section 422 of the Code.

     (b) The Option price per share of Common Stock purchasable under an
Incentive Stock Option shall not be less than 100% of the Fair Market Value of
the Common Stock on the date of grant or the par value of the Common Stock,
whichever is higher. If the Key Employee owns or is deemed to own (by reason of
the attribution rules applicable under Section 424(d) of the Code) more than 10%
of the combined voting power of all classes of stock of the Bank and an
Incentive Stock Option is granted to such Key Employee, the Option price shall
be not less than 110% of Fair Market Value of the Common Stock on the date of
grant or the par value of the Common Stock, whichever is higher.

     (c) No Employee Option shall be exercisable more than ten (10) years after
the date such Option is granted. If a Key

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Employee owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Bank, and an Incentive Stock Option is granted to such
Key Employee, such Option shall not be exercisable after the expiration of five
(5) years from the date of grant.

     SECTION 8. TERMS AND CONDITIONS OF OPTIONS TO SERVICE PROVIDERS

     (a) The terms and conditions of each Non-Qualified Stock Option shall be
stated in the Option Agreement.

     (b) The purchase price of the shares of Common Stock subject to each
Non-Qualified Stock Option granted to a Service Provider shall be equal to at
least eighty-five percent (85%) of the Common Stock on the date the Option is
granted or the par value of the Common Stock, whichever is higher, provided,
however, that the exercise price of any Non-Qualified Stock Option granted to a
Service Provider as compensation for serving as a member of the Board shall not
be less than the greater of one hundred percent (100%) of the Fair Market Value
of the Common Stock at the time of the grant of the Option and the par value of
the Common Stock. Options granted to Service Providers may be exercised by
written notice of exercise accompanied by payment of the exercise price in full
for the purchased shares of Common Stock in cash or by certified or cashier's
check payable to the Bank.

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     (c) A Non-Qualified Stock Option shall only be transferable by a Service
Provider (i) by will, (ii) by the laws of descent and distribution, (iii) to the
Service Provider's spouse or issue, or (iv) to a trust established for the
benefit of a Service Provider's spouse or issue. All Non-Qualified Stock Options
shall be exercisable during a Service Provider's lifetime only by the Service
Provider or his duly appointed guardian or personal representative. The
restrictions set forth in Section 8 of this Plan shall apply to all
Non-Qualified Stock Options granted to Service Providers.

     (d) If a Service Provider dies, the Service Provider's Options shall be
exercisable by either his executor or administrator or, if not so exercised, by
the legatees or the distributees of his estate, only during the twelve (12)
months following his death. If a Director's membership on the Board terminates
for any reason other than death, such Director's Options shall be exercisable
only during the three (3) months following the date of termination.

     (e) Each Option granted to a Service Provider shall be evidenced by a
writing signed by him specifying the terms and conditions thereof in accordance
with this Section 8.

     SECTION 9. GENERAL PROVISIONS APPLICABLE TO OPTIONS

     (a) Notwithstanding any other provision of the Plan, in order to qualify
for the exemption provided by Rule 16b-3

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under the Securities Act, any Common Stock acquired by a Participant subject to
Section 16 of the Securities Act (a "Section 16 Participant") upon exercise of
an Option may not be sold for six (6) months after the date of grant of the
Option. The Committee shall have no authority to take any action if the
authority to take such action, or the taking of such action, would disqualify
the Plan from the exemption provided by Rule 16b-3 under the Securities Act.

     (b) Each Option under the Plan shall be evidenced by a writing delivered to
the Participant specifying the terms and conditions thereof and containing such
other terms and conditions not inconsistent with the provisions of the Plan as
the Committee considers necessary or advisable to achieve the purposes of the
Plan or comply with applicable tax and regulatory laws and accounting
principles.

     (c) Each Option may be granted alone, in addition to or in relation to any
other Option. The terms of each Option need not be identical, and the Committee
need not treat Participants uniformly, except as otherwise provided in Section
9. Except as otherwise provided by the Plan or a particular Option, any
determination with respect to an Option may be made by the Committee at the time
of grant or at any time thereafter.

     (d) The Committee may amend, modify, or terminate any outstanding Option
held by a Service Provider, including substituting therefor another Option of
the same or a different

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type, changing the date of exercise or realization, provided that the Service
Provider's consent to each action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     (e) A Key Employee shall notify the Committee in writing in the event that
he disposes of Common Stock acquired upon exercise of an Incentive Stock Option
within the two-year period following the date the Incentive Stock Option was
granted or within the one-year period following the date he received Common
Stock upon the exercise of an Incentive Stock Option and shall comply with any
other requirements imposed by the Bank to enable the Bank to secure the related
income tax deduction to which it will be entitled in such event under the Code.

     (f) The vesting schedule of any Option may, in the discretion of the
Committee and as stated in the Option Agreement, be subject to acceleration in
the event of death or Disability of the Service Provider, or the termination of
the Service Provider's relationship with the Bank. All Options shall
automatically and immediately vest on a change in control of the Bank (as
defined in the Option Agreement). In the event any Employee Option granted to a
Key Employee fails to satisfy the requirements of Code Section 422 due to the
acceleration of the vesting schedule described in herein, such Employee Option
shall

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be considered a Non-Qualified Stock Option. In the event an Employee Option is
considered a Non-Qualified Stock Option pursuant to the foregoing sentence, such
Non-Qualified Stock Option shall be subject to the same terms and conditions of
the relevant Option Agreement.

     SECTION 10. NON-TRANSFERABILITY OF EMPLOYEE OPTIONS

     No Employee Option granted under this Plan shall be transferable by a Key
Employee other than by will or the laws of descent and distribution, and, except
as otherwise provided herein, such Employee Option may be exercised by the Key
Employee only during a Key Employee's lifetime and only by the Participant or
the Key Employee's duly appointed guardian or personal representative.

     SECTION 11. OPTION AGREEMENTS

     (a) The grant of every Option shall be evidenced by and conditioned upon
the execution of a written Option Agreement between the Bank and the Service
Provider. The Option Agreement shall set forth the number of shares subject to
the Option, the Option price, the term during which the Option may be exercised,
and any other provisions not inconsistent with the provisions of this Plan,
which the Committee may deem necessary or appropriate from time to time. With
respect to the grant of ISOs, the Option agreement shall not contain any
provision that would cause such Option to fail to qualify as an Incentive Stock
Option under Section 422 of the Code as of the date of grant. The Committee

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may approve a form or forms of option agreements that the Committee, in its
discretion, may specify as the sole forms of Option agreement effective to grant
Options to Participants under this Plan.

     (b) Notwithstanding the date on which an Option agreement may be executed,
the date on which an Option is deemed to be granted shall be the effective date
of the approval of an Option by the Committee.

     SECTION 12. OPTION EXERCISE AND PAYMENT

     (a) Subject to Sections 5, 6, 7, 8, and 9 of this Plan, each Option granted
under this Plan shall be exercisable on such date or dates and during such
period and for such number of shares as shall be determined pursuant to the
provisions of the Option Agreement evidencing such Option.

     (b) A Service Provider electing to exercise an Option shall give written
notice to the Committee of such election and of the number of full shares he
elects to purchase. Options shall be exercisable in such amounts as the Service
Provider may elect subject to such restrictions as the Committee or this Plan
may provide.

     (c) Subject to the other provisions of this Plan and applicable state and
federal law, payment of the Option price shall be tendered to the Bank (i) in
cash, including certified check, bank draft, or money order, or (ii) at the
discretion of the Committee, by delivering a promissory note, containing such

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terms and conditions acceptable to the Committee, or a combination of the
foregoing, for all or a portion of the purchase price of the shares purchased.

     SECTION 13. NO RIGHTS AS STOCKHOLDER

     Neither the Service Provider nor the personal representatives, heirs, or
legatees of such Service Provider shall be, or have any rights or privileges of,
a stockholder of the Bank with respect to any shares subject to an Option unless
and until certificates evidencing such shares shall have been issued and
delivered to the Service Provider or to such personal representatives, heirs, or
legatees.

     SECTION 14. NO RIGHTS TO CONTINUED EMPLOYMENT

     This Plan and any Option granted under the Plan shall not confer upon any
Service Provider any right with respect to continuation of employment by the
Bank, nor shall they interfere in any way with the right of the Bank to
terminate his employment at any time.

     SECTION 15. ADDITIONAL PROPERTY

     At the time any Option is exercised, the Committee, in its discretion, may
transfer to the Service Provider such additional property as it may determine,
including, without limitation, cash or stock appreciation rights.

     SECTION 16. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

     Except as otherwise provided herein, the instruments

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evidencing Options granted hereunder shall contain such provisions as the
Committee shall deem appropriate to adjust the number and classes of shares
covered thereby, or to adjust the Option prices, or both, in the event of the
sale or other disposition or distribution by the Bank of all or a portion of its
assets or any change in the outstanding Common Stock of the Bank by reason of
stock dividends, stock split-ups, recapitalizations, reorganizations, mergers,
consolidations, combinations, or exchanges of shares or the like, of or by the
Bank. To prevent dilution or enlargement of rights in the event of any such
change, the aggregate number and classes of shares for which Options thereafter
may be granted under this Plan may be appropriately adjusted as determined by
the Committee to reflect such change.

     SECTION 17. WITHHOLDING TAXES

     (a) The Service Provider shall pay to the Bank, or make provision
satisfactory to the Committee for payment of, any taxes required by law to be
withheld in respect of Options under the Plan no later than the date of the
event creating the tax liability. In the Committee's sole discretion, and to the
extent permitted under the Act, a Service Provider (other than a Section 16
Service Provider, who shall be subject to the following sentence) may elect to
have such tax obligations paid, in whole or in part, in shares of Common Stock,
including shares retained from the Option creating the tax obligation. With
respect to

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Section 16 Service Providers, upon the issuance of shares of Common Stock in
respect of an Option, such number of shares issuable shall be reduced, to the
extent permitted under the Act and the Securities Act, by the number of shares
necessary to satisfy such Section 16 Service Provider's federal, and where
applicable, state withholding tax obligations. For withholding tax purposes, the
value of the shares of Common Stock shall be the Fair Market Value on the date
the withholding obligation is incurred. The Bank may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise due
to the Service Provider.

     SECTION 18. NECESSITY OF STOCKHOLDER APPROVAL

     This Plan and any Options granted hereunder shall be null, void, and of no
effect unless this Plan has been previously approved by two-thirds of the
holders of Common Stock of the Bank, voting as a single class, within twelve
(12) months after the date of the Plan's adoption by the Board.

     SECTION 19. DURATION AND AMENDMENT OF THE PLAN

     (a) No Option may be granted under this Plan after the expiration of ten
(10) years from the earlier of: (a) the date this Plan is adopted by the Board
or (b) the date this Plan is approved by the holders of two-thirds (2/3) of the
stock of the Bank entitled to vote.

     (b) The Board or, if authorized by the Board, any committee of the Board,
may amend, terminate, or suspend this

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Plan at any time; provided, however, that no such amendment shall, without
approval of the Bank's stockholders, (a) increase the aggregate number of shares
as to which Options may be granted under this Plan except as specified in
Section 16 of this Plan; (b) change the number of shares subject to Options or
the date of grant or the exercise price of such Options; (c) materially modify
the requirements concerning eligibility for participation in this Plan; or (d)
materially increase the benefits accruing to Service Providers in this Plan.

     (c) No Option may be granted during any suspension of this Plan or after
this Plan has been terminated; and no amendment, suspension, or termination
shall, without the Service Provider's consent, alter or impair any of the
Service Provider's rights or obligations under any Option theretofore granted to
him under this Plan except insofar as a merger or consolidation of the Bank or
termination of employment of a Service Provider or a liquidation or dissolution
shall affect the cancellation of an Option.

     SECTION 20. APPLICABLE LAW

     To the extent that state laws shall not have been preempted by any laws of
the United States, this Plan shall be governed by, and construed in accordance
with, the laws of the State of New Jersey. The Plan is intended to comply with
N.J.A.C. ss.3:4-2 and any successor provision thereto and Rule 16b-3

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promulgated under the Securities Act, and is further intended to be administered
in the manner specified in paragraph (c)(2)(ii) of that Rule, and the Committee
shall interpret and administer the provisions of the Plan or any Stock Option in
a manner consistent therewith. Any provisions inconsistent with such provision
of N.J.A.C. and such Rule and paragraph shall be inoperative and shall not
affect the validity of the Plan.

     SECTION 21. BINDING EFFECT

     The terms of this Plan shall be binding on its successors and assigns.

     SECTION 22. SAVINGS CLAUSE

     The invalidity or illegality of any provision herein shall not be deemed to
affect the validity of any other provision.

     SECTION 23. NO RIGHTS TO CONTINUED DIRECTORSHIP

     Nothing in this Plan or in any Stock Option granted hereunder shall confer
on any Director any right to continue to serve as a director of the Bank or
shall interfere with or restrict in any way the right, which right is hereby
expressly reserved, to remove any Director as a director in accordance with the
by-laws and certificate of incorporation of the Bank and applicable law.

     SECTION 24. MISCELLANEOUS

     The terms of this Plan shall be binding on the Bank, Key Employees,
Directors, and their successors and assignees.

22PROPOSED AMENDMENT TO
                         THE BANK OF THE SOMERSET HILLS
                      1998 NON-QUALIFIED STOCK OPTION PLAN

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

     (b) An Option shall terminate immediately, and no rights thereunder may be
exercised, if the person to whom it is granted ceases to be employed by the
Bank, except that:

     (iii) if the Service Provider is employed by the Bank and such employment
is terminated by reason of his retirement in accordance with the terms of the
Bank's retirement plans or with the consent of the Committee or is involuntarily
terminated other than for cause, the Service Provider's rights under the Option
may be exercised as to all shares of Common Stock covered thereby at any time
within three (3) months after termination of employment, OR AS SUCH TIME PERIOD
MAY BE EXTENDED BY THE COMMITTEE IN ITS DISCRETION. Termination for cause shall
mean termination of employment by reason of habitual alcohol or drug abuse;
commission of a felony, fraud, willful misconduct; the unauthorized disclosure
of any Bank data, secret, or financial information, that has resulted, or is
likely to result, in damage to the Bank, all as the Board in its sole and
absolute discretion shall determine.

<PAGE>

                         THE BANK OF THE SOMERSET HILLS

                      1998 NON-QUALIFIED STOCK OPTION PLAN

     SECTION 1. PURPOSE

     The Bank of the Somerset Hills ("the Bank") 1998 Non-Qualified Stock Option
Plan (the "Plan") is intended to attract and to retain the Bank's Service
Providers and to motivate them to participate in the long term growth of the
Bank by providing for or increasing the proprietary interests of such persons in
the Bank, thereby assisting the Bank to achieve its long-range goals.

     SECTION 2. DEFINITIONS

     Capitalized terms not specifically defined elsewhere herein shall have the
following meanings:

     "Act" shall mean the New Jersey Bank Officers and Employees' Stock Option
Plan Act.

     "Bank" shall mean The Bank of the Somerset Hills and any present or future
parent or subsidiary corporations (as defined in Section 424 of the Code) or any
successor to the Bank or to such corporations.

     "Board" shall mean the Board of Directors of the Bank.

     "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time and the regulations promulgated thereunder.

     "Committee" shall mean the Board or any committee or

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group of people selected by the Board to administer the Plan and perform the
functions set forth herein.

     "Common Stock" or "Stock" shall mean the common stock, $5.00 par value per
share, of the Bank.

     "Director" shall mean a member of the Board or a member of an advisory or
business development committee of the Bank.

     "Disability" shall mean permanent and total disability, as defined in
Section 22(e)(3) of the Code.

     "Fair Market Value" shall mean with respect to shares of Common Stock, the
fair market value as determined in good faith by the Committee and in a manner
established by the Committee from time to time using any reasonable method of
valuation; provided, that in the event the shares of Common Stock are listed for
trading on a national or regional securities exchange (including the NASDAQ
National Market System), the "fair market value" of such shares shall be, on any
date, the average closing sale price for the Common Stock for the last five (5)
market trading days prior to the day of determination.

     "Non-Qualified Stock Option" shall mean an option to purchase shares of
Common Stock granted to a Service Provider under the Plan.

     "Option" shall mean a Non-Qualified Stock Option.

     "Option Agreement" shall mean a written or electronic agreement between the
Bank and an Optionee evidencing the terms

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and conditions of an individual option grant. The Option Agreement is subject to
the terms and conditions of the Plan.

     "Optionee" shall mean a Service Provider selected by the Committee to
receive an Option under the Plan.

     "Plan" shall mean The Bank of the Somerset Hills 1998 Non-Qualified Stock
Option Plan.

     "Securities Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder, and
any successor provisions thereto.

     "Service Provider" shall mean a key employee of the Bank or a Director.

     As used herein, the masculine gender shall include the feminine gender.

     SECTION 3. ADMINISTRATION

     (a) The Plan shall be administered by the Committee. Among other things,
the Committee shall have authority, subject to the terms of this Plan, to grant
Options, to determine the individuals to whom and the time or times at which
Options may be granted and to determine the terms and conditions of any Option
granted hereunder.

     (b) Subject to the provisions of this Plan, the Committee shall have
authority to adopt, alter, and repeal such administrative rules, guidelines, and
practices governing the

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operation of this Plan as it shall from time to time consider advisable, to
interpret the provisions of this Plan and any Option, and to decide all disputes
arising in connection with this Plan. The Committee's decision and
interpretations shall be final and binding. Any action of the Committee with
respect to the administration of this Plan shall be taken pursuant to a majority
vote or by the unanimous written consent of its members.

     (c) Subject to the provisions of this Plan and the applicable requirements
of federal and state law, the Committee shall have authority, in its discretion,
to take the following actions:

     (i) to determine the Service Providers to be granted Options under this
Plan;

     (ii) to determine the number of shares subject to each Option;

     (iii) to determine the time or times at which Options will be granted;

     (iv) to determine the Option price of the shares subject to each Option,
which price shall be not less than the minimum specified in Section 6 of this
Plan;

     (v) to determine or change the time or times when each Option becomes
exercisable and the duration of the exercise period; provided, however, that no
Option granted to Service Providers pursuant to this Plan, shall be exercisable
until (i) two-thirds of the holders of shares of Common Stock of the Bank

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entitled to vote at a meeting of the Bank's stockholders, voting as a single
class, shall have approved the Plan; and (ii) the Bank shall have fully complied
with the other terms and provisions of the Act;

     (vi) to prescribe the form or forms of the instruments evidencing any
Options granted under this Plan (which forms shall be consistent with this Plan
but need not be identical to one another);

     (vii) to adopt, amend, and rescind such rules and regulations as it
determines are necessary or advisable in the administration of this Plan;

     (viii) to construe and interpret this Plan, the rules and regulations, and
the instruments evidencing Options granted under this Plan and to make all other
determinations deemed necessary or advisable for the administration of this
Plan;

     (ix) to delegate such administrative functions as it deems appropriate; and

     (x) in general, to exercise full and final authority (consistent with this
Plan) over all matters relating to the Plan, the powers denominated above being
by way of example and not of limitation.

     Any interpretation, determination, or other action made or
taken by the Committee shall be final, binding, and conclusive.

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     (d) No member of the Committee shall be personally liable to the Bank or
its stockholders for damages for any action taken or determination made in good
faith. The members of the Committee shall be indemnified by the Bank for any
acts or omissions in connection with the Plan to the full extent permitted by
the Bank's Certificate of Incorporation and New Jersey law.

     SECTION 4. SHARES OF STOCK AVAILABLE FOR OPTIONS

     (a) The aggregate number of shares of Common Stock for which Non-Qualified
Stock Options may be granted under this Plan shall be 75,000 shares of Common
Stock, subject to adjustment as provided in Section 14 of this Plan.

     (b) The shares transferred by the Bank upon the exercise of Options under
this Plan shall consist of authorized but unissued shares of Common Stock.

     (c) The aggregate number of shares of Common Stock that may be issued or
purchased under this Plan pursuant to the exercise of Non-Qualified Stock
Options shall not exceed 5% of the outstanding shares of Common Stock of the
Bank at the time of the adoption of the Plan, subject to adjustment as provided
in Section 14 of this Plan. The aggregate number of shares of Common Stock that
may be issued or purchased under this Plan pursuant to the exercise of
Non-Qualified Stock Options when taken together with the number of shares of
Common Stock that may be issued or purchased under any other plan of the Bank
pursuant to the exercise of Non-Qualified Stock Options shall not exceed 10% of
the outstanding shares of Common Stock of the Bank at the

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time of adoption of this Plan, subject to adjustment as provided in Section 14
of this Plan.

     (d) If an Option granted under this Plan shall expire or terminate for any
reason without having been fully exercised, then the unexercised portion of such
Option shall again be available for the grant under this Plan.

     (e) All Options granted hereunder shall be clearly identified as a
Non-Qualified Stock Option.

     SECTION 5. ELIGIBILITY AND PARTICIPATION

     (a) All Service Providers to the Bank shall be eligible to participate in
this Plan to the extent provided herein.

     SECTION 6. TERMS AND CONDITIONS OF OPTIONS

     (a) Except as herein provided, Employee Options granted hereunder shall be
exercisable for such period as the Committee shall determine at the time of
grant; provided, however, that (i) such period may not commence until at least
six months following the date of grant, except in the event of the death,
Disability, retirement in accordance with the Bank's retirement plans, or in the
case of an employee of the Bank, the involuntary termination of employment other
than for cause before the expiration of such period; and (ii) the Bank shall
have fully complied with the terms and provisions of the Act and the Securities
Act. Options shall be subject to earlier termination as hereinafter provided.

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     (b) An Option shall terminate immediately, and no rights thereunder may be
exercised, if the person to whom it is granted ceases to be employed by the
Bank, except that:

     (i) subject to the limitations on exercisability set forth in this Section
6 of this Plan, if the Service Provider dies, the Service Provider's rights
under the Option may be exercised as to all shares of Common Stock covered
thereby, by his legal representative or by the person or persons to whom such
rights under the Option shall pass by will or by the laws of descent and
distribution, at any time within twelve (12) months following his death;

     (ii) if the Service Provider is employed by the Bank and such employment is
terminated because of Disability, the Service Provider's rights under the Option
may be exercised as to all shares of Common Stock covered thereby by the Service
Provider or his guardian or other legal representative, at any time within
twelve (12) months following termination of his employment because of
Disability;

     (iii) if the Service Provider is employed by the Bank and such employment
is terminated by reason of his retirement in accordance with the terms of the
Bank's retirement plans or with the consent of the Committee or is involuntarily
terminated other than for cause, the Service Provider's rights under the Option

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may be exercised as to all shares of Common Stock covered thereby at any time
within three (3) months after termination of employment. Termination for cause
shall mean termination of employment by reason of habitual alcohol or drug
abuse; commission of a felony, fraud, willful misconduct; the unauthorized
disclosure of any Bank data, secret, or financial information, that has
resulted, or is likely to result, in damage to the Bank, all as the Board in its
sole and absolute discretion shall determine.

     (c) Notwithstanding anything contained in this Section 6 to the contrary,
no Option shall be exercisable by anyone after the expiration of the term of
such Option as determined by the Committee at the date of grant of such Option.

     (d) The purchase price of the shares of Common Stock subject to each
Non-Qualified Stock Option granted to a Service Provider shall be equal to at
least eighty-five percent (85%) of the Common Stock on the date the Option is
granted or the par value of the Common Stock, whenever is higher, provided,
however, that the exercise price of any Non-Qualified Stock Option granted to a
Service Provider as compensation for serving as a Director shall not be less
than the greater of 100 percent (100%) of the Fair Market Value of the Common
Stock at the time of the grant of the Option and the par value of the Common
Stock. Options granted to Service Providers may be exercised by written notice
of exercise accompanied by payment of the exercise price in full for the
purchased shares of Common Stock in cash or by certified or cashier's check
payable to the Bank.

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     (e) No Non-Qualified Stock Option shall be transferable by a Service
Provider other than by will or by the laws of descent and distribution and all
Non-Qualified Stock Options shall be exercisable during a Service Provider's
lifetime only by the Service Provider or his duly appointed guardian or personal
representative. The restrictions set forth in Section 6 of this Plan shall apply
to all Non-Qualified Stock Options granted to Service Providers.

     (f) Each Option granted to a Service Provider shall be evidenced by a
writing signed by him specifying the terms and conditions thereof in accordance
with this Section 6.

     SECTION 7. GENERAL PROVISIONS APPLICABLE TO OPTIONS

     (a) Notwithstanding any other provision of the Plan, in order to qualify
for the exemption provided by Rule 16b-3 under the Securities Act, any Common
Stock acquired by a Participant subject to Section 16 of the Securities Act (a
"Section 16 Participant") upon exercise of an Option may not be sold for six (6)
months after the date of grant of the Option. The Committee shall have no
authority to take any action if the authority to take such action, or the taking
of such action, would disqualify the Plan from the exemption provided by Rule
16b-3 under the Securities Act.

     (b) Each Option under the Plan shall be evidenced by a writing delivered to
the Service Provider specifying the terms

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and conditions thereof and containing such other terms and conditions not
inconsistent with the provisions of the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or comply with
applicable tax and regulatory laws and accounting principles.

     (c) Each Option may be granted alone, in addition to or in relation to any
other Option. The terms of each Option need not be identical, and the Committee
need not treat Service Providers uniformly, except as otherwise provided in
Section 6. Except as otherwise provided by the Plan or a particular Option, any
determination with respect to an Option may be made by the Committee at the time
of grant or at any time thereafter.

     (d) The Committee may amend, modify, or terminate any outstanding Option
held by a Service Provider, including substituting therefor another Option of
the same or a different type, changing the date of exercise or realization,
provided that the Service Provider's consent to each action shall be required
unless the Committee determines that the action, taking into account any related
action, would not materially and adversely affect the Service Provider.

     (e) The vesting schedule of any Option may, in the discretion of the
Committee and as stated in the Option Agreement, be subject to acceleration in
the event of the death or Disability of the Service Provider, or the termination
of the Service Provider's relationship with the Bank. All Options shall

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automatically and immediately vest on a change in control the Bank (as defined
in the Option Agreement).

     SECTION 8. NON-TRANSFERABILITY OF OPTIONS

     All Options granted under this Plan shall only be transferable by a Service
Provider (i) by will, (ii) the laws of descent and distribution, (iii) to the
Service Provider's spouse or issue, or (iv) a trust established for the benefit
of such Service Provider's spouse or issue. All Options granted under this Plan
may be exercised by the Service Provider only during a Service Provider's
lifetime and only by the Participant or the Service Provider's duly appointed
guardian or personal representative.

     SECTION 9. OPTION AGREEMENTS

     (a) The grant of every Option shall be evidenced by and conditioned upon
the execution of a written Option Agreement between the Bank and the Service
Provider. The Option Agreement shall set forth the number of shares subject to
the Option, the Option price, the term during which the Option may be exercised,
and any other provisions not inconsistent with the provisions of this Plan,
which the Committee may deem necessary or appropriate from time to time.

     (b) Notwithstanding the date on which an Option agreement may be executed,
the date on which an Option is deemed to be granted shall be the effective date
of the approval of an Option by the Committee.

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     SECTION 10. OPTION EXERCISE AND PAYMENT

     (a) Subject to Sections 5, 6, and 7 of this Plan, each Option granted under
this Plan shall be exercisable on such date or dates and during such period and
for such number of shares as shall be determined pursuant to the provisions of
the Option Agreement evidencing such Option.

     (b) A Service Provider electing to exercise an Option shall give written
notice to the Committee of such election and of the number of full shares he
elects to purchase. Options shall be exercisable in such amounts as the Service
Provider may elect subject to such restrictions as the Committee or this Plan
may provide.

     (c) Subject to the other provisions of this Plan and applicable state and
federal law, payment of the Option price shall be tendered to the Bank (i) in
cash, including certified check, bank draft, or money order, or (ii) at the
discretion of the Committee, by delivering a promissory note, containing such
terms and conditions acceptable to the Committee, for all or a portion of the
purchase price of the shares purchased, or any combination of the foregoing.

     SECTION 11. NO RIGHTS AS STOCKHOLDER

     Neither the Service Provider nor the personal representatives, heirs, or
legatees of such Service Provider

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shall be, or have any rights or privileges of, a stockholder of the Bank with
respect to any shares subject to an Option unless and until certificates
evidencing such shares shall have been issued and delivered to the Service
Provider or to such personal representatives, heirs, or legatees.

     SECTION 12. NO RIGHTS TO CONTINUED EMPLOYMENT

     This Plan and any Option granted under the Plan shall not confer upon any
Service Provider any right with respect to continuation of employment by the
Bank, nor shall they interfere in any way with the right of the Bank to
terminate his employment at any time.

     SECTION 13. ADDITIONAL PROPERTY

     At the time any Option is exercised, the Committee, in its discretion, may
transfer to the Service Provider such additional property as it may determine,
including, without limitation, cash or stock appreciation rights.

     SECTION 14. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

     Except as otherwise provided herein, the instruments evidencing Options
granted hereunder shall contain such provisions as the Committee shall deem
appropriate to adjust the number and classes of shares covered thereby, or to
adjust the Option prices, or both, in the event of the sale or other disposition
or distribution by the Bank of all or a portion of its assets or any change in
the outstanding Common Stock of the Bank by reason of stock dividends, stock
split-ups,

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recapitalizations, reorganizations, mergers, consolidations, combinations, or
exchanges of shares or the like, of or by the Bank. To prevent dilution or
enlargement of rights in the event of any such change, the aggregate number and
classes of shares for which Options thereafter may be granted under this Plan
may be appropriately adjusted as determined by the Committee to reflect such
change.

     SECTION 15. WITHHOLDING TAXES

     The Service Provider shall pay to the Bank, or make provision satisfactory
to the Committee for payment of, any taxes required by law to be withheld in
respect of Options under the Plan no later than the date of the event creating
the tax liability. In the Committee's sole discretion, and to the extent
permitted under the Act, a Service Provider (other than a Section 16 Service
Provider, who shall be subject to the following sentence) may elect to have such
tax obligations paid, in whole or in part, in shares of Common Stock, including
shares retained from the Option creating the tax obligation. With respect to
Section 16 Service Providers, upon the issuance of shares of Common Stock in
respect of an Option, such number of shares issuable shall be reduced, to the
extent permitted under the Act and the Securities Act, by the number of shares
necessary to satisfy such Section 16 Service Provider's federal, and where
applicable, state withholding tax obligations. For withholding tax purposes, the
value of the shares of Common Stock shall be the Fair Market Value on the date
the withholding obligation is

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incurred. The Bank may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Service Provider.

     SECTION 16. NECESSITY OF STOCKHOLDER APPROVAL

     This Plan and any Options granted hereunder shall be null, void and of no
effect unless this Plan has been previously approved by two-thirds of the
holders of Common Stock of the Bank, voting as a single class, within twelve
(12) months after the date of the Plan's adoption by the Board.

     SECTION 17. DURATION AND AMENDMENT OF THE PLAN

     (a) No Option may be granted under this Plan after the expiration of ten
(10) years from the earlier of: (a) the date this Plan is adopted by the Board
or (b) the date this Plan is approved by the holders of two-thirds (2/3) of the
stock of the Bank entitled to vote.

     (b) The Board, or if authorized by the Board, any committee of the Board,
may amend, terminate, or suspend this Plan at any time; provided, however, that
no such amendment shall, without approval of the Bank's stockholders, (a)
increase the aggregate number of shares which Options may be granted under this
Plan except as specified in Section 14 of this Plan; (b) change the number of
shares subject to Options or the date of grant or the exercise price of such
Options; (c) materially modify the requirements concerning eligibility for
participation

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in this Plan; or (d) materially increase the benefits accruing to Service
Providers in this Plan.

     (c) No Option may be granted during any suspension of this Plan or after
this Plan has been terminated; and no amendment, suspension, or termination
shall, without the Service Provider's consent, alter or impair any of the
Service Provider's rights or obligations under any Option theretofore granted to
him under this Plan except insofar as a merger or consolidation of the Bank or
termination of employment of a Service Provider or a liquidation or dissolution
shall affect the cancellation of an Option.

     SECTION 18. APPLICABLE LAW

     To the extent that state laws shall not have been preempted by any laws of
the United States, this Plan shall be governed by, and construed in accordance
with, the laws of the State of New Jersey. The Plan is intended to comply with
N.J.A.C. ss.3:4-2 and any successor provision thereto and Rule 16b-3 promulgated
under the Securities Act, and is further intended to be administered in the
manner specified in paragraph (c)(2)(ii) of that Rule, and the Committee shall
interpret and administer the provisions of the Plan or any Stock Option in a
manner consistent therewith. Any provisions inconsistent with such provision of
N.J.A.C. and such Rule and paragraph shall be inoperative and shall not affect
the validity of the Plan.

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     SECTION 19. BINDING EFFECT

     The terms of this Plan shall be binding on its successors and assigns.

     SECTION 20. SAVINGS CLAUSE

     The invalidity or illegality of any provision herein shall not be deemed to
affect the validity of any other provision.

     SECTION 21. GENDER

     As used herein, the masculine gender shall include the feminine gender.

     SECTION 22. NO RIGHTS TO CONTINUED DIRECTORSHIP

     Nothing in this Plan or in any Option granted hereunder shall confer on any
Director any right to continue to serve as a director of the Bank or shall
interfere with or restrict in any way the right, which right is hereby expressly
reserved, to remove any Director as a director in accordance with the by-laws
and certificate of incorporation of the Bank and applicable law.

     SECTION 23. MISCELLANEOUS

     The terms of this Plan shall be binding on the Bank, Key Employees,
Directors, and their successors and assignees.

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