SOMERSET HILLS BANCORP Incentive Stock Option Agreement Granted Under 2007 Equity Incentive Plan
Granted
Under 2007 Equity Incentive
Plan
1. Grant
of Option.
This
agreement evidences the grant by Somerset Hills Bancorp, a New Jersey
corporation (the “Company”), on
,
200[ ] (the “Grant Date”) to
[ ],
an employee of the Company (the “Participant”), of an option to purchase, in
whole or in part, on the terms provided herein and in the Company’s 2007 Equity
Incentive Plan (the “Plan”), a total of
[
] shares (the “Shares”) of common stock, without par value, of the
Company (“Common Stock”) at
$[ ] per
Share. Unless earlier terminated, this option shall expire at 5:00
p.m., Eastern time, on [_______] (the “Final Exercise
Date”).
It
is
intended that the option evidenced by this agreement shall be an incentive
stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the
“Code”). Except as otherwise indicated by the context, the term
“Participant”, as used in this option, shall be deemed to include any person who
acquires the right to exercise this option validly under its terms. Defined
terms used herein and not otherwise defined shall have the meanings ascribed
to
them under the Plan, which is incorporated into and made a part of this
Agreement.
2. Vesting
Schedule.
This
option will become exercisable (“vest”) as follows:
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DATE
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NUMBER
OF SHARES
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Notwithstanding
the foregoing, upon the occurrence of a Change In Control Event, this option
shall immediately become exercisable for all Shares listed under
Section 1.
The
right
of exercise shall be cumulative so that to the extent the option is not
exercised in any period to the maximum extent permissible it shall continue
to
be exercisable, in whole or in part, with respect to all Shares for which it
is
vested until the earlier of the Final Exercise Date or the termination of this
option under Section 3 hereof or the Plan.
3. Exercise
of Option.
(a) Form
of Exercise. Each election to exercise this option shall be in
writing in the form attached hereto as Exhibit A, signed by the
Participant, and received by the Company at its principal office, accompanied
by
this agreement, and payment in full in the manner provided in the
Plan. The Participant may purchase less than the number of shares
covered hereby, provided that no partial exercise of this option may be for
any
fractional share.
(b) Continuous
Relationship with the Company Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been
at
all times since the Grant Date, an employee or officer of the Company or any
parent or subsidiary of the Company as defined in Section 424(e) or (f) of
the
Code (an “Eligible Participant”).
(c) Termination
of Relationship with the Company. If the Participant ceases to be
an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall
terminate three months after such cessation (but in no
event after the Final Exercise Date), providedthat this option
shall be exercisable only to the extent that the Participant was entitled to
exercise this option on the date of such cessation. Notwithstanding
the foregoing, if the Participant, prior to the Final Exercise Date, violates
the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the
Participant and the Company, the right to exercise this option shall terminate
immediately upon written notice to the Participant from the Company describing
such violation.
(d) Exercise
Period Upon Death or Disability. If the Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for “cause” as specified in
paragraph (e) below, this option shall be exercisable, within the period of
one
year following the date of death or disability of the Participant, by the
Participant (or in the case of death by an authorized transferee),
providedthat this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e) Discharge
for Cause. If the Participant, prior to the Final Exercise
Date, is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of
such
discharge. “Cause” shall mean willful misconduct by the Participant
or willful failure by the Participant to perform his or her responsibilities
to
the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company), as determined by the Company, which determination shall be
conclusive.
4. Tax
Matters.
(a) Withholding. No
Shares will be issued pursuant to the exercise of this option unless and until
the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required
by law to be withheld in respect of this option.
(b) Disqualifying
Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.
5. Nontransferability
of Option.
This
option may not be sold, assigned, transferred, pledged or otherwise encumbered
by the Participant, either voluntarily or by operation of law, except by will
or
the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the
Participant.
6. Provisions
of the Plan.
This
option is subject to the provisions of the Plan, a copy of which is furnished
to
the Participant with this option.
IN
WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
PARTICIPANT’S
ACCEPTANCE
The
undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company’s 2007 Equity Incentive Plan.
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PARTICIPANT:
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Address:
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EXHIBIT
A
NOTICE
OF STOCK OPTION EXERCISE
Date:
__________
_____________________
_____________________
_____________________
Attention: Treasurer
Dear
Sir
or Madam:
I
am the
holder of _____________ Stock Option granted to me under the Somerset Hills
Bancorp (the “Company”) 2007 Equity Incentive Plan on _________ for the purchase
of __________ shares of Common Stock of the Company at a purchase price of
$__________ per share.
I
hereby
exercise my option to purchase _________ shares of Common Stock (the “Shares”),
for which I have enclosed __________ in the amount of
________. Please register my stock certificate as
follows:
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Name(s):
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Address:
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Tax
I.D. #:
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Very
truly yours,
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_____________________________
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(Signature)
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