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Exhibit 10.26
THE TOWN BANK
OF
WESTFIELD
1999 EMPLOYEE STOCK OPTION PLAN
1. Purpose of the 1999 Employee Stock Option Plan.
The Town Bank of Westfield (the "Corporation") desires to
attract
and retain the best available employees ("Eligible Employees",
as hereinafter
defined) and to encourage their highest level of performance.
The 1999 Employee
Stock Option Plan (the "Employee Stock Option Plan") amends in
its entirety,
restates, supersedes and terminates all preceding stock option
plans for
employees and is intended to contribute significantly to the
attainment of these
objectives by (i) providing long-term incentives and rewards to
all Eligible
Employees who are in a position to contribute to the long-term
success and
growth of the Corporation, (ii) assisting the Corporation and
any subsidiary of
the Corporation in attracting and retaining Eligible Employees
with experience
and ability, and (iii) associating more closely the interests of
the Eligible
Employees with those of the Corporation's stockholders.
The term "Eligible Employees" as used in this Employee Stock
Option
Plan means the employees and officers of (i) the Corporation,
(ii) any parent of
the Corporation, or (iii) any subsidiary of the Corporation.
2. Scope and Duration of the Employee Stock Option Plan.
Under the Employee Stock Option Plan, options (singularly,
an
"Option", collectively, the "Options") to purchase voting common
stock, $5.00
par value ("Common Stock") of the Corporation, may be granted,
which options, if
granted to Eligible Employees who are also employees (including
officers who are
employees) of the Corporation, a parent corporation or a
subsidiary Corporation
of the Corporation, may, at the time of grant, be designated as
incentive stock
options ("ISOs"), with the attendant tax benefits, as provided
for under
sections 421 and 422 of the Internal Revenue Code of 1986, as
amended, and any
successor statute and regulations promulgated or proposed
thereunder (the
"Code"). The aggregate number of shares of Common Stock reserved
for grant from
time to time under the Employee Stock Option Plan is 31,169
shares of Common
Stock, which shares may be authorized but unissued shares of
Common Stock or
shares of Common Stock which shall have been or which may be
reacquired by the
Corporation, as the Board of Directors of the Corporation shall
from time to
time determine. In no event may there be dedicated under the
Employee Stock
Option Plan a number of shares of Common Stock of the
Corporation greater than
five percent of the outstanding shares of Capital Stock of the
Corporation. The
aggregate number of shares of Common Stock reserved for grant
under the Employee
Stock Option Plan shall be subject to adjustment as provided in
Paragraph 11. If
an Option shall expire or terminate for any reason without
having been exercised
in full, the shares represented by the portion thereof not so
exercised shall
(unless the Employee Stock Option Plan shall have been
terminated) become
available for other Options under the Employee Stock Option
Plan. The Employee
Stock Option Plan shall become effective upon approval by the
Board of Directors
and stockholders of the Corporation as provided in Paragraph 12.
Subject to
Paragraph 13, no Option shall be granted under the Employee
Stock Option Plan
after the tenth (10th) anniversary of the approval of the
Employee Stock Option
Plan by the stockholders of the Corporation, or December 31,
2009, whichever
occurs first.
3. Administration of the Employee Stock Option Plan.
The Board of Directors of the Corporation shall appoint a
committee
(the "Committee") to administer the Employee Stock Option Plan.
The Committee
shall consist of either the entire Board of Directors (provided
that a majority
of the Board of Directors and a majority of the Directors acting
as the
Committee are disinterested persons) or a Committee appointed by
the Board of
Directors consisting of one or more disinterested persons, who
are Directors of
the Corporation, and who shall serve at the pleasure of the
Board of Directors.
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<PAGE>
The Committee shall have authority in its discretion, subject
to,
and not inconsistent with, the express provisions of the
Employee Stock Option
Plan, to direct the grant of Options; to determine the purchase
price of the
Common Stock covered by each Option, the Eligible Employees to
whom, and the
time or times at which, Options shall be granted and the number
of shares to be
covered by each Option; to designate Options as ISOs; to
interpret the Employee
Stock Option Plan; to determine the time or times at which
Options may be
exercised; to prescribe, amend and rescind rules and regulations
relating to the
Employee Stock Option Plan, including, without limitation, such
rules and
regulations as it shall deem advisable to insure that
transactions involving
Options may qualify for exemption under such rules and
regulations as the
Securities and Exchange Commission may promulgate or propose
from time to time
exempting transactions from Section 16(b) of the Securities
Exchange Act of
1934; to determine the terms and provisions of, and to cause the
Corporation to
enter into, agreements with Eligible Employees as a prerequisite
to, and in
connection with, a grant of Options under the Employee Stock
Option Plan (the
"Agreements"), which Agreements may vary from one another as the
Committee shall
deem appropriate; and to make all other determinations it may
deem necessary or
advisable for the administration of the Employee Stock Option
Plan. The
Committee may delegate to one or more of its members, or to one
or more agents,
those administrative duties as the Committee may deem advisable
and may employ
(or authorize any person to whom it has delegated duties, as
aforesaid) to
employ one or more persons to render advice with respect to any
responsibility
it (or that person) may have under the Employee Stock Option
Plan.
The Board of Directors of the Corporation may from time to
time
appoint members of the Committee in substitution for, or in
addition to, members
previously appointed and may fill vacancies, however caused, in
the Committee.
The Committee shall hold its meetings at such times and places
as it shall deem
advisable. Members may participate in meetings through
conference telephone
calls or similar arrangements. A majority of the members of the
Committee shall
constitute a quorum. All determinations of the Committee shall
be made by a
majority of its members. Any decision or determination reduced
to writing and
signed by all of the members shall be fully effective as if it
had been made by
a majority vote at a meeting duly called and held. The Committee
may appoint a
secretary, shall keep minutes of its meetings, and shall make
such rules and
regulations for the conduct of its business as it shall deem
necessary or
advisable. No member of the Committee shall be liable for any
action or
determination taken or made, or not taken or not made, in good
faith with
respect to the Employee Stock Option Plan or any Option granted
under it.
4. Eligibility: Factors to be Considered in Granting Options and
Designating
ISOs.
(a) Options may be granted only to (i) employees (including
officers
who are employees) of the Corporation, or a parent corporation
or a subsidiary
corporation thereof on the date of grant (Options so granted may
be designated
as ISOs), and (ii) to officers of the Corporation, a parent
corporation or a
subsidiary corporation thereof on the date of grant, without
regard to whether
they are employees. In determining the persons to whom Options
shall be granted
and the number of shares of Common Stock to be covered by each
Option, the
Committee shall take into account the nature of the duties of
the respective
persons, their present and potential contributions to the
Corporation's
successful operation or to successful operation of a parent
corporation or a
subsidiary corporation thereof, as the case may be, and such
other factors as
the Committee in its sole and absolute discretion shall deem
relevant. Subject
to the provisions of Paragraph 2, above, an Eligible Employee
may receive
Options on more than one occasion under the Employee Stock
Option Plan.
(b) In the case of each ISO granted to an employee, the
aggregate
fair market value (determined at the time the ISO is granted) of
the Common
Stock with respect to which the ISO is exercisable for the first
time by such
employee during any calendar year (under all plans of the
Corporation and any
parent corporation or any subsidiary corporation thereof) may
not exceed
$100,000.
5. Option Price.
The purchase price per share of the Common Stock covered by
each
Option shall be established by the Committee, but in no event in
the case of an
ISO shall it be less than the fair market value of a share of
the Common Stock
on the date the ISO is granted or one hundred and ten percent
(110%) of the fair
market value of a share of the Common Stock on the date the ISO
is granted if
the Holder owns stock possessing more than ten percent (10%) of
the total
combined voting power of all classes of stock of the Corporation
or of a parent
or subsidiary corporation thereof (a "Ten Percent Holder"). In
no event may the
option price of a share of Common Stock be less than the
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greater of the par value of a share of stock or 85 percent of
its fair market
value on the date the Option is granted. For all purposes under
the Employee
Stock Option Plan, if at the time of grant the Common Stock is
publicly traded,
its fair market value shall be the last reported sale price,
regular way, on the
last preceding trading day, or, in case no such reported sale
takes place on
that day, the average of the last reported bid and asked prices,
regular, in
either case on the principal national securities exchange, if
any, on which the
Common Stock is admitted to trading or listed, or if not so
admitted to trading
or listed on any national securities exchange, the average of
the closing
reported bid and asked prices on the last preceding trading day
as reported by
the National Association of Securities Dealers Automated
Quotation System
("NASDAQ") or any comparable system, or if not listed for
quotation through
NASDAQ or any comparable system, the average of the closing bid
and asked prices
on the last preceding trading day as recorded by two members of
the National
Association of Securities Dealers, Inc. selected from time to
time by the
Committee for that purpose. If the Committee shall determine
that no stock
quotation is available or that the stock price quotation is not
representative
of fair market value by reason of the lack of a significant
number of recent
transactions or otherwise, the Committee may determine fair
market value in such
a manner as it shall deem appropriate under the circumstances.
If, at the time
an ISO is granted, the Common Stock is not publicly traded, the
Committee shall
make a good faith attempt to determine its fair market value.
The determination
of the fair market value of the Common Stock shall be made by
the Committee
without regard to any restrictions, other than a restriction
which, by its
terms, will never lapse.
The date on which the Committee adopts a resolution
expressly
granting an Option shall be considered the date on which that
Option is granted.
6. Term of Options.
The term of each option shall be fixed by the Committee, but in
no
event shall it be more than 10 years from the date of grant,
subject to earlier
termination as provided in Paragraphs 9 and 10. The term of an
IS
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