HUBCO, INC. 1995 STOCK
OPTION PLAN
ARTICLE
I. Purpose
The purposes of the 1995 Stock Option Plan are
(i) to attract and retain highly-qualified executives, (ii) to
align executive and stockholder long-term interests by creating a
direct link between executive compensation and stockholder return,
(iii) to enable executives of HUBCO, Inc. (the
“Corporation”) to develop and maintain stock ownership
positions in the Corporation, and (iv) to provide incentives to
such executives to contribute to the success of the Corporation. To
achieve these objectives, the Plan provides for the granting of
“incentive stock options” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended, and
nonqualified stock options.
ARTICLE
II. Definitions
Whenever the following terms are used in this
Plan, they shall have the meaning specified below:
“Affiliate” shall mean the
Corporation, a Subsidiary, or any employee benefit plan established
or maintained by the Corporation or a Subsidiary.
“Board” shall mean the Board of
Directors of the Corporation.
“Cause” shall mean (i) the
conviction of the Participant of a felony by a court of competent
jurisdiction, (ii) the indictment of the Participant by a state or
Federal grand jury of competent jurisdiction for embezzlement or
misappropriation of funds of the Corporation or for any act of
dishonesty or lack of fidelity towards the Corporation, (iii) the
written confession by the Participant of any act of dishonesty
towards the Corporation or any embezzlement or misappropriation of
the Corporation’s funds, or (iv) willful or gross neglect of
the duties for which the Participant was responsible, all as the
Committee, in its sole discretion, may determine.
“Change in Control” shall mean the
occurrence of one or more of the following events: (i) the
Corporation acquires actual knowledge that any person (as such term
is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
other than an Affiliate is or becomes the beneficial owner (as
defined in Rule 13d-3 of the Exchange Act) directly or indirectly,
of securities of the Corporation representing 10% or more of the
combined voting power of the Corporation’s then outstanding
securities, (ii) the first purchase of Common Stock pursuant to a
tender or exchange offer (other than a tender or exchange offer
made by an Affiliate), (iii) the approval by the
Corporation’s stockholders of (a) a merger or consolidation
of the Corporation with or into another corporation (other than a
merger or consolidation in which the Corporation is the surviving
corporation and which does not result in any reclassification or
reorganization of the Corporation’s then outstanding shares
of Common Stock or a change in the Corporation’s directors,
other than the addition of not more than three directors), (b) a
sale or disposition of all or substantially all of the
Corporation’s assets, or (c) a plan of liquidation or
dissolution of the Corporation, (iv) during any period of two
consecutive calendar years, individuals who at the beginning of
such period constitute the Board of Directors of the Corporation
cease for any reason to constitute at least two-thirds thereof,
unless the election or nomination for the election by the
Corporation’s stockholders of each new director was approved
by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period, or (v) a
sale of (a) Common Stock of the Corporation if after such sale any
person (as defined above) other than an Affiliate owns a majority
of the Corporation’s Common Stock or (b) all or substantially
all of the Corporation’s assets (other than in the ordinary
course of business). Notwithstanding the foregoing, no Change in
Control shall be deemed to have occurred for purposes of clause (i)
above if a person is or becomes the beneficial owner, directly or
indirectly, of more than 10% but less than 25% of the combined
voting power of the Corporation’s then outstanding securities
if the acquisition of all voting securities in excess of 10% was
approved in advance by two-thirds of the directors then in
office.
“Code” shall mean the Internal
Revenue Code of 1986, as now in effect or as hereafter amended.
(All citations to sections of the Code are to such sections as they
may from time to time be amended or renumbered.).
“Committee” shall mean the committee
consisting of at least three (3) directors of the Corporation
appointed by the Board to administer the Plan pursuant to the
provisions of Article III of the Plan.
“Common Stock” or
“Stock” shall mean the common stock of the Corporation,
no par value.
“Disability” shall mean permanent
and total disability within the meaning of Section 105(d)(4) of the
Code.
“Employee” shall mean a common law
employee (as defined in accordance with the regulations and Revenue
Rulings then applicable under Section 3401(c) of the Code) of an
Affiliate.
“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.
“Incentive Option” shall mean an
Option whose terms satisfy the requirements imposed by Section 422
of the Code and which is intended by the Committee to be treated as
an Incentive Option.
“Nonqualified Option” shall mean
either (i) any Option which, when granted, is not an Incentive
Option, and (ii) an Incentive Option which, subsequent to its
grant, ceases to qualify as an Incentive Option because of a
failure to satisfy the requirements of Section 422(b) of the
Code.
“Option” shall mean a right to
purchase Common Stock which is awarded in accordance with the terms
of this Plan.
“Participant” shall mean an Employee
who has been granted an Option under the Plan.
“Plan” shall mean the HUBCO, Inc.
1995 Stock Option Plan, as may be amended from time to
time.
“Retirement” shall mean any normal
or early retirement by a Participant pursuant to the terms of any
pension plan or policy of the Corporation or any Subsidiary which
is applicable to such Participant at the time of his or her
Termination of Service.
“Secretary” shall mean the corporate
secretary of the Corporation.
“Securities Act” shall mean the
Securities Act of 1933.
“Shares” shall mean shares of Common
Stock.
“Subsidiary(ies)” shall mean any
corporation or other legal entity, domestic or foreign, more than
50% of the voting power of which is owned or controlled, directly
or indirectly by the Corporation.
“Terminate (Termination of) Service (or
Termination ) ” shall mean the time at which the
Participant ceases to provide services to the Corporation as an
employee, but shall not include a lapse in providing services which
the Committee determines to be a temporary leave of
absence.
ARTICLE
III. Administration
The Plan shall be administered by a committee
(the “Committee”) selected by the Board from among its
members, which shall consist of not less than three members, each
of whom must be both (i) a “disinterested person”
within the meaning of the rules promulgated under Section 16(b) of
the Exchange Act, and (ii) an “outside director” within
the meaning of Section 162(m) of the Code. The Committee shall hold
meetings at such times as may be necessary for the proper
administration of the Plan and shall keep minutes of its meetings.
A majority of the Committee shall constitute a quorum and a
majority of the quorum may authorize any action.
Subject to the provisions of the Plan, the
Committee shall have sole authority, in its absolute discretion:
(i) to determine which of the eligible Employees of the Corporation
shall be granted Options; (ii) to grant Options; (iii) to determine
the times when Options may be granted and the number of Shares that
may be purchased pursuant to such Options; (iv) to determine the
exercise price of the Shares subject to each Option, which price
shall be not less than the minimum specified in Section 6.1; (v) to
determine the time or times when each Option becomes exercisable,
the duration of the exercise period, and any other restrictions on
the exercise of Options issued hereunder; (vi) to prescribe the
form or forms of the Option agreements under the Plan; (vii) to
determine the circumstances under which the time for exercising
Options should be accelerated and to accelerate the time for
exercising outstanding Options; (viii) to determine the duration
and purposes for leaves of absence which may be granted to a
Participant without constituting a Termination of Service for
purposes of the Plan; (ix) to adopt, amend and rescind such rules
and regulations as, in its opinion, may be advisable in the
administration of the Plan; and (x) to construe and interpret the
Plan, the rules and regulations and the Option agreements under the
Plan, and to make all other determinations deemed necessary or
advisable for the administration of the Plan; provided, however,
that with respect to those eligible Employees who are not
“officers” of the Corporation, within the meaning of
Section 16(b) of the Exchange Act, the Committee may delegate to
any person or persons (“Subcommittee”) all or any part
of its authority as set forth in (i) through (x) above. All
references in the Plan to the powers of a Subcommittee to act for
the Committee shall be applicable only to the extent consistent
with the forgoing provision and only to the extend consistent with
the powers which have actually been delegated to it. All decisions,
determinations and interpretations of the Committee, or
Subcommittee, to the extent consistent with such delegation, shall
be final and binding.
ARTICLE
IV. Shares Subject to Plan
The maximum number of Shares that may be made
subject to Options granted pursuant to the Plan after May 25, 1997
is 750,000 (or the number and kind of Shares or other securities
which are substituted for those Shares or to which those Shares are
adjusted pursuant to the provisions of Article VIII of the Plan
after March 31, 1998) plus that number of Shares authorized prior
to May 25, 1997. The maximum number of Shares with respect to which
Options may be granted to any one person during the term of the
plan shall not exceed 437,500, except as such number of Shares
shall be adjusted in accordance with the provision of Article VIII
hereof. The Corporation shall reserve such number of Shares for the
purposes of the Plan out of its authorized but unissued shares, or
out of Shares held in the Corporation’s treasury, or partly
out of each, as shall be determined by the Board. No fractional
Shares shall be issued with respect to Options granted under the
Plan. The maximum number of Shares that could be issued or
transferred pursuant to Awards made under the Plan prior to May 25,
1997, was 500,000 shares, as adjusted for Changes in Capitalization
occurring after December 13, 1994.
In the event that any outstanding Option under
the Plan for any reason expires, is terminated, forfeited or is
cancelled prior to the expiration date of the Plan, the Shares
called for by the unexercised portion of such Option may, to the
extent permitted by Rule 16b-3 under the Exchange Act, again be
subject to an Option under the Plan.
ARTICLE
V. Eligibility for Award of Options
The Committee may designate any officer of the
Corporation, any group or divisional officer, and any other key
Employee of the Corporation as eligible to receive Options under
the Plan. Non-employee directors shall not be eligible to
participate in the Plan.
ARTICLE
VI. Grant of Options
The Committee or Subcommittee may in its sole
discretion grant Options to such officers and key Employees of the
Corporation as it determines appropriate consistent with Article V.
Options shall be evidenced by Option agreements (which need not be
identical) in such forms as the Committee may from time to time
approve.
Option agreements shall conform to the terms and
conditions of the Plan. Such agreements may provide that the grant
of any Option under the Plan, or that Stock acquired pursuant to
the exercise of any Option, shall be subject to such other
conditions (whether or not applicable to the Option or Stock
received by any other optionee) as the Committee determines
appropriate, including, without limitation, provisions conditioning
exercise upon the occurrence of certain events or performance or
the passage of time, provisions to assist the optionee in financing
the purchase of Stock through the exercise of Options, provisions
for forfeiture, or restrictions on resale or other disposition, of
shares acquired under the Plan, provisions giving the Corporation
the right to repurchase shares acquired under the Plan in the event
the Participant elects to dispose of such shares, and provisions to
comply with federal and state securities laws and federal and state
income tax and other payroll tax withholding requirements. Options
granted under this Plan which are intended to qualify as Incentive
Options shall be specifically designated as such in the Option
agreement.
6.1 Option Price. The exercise price for each Option granted under
the Plan shall be determined by the Committee or Subcommittee;
provided, however, that it shall not be less than the fair market
value of the Stock on the date of grant. The fair market value
shall be deemed for all purposes of the Plan to be the mean between
the highest and lowest sale prices reported as having occurred on
any Exchange with which the Stock may be listed and traded on the
date chosen to determine such fair market value, or, if there are
no such sales on that date, then on the last preceding date on
which such a sale was reported. If the Stock is not listed on any
exchange but the Stock is quoted on the National Market System of
the National Association of Securities Dealers Automated Quotation
(NASDAQ) System on a last sale basis, then the fair market value of
the Stock shall be deemed to be the mean between the high and low
price reported on the date of grant. If the Stock is not quoted on
the NASDAQ on a last sale basis, then the fair market value
of
