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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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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<PAGE>
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 ISO granted to a
