NON-QUALIFIED STOCK OPTION AGREEMENT UNDER THE 2007 NON-QUALIFIED STOCK OPTION PLAN FOR DIRECTORS
Exhibit 10.2
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made between BANCORP
OF NEW JERSEY, INC., a New Jersey corporation (the “Company”) and [ ] (the
“Optionee”).
WHEREAS, the Company, by assumption from Bank of New Jersey, maintains the 2007 Non-Qualified
Stock Option Plan for Directors (the “Plan”) for the benefit of Non-Employee Directors of
the Company and its Affiliates; and
WHEREAS, the Plan permits the award of Non-Qualified Stock Options to purchase Shares, subject
to the terms of the Plan; and
WHEREAS, the Company desires to grant the Optionee Non-Qualified Stock Options under the Plan
to further align the Optionee’s personal financial interests with those of the Company’s
stockholders.
NOW, THEREFORE, in consideration of these premises and the agreements set forth herein and
intending to be legally bound hereby, the parties agree as follows:
1. Award of Option. This Agreement evidences the grant to the Optionee of an option (the
“Option”) to purchase [ ] ([ ]) Shares (the “Option Shares”). The Option
is subject to the terms set forth herein, and in all respects is subject to the terms and
provisions of the Plan applicable to Non-Qualified Stock Options, which terms and provisions are
incorporated herein by this reference. Except as otherwise specified herein or unless the context
herein requires otherwise, the terms defined in the Plan will have the same meanings herein.
2. Nature of the Option. The Option is intended to be a nonstatutory stock option and is
not intended to be an Incentive Stock Option within the meaning of Section 422 of the
Internal Revenue Code (the “Code”), or to otherwise qualify for any special tax benefits to
the Optionee.
3. Date of Grant; Term of Option. The Option was granted on [ , 20___] (the
“Effective Date”) and may not be exercised later than the date that is ten (10) years after
that date, subject to earlier termination in accordance with the Plan.
4. Option Exercise Price. The per share exercise price of the Option is $[ ] (the
“Exercise Price”), which is the Fair Market Value per Share on the Effective Date.
5. Exercise of Option. The Option will become exercisable only in accordance with the terms
and provisions of the Plan and this Agreement, as follows:
(a) Right to Exercise. Option shares will become exercisable if the Optionee remains in
continuous service to the Company through the applicable vesting date as follows: (1) the Option
shall become exercisable with respect to 33% of the Option Shares on the first anniversary of the
Effective Date, (2) an additional 33% of the Option Shares will become exercisable on the second
anniversary of the Effective Date, and (3) the remaining 34% of the Option Shares will become
exercisable on the third anniversary of the Effective Date.
Upon a termination of the Optionee’s service with the Company, the Option will be exercisable
only to the extent specified in Section 6 of the Plan. Solely for purposes of this Option, service
with the Company will be deemed to include service with an Affiliate of the Company for so long as
that entity remains an Affiliate of the Company.
(b) Method of Exercise. The Optionee may exercise the Option by providing written notice to
the Company stating the election to exercise the Option. Such written notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company
or such other person as may be designated by the Company, and shall be accompanied by payment of
the Exercise Price and an amount equal to any required tax withholding. Payment of the Exercise
Price will be made in cash or such other form as may be accepted by the Board in accordance with
the Plan.
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(c) Share Legends. Any certificate evidencing an Option Share will contain such legends as
may be required or appropriate under any applicable stockholder agreement or stock purchase
agreement, in addition to any other legend that may be required or appropriate under applicable
law, the Plan or otherwise.
(d) Partial Exercise. The Option may be exercised in whole or in part; provided, however,
that any exercise may apply only with respect to a whole number of Option Shares.
(e) Restrictions on Exercise. The Option may not be exercised, and any purported exercise
will be void, if the issuance of the Option Shares upon such exercise would constitute a violation
of any applicable federal or state securities laws or other laws or regulations.
6. Investment Representations. The Optionee represents and warrants to the Company that:
(a) he or she is acquiring the Option (and upon exercise of the Option, will be acquiring the
Option Shares) for investment for his or her own account, not as a nominee or agent, and not with a
view to, or for resale in connection with, any distribution thereof; and
(b) he or she has a preexisting personal or business relationship with the Company or one of
its directors, officers or controlling persons and by reason of his or her business or financial
experience, has, and could be reasonably assumed to have, the capacity to protect his or her
interests in connection with the acquisition of this Option and the Option Shares.
In addition, as a further condition to the exercise of the Option, the Company may require the
Optionee to make any representation or warranty to the Company as may be required by or advisable
under any applicable law or regulation
7. Non-Transferability of Option. The Option may not be sold, pledged, assigned,
hypothecated, gifted, transferred or disposed of in any manner either voluntarily or involuntarily
by operation of law, other than by will or by the laws of descent or distribution. During the
Optionee’s lifetime, the Option is exercisable only by the Optionee. Subject to the foregoing and
the terms of the Plan, the terms of the Option will be binding upon the executors, administrators
and heirs of the Optionee.
8. Tax Consequences. The Optionee has reviewed with the Optionee’s own tax advisors the
federal, state, local and foreign tax consequences of the Option. The Optionee is relying solely
on such advisors and not on any statements or representations of the Company or any of its agents
or affiliates. The Optionee understands that he or she (and not the Company) will be responsible
for his or her own tax liabilities arising in connection with this award or the transactions
contemplated by this Agreement.
9. No Continuation of Service. Neither the Plan nor this Option will confer upon the Optionee
any right to continue in the service of the Company or any of its Affiliates, or limit in any
respect the right of the Company or its Affiliates to discharge the Optionee at any time, with or
without Cause and with or without notice.
10. The Plan. The Optionee has received a copy of the Plan (a copy of which is attached
hereto), has read the Plan and is familiar with its terms, and hereby accepts the Option subject to
the terms and provisions of the Plan, as amended from time to time. Pursuant to the Plan, the
Board is authorized to interpret the Plan and to adopt rules and regulations not inconsistent with
the Plan as it deems appropriate. The Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board with respect to questions arising under the
Plan or this Award Agreement.
11. Call upon Cessation of Service.
(a) If the Optionee’s service with the Company ceases for any reason, the Company or its
assignee may repurchase up to all of the Option Shares that the Optionee (and/or his estate, heirs
or permitted transferees) then holds (or thereafter acquires). The price payable by the Company or
its assignee to repurchase Shares pursuant to this Section 12(a) will be the Fair Market Value of
those Shares at the time the right described in this Section 12 is exercised. Notwithstanding the
foregoing, if the cessation of the Optionee’s service is due to a termination by the Company for
Cause, the price payable by the Company or its assignee to repurchase Shares pursuant to this
Section 12(a) will be lesser of (i) the Fair Market Value of those Shares at the time the right
described in this Section 12 is exercised, or (ii) the price paid by the Optionee (and/or his
estate or heirs) to acquire such Shares.
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(b) With respect to each share subject to repurchase pursuant to this Section 12, the Company
(or its assignee) may exercise its repurchase right by delivery of written notice to the holder of
such share at any time during the 180-day period beginning on the later of (i) the date the
Optionee’s employment or engagement with the Company ceases, or (ii) six months following the date
the Option was exercised with respect to that Option Share. All the rights of the holder of any
such shares, other than the right to receive payment in the manner described in Section 12(a) or
(b), will terminate as of the date of delivery by the Company of the written notice described in
this paragraph. The only representations, warranties or covenants which the holder of such shares
will be required to make in connection with a sale pursuant to Section 12(a) or (b) are with
respect to his or her ownership of the shares, his or her ability to convey title thereto free and
clear of liens, claims or encumbrances, and the due execution, validity and binding nature of the
sale documentation.
(c) If a holder of shares becomes obligated to transfer those shares to the Company or its
assignee pursuant to this Agreement, that holder will endorse in blank the certificates evidencing
the shares to be sold and deliver those certificates to the Company or its assignee within 15 days
of receipt of the notice described above in Section 12(c). If a holder of shares fails to deliver
those shares in accordance with the terms of this Agreement, the Company or its assignee may, at
its option, in addition to all other remedies it may have, either (i) send to that holder the
purchase price for such shares, as specified in Section 12(a) or (b), or (ii) deposit such amount
with a trustee or escrow agent for the benefit of that holder for release upon delivery of shares
in accordance with the terms of this Agreement. Thereupon, the Company or its assignee, upon
written notice to the holder, will (x) cancel on its books the certificate or certificates
representing the shares required to be transferred, and (y) issue, in lieu thereof, in the name of
the Company (or its assignee) a new certificate or certificates representing such shares.
(d) Any repurchase price payable under this Section 12 may be paid (i) in cash; (ii) by offset
of any obligation of the Optionee to the Company or its Affiliates; or (iii) to the extent that
payment in cash would give rise to an “event of default” under the Company’s principal credit
agreement then in effect, by delivery of a promissory note with interest accruing at the “prime
rate” published in The Wall Street Journal on the date of issuance, which interest will be payable
annually in arrears through maturity. Such note will mature and be payable five years from the
date of issuance or, if earlier, when such payment would not give rise to an “event of default”
under the Company’s principal credit agreement then in effect.
12. Market Stand Off. The Optionee agrees that, in connection with any public offering by the
Company of its equity securities pursuant to a registration statement filed under the Securities
Act of 1933, not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for
the purchase of or otherwise dispose of any Shares without the prior written consent of the Company
or its underwriters, for such period of time before or after the effective date of such
registration statement as may be requested by the Company or such underwriters.
13. Entire Agreement. This Agreement, together with the Plan, and other exhibits attached
thereto or hereto, represents the entire agreement between the parties and supersedes any and all
prior or contemporaneous discussions, understandings or any agreements of any nature, written or
otherwise, relating to the subject matter hereof.
14. Governing Law. This Agreement will be construed in accordance with the laws of the State
of New Jersey, without regard to the application of the principles of conflicts of laws.
15. Execution. This Agreement may be executed, including execution by facsimile signature, in
one or more counterparts, each of which will be deemed an original, and all of which together shall
be deemed to be one and the same instrument.
[This space intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties on the ___day of
, 20___.
| BANCORP OF NEW JERSEY, INC. | ||||
| Title: | ||||
| [PARTICIPANT] | ||||
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THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES HAVE NOT BEEN ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF, BY
GIFT OR OTHERWISE, OR IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS,
OR A SATISFACTORY OPINION OF COUNSEL SATISFACTORY TO BANCORP OF NEW JERSEY, INC. THAT REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT AND UNDER APPLICABLE STATE SECURITIES LAWS.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND MAY NOT BE SOLD, EXCHANGED, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF EXCEPT IN ACCORDANCE WITH AND SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE PLAN, THIS
AGREEMENT OR ANY OTHER AGREEMENT REQUIRED HEREBY.
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