<PAGE> 1
As filed with the Securities and Exchange Commission on August 11, 1998
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BAYONNE BANCSHARES, INC.
(exact name of registrant as specified in its certificate of incorporation)
DELAWARE 22-3511899
(state or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
568 BROADWAY
BAYONNE, NEW JERSEY 07002
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
AMENDED AND RESTATED BAYONNE BANCSHARES, INC.
1995 STOCK OPTION PLAN
AMENDED AND RESTATED BAYONNE BANCSHARES, INC.
1995 RECOGNITION AND RETENTION PLAN
(Full Title of the Plan)
MICHAEL NILAN COPIES TO:
PRESIDENT AND CHIEF EXECUTIVE OFFICER CHRISTINA M. GATTUSO, ESQUIRE
BAYONNE BANCSHARES, INC. MULDOON, MURPHY & FAUCETTE
568 BROADWAY 5101 WISCONSIN AVENUE, N.W.
BAYONNE, NEW JERSEY 07002 WASHINGTON, D.C. 20016
(202) 362-0840
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / X /
---
<TABLE>
<CAPTION>
=================================================================================================================
Title of each Class of Amount to be Proposed Purchase Estimated Aggregate Registration
Securities to be Registered Registered(1) Price Per Share Offering Price Fee
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 398,307 Shares
$.01 par Value (2) $6.4413 (3) $2,565,615 $757
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Common Stock 159,323 Shares
$.01 par Value (4) $3.4100(5) $ 543,291 $161
=================================================================================================================
(1) Together with an indeterminate number of additional shares which may be necessary to adjust the number of
shares reserved for issuance pursuant to the Amended and Restated Bayonne Bancshares, Inc. 1995 Stock Option
Plan and the Amended and Restated Bayonne Bancshares, Inc. 1995 Recognition and Retention Plan (collectively
the "Plan") as the result of a stock split, stock dividend or similar adjustment of the outstanding Common
Stock of Bayonne Bancshares, Inc. pursuant to 17 C.F.R. ss.230.416(a).
(2) Represents the total number of shares currently reserved or available for issuance upon the exercise of
stock options pursuant to the Plan.
(3) Represents the average exercise price of $6.4413 per share, adjusted at an exchange ratio of 2.933 to 1 in
the conversion and reorganization of First Savings Bank of New Jersey, SLA to the stock holding company
structure which options for 398,307 shares under the Plan have been granted to date.
(4) Represents the total number of shares currently available for issuance as stock awards under the Plan.
(5) The weighted average price determined by the aggregate purchase price of $543,291 at which the 159,323
shares have been purchased for satisfying awards under the Plan.
</TABLE>
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IMMEDIATELY UPON FILING IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT") AND 17 C.F.R. SS.230.462.
Number of Pages 36
Exhibit Index begins on Page 10
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BAYONNE BANCSHARES, INC.
PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEMS 1 & 2. The documents containing the information for the Amended and
Restated Bayonne Bancshares, Inc. (the "Company" or the "Registrant") 1995 Stock
Option Plan and the Amended and Restated Bayonne Bancshares, Inc. 1995
Recognition and Retention Plan (collectively the "Plan") required by Part I of
the Registration Statement will be sent or given to the participants in the Plan
as specified by Rule 428(b)(1). Such documents are not filed with the Securities
and Exchange Commission (the "SEC") either as a part of this Registration
Statement or as a prospectus or prospectus supplement pursuant to Rule 424 in
reliance on Rule 428.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the SEC are incorporated
by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1998, which includes the consolidated statements of financial
condition of Bayonne Bancshares, Inc. and subsidiaries as of March 31, 1998 and
1997, and the related consolidated statements of operation, changes in
stockholders' equity, and cash flows for each of the years in the three year
period ended March 31, 1998, together with the related notes filed with the SEC
on June 29, 1998, and the Form 10-K/A filed by the Company with the SEC on July
29, 1998 (File No. 0-022499).
(b) The Form 8-K filed by the Registrant with the SEC on July 27, 1998
(File No. 0-022499).
(c) The description of Registrant's Common Stock contained in Registrant's
Form 8-A/12G (File No. 0-22499), as filed with the SEC on April 30, 1997
pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 12b-15 promulgated thereunder.
(d) All documents filed by the Registrant pursuant to Section 13(a) and
(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which deregisters all securities then
remaining unsold.
ANY STATEMENT CONTAINED IN THIS REGISTRATION STATEMENT, OR IN A DOCUMENT
INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE HEREIN, SHALL BE DEEMED
TO BE MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS REGISTRATION STATEMENT TO THE
EXTENT THAT A STATEMENT CONTAINED HEREIN, OR IN ANY OTHER SUBSEQUENTLY FILED
DOCUMENT WHICH ALSO IS INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE
HEREIN, MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY SUCH STATEMENT SO MODIFIED OR
SUPERSEDED SHALL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO
CONSTITUTE A PART OF THIS REGISTRATION STATEMENT.
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ITEM 4. DESCRIPTION OF SECURITIES
The common stock to be offered pursuant to the Plan has been registered
pursuant to Section 12 of the Exchange Act. Accordingly, a description of the
common stock is not required herein.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None
The validity of the Common Stock offered hereby has been passed upon by
Muldoon, Murphy & Faucette, Washington, DC, for the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Directors and officers of the Registrant are indemnified and held harmless
against liability to the fullest extent permissible by the general corporation
law of Delaware as it currently exists or as it may be amended provided any such
amendment provides broader indemnification provisions than currently exists.
This indemnification applies to the Board of Directors who administer the Plan.
In accordance with the General Corporation Law of the State of Delaware
(being Chapter 1 of Title 8 of the Delaware Code), Articles 10 and 11 of the
Registrant's Certificate of Incorporation provide as follows:
TENTH:
- -----
A. Each person who was or is made a party or is threatened to be made a party to
or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a Director or an Officer of the
Corporation or is or was serving at the request of the Corporation as a
Director, Officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a Director, Officer,
employee or agent or in any other capacity while serving as a Director, Officer,
employee or agent, shall be indemnified and held harmless by the Corporation to
the fullest extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such
indemnitee in connection therewith; provided, however, that, except as provided
in Section C hereof with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
B. The right to indemnification conferred in Section A of this Article TENTH
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
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Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a Director or Officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, services to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section or otherwise. The rights to indemnification and to the advancement of
expenses conferred in Sections A and B of this Article TENTH shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
Director, Officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article TENTH is not paid in full by
the Corporation within sixty days after a written claim has been received by the
Corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expenses of prosecuting or defending such suit. In (i) any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not in a suit
brought by the indemnitee to enforce a right to an advancement of expenses) it
shall be a defense that, and (ii) in any suit by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking the Corporation
shall be entitled to recover such expenses upon a final adjudication that, the
indemnitee has not met any applicable standard for indemnification set forth in
the Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article TENTH or otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of expenses conferred in
this Article TENTH shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, the Corporation's Certificate
of Incorporation, Bylaws, agreement, vote of stockholders or Disinterested
Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect itself and
any Director, Officer, employee or agent of the Corporation or subsidiary or
Affiliate or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
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F. The Corporation may, to the extent authorized from time to time by the Board
of Directors, grant rights to indemnification and to the advancement of expenses
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article TENTH with respect to the indemnification and
advancement of expenses of Directors and Officers of the Corporation.
ELEVENTH:
- --------
A Director of this Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
Director, except for liability: (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under Section 174 of the Delaware General Corporation Law; or (iv)
for any transaction from which the Director derived an improper personal
benefit. If the Delaware General Corporation Law is amended to authorize
corporate action further eliminating or limiting the personal liability of
Directors, then the liability of a Director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders of the
Corporation shall not adversely affect any right or protection of a Director of
the Corporation existing at the time of such repeal or modification.
The Registrant is also permitted to maintain directors' and officers'
liability insurance covering its directors and officers and has obtained a
directors' and officers' liability and corporation reimbursement policy which
(subject to certain limits and deductibles) (i) insures officers and directors
of the Registrant against loss arising from certain claims made against them by
reason of their being such directors or officers, and (ii) insures the
Registrant against loss which it may be required or permitted to pay as
indemnification due its directors or officers for certain claims.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers or
persons controlling the Registrant, the Registrant has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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ITEM 8. LIST OF EXHIBITS.
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8 (numbering corresponds generally to
Exhibit Table in Item 601 of Regulation S-K):
3.1 Certificate of Incorporation of the Registrant.1
3.2 Bylaws of the Registrant.1
4.0 (a) Amended and Restated Bayonne Bancshares, Inc. 1995 Stock
Option Plan
(b) Amended and Restated Bayonne Bancshares, Inc. 1995
Recognition and Retention Plan
5.0 Opinion of Muldoon, Murphy & Faucette as to the legality of the
Common Stock registered hereby.
23.0 Consent of Muldoon, Murphy & Faucette (contained in the opinion
included in Exhibit 5).
23.1 Consent of KPMG Peat Marwick LLP
24.0 Power of Attorney is located on the signature pages.
- --------------------------
1 Incorporated herein by reference from the Exhibit of the same
number contained in the Registration Statement on Form S-1 (SEC
No. 333-23199), as amended, filed with the SEC on March 17, 1997
and declared effective on July 2, 1997.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) Include any Prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) Reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent
a fundamental change in the information in the
Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change
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in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) Include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference into this
Registration Statement.
(2) That, for the purpose of determining liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities registered that remain unsold
at the termination of the Offering.
(b) The undersigned hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the
Registrant's or the Plan's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act that is incorporated by reference in
the Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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CONFORMED
SIGNATURES
Pursuant to the requirements of the Securities Act, Bayonne
Bancshares, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Bayonne, State of New Jersey, on August 3, 1998.
BAYONNE BANCSHARES, INC.
By: /s/ Michael Nilan
------------------------------
Michael Nilan
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears
below (other than Mr. Nilan) constitutes and appoints Michael Nilan and Mr.
Nilan hereby constitutes and appoints Eugene Malinowski, as the true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
or all amendments to the Form S-8 Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
U.S. Securities and Exchange Commission, respectively, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and things requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Name Title Date
---- ----- -----
/s/ Patrick F.X. Nilan Chairman of the Board August 3, 1998
- ------------------------
Patrick F.X. Nilan
/s/ Michael Nilan Director,President and Chief Executive
- ------------------------ Officer (principal executive officer) August 3, 1998
Michael Nilan
/s/ Eugene V. Malinowski Vice President and Chief Financial August 3, 1998
- ------------------------ Officer (principal accounting
Eugene V. Malinowski and financial officer)
/s/ Patrick D. Conaghan Director August 3, 1998
- ------------------------
Patrick D. Conaghan
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/s/ James F. Sisk Director August 3, 1998
- ------------------------
James F. Sisk
/s/ Frederick G. Whelply Diretor August 3, 1998
- ------------------------
Frederick G. Whelply
/s/ Joseph L. Wisniewski Director August 3, 1998
- ------------------------
Joseph L. Wisniewski
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Numbered
Page
Exhibit No. Description Method of Filing Location
- ------------ ------------------ --------------------------------------------------- ------------
<S> <C> <C> <C>
3.1 Certificate of Incorporated by reference from the Exhibits of the --
Incorporation of the Registrant's Registration Statement on Form S-1
Registrant filed with the SEC on March 13, 1997 and declared
effective on July 2, 1997.
3.2 Bylaws of the Incorporated by reference from the Exhibits of the --
Registrant Registrant's Registration Statement on Form S-1
with the SEC on March 13, 1997 and
declared effective on July 2, 1997.
4.0(a) Amended and Filed herewith. 12
Restated Bayonne
Bancshares, Inc. 1995
Stock Option Plan
4.0(b) Amended and Filed herewith. 22
Restated Bayonne
Bancshares, Inc. 1995
Recognition and
Retention Plan
23.1 Consent of Muldoon, Contained in Exhibit 5 hereof. 33
Murphy & Faucette
23.2 Consent of KPMG Filed herewith. 36
Peat Marwick LLP
24 Power of Attorney Located on the signature page. --
</TABLE>
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EXHIBIT 4.0(A) AMENDED AND RESTATED BAYONNE BANCSHARES, INC.
1995 STOCK OPTION PLAN
<PAGE> 2
AMENDED AND RESTATED BAYONNE BANCSHARES, INC.
1995 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Amended and Restated Bayonne Bancshares, Inc. 1995
Stock Option Plan (the "Plan") is to advance the interests of Bayonne
Bancshares, Inc. (the "Company") and its shareholders by providing Employees and
Outside Directors of the Company and its Affiliates, including First Savings
Bank of New Jersey, S.L.A. (the "Bank"), upon whose judgment, initiative and
efforts the successful conduct of the business of the Company and its Affiliates
largely depends, with an additional incentive to perform in a superior manner as
well as to attract people of experience and ability.
2. DEFINITIONS
"AFFILIATE" "parent corporation" or "subsidiary corporation" of the Bank
or the Company, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"AWARD" means an Award of Non-statutory Stock Options, Incentive Stock
Options, and/or Limited Rights granted under the provisions of the Plan.
"BENEFICIARY" means the person or persons designated by a Recipient to
receive any benefits payable under the Plan in the event of such Recipient's
death. Such person or persons shall be designated in writing on forms provided
for this purpose of the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate.
"BOARD OF DIRECTORS" means the Board of Directors of the Bank and the
Company, as applicable.
"CHANGE IN CONTROL" means a change in control of the Company or the Bank
of a nature that (i) would be required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Sections 13 or 15(d) of the Exchange Act; (ii) results in a "change of control"
or "acquisition of control" within the meaning of the regulations promulgated by
the Office of Thrift Supervision ("OTS") (or its predecessor agency) found at 12
C.F.R. Part 574, as in effect on the date hereof; PROVIDED, HOWEVER, that in
applying the definition of change in control as set forth under such regulations
the Board of Directors shall substitute its judgment for that of the OTS; or
(iii) without limitation Change in Control shall be deemed to have occurred at
such time as (A) any "person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Bank
or the Company representing 20% or more of the Bank's or the Company's
outstanding securities except for any securities of the Bank purchased by the
Company and any securities purchased by any tax-qualified employee benefit plan
of the Bank; or (B) individuals who constitute the Board of Directors on the
date hereof (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the date hereof whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board, or whose nomination for
election by the Company's stockholders was approved by a nominating committee
serving under the Incumbent Board, shall be, for purposes of this clause (B),
considered as though he were a member of the Incumbent Board; or (C) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Bank or the Company or similar transaction occurs in which the
Bank or Company is not the resulting entity; or (D) a solicitation of
shareholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or Bank or similar transaction with one or more
corporations, as a result of which the outstanding shares of the class of
securities then subject to the plan are exchanged for or converted into cash or
property or securities not issued by the Bank or the Company; or (E) a tender
offer is made for 20% or more of the voting securities of the Bank or the
Company.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the Committee designated by the Board of Directors,
pursuant to Section 3 herein, to administer the Plan.
"COMMON STOCK" means the common stock of the Company , par value $0.10 per
share.
"COMPANY" means Bayonne Bancshares, Inc.
"DATE OF GRANT" means the actual date on which an Award is granted by the
Committee.
"DIRECTOR" means a member of the Boards of Directors of the Company or its
Affiliates.
"DIRECTOR EMERITUS" means a former Director of the Bank, who in
recognition of his past contributions to the Bank, has been titled as a director
emeritus of the Bank.
"DISABILITY" means the permanent and total inability by reason of mental
or physical infirmity, or both, of an employee to perform the work customarily
assigned to him. Additionally, a medical doctor selected or approved by the
Board of Directors must advise the Committee that it is either not possible to
determine when such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of such employee's
lifetime.
"EMPLOYEE" means any person who is currently employed by the Bank or the
Company or an Affiliate, including officers.
"FAIR MARKET VALUE" means, when used in connection with the Common Stock
on a certain date, the reported closing price of the Common Stock as reported by
the National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market (as published by THE WALL STREET JOURNAL, if published) on the
date prior to such date, or if the Common Stock was not traded on such date, on
the next preceding day on which the Common Stock was traded thereon; PROVIDED,
HOWEVER, that if the Common Stock is not reported on the Nasdaq National Market,
Fair Market Value shall mean the average sale price of all shares of Common
Stock sold during the 30-day period immediately preceding the date on which such
stock option was granted, and if no shares of stock have been sold within such
30-day period, the average sale price of the last three sales of Common Stock
sold during the 90-day period immediately preceding the date on which such stock
option was granted. In the event Fair Market Value cannot be determined in the
manner described above, then Fair Market Value shall be determined by the
Committee. The Committee shall be authorized to obtain an independent appraisal
to determine the Fair Market Value of the Common Stock.
"INCENTIVE STOCK OPTION" means an Option granted by the Committee to an
Employee Participant, which Option is designated as an Incentive Stock Option
pursuant to Section 8.
"LIMITED RIGHT" means the right to receive an amount of cash based upon
the terms set forth in Section 9.
"NON-STATUTORY STOCK OPTION" means an Option granted by the Committee to
(i) an Outside Director or (ii) to any other Participant and such option is
either (A) not designated by the Committee as an Incentive Stock Option, or (B)
fails to satisfy the requirements of an Incentive Stock Option as set forth in
Section 422 of the Code and the regulations thereunder.
"NORMAL RETIREMENT" means, for an Employee, retirement at the normal or
early retirement date as set forth in the Bank's Employee Stock Ownership Plan,
or any successor plan. For an Outside Director, Normal Retirement means
retirement from service on the Boards of Directors of the Company or an
Affiliate.
"OPTION" means Award granted under Section 7 or Section 8.
"OUTSIDE DIRECTOR" means a Director who is not also an Employee.
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<PAGE> 4
"PARTICIPANT" means an Outside Director or an Employee of the Bank or the
Company or an Affiliate chosen by the Committee to participate in the Plan.
"TERMINATION FOR CAUSE" means the termination of employment caused by the
individual's personal dishonesty, willful misconduct, any breach of a fiduciary
duty involving personal profit or intentional failure to perform stated duties,
or willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, any of which
results in material loss to the Bank, the Company, or an Affiliates.
3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall
consist of two or more disinterested directors of the Company, who shall be
appointed by the Board of Directors of the Company. A member of the Board of
Directors shall be deemed to be "disinterested" only if he satisfies such
requirements as the Securities and Exchange Commission may establish for
non-employee directors administering plans intended to qualify for exemption
under Rule 16b-3 (or its successor) under the Exchange Act. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable. All determinations and interpretations made by
the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
4. TYPES OF AWARDS
Awards under the Plan may be granted in any one or a combination of (a)
Incentive Stock Options as defined in Section 7; (b) Non-statutory Stock Options
as defined in Section 8; and (c) Limited Rights as defined herein in Section 9.
5. STOCK SUBJECT TO THE PLAN
There shall be 398,307 shares available for Awards under this Plan. Of
those shares no more than 270, 851 shares shall be available in connection with
the grant of Incentive Stock Options. The shares of Common Stock represented by
Options granted pursuant to this Plan may be either authorized but unissued
shares or shares previously issued and reacquired by the Company. To the extent
that Options together with any related rights granted under the Plan terminate,
expire or are cancelled without having been exercised or, in the case of Limited
Rights exercised for cash, new Awards may be made with respect to these shares.
Option Awards granted to Employees and Outside Directors shall be subject to the
individual and aggregate limitations imposed by the Office of Thrift Supervision
regulations, as applicable.
6. ELIGIBILITY
Officers and other Employees of the Company and its Affiliates shall be
eligible to receive Incentive Stock Options, Non-statutory Stock Options and/or
Limited Rights under the Plan. Outside Directors shall not be eligible to
receive Incentive Stock Options under the Plan. Outside Directors shall be
eligible to receive only Non-statutory Stock Options.
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<PAGE> 5
7. NON-STATUTORY STOCK OPTIONS
7.1 GRANT OF NON-STATUTORY STOCK OPTIONS
(a) Grants. The Committee may, from time to time, grant Non-statutory
------
Stock Options to eligible Employees and Outside Directors upon such terms and
conditions as the Committee may determine. Non-statutory Stock Options granted
under this Plan are subject to the terms and conditions set forth in this
Section 7.
(b) Option Agreement. Each Option shall be evidenced by a written option
-----------------
agreement between the Company and the Award recipient specifying the number of
shares of Common Stock that may be acquired through its exercise and containing
such other terms and conditions that are not inconsistent with the terms of this
grant. The maximum number of shares subject to a Non-statutory Option that may
be awarded under the Plan to any Employee shall be 117,320.
(c) Price. The purchase price per share of Common Stock deliverable upon
-----
the exercise of each Nonstatutory Stock Option shall be determined by the
Committee on the date the Option is granted. Except as provided below, such
purchase price shall not be less than 100% of the Fair Market Value of the
Company's Common Stock on the date the Option is granted. The purchase price per
share of Common Stock deliverable upon the exercise of each Non-statutory Stock
Option granted in exchange for and upon surrender of previously granted awards
shall be not less than 100% of the Fair Market Value of the Company's Common
Stock on the date the Option is granted, but in no event may the purchase price
of any Non-statutory Stock Option be less than the par value of the Common
Stock. Shares may be purchased only upon full payment of the purchase price.
Payment of the purchase price may be made, in whole or in part, through the
surrender of shares of the Common Stock of the Company at the Fair Market Value
of such shares determined in the manner described in Section 2.
(d) Manner of Exercise. Unless otherwise specified by the Committee,
-------------------
Non-statutory Stock Options granted under the Stock Option Plan shall vest in a
Participant at the rate of twenty percent (20%) per year commencing from the
Date of Grant. The vested Option may be exercised from time to time, in whole or
in part, by delivering a written notice of exercise to the President or Chief
Executive Officer of the Company . Such notice is irrevocable and must be
accompanied by full payment of the purchase price in cash or shares of
previously acquired Common Stock of the Company at the Fair Market Value of such
shares determined on the exercise date by the manner described in Section 2
hereof.
(e) Terms of Options. The term during which each Non-statutory Stock
-----------------
Option may be exercised shall be determined by the Committee, but in no event
shall a Non-statutory Stock Option be exercisable in whole or in part more than
10 years and one day from the Date of Grant. The Non-statutory Options awarded
to Employees shall be exercisable in installments, as determined by the
Committee. The Committee shall determine the date on which each installment
shall become exercisable. The shares comprising each installment may be
purchased in whole or in part at any time after such installment becomes
exercisable. The Committee, in its sole discretion, may accelerate the time at
which any Non-statutory Stock Option awarded to Employees and Outside Directors
may be exercised in whole or in part. Notwithstanding the above, in the event of
a Change in Control of the Bank or the Company, all Non-statutory Stock Options
shall become immediately exercisable.
(d) Termination of Employment or Service. Upon the termination of an
--------------------------------------
Employee's employment or upon termination of an Outside Director's service for
any reason other than Disability, death, Normal Retirement or Termination for
Cause, the Employee's or Outside Director's Non-statutory Stock Options shall be
exercisable only as to those shares that were immediately purchasable by the
Employee or Outside Directors at the date of termination and only for a period
of one (1) year following termination. For purposes of determining the date of
termination of an Outside Director's service, service as a Director Emeritus of
the Bank following termination from the Board of Directors will not cause a
Participant to incur a termination of service and such Participant will continue
to vest in his Award until termination of service as a Director Emeritus. In the
event of Termination for Cause, all rights under his Non-statutory Stock Options
shall expire upon termination. In the event of the death or Disability of any
Employee or Outside Director, all Non-statutory Stock Options held by such
Employee or Outside Director, whether or not exercisable at such
4
<PAGE> 6
time, shall be exercisable by such person or his legal representatives or
beneficiaries for one (1) year following the date of his death or cessation of
employment or service, as applicable, PROVIDED that in no event shall the period
extend beyond the expiration of the Non-statutory Stock Option term. In the
event of Normal Retirement, all Non-statutory Stock Options held by an Employee,
whether or not exercisable at such time, shall be exercisable for one (1) year
following the date of the Participant's retirement, provided, however, that in
-------- -------
the event the Employee continues in service as a director of the Company or an
Affiliate, following his Normal Retirement, the Participant's Award will
continue to vest during his tenure as a Director pursuant to his original
vesting schedule. Notwithstanding the above, all Non-statutory Options held by a
Participant whose employment as an Employee or service as an Outside Director
terminates following a Change in Control of the Bank or the Company shall be
deemed earned as of the last day of employment or service with the Company or an
Affiliate and shall be exercisable for one (1) year following such termination
of employment or service.
8. INCENTIVE STOCK OPTIONS
8.1 GRANT OF INCENTIVE STOCK OPTIONS
The Committee, from time to time, may grant Incentive Stock Options to
eligible Employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) Option Agreement. Each Option shall be evidenced by a written option
-----------------
agreement between the Bank and the Employee specifying the number of shares of
Common Stock that may be acquired through its exercise and containing such other
terms and conditions that are not inconsistent with the terms of this grant.
(b) Price. The purchase price per share of Common Stock deliverable upon
-----
the exercise of each Incentive Stock Option shall be not less than 100% of the
Fair Market Value of the Company's Common Stock on the date the Incentive Stock
Option is granted. However, if an Employee owns stock possessing more than 10%
of the total combined voting power of all classes of Common Stock of the Company
(or under Section 424(d) of the Code, is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company or its Affiliates by reason of the ownership of such classes of common
stock directly or indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendant of such Employee or by or for any corporation, partnership,
estate or trust or which such employee is a shareholder, partner or
beneficiary), the purchase price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall not be less than 110% of the Fair
Market Value of the Company's Common Stock on the date the Incentive Stock
Option is granted. Shares may be purchased only upon payment of the full
purchase price. Payment of the purchase price may be made, in whole or in part,
through the surrender of shares of the Common Stock of the Company. If
previously acquired shares of Common Stock are tendered in payment of all or
part of the exercise price, the value of such shares shall be determined as of
the date of exercise of the Incentive Stock Option.
(c) Manner of Exercise. Unless otherwise determined by the Committee,
------------------
Incentive Stock Options granted under the Stock Option Plan shall vest in a
Participant at the rate of twenty percent (20%) per year commencing from the
date of grant. The vested Option may be exercised from time to time, in whole or
in part, by delivering a written notice of exercise to the President or Chief
Executive Officer of the Company , PROVIDED, HOWEVER, that no Options shall be
exercisable prior to approval of the Plan by stockholders. Such notice is
irrevocable and must be accompanied by full payment of the purchase price in
cash or shares of previously acquired Common Stock of the Company. . If
previously acquired shares of Common Stock are tendered in payment of all or
part of the exercise price, the Fair Market Value of such shares shall be
determined as of the date of such exercise of the Incentive Stock Option.
(d) Amount of Options. Incentive Stock Options may be granted to any
------------------
eligible Employee in such amounts as determined by the Committee; PROVIDED that
the amount granted is consistent with the terms of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). Notwithstanding the above, the
maximum number of shares that may be subject to an Incentive Stock Option
awarded under the Plan to any Employee shall be 117,320. In granting Incentive
Stock Options, the Committee shall consider the position and responsibilities of
the eligible Employee, the length and value of his or her service to the or the
Company, the compensation paid to the Employee and the Committee's evaluation of
the performance of the or the Company according to measurements that include,
among
5
<PAGE> 7
others, key financial ratios, levels of classified assets, and independent audit
findings. In the case of an option intended to qualify as an Incentive Stock
Option, the aggregate Fair Market Value (determined as of the time the option is
granted) of the Common Stock with respect to which Incentive Stock Options
granted are exercisable for the first time by the Participant during any
calendar year (under all plans of the Participant's employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. The provisions of
this Section 8.1(d) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder.
(e) Term of Options. The term during which each Incentive Stock Option may
---------------
be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock option be exercisable in whole or in part more than 10 years
from the Date of Grant. If any Employee, at the time an Incentive Stock Option
is granted to him, owns Common Stock representing more than 10% of the total
combined voting power of the Company or its Affiliates (or, under Section 424(d)
of the Code, is deemed to own Common Stock representing more than 10% of the
total combined voting power of all such classes of Common Stock, by reason of
the ownership of such classes of Common Stock, directly or indirectly, by or for
any brother, sister, spouse, ancestor or lineal descendent of such Employee, or
by or for any corporation, partnership, estate or trust of which such Employee
is a shareholder, partner or beneficiary), the Incentive Stock Option granted to
him or her shall not be exercisable after the expiration of five years from the
Date of Grant. No Incentive Stock Option granted under this Plan is transferable
except by will or the laws of descent and distribution and is exercisable during
his lifetime only by the Employee to which it is granted.
The Committee shall determine the date on which each Incentive Stock
Option shall become exercisable and may provide that an Incentive Stock Option
shall become exercisable in installments. The shares comprising each installment
may be purchased in whole or in part at any time after such installment becomes
purchasable, provided that the amount able to be first exercised in a given year
is consistent with the terms of Section 422 of the Code. To the extent required
by Section 422 of the Code, the aggregate fair market value (determined at the
time the Option is granted) of the Common Stock for which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar
year (under all plans of the Bank and its Affiliates) shall not exceed $100,000.
The Committee, in its sole discretion, may accelerate the time at which any
Incentive Stock Option may be exercised in whole or in part; PROVIDED that it is
consistent with the terms of Section 422 of the Code. Notwithstanding the above,
in the event of a Change in Control of the Bank or Company, all Incentive Stock
Options shall become immediately exercisable unless the fair market value of the
amount exercisable as a result of a Change in Control shall exceed $100,000
(determined as of the date of grant). In such event, the first $100,000 of
Incentive Stock Options (determined as of the date of grant) shall be
exercisable as Incentive Stock Options and any excess shall be exercisable as
Non-statutory Stock Options.
(f) Termination of Employment. Upon the termination of an Employee's
---------------------------
employment for any reason other than Normal Retirement, Disability, Change in
Control, death or Termination for Cause, his or her Incentive Stock Options
shall be exercisable only as to those shares which were immediately purchasable
by him at the date of termination and only for a period of three (3) months
following termination. In the event of Termination for Cause all rights under
his or her Incentive Stock Options shall expire upon termination.
In the event of death, Disability, termination in the event of a Change in
Control or Normal Retirement, all Incentive Stock Options held by an Employee,
whether or not exercisable at such time, shall be exercisable by such Employee
or his legal representatives or beneficiaries for one (1) year following the
date of his or her death or cessation of employment; PROVIDED, HOWEVER, that, in
the case of Normal Retirement or termination in the event of a Change in
Control, such Options shall not be eligible for treatment as Incentive Stock
Options in the event such Options are exercised more than three (3) months
following the date of the termination in the event of a Change in Control;
PROVIDED, FURTHER, that, upon a Participant's Normal Retirement, any such
Options which are not eligible for treatment as Incentive Stock Options by
operation of Section 422(d) of the Code (or any successor provision) shall be
treated as Non-statutory Stock Options. In no event shall the exercise period
extend beyond the expiration of the Incentive Stock Option term.
(g) Compliance with Code. The Options granted under this Section 8 of the
---------------------
Plan are intended to qualify as Incentive Stock Options within the meaning of
Section 422 of the Code, but the Company makes no warranty as to the
qualification of any Option as an incentive stock option within the meaning of
Section 422 of the Code. If an Option granted hereunder fails for whatever
reason to comply with the provisions of Section 422 of the Code and such failure
is not or cannot be cured, such Option shall be a Non-statutory Stock Option.
6
<PAGE> 8
9. LIMITED RIGHTS
9.1 GRANT OF LIMITED RIGHTS
The Committee may grant a Limited Right simultaneously with the grant of
any Option to any Employee of the Company or an Affiliate, with respect to all
or some of the shares covered by such Option. Limited Rights granted under this
Plan are subject to the following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be exercisable in
---------------
whole or in part before the expiration of six (6) months from the date of grant
of the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control of the Bank.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.
Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall promptly
-------
receive from the Company an amount of cash equal to the difference between the
Fair Market Value on the Date of Grant of the related Option and the Fair Market
Value of the underlying shares on the date the Limited Right is exercised,
multiplied by the number of shares with respect to which such Limited Right is
being exercised. In the event of a Change in Control in which pooling accounting
treatment is a condition to the transaction, the Limited Right shall be
exercisable solely for shares of stock of the Company, or in the event of a
merger transaction, for shares of the acquiring corporation, or its parent, as
applicable. The number of shares to be received on the exercise of such Limited
Right shall be determined by dividing the amount of cash that would have ben
available under the first sentence above by the Fair Market Value at the time of
exercise of the shares underlying the Option subject to the Limited Right.
10. SURRENDER OF OPTION
In the event of a Participant's termination of employment or termination
of service as a result of death or Disability, the Participant (or his personal
representative(s), heir(s), or devisee(s)) may, in a form acceptable to the
Committee, make application to surrender all or part of the Options held by such
Participant in exchange for a cash payment from the Company of an amount equal
to the difference between the Fair Market Value of the Common Stock on the date
of termination of employment and the exercise price per share of the Option on
the Date of Grant. Whether the Company accepts such application or determines to
make payment, in whole or in part, is within its absolute and sole discretion,
it being expressly understood that the Company is under no obligation to any
Participant whatsoever to make such payments. In the event that the Company
accepts such application and determines to make payment, such payment shall be
in lieu of the exercise of the underlying Option and such Option shall cease to
be exercisable.
11. RIGHTS OF A SHAREHOLDER; NON-TRANSFERABILITY
An optionee shall have no rights as a shareholder with respect to any
shares covered by a Non-statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate his or her services as an officer or other employee at
any time.
7
<PAGE> 9
No Award under the Plan shall be transferable by the optionee other than
by will or the laws or descent and distribution and may only be exercised during
his or her lifetime by the optionee, or by a guardian or legal representative.
The designation of a beneficiary does not constitute a transfer of an Award.
12. DESIGNATION OF BENEFICIARY
A Participant, with the consent of the Committee, may designate a person
or persons to receive, in the event of death, any Option or Limited Rights Award
to which he or she would then be entitled. Such designation will be made upon
forms supplied by and delivered to the Company and may be revoked in writing. If
a Participant fails effectively to designate a Beneficiary, then his estate will
be deemed to be the Beneficiary.
13. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company , the Committee will
make such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
covered by Awards already made under the Plan;
(c) subject to 422 of the Code , adjustments in the purchase price of
outstanding Incentive and/or Nonstatutory Stock Options, or any Limited
Rights attached to such Options.
No such adjustments, however, may change materially the value of benefits
available to a Participant under a previously granted Award.
14. WITHHOLDING
There may be deducted from each distribution of cash and/or Common Stock
under the Plan the amount of tax required by any governmental authority to be
withheld.
15. AMENDMENT OF THE PLAN
The Board of Directors may at any time, and from time to time, modify or
amend the Plan and Award Agreements in any respect; PROVIDED, HOWEVER, that if
necessary to continue to qualify the Plan under the Securities and Exchange
Commission Rule 16b-3, the approval by a majority of the shares represented in
person or by proxy at an annual or special meeting of the Company shall be
required for any such modification or amendment that:
(a) increases the maximum number of shares for which options may be
granted under the Plan (SUBJECT, HOWEVER, to the provisions of Section 13
hereof);
(b) reduces the exercise price at which Awards may be granted (SUBJECT,
HOWEVER, to the provisions of Sections 8.1(a) and 13 hereof);
(c) extends the period during which options may be granted or exercised
beyond the times originally prescribed (SUBJECT, HOWEVER, to the
provisions of Section 8.1(a) hereof); or
(d) changes the persons eligible to participate in the Plan.
8
<PAGE> 10
Failure to ratify or approve amendments or modifications to subsections
(a) through (d) of this Section 15 by shareholders shall be effective only as to
the specific amendment or modification requiring such ratification. Other
provisions, sections, and subsections of this Plan will remain in full force and
effect.
No such termination, modification or amendment may affect the rights of a
Participant under an outstanding Award.
16. APPROVAL BY STOCKHOLDERS
The Plan was approved by stockholders of the Bank. No Options were granted
pursuant to the Plan prior to such stockholder approval. Any amendments to the
Plan shall be subject to the provisions of Section 15 hereof.
17. EFFECTIVE DATE OF PLAN
The Plan shall become effective upon the date adopted by the Board of
Directors, following the approval of stockholders (the "Effective Date").
18. TERMINATION OF THE PLAN
The right to grant Awards under the Plan will terminate upon the earlier
of ten (10) years after the Effective Date of the issuance of Common Stock or
the date on which the exercise of Options or related rights equaling the maximum
number of shares reserved under the Plan occurs as set forth in Section 5
hereof. The Board of Directors has the right to suspend or terminate the Plan at
any time; PROVIDED that no such action will, without the consent of a
Participant, affect adversely his rights under a previously granted Award.
19. APPLICABLE LAW
The Plan will be administered in accordance with the laws of the State of
New Jersey and federal law, to the extent applicable.
9
<PAGE> 1
EXHIBIT 4.0(B) AMENDED AND RESTATED BAYONNE BANCSHARES, INC.
1995 RECOGNITION AND RETENTION PLAN
<PAGE> 2
AMENDED AND RESTATED BAYONNE BANCSHARES, INC.
1995 RECOGNITION AND RETENTION PLAN
1. ESTABLISHMENT OF THE PLAN.
First Savings Bank of New Jersey, S.L.A. (the "Bank") and Bayonne
Bankshares, M.H.C. (the "M.H.C.") implemented the 1995 Recognition and Retention
Plan (the "Plan") in August 1995 after the Plan was approved by stockholders in
July 1995. Effective August 22, 1997, (the consummation of the Bank's conversion
and reorganization) Bayonne Bancshares, Inc. (the "Company"), the parent holding
company of the Bank, adopted this Plan and issued Common Stock in lieu of Bank
Common Stock to this Plan in a 2.933 exchange ratio.
2. PURPOSE OF THE PLAN.
The purpose of the Plan is to retain Employees and Outside Directors of
experience and ability by providing such persons with a proprietary interest in
the Company as compensation for their contributions to the Company and its
Affiliates and as an incentive to make such contribution and to promote the
Company's growth and profitability in the future.
3. DEFINITIONS.
The following words and phrases when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meanings set forth below. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural:
"AFFILIATE" means any "parent corporation" or "subsidiary corporation" of
the Bank or the Company, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"AWARD" means the grant by the Committee of Restricted Stock, as provided
in the Plan.
"BANK" means First Savings Bank of New Jersey, S.L.A.
"BENEFICIARY" means the person or persons designated by a Recipient to
receive any benefits payable under the Plan in the event of such Recipient's
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate. The designation of a beneficiary does not constitute a
transfer of an Award.
"BOARD" means the Board o Directors of the Bank and the Company, as
applicable.
"CAUSE" shall mean personal dishonesty, incompetence, willful misconduct,
any breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, the willful
<PAGE> 3
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or a final cease-and-desist order. In the case of an Outside
Director, Cause means a removal for cause pursuant to the Bank's Bylaws.
"CHANGE IN CONTROL" means a change in control of the Company or the Bank
of a nature that (i) would be required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Sections 13 or 15(d) of the Exchange Act; (ii) results in a "change of control"
or "acquisition of control" within the meaning of the regulations promulgated by
the Office of Thrift Supervision ("OTS") (or its predecessor agency) found at 12
C.F.R. Part 574, as in effect on the date hereof; PROVIDED, HOWEVER, that in
applying the definition of change in control as set forth under such regulations
the Board of Directors shall substitute its judgment for that of the OTS; or
(iii) without limitation Change in Control shall be deemed to have occurred at
such time as (A) any "person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Bank
or the Company representing 20% or more of the Bank's or the Company's
outstanding securities except for any securities of the Bank purchased by the
Company and any securities purchased by any tax-qualified employee benefit plan
of the Bank; or (B) individuals who constitute the Board of Directors on the
date hereof (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the date hereof whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board, or whose nomination for
election by the Company's stockholders was approved by a nominating committee
serving under the Incumbent Board, shall be, for purposes of this clause (B),
considered as though he were a member of the Incumbent Board; or (C) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Bank or the Company or similar transaction occurs in which the
Bank or Company is not the resulting entity; or (D) a solicitation of
shareholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or Bank or similar transaction with one or more
corporations, as a result of which the outstanding shares of the class of
securities then subject to the plan are exchanged for or converted into cash or
property or securities not issued by the Bank or the Company; or (E) a tender
offer is made for 20% or more of the voting securities of the Bank or the
Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the Committee designated by the Board, pursuant to
Section 4.02 herein to administer the Plan.
"COMPANY" means Bayonne Bancshares, Inc.
"COMMON STOCK" means shares of the common stock, par value of $0.10 per
share, of the Company.
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<PAGE> 4
"CONTINUOUS SERVICE" means the absence of any interruption or termination
of service as an Employee of the Bank, the Company or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Bank or the Company or in the case of
transfers between payroll locations of the Bank or between the Bank, its parent,
its subsidiaries or its successor. For the purposes of determining Continuous
Service, an Outside Director who terminates service on the Board of Directors of
the Bank and the Company but who continues to serve the Bank or Company as a
Director Emeritus will not be deemed to have a termination of service under the
Plan.
"DIRECTOR" means any director of the Bank, the Company or an Affiliate.
"DIRECTOR EMERITUS" means a former Director of the Bank, who in
recognition of his past contributions to the Bank, has been titled as a director
emeritus of the Bank.
"DISABILITY" means the permanent and total inability by reason of mental
or physical infirmity, or both, of an employee to perform the work customarily
assigned to him. Additionally, a medical doctor selected or approved by the
Board must advise the Committee that it is either not possible to determine when
such Disability will terminate or that it appears probable that such Disability
will be permanent during the remainder of said Participant's lifetime.
"EFFECTIVE DATE" shall be the date adopted by the Board of Directors,
following the approval of stockholders.
"EMPLOYEE" means any person who is employed by the Bank or the Company, or
an Affiliate, including officers.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"NORMAL RETIREMENT" means for an Employee retirement at the normal or
early retirement date as set forth in the Bank's Employee Stock Ownership Plan,
or any successor plan. For an Outside Director, Normal Retirement means
retirement from service on the Board.
"OUTSIDE DIRECTOR" means any non-employee director of the Bank, the Company
or an Affiliate.
"PLAN" means this Amended and Restated Bayonne Bancshares, Inc. 1995
Recognition and Retention Plan.
"RECIPIENT" means an Employee or Outside Director who receives a
Restricted Stock Award under the Plan.
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<PAGE> 5
"RESTRICTED PERIOD" means the period of time selected by the Committee for
the purpose of determining when restrictions are in effect under Section 6
hereof with respect to Restricted Stock awarded under the Plan.
"RESTRICTED STOCK" means shares which have been contingently awarded to a
Recipient by the Committee subject to the restrictions referred to in Section 6
hereof, so long as such restrictions are in effect.
4. ADMINISTRATION OF THE PLAN.
4.01 ROLE OF THE COMMITTEE. The Committee shall determine and interpret
the Plan. The Committee shall consist of two or more disinterested directors of
the Company, who shall be appointed by the Board of Directors of the Company. A
member of the Board of Directors shall be deemed to be "disinterested" only if
he satisfies such requirements as the Securities and Exchange Commission may
establish for non-employee directors administering plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Restricted Stock Award granted hereunder shall be final and binding.
The Committee shall act by vote or written consent of a majority of its members.
Subject to the express provisions and limitations of the Plan, the Committee may
adopt such rules, regulations and procedures as it deems appropriate for the
conduct of its affairs. The Committee shall report its actions and decisions
with respect to the Plan to the Board at appropriate times, but in no event less
than one time per calendar year.
4.02 ROLE OF THE BOARD. The members of the Committee shall be appointed or
approved by, and will serve at the pleasure of the Board of Directors of the
Company. The Board may in its discretion from time to time remove members from,
or add members to, the Committee. The Board shall have all of the powers
allocated to it in this and other Sections of the Plan, may take any action
under or with respect to the Plan which the Committee is authorized to take, and
may reverse or override any action taken or decision made by the Committee under
or with respect to the Plan, PROVIDED, HOWEVER, that except as provided in
Section 6.05, the Board may not revoke any Restricted Stock Award except in the
event of Revocation for Cause, or with respect to unearned Restricted Stock
Awards in the event a Recipient of a Restricted Stock Award voluntarily
terminates employment.
4.03 PLAN ADMINISTRATION RESTRICTIONS. This Plan is intended to comply
with Rule 16b-3 under the Securities Exchange Act of 1934, as amended. To the
extent any provision of the Plan or action by Plan administrators fails to
comply with this Section 4.03, such provision or action shall be deemed null and
void to the extent permitted by law and deemed advisable by the Board.
4.04 LIMITATION ON LIABILITY. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Restricted Stock
4
<PAGE> 6
Awards granted under it. If a member of the Board or the Committee is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative by
reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Company shall indemnify such member against expense
(including attorney's fees), judgements, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Bank, the Company and its Affiliates and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
5. ELIGIBILITY AND AWARDS
5.01 ELIGIBILITY. Employees and Outside Directors are eligible to receive
Restricted Stock Awards.
5.02 AWARDS. The Committee may determine which Employees and Outside
Directors will be granted Restricted Stock Awards and the number of shares
covered by each Award. Shares of Restricted Stock which are awarded by the
Committee shall, on the date of the Award, be registered in the name of the
Recipient and transferred to the Recipient, in accordance with the terms and
conditions established under this Plan. 159,323 shares are available for Awards
under this Plan. Awards to Employees and Outside Directors shall be subject to
the individual and aggregate limitations imposed by the Office of Thrift
Supervision regulations, as applicable.
In the event Restricted Stock is forfeited for any reason, the Committee,
from time to time, may determine which Employees and Outside Directors will be
granted additional Restricted Stock Awards to be awarded from forfeited
Restricted Stock. In selecting those Employees and/or Outside Directors to whom
Restricted Stock Awards will be granted and the number of Restricted Stock
covered by such Awards, the Committee shall consider each individual's position
and responsibilities, the length and value of their services to the Company and
its Affiliates, the compensation paid to the Employees, and any other factors
the Committee may deem relevant, and the Committee may request the written
recommendation of the Chief Executive Officer and other senior executive
officers of the Company and its Affiliates. All allocations by the Committee
shall be subject to review, and approval or rejection, by the Board.
No restricted Stock shall be earned unless the Employee and/or Outside
Directors maintains Continuous Service with the Bank, the Company or any
Affiliate until the restrictions lapse.
5.03 MANNER OF AWARD. As promptly as practicable after a determination is
made pursuant to Section 5.02 that a Restricted Stock Award has been granted,
the Committee shall notify the Recipient in writing of the grant of the Award,
the number of shares of Restricted Stock covered by the Award, and the terms
upon which the Restricted Stock subject to the Award may be earned. Upon
notification of an Award of Restricted Stock, the Recipient shall
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<PAGE> 7
execute and return to the Company a Restricted Stock agreement setting forth the
terms and conditions under which the Recipient shall earn the Restricted Stock
(the "Restricted Stock Agreement"), together with a stock power endorsed in
blank. Thereafter, the Recipient's Restricted Stock and stock power shall be
deposited with an escrow agent specified by the Company (the "Escrow Agent") who
shall hold such Restricted Stock under the terms and conditions set forth in the
Restricted Stock Agreement. Each certificate in respect of shares of Restricted
Stock awarded under the Plan shall be registered in the name of the Recipient.
5.04 TREATMENT OF FORFEITED SHARES. In the event shares of Restricted
Stock are forfeited by a Recipient hereunder, such shares shall be returned to
the Company and shall be held and accounted for by the Company pursuant to the
terms of the Plan until such time as the Committee re-awards such shares to
another Recipient, in accordance with the terms of the Plan and the applicable
state and federal laws, rules and regulations.
6. TERMS AND CONDITIONS OF RESTRICTED STOCK.
The Committee shall have full and complete authority, subject to the
limitations of the Plan, to grant awards of Restricted Stock and, in addition to
the terms and conditions contained in paragraphs 6.01 through 6.09 of this
Section 6, to provide such other terms and conditions (which need not be
identical among Recipients) in respect of such Awards, and the vesting thereof,
as the Committee shall determine.
6.01 GENERAL RULES. Unless the Committee shall specifically state to the
contrary at the time a Restricted Stock Award is granted, Restricted Stock shall
be earned by a Recipient at the rate of twenty percent (20%) of the aggregate
number of shares covered by the Award at the end of each full twelve months of
consecutive employment or service with the Bank, the Company or an Affiliate
after the date of grant of the Award; PROVIDED, HOWEVER, that the Committee may
provide for a less or more rapid earnings rate than set forth herein for any or
all Awards awarded subsequent to the date of this Plan, subject to the prior
written approval of the OTS if required.
Subject to any such other terms and conditions as the Committee shall
provide, shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered by the Recipient, except as hereinafter
provided, during the Restricted Period. The Committee shall have the authority,
in its discretion subject to the prior approval of the OTS, if required, to
accelerate the time at which any or all of the restrictions shall lapse with
respect to shares issued to Recipients, or to remove any or all of such
restrictions, whenever it may determine that such action is appropriate by
reason of changes in applicable tax or other laws or other changes in
circumstances occurring after the commencement of such Restricted Period.
6.02 CONTINUOUS SERVICE; FORFEITURE. Except as provided in Section 6.04
hereof, if a Recipient ceases to maintain Continuous Service for any reason
(other than death or Disability as provided in Section 6.03), unless the
Committee shall otherwise determine, all shares of
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<PAGE> 8
Restricted Stock theretofore awarded to such Recipient and which at the time of
such termination of Continuous Service are subject to the restrictions imposed
by Section 6.01 shall upon such termination of Continuous Service be forfeited
and returned to the Company.
6.03 EXCEPTION FOR TERMINATION DUE TO DEATH, DISABILITY, OR NORMAL
RETIREMENT. Notwithstanding the general rule contained in 6.01, Restricted Stock
awarded to a Recipient whose employment with or service on the Board of the
Company, Bank or an Affiliate terminates due to death or Disability, or any part
of an Award of Restricted Stock that has not theretofore been earned, shall be
deemed earned as of the Recipient's last day of employment with the Company or
an Affiliate, or last day of service on the Board of the Bank or an Affiliate.
Notwithstanding other provisions in this Plan, in the event of a
Recipient's retirement, the Recipient's unvested Restricted Stock Awards as of
the date of retirement shall be forfeited and any rights the Recipient had to
such unvested Restricted Stock Awards shall become null and void; provided
however, that upon the Recipient's retirement, the Committee, in its discretion,
may determine that all unvested Restricted Stock Awards shall continue to vest
in accordance with the Award agreement if the Recipient is immediately engaged
by the Bank, the Company or an Affiliate as a consultant or advisor or continues
to serve the Bank, the Company or an Affiliate as a director or advisory
directory.
6.04 EXCEPTION FOR TERMINATIONS AFTER A CHANGE IN CONTROL. Notwithstanding
the general rule contained in Section 6.01, all Restricted Stock subject to a
Restricted Stock Award held by a Recipient whose employment as an Employee or
service as an Outside Director of the Bank, the Company or Affiliate terminates
following a Change in Control of the Bank or the Company shall be deemed earned
as of the Recipient's last day of employment or service with the Bank or an
Affiliate.
6.05 REVOCATION FOR CAUSE. Notwithstanding anything hereinafter to the
contrary, the Board may by resolution immediately revoke, rescind and terminate
any Restricted Stock Award, or portion thereof, previously awarded under this
Plan, to the extent Restricted Stock has not been redelivered by the Escrow
Agent to the Recipient, whether or not yet earned, in the case of an Employee or
Director whose employment or service is terminated by the Bank, the Company or
Affiliate for Cause, or who is discovered after termination of employment to
have engaged in conduct that would have justified termination for Cause.
6.06 RESTRICTED STOCK LEGEND. Each certificate in respect of shares of
Restricted Stock awarded under the Plan shall be registered in the name of the
Recipient and deposited by the Recipient, together with a stock power endorsed
in blank, with the Escrow Agent and shall bear the following (or a similar)
legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and conditions
(including forfeiture) contained in the Amended and Restated
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Bayonne Bancshares, Inc. 1995 Recognition and Retention Plan.
Copies of such Plan are on file in the offices of the Secretary of
First Savings Bank of New Jersey, S.L.A., 568 Broadway,
Bayonne, New Jersey 07002-3896"
6.07 PAYMENT OF DIVIDENDS. After a Restricted Stock Award has been granted
but before such Award has been earned, the Recipient shall receive any cash
dividends or stock dividends paid with respect to such shares. Unless the
Recipient has made an election under Section 83(b) of the Code, any dividends so
paid on shares which have not yet been earned by the Recipient shall be treated
as compensation income to the Recipient when paid.
6.08 VOTING OF RESTRICTED SHARES. After a Restricted Stock Award has been
granted, the Recipient, as owner of such shares, shall have the right to vote
such shares.
6.09 DELIVERY OF EARNED SHARES. At the expiration of the restrictions
imposed by Section 6.01, the Escrow Agent shall redeliver to the Recipient (or
where the relevant provision of Section 6.02 applies in the case of a deceased
Recipient, to his Beneficiary), the certificate(s) and stock power deposited
with it pursuant to Section 6.04 and the shares represented by such
certificate(s) shall be free of the restrictions referred to in Section 6.01.
6.10 STOCK SUBJECT TO THE PLAN. Shares necessary to satisfy awards of
Restricted Stock may be authorized but unissued shares of the Company, or shares
of common stock purchased by the Company on the open market. The Company may use
dividends received from the Bank to fund the purchase in the open market of
shares necessary to satisfy Awards hereunder.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of any change in the outstanding shares subsequent to the
effective date of the Plan by reason of any reorganization, recapitalization,
stock split, stock dividend, combination or exchange of shares, merger,
consolidation or any change in the corporate structure or shares of the Company,
the maximum aggregate number and class of shares as to which Awards may be
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Recipient with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Company in the manner
provided in Section 6.06 hereof.
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<PAGE> 10
8. ASSIGNMENTS AND TRANSFERS.
No Award nor any right or interest of a Recipient under the Plan in any
instrument evidencing any Award under the Plan may be assigned, encumbered or
transferred except, in the event of the death of a Recipient, by will or the
laws of descent and distribution.
9. EMPLOYEE RIGHTS UNDER THE PLAN.
No Employee shall have a right to be selected as a Recipient nor, having
been so selected, to be selected again as a Recipient and no Employee or other
person shall have any claim or right to be granted an Award under the Plan or
under any other incentive or similar plan of the Company or any Affiliate.
Neither the Plan nor any action taken thereunder shall be construed as giving
any Employee any right to be retained in the employ of the Company or any
Affiliate.
10. WITHHOLDING TAX.
Upon the termination of the Restricted Period with respect to any shares
of Restricted Stock (or at any such earlier time, if any, that an election is
made by the Employee under Section 83(b) of the Code, or any successor provision
thereto, to include the value of such shares in taxable income), the Company
shall have the right to require the Employee or other person receiving such
shares to pay the Company or an Affiliate the amount of any taxes which the
Company or an Affiliate is required to withhold with respect to such shares, or,
in lieu thereof, to retain or sell without notice, a sufficient number of shares
held by it to cover the amount required to be withheld. The Company or an
Affiliate shall have the right to deduct from all dividends paid with respect to
shares of Restricted Stock the amount of any taxes which the Company or an
Affiliate is required to withhold with respect to such dividend payments.
11. AMENDMENT OR TERMINATION.
The Board of Directors of the Company may amend, suspend or terminate the
Plan or any portion thereof at any time, but (except as provided in Section 6
hereto) no amendment shall be made without approval of the stockholders of the
Company which shall (i) materially increase the aggregate number of shares with
respect to which Awards may be made under the Plan, (ii) materially increase the
aggregate number of shares which may be subject to Awards to Recipients who are
not Employees or (iii) change the class of persons eligible to participate in
the Plan; PROVIDED, HOWEVER, that no such amendment, suspension or termination
shall impair the rights of any Recipient, without his consent, in any Award
theretofore made pursuant to the Plan.
12. GOVERNING LAW.
The Plan shall be governed by the laws of the State of New Jersey and
federal law, to the extent applicable.
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<PAGE> 11
13. TERM OF PLAN.
The Plan shall continue in effect for a term of fifteen years from the
Effective Date unless sooner terminated under Section 11 hereof.
10
<PAGE> 1
EXHIBIT 5.0 OPINION OF MULDOON, MURPHY & FAUCETTE RE: LEGALITY
<PAGE> 2
August 11, 1998
Board of Directors
Bayonne Bancshares, Inc.
568 Broadway
Bayonne, New Jersey 07002
Re: Amended and Restated Bayonne Bancshares, Inc. 1995 Stock Option Plan
and Amended and Restated Bayonne Bancshares, Inc. 1995 Recognition
and Retention Plan
Registration Statement on Form S-8 for Offer and Sale of
557,630 Additional Shares of Common Stock
Gentlemen:
We have been requested by Bayonne Bancshares, Inc. (the "Company") to
issue a legal opinion in connection with the registration under the Securities
Act of 1933, as amended, on Form S-8 of 557,630 shares of the Company's Common
Stock, $.01 par value (the "Shares"), that may be issued under the Amended and
Restated Bayonne Bancshares, Inc. 1995 Stock Option Plan (the "Stock Option
Plan") and the Amended and Restated Bayonne Bancshares, Inc. 1995 Recognition
and Retention Plan (the "Recognition and Retention Plan")(collectively, the
"Plans").
We have made such legal and factual examinations and inquiries as we
deemed advisable for the purpose of rendering this opinion. In our examination,
we have assumed and have not verified (i) the genuineness of all signatures,
(ii) the authenticity of all documents submitted to us as originals, (iii) the
conformity with the originals of all documents supplied to us as copies, and
(iv) the accuracy and completeness of all corporate records and documents and of
all certificates and statements of fact, in each case given or made available to
us by the Company or its subsidiary, First Savings Bank of New Jersey, SLA.
Based on the foregoing and limited in all respects to Delaware law, it is
our opinion that the Shares reserved under the Plans have been duly authorized
and and will be legally issued, fully paid and nonassessable upon payment for
and issuance of stock options in the manner described in the Stock Option Plan
or upon issuance of stock awards in consideration for past services pursuant to
the Recognition and Retention Plan.
<PAGE> 3
Board of Directors
August 11, 1998
Page 2
The following provisions of the Certificate of Incorporation may not be given
effect by a court applying Delaware law, but in our opinion the failure to give
effect to such provisions will not affect the duly authorized, validly issued,
fully paid and nonassessable status of the Common Stock:
(a) Subsections C.3 and C.6 of Article FOURTH and Section D of Article
EIGHTH, which grant the Board the authority to construe and apply the provisions
of those Articles, subsection C.4 of Article FOURTH, to the extent that
subsection obligates any person to provide to the Board the information such
subsection authorizes the Board to demand, and the provision of subsection C.7
of Article EIGHTH authorizing the Board to determine the Fair Market Value of
property offered or paid for the Company's stock by an Interested Stockholder,
in each case to the extent, if any, that a court applying Delaware law were to
impose equitable limitations upon such authority; and
(b) Article NINTH of the Certificate of Incorporation, which authorizes
the Board to consider the effect of any offer to acquire the Company on
constituencies other than stockholders in evaluating any such offer.
This opinion is rendered to you solely for your benefit in connection with
the issuance of the Shares as described above. This opinion may not be relied
upon by any other person or for any other purpose, and it should not be quoted
in whole or in part or otherwise referred to or be furnished to any governmental
agency (other than the Securities and Exchange Commission in connection with the
aforementioned registration statement on Form S-8 in which this opinion is
contained) or any other person or entity without the prior written consent of
this firm.
We hereby consent to the filing of this opinion as an exhibit to the
Company's Registration Statement on Form S-8, and we consent to the use of the
name of our firm under the heading "Interests of Named Experts and Counsel."
Sincerely,
/s/ MULDOON, MURPHY & FAUCETTE
<PAGE> 1
EXHIBIT 23.1 CONSENT OF KPMG PEAT MARWICK LLP
<PAGE> 2
INDEPENDENT ACCOUNTANT'S CONSENT
The Board of Directors
Bayonne Bancshares, Inc.:
We consent to the incorporation by reference in this registration statement on
Form S-8 of Bayonne Bancshares, Inc. of our report dated April 27, 1998,
relating to the consolidated statements of financial condition of Bayonne
Bancshares, Inc. and subsidiaries as of March 31, 1998 and 1997, and the related
consolidated statements of operation, stockholders' equity, and cash flows for
each of the years in the three-year period ended March 31, 1998, which report
appears in the March 31, 1998 annual report on Form 10-K of Bayonne Bancshares,
Inc. and subsidiaries.
Short Hills, New Jersey /s/ KPMG Peat Marwick LLP
July 21, 1998
