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FIRST COLONIAL SECURITIES HOLDING CORP.
1998 INCENTIVE STOCK OPTION PLAN
Section 1.01 The purpose of this Incentive Stock Option Plan (the
"Plan") is to promote the growth and general prosperity of First Colonial
Securities Holding Corp. (the "Company") by permitting the Company to grant
options to purchase shares of its common stock (the "Common Stock"), to persons
whose contributions are important to the success of the Company. The Plan is
designed to help attract and retain superior personnel, and to offer them an
additional incentive to contribute to the success of the Company. The Company
intends that options granted to employees, directors, and consultants pursuant
to the provisions of the Plan will quality as "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and Treasury Regulations promulgated thereunder ("ISOs"), unless an
option, by its terms, would not qualify thereunder. As used in the Plan, the
terms "corporation" and "subsidiary" shall have the meanings set forth in
subsections (e) and (f), respectively, of Section 424 of the Code.
Section 2.01 Administration. The Plan shall be administered by the
entire board of directors of the Company or by a committee of the board of
directors consisting of two or more directors to whom administration of the Plan
has been delegated by resolution of the board of directors. The members of the
board or that committee, as the case may be, are hereafter referred to as the
"Plan Administrators". Actions of the Plan Administrators shall be taken by a
majority vote or by unanimous written consent. In the event that the Company is
subject to Section 16 of the Securities Exchange Act of 1934, as amended
("Act"), all Plan Administrators shall be "Non-Employee Directors" within the
meaning of Rule 16b-3(b)(3) of the General Rules and Regulations under the Act,
if less than all the members of the Board are Plan Administrators. In the event
that the Company is the issuer of any common equity securities required to be
registered under Section 12 of the Act, all Plan Administrators shall be
"outside directors" within the meaning of the Regulations underlying Section
162(m) of the Code.
Section 2.02 Authority of Plan Administrators. Subject to the provisions
of the Plan, and with a view to effecting its purpose, the Plan Administrators
shall have sole authority, in their absolute discretion, (a) to construe and
interpret the Plan, (b) to define the terms used herein, (c) to prescribe,
amend, and rescind rules and regulations relating to the Plan, (d) to determine
the individuals to whom options to purchase Common Stock shall be granted under
the Plan, (e) to determine the time or times at which options shall be granted
under the Plan, (f) to determine the number of shares of Common Stock subject to
each option, the option price, vesting schedule and the duration of each option
granted under the Plan, (g) to determine all of the other terms and conditions
of options granted under the Plan, and (h) to make all other determinations
necessary or advisable for the administration of the Plan and do everything
necessary or appropriate to administer the Plan. All decisions, determinations
and interpretations made by the Plan Administrators shall be binding and
conclusive on all participants in the Plan and on their legal representatives,
heirs and beneficiaries. The Plan Administrators shall endeavor to ensure that
option agreements entered into pursuant to the Plan which are intended to be
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ISOs meet all the requirements for incentive stock options described in Section
422 of the Code.
Section 2.03. Terms, Conditions and Method of Grant. The terms and
conditions of options granted under the Plan may differ from one another as the
Plan Administrators, in their absolute discretion, shall determine as long as
all options granted under the Plan satisfy the requirements of the Plan. All
options granted hereunder shall be evidenced by a written option agreement (with
a copy of the Plan attached) between the Company and the optionee. The option
agreement shall be in the form and shall contain such provisions consistent with
the Plan as the Plan Administrators, acting with the benefit of legal counsel,
shall deem advisable. No option under the Plan shall be granted, the exercise of
which shall be conditioned upon the exercise of any other option under the Plan
or any other plan.
Section 3.01. Maximum Number of Shares of Common Stock Subject to the
Plan. Subject to the provisions of Section 12.01, the maximum aggregate number
of shares of Common Stock with respect to which options may be granted under the
Plan is one million, five hundred thousand (1,500,000). The maximum number of
shares subject to the Plan may be adjusted pursuant to the provisions of Section
12.02 of the Plan. If any of the options granted under the Plan expire or
terminate for any reason before they have been exercised in full, the
unpurchased Common Stock subject to those expired or terminated options shall
again be available for the purpose of the Plan.
Section 4.01. Eligibility and Participation. Officers, employees,
directors and consultants of the Company and its subsidiaries shall be eligible
for selection by the Plan Administrators to participate in the Plan.
Section 5.01. Effective Date and Term of Plan. The Plan shall become
effective upon its adoption by the board of directors of the Company, subject to
approval of the Plan by the stockholders of the Company, as provided in Section
14.01. The Plan shall continue in effect for a term of 10 years unless sooner
terminated under Section 13.01.
Section 5.02. Duration of Options. Each option and all rights there
under granted pursuant to the terms of the Plan shall expire on the date
determined by the Plan Administrators, but in no event shall any option granted
under the Plan expire later than ten (10) years from the date on which the
option is granted. In addition, each option shall be subject to early
termination as provided in this Plan.
Section 5.03. Exercise Price. The purchase price for shares of Common
Stock acquired pursuant to the exercise (in whole or in part) of any option (the
"Exercise Price") shall not be less than the fair market value per share of the
Company's Common Stock at the time of the grant of the option. Fair market value
shall be determined by the Plan Administrators on the basis of those factors
they deem appropriate; provided that the Plan Administrators shall make a good
faith effort to determine such fair market value in selecting such factors; and
provided further, that if at the time the determination is made
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the Common Stock is admitted to trading on a national securities exchange, the
fair market value of the shares shall be not less than the greater of (i) the
mean between the high bid and low ask prices reported for the Common Stock on
that exchange on the day the option is granted or the most recent trading day
preceding the date on which the option is granted or (ii) the last reported sale
price reported for the Common Stock on that exchange on the day the option is
granted or most recent trading day preceding the date on which the option is
granted. The phrase "national securities exchange" shall include, but not be
limited to, the National Association of Securities Dealers Automated Quotation
System and the over-the-counter market.
Section 5.04. Term and Exercise Price of Option Granted to More Than Ten
Percent Stockholder. Notwithstanding anything to the contrary in Sections 5.02
and 5.03, an option granted to an optionee who at the time the option is granted
owns (or under Section 424 (d) of the Code is deemed to own) more than 10
percent of the voting power or value of all classes of stock of the Company
shall not be an ISO unless the option, by its terms, shall not be exercisable
after the expiration of five years after the date that option is granted, and
(ii) the Exercise Price for that option shall be at least 110 percent of the
fair market value (as determined under Section 5.03) of the shares subject to
the option at the time the option granted.
Section 5.05. Maximum Amount of Options to any Optionee. To the extent
that the aggregate fair market value of Common Stock, determined as of the date
of grant, with respect to which options under this Plan and all other such
option plans of the Company (or a parent or subsidiary as defined in Section 424
of the Code), and which would otherwise be ISOs, are exercisable for the first
time by an Optionee in any calendar year exceeds $100,000, such options shall
not be treated as ISOs. Subject to the provisions of Section 12.01, the maximum
aggregate number of shares which may be granted under the Plan to any individual
during any 12-month period is one-half of the number of shares set forth in
Section 3.01, above.
Section 6.01. Exercise of Options by Optionee. Each option shall be
exercisable in one or more installments during its term, and the right to
exercise may be cumulative as determined by the Plan Administrators. No option
may be exercised for a fraction of a share of Company Stock. In addition, no
option may be exercised other than on a business day of the Company. The full
Exercise Price of any shares purchased shall be paid at the time of exercise in
cash or, if permitted by the terms of the option, any combination of cash or
shares of Common Stock. If any portion of the Exercise Price is paid in shares
of Common Stock, those shares shall be tendered at their then fair market value,
as determined by the Plan Administrators in accordance with Section 5.03 of the
Plan. In addition, if permitted by the terms of the option, the optionee may
purchase all or any portion of the shares subject to an option by directing the
Company to withhold from delivery to the optionee the number of shares having a
fair market value equal to the aggregate exercise price of the total number of
shares purchased. No option may be exercised on a date later than 10 years from
the date it is granted.
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Section 6.02. Exercise of Options by Estate or Beneficiaries. Subject to
the provisions of Section 11.01, if an option shall have been transferred to an
estate of an optionee, or any beneficiary thereof who shall have acquired such
option by bequest or inheritance by reason of the death of such optionee, the
option shall be exercisable in the same manner as if exercised by such optionee
pursuant to Section 6.01. Such options, if so exercised, shall be eligible for
treatment under Section 422 of the Code without regard to whether such executor,
administrator or beneficiary is then employed by the Company, provided the
optionee shall have met the employment requirements of Section 422 of the Code
on the date of his or her death. If an ISO had not been exercised by an optionee
prior to the expiration of the applicable holding period of Section 422(a)(1) of
the Code, the executor, administrator or beneficiary of the estate of such
optionee may exercise such option, and such option shall be treated as an ISO,
notwithstanding whether the shares of Common Stock acquired thereunder shall be
disposed of prior to the expiration of such applicable period.
Section 6.03. Written Notice Required. Any option granted pursuant to
the terms of the Plan shall be considered exercised when written notice of that
exercise, together with the investment representations described in Section
7.01, if any, have been given to the Company at its principal office by the
person entitled to exercise the option and full payment for the shares with
respect to which the option is exercised has been received by the Company. Upon
receipt thereof, and in connection with the transfer of Common Stock pursuant to
the exercise of an ISO, the Company shall provide optionee with a written
statement containing the information required by Section 6039(a) of the Code.
Section 7.01 Compliance with State and Federal Laws. Shares of Common
Stock shall not be issued with respect to any option granted under the Plan
unless the exercise of that option and the issuance and delivery of the Common
Stock pursuant to that exercise shall comply with all relevant provisions of
state and federal laws, rules and regulations, and the requirements of any stock
exchange upon which the Common Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to that
compliance. If any law or any regulation of any federal or state body having
jurisdiction shall require the Company or the optionee to take any action in
connection with the shares specified in the optionee' notice, then the date for
the delivery of the shares shall be postponed until the completion of the
necessary action. The Plan Administrators also shall require (to the extent
required by applicable laws, rules and regulations) an optionee to furnish
evidence satisfactory to the Company (including a written and signed
representation letter and a consent to be bound by any transfer restrictions
imposed by law, legend, condition, or otherwise) that the Common Stock is being
purchased only for investment and without any present intention to sell or
distribute the Common Stock in violation of any law, rule or regulation.
Further, each optionee shall consent to the imposition of a legend on the shares
of Common Stock
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subject to his or her option restricting their transferability as may be
required by applicable laws, rules and regulations.
Section 8.01. Option Rights Upon Termination of Employment.
(a) If an optionee's employment with the Company terminates for any
reason, other than as a result of the optionee's death or permanent and total
disability, any unexercised portion of his or her option shall immediately
terminate, unless an option agreement allows the option to be exercised at any
time within 3 months after the date of termination. For this purpose, the
employment in respect of which an option shall have been granted shall be deemed
to continue while the optionee to whom said option shall have been granted shall
be on military leave, leave on account of illness or other bona fide leave
determined in the discretion of the Plan Administrator, provided the period of
such leave shall not exceed 90 days, or if longer, so long as the right of an
optionee who is an employee to reemployment is not so guaranteed by operation of
law or contract, then such employment shall be deemed to terminate on the 91st
day of such leave.
(b) Nothing in this Plan shall be deemed to obligate the Company to
continue an optionee's employment for any particular time.
Section 9.01. Option Rights upon Death or Disability. Except as
otherwise limited by the Plan Administrators in the option agreement, if any
optionee dies or becomes permanently and totally dissolved within the meaning of
Section 22(e)(3) of the Code while in the employ of the Company or a subsidiary
thereof, or dies within 3 months following termination of employment, his or her
option shall expire one year after the date of death or the date of permanent
and total disability, unless in either case the option agreement or the Plan
otherwise provides for earlier termination. During that period, the unexercised
portion of the option may be exercised by the optionee, if living, or by the
person or persons to whom the optionee's rights under the option shall pass by
will or by the laws of descent and distribution, but only to the extent that the
optionee was entitled to exercise the option at the date of his or her death or
permanent and total disability, as the case may be.
Section 10.01. Privileges of Stock Ownership. Notwithstanding the
exercise of any option granted pursuant to the Plan, no optionee shall have any
of the rights or privileges of a stockholder of the Company in respect of any
shares of Common Stock issuable upon the exercise of his or her option until the
optionee becomes a stockholder of record.
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Section 11.01. Options Not Transferable. Options granted pursuant to the
terms of the Plan may not be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent or distribution and may be
exercised during the lifetime of an optionee only by that optionee.
Section 12.01. Adjustments for Changes in Capitalization or
Organization; Acceleration of Right to Exercise Option. All options granted
pursuant to this Plan shall be adjusted in the manner prescribed by this
section.
(a) If the outstanding shares of the Common Stock of the Company are
increased, decreased, changed into, or exchanged for a different number or kind
of shares or securities through recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares of Common
Stock as to which options may be granted under the Plan. A corresponding
adjustment changing the number or kind of shares of Common Stock allocated to
unexercised options or portions thereof, which shall have been granted prior to
any such change, shall likewise be made. Any such adjustment in outstanding
options shall be made without change in the aggregate purchase price applicable
to the unexercised portion of the option, but with a corresponding adjustment in
the price for each share of Common Stock or other unit of any security covered
by the option.
(b) Upon the effective date of the dissolution or liquidation of the
Company, or of a reorganization, merger, combination or consolidation of the
Company with one or more other corporations in which the Company is not the
surviving corporation, or of the transfer of substantially all of the assets or
stock of the Company to another corporation, the Plan and any option theretofore
granted hereunder shall terminate unless provision is made in writing in
connection with that transaction for the continuance of the Plan and for the
assumption of options theretofore granted hereunder, or the substitution for
those options of new options covering the stock of the successor corporation, or
a parent or subsidiary thereof, with appropriate adjustments, as determined or
approved by the Plan Administrators, as to the number and kind of shares of
stock subject to the substituted options and Exercise Price with respect
thereto, in which event the Plan and the options theretofore granted, or the new
options substituted therefor, shall continue in the manner and under the terms
so provided. For the purposes of the preceding sentence, the excess of the
aggregate fair market value of the shares subject to the option immediately
after the substitution or assumption over the aggregate Exercise Price with
respect thereto shall not be more than the excess of the aggregate fair market
value of the shares subject to the option immediately before the substitution or
assumption over the aggregate Exercise Price with respect thereto, and the new
option or assumption of the old option shall not give the optionee additional
benefits which the optionee did not have under the old option.
In the event of such dissolution, liquidation, reorganization, merger,
combination, consolidation or sale or transfer of assets or stock (i) in which
provision is not made in
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the transaction for the continuance of the Plan and for the assumption of
options theretofore granted or the substitution for those options of new options
covering the securities of a successor corporation or a parent or subsidiary
thereof or (ii) a difference between the excess of the aggregate fair market
value of the shares subject to the option immediately after the substitution or
assumption over the aggregate Exercise Price with respect thereto and the excess
of the aggregate fair market value of the shares subject to the option
immediately before the substitution or assumption over the aggregate Exercise
Price with respect thereto, each optionee (or that person's estate or a person
who acquired the right to exercise the option from the optionee by bequest or
inheritance) shall be entitled, prior to the effective date of the consummation
of any such transaction, to purchase, in whole or in part, the full number of
shares of Common Stock under the option or options granted to him or her which
he or she would otherwise have been entitled to purchase during the remaining
term of the option and without regard to any otherwise applicable exercise
restrictions or vesting schedules set forth in the option agreement. To the
extent that any such exercise relates to stock that is not otherwise available
for purchase through the exercise of the option by the optionee at that time,
the exercise shall be contingent upon the consummation of that dissolution,
liquidation, reorganization, merger, combination, consolidation, or sale or
transfer of assets or stock.
Section 13.01. Termination and Amendment of Plan. The Plan shall
terminate 10 years after the earlier of its adoption by the Board of Directors
or its approval by the stockholders of the Company, and no options shall be
granted under the Plan after that date; provided, however, that termination of
the Plan shall not terminate any option granted prior thereto, and options
granted prior to termination of the Plan and existing at the time of termination
of the Plan shall continue to be subject to all the terms and conditions of the
Plan as if the Plan had not terminated. Subject to the limitation contained in
Section 14.02, the Plan Administrators may at any time amend or revise the terms
of the Plan (including the form and substance of the option agreements to be
used hereunder), provided that no amendment or revision shall (i) increase the
maximum aggregate number of share of Common Stock provided for in Section 3.01
that may be sold pursuant to options granted under the Plan, except with the
approval of the stockholders of the Company or except as required under the
provisions of Section 12.01(a), (ii) permit the granting of an option to anyone
other than as provided in Section 4.01, (iii) increase the maximum term provided
for in Sections 5.02 and 5.04 of any option, or (iv) reduce the Exercise Price
shares of Common Stock under Sections 5.03 and 5.04.
Section 14.01. Approval of Stockholders. Within 12 months before or
after its adoption by the board of directors of the Company, as provided by
Section 5.01, the Plan must be approved by stockholders of the Company holding
at least a majority of the voting stock of the Company voting in person or by
proxy at a duly held stockholder's meeting. Options may be granted under the
Plan prior to obtaining approval, subject to the limitations of Section 13.01
concerning the period during which options may be
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granted, but those options shall be contingent upon approval being obtained and
may not be exercised prior to the receipt of that approval.
Section 14.02. Prior Rights and Obligations. No amendment, suspension or
termination of the Plan shall, without the consent of the optionee, alter or
impair any of that optionee's rights or obligations under any option granted
under the Plan prior to that amendment, suspension or termination.
Section 15.01. Reservation of Shares of Common Stock. The Company,
during the term of the Plan, will at all times reserve and keep available a
sufficient number of shares of Common Stock to satisfy the requirements of the
Plan. In addition, the Company will from time to time, as is necessary to
accomplish the purposes of the Plan, seek to obtain from any regulatory agency
having jurisdiction any requisite authority in order to grant options under the
Plan and to issue and sell shares of Common Stock hereunder. The inability of
the Company to obtain from any regulatory agency having jurisdiction the
authority deemed by the Company's counsel to be necessary to the lawful issuance
and sale of Common Stock hereunder shall relieve the Company of any liability in
respect of the non-issuance or sale of the Common Stock as to which the
requisite authority shall not have been obtained.
Section 16.01 Headings. The headings of the sections of the Plan are for
convenience only and shall not be considered or referred to in resolving
questions of interpretation.
Section 17.01. Brokers' Commissions. No commission may be paid to
brokers on the sale by the Company to the optionee of Common Stock that is
optioned and sold under the Plan.
Section 18.01. Adoption. The Plan has been adopted by a resolution duly
adopted by the board of directors of the Company.
Section 19.01. Applicable Law. The Plan and Options granted hereunder
shall be governed by the laws of the State of Delaware, without regard to
principles of conflicts of law.
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