<PAGE>
No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
THE SUMMIT BANCORPORATION
-------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2007124
_____________________________ ____________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Main Street
Chatham, New Jersey 07928
----------------------------------------
(Address of principal executive offices)
----------------------
THE SUMMIT BANCORPORATION
1995 DIRECTORS STOCK OPTION PLAN
-------------------
(Full title of the plan)
JOHN F. KUNTZ
General Counsel and Corporate Secretary
The Summit Bancorporation
One Main Street
Chatham, New Jersey 07928
---------------------------------------
(Name and address of agent for service)
(201) 701-2665
------------------------------------------
(Telephone number, including area code, of
agent for service)
----------------------
Copy of all communications to:
MARTIN RUBASHKIN, ESQ.
Bourne, Noll & Kenyon
382 Springfield Avenue
Summit, New Jersey 07901
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1
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(Cover Page Continued)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Offering Aggregate Amount of
Securities to Amount to be Price Per Offering Registration
be Registered Registered (1) Share (1) Price (1) Fee (1)
------------- -------------- --------- --------- ------------
Common Stock 165,000 $ 29.00 $4,785,000 $1,650.00
No Par Value
(and
associated
stock purchase
rights) (2)
(1) The registration fee is calculated by using $ 29.00 per share as the
average of the high and low prices per share as reported on the NASDAQ National
Market System on October 12, 1995, solely for the purpose of determining the
registration fee for the 165,000 additional shares registered hereby. See SEC
Rule 457(c) and (h).
(2) Prior to the occurrence of certain events, the stock purchase rights
will not be evidenced separately from the common stock.
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2
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The registrant hereby incorporates by reference the following
documents:
(a) The registrant's Annual Report on Form 10-K for its fiscal year
ended December 31, 1994;
(b) The registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31 and June 30, 1995;
(c) The registrant's Current Reports on Form 8-K dated May 16, 1995,
July 7, 1995 and September 27, 1995;
(d) The registrant's Definitive Proxy Statement for its Annual
Meeting of Shareholders held on April 18, 1995.
(e) Description of the registrant's Junior Participating Preferred
stock, contained in the registrant's registration statement on
Form 8-A filed February 3, 1990 and amendment thereto on Form 8
filed January 31, 1992.
All documents subsequently filed by the registrant pursuant to
<PAGE>
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be part hereof from the date of filing of such documents. Any
statement contained 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 on Form S-8 to the extent that a statement
contained in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement on
Form S-8.
ITEM 4. DESCRIPTION OF SECURITIES
General
The registrant's authorized capital stock consists of 50,000,000
shares of common stock, no par value, and 12,000,000 shares of preferred stock,
no par value, issuable in one or more series and with such terms as the
registrant's board of directors determines. As of June 30, 1995, there were
3
issued 33,804,009 and outstanding 33,719,524 shares of common stock and 504,481
shares of Cumulative Adjustable Rate Preferred Stock. As of June 30, 1995,
there were 1,777,404 shares of common stock reserved for issuance under various
stock incentive plans. As of June 30, 1995, 2,579,159 shares of common stock
were reserved for issuance under the Dividend Reinvestment and Stock Purchase
Plan (described below) and 250,000 shares of Series B Junior Participating
Preferred Stock were reserved for issuance under the Shareholder Rights Plan
(described below).
The following summary does not purport to be complete and is subject
in all respects to the applicable provisions of the New Jersey Business
Corporation Act, the registrant's certificate of incorporation, including
certificates of designation pursuant to which the outstanding series of
preferred stock was issued, and the registrant's Shareholder Rights Plan and
Dividend Reinvestment and Stock Purchase Plan.
Common Stock
Holders of common stock are entitled to receive dividends when and as
declared by the registrant's board of directors out of funds legally available
therefor, provided that, so long as any shares of preferred stock are
outstanding, no dividends (other than dividends payable in common stock) or
other distributions (including redemptions and purchases) may be made with
respect to the common stock unless full dividends on the shares of preferred
stock, including accumulations, have been paid.
In the event of the liquidation of the registrant, holders of common
stock would be entitled to receive pro rata any assets legally available for
distribution to holders of common stock with respect to shares held by them,
subject to any prior rights of any preferred stock then outstanding.
The common stock does not have any preemptive rights, redemption
privileges, sinking fund privileges, or conversion rights. All the outstanding
shares of common stock are validly issued, fully paid and nonassessable.
<PAGE>
Subject to the rights of the preferred stock under certain
circumstances, the holders of outstanding common stock are entitled to one vote
per share with no cumulative voting.
The registrant's certificate of incorporation and bylaws provide for
a classified board of directors by dividing the board into three classes of
approximately equal size. Directors are generally elected for three-year terms
which have been established so that the terms of office of approximately one-
third of the members of the board expire each year.
4
The registrant's certificate of incorporation also provides that no
merger or consolidation or similar transaction involving the registrant may be
effected without the approval of voting securities representing at least two-
thirds of the votes entitled to be cast (excluding shares owned by 5%
shareholders and their affiliates) unless the board of directors has previously
approved the transaction or unless certain fair price tests, meant to ensure
equal price treatment for all shareholders, are met. The effect of this
provision, together with the provisions for the classified board and the
Shareholder Rights Plan (described below), may make it difficult for any person
to acquire control of the registrant and remove management by means of a
hostile takeover.
On May 9, 1995, the registrant announced that its board of directors had
authorized the repurchase of up to 2.3 million shares of its common stock and
that it expected to make such purchases from time to time in the open market or
in privately negotiated transactions, subject to market conditions.
Preferred Stock
The registrant's board of directors is authorized by the registrant's
certificate of incorporation to issue shares of preferred stock in series and
classes and to fix, from time to time, the number of shares to be included in
any class and series and the par value, dividend rights, voting rights,
redemption rights, designation, relative rights, preferences and limitations,
and all other characteristics and rights of the shares of each class and
series.
The registrant's only issued and outstanding series of preferred
stock is the Adjustable Rate Cumulative Preferred Stock, $25.00 stated value.
The holders of adjustable rate cumulative preferred shares are entitled to
receive, when and as declared by the registrant's board of directors,
cumulative preferred dividends payable quarterly in cash at the applicable rate
in effect at the time of declaration. The applicable rate for any dividend
period is 2.75% below the highest of the three-month "Treasury Bill Rate," the
"Ten-Year Constant Maturity Rate" and the "Twenty-Year Constant Maturity Rate"
determined in advance of the dividend period. However, the applicable rate for
any dividend period will not be less than 6% per annum nor greater than 12% per
annum. Shares of the Adjustable Rate Cumulative Preferred Stock are
redeemable, in whole or in part, at $25.00 per share.
No shares of the registrant's Series B Junior Participating Preferred
Stock (described below) are outstanding.
Shareholder Rights Plan
The registrant's Shareholder Rights Plan is intended to protect
shareholders in the event of certain unsolicited offers or attempts to acquire
<PAGE>
the registrant. The Plan provides that attached to each share of common stock
is one right which, when exercisable, entitles the holder of the right to
5
purchase one-hundredth of a share of Series B Junior Participating Preferred
Stock at a purchase price of $70, subject to adjustment. In certain events
(such as a person or group acquiring or announcing an intent to acquire 15% or
more of the common stock or the registrant's board of directors determining
that 10% or more of the common stock has been acquired by an adverse person, as
defined in the Shareholder Rights Plan), exercise of the rights would entitle
the holder to common stock of the registrant or a surviving corporation with a
market value of two times the exercise purchase price. Accordingly, exercise
of the rights may cause substantial dilution to a person that attempts to
acquire the registrant. The rights automatically attach to each outstanding
share of common stock. There is no monetary value presently assigned to the
rights, and they do not trade separately from the shares of common stock unless
and until they become exercisable. The rights expire on January 15, 2000. The
Plan may have certain antitakeover effects, although it is not intended to
preclude any prospective offer for all outstanding shares of common stock at a
fair price and otherwise in the best interests of the registrant and its
shareholders, as determined by the registrant's board of directors. However, a
shareholder could potentially disagree with the board's determination of what
constitutes a fair price or the best interests of the registrant and its
shareholders.
Dividend Reinvestment and Stock Purchase Plan
In September 1991, the registrant amended its Dividend Reinvestment
and Stock Purchase Plan to permit the registrant's shareholders to purchase
newly issued common stock at up to a 5% discount from the current market price
(as defined in the Plan). Effective November 13, 1992, the discount was
reduced to 3.5%. As long as the registrant continues to issue common stock
under the Plan, the registrant anticipates that the proceeds from sales under
the Plan will increase its equity capital and the number of shares of common
stock outstanding on a systematic and continuing basis.
Recent Developments
On September 10, 1995 the registrant entered into an Agreement and
Plan of Merger (the "Merger Agreement") with UJB Financial Corp. ("UJB")
pursuant to which the registrant will be merged with and into UJB in a stock-
for-stock merger. Pursuant to the Merger Agreement, each outstanding share of
the registrant's common stock (other than treasury shares or shares owned by
UJB or a subsidiary of UJB) will be exchanged for .9 shares of UJB common stock
and all shares of the registrant's $25.00 Stated Value Adjustable Rate
Cumulative Preferred Stock (other than treasury shares or shares held by UJB or
one of its subsidiaries) will be converted into one share of $25.00 Stated
Value Adjustable Rate Cumulative Preferred Stock of UJB. Consummation of the
merger is subject to the satisfaction of all terms and conditions set forth in
the Merger Agreement, including the receipt of required regulatory approvals,
6
approval of the shareholders of both the registrant and UJB and a letter from
KPMG Peat Marwick L.L.P. to the effect that the transaction will qualify for
pooling-of-interests accounting treatment.
In connection with the Merger Agreement, the registrant has granted
<PAGE>
to UJB an option to acquire 6,730,000 shares of the registrant's common stock
at $26.75 per share exercisable under certain circumstances and UJB has granted
to the registrant an option to acquire 11,450,000 shares of UJB Common Stock at
$36.625 per share, also exercisable under certain circumstances.
The registrant's Shareholder Rights Plan (the "Rights Plan") was
amended on September 10, 1995 to exclude UJB or any of its affiliates or
associates from the definition of "Acquiring Person". The effect of this
amendment is to not to treat the merger or stock option exercise as a
triggering event permitting the registrant's common stockholders to purchase
shares of Series B Junior Participating Preferred Stock under the Rights Plan.
See "Shareholder Rights Plan", above.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock of the registrant (the "Common
Stock") offered pursuant to this Registration Statement on Form S-8 will be
passed upon for the Corporation by Bourne, Noll & Kenyon, P.A. and all
attorneys employed thereby own shares of Common Stock in an amount that does
not exceed .005% of the outstanding Common Stock of the registrant.
The consolidated financial statements of The Summit Bancorporation
and subsidiaries as of December 31, 1994 and 1993 and for each of the years in
the three-year period ended December 31, 1994, included in the registrant's
Annual Report on Form 10-K, have been incorporated by reference herein in
reliance on the report of KPMG Peat Marwick LLP, independent certified public
accountants, included in the registrant's 1994 Annual Report on Form 10-K and
incorporated by reference herein, and upon the authority of such firm as
experts in accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As provided under New Jersey law, the registrant's certificate of
incorporation provides that a director or officer shall not be personally
liable to the corporation or its shareholders for breach of duty owed to the
corporation, except that such provision shall not relieve a director or officer
from liability for any breach of duty based upon an act or omission (a) in
breach of duty based upon an act or omission (a) in breach of such person's
duty of loyalty to the corporation or its shareholders, (b) not in good faith
or involving a knowing violation of law or (c) resulting in receipt by such
person or any improper personal benefit.
7
Under Article X of its bylaws, the registrant is required, to the
full extent permitted by law, to indemnify its directors, officers, employees
and agents. The New Jersey Business Corporation Act provides that a
corporation may indemnify its directors, officers, and agents against
judgments, fines, penalties, amounts paid in settlement and expenses, including
attorney's fees, resulting from various types of legal actions or proceedings
if the actions of the party being indemnified meet the standards of conduct
specified therein. Determinations concerning whether the applicable standard
of conduct has been met can be made by (a) a disinterested majority of the
board of directors, (b) independent legal counsel, or (c) an affirmative vote
of a majority of shares held by the shareholders. No indemnification shall be
made to or on behalf of a corporate director, officer, employee or agent if a
judgment or other final adjudication adverse to such person establishes that
his acts or omissions (a) were breaches of his duty of loyalty to the
corporation or its shareholders, (b) were not in good faith or involved a
<PAGE>
knowing violation of law or (c) resulted in receipt by such person or an
improper personal benefit.
The registrant's directors and officers are insured against losses
arising from any claim against them as such for wrongful acts or omissions,
subject to certain limitations.
ITEM 8. EXHIBITS
5 Opinion of Bourne, Noll & Kenyon
24(a) Consent of Counsel (included in Exhibit 5)
24(b) Consent of Independent Auditors
25 Power of Attorney
99 Copy of The Summit Bancorporation 1995 Directors Stock Option Plan
ITEM 9. UNDERTAKINGS
The registrant hereby undertakes to file, during any period in which
offers or sales are being made, a post-effective amendment to this registration
statement (1) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (2) to 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 set forth in the
registration statement; (3) to 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 sections (1) and (2) above do not apply if the
8
registration statement is on Form S-3 or Form S-8 and information required to
be included in a post-effective amendment by those sections is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
The registrant hereby undertakes (1) that, for the purpose of
determining any liability under the Securities Act of 1933, each such post-
effective amendment to this 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 and (2) to remove from registration by means of a post-
effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 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
<PAGE>
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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SIGNATURES
The Registrant
- --------------
Pursuant to the requirements of the Securities Act of 1933, the
registrant 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 Borough of Chatham, State of New Jersey, on October 18,
1995.
THE SUMMIT BANCORPORATION
By:/S/ John F. Kuntz
-----------------------------
John F. Kuntz,
Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Signitures Capacity Date
---------- -------- ----
* Chairman of the October 18, 1995
--------------------- Board of Directors
Thomas D. Sayles, Jr.
/S/ Robert G. Cox President, Chief October 18, 1995
-------------------- Executive Officer
Robert G. Cox and Director
(Principal
Executive
Officer)
<PAGE>
/S/ John R.Feeney Senior Executive October 18, 1995
------------------ Vice President
John R. Feeney and Chief
Financial Officer
(Principal
Financial
Officer)
/S/ Alfred J. Soles Senior Vice October 18, 1995
-------------------- President and
Alfred J. Soles Controller
(Principal
Accounting
Officer)
10
Signitures Capacity Date
---------- -------- ----
*
---------------------- Director October 18, 1995
Allan G. Anderson
*
---------------------- Director October 18, 1995
S. Rodgers Benjamin
*
---------------------- Director October 18, 1995
James C. Brady, Jr.
*
---------------------- Director October 18, 1995
Samuel V. Gilman, Jr.
*
---------------------- Director October 18, 1995
S. Griffin McClellan
III
*
---------------------- Director October 18, 1995
William Boyce Lum
*
---------------------- Director October 18, 1995
Robert W. Parsons, Jr.
*
---------------------- Director October 18, 1995
Reeve Schley III
*
---------------------- Director October 18, 1995
Orin R. Smith
*
---------------------- Director October 18, 1995
Douglas G. Watson
<PAGE>
*
---------------------- Director October 18, 1995
Kate B. Wood
* John F. Kuntz, by signing his name hereto, does sign this document on
behalf of each of the persons indicated above pursuant to powers of
attorney duly executed by such persons and filed as exhibits herewith.
/S/ John F. Kuntz
-------------------------------
John F. Kuntz, Attorney-in-Fact
11
EXHIBITS
Exhibit Number
- --------------
5 Opinion of Bourne, Noll & Kenyon
24(a) Consent of Counsel (included in
Exhibit 5)
24(b) Consent of Independent Auditors
25 Power of Attorney
99 Copy of The Summit Bancorporation
1995 Directors Stock Option Plan
12
<PAGE>
EXHIBIT 5
<PAGE>
October 18, 1995
The Summit Bancorporation
One Main Street
Chatham, New Jersey 07928
Attn: John F. Kuntz, Esq.
Corporate Secretary and General Counsel
Re: Form S-8 Registration Statement - The Summit Bancorporation 1995
Directors Stock Option Plan
Dear Mr. Kuntz:
We are rendering this opinion as counsel for The Summit Bancorporation
(the "Company") in connection with the registration and issuance of 165,000
shares of Common Stock of the Company (the "Securities") pursuant to a
Registration Statement to be filed with the Securities and Exchange Commission
on Form S-8 (the "Registration Statement").
In connection with the foregoing, we have participated in the preparation
of, and have reviewed the Registration Statement. In addition, we have
examined originals or copies identified to our satisfaction as being the true
copies of such documents, corporate records and other instruments as we have
deemed necessary or appropriate for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing under the
laws of State of New Jersey;
2. The issuance and sale of the Securities have been validly authorized;
and
3. The Securities, when issued and sold, will be legally issued, fully
paid and non-assessable.
We hereby consent to all references to us in the Registration Statement,
including any prospectus relating thereto, and to the inclusion of a duplicate
original of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/S/ Bourne, Noll & Kenyon, P.A.
BOURNE, NOLL & KENYON
A Professional Corporation
14
<PAGE>
EXHIBIT 24(a)
<PAGE>
EXHIBIT 24(b)
<PAGE>
INDEPENDENT AUDITOR'S CONSENT
-----------------------------
The Board of Directors
The Summit Bancorporation:
We consent to the incorporation by reference in the registration statement on
Form S-8 relating to The Summit Bancorporation 1995 Directors Stock Option Plan
of our report dated January 17, 1995, relating to the consolidated balance
sheets of The Summit Bancorporation and subsidiaries as of December 31, 1994,
and 1993, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1994, which report is included in the December 31, 1994 Annual
Report on Form 10-K of The Summit Bancorporation, and to the reference to our
Firm under the heading "Interests of Named Experts and Counsel" in the
registration statement.
KPMG Peat Marwick LLP
Short Hills, New Jersey
October 18, 1995
17
<PAGE>
EXHIBIT 25
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below, in his or her capacity as a Director or Officer of The Summit
Bancorporation ("Summit"), hereby constitutes and appoints John F. Kuntz his or
her true and lawful attorney-in-fact and agent, with full power of
substitution, for him or her and in his or her name, place and stead, and in
any and all capacities, to execute a registration statement on Form S-8 under
the issuance and sale of Summit's Common Stock pursuant to Summit's 1995
Directors Stock Option Plan, which was approved at its annual meeting of
shareholders held on April 18, 1995, and file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, and to execute and file any and all amendments thereto
(including post-effective amendments), granting unto said attorney-in-fact and
agent full power and authority to do each and every act requisite and necessary
to be done, as fully and to all intents and purposes as he or she might do in
person, and hereby ratifying and confirming all that said attorney-in-fact and
agent may lawfully do or cause to be done by virtue thereof.
Dated: October 18, 1995 /S/ Thomas D. Sayles, Jr.
-------------------------
Thomas D. Sayles, Jr.
/S/ Robert G. Cox
-------------------------
Robert G. Cox
/S/ John R. Feeney
-------------------------
John R. Feeney
/S/ Allan G. Anderson
-------------------------
Allan G. Anderson
/S/ S. Rodgers Benjamin
-------------------------
S. Rodgers Benjamin
/S/ James C. Brady, Jr.
-------------------------
James C. Brady, Jr.
/S/ Samuel V. Gilman, Jr.
-------------------------
Samuel V. Gilman, Jr.
19
<PAGE>
/S/ William Boyce Lum
-------------------------
William Boyce Lum
/S/ S. Griffin McClellan III
----------------------------
S. Griffin McClellan III
/S/ Robert W. Parsons, Jr.
--------------------------
Robert W. Parsons, Jr.
/S/ Reeve Schley III
-------------------------
Reeve Schley III
/S/ Orin R. Smith
-------------------------
Orin R. Smith
/S/ Douglas G. Watson
-------------------------
Douglas G. Watson
/S/ Kate B. Wood
-------------------------
Kate B. Wood
20
<PAGE>
EXHIBIT 99
<PAGE>
THE SUMMIT BANCORPORATION
1995 DIRECTORS STOCK OPTION PLAN
1. PURPOSE
The purpose of the Summit Bancorporation Directors Stock Option Plan (the
"Plan") is to promote the interests of The Summit Bancorporation (the
"Company") and its stockholders by enhancing the ability of the Company and its
subsidiary, Summit Bank, to attract and retain the services of knowledgeable
nonemployee directors and by encouraging such directors to acquire an increased
proprietary interest in the Company.
2. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Article 7, the total number of shares
of common stock of the Company (the "Shares") for which options may be granted
under the Plan shall be 165,000. The Shares shall be currently authorized but
unissued or currently held or subsequently acquired by the Company as treasury
shares, including shares purchased in the open market or in private
transactions. If an option granted under the Plan expires or terminates for
any reason without having been exercised in full, the Shares subject to but
not delivered under such option may become available for the grant of other
options under the Plan. No shares delivered to the Company in full or partial
payment of an option purchase price payable pursuant to Section 6.6 shall
become available for the grant of other options under the Plan.
22
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Committee of the
Company's Board of Directors (the "Committee"). Subject to the terms of the
Plan, the Committee shall have the power to construe the provisions of the
Plan, to determine all questions arising thereunder, and to adopt and amend
such rules and regulations for administering the Plan as the Committee deems
desirable.
<PAGE>
4. PARTICIPATION IN THE PLAN
Each member of the Company's Board of Directors and the Board of
Directors of Summit Bank (a "Director") who is not otherwise an employee of
the Company or any subsidiary of the Company (an "Eligible Director") shall be
eligible to participate in the Plan.
5. NONSTATUTORY STOCK OPTIONS
All options granted under the Plan shall be nonstatutory options which are
not intended to qualify under Section 422 of the Internal Revenue Code of 1986,
as amended.
6. OPTION TERMS
Each option granted to an Eligible Director under the Plan and the
issuance of Shares thereunder shall be subject to the following terms:
6.1 OPTION AGREEMENTS
Each option granted under the Plan shall be evidenced by an option
agreement (an "Agreement") duly executed on behalf of the Company and by the
Eligible Director to whom such option is granted and dated as of the applicable
date of grant. Each Agreement shall comply with and be subject to the terms
23
and conditions of the Plan. Any Agreement may contain such other provisions
not inconsistent with the Plan as may be determined by the Committee.
6.2 OPTION GRANT
An option to purchase 1,000 Shares shall be automatically granted each
year to each Eligible Director on the date of the first regularly scheduled
meeting of the Board of Directors of the Company following the annual meeting
of shareholders. Any Eligible Director of the Company who is also an Eligible
Director of Summit Bank shall not be granted an additional option because of
his or her Summit Bank directorship.
<PAGE>
6.3 OPTION EXERCISE PRICE
The option exercise price per share for an option granted under the Plan
shall be the Fair Market Value of the underlying Shares on the date the option
is granted. "Fair Market Value" shall mean the average of the high and low
sales prices per share of the Company's common stock as reported on the NASDAQ
National Market System (or such other exchange on which such stock is then
primarily listed) on the relevant date or, if no sales were made on such date,
on the next preceding date on which sales of the Company's common stock were
made.
6.4 VESTING
One hundred percent (100%) of each option shall vest and become
nonforfeitable and exercisable when, and only if, the optionee continues to
24
serve as a Director for one year following the date on which the option was
granted.
6.5 EXERCISE
Any vested option shall be exercisable in whole or in part (but not for
fewer than 100 Shares at a time) at any time, or from time to time, during the
option period by the giving of written notice, signed by the person exercising
the option, to the Company stating the number of Shares with respect to which
the option is being exercised, accompanied by payment in full of the option
exercise price for the number of Shares to be purchased. The earliest date
that both such notice and payment are received by the Office of the Secretary
of the Company shall be the date of exercise of the stock option as to such
number of Shares. No option may at any time be exercised with respect to a
fractional share.
6.6 PAYMENT
Payment of the option exercise price may be made by bank-certified,
<PAGE>
cashier's, or personal check. Payment also may be in whole or part by transfer
to the Company of shares of the Company's common stock having a Fair Market
Value equal to the option exercise price at the time of such exercise. If, in
such case, the Fair Market Value of the number of whole shares delivered to the
Company is less than the total exercise price of the options, the shortfall
shall be paid by bank-certified, cashier's or personal check.
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6.7 TERM OF OPTIONS
Each option shall expire ten years from its date of grant, but shall be
subject to earlier termination if:
(a) the optionee shall cease to serve as a Director for reason other
than retirement or disability (each of which is defined below), or
death, in which event the then outstanding option shall not vest any
further and may be exercised as to previously vested options only
within three months after such termination or on the stated grant
expiration date, whichever is earlier, unless such termination of
service shall result from removal for cause, in which case the
options shall forthwith terminate;
(b) the optionee shall cease to serve as a Director because of retirement
or disability, in which event then-outstanding options of such
optionee shall thereupon vest and become exercisable, and each such
option shall expire one year after the date of such termination or
on the stated grant expiration date, whichever is earlier. The term
"by reason of retirement" shall mean mandatory retirement pursuant
to any statute, regulation, by-law or Board of Directors' policy.
"Disability" shall mean the inability to perform the duties of a
Director by reason of any medically determinable physical or mental
impairment;
<PAGE>
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(c) the optionee shall cease to serve as a Director because of death, in
which event, the then-outstanding options of such optionee shall
thereupon vest and become exercisable, and each such option shall
expire one year after the date of death of such optionee or on the
stated grant expiration date, whichever is earlier. Exercise of a
deceased optionee's options shall be by his or her estate or by a
person or persons whom the optionee had designated in a writing
filed with the Company, or, if no designation had been made, by the
person or persons to whom the optionee's rights have passed by will
or the laws of descent and distribution.
6.8 TRANSFERABILITY
The right of any optionee to exercise an option granted under the Plan
shall, during the lifetime of such optionee, be exercisable only by such
optionee or, if then permitted under Section 16 of the Securities Exchange Act
of 1934, as amended, or regulations thereunder, pursuant to a qualified
domestic relations order as defined in the Internal Revenue Code and
regulations thereunder (a "QDRO") and shall not be assignable or transferable
by such optionee other than by will or the laws of descent and distribution or,
if then permitted by Section 16, to a QDRO.
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6.9 LIMITATION OF RIGHTS
6.9.1 LIMITATION AS TO SHARES. Neither an optionee nor an optionee's
successor or successors in interest shall have any right as a stockholder of
the Company with respect to any Shares subject to an option granted to such
person until the date of exercise.
6.9.2 LIMITATION AS TO DIRECTORSHIP. Neither the Plan, nor the granting
of an option, nor any other action taken pursuant to the Plan shall constitute
<PAGE>
or be evidence of any agreement or understanding, express or implied, that an
Eligible Director has a right to continue as a Director for any period of time
or at any particular rate or compensation.
6.10 CHANGE OF CONTROL
In the event of a Change of Control, all outstanding options shall vest
and become immediately exercisable.
A Change of Control shall be deemed to occur on (a) the date that any one
person (as defined herein), or more than one person acting as a group, acquired
ownership of stock of the Company that, together with stock held by such person
or group, possesses more than 50 percent of the total fair market value or
total voting power of the stock of the Company, provided that such person or
group was not considered to own more than 50 percent of the total fair market
value or total voting power of the Company's stock prior to such acquisition,
or (b) the date that any one person or more than one person acting as a group,
acquired or has acquired during the 12 month period ending on the date of the
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most recent acquisition by such person or persons, ownership of stock of the
Company possessing 20 percent or more of the total voting power of the
Company's stock, provided that such person or group was not considered to have
achieved a Change of Control pursuant to items (a) or (b) of this section prior
to such acquisition, or (c) the date that a majority of the members of the
Company's Board of Directors is replaced during any 12 month period by
Directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of appointment or election. No sale to
underwriters or private placement of its capital stock by the Company, nor any
acquisition by the Company or any of its subsidiaries, through merger, purchase
of assets or otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of Control.
<PAGE>
For purposes of this Section, the following definitions shall be
applicable:
(i) The term "person" shall mean any individual, corporation or
other entity.
(ii) Any person shall be deemed to be the beneficial owner of any
shares of capital stock of the Company
(a) which that person owns directly, whether or not of record,
or
(b) which are attributed to that person pursuant to the rules
of section 318(a) of the Internal Revenue Code of 1986, or
(c) which that person has the right to acquire pursuant to any
agreement or understanding or upon exercise of conversion
right, warrants or options, or otherwise, or
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(d) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (c) above), by an "affiliate" or "associate" (as
defined in the rules of the Securities and Exchange
Commission) of that person, or
(e) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (c) above), by any other person with which that
person or his "affiliate" or "associate" has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of capital stock of the
Company.
(iii) The outstanding shares of capital stock of the Company shall
include shares deemed owned through application of clauses (ii)(b), (c), (d)
and (e) above, but shall not include any other shares which may be issuable
pursuant to any agreement or upon exercise of conversion rights, warrants or
options, or otherwise, but which are not actually outstanding.
6.11 REGULATORY APPROVAL AND COMPLIANCE
The Company shall not be required to issue any certificate or certificates
for Shares upon the exercise of an option granted under the Plan or to record
<PAGE>
as a holder of record of Shares the name of the individual exercising an option
under the Plan, without obtaining to the complete satisfaction of the Committee
the approval of all regulatory bodies deemed necessary by the Committee and
without complying, to the Committee's complete satisfaction, with all rules
and regulations under federal, state, or local law deemed applicable by the
Committee.
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7. CAPITAL ADJUSTMENTS
In the event of stock dividends, stock splits, recapitaliza-tions,
mergers, consolidations, combinations, exchanges of shares, spin-offs,
liquidations, reclassifications or other similar changes in the capitalization
of the Company, the number and class of Shares available for grant under this
Plan shall be adjusted proportionately and the number and class of Shares
covered by outstanding options and the option price shall be similarly
adjusted.
8. EXPENSES
All costs and expenses of the adoption and administration of the Plan
shall be borne by the Company and none of such expenses shall be charged to
any optionee.
9. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective immediately following approval by the
Company's shareholders; provided, however, that grants may be made prior to the
effective date if such grants are made subject to shareholder approval of the
Plan. The Plan shall continue in effect until it is terminated by action of
the Board or the Company's shareholders, but such termination shall not affect
the terms of any then outstanding options.
<PAGE>
10. CHOICE OF LAW
The validity, interpretation and administration of the Plan and of any
rules, regulations, determinations or decisions made thereunder, and the rights
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of any and all persons having or claiming to have any interest therein or
thereunder, shall be determined in accordance with the laws of the State of
New Jersey.
11. TERMINATION AND AMENDMENT OF THE PLAN
The Company's Board of Directors may amend, terminate or suspend the Plan
at any time, in its sole and absolute discretion; provided, however, that if
required to qualify the Plan under Rule 16b-3 promulgated under Section 16 of
the Securities Exchange Act of 1934, as amended, no amendment shall be made
more than once every six months that would change the amount, price or timing
of options granted under the Plan, other than to comport with changes in the
Internal Revenue Code of 1986, as amended, or the rules and regulations
promulgated thereunder, PROVIDED, FURTHER, that if required to qualify the Plan
under Rule 16b-3, no amendment that would do any of the following shall be made
without the approval of the Company's shareholders:
(a) materially increase the number of Shares that may be issued under the
Plan;
(b) materially modify the requirements as to eligibility for
participation in the Plan; or
(c) otherwise materially increase the benefits accruing to participants
under the Plan.
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