EXHIBIT 4
BEVERLY NATIONAL CORPORATION
1998 Directors' Plan
1. Purpose.
1.1 The purpose of the Beverly National Corporation
1998 Directors' Plan (hereinafter referred to as the "Plan") is
to provide incentives to present and future directors of Beverly
National Corporation, a Massachusetts corporation (this
"Corporation") and any of its present and future subsidiaries at
least fifty percent (50%) owned by this Corporation
("Subsidiaries") (such directors being hereinafter referred to as
"Optionees" and each of them individually as an "Optionee"), in
order that they may provide exceptional services to this
Corporation and its Subsidiaries, and to offer inducements to
Optionees to accept and continue service on its or their boards
of directors, as applicable, by offering Optionees options to
purchase shares of this Corporation's common stock.
2. Administration of Plan.
2.1 The Plan shall be administered by the Board of
Directors of this Corporation (the "Board of Directors") which
shall: (1) determine which Optionees shall be granted options to
purchase shares of this Corporation's Common Stock ($2.50 par
value) ("Stock") pursuant to the Plan (which options shall
hereinafter be referred to as "Options," or in the singular as an
"Option"); (2) determine the time or times when Options shall be
granted and the number of shares of Stock to be subject to each
Option; (3) determine the option price at which the shares of
Stock subject to each Option may be purchased pursuant to the
Plan and the forms of the instruments evidencing any Options
granted under the Plan or any other instrument to be used in
connection with the Plan; (4) adopt, amend and rescind, in its
discretion, rules and regulations for the administration of the
Plan; (5) interpret the Plan and decide all questions and settle
all controversies and disputes which may arise in connection with
the Plan, which decisions and interpretations shall be binding
upon all persons; and (6) exercise such other powers as may be
necessary or desirable to implement the provisions of this Plan.
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2.2 The grant of an Option to an Optionee shall not be
affected or invalidated by reason of the fact that such director
voted to approve the grant of such Option.
2.3 No member of the Board of Directors shall be
liable for any action taken or determination made in good faith
and in a manner reasonably believed to be in the best interests
of this Corporation with respect to the Plan or any Option
granted pursuant thereto. The Board of Directors may indemnify
any person against expenses reasonably incurred or the amount of
any damages, fine, or settlement assessed against or agreed to by
such person, in connection with any action, suit or proceeding in
which such person may be involved in connection with any Option
or this Plan to the same extent that the Board of Directors may
indemnify such person under the By-laws of this Corporation.
3. Authority to Grant Options.
3.1 Subject to the terms and conditions of this Plan,
the Board of Directors may from time to time grant to such
Optionees as it may determine Options upon such terms and
conditions as it may deem appropriate, subject to applicable
provisions of this Plan. The Board of Directors may rely upon
the advice of a Compensation Committee or such other person or
persons as they determine appropriate in making determinations to
award Options hereunder.
3.2 The Board of Directors may authorize the grant of
Options to Optionees by action taken with or without a meeting.
The effective date of the grant of an Option pursuant hereto
shall be the date specified by the Board of Directors in the
Stock Option Agreement, as hereinafter defined.
3.3 The number of shares of Stock subject to an Option
shall in each case be determined by the Board of Directors,
subject to the applicable provisions of this Plan. More than one
Option may be granted to the same Optionee.
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3.4 Nothing contained in this Plan or in any
resolution adopted by the Board of Directors or the shareholders
of this Corporation shall constitute the grant of an Option
hereunder, and no Optionee shall be entitled to the grant of an
Option unless action granting an Option to such Optionee shall
have been taken by the Board of Directors and unless the
recipient of an Option shall have executed an agreement in form
and substance satisfactory to the Board of Directors containing
terms, restrictions and conditions imposed upon the exercise of
the Option and the transfer of any Stock pursuant thereto ("Stock
Option Agreement").
4. Stock Subject to the Plan
4.1 Stock to be issued upon the exercise of an Option
shall be made available, in the discretion of the Board of
Directors, from authorized but unissued shares of Stock or from
shares of Stock held in the treasury of this Corporation, however
acquired.
4.2 The aggregate number of shares of Stock for which
Options may be granted under the Plan shall be 30,000. If an
Option shall expire, terminate, or be canceled or surrendered in
whole or in part prior to the exercise thereof, the number of
shares of Stock subject to the unexercised portion of such Option
shall be subject to other Options granted theretofore or
thereafter pursuant to the Plan.
4.3 Appropriate adjustments in the number of shares of
Stock subject to Options previously issued hereunder and in the
number of shares of Stock for which Options have not yet been
granted under this Plan shall be made by the Board of Directors
if at any time after the effective date of this Plan this
Corporation shall increase or decrease the number of outstanding
shares of Stock, whether by stock split, combination, stock
dividend or reclassification, or merger, consolidation,
recapitalization, or reorganization.
4.4 No provision of this Plan, nor any Option granted
pursuant hereto or Stock Option Agreement entered into in
connection therewith shall confer upon any Optionee or any other
person any preemptive right to acquire any stock of this
Corporation.
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5. Eligibility.
5.1 The Board of Directors may grant Options pursuant
hereto to such Optionees as it may designate from time to time
pursuant to Section 3.1 hereof.
5.2 If an Optionee or former Optionee eligible to
exercise an Option granted pursuant to this Plan dies prior to
such exercise, such Option may be exercised to the extent
permitted herein by his estate or a person who acquires the right
to exercise such Option by bequest or inheritance.
5.3 No Option granted pursuant to this Plan may be
transferred by the holder thereof other than by will or the laws
of descent and distribution of the state in which such holder is
domiciled at the time of his death.
6. Terms of Options.
6.1 The price at which shares of Stock may be
purchased pursuant to an Option shall be that price established
by the Board of Directors on the date of the grant of such Option
(as determined pursuant to Section 3.2 hereof).
6.2 Each Option granted under this Plan shall expire,
and may not be exercised to any extent, upon the earliest to
occur of the following:
(a) Each Option shall expire ten years after the
date of grant of such Option (as determined pursuant to Section
3.2 hereof), or on such date prior thereto as may be fixed by the
Board of Directors.
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(b) Each Option shall expire not later than three
months after termination of the Optionee's service with this
Corporation or any of its Subsidiaries (with or without cause,
voluntary or involuntary) for reasons other than death,
retirement or total and permanent disability, during which three-
month period the Option may be exercised only to the extent that
it was exercisable upon termination. If the Optionee's service
with this Corporation or any of its Subsidiaries terminates for
reasons of death, retirement or total and permanent disability,
then the Option shall expire 12 months after such termination of
service, and during that 12-month period the Option may be
exercised only to the extent it was exercisable upon termination.
If an Optionee whose service terminates for reasons other than
death, retirement or disability dies during the three-month
period described above, such Optionee's Options shall expire one
year from the date of termination of service, during which time
they may be exercised to the extent exercisable on the date of
termination.
7. Exercise of Options.
7.1 Each Option granted hereunder shall be exercisable
in such installment or installments as may be determined by the
Board of Directors. The right to purchase shares shall be
cumulative so that when the right to purchase any shares has
accrued such shares or any part thereof may be purchased at any
time thereafter until the expiration or termination of the
Option.
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7.2 A person entitled to exercise an Option may,
subject to the terms and conditions of the Stock Option Agreement
executed in connection therewith, exercise such Option from time
to time by delivery to this Corporation at its principal office
of written notice of his or her intention to exercise such Option
setting forth the number of shares with respect to which the
Option is to be exercised and accompanied by (1) payment in full
of the purchase price of the shares to be purchased, (2) payment
in full of all local, state or federal taxes due on account of
the exercise of such Option, and (3) such other documents and
materials as may be required by this Corporation under the terms
of this Plan, the Stock Option Agreement, or otherwise. As
promptly as practicable thereafter, this Corporation shall
deliver to the purchaser certificates for the number of shares
purchased.
7.3 The date of actual receipt by this Corporation of
notice of intention to exercise an Option shall be deemed the
date of exercise of the Option with respect to the shares then
purchased. Delivery of shares purchased shall be deemed
effective when a stock transfer agent shall have deposited
certificates therefor with the United States mail for delivery to
the purchaser at the address specified in the notice of exercise
provided to this Corporation.
7.4 During the life of a holder of an Option issued
pursuant to this Plan, such Option may be exercised only by the
holder, or, if legally incapacitated, his personal
representative.
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7.5 No person, estate or other entity shall have any
of the rights of a shareholder of this Corporation with respect
to shares subject to an Option until a certificate or
certificates for such shares shall have been delivered by this
Corporation to such person or entity. Upon delivery of such a
certificate to the purchaser thereof for the number of shares of
Stock purchased, the owner thereof shall have all the rights of a
shareholder of such shares of Stock, including the right to vote
the same and receive dividends thereon, subject, however, to the
terms, conditions and restrictions contained in this Plan and in
the Stock Option Agreement executed in connection with the Option
exercised with respect to such shares.
8. Miscellaneous.
8.1 The grant of an Option pursuant hereto to an
employee of this Corporation or any Subsidiary shall not confer
upon such Optionee a right to continued employment, nor shall it
limit the right of this Corporation or any Subsidiary to
terminate the employment of any such Optionee.
8.2 The Board of Directors may modify, amend or
terminate this Plan or any provision thereof at any time and from
time to time. No amendment to this Plan shall alter or impair
any Option previously granted pursuant hereto without the consent
of the holder thereof.
8.3 The effective date of this Plan shall be the date
of adoption by the Board of Directors. No Option may be granted
pursuant hereto subsequent to the date which is ten years after
the date on which the Plan shall be adopted by the Board of
Directors.
8.4 This Plan, and all rights and obligations
hereunder, including matters of construction, validity and
performance, shall be governed by the laws of the Commonwealth of
Massachusetts.
8.5 Notice to this Corporation pursuant to Sections
7.2 or 8.5 hereof or for any other purpose may be given by
delivery in hand or first class mail, postage prepaid, and
addressed as follows:
Beverly National Corporation
240 Cabot Street
Beverly, Massachusetts 01915
Attention: President
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Notice to an Optionee to whom an Option shall be
granted hereunder may be given by delivery in hand or first class
mail, postage prepaid, to the address listed by such Optionee in
the Stock Option Agreement executed by such Optionee.
