17:9A-27.50. Stock option plan

a. Subject to the limitations prescribed by this act, a bank may grant options to purchase shares of its capital stock to its officers and employees, and to the officers and employees of any subsidiary, without first offering the same to its stockholders, for a consideration in cash of not less than the higher of par value or 85% of the fair market value of the shares at the time the options are granted, pursuant to the terms of a stock option plan which has been previously adopted by its board of directors and approved by the holders of two-thirds of the capital stock of the bank entitled to vote. A stock option plan adopted and approved as provided herein may contain any provisions which the bank may choose to make and which are not prohibited by law. The number of shares which may be issued or purchased pursuant to any one stock option plan shall not exceed 5% of the amount of outstanding shares of the capital stock of the bank at the time of the adoption of the plan, but there may be more than one stock option plan in effect at the same time, provided that the total number of shares of stock subject to all existing stock option plans may not exceed 10% of the amount of the outstanding shares of the capital stock of the bank. In the absence of actual fraud in the transactions, and within the limits of the particular stock option plan under which a stock option is issued, the judgment of the board of directors as to the consideration for the issuance of such options and the sufficiency thereof, and as to the recipients of the options, shall be conclusive.

b. In addition to, or as an alternative to, adopting a stock option plan pursuant to paragraph a. of this section, a bank may adopt any form of stock option plan which is an Incentive Stock Option as defined in section 422A of the Internal Revenue Code or an Employee Stock Purchase Plan as defined in section 423 of the Internal Revenue Code, provided that the additional or alternative plan shall be adopted by the board of directors and approved by the holders of two-thirds of the capital stock of the bank entitled to vote.

L. 1964, c. 202, s. 1. Amended by L. 1985, c. 528, s. 15, eff. Jan. 21, 1986.