<PAGE>
As filed with the Securities and Exchange Commission on June 13, 1997
Registration No.
---------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
Form S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-------------------
BSM BANCORP
(Exact name of issuer as specified in its charter)
California 77-0442667
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
2739 Santa Maria Way, Santa Maria, California 93455
(Address of principal executive offices)
BSM BANCORP 1996 STOCK OPTION PLAN
(Full title of the plan)
William A. Hares
President and Chief Executive Officer
BSM Bancorp
2739 Santa Maria Way
Santa Maria, California 93455
(Name and address of agent for service)
(805) 937-8551
(Telephone number, including area code, of agent for service)
Copy to:
Loren P. Hansen, Esquire
Knecht & Hansen
1301 Dove Street, Suite 900
Newport Beach, California 92660
-1-
<PAGE>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF OFFERING AGGREGATE AMOUNT OF
SECURITIES TO AMOUNT TO PRICE PER OFFERING REGISTRATION
BE REGISTERED BE REGISTERED(1) SHARE(2) PRICE FEE
- --------------------------------------------------------------------------------
Common Stock,
No Par Value 892,542 $17.00 $15,173,214 $4,597.94
- --------------------------------------------------------------------------------
EXPLANATORY NOTE
In accordance with the Note to Part I of the Form S-8, the information
specified by Part I has been omitted from this Registration Statement.
- ------------------------
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, such indeterminate number of shares as may
become subject to options under the BSM Bancorp 1996 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(g).
-2-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The Company hereby
incorporates by reference into this Registration Statement the following
documents:
(a) The Bank of Santa Maria's Annual Report on Form F-2 for the fiscal
year ended December 31, 1996 filed with the Federal Deposit Insurance
Corporation.
(b) All other reports filed with the Securities and Exchange
Commission ("Commission") pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended ("1934 Act"), since December 31, 1996.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form S-4 that was filed with the Commission on
November 27, 1996, as amended.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the filing of a post-
effective amendment which indicates that all securities have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Inapplicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Inapplicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 3.15 of the Company's Bylaws provides as follows:
(a) The corporation shall, to the maximum extent and in the manner
permitted by the California Corporations Code (the "Code"), indemnify each of
its directors against expenses (as defined in Section 317(a) of the Code),
judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding (as defined in Section 317(a) of the
Code), arising by reason of the fact that such person is or was an agent of the
corporation. For purposes of this Section 3.15, a "director" of the corporation
includes any person (i) who is or was a director of the corporation, (ii) who is
or was serving at the request of the corporation as a director of another
corporation, partnership, joint venture, trust or other enterprise, or (iii) who
was a director of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
-3-
<PAGE>
(b) The corporation shall have the power, to the extent and in the
manner permitted by the Code, to indemnify each of its officers, employees and
agents against expenses (as defined in Section 317(a) of the Code), judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding (as defined in Section 317(a) of the Code),
arising by reason of the fact that such person is or was an officer, employee or
agent of the corporation. For purposes of this Section 3.15, an "officer",
"employee" or "agent" of the corporation includes any person (i) who is or was
an officer, employee, or agent of the corporation, (ii) who is or was serving at
the request of the corporation as an officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or (iii) who
was an officer, employee or agent of the corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation.
(c) Expenses incurred in defending any civil or criminal action or
proceeding for which indemnification is required pursuant to Section 3.15 shall
be paid by the corporation in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of the indemnified
party to repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified as authorized in this
Section 3.15. Expenses incurred in defending any civil or criminal action or
proceeding for which indemnification is permitted pursuant to Section 3.15 may
be paid by the corporation in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of the indemnified
party to repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified as authorized in this
Section 3.15.
(d) The indemnification provided by this Section 3.15 shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office, to the extent that such
additional rights to indemnification are authorized in the Articles of
Incorporation.
(e) The corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was an agent of the corporation
against any liability asserted against or incurred by such person in such
capacity or arising out of such person's status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Section 3.15.
(f) No indemnification or advance shall be made under this Section
3.15, except where such indemnification or advance is mandated by law or the
order, judgment or decree of any court of competent jurisdiction, in any
circumstance where it appears:
(1) That it would be inconsistent with a provision of the
Articles of Incorporation, these bylaws, a resolution of the shareholders or an
agreement in effect at the time of the accrual of the alleged cause of the
action asserted in the proceeding in which the expenses were incurred or other
amounts were paid, which prohibits or otherwise limits indemnification; or
-4-
<PAGE>
(2) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
Section 204 of the California Corporations Code allows a corporation
to adopt a partial exemption from liability of its directors. New subsections
(10) and (11) of Section 204(a) of the California Corporations Code permit the
Articles of Incorporation to include the following provisions:
"(10) Provisions eliminating or limiting the personal liability
of a director for monetary damages in an action brought by or in the
right of the corporation for breach of director's duties to the
corporation and its shareholders, as set forth in Section 309,
provided, however, that (A) such a provision may not eliminate or
limit the liability of directors (i) for acts or omissions that
involve intentional misconduct or a knowing and culpable violation of
law, (ii) for acts of omissions that a director believes to be
contrary to the best interests of the corporation or its shareholders
or that involve the absence of good faith on the part of the director,
(iii) for any transaction from which a director derived an improper
personal benefit, (iv) for acts or omissions that show a reckless
disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or
should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or
its shareholders, (v) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the
director's duty to the corporation or its shareholders, (vi) under
Section 310 (which relates to transactions between corporations and
directors of corporations have interrelated directors) or (vii) under
Section 316 (which relates to liability for illegal distributions or
dividends) (B) no such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the
date when the provision becomes effective, and (C) no such provision
shall eliminate or limit the liability of an officer for any act or
omission as an officer, notwithstanding that the officer is also a
director or that his or her actions, if negligent or improper, have
been ratified by the directors.
"(11) A provision authorizing, whether by bylaw, agreement, or
otherwise, the indemnification of agents (as defined in Section 317)
in excess of that expressly permitted by Section 317 for those agents
of the corporation for breach of duty to the corporation and its
stockholders, provided, however, that the provision may not provide
for indemnification of any agent for any acts or omissions or
transactions from which a director may not be relieved of liability as
set forth in the exception to paragraph (10) or as to circumstances in
which indemnity is expressly prohibited by Section 317.
Notwithstanding this subdivision, in the case of a close
corporation any of the provisions referred to above may be validly
included in a shareholders' agreement. Notwithstanding this
subdivision, bylaws may require for all or any actions by the board
the affirmative vote of a majority of the authorized number of
directors. Nothing contained in this subdivision shall affect the
-5-
<PAGE>
enforceability, as between the parties thereto, of any lawful
agreement not otherwise contrary to public policy."
Section 204.5(a) was added to the California Corporations Code and
provides that if the articles of incorporation include a provision reading
substantially as follows: "The liability of the directors of the corporation
for monetary damages shall be eliminated to the fullest extent permissible
under "California law", then the corporation shall be considered to have adopted
a provision as authorized by paragraph (10) of subdivision (a) of Section 204
and more specific wording shall not be required.
The Articles of the Company contains the following Article V:
"ARTICLE V - DIRECTOR LIABILITY
The liability of the directors of the Corporation
for monetary damages shall be eliminated to the
fullest extent permissible under California law."
In addition, the Articles of the Company contains the following
Article VI:
"ARTICLE VI - INDEMNIFICATION
The corporation is authorized to provide
indemnification of agents (as defined in Section
317 of the Corporation Code) for breach of duty to
the corporation and its stockholders through
bylaw provisions or through agreements with the
agents, or both, in excess of the indemnification
otherwise permitted by Section 317 of the
Corporations Code, subject to the limits on such
excess indemnification set forth in Section 204 of
the Corporations Code."
The Company has adopted provisions in its bylaws and indemnification agreements
pursuant to the above provisions.
Section 317 of the California General Corporation Law is set forth below:
"SECTION 317. INDEMNIFICATION OF CORPORATE "AGENT".
(a) For the purposes of this section, "agent" means any person who is
or was a director, officer, employee or other agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative; and
"expenses" includes without
-6-
<PAGE>
limitation attorneys' fees and any expenses of establishing a right to
indemnification under subdivision (d) or paragraph (3) of subdivision (e).
(b) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the corporation to procure a judgment in its favor)
by reason of the fact that such person is or was an agent of the corporation,
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such proceeding if such person acted in
good faith and in a manner such person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of such person was unlawful. The
termination of any proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which the
person reasonably believed to be in the interests of the corporation or that the
person had reasonable cause to believe that the person's conduct was unlawful.
(c) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that such person is or was an agent of the
corporation, against expenses actually and reasonably incurred by such person
in connection with the defense or settlement of such action if such person acted
in good faith, in a manner such person believed to be in the best interests of
the corporation and its shareholders.
No indemnification shall be made under this subdivision for any of the
following:
(1) In respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation in the
performance of such person's duty to the corporation and its shareholders,
unless and only to the extent that the court in which such proceeding is or was
pending shall determine upon application that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for the expenses and then only to the extent that the court shall
determine.
(2) Of amounts paid in settling or otherwise disposing of a
pending action without court approval.
(3) Of expenses incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
(d) To the extent that an agent of a corporation has been successful
on the merits in defense of any proceeding referred to in subdivision (b) or (c)
or in defense of any claim, issue or matter therein, the agent shall be
indemnified against expenses actually and reasonably incurred by the agent in
connection therewith.
(e) Except as provided in subdivision (d), any indemnification under
this section shall be made by the corporation only if authorized in the specific
case, upon a determination
-7-
<PAGE>
that indemnification of the agent is proper in the circumstances because the
agent has met the applicable standard of conduct set forth in subdivision (b) or
(c), by any of the following:
(1) A majority vote of a quorum consisting of directors who are
not parties to such proceeding.
(2) If such a quorum of directors is not obtainable, by
independent legal counsel in a written opinion.
(3) Approval of the shareholders (Section 153), with the shares
owned by the person to be indemnified not being entitled to vote thereon.
(4) The court in which such proceeding is or was pending upon
application made by the corporation or the agent or the attorney or other person
rendering services in connection with the defense, whether or not such
application by the agent, attorney or other person is opposed by the
corporation.
(f) Expenses incurred in defending any proceeding may be advanced by
the corporation prior to the final disposition of such proceeding upon receipt
of an undertaking by or on behalf of the agent to repay such amount unless it
shall be determined ultimately that the agent is not entitled to be indemnified
as authorized in this section.
(g) The indemnification provided by this section shall not be deemed
exclusive of any additional rights to indemnification for breach of duty to the
corporation and its shareholders while acting in the capacity of a director or
officer of the corporation to the extent the additional rights to
indemnification are authorized in an article provision adopted pursuant to
paragraph (11) of subdivision (a) of section 204. The indemnification provided
by this section for acts, omissions, or transactions while acting in the
capacity of, or while serving as, a director or officer of the corporation but
not involving breach of duty to the corporation and its shareholders shall not
be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise, to the extent the additional rights to
indemnification are authorized in the articles of the corporation. An article
provision authorizing indemnification "in excess of that otherwise permitted by
Section 317" or "to the fullest extent permissible under California law" or the
substantial equivalent thereof shall be construed to be both a provision for
additional indemnification for breach of duty to the corporation and its
shareholders as referred to in, and with the limitations required by, paragraph
(11) of subdivision (a) of section 204 and a provision for additional
indemnification as referred to in the second sentence of this subdivision. The
rights to indemnity hereunder shall continue as to a person who has ceased to be
a director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of the person. Nothing contained in this
section shall affect any right to indemnification to which persons other than
such directors and officers may be entitled by contract or otherwise.
(h) No indemnification or advance shall be made under this section,
except as provided in subdivision (d) or paragraph (3) of subdivision (e), in
any circumstance where it appears:
-8-
<PAGE>
(1) That it would be inconsistent with a provision of the
articles, bylaws, a resolution of the shareholders or an agreement in effect at
the time of the accrual of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other amounts were paid, which
prohibits or otherwise limits indemnification.
(2) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
(i) A corporation shall have power to purchase and maintain insurance
on behalf of any agent of the corporation against any liability asserted against
or incurred by the agent in such capacity or arising out of the agent's status
as such whether or not the corporation would have the power to indemnify the
agent against such liability under the provisions of this section. The fact that
a corporation owns all or a portion of the shares of the company issuing a
policy of insurance shall not render this subdivision inapplicable if either of
the following conditions are satisfied: (l) if the articles authorize
indemnification in excess of that authorized in this section and he insurance
provided by this subdivision is limited as indemnification is required to be
limited by paragraph (11) of subdivision (a) of Section 204; or (2)(A) the
company issuing the insurance policy is organized, licensed, and operated in a
manner that complies with the insurance laws and regulations applicable to its
jurisdiction of organization, (B) the company issuing the policy provides
procedures for processing claims that do not permit that company to be subject
to the direct control of the corporation that purchased that policy, and (C) the
policy issued provides for some manner of risk sharing between the issuer and
purchaser of the policy, on one hand, and some unaffiliated person or persons,
on the other, such as by providing for more than one unaffiliated owner of the
company issuing the policy or by providing that a portion of the coverage
furnished will be obtained from some unaffiliated insurer or reinsurer.
(j) This section does not apply to any proceeding against any
trustee, investment manager or other fiduciary of an employee benefit plan in
such person's capacity as such, even though such person may also be an agent as
defined in subdivision (a) of the employer corporation. A corporation shall
have power to indemnify such a trustee, investment manager or other fiduciary to
the extent permitted by subdivision (f) of Section 207."
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, 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.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Inapplicable.
-9-
<PAGE>
ITEM 8. EXHIBITS.
Exhibit No. Description Page
- ---------- ----------- ----
4 BSM Bancorp 1996 Stock Option
Plan, as amended, and form Stock
Option Agreement
5 Opinion of Knecht & Hansen regarding
legality of shares to be registered
15 Letter regarding unaudited interim
financial information Inapplicable
23(a) Consent of Knecht & Hansen (filed
as part of Exhibit 5)
23(b) Consent of independent public accountants
25 Power of Attorney (included in signature page)
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"1933 Act"), each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the 1934 Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the 1934 Act)
hat 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.
(b) Insofar as indemnification for liabilities arising under the 1933
Act 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 Commission such indemnification is
against public policy as expressed in the 1933 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 of 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 1933 Act and will be governed by the final
adjudication of such issue.
-10-
<PAGE>
(c) The undersigned registrant undertakes 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.
(d) The undersigned registrant undertakes that, for the purpose of
determining any liability under the 1933 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 such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant undertakes 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.
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 City of Santa Maria, State of California, on
this 13th day of June, 1997.
BSM BANCORP
By /s/ William A. Hares
------------------------------------------
William A. Hares
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William A. Hares and F. Dean Fletcher, jointly
and severally, each in his own capacity, his true and lawful attorneys-in-fact
and agents, each with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact and agents, or
his substitute or substitutes, may lawfully do or cause to be done by virtue.
-11-
<PAGE>
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 dates indicated.
Name Title Date
---- ----- ----
Principal Executive Officer:
/s/ William A. Hares President and Chief Executive June 13, 1997
- ---------------------------- Officer
William A. Hares
Principal Financial and Accounting Officer:
/s/ F. Dean Fletcher Executive Vice President and June 13, 1997
- ---------------------------- Chief Financial Officer
F. Dean Fletcher
/s/ Armand R. Acosta Director June 13, 1997
- ----------------------------
Armand R. Acosta
/s/ Richard E. Adam Director June 13, 1997
- ----------------------------
Richard E. Adam
/s/ Fred L. Crandall, Jr. Director June 13, 1997
- ----------------------------
Fred L. Crandall, Jr.
Chairman of the Board, June 13, 1997
- ---------------------------- Director
A.J. Diani
/s/ Roger A. Ikola Director June 13, 1997
- ----------------------------
Roger A. Ikola
/s/ Toshiharu Nishino Director June 13, 1997
- ----------------------------
Toshiharu Nishino
/s/ Joseph Sesto, Jr. Director June 13, 1997
- ----------------------------
Joseph Sesto, Jr.
-12-
<PAGE>
Name Title Date
---- ----- ----
/s/ William L. Snelling Director June 13, 1997
- ----------------------------
William L. Snelling
/s/ Mitsuo Taniguchi Director June 13, 1997
- ----------------------------
Mitsuo Taniguchi
/s/ Joseph F. Ziemba Director June 13, 1997
- ----------------------------
Joseph F. Ziemba
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Board of Directors who administer the BSM Bancorp 1996 Stock Option Plan has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Maria, State of
California, on the 13th day of June, 1997.
BSM BANCORP
1996 STOCK OPTION PLAN
By /s/ William A. Hares
------------------------------------------
William A. Hares, President and Chief
Executive Officer
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 dates indicated.
Name Title Date
---- ----- ----
Principal Executive Officer:
/s/ William A. Hares President and Chief Executive June 13, 1997
- ---------------------------- Officer
William A. Hares
Principal Financial and Accounting Officer:
/s/ F. Dean Fletcher Executive Vice President and June 13, 1997
- ---------------------------- Chief Financial Officer
F. Dean Fletcher
-13-
<PAGE>
Name Title Date
---- ----- ----
/s/ Armand R. Acosta Director June 13, 1997
- ----------------------------
Armand R. Acosta
/s/ Richard E. Adam Director June 13, 1997
- ----------------------------
Richard E. Adam
/s/ Fred L. Crandall, Jr. Director June 13, 1997
- ----------------------------
Fred L. Crandall, Jr.
Chairman of the Board, June 13, 1997
- ---------------------------- Director
A.J. Diani
/s/ Roger A. Ikola Director June 13, 1997
- ----------------------------
Roger A. Ikola
/s/ Toshiharu Nishino Director June 13, 1997
- ----------------------------
Toshiharu Nishino
/s/ Joseph Sesto, Jr. Director June 13, 1997
- ----------------------------
Joseph Sesto, Jr.
/s/ William L. Snelling Director June 13, 1997
- ----------------------------
William L. Snelling
/s/ Mitsuo Taniguchi Director June 13, 1997
- ----------------------------
Mitsuo Taniguchi
/s/ Joseph F. Ziemba Director June 13, 1997
- ----------------------------
Joseph F. Ziemba
-14-
<PAGE>
EXHIBIT 4
(1) BSM Bancorp 1996 Stock Option Plan, as amended
(2) BSM Bancorp Incentive and Nonqualified Stock Option Agreement
<PAGE>
BSM BANCORP
1996 STOCK OPTION PLAN
Adopted November 12, 1996
Amended, March 11, 1997
Amended May 13, 1997
1. PURPOSE
The purpose of the BSM Bancorp 1996 Stock Option Plan (the "Plan") is to
strengthen BSM Bancorp (the "Corporation") and those corporations which are or
hereafter become subsidiary corporations by providing additional means of
attracting and retaining competent managerial personnel and by providing to
participating directors, officers, and key employees added incentives for high
levels of performance and for unusual efforts to increase the earnings of the
Corporation and any Subsidiary corporations; and to allow consultants, business
associates and others with business relationships with the opportunity to
participate in the ownership of the Corporation and thereby have an interest in
the success and increased value of the Corporation. The Plan seeks to
accomplish these purposes and achieve these results by providing a means whereby
such directors, officers, key employees, consultants, business associates and
others may purchase shares of Common Stock of the Corporation pursuant to Stock
Options granted in accordance with this Plan.
-1-
<PAGE>
Stock Options granted pursuant to this Plan are intended to be Incentive
Stock Options or Non-Qualified Stock Options, as shall be determined and
designated by the Stock Option Committee upon the grant of each Stock Option
hereunder.
2. DEFINITIONS
For the purposes of this Plan, the following terms shall have the following
meanings:
(a) "COMMON STOCK." This term shall mean shares of the Corporation's
no par value common stock, subject to adjustment pursuant to Paragraph 14
(Adjustment Upon Changes in Capitalization) hereunder.
(b) "CORPORATION." This term shall mean BSM Bancorp, a California
corporation.
(c) "ELIGIBLE PARTICIPANT." This term shall mean: (i) all directors
of the Corporation or any Subsidiary; (ii) all full time officers (whether or
not they are also directors) of the Corporation or any Subsidiary; (iii) all
full time key employees (as such persons may be determined by the Stock Option
Committee from time to time) of the Corporation or any Subsidiary, and (iv)
consultants, business associates or others with important business relationships
with the Corporation.
(d) "EMPLOYER." This term shall mean the Corporation, as defined
herein, or any other Subsidiary of the Corporation, as appropriate, depending
upon which company optionee is employed.
(e) "FAIR MARKET VALUE." This term shall mean the fair market value
of the Corporation's Common Stock as determined by any reasonable valuation
method
-2-
<PAGE>
including the average of the bid price per share for the five (5) business days
prior to the date of grant of the option, or in accordance with the Commissioner
of Corporations Regulation Section 260.140.50, which generally provides that in
determining whether the price is fair, predominant weight will be given to the
following: (a) if securities of the same class are publicly traded on an active
market of substantial depth, the recent market price of such securities; (b) if
the securities of the same class have not been so publicly traded, the price at
which securities of reasonable comparable corporations (if any) in the same
industry are being traded, subject to appropriate adjustments for the
dissimilarities between the corporations being compared; or (c) in the absence
of any reliable indicator under subsection (a) or (b), the earnings history,
book value and prospects of the issuer in light of market conditions generally.
(e) "INCENTIVE STOCK OPTION." This term shall mean a Stock Option
which is an "Incentive Stock Option" within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended.
(f) "NON-QUALIFIED STOCK OPTION." This term shall mean a Stock Option
which is not an Incentive Stock Option.
(g) "OPTION SHARES." This term shall mean shares of Common Stock
which are covered by and subject to any outstanding unexercised Stock Option
granted pursuant to this Plan.
-3-
<PAGE>
(h) "OPTIONEE." This term shall mean any Eligible Participant to whom
a stock option has been granted pursuant to this Plan, provided that at least
part of the Stock Option is outstanding and unexercised.
(i) "PLAN." This term shall mean the BSM Bancorp 1996 Stock Option
Plan as embodied herein and as may be amended from time to time in accordance
with the terms hereof and applicable law.
(j) "STOCK OPTION." This term shall mean the right to purchase from
the Corporation a specified number of shares of Common Stock under the Plan at a
price and upon terms and conditions determined by the Stock Option Committee.
(k) "STOCK OPTION COMMITTEE." The Board of Directors of the
Corporation may select and designate a stock option committee consisting of at
least three and not more than five persons, at least two of whom are directors,
having full authority to act in the matters. Regardless of whether a Stock
Option Committee is selected, the Board of Directors may act as the Stock Option
Committee and any action taken by the Board of Directors as such shall be deemed
to be action taken by the Stock Option Committee. All references in the Plan to
the "Stock Option Committee" shall be deemed references to the Board of
Directors acting as a stock option committee and to a duly appointed Stock
Option Committee, if there be one. In the event of any conflict between any
action taken by the Board of Directors acting as a Stock Option Committee and
any action taken by a duly appointed Stock Option Committee, the action taken by
the Board of Directors shall be controlling and the action taken by the duly
appointed Stock Option Committee shall be disregarded.
-4-
<PAGE>
(l) "SUBSIDIARY." This term shall mean any subsidiary corporation of
the Corporation as such term is defined in Section 425(f) of the Internal
Revenue Code of 1986, as amended.
3. ADMINISTRATION
(a) STOCK OPTION COMMITTEE. This Plan shall be administered by the
Stock Option Committee. The Board of Directors of the Corporation shall have
the right, in its sole and absolute discretion, to remove or replace any person
from or on the Stock Option Committee at any time for any reason whatsoever.
(b) ADMINISTRATION OF THE PLAN. Any action of the Stock Option
Committee with respect to the administration of the Plan shall be taken pursuant
to a majority vote, or pursuant to the unanimous written consent, of its
members. Any such action taken by the Stock Option Committee in the
administration of this Plan shall be valid and binding, so long as the same is
in conformity with the terms and conditions of this Plan. Subject to compliance
with each of the terms, conditions and restrictions set forth in this Plan,
including, but not limited to, those set forth in Section 6(a)(ii) hereof, the
Stock Option Committee shall have the exclusive right, in its sole and absolute
discretion, to establish the terms and conditions of any Stock Options granted
under the Plan, including, without limitation, the power to: (i) establish the
number of Stock Options, if any, to be granted hereunder, in the aggregate and
with regard to any individual Eligible Participant; (ii) determine the time or
times when such Stock Options, or any parts thereof, may be exercised; (iii)
determine and designate which Stock Options granted under the Plan shall be
-5-
<PAGE>
Incentive Stock Options and which shall be Non-Qualified Stock Options; (iv)
determine the Eligible Participants, if any, to whom Stock Options are granted;
(v) determine the duration and purposes, if any, of leaves of absence which may
be permitted to holders of unexercised, unexpired Stock Options without such
constituting a termination of employment under the Plan; (vi) prescribe and
amend the terms, provisions and form of any instrument or agreement setting
forth the terms and conditions of every Stock Option granted hereunder; and
(vii) make loans to or guarantee any obligations of any Optionees, except
directors, in connection with the exercise of Stock Options as specified in
Section 8(d) hereof, whenever the Stock Option Committee determines that such
loan or guarantee may reasonably be expected to benefit the corporation, subject
to the provisions of Section 315(b) of the California General Corporations Law
of 1977, as amended and subject to Regulations G, U and T promulgated by the
Board of Governors of the Federal Reserve System pursuant to Section 7 of the
Securities Exchange Act of 1934, if the Option Shares are listed on a stock
exchange or are contained in the list of over-the-counter margin securities
published by the Federal Reserve Board.
(c) DECISIONS AND DETERMINATIONS. Subject to the express provisions
of the Plan, the Stock Option Committee shall have the authority to construe and
interpret the Plan, to define the terms used therein, to prescribe, amend, and
rescind rules and regulations relating to the administration of the Plan, and to
make all other determinations necessary or advisable for administration of the
Plan. Determinations
-6-
<PAGE>
of the Stock Option Committee on matters referred to in this Section 3 shall be
final and conclusive so long as the same are in conformity with the terms of
this Plan.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustments as provided in Section 14 hereof, the maximum number
of shares of Common Stock which may be issued upon exercise of Stock Options
granted under this Plan is limited to 30% of the issued and outstanding shares
of the Corporation up to a maximum of 892,542 shares in the aggregate. If any
Stock Option shall be canceled, surrendered, or expire for any reason without
having been exercised in full, the unpurchased Option Shares represented thereby
shall again be available for grants of Stock Options under this Plan.
5. ELIGIBILITY
Only Eligible Participants shall be eligible to receive grants of Stock
Options under this Plan.
6. GRANTS OF STOCK OPTIONS
(a) GRANT. Subject to the express provisions and limitations of the
Plan, the Stock Option Committee, in its sole and absolute discretion, may grant
Stock Options to Eligible Participants of the Corporation, for a number of
Option Shares, at the price(s) and time(s), on the terms and conditions and to
such Eligible Participants as it deems advisable and specifies in the respective
grants.
Subject to the limitations and restrictions set forth in the Plan, an
Eligible Participant who has been granted a Stock Option may, if otherwise
eligible, be granted additional Stock Options if the Stock Option Committee
shall so determine. The Stock
-7-
<PAGE>
Option Committee shall designate in each grant of a Stock Option whether the
Stock Option is an Incentive Stock Option or a Non-Qualified Stock Option.
(b) DATE OF GRANT AND RIGHTS OF OPTIONEE. The determination of the
Stock Option Committee to grant a Stock Option shall not in any way constitute
or be deemed to constitute an obligation of the Corporation, or a right of the
Eligible Participant who is the proposed subject of the grant, and shall not
constitute or be deemed to constitute the grant of a Stock Option hereunder
unless and until both the Corporation and the Eligible Participant have executed
and delivered the form of stock option agreement then required by the Stock
Option Committee as evidencing the grant of the Stock Option, together with such
other instruments as may be required by the Stock Option Committee pursuant to
this Plan; provided, however, that the Stock Option Committee may fix the date
of grant as any date on or after the date of its final determination to grant
the Stock Option (or if no such date is fixed, then the date of grant shall be
the date on which the determination was finally made by the Stock Option
Committee to grant the Stock Option), and such date shall be set forth in the
stock option agreement. The date of grant as so determined shall be deemed the
date of grant of the Stock Option for purposes of this Plan.
(c) SHAREHOLDER-EMPLOYEES. Notwithstanding anything to the contrary
contained elsewhere herein, a Stock Option shall not be granted hereunder to an
Eligible Participant who owns, directly or indirectly, at the date of the grant
of the Stock Option, more than ten percent (10%) of the total combined voting
power of all classes of capital stock of the Corporation or a Subsidiary
corporation, unless the
-8-
<PAGE>
purchase price of the Option Shares subject to said Stock Option is at least
110% of the Fair Market Value of the Option Shares, determined as of the date
said Stock Option is granted.
(d) MAXIMUM VALUE OF STOCK OPTIONS. Except as provided in paragraph
(e) of this Section 6, the maximum aggregate Fair Market Value of Option Shares
(determined as of the respective Stock Option grant dates) for which an Eligible
Participant may be granted Incentive Stock Options in any calendar year shall
not exceed $100,000, plus any "unused carryover amount." The unused carryover
amount, determined on a yearly basis, shall be equal to one-half (1/2) of the
difference between $100,000 and the aggregate Fair Market Value (determined as
of the respective Stock Option grant dates) of all of the Option Shares subject
to Incentive Stock Options granted to the Optionee during the calendar year
under the Plan. The provisions of Section 422A(c)(4) of the Internal Revenue
Code of 1986, as amended, are incorporated herein by this reference for the
purpose of the determination and application of the unused carryover amount.
The aggregate fair market value (determined at the time the option is
granted) of the stock with respect to which incentive stock options are
exercisable for the first time by such individual under the terms of the Plan
during any calendar year is limited to $100,000, but the value of stock for
which options may be granted to an employee in a given year may exceed $100,000.
(e) SUBSTITUTED STOCK OPTIONS. If all of the outstanding shares of
common stock of another corporation are changed into or exchanged solely for
common stock
-9-
<PAGE>
in a transaction to which Section 425(a) of the internal Revenue Code of 1986,
as amended, applies, then, subject to the approval of the Board of Directors of
the Bank, Stock Options under the Plan may be substituted ("Substituted
Options") in exchange for valid, unexercised and unexpired stock options of such
other corporation. Substituted options shall qualify as Incentive Stock Options
under the Plan, provided that (and to the extent) the stock options exchanged
for the Substituted Options were "Incentive Stock Options" within the meaning of
Section 422A of the Internal Revenue Code of 1986, as amended.
(f) NON-QUALIFIED STOCK OPTIONS. All Stock Options granted by the
Stock Option Committee which: (i) are designated at the time of grant as
Incentive Stock Options but do not so qualify under the provisions of Section
422A of the Code or any regulations or rulings issued by the Internal Revenue
Service for any reason; (ii) are in excess of the fair market value limitations
set forth in Section 6(d); or (iii) are designated at the time of grant as Non-
Qualified Stock Options, shall be deemed Non-Qualified Stock Options under this
Plan. Non-Qualified Stock Options granted or substituted hereunder shall be so
designated in the stock option agreement entered into between the Corporation
and the Optionee.
7. STOCK OPTION EXERCISE PRICE
(a) MINIMUM PRICE. The exercise price of any Option Shares shall be
determined by the Stock Option Committee, in its sole and absolute discretion,
upon the grant of a Stock Option. Except as provided elsewhere herein, said
exercise price shall not be less than one hundred percent (100%) of the Fair
Market Value of the
-10-
<PAGE>
Common Stock represented by the Option Share on the date of grant of the related
Stock Option.
(b) EXCHANGED STOCK OPTIONS. Where the outstanding shares of stock of
another corporation are changed into or exchanged for shares of Common Stock of
the Corporation without monetary consideration to that other corporation, then,
subject to the approval of the Board or Directors of the Corporation, Stock
Options may be granted in exchange for unexercised, unexpired stock options of
the other corporation, and the exercise price of the Option Shares subject to
each Stock Option so granted may be fixed at a price less than one hundred
percent (100%) of the Fair Market Value of the Common Stock at the time such
Stock Option is granted if said exercise price has been computed to be not less
than the exercise price set forth in the stock option of the other corporation,
with appropriate adjustment to reflect the exchange ratio of the shares of stock
of the other corporation into the shares of Common Stock of the Corporation.
(c) SUBSTITUTED OPTIONS. The exercise price of the Option Shares
subject to each Substituted Option may be fixed at a price less than one hundred
percent (100%) of the Fair Market Value of the Common Stock at the time such
Substituted option is granted if said exercise price has been computed to be not
less than the exercise price set forth in the stock option of the other
corporation for which it was exchanged, with appropriate adjustment to reflect
the exchange ratio of the shares of stock of the other corporation into the
shares of Common Stock.
-11-
<PAGE>
8. EXERCISE OF STOCK OPTIONS.
(a) EXERCISE. Except as otherwise provided elsewhere herein, each
Stock Option shall be exercisable in such increments, which need not be equal,
and upon such contingencies as the Stock Option Committee shall determine at the
time of grant of the Stock Option; provided, however, (i) that if an Optionee
shall not in any given period exercise any part of a Stock Option which has
become exercisable during that period, the Optionee's right to exercise such
part of the Stock Option shall continue until expiration of the Stock Option or
any part thereof as may be provided in the related stock option agreement, and
(ii) in the case of options that are not granted to officers, directors or
consultants of the Company, a minimum of 20% of the Stock Option shall be
exercisable in each year over a five year period from the date the option is
granted. No Stock Option or part thereof shall be exercisable except with
respect to whole shares of Common Stock, and fractional share interests shall be
disregarded except that they may be accumulated.
(b) PRIOR OUTSTANDING INCENTIVE STOCK OPTIONS. Incentive Stock
Options granted to an Optionee may be exercisable while such Optionee has
outstanding and unexercised any Incentive Stock Option previously granted (or
substituted) to him or her pursuant to this Plan. The Stock Option Committee
shall determine if such options shall be exercisable if there are any Incentive
Stock Options previously granted (or substituted) to him or her pursuant to this
Plan, and such determination shall be evidenced in the Agreement executed by the
Optionee and Company. An Incentive
-12-
<PAGE>
Stock Option shall be treated as outstanding until it is exercised in full or
expires by reason of lapse of time.
(c) NOTICE AND PAYMENT. Stock Options granted hereunder shall be
exercised by written notice delivered to the Corporation specifying the number
of Option Shares with respect to which the Stock Option is being exercised,
together with concurrent payment in full of the exercise price as hereinafter
provided in Section 8(d) hereof. If the Stock Option is being exercised by any
person or persons other than the Optionee, said notice shall be accompanied by
proof, satisfactory to counsel for the Corporation, of the right to such person
or persons to exercise the Stock Option. The Corporation's receipt of a notice
of exercise without concurrent receipt of the full amount of the exercise price
shall not be deemed an exercise of a Stock Option by an Optionee, and the
Corporation shall have no obligation to an Optionee for any Option Shares unless
and until full payment of the exercise price is received by the Corporation in
accordance with Section 8(d) hereof, and all of the terms and provisions of the
Plan and the related stock option agreement have been complied with.
(d) PAYMENT OF EXERCISE PRICE. The exercise price of any Option
Shares purchased upon the proper exercise of a Stock Option shall be paid in
full at the time of each exercise of a Stock Option in cash and/or, with the
prior written approval of the Stock Option Committee, in Common Stock of the
Corporation which, when added to the cash payment, if any, has an aggregate Fair
Market Value equal to the full amount of the exercise price of the Stock Option,
or part thereof, then being exercised
-13-
<PAGE>
and/or, with the prior written approval of the Stock Option Committee, on a
deferred basis evidenced by a promissory note, containing such terms and subject
to such security as the Stock Option Committee shall determine to be fair and
reasonable from time to time, for the total option price for the number of
shares so purchased. In addition, the Optionee shall have the right upon the
exercise of a stock Option in the manner set forth above to surrender for
cancellation a portion of the Stock Option to the Company for the number of
shares (the "Surrendered Shares") specified in the holder's notice of exercise,
by delivery to the Company with such notice written instructions from such
holder to apply the Appreciated Value (as defined below) of the Surrendered
Shares to payment of the exercise price for shares subject to the Stock Options
that are being acquired upon such exercise. The term "Appreciated Value" for
each share subject to this Stock Option shall mean the excess of the Fair Market
Value thereof over the exercise price then in effect. No director, consultant
or business associate may purchase any Stock Option on a deferred basis
evidenced by a promissory note. Unless payment is on a deferred basis, payment
by an Optionee as provided herein shall be made in full concurrently with the
Optionee's notification to the Corporation of his intention to exercise all or
part of a Stock Option. If all or part of payment is made in shares of Common
Stock as heretofore provided, such payment shall be deemed to have been made
only upon receipt by the Corporation of all required share certificates, and all
stock powers and other required transfer documents necessary to transfer the
shares of Common Stock to the Corporation.
-14-
<PAGE>
(e) REORGANIZATION. Notwithstanding any provision in any stock option
agreement pertaining to the time of exercise of a Stock Option, or part thereof,
upon adoption by the requisite holders of the Corporation's outstanding shares
of Common Stock of any plan of dissolution, liquidation, reorganization, merger,
consolidation or sale of all or substantially all of the assets of the
Corporation to another corporation, or the acquisition of stock representing
more than 50% of the voting power of the Corporation then outstanding, by
another corporation or person, which would, upon consummation, result in
termination of a Stock Option in accordance with Section 15 hereof, the Stock
Option shall become immediately exercisable as to all Option Shares, whether or
not vested, for such period of time as may be determined by the Stock Option
Committee, but in any event not less than 30 days prior to the adoption of the
plan of dissolution, liquidation, reorganization, merger, consolidation, sale,
or acquisition on the condition that the terminating event described in Section
15 hereof is consummated. Any Option Shares not exercised will be terminated.
If such Terminating Event is not consummated, Stock Options granted pursuant to
the Plan shall be exercisable in accordance with their respective terms.
(f) MINIMUM EXERCISE. Not less than ten (10) Option Shares may be
purchased at any one time upon exercise of a Stock Option unless the number of
shares purchased is the total number which remains to be purchased under the
Stock Option.
(g) COMPLIANCE WITH LAW. No shares of Common Stock shall be issued by
the Corporation upon exercise of any Stock Option, and an Optionee shall have no
-15-
<PAGE>
rights or claim to such shares, unless and until: (a) payment in full as
provided in Section 8(d) hereof has been received by the Corporation; (b) in the
opinion of the counsel for the Corporation, all applicable registration
requirements of the Securities Act of 1933, all applicable listing requirements
of securities exchanges or associations on which the Corporation's Common Stock
is then listed or traded, and all other requirements of law and of regulatory
bodies having jurisdiction over such issuance and delivery, have been fully
complied with; and (c) if required by federal or state law or regulation, the
Optionee shall have paid to the Corporation the amount, if any, required to be
withheld on the amount deemed to be compensation to the Optionee as a result of
the exercise of his or her Stock Option, or made other arrangements satisfactory
to the Corporation, in its sole discretion, to satisfy applicable income tax
withholding requirements.
9. NONTRANSFERABILITY OF STOCK OPTIONS.
Each Stock Option shall, by its terms, be nontransferable by the Optionee
other than by will or the laws of descent and distribution, and shall be
exercisable during the Optionee's lifetime only by the Optionee or his or her
guardian or legal representative.
10. CONTINUATION OF EMPLOYMENT
Except for directors, consultants or business advisors with a written
contract for any definite term, this Agreement shall not obligate the
Corporation or a Subsidiary to employ Optionee. Optionee acknowledges that
there is no agreement, express or implied, between Optionee and the Corporation
or other Subsidiary of the Corporation for any specific period of employment,
nor for continuing long-term employment.
-16-
<PAGE>
Optionee and the Employer each have a right to terminate employment, with or
without cause. Optionee also acknowledges that the Employer retains the right
to demote, transfer, change job duties, and change the compensation at any time
with or without cause in its sole discretion.
11. CESSATION OF EMPLOYMENT
(a) Except as provided in Sections 8(e), 12, 13, 14 or 15 hereof, except if
Optionee is granted an option as a consultant, business associate or other
person or entity with important business relationships with the Corporation, if,
for any reason, an Optionee's status as an Eligible Participant is terminated,
the Stock Options granted to such Optionee shall expire on the expiration dates
specified for said Stock Options at the time of their initial grant, or three
(3) months after the Optionee's status as an Eligible Participant is terminated,
whichever is earlier. During such period after Options shall be exercisable
only as to those increments, if any, which had become exercisable as of the date
on which such Optionee's status as an Eligible Participant terminated, and any
Stock Options or increments which had not become exercisable as of such date
shall expire and terminate automatically on such date. If Optionee is granted
an option as a consultant, business associate or other person or entity with
important business relationships with the Corporation, this Stock Option shall
not expire as a result of consultant, business associate or other person or
entity with important business relationships with the Corporation no longer
doing business or otherwise terminating his or its business relationship with
the Corporation.
-17-
<PAGE>
(b) Except if Optionee is granted an option as a consultant, business
advisor, or other person or entity with important business relationships with
the Corporation, and if Optionee's status as an Eligible Participant is
terminated for violation of the Employer's Standards of Conduct, the Stock
Options granted to such Optionee shall automatically expire and terminate in
their entirety immediately upon such termination; provided, however, that the
Stock Option Committee may, in its sole discretion, within thirty (30) days of
such termination, reinstate such Stock Options by giving written notice of such
reinstatement to the Optionee. In the event of such reinstatement, the Optionee
may exercise the Stock Options only to such extent, for such time, and upon such
terms and conditions as in the case of an Optionee whose status as an Eligible
Participant had been terminated for a reason other than violation of the
Employer's Standards of Conduct, disability or death. Reasons for termination
for violation of the Employer's Standards of Conduct, shall include, but not be
limited to, termination for malfeasance or gross misfeasance in the performance
of duties or conviction of illegal activity in connection therewith, and, in any
event, the determination of the Stock Option Committee with respect thereto
shall be final and conclusive. If Optionee is granted an option as a
consultant, business advisor, or other person or entity with important business
relationships with the Corporation, and are not classified as eligible employees
of the Corporation or any Subsidiary, this Stock Option shall not expire as a
result of such Optionee's termination.
-18-
<PAGE>
12. DEATH OF OPTIONEE
Except if Optionee is granted an option as a consultant, business associate
or other person or entity with important business relationships with the
Corporation, if an Optionee loses his status as an Eligible Participant by
reason of death, or if an Optionee dies during the three-month period referred
to in Section 11 hereof, the Stock Options granted to such Optionee shall expire
on the expiration dates specified for said Stock Options at the time of their
initial grant, or one (l) year after the date of such death, whichever is
earlier. If Optionee is granted an option as a consultant, business associate
or other person or entity with important business relationships with the
Corporation, this Stock Option shall not expire as a result of such Optionee's
death. After such death but before such expiration, subject to the terms and
provisions of the Plan and the related stock option agreements, the person or
persons to whom such Optionee's rights under the Stock Options shall have passed
by will or by the applicable laws of descent and distribution, or the executor
or administrator of the Optionee's estate, shall have the right to exercise such
Stock Options to the extent that increments, if any, had become exercisable as
of the date on which the Optionee's status as an Eligible Participant had been
lost.
13. DISABILITY OF OPTIONEE
Except if Optionee is granted an option as a consultant, business associate
or other person or entity with important business relationships with the
Corporation, if an Optionee is disabled while employed by or while serving as a
director of the Corporation or a Subsidiary or during the three-month period
referred to in Section 11
-19-
<PAGE>
hereof, the Stock Options granted to such Optionee shall expire on the
expiration dates specified for said Stock Options at the time of their initial
grant, or one (l) year after the date of such disability, whichever is earlier.
If Optionee is granted an option as a consultant, business associate or other
person or entity with important business relationships with the Corporation,
this Stock Option shall not expire as a result of such Optionee's disability.
After such disability but before such expiration, the Optionee or a guardian or
conservator of the Optionee's estate, as duly appointed by a court of competent
jurisdiction, shall have the right to exercise such Stock Options to the extent
that increments, if any, had become exercisable as of the date on which the
Optionee became disabled or ceased to be employed by the Corporation or a
Subsidiary as a result of the disability. For the purpose of this Section 13,
an Optionee shall be deemed to have become "disabled" if it shall appear to the
Stock Option Committee, upon written certification delivered to the Corporation
by a qualified licensed physician, that the Optionee has become permanently and
totally unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death, or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
14. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of Common Stock of the Corporation are increased,
decreased, or changed into or exchanged for a different number or kind of shares
or securities of the Corporation, through a reorganization, merger,
recapitalization,
-20-
<PAGE>
reclassification, stock split, stock dividend, stock consolidation, or
otherwise, without consideration to the Corporation, an appropriate and
proportionate adjustment shall be made in the number and kind of shares as to
which Stock Options may be granted. A corresponding adjustment changing the
number or kind of Option Shares and the exercise prices per share allocated to
unexercised Stock Options, or portions thereof, which shall have been granted
prior to any such change, shall likewise be made. Any such adjustment, however,
in an outstanding Stock Option shall be made without change in the total price
applicable to the unexercised portion of the Stock Option, but with a
corresponding adjustment in the price for each Option Share subject to the Stock
Option. Any adjustment under this Section shall be made by the Stock Option
Committee, whose determination as to what adjustments shall be made, and the
extent thereof, shall be final and conclusive. No fractional shares of stock
shall be issued or made available under the Plan on account of any such
adjustment, and fractional share interests shall be disregarded and the
fractional share interest shall be rounded down to the nearest whole number.
15. TERMINATING EVENTS
Not less than thirty (30) days prior to consummation of a plan of
dissolution or liquidation of the Corporation, or consummation of a plan of
reorganization, merger or consolidation of the Corporation with one or more
corporations, as a result of which the Corporation is not the surviving
corporation and the outstanding securities of the class then subject to options
hereunder are changed or exchanged for cash or property or securities not of the
Corporation's issue, or upon the sale of all or substantially all
-21-
<PAGE>
the assets of the Corporation to another corporation, or the acquisition of
stock representing more than fifty percent (50%) of the voting power of the
Corporation then outstanding by another corporation or person (the "Terminating
Event"), the Stock Option Committee or the Board of Directors shall notify each
Optionee of the pendency of the Terminating Event. Upon the effective date of
the Terminating Event, the Plan shall automatically terminate and all Stock
Options theretofore granted shall terminate, unless provision is made in
connection with such transaction for the continuance of the Plan and/or
assumption of Stock Options theretofore granted, or substitution for such Stock
Options with new stock options covering stock of a successor employer
corporation, or a parent or subsidiary corporation thereof, solely at the
discretion of such successor corporation, or parent or subsidiary corporation,
with appropriate adjustments as to number and kind of shares and prices, in
which event the Plan and options theretofore granted shall continue in the
manner and under the terms so provided. If the Plan and unexercised options
shall terminate pursuant to the foregoing sentence, all persons shall have the
right to exercise any unexercised portions of options outstanding and not
exercised, shall have the right, at such time prior to the consummation of the
transaction causing such termination as the Corporation shall designate and for
a period of not less than 30 days, to exercise all unexercised portions of their
options, including the portions which would, but for this paragraph entitled
"Terminating Events," not yet be exercisable.
-22-
<PAGE>
16. AMENDMENT AND TERMINATION
The Board of Directors of the Corporation may at any time and from time-to-
time suspend, amend, or terminate the Plan and may, with the consent of
Optionee, make such modifications of the terms and conditions of a Stock Option
as it shall deem advisable; provided that, except as permitted under the
provisions of Section 15 hereof, no amendment or modification may be adopted
without the Corporation having first obtained all necessary regulatory approvals
and approval of the holders of a majority of the Corporation's shares of Common
Stock present, or represented, and entitled to vote at a duly held meeting of
shareholders of the Corporation if the amendment or modification would:
(a) materially increase the benefits accruing to participants under
the Plan;
(b) materially increase the number of securities which may be issued
under the Plan;
(c) materially modify the requirements as to eligibility for
participation in the Plan;
(d) increase or decrease the exercise price of any Stock Options
granted under the Plan;
(e) increase the maximum term of Stock Options provided for herein;
(f) permit Stock Options to be granted to any person who is not an
Eligible Participant; or
-23-
<PAGE>
(g) change any provision of the Plan which would affect the
qualification as an Incentive Stock Option under the Plan.
No Stock Option may be granted during any suspension of the Plan or after
termination of the Plan. Amendment, suspension, or termination of the Plan
shall not (except as otherwise provided in Section 16 hereof), without the
consent of the Optionee, alter or impair any rights or obligations under any
Stock Option theretofore granted.
17. RIGHTS OF ELIGIBLE PARTICIPANTS AND OPTIONEES
Neither any Eligible Participant, any Optionee or any other person shall
have any claim or right to be granted any Stock Option under this Plan, and
neither this Plan nor any action taken hereunder shall be deemed or construed as
giving any Eligible Participant, Optionee or any other person any right to be
retained in the employ of the Corporation or any subsidiary of the Corporation.
Without limiting the generality of the foregoing, there is no vesting of any
right in the classification of any person as an Eligible Participant or
Optionee, such classification being used solely to define and limit those
persons who are eligible for consideration of the grant of Stock Options under
the Plan.
18. PRIVILEGES OF STOCK OWNERSHIP; SECURITIES LAW COMPLIANCE; NOTICE OF SALE
No Optionee shall be entitled to the privileges of stock ownership as to
any Option Shares not actually issued and delivered. No Option Shares may be
purchased upon the exercise of a Stock Option unless and until all then
applicable requirements of all regulatory agencies having jurisdiction and
all applicable requirements of all regulatory agencies having jurisdiction and
all applicable requirements of
-24-
<PAGE>
securities exchanges upon which the stock of the Corporation is listed (if any)
shall have been fully complied with. The Corporation will diligently endeavor
to comply with all applicable securities laws before any options are granted
under the Plan and before any stock is issued pursuant to options. The Optionee
shall, not more than five (5) days after each sale or other disposition of
shares of Common Stock acquired pursuant to the exercise of Stock Options, give
the Corporation notice in writing of such sale or other disposition.
The Corporation will provide to each Optionee its Annual Report as required
by Section 260.140.46 of the regulations of the California Commissioner of
Corporations.
19. EFFECTIVE DATE OF THE PLAN
The Plan shall be deemed adopted as of November 12, 1996, and shall be
effective immediately, subject to approval of the Plan by the holders of at
least a majority of the corporation's outstanding shares of Common Stock and
approval of the Plan by the California Commissioner of Corporations.
20. TERMINATION
Unless previously terminated as aforesaid, the Plan shall terminate ten
(10) years from the earliest date of (i) adoption of the Plan by the Board of
Directors, (ii) approval of the Plan by holders of at least a majority of the
Corporation's outstanding shares of Common Stock, or (iii) approval of the Plan
by the California Commissioner of Corporations. No Stock Options shall be
granted under the Plan thereafter, but such termination shall not affect any
Stock Option theretofore granted.
-25-
<PAGE>
21. OPTION AGREEMENT
Each Stock Option granted under the Plan shall be evidenced by a written
stock option agreement executed by the Corporation and the Optionee, and shall
contain each of the provisions and agreements herein specifically required to be
contained therein, and such other terms and conditions as are deemed desirable
by the Stock Option Committee and are not inconsistent with the Plan.
22. STOCK OPTION PERIOD
Each Stock Option and all rights and obligations thereunder shall expire on
such date as the Stock Option Committee may determine, but not later than ten
(10) years from the date such Stock Option is granted, and shall be subject to
earlier termination as provided elsewhere in the Plan.
23. EXCULPATION AND INDEMNIFICATION OF STOCK OPTION COMMITTEE
In addition to such other rights of indemnification which they may have as
directors of the Corporation or as members of the Stock Option Committee, the
present and former members of the Stock Option Committee, and each of them,
shall be indemnified by the Corporation for and against all costs, judgments,
penalties and reasonable expenses, including reasonable attorney's fees,
actually and necessarily incurred by them in connection with any action, suit or
proceeding, or in connection with any appeal thereof, to which they or any of
them may be a party by reason of any act or omission of any member of the Stock
Option Committee under or in connection with the Plan or any Stock Option
granted thereunder; provided, however, that a member of the Stock Option
Committee shall not be entitled to any
-26-
<PAGE>
indemnification whatsoever pursuant to this Section for or as a result of any
act or omission of such member which was not taken in good faith and which
constituted willful misconduct or gross negligence by such member; provided
further, that any amounts paid by any member of the Stock Option Committee in
settlement of any action, suit or proceeding for which indemnification may be
sought pursuant to this Section shall be first approved in writing by
independent legal counsel selected by the Corporation; and, provided further,
that within thirty (30) days after institution of any action, suit or proceeding
against any member with respect to which such member is entitled to
indemnification hereunder, such member shall, in writing, offer the Corporation
the opportunity, at its own expense, to handle (including settle) and conduct
the defense thereof. The provisions of this Section shall apply to the estate,
executor and administrator of each member of the Stock Option Committee.
24. AGREEMENT AND REPRESENTATIONS OF OPTIONEE
Unless the shares of Common Stock covered by this Plan have been registered
with the Securities and Exchange Commission pursuant to Section 5 of the
Securities Act of 1933, each Optionee shall by and upon accepting a Stock
Option, represent and agree in writing, for himself or herself and his or her
transferees by will or the laws of descent and distribution, that he or she is a
bona fide California resident, that all such Option Shares will be acquired for
investment purposes and not for resale or distribution and that the optioned
stock will not be transferred to a person who is not a California resident.
Upon the exercise of a Stock Option, or a part thereof, the person entitled to
exercise the same shall, unless waived by the Corporation, furnish
-27-
<PAGE>
evidence satisfactory to the Corporation, including written and signed
representations, to the effect that he or she is a California resident, that the
Option Shares are being acquired for investment purposes and not for resale or
distribution, and that the Option Shares being acquired shall not be sold or
otherwise transferred to any individual or entity not a resident of the State of
California. Furthermore, the Corporation, at its sole discretion, to assure
itself that any sale or distribution by the Optionee complies with this Plan and
any applicable federal or state securities laws, may take all reasonable steps,
including placing stop transfer instructions with the corporation's transfer
agent prohibiting transfers in violation of the Plan and affixing the following
legend (and/or such other legend or legends as the Stock Option Committee shall
require) on certificates evidencing the shares:
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."
and
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER
THE ACT OR A DETERMINATION BY BSM Bancorp THAT REGISTRATION
IS NOT REQUIRED."
At any time that an Optionee contemplated the disposition of any of the Option
Shares (whether by sale, exchange, gift or other form of transfer) he or she
shall first notify
-28-
<PAGE>
the Corporation of such proposed disposition and shall thereafter cooperate with
the Corporation in complying with all applicable requirements of law which, in
the opinion of counsel for the Corporation, must be satisfied prior to the
making of such disposition. Before consummating such disposition, BSM Bancorp
shall determine that such disposition will not result in a violation of any
state or federal securities law or regulations. The Corporation shall remove
any legend affixed to certificates for Option Shares pursuant to this Section if
and when all of the restrictions on the transfer of the Option Shares, whether
imposed by this Plan or federal or state law, have terminated. An Optionee who
thereafter sells or disposes of his shares of Common Stock will be required to
notify the Corporation of such sale or disposition within five (5) days after
the sale or disposition.
25. NOTICES
All notices and demands of any kind which the Stock Option Committee, any
Optionee, Eligible Participant, or any other person may be required or desires
to serve under the terms of this Plan shall be in writing and shall be served by
personal service upon the respective person or by leaving a copy of such notice
or demand at the address of such person as may be reflected in the records of
the Corporation, or in the case of the Stock Option Committee, with the
Secretary of the Corporation, or by mailing a copy thereof by certified or
registered mail, postage prepaid, with return receipt requested. In the case of
service by mail, it shall be deemed complete at the expiration of the third day
after the day of mailing, except for notice of the exercise
-29-
<PAGE>
of any Stock Option and payment of the Stock Option exercise price, both of
which must be actually received by the Corporation.
26. LIMITATION OF OBLIGATIONS OF THE CORPORATION
Any obligation of the Corporation arising under or as a result of this Plan
or any Stock Option granted hereunder shall constitute the general unsecured
obligation of the Corporation, and not of the Board of Directors of the
Corporation, or any members thereof, the Stock Option Committee, or any member
thereof, any officer of the Corporation, or any other person or any Subsidiary,
and none of the foregoing, except the Corporation, shall be liable for any debt,
obligation, cost or expense hereunder.
27. LIMITATION OF RIGHTS
The Stock Option Committee, in its sole and absolute discretion, is
entitled to determine who, if anyone, is an Eligible Participant under this
Plan, and which, if any, Eligible Participant shall receive any grant of a Stock
Option. No oral or written agreement by any person on behalf of the Corporation
relating to this Plan or any Stock Option granted hereunder is authorized, and
such agreement may not bind the Corporation or the Stock Option Committee to
grant any Stock Option to any person.
28. SEVERABILITY
If any provision of this Plan as applied to any person or to any
circumstances shall be adjudged by a court of competent jurisdiction to be void,
invalid, or unenforceable, the same shall in no way effect any other provision
hereof, the application of any such provision in any other circumstances, or the
validity of enforceability hereof.
-30-
<PAGE>
29. CONSTRUCTION
Where the context or construction requires, all words applied in the plural
shall be deemed to have been used in the singular and vice versa, and the
masculine gender shall include the feminine and the neuter.
30. HEADINGS
The headings of the several paragraphs of this Plan are inserted solely for
convenience of reference and are not intended to form a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.
31. SUCCESSORS
This Plan shall be binding upon the respective successors, assigns, heirs,
executors, administrators, guardians and personal representatives of the
Corporation and any Optionee.
32. GOVERNING LAW
This Plan shall be governed by and construed in accordance with the laws of
the State of California.
33. CONFLICT
In the event of any conflict between the terms and provisions of this Plan,
and any other document, agreement or instrument, including, without limitation,
any stock option agreement, the terms and provisions of this Plan shall control.
-31-
<PAGE>
SECRETARY'S CERTIFICATE OF ADOPTION
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting Secretary of BSM Bancorp;
and
2. That the foregoing BSM Bancorp 1996 Stock Option Plan, as amended,
was duly adopted by the Board of Directors of BSM Bancorp as the Stock Option
Plan for the Corporation at a meeting duly called as required by law and
convened on the 13th day of May, 1997.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of the Corporation this 13th day of May, 1997.
/s/ William L. Snelling
---------------------------------------
William L. Snelling, Secretary
[SEAL]
-32-
<PAGE>
OPTIONEES TO WHOM INCENTIVE STOCK OPTIONS ARE GRANTED MUST MEET CERTAIN HOLDING
PERIOD AND EMPLOYMENT REQUIREMENTS FOR FAVORABLE TAX TREATMENT.
UNLESS OTHERWISE STATED, ALL DEFINED TERMS IN THE PLAN SHALL HAVE THE SAME
MEANING HEREIN AS SET FORTH IN THE PLAN.
BSM BANCORP
STOCK OPTION AGREEMENT
/ / Incentive Stock Option
/ / Non-Qualified Stock Option
THIS AGREEMENT, dated the day of , 19 , by and
---- ------------ --
between BSM Bancorp, a California corporation (the "Corporation"), and
(the "Optionee");
- ---------------------
WHEREAS, pursuant to the Corporation's 1996 Stock Option Plan (the
"Plan"), the Stock Option Committee has authorized the grant to Optionee of a
Stock Option to purchase all or any part of
( ) authorized but unissued shares of the
- --------------------- ------
Corporation's Common Stock at the price of
-----------------
Dollars ($ ) per share, such Stock Option to be for the term and upon the
-----
terms and conditions hereinafter stated;
NOW, THEREFORE, it is hereby agreed:
1. GRANT OF STOCK OPTION. Pursuant to said action of the Stock
Option Committee and pursuant to authorizations granted by all appropriate
regulatory and governmental agencies, the Corporation hereby grants to Optionee
a Stock Option to
-1-
<PAGE>
purchase, upon and subject to the terms and conditions of the Plan, which is
incorporated in full herein by this Reference, all or any part of
--------------
( ) Option Shares of the Corporation's Common Stock, at
-------
the price of Dollars ($ ) per share. For purposes of
-------------------- -----
this Agreement and the Plan, the date of grant shall be , 19 .
----------------- --
At the date of grant, Optionee [DOES] [DOES NOT OWN] stock possessing more than
10% of the total combined voting power of all classes of capital stock of the
Corporation or any Subsidiary.
The Stock Option granted hereunder [IS] [IS NOT] intended to qualify
as an Incentive Stock Option within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended.
2. Exercisability. This Stock Option shall be exercisable as to
Option Shares on , 19 , as to
- ----------------- ---------------- --
Option Shares on , 19 , as to
- ----------------- ---------------- --
Option Shares on , 19 , as to
- ----------------- ---------------- --
Option Shares on , 19 , and as to
- ----------------- ---------------- --
Option Shares on , 19 . This Stock Option
- ----------------- ---------------- --
shall remain exercisable as to all of such Option Shares until ,
----------
19 (but not later than ten (10) years from the date hereof), at which time it
--
shall expire in its entirety, unless this Stock Option has expired or terminated
earlier in accordance with the provisions hereof. Option shares as to which
this Stock Option becomes exercisable may be purchased at any time prior to
expiration of this Stock Option.
-2-
<PAGE>
3. EXERCISE OF STOCK OPTION. Subject to the provision of Paragraph 4
hereof, this Stock Option may be exercised by written notice delivered to the
Corporation stating the number of Option Shares with respect to which this Stock
Option is being exercised, together with cash and/or, if permitted at the time
of exercise by the Stock Option Committee, shares of Common Stock of the
Corporation which, when added to the cash payment, if any, have an aggregate
Fair Market Value equal to the full amount of the purchase price of such Option
Shares, and/or, if permitted at the time of exercise by the Stock Option
Committee, and if Optionee is not also a director, consultant or business
advisor of the Corporation or any of its subsidiaries, on a deferred basis
evidenced by a promissory note. In addition, the Optionee shall have the right
upon the exercise of this Stock Option in the manner set forth above to
surrender for cancellation a portion of this Stock Option to the Company for the
number of share (the "Surrendered Shares") specified in the holder's notice of
exercise, by delivery to the Company with such notice written instructions from
such holder to apply the Appreciated Value (as defined below) of the Surrendered
Shares to payment of the exercise price for shares subject to this Stock Option
that are being acquired upon such exercise. The term "Appreciated Value" for
each share subject to this Stock Option shall mean the excess of the Fair Market
Value thereof over the exercise price then in effect. Not less than ten (10)
Option shares may be purchased at any one time unless the number purchased is
the total number which remains to be purchased under this Stock Option and in no
event may the Stock Option be exercised with respect to fractional shares. Upon
exercise, Optionee shall
-3-
<PAGE>
make appropriate arrangements and shall be responsible for the withholding of
any federal and state income taxes then due.
4. PRIOR OUTSTANDING STOCK OPTIONS. Incentive Stock Options granted
to an Optionee may be exercisable while such Optionee has outstanding and
unexercised any Incentive Stock Option previously granted to him or her pursuant
to this Plan. The Stock Option Committee shall determine if such options shall
be exercisable if there are any Incentive Stock Options previously granted (or
substituted) to him or her pursuant to this Plan, and such determination shall
be evidenced in the Agreement executed by the Optionee and the Corporation. An
Incentive Stock Option shall be treated as outstanding until it is exercised in
full or expires by reason of lapse of time.
5. CESSATION OF EMPLOYMENT. (a) Except as provided in Paragraphs 6,
8 or 10 hereof, except if Optionee is granted an option as a consultant,
business associate or other person or entity with important business
relationships with the Corporation, if Optionee's status as an Eligible
Participant under the Plan is terminated, this Stock Option shall expire three
(3) months thereafter or on the date specified in Paragraph 2 hereof, whichever
is earlier. During such period after termination of status as an Eligible
Participant, except if Optionee is granted an option as a consultant, business
associate or other person or entity with important business relationships with
the Corporation, this Stock Option shall be exercisable only as to those
increments, if any, which had become exercisable as of the date on which the
Optionee's status as an Eligible Participant was terminated, and any Stock
Options or increments which had not become exercisable as of such date shall
expire and
-4-
<PAGE>
terminate automatically on such date. If Optionee is granted an option as a
consultant, business associate or other person or entity with important business
relationships with the Corporation, this Stock Option shall not expire as a
result of consultant, business associate or other person or entity with
important business relationships with the Corporation no longer doing business
or otherwise terminating his or its business relationship with the Corporation.
(b) TERMINATION FOR VIOLATION OF STANDARDS OF CONDUCT AS REFERENCED IN
OPTIONEE'S EMPLOYEE HANDBOOK. Except if Optionee is granted an option as a
consultant, business associate or other person or entity with important business
relationships with the Corporation, if Optionee's status as an Eligible
Participant under the Plan is terminated for violation of the Employer's
Standards of Conduct, this Stock Option shall automatically expire unless
reinstated by the Stock Option committee within thirty (30) days of such
termination by giving written notice of such reinstatement to Optionee. In the
event of such reinstatement, Optionee may exercise this Stock Option only to
such extent, for such time, and upon such terms and conditions as in the case of
Optionee's termination as an Eligible Participant under the Plan for a reason
other than violation of the Employer's Standards of Conduct, disability or
death. Termination for violation of the Employer's Standards of Conduct shall
include, but not be limited to, or termination for malfeasance or gross
misfeasance in the performance of duties or conviction of illegal activity in
connection therewith, and, in any event, the determination of the Stock Option
Committee with respect thereto shall be final and conclusive. If Optionee is
granted an option as a
-5-
<PAGE>
consultant, business associate or other person or entity with important business
relationships with the Corporation and are not classified as eligible employees
of the Corporation or its subsidiaries, this Stock Option shall not expire as a
result of such Optionee's termination.
6. DISABILITY OR DEATH OF OPTIONEE. Except if Optionee is granted an
option as a consultant, business associate or other person or entity with
important business relationships with the Corporation, if Optionee loses his or
its status as an Eligible Participant under the Plan by reason of death or if
Optionee is disabled while employed by the Corporation or a Subsidiary, or if
Optionee dies or becomes so disabled during the three-month period referred to
in Paragraph 5 hereof, this Stock Option shall automatically expire and
terminate one (l) year after the date of Optionee's disability or death or on
the day specified in Paragraph 2 hereof, whichever is earlier. If Optionee is
granted an option as a consultant, business associate or other person or entity
with important business relationships with the Corporation, this Stock Option
shall not expire as a result of such Optionee's death or disability. After
Optionee's disability or death but before such expiration, the person or persons
to whom Optionee's rights under this Stock Option shall have passed by order of
a court of competent jurisdiction or by will or the applicable laws of descent
and distribution, or the executor, administrator or conservator of Optionee's
estate, shall have the right to exercise this Stock Option to the extent that
increments, if any, had become exercisable as of the date on which Optionee's
status as an Eligible Participant under
-6-
<PAGE>
the Plan had been terminated. For purposes hereof, "disability" shall have the
same meaning as set forth in Section 13 of the Plan.
7. NONTRANSFERABILITY. This Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during Optionee's lifetime only by Optionee or his or her guardian
or legal representative.
8. EMPLOYMENT. Except for directors, consultants or business
advisors with a written contract for any definite term, this Agreement shall not
obligate the Corporation or a Subsidiary to employ Optionee. Optionee
acknowledges that there is no agreement, express or implied, between Optionee
and the Corporation or other Subsidiary of the Corporation for any specific
period of employment, nor for continuing long-term employment. Optionee and the
Employer each have a right to terminate employment, with or without cause.
Optionee also acknowledges that the Employer retains the right to demote,
transfer, change job duties, and change the compensation at any time with or
without cause in its sole discretion.
9. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall have no rights as a
stockholder with respect to the Option Shares unless and until said Option
Shares are issued to Optionee as provided in the Plan. Except as provided in
Section 15 of the Plan, no adjustment will be made for dividends or other rights
in respect of which the record date is prior to the date such stock certificates
are issued.
10. MODIFICATION AND TERMINATION BY BOARD OF DIRECTORS. The rights
of Optionee are subject to modification and termination upon the occurrence of
certain events as provided in Sections 12, 13, 14 and 15 of the Plan. Upon
adoption by the
-7-
<PAGE>
requisite holders of the Corporation's outstanding shares of Common Stock of any
plan of dissolution, liquidation, reorganization, merger, consolidation or sale
of all or substantially all of the assets of the Corporation to, or the
acquisition of stock representing more than fifty percent (50%) of the voting
power of the Corporation then outstanding by another corporation or person which
would, upon consummation, result in termination of this Stock Option in
accordance with Section 15 of the Plan, this Stock Option shall become
immediately exercisable as to all unexercised Option Shares notwithstanding the
incremental exercise provisions of paragraph 2 of this Agreement for a period
then specified by the Stock Option Committee, but in any event not less than 30
days, in accordance with Section 8(e) of the Plan, on the condition that the
terminating event described in Section 15 of the Plan is consummated. If such
terminating event is not consummated, this Stock Option shall be exercisable in
accordance with the terms of the Agreement, excepting this Paragraph 10.
11. NOTIFICATION OF SALE. Optionee agrees that Optionee, or any
person acquiring Option Shares upon exercise of this Stock Option, will notify
the Corporation in writing not more than five (5) days after any sale or other
disposition of such Shares.
12. REPRESENTATIONS OF OPTIONEE. No Option Shares issuable upon the
exercise of this Stock Option shall be issued and delivered unless and until all
requirements of applicable state and federal law and of the Securities and
Exchange Commission pertaining to the issuance and sale of such Option Shares,
and all
-8-
<PAGE>
applicable listing requirements of the securities exchanges, if any, on which
shares of Common Stock of the Corporation of the same class are then listed,
shall have been complied with. Without limiting the foregoing, the undersigned
Optionee hereby agrees, represents and warrants that unless and until the shares
of Common Stock covered by the Plan and issued to Optionee have been registered
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, Optionee will acquire all Option Shares upon exercise of this
Stock Option for investment purposes only and not for resale or for
distribution, and Optionee hereby agrees to execute and deliver to the
Corporation a representation letter in the form and substance of Exhibit "A"
attached hereto, and to be bound by the representations, warranties, covenants
and promises contained therein. Optionee further agrees, represents and
warrants that upon exercise of all or part of this Stock Option, Optionee will
not transfer any such Option Shares except in compliance with said registration
provisions or an applicable exemption therefrom. Upon each exercise of any
portion of this Stock Option, the person entitled to exercise same shall, unless
waived by the Corporation, furnish evidence satisfactory to counsel for the
Corporation (including written and signed representations in the form attached
hereto as Exhibit "B") that the Option Shares are being acquired in good faith
for investment purposes only and not for resale or distribution except in
compliance with the state and federal requirements described above or applicable
exemptions therefrom. Furthermore, the Corporation, may, if it deems
appropriate, issue stop transfer
-9-
<PAGE>
instructions against any Option Shares and affix to any certificate representing
such Shares the legends of the type described in Section 24 of the Plan.
13. NOTICES. All notices to the Corporation provided for in this
Agreement shall be addressed to it in care of its President or Chief Financial
Officer at its principal office and all notices to Optionee shall be addressed
to Optionee's address on file with the Corporation or a subsidiary corporation,
or to such other address as either may designate to the other in writing, all in
compliance with the notice provisions set forth in Section 25 of the Plan.
14. INCORPORATION OF PLAN. All of the provisions of the Plan are
incorporated herein by reference as if set forth in full hereat. In the event
of any conflict between the terms of the Plan and any provision contained
herein, the terms of the Plan shall be controlling and the conflicting
provisions herein shall be disregarded.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
BSM Bancorp
By:
-----------------------------------
By:
-----------------------------------
OPTIONEE
---------------------------------------
-11-
<PAGE>
EXHIBIT 5
Opinion of Knecht & Hansen
<PAGE>
KNECHT & HANSEN
A PARTNERSHIP OF PROFESSIONAL CORPORATIONS
ATTORNEYS AT LAW
RICHARD E. KNECHT 1301 DOVE STREET, SUITE 900 TELECOPIER:
LOREN P. HANSEN NEWPORT BEACH, CALIFORNIA 92660 (714) 851-1732
TELEPHONE: (714) 851-8070
June 13, 1997
Board of Directors
BSM Bancorp
2739 Santa Maria Way
Santa Maria, California 93456
Re: BSM BANCORP - 1996 STOCK OPTION PLAN
Gentlemen:
We are acting as counsel for BSM Bancorp in connection with the
registration under the Securities Act of 1933, as amended (the "Act"), of
892,542 shares of Common Stock, no par value, of BSM Bancorp, a California
corporation, to be issued upon the exercise of options under the BSM Bancorp
1996 Stock Option Plan (the "Plan"), plus an indeterminate number of shares as
may become subject to options under the Plan (collectively referred to as the
"Shares"). A registration statement on Form S-8 (the "Registration Statement")
will be filed under the Act with respect to the offering of the Shares. Based
upon the examination of such instruments, documents and records as we deem
necessary, including the Registration Statement, we are of the opinion that:
1. BSM Bancorp has been duly incorporated and is validly existing
under the laws of the State of California.
2. The Shares to be offered by BSM Bancorp under the Plan, have been
duly authorized and legally issued, fully paid, and nonassessable under the laws
of the State of California.
Consent is hereby given to the filing of this opinion as an Exhibit to
the Registration Statement and to the reference to this firm under the caption
"Legal Opinions" in the Exhibits to the Registration Statement.
Very truly yours,
/s/ Loren P. Hansen
Loren P. Hansen of
Knecht & Hansen
<PAGE>
EXHIBIT 23(b)
Consent of independent public accountants
<PAGE>
[LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our Independent Auditor's Report dated
February 6, 1997 regarding the statements of condition of Bank of Santa Maria
as of December 31, 1996 and 1995, and the related statements of income, changes
in stockholders' equity, and cash flows for each of the three years in the
period ended December 31, 1996, and the reference to our firm as "experts", in
the Form S-8 filed with the Securities and Exchange Commission.
/s/ Vavrinek, Trine, Day & Co.
June 12, 1997
Laguna Hills, California
