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Registration No. 33-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement
Under the Securities Act of 1933
WESTERN SIERRA BANCORP
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 68-0390121
------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4011 PLAZA GOLDORADO CIRCLE, CAMERON PARK, CALIFORNIA 95682
(Address of Principal Executive Offices)
WESTERN SIERRA BANCORP 1999 STOCK OPTION PLAN
WESTERN SIERRA BANCORP 1997 STOCK OPTION PLAN
WESTERN SIERRA NATIONAL BANK 1989 STOCK OPTION PLAN
ROSEVILLE 1ST NATIONAL BANK 1993 STOCK OPTION PLAN
LAKE COMMUNITY BANK 1984 STOCK OPTION PLAN
(Full Titles of the Plans)
GARY D. GALL, PRESIDENT AND CHIEF EXECUTIVE OFFICER
4011 PLAZA GOLDORADO CIRCLE, CAMERON PARK, CALIFORNIA 95682
(Name and Address of Agent for Service)
(530) 677-5600
(Telephone Number, including Area Code, of Agent for Service)
Copy to:
Laura Dean-Richardson, Esq.
Gary Steven Findley & Associates
1470 North Hundley Street, Anaheim, California 92806
(714) 630-7136
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================
Title of Each Class Amount Proposed Maximum Proposed Maximum Amount of
Of Securities To To Be Offering Price Aggregate Registration
Be Registered Registered(a) Per Share(b) Offering Price Fee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock 506,253 Shares $14.4375 $7,309,027.69 $2,031.91
(No Par Value)
</TABLE>
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(a) The number of shares being registered is the number of shares issuable
under the Western Sierra Bancorp 1999 Stock Option Plan, the Western
Sierra Bancorp 1997 Stock Option Plan, the Western Sierra National Bank
1989 Stock Option Plan, the Roseville 1st National Bank 1993 Stock Option
Plan and the Lake Community Bank 1984 Stock Option Plan (collectively
the "Plans"). There are 300,000 shares issuable under the Western Sierra
Bancorp 1999 Stock Option Plan;108,000 shares issuable under the Western
Sierra Bancorp 1997 Stock Option Plan; 49,104 shares issuable under the
Western Sierra National Bank 1989 Stock Option Plan; 26,641 shares
issuable under the Roseville 1st National Bank 1993 Stock Option Plan;
and 22,508 shares issuable under the Lake Community Bank 1984 Stock
Option Plan. Because of certain events specified in the Plans, an
indeterminate number of shares may additionally become subject to
issuance under each of the Plans.
(b) Estimated pursuant to Rule 457(h) solely for the purpose of computing the
registration fee, utilizing $14.4375 as the average of the bid and asked
price of Western Sierra Bancorp's common stock as of September 1, 1999.
================================================================================
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PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Western Sierra Bancorp (the "Registrant") hereby incorporates by reference the
documents listed below. All documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934 prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing such documents.
(a) The Registrant's quarterly reports filed on Form 10-Q for the quarters
ended March 31, 1999 and June 30, 1999.
(b) The description of the Registrant's common stock is contained in its
Registration Statement on Form S-4, file number 333-66675.
Any statement contained herein or in any document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that another statement contained herein or
in any other document subsequently filed, which also is incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation and Bylaws of the Registrant provide for
indemnification of agents including directors, officers and employees to the
maximum extent allowed by California law including the use of an indemnity
agreement. The Registrant's Articles further provide for the elimination of
director liability for monetary damages to the maximum extent allowed by
California law. The indemnification law of the State of California generally
allows indemnification in matters not involving the right of the corporation, to
an agent of the corporation 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 matter, had no reasonable cause to believe the
conduct of such person was unlawful. California law, with respect to matters
involving the right of a corporation, allows indemnification of an agent of the
corporation, 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;
provided that there shall be no indemnification for: (i) amounts paid in
settling or otherwise disposing of a pending
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action without court approval; (ii) expenses incurred in defending a pending
action which is settled or otherwise disposed of without court approval; (iii)
matters in which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which the proceeding
is or was pending shall determine that such person is entitled to be
indemnified; or (iv) other matters specified in the California General
Corporation Law.
The Registrant's Bylaws provide that the Registrant shall to the maximum extent
permitted by law have the power to indemnify its directors, officers and
employees. The Registrant's Bylaws also provide that the Registrant shall have
the power to purchase and maintain insurance covering its directors, officers
and employees against any liability asserted against any of them and incurred by
any of them, whether or not the Registrant would have the power to indemnify
them against such liability under the provisions of applicable law or the
provisions of the Registrant's Bylaws. Each of the directors and executive
officers of the Registrant has an indemnification agreement with the Registrant
that provides that the Registrant shall indemnify such person to the full extent
authorized by the applicable provisions of California law and further provide
advances to pay for any expenses which would be subject to reimbursement.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
<TABLE>
<S> <C>
5.1 Opinion re: Legality
*99.1 Western Sierra National Bank 1989 Stock Option Plan and Agreements
*99.2 Western Sierra Bancorp 1997 Stock Option Plan and Agreements
99.3 Western Sierra Bancorp 1999 Stock Option Plan and Agreements
99.4 Roseville 1st National Bank 1993 Stock Option Plan and Agreements
99.5 Lake Community Bank 1984 Stock Option Plan and Agreements
</TABLE>
- ---------------
* Filed as Exhibits 10.10 and 10.11 in the Registration Statement on Form
S-4, file number 333-66675.
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
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(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, 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.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
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 Cameron Park, State of California, on September 7,
1999.
WESTERN SIERRA BANCORP
/s/ GARY D. GALL
--------------------------
Gary D. Gall
President & CEO
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<S><C>
/s/ GARY D. GALL
- -------------------------------, Director and Principal September 7, 1999
Gary D. Gall Executive Officer
/s/ JOSEPH A. SURRA
- -------------------------------, Chairman September 7, 1999
Joseph A. Surra
/s/ ROBERT G. ALBRECHT
- -------------------------------, Director September 7, 1999
Robert G. Albrecht
/s/ CHARLES W. BACCHI
- -------------------------------, Director September 7, 1999
Charles W. Bacchi
/s/ BARBARA L. COOK
- -------------------------------, Director September 7, 1999
Barbara L. Cook
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/s/ KIRK DOYLE
- -------------------------------, Director September 7, 1999
Kirk Doyle
/s/ WILLIAM J. FISHER
- -------------------------------, Director September 7, 1999
William J. Fisher
/s/ RICHARD L. GOLEMON
- -------------------------------, Director September 7, 1999
Richard L. Golemon
/s/ JOHN H. HELMS
- -------------------------------, Director September 7, 1999
John H. Helms
/s/ HOWARD "SKIP" JAHN
- -------------------------------, Director September 7, 1999
Howard "Skip" Jahn
/s/ THOMAS MANZ
- -------------------------------, Director September 7, 1999
Thomas Manz
/s/ HAROLD S. PRESCOTT, JR.
- -------------------------------, Director September 7, 1999
Harold S. Prescott, Jr.
/s/ DAROL B. RASMUSSEN
- -------------------------------, Director September 7, 1999
Darol B. Rasmussen
/s/ OSVALDO I. SCARIOT
- -------------------------------, Director September 7, 1999
Osvaldo I. Scariot
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/s/ RICHARD C. SEEBA
- --------------------------------, Director September 7, 1999
Richard C. Seeba
/s/ HOWARD "BUD" VAN LENTE
- --------------------------------, Director September 7, 1999
Howard "Bud" Van Lente
/s/ LESA FYNES
- --------------------------------, Principal Financial September 7, 1999
Lesa Fynes Officer
</TABLE>
7
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
5.1 Opinion re: Legality
99.3 Western Sierra Bancorp 1999 Stock
Option Plan and Agreements
99.4 Roseville 1st National Bank 1993 Stock
Option Plan and Agreements
99.5 Lake Community Bank 1984 Stock
Option Plan and Agreements
</TABLE>
8
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EXHIBIT 5.1
OPINION RE: LEGALITY
<PAGE>
[LETTERHEAD]
September 7, 1999
Western Sierra Bancorp
4011 Plaza Goldorado Circle
Cameron Park, California 95682
Re: Registration Statement on Form S-8
Gentlemen:
At your request, we have examined the form of Registration Statement to be filed
with the Securities and Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended, for the offer and sale, pursuant
to (i) the Western Sierra Bancorp 1999 Stock Option Plan, of 300,000 shares of
Western Sierra Bancorp no par value common stock ("Common Stock")issuable upon
the exercise of stock options granted under the Western Sierra Bancorp 1999
Stock Option Plan; (ii) the Western Sierra Bancorp 1997 Stock Option Plan, of
108,000 shares of Common Stock issuable upon exercise of stock options granted
under the Western Sierra Bancorp 1997 Stock Option Plan; (iii) the Western
Sierra National Bank 1989 Stock Option Plan, of 49,104 shares of Common Stock
issuable upon the exercise of stock options granted under the Western Sierra
National Bank 1989 Stock Option Plan; (iv) the Roseville 1st National Bank 1993
Stock Option Plan, of 26,641 shares of Common Stock issuable upon exercise of
stock options granted under the Roseville 1st National Bank 1993 Stock Option
Plan; and (v) the Lake Community Bank 1984 Stock Option Plan, of 22,508 shares
of Common Stock issuable upon the exercise of stock options granted under the
Lake Community Bank 1984 Stock Option Plan. We are familiar with the actions
taken or to be taken in connection with the authorization, issuance and sale of
the Common Stock.
It is our opinion that, subject to said proceedings being duly taken and
completed as now contemplated before the issuance of the Common Stock, said
Common Stock, will, upon the issuance and sale thereof in accordance with the
Western Sierra Bancorp 1999 Stock Option Plan, the Western Sierra Bancorp 1997
Stock Option Plan, the Western Sierra National Bank 1989 Stock Option Plan, the
Roseville 1st National Bank 1993 Stock Option Plan and the Lake Community Bank
1984 Stock Option Plan referred to in the Registration Statement, be legally and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted,
GARY STEVEN FINDLEY & ASSOCIATES
By: /s/ Gary Steven Findley
Gary Steven Findley
Attorney at Law
GSF:bl
<PAGE>
EXHIBIT 99.3
WESTERN SIERRA BANCORP 1999 STOCK OPTION PLAN
STOCK OPTION AGREEMENTS
<PAGE>
WESTERN SIERRA BANCORP
1999 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Western Sierra Bancorp 1999 Stock Option Plan (the
"Plan") is to strengthen Western Sierra Bancorp (the "Bancorp") and those
corporations which are or hereafter become subsidiary corporations of the
Bancorp by providing an additional means of attracting and retaining competent
directors, officers and management level employees and by providing to
participating directors, officers and management level employees added incentive
for high levels of performance. The Plan seeks to accomplish these purposes and
achieve these results by providing a means whereby such directors, officers and
management level employees may purchase shares of the common stock of the
Bancorp pursuant to options granted in accordance with the Plan.
Options granted pursuant to the Plan are intended to be either
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or
"nonqualified stock options", as shall be determined and designated upon the
grant of each option hereunder.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors (the "Board").
Any action of the Board with respect to the administration of the Plan shall be
taken pursuant to a majority vote, or the unanimous written consent, of its
members. Subject to the express provisions of the Plan, the Board shall have the
authority to construe and interpret the Plan, define the terms used herein,
prescribe, amend and rescind, the rules and regulations relating to
administration of the Plan, and make all other determinations necessary or
advisable for administration of the Plan.
All decisions, determinations, interpretations or other actions by the
Board shall be final, conclusive and binding on all persons, optionees,
grantees, subsidiary corporations of the Bancorp and any successors-in-interest
to such parties.
3. INCENTIVE STOCK OPTIONS
All options granted which are designated at the time of grant as an
"incentive stock option" shall be deemed an incentive stock option.
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(a) Incentive stock options granted under the Plan are intended to be
qualified under Section 422 of the Code.
(b) Full-time salaried officers and management level employees of the
Bancorp or a subsidiary corporation (as that term is defined in Section 424(f)
of the Code), shall be eligible for selection to participate in the incentive
stock option portion of the Plan. No director of the Bancorp who is not also a
full-time salaried officer or employee of the Bancorp or a subsidiary
corporation, may be granted an incentive stock option hereunder. Subject to the
express provisions of the Plan, the Board shall (i) select from the eligible
class of employees and determine to whom incentive stock options shall be
granted, (ii) determine the discretionary terms and provisions of the respective
incentive stock option agreements (which need not be identical), (iii) determine
the times at which such incentive stock options shall be granted, (iv) determine
the number of shares subject to each incentive stock option, and (v) grant such
incentive stock options to such individuals. An individual who has been granted
an incentive stock option may, if he or she is otherwise eligible under the
Plan, be granted additional incentive stock options if the Board shall so
determine.
(c) Except as described in subsection (e) below, the Board shall not
grant an incentive stock option to purchase shares of the Bancorp's common stock
to any individual who, at the time of the grant, owns stock possessing more than
10% of the total combined voting power or value of all classes of stock of the
Bancorp or a subsidiary corporation. The attribution rules of Section 424(d) of
the Code shall apply in the determination of ownership of stock for these
purposes.
(d) The aggregate fair market value (determined as of the time the
incentive stock option is granted) of stock with respect to which incentive
stock options are exercisable for the first time by an individual during any
calendar year (under all plans of the Bancorp and its subsidiary corporations,
if any) shall not exceed $100,000, plus any greater amount as may be permitted
under subsequent amendments to the Code.
(e) The purchase price of stock subject to each incentive stock option
shall be determined by the Board but shall not be less than one hundred percent
(100%) of the fair market value of such stock at the time such option is
granted, except, in the case of optionees who at the time of the grant own more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Bancorp or a subsidiary corporation, in which case the purchase
price of the stock shall not be less than one hundred ten percent (110%) of the
fair market value of such stock at the time such option is granted and the term
of such option shall be for no more than five (5) years. The fair market value
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of such stock shall be determined in accordance with any reasonable valuation
method, including the valuation methods described in Treasury Regulation Section
20.2031-2.
4. NONQUALIFIED STOCK OPTIONS
(a) All options granted which are (i) in excess of the aggregate fair
market value limitations set forth in Section 3(d) hereof, (ii) designated at
the time of the grant as "nonqualified", or (iii) intended to be incentive stock
options but do not meet the requirements of incentive stock options, shall be
deemed nonqualified stock options. Nonqualified stock options granted hereunder
shall be so designated in the nonqualified stock option agreement entered into
between the Bancorp and the optionee.
(b) Directors, full-time salaried officers and management level
employees of the Bancorp or a subsidiary corporation shall be eligible for
selection to participate in the nonqualified stock option portion of the Plan.
Subject to the express provisions of the Plan, the Board shall (i) select from
the eligible class of individuals and determine to whom nonqualified stock
options shall be granted, (ii) determine the discretionary terms and provisions
of the respective nonqualified stock option agreements (which need not be
identical), (iii) determine the times at which such nonqualified stock options
shall be granted, (iv) determine the number of shares subject to each
nonqualified stock option and (v) grant such nonqualified stock options to such
individuals. An individual who has been granted a nonqualified stock option may,
if he or she is otherwise eligible under the Plan, be granted additional
nonqualified stock options if the Board shall so determine.
(c) The purchase price of stock subject to each nonqualified stock
option shall be determined by the Board but shall not be less than one hundred
percent (100%) of the fair market value of such stock at the time such option is
granted. The fair market value of such stock shall be determined in accordance
with any reasonable valuation method, including the valuation methods described
in Treasury Regulation 20.2031-2.
5. STOCK SUBJECT TO THE PLAN
Subject to adjustments as provided in Section 12, hereof, the stock to
be offered under the Plan shall be shares of the Bancorp's authorized but
unissued common stock (hereinafter called "stock") and the aggregate amount of
stock to be delivered upon exercise of all options granted under the Plan shall
not exceed 300,000 shares. If any option shall be canceled, surrendered or
expire for
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any reason without having been exercised in full, the underlying shares subject
thereto shall again be available for purposes of the Plan.
6. CONTINUATION OF EMPLOYMENT
Nothing contained in the Plan (or in any option agreement) shall
obligate the Bancorp or a subsidiary corporation to employ any optionee for any
period or interfere in any way with the right of the Bancorp or a subsidiary
corporation to reduce the optionee's compensation. However, the Bancorp may not
reduce the terms of any option without the approval of the optionee.
7. EXERCISE OF OPTIONS
No option shall be exercisable until all necessary regulatory and
shareholder approvals of the Plan are obtained. Except as otherwise provided in
this section, each option shall be exercisable in such installments, which need
not be equal, and upon such contingencies as the Board shall determine;
provided, however, that if an optionee shall not in any given installment period
purchase all of the shares which the optionee is entitled to purchase in such
installment period, the optionee's right to purchase any shares not purchased in
such installment period shall continue until expiration or termination of such
option. Notwithstanding the foregoing, the options shall vest at the rate of at
least 20% per year over a five year period from the date the option is granted.
Fractional share interests shall be disregarded, except that they may
be accumulated. Not less than ten (10) shares may be purchased at any one time
unless the number of shares purchased is the total number of shares which is
exercisable at such time. Options may be exercised by written notice delivered
to the Bancorp stating the number of shares with respect to which the option is
being exercised, together with the full purchase price for such shares. Payment
of the option price in full, for the number of shares to be delivered, must be
made (a) in cash or (b) subject to applicable law, with the Bancorp's stock
previously acquired by the optionee and held by the optionee for a period of at
least six months. Notwithstanding the foregoing, in the event an optionee who
has an incentive stock option does exercise the incentive stock option by
utilizing (b) above, the optionee should obtain tax advice as to the
consequences of such action. The equivalent dollar value of shares used to
effect a purchase shall be the fair market value of the shares on the date of
exercise. If the option is being exercised by any person other than the
optionee, said notice shall be accompanied by proof, satisfactory to counsel for
the Bancorp, of the right of such person to exercise the option. Optionees
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will have no rights as shareholders with respect to stock of the Bancorp
subject to their stock option agreements until the date of issuance of the
stock certificate to them.
8. NONTRANSFERABILITY OF OPTIONS
Each 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 his or her lifetime only by the optionee.
9. CESSATION OF DIRECTORSHIP OR EMPLOYMENT
Except as provided in Sections 10 and 20 hereof, if an optionee ceases
to be a director or an employee of the Bancorp or a subsidiary corporation for
any reason other than his or her disability (as defined in Section 22(e)(3) of
the Code) or death, the optionee's option shall expire three (3) months after
the date of termination of such directorship or employment. During the period
after cessation of directorship or employment, such option shall be exercisable
only as to those installments, if any, which have accrued and/or vested as of
the date on which the optionee ceased to be a director or an employee of the
Bancorp or a subsidiary corporation. If an optionee is both a director and an
employee, then unless otherwise provided for in the optionee's option grant or
option agreement, such option shall expire three (3) months after the latter of
the date of termination of the optionee's directorship or employment.
10. TERMINATION OF EMPLOYMENT FOR CAUSE
If the stock option agreement so provides and if an optionee's
employment by the Bancorp or a subsidiary corporation is terminated for cause,
the optionee's option shall expire thirty (30) days from the date of such
termination. Termination for cause shall include, but not be limited to,
termination for malfeasance or gross misfeasance in the performance of duties or
conviction of a crime involving moral turpitude, and, in any event, the
determination of the Board with respect thereto shall be final and conclusive.
11. DISABILITY OR DEATH OF OPTIONEE
If any optionee dies while serving as a director or an employee of the
Bancorp or a subsidiary corporation, the option shall expire one (1) year after
the date of such death, except as provided in
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Section 20 hereof. After such death but before such expiration, the persons to
whom the optionee's rights under the option shall have passed by will or by the
laws of descent and distribution or the executor or administrator of optionee's
estate shall have the right to exercise such option to the extent that
installments, if any, had accrued and/or vested as of the date on which the
optionee ceased to be a director or an employee of the Bancorp or a subsidiary
corporation.
If the optionee shall terminate his or her directorship or employment
because of disability (as defined in Section 22(e)(3) of the Code), the optionee
may exercise this option to the extent he or she is entitled to do so at the
date of termination, at any time within one (1) year of the date of termination,
except as provided in Section 20 hereof.
If any optionee dies during the three (3) month period referred to in
Section 9 hereof, the option shall expire one (1) year after the date of such
death, except as provided in Section 20 hereof.
12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of the stock of the Bancorp are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Bancorp through reorganization, merger, recapitalization,
reclassification, stock split, stock dividend, stock consolidation or otherwise,
without consideration to the Bancorp, an appropriate and proportionate
adjustment shall be made in the number and kind of shares as to which options
may be granted. A corresponding adjustment changing the number or kind of shares
and the exercise price per share allocated to unexercised 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 option shall be made
without change in the total price applicable to the unexercised portion of the
option, but with a corresponding adjustment in the price for each share subject
to the option. Any adjustment under this Section 12 shall be made by the Board,
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, except that they may be
accumulated.
13. TERMINATING EVENTS
A Terminating Event shall be defined as any one of the following
events: (i) a dissolution or liquidation of the Bancorp; (ii) a reorganization,
merger or consolidation of the Bancorp with one
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or more corporations, the result of which (A) the Bancorp is not the surviving
corporation, or (B) the Bancorp becomes a subsidiary of another corporation
(which shall be deemed to have occurred if another corporation shall own
directly or indirectly, over 80% of the aggregate voting power of all
outstanding equity securities of the Bancorp); (iii) a sale of substantially
all the assets of the Bancorp to another corporation; or (iv) a sale of the
equity securities of the Bancorp representing more than 80% of the aggregate
voting power of all outstanding equity securities of the Bancorp to any person
or entity, or any group of persons and/or entities acting in concert. When the
Bancorp knows that a Terminating Event will occur (i) the Bancorp shall deliver
to each optionee no less than thirty (30) days prior to the Terminating Event,
written notification of the Terminating Event and the optionee's right to
exercise all options granted pursuant to the Plan, whether or not vested under
the Plan or applicable stock option agreement, and (ii) all outstanding options
granted pursuant to the Plan shall completely vest and become immediately
exercisable as to all shares granted pursuant to the option immediately prior
to such Terminating Event. This right of exercise shall be conditional upon
execution of a final plan of dissolution or liquidation or a definitive
agreement of consolidation or merger. Upon the occurrence of the Terminating
Event all outstanding options and the Plan shall terminate; provided, however,
that any outstanding options not exercised as of the occurrence of the
Terminating Event shall not terminate if there is a successor corporation
which assumes the outstanding options or substitutes for such options, new
options covering the stock of the successor corporation with appropriate
adjustments as to the number and kind of shares and prices.
14. AMENDMENT AND TERMINATION
The Board may at any time suspend, amend or terminate the Plan and may,
with the consent of the optionee, make such modification of the terms and
conditions of the option as it shall deem advisable; provided that, except as
permitted under the provisions of Sections 12 and 13 hereof, no amendment or
modification which would:
(a) increase the maximum number of shares which may be purchased
pursuant to options granted under the Plan either in the
aggregate or by an individual;
(b) change the minimum option price;
(c) increase the maximum term of options provided for herein; or
7
<PAGE>
(d) permit options to be granted to anyone other than directors,
full-time salaried officers or management level employees of
the Bancorp or a subsidiary corporation;
may be adopted without the Bancorp having first obtained any necessary
regulatory and shareholder approvals required by law.
No option may be granted during any suspension or after termination of
the Plan. Amendment, suspension or termination of the Plan shall not (except as
otherwise provided in Section 12 hereof), without the consent of the optionee,
alter or impair any rights or obligations under any option theretofore granted.
15. TIME OF GRANTING OPTIONS
The time an option is granted, sometimes referred to as the date of
grant, shall be the day of the action of the Board described in Sections 3(b)
and 4(b) hereof; provided, however, that if appropriate resolutions of the Board
indicate that an option is granted as of and on some future date, the time such
option is granted shall be such future date. If action by the Board is taken by
unanimous written consent of its members, the action of the Board shall be
deemed to be at the time the last member of the Board signs the consent.
16. PRIVILEGES OF STOCK OWNERSHIP;
SECURITIES LAW COMPLIANCE; NOTICE OF SALE
No optionee shall be entitled to the privileges of stock ownership as
to any shares of stock not actually issued. No shares shall be purchased upon
the exercise of any option unless and until the Bancorp has fully complied with
all applicable requirements of any regulatory agency having jurisdiction over
the Bancorp including registration of the stock options and underlying shares,
as necessary, and all applicable requirements of any exchange upon which stock
of the Bancorp may be listed. The optionee shall give the Bancorp notice of any
sale or disposition of any such shares not more than five (5) days after such
sale or disposition.
17. EFFECTIVE DATE OF THE PLAN
The Plan shall be deemed adopted by the Board as of June 15, 1999 and
shall be effective immediately subject to approval by the shareholders of the
Bancorp within twelve months of the date
8
<PAGE>
the Plan is adopted, by the vote of a majority of the outstanding shares
represented and voting at a duly held meeting of shareholders at which a quorum
is present, or by the written consent vote of the holders of a majority of the
outstanding shares of the Bancorp's stock. No option under the Plan shall be
exercised prior to the shareholders' approval of the Plan.
18. TERMINATION
Unless previously terminated by the Board, the Plan shall terminate at
the close of business on June 15, 2009. No options shall be granted under the
Plan thereafter, but such termination shall not affect any option theretofore
granted.
19. OPTION AGREEMENT
Each option shall be evidenced by a written stock option agreement
executed by the Bancorp 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 and are not
inconsistent with the Plan. Each incentive stock option agreement shall contain
such terms and provisions as the Board may determine to be necessary in order to
qualify such option as an incentive stock option within the meaning of Section
422 of the Code.
20. OPTION PERIOD
Each option and all rights and obligations thereunder shall expire on
such date as the Board may determine, but not later than ten (10) years from the
date such option is granted, and shall be subject to earlier termination as
provided elsewhere in the Plan.
21. EXCULPATION AND INDEMNIFICATION
To the extent permitted by applicable law in effect from time to time,
no member of the Board shall be liable for any act or omission of any other
member of the Board nor for any act or omission on the member's own part, except
the member's own willful misconduct or gross negligence. The Bancorp and its
subsidiary corporations shall pay expenses incurred by, and satisfy a judgment
or fine rendered or levied against, a present or former member of the Board in
any action brought by a third party against such person (whether or not the
Bancorp is joined as a party defendant) to impose a liability or penalty on such
person while a member of the Board arising with
9
<PAGE>
respect to the Plan or administration thereof or out of membership on the Board
or all or any combination of the preceding; provided, the Board determines in
good faith that such member of the Board was acting in good faith, within what
such member of the Board reasonably believed to be the scope of his or her
employment or authority, and for a purpose which he or she reasonably believed
to be in the best interests of the Bancorp or its shareholders. Payments
authorized hereunder include amounts paid and expenses incurred in settling any
such action or threatened action. This Section 21 does not apply to any action
instituted or maintained in the right of the Bancorp by a shareholder or holder
of a voting trust certificate representing shares of the Bancorp or a
subsidiary corporation thereof. The provisions of this Section 21 shall apply
to the estate, executor, administrator, heirs, legatees or devisees of a member
of the Board and the term "person" as used in this Section 21 shall include the
estate, executor, administrator, heirs, legatees or devisees of such person.
22. AGREEMENT AND REPRESENTATIONS OF OPTIONEE
Unless the shares of stock covered by the Plan have been registered
with the Securities Exchange Commission, each optionee shall, by accepting an
option, represent and agree, for himself or herself and his or her transferees
by will or the laws of descent and distribution, that all stock will be acquired
for investment and not for resale or distribution. Upon such exercise of any
portion of an option, the person entitled to exercise the same shall, upon
request of the Bancorp, furnish evidence satisfactory to the Bancorp (including
a written and signed representation) to the effect that the stock is being
acquired in good faith for investment and not for resale or distribution.
Furthermore, the Bancorp, at its sole discretion, may take all reasonable steps,
including affixing the following legend (and/or such other legend or legends as
counsel shall require) on certificates embodying the shares:
The shares represented by this certificate have not been registered
under the Securities Act of 1933 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 Securities Act of 1933 or a written opinion of counsel for
the optionee which opinion shall be acceptable to counsel for the
Bancorp that registration is not required.
10
<PAGE>
to assure itself against any sale or distribution by the optionee which does not
comply with the Plan or any federal or state securities laws.
The Bancorp agrees to remove any legend affixed to the certificates
embodying the shares pursuant to this Section 22 when all of the restrictions on
the transfer of the shares, whether imposed by the Plan or federal or state law,
have terminated.
23. INFORMATION TO EMPLOYEES
The Bancorp shall provide optionees with financial statements of the
Bancorp at least annually.
11
<PAGE>
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF WESTERN
SIERRA BANCORP'S COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE WESTERN
SIERRA BANCORP 1999 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY THE
SHAREHOLDERS OF WESTERN SIERRA BANCORP.
WESTERN SIERRA BANCORP
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement (the "Agreement") is made and
entered into as of the ______ day of __________, _____, by and between Western
Sierra Bancorp, a California corporation (the "Bancorp"), and ________________
("Optionee");
WHEREAS, pursuant to the Western Sierra Bancorp 1999 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Board of Directors of the
Bancorp has authorized granting to Optionee an incentive stock option to
purchase all or any part of ______________ (_____) authorized but unissued
shares of the Bancorp's common stock at the price of ________ Dollars and
_______ Cents ($__.__) per share, such option to be for the term and upon the
terms and conditions hereinafter stated;
NOW, THEREFORE, it is hereby agreed:
1. GRANT OF OPTION. Pursuant to said action of the Board of Directors,
the Bancorp hereby grants to Optionee the option to 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 ______________ (_____) shares of the
Bancorp's common stock (hereinafter called "stock") at the price of __________
Dollars and _______ Cents ($__.__) per share, which price is not less than one
hundred percent (100%) of the fair market value of the stock (or not less than
110% of the fair market value of the stock for Optionee-shareholders who own
securities possessing more than ten percent (10%) of the total combined voting
power of all classes of securities of the Bancorp) as of the date of action of
the Board of Directors granting this option.
2. EXERCISABILITY. This option shall be exercisable as to:
<TABLE>
<CAPTION>
NUMBER OF SHARES VESTING DATE
------------------- ------------------
<S> <C>
------------------- ------------------
------------------- ------------------
------------------- ------------------
------------------- ------------------
</TABLE>
1
<PAGE>
This option shall remain exercisable as to all vested shares until
____________, ____ (but not later than ten (10) years from the date this
option is granted) unless this option has expired or terminated earlier in
accordance with the provisions hereof or in the Plan. Subject to paragraphs 4
and 5, shares as to which this option becomes exercisable pursuant to the
foregoing provision may be purchased at any time prior to expiration of this
option.
3. EXERCISE OF OPTION. This option may be exercised by written notice
(substantially in the form as that which is attached as Exhibit A) delivered
to the Bancorp stating the number of shares with respect to which this option
is being exercised, together with (a) cash in the amount of the purchase
price of such shares, or (b) subject to applicable law, with the Bancorp's
stock previously acquired by Optionee and held by Optionee for a period of at
least six months. Notwithstanding the foregoing, in the event Optionee does
exercise the option by utilizing (b) above, Optionee should obtain tax advice
as to the consequences of such action. Not less than ten (10) shares may be
purchased at any one time unless the number purchased is the total number
which may be purchased under this option and in no event may the option be
exercised with respect to fractional shares. Upon exercise, Optionee shall
make appropriate arrangements and shall be responsible for the withholding of
any federal and state taxes then due.
4. CESSATION OF EMPLOYMENT. Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be an employee of the Bancorp or a subsidiary
corporation for any reason other than Optionee's death or disability [as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended from time
to time (the "Code")], this option shall expire three (3) months thereafter.
During the three (3) month period this option shall be exercisable only as to
those installments, if any, which had accrued as of the date when Optionee
ceased to be an employee of the Bancorp or a subsidiary corporation.
5. TERMINATION OF EMPLOYMENT FOR CAUSE. If Optionee's employment with
the Bancorp or a subsidiary corporation is terminated for cause, this option
shall expire thirty (30) days from the date of such termination. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of a crime involving
moral turpitude, and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.
6. NONTRANSFERABILITY; DEATH OR DISABILITY OF OPTIONEE. This option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during
2
<PAGE>
Optionee's lifetime only by Optionee. If Optionee dies while serving as an
employee of the Bancorp or a subsidiary corporation, or during the three (3)
month period referred to in Paragraph 4 hereof, this option shall expire one
(1 year after the date of Optionee's death or on the day specified in
Paragraph 2 hereof, whichever is earlier. After Optionee's death but before
such expiration, the persons to whom Optionee's rights under this option
shall have passed by will or by the laws of descent and distribution or the
executor or administrator of Optionee's estate shall have the right to
exercise this option as to those shares for which installments had accrued
under Paragraph 2 hereof as of the date on which Optionee ceased to be an
employee of the Bancorp or a subsidiary corporation.
If Optionee terminates his or her employment because of disability (as
defined in Section 22(e)(3) of the Code), Optionee may exercise this option to
the extent he or she is entitled to do so at the date of termination, at any
time within one (1) year of the date of termination, or before the expiration
date specified in Paragraph 2 hereof, whichever is earlier.
7. EMPLOYMENT. This Agreement shall not obligate the Bancorp or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
8. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock certificates to Optionee. Except as provided in the
Plan, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
9. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification and termination upon the occurrence of certain events as provided
in Sections 13 and 14 of the Plan.
10. NOTIFICATION OF SALE. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
11. REPRESENTATIONS OF OPTIONEE. No shares issuable upon the
exercise of this option shall be issued and delivered unless and until the
Bancorp has complied with all applicable requirements of California and
federal law and of the Securities and Exchange Commission and the California
Department of Corporations pertaining to the issuance and sale of such
shares, and all applicable listing requirements of the securities exchanges,
if any, on which shares of the Bancorp of the same class are then listed.
Optionee agrees to ascertain that such requirements shall have been complied
3
<PAGE>
with at the time of any exercise of this option. In addition, if the Optionee
is an "affiliate" for purposes of the Securities Act of 1933, there may be
additional restrictions on the resale of stock, and Optionee therefore agrees
to ascertain what those restrictions are and to abide by the restrictions and
other applicable federal and state securities laws.
Furthermore, the Bancorp may, if it deems appropriate, issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any certificate representing such shares the legends
which the Bancorp deems appropriate.
Optionee represents that the Bancorp, its directors, officers,
employees and agents have not and will not provide tax advice with respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax consequences of the option, including the application and
effect of federal, state, local and other tax laws.
12. NOTICES. Any notice to the Bancorp provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial Officer at
its main office and any notice to Optionee shall be addressed to Optionee's
address on file with the Bancorp or a subsidiary corporation, or to such other
address as either may designate to the other in writing. Any notice shall be
deemed to be duly given if and when enclosed in a properly sealed envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal Service. In lieu of giving notice by mail as aforesaid, any written
notice under this Agreement may be given to Optionee in person, and to the
Bancorp by personal delivery to its President or Chief Financial Officer.
13. INCENTIVE STOCK OPTION. This Agreement is intended to be an
incentive stock option agreement as defined in Section 422 of the Code;
provided, however, that if the option shall fail to constitute an incentive
stock option for any reason, the option shall thereafter be governed by the
provisions of the Plan regarding nonqualified stock options.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
OPTIONEE WESTERN SIERRA BANCORP
By_______________________ By_________________________
By_________________________
5
<PAGE>
EXHIBIT A
NOTICE OF STOCK OPTION EXERCISE
Mr. Gary D. Gall
President
Western Sierra Bancorp
3350 Country Club Drive
Cameron Park, California 95682
Dear Mr. Gall:
Pursuant to my incentive stock option agreement dated _______________, I am
exercising my stock option to acquire ____________ shares of common stock of
Western Sierra Bancorp. I am also enclosing payment by means of (CASH IN THE
AMOUNT OF $_________, OR ________ QUALIFYING SHARES OF WESTERN SIERRA BANCORP
HAVING A FAIR MARKET VALUE) equal to the sum of the option exercise price.
I further acknowledge that Western Sierra Bancorp makes no representations as to
federal or state tax matters, and that I am to consult with my own tax attorney
or tax accountant for advice with respect to the exercise of my stock option and
the effect of the sale of the option shares. [(FOR EXECUTIVE OFFICERS OF THE
BANCORP OR INSIDERS OF THE BANCORP) I further acknowledge that I am an affiliate
or insider of Western Sierra Bancorp and that federal securities laws are
applicable to the exercise of the stock option and any subsequent sale of the
option shares including the applicability of the Securities Act of 1933 and Rule
144 (both dealing with the sale of shares by an affiliate). I agree to comply
with such securities laws and rules.]
Sincerely,
Name of Optionee
6
<PAGE>
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF WESTERN
SIERRA BANCORP'S COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE WESTERN
SIERRA BANCORP 1999 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY THE
SHAREHOLDERS OF WESTERN SIERRA BANCORP.
WESTERN SIERRA BANCORP
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made and
entered into as of the ______ day of _____________, _____, by and between
Western Sierra Bancorp, a California corporation (the "Bancorp"), and
_______________, ("Optionee");
WHEREAS, pursuant to the Western Sierra Bancorp 1999 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Board of Directors of the
Bancorp has authorized granting to Optionee a nonqualified stock option to
purchase all or any part of _______________ (_______) authorized but unissued
shares of the Bancorp's common stock at the price of _____________ Dollars and
_______ Cents ($__.__) per share, such option to be for the term and upon the
terms and conditions hereinafter stated;
NOW, THEREFORE, it is hereby agreed:
1. GRANT OF OPTION. Pursuant to said action of the Board of Directors,
the Bancorp hereby grants to Optionee the option to 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 _______________ (______) shares of the
Bancorp's common stock (hereinafter called "stock") at the price of ___________
Dollars and _______ Cents ($__.__) per share, which price is not less than one
hundred percent (100%) of the fair market value of the stock as of the date of
action of the Board of Directors granting this option.
2. EXERCISABILITY. This option shall be exercisable as to:
<TABLE>
<CAPTION>
NUMBER OF SHARES Vesting Date
--------------------- --------------------
<S> <C>
--------------------- --------------------
--------------------- --------------------
--------------------- --------------------
--------------------- --------------------
</TABLE>
1
<PAGE>
This option shall remain exercisable as to all vested shares until
____________, _____ (but not later than ten (10) years from the date this
option is granted) unless this option has expired or terminated earlier in
accordance with the provisions hereof or in the Plan. Subject to paragraphs 4
and 5, shares as to which this option becomes exercisable pursuant to the
foregoing provision may be purchased at any time prior to expiration of this
option.
3. EXERCISE OF OPTION. This option may be exercised by
written notice (substantially in the form as that which is attached as
Exhibit A) delivered to the Bancorp stating the number of shares with respect
to which this option is being exercised, together with (a) cash in the amount
of the purchase price of such shares, or (b) subject to applicable law, with
the Bancorp's stock previously acquired by Optionee and held by Optionee for
a period of at least six months. Notwithstanding the foregoing, in the event
Optionee does exercise the option by utilizing (b) above, Optionee should
obtain tax advice as to the consequences of such action. Not less than ten
(10) shares may be purchased at any one time unless the number purchased is
the total number which may be purchased under this option and in no event may
the option be exercised with respect to fractional shares. Upon exercise,
Optionee shall make appropriate arrangements and shall be responsible for the
withholding of any federal and state taxes then due.
4. CESSATION OF DIRECTORSHIP OR EMPLOYMENT. Except as provided in
Paragraphs 2 and 5 hereof, if Optionee shall cease to be a director or an
employee of the Bancorp or a subsidiary corporation for any reason other than
Optionee's death or disability [as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended from time to time (the "Code")], this option
shall expire three (3) months thereafter. During the three (3) month period this
option shall be exercisable only as to those installments, if any, which had
accrued as of the date when Optionee ceased to be a director or an employee of
the Bancorp or a subsidiary corporation. If Optionee is both a director and an
employee, then such option shall expire three (3) months after the latter of
the date of termination of Optionee's directorship or employment.
5. TERMINATION OF EMPLOYMENT FOR CAUSE. If Optionee's employment with
the Bancorp or a subsidiary corporation is terminated for cause, this option
shall expire thirty (30) days from the date of such termination. Termination
for cause shall include, but not be limited to, termination for malfeasance
or gross misfeasance in the performance of duties or conviction of a crime
involving moral turpitude, and, in any event, the determination of the Board
of Directors with respect thereto shall be final and conclusive.
2
<PAGE>
6. NONTRANSFERABILITY; DEATH OR DISABILITY OF OPTIONEE. This 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. If Optionee dies while serving as a director or an employee of the
Bancorp or a subsidiary corporation, or during the three (3) month period
referred to in Paragraph 4 hereof, this option shall expire one (1) year after
the date of Optionee's death or on the day specified in Paragraph 2 hereof,
whichever is earlier. After Optionee's death but before such expiration, the
persons to whom Optionee's rights under this option shall have passed by will or
by the laws of descent and distribution or the executor or administrator of
Optionee's estate shall have the right to exercise this option as to those
shares for which installments had accrued under Paragraph 2 hereof as of the
date on which Optionee ceased to be a director or an employee of the Bancorp or
a subsidiary corporation.
If Optionee terminates his or her directorship or employment because of
disability (as defined in Section 22(e)(3) of the Code), Optionee may exercise
this option to the extent he or she is entitled to do so at the date of
termination, at any time within one (1) year of the date of termination, or
before the expiration date specified in Paragraph 2 hereof, whichever is
earlier.
7. EMPLOYMENT. This Agreement shall not obligate the Bancorp or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
8. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock certificates to Optionee. Except as provided in the
Plan, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
9. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification and termination upon the occurrence of certain events as provided
in Sections 13 and 14 of the Plan.
10. NOTIFICATION OF SALE. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
11. REPRESENTATIONS OF OPTIONEE. No shares issuable upon the exercise
of this option shall be issued and delivered unless and until the Bancorp has
complied with all applicable requirements of California and federal law and of
the Securities and Exchange Commission and the California Department of
Corporations pertaining to the issuance and sale of such shares, and all
applicable
3
<PAGE>
listing requirements of the securities exchanges, if any, on which shares of the
Bancorp of the same class are then listed. Optionee agrees to ascertain that
such requirements shall have been complied with at the time of any exercise of
this option. In addition, if the Optionee is an "affiliate" for purposes of the
Securities Act of 1933, there may be additional restrictions on the resale of
stock, and Optionee therefore agrees to ascertain what those restrictions are
and to abide by the restrictions and other applicable federal and state
securities laws.
Furthermore, the Bancorp may, if it deems appropriate, issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any certificate representing such shares the legends
which the Bancorp deems appropriate.
Optionee represents that the Bancorp, its directors, officers,
employees and agents have not and will not provide tax advice with respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax consequences of the option, including the application and
effect of federal, state, local and other tax laws.
12. NOTICES. Any notice to the Bancorp provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial Officer at
its main office and any notice to Optionee shall be addressed to Optionee's
address on file with the Bancorp or a subsidiary corporation, or to such other
address as either may designate to the other in writing. Any notice shall be
deemed to be duly given if and when enclosed in a properly sealed envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal Service. In lieu of giving notice by mail as aforesaid, any written
notice under this Agreement may be given to Optionee in person, and to the
Bancorp by personal delivery to its President or Chief Financial Officer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
OPTIONEE WESTERN SIERRA BANCORP
By__________________________ By_________________________
By_________________________
4
<PAGE>
EXHIBIT A
NOTICE OF STOCK OPTION EXERCISE
Mr. Gary D. Gall
President
Western Sierra Bancorp
3350 Country Club Drive
Cameron Park, California 95682
Dear Mr. Gall:
Pursuant to my nonqualified stock option agreement dated _______________, I am
exercising my stock option to acquire ____________ shares of common stock of
Western Sierra Bancorp. I am also enclosing payment by means of (CASH IN THE
AMOUNT OF $_________, OR ________ QUALIFYING SHARES OF WESTERN SIERRA BANCORP
HAVING A FAIR MARKET VALUE) equal to the sum of the option exercise price.
I further acknowledge that Western Sierra Bancorp makes no representations as to
federal or state tax matters, and that I am to consult with my own tax attorney
or tax accountant for advice with respect to the exercise of my stock option and
the effect of the sale of the option shares. [(FOR EXECUTIVE OFFICERS OF THE
BANCORP OR INSIDERS OF THE BANCORP) I further acknowledge that I am an affiliate
or insider of Western Sierra Bancorp and that federal securities laws are
applicable to the exercise of the stock option and any subsequent sale of the
option shares including the applicability of the Securities Act of 1933 and Rule
144 (both dealing with the sale of shares by an affiliate). I agree to comply
with such securities laws and rules.]
Sincerely,
Name of Optionee
5
<PAGE>
EXHIBIT 99.4
ROSEVILLE 1ST NATIONAL BANK 1993 STOCK OPTION PLAN
STOCK OPTION AGREEMENTS
<PAGE>
ROSEVILLE 1ST NATIONAL BANK
1993 STOCK OPTION PLAN
INDEX
<TABLE>
<CAPTION>
COMMENCING
ARTICLE NO. DESCRIPTION ON PAGE
- ---------- ----------------------------------------- -----------
<S> <C> <C>
1 PURPOSE 1
2 ADMINISTRATION 1
3 PARTICIPANTS 2
4 THE SHARES 2
5 GRANT, TERMS AND CONDITIONS OF OPTIONS 2
6 ADJUSTMENT OF AND CHANGES IN THE SHARES 6
7 LISTING OR QUALIFICATION OF SHARES 7
8 BINDING EFFECT OF CONDITIONS 7
9 AMENDMENT OF THE PLAN 8
10 EFFECTIVENESS AND TERMINATION OF THE PLAN 8
11 NOTICE OF SALE 8
12 INDEMNIFICATION 8
</TABLE>
<PAGE>
ROSEVILLE 1ST NATIONAL BANK
1993 STOCK OPTION PLAN
1. PURPOSE
The purpose of this Stock Option Plan (the "Plan") of Roseville 1st
National Bank (hereinafter referred to as the "Bank") is to secure for the Bank
and its shareholders the benefits of the incentive inherent in the ownership of
Common Stock of the Bank by those directors and key full-time employees and
officers of the Bank who will share responsibility for the future growth and
success of the Bank.
The word "Affiliate", as used in this Plan, means any bank or
corporation in an unbroken chain of banks or corporations beginning or ending
with the Bank, if at the time of the granting of an option, each such bank or
corporation other than the last in the chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other banks or corporations in the chain.
2. ADMINISTRATION
The following provisions shall govern the administration of the Plan:
(a) The Plan shall be administered by the Board of Directors (the
"Board") or a committee of the Board duly appointed by the Board for this
purpose (the "Committee") composed of not less than three (3) Directors. The
Board of Directors may from time to time remove members from or add members to
the Committee. Vacancies on the committee, however caused, shall be filled by
the Board of Directors. The Board of Directors shall designate a Chairman and
Vice Chairman of the Committee from among the Committee members. Acts of the
Committee (i) at a meeting, held at a time and place and in accordance with
rules adopted by the Committee, at which a quorum of the Committee is present
and acting, or (ii) reduced to and approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee.
(b) The Bank shall effect the grant of options under the grant of
options under the Plan by execution of instruments in writing in a form approved
by the Board or, if appointed, the Committee. Subject to the express terms and
conditions of the Plan and the terms of any option outstanding under the Plan,
the Board, or if appointed the Committee shall have full power to construe the
Plan and the terms of any option granted under the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan or such options and to make
all other determinations necessary or advisable for the administration of the
Plan, including, without limitation, the power to: (i) determine which persons
meet the requirements of Section 3 hereof for selection as participants in the
Plan and which persons are considered to be "employees" for purposes of the
Internal Revenue Code, as amended (the "Code"), and therefore eligible to
receive incentive stock options under the Plan; (ii) determine to whom of the
eligible persons, if any, options shall be granted under the Plan; (iii)
establish the terms and conditions required or permitted to be included in every
option agreement or any amendments thereto, as provided hereunder, including
whether
1
<PAGE>
options to be granted thereunder shall be "incentive stock options", as defined
in the code, or "nonstatutory stock options"; (v) determine and incorporate such
terms and provisions, as well as amendments thereto, as shall be required or
advisable to provide for or conform such option to any change in any law,
regulation, ruling or interpretation applicable thereto; (vi) determine the fair
market value of shares of the Bank Common Stock used by an optionee to exercise
options pursuant to Section 5(b) hereof; and (vii) make all their determinations
deemed necessary or advisable for administering the Plan. The determination on
the foregoing matters by the Board or the Committee if appointed shall be
conclusive.
3. PARTICIPANTS
Participants in the Plan shall be those directors, officers and key
full-time salaried employees of the Bank to whom options may be granted from
time to time.
4. THE SHARES
The Shares of $5.00 par value common stock of the Bank (the "Common
Stock") initially reserved for issuance under the Plan (the "Shares") shall
consist of _____________ or the number and kind of shares of stock or other
securities which shall be substituted for such Shares or to which such Shares
shall be adjusted as provided in Section 6. The Shares subject to the Plan may
be set aside out of the authorized but unissued shares of Common Stock of the
Bank not reserved for any other purpose or out of shares of Common Stock subject
to an option which, for any reason, terminates unexercised as to the Shares.
5. GRANT, TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be evidenced by agreements
in such form as the Committee shall recommend and the Board shall from time to
time approve, which agreements shall be executed by the optionee and by an
officer of the Bank designated by the Board or its Committee. Options may be
granted at any time prior to the termination of the Plan to directors, officers
and other employees of the Bank who, in the judgment of the Committee,
contribute to the successful conduct of the operation of the Bank through their
judgment, interest, ability and special efforts; provided, however, that: (i)
the aggregate initial fair market value of the stock (determined as of the date
the option is granted) that may be acquired by any one officer or employee
pursuant to all incentive stock options granted under the Plan after 1986 that
are exercisable for the first time during any one calendar year (taking into
account all incentive stock options under any stock option plans of the Bank,
any of its Affiliates and any predecessor of any such corporation) shall not
exceed $100,000; (ii) except in the case of termination by death or disability,
as set forth in Section 5(e) below, the granted option must be exercised by the
optionee no later than three (3) months after any termination of office or
employment with the Bank and said office or employment must have been continuous
since the granting of the option. In addition, options granted pursuant to the
Plan shall be subject to the following terms and conditions:
2
<PAGE>
(a) NUMBER OF SHARES. Each agreement evidencing an option granted
under the plan shall state the number of Shares subject to the option.
(b) OPTION PRICE. The purchase price (the "Option Price") under
each option shall not be less than one hundred percent (100%) of the fair market
value of the Shares subject thereto on the date the option is granted, as such
value is determined by the Board or the Committee. The fair market value of such
stock shall be determined in accordance with any reasonable valuation method,
including the valuation methods described in Treasury Regulation Section
20.2031-2. If, however, an employee owns stock of the Bank possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Bank, the Option Price of any incentive stock option granted to such
optionee shall be not less than 110 percent (110%) of such fair market value at
the time such option is granted.
(c) DURATION, VESTING AND EXERCISE OF OPTIONS. Each option shall
vest in such manner and at such time up to but not exceeding ten (10) years from
the date the option is granted as the Board of Directors or the Committee shall
determine in its sole discretion; provided also, however, that the Board of
Directors or the Committee may accelerate the time of exercise of any option. If
an employee owns stock of the Bank possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Bank, any incentive
stock option shall vest in such manner and at such time up to but not exceeding
five (5) years from the date the option is granted. The termination of the Plan
shall not alter the maximum duration, the vesting provisions, or any other term
or condition of any option granted prior to the termination of the Plan.
With respect to incentive stock options granted to a participant under
the Plan in any calendar year, the Bank may grant a participant incentive stock
options to purchase Shares having more than $100,000 in initial aggregate fair
market value (determined at the times the options are granted), subject to the
$100,000 limitation set forth in this paragraph applicable to each year in which
such options first become exercisable. The optionee may exercise, during a
calendar year, an incentive stock option only to the extent that the aggregate
initial fair market value of the Shares that may be acquired pursuant to the
option (or portion thereof) and all other incentive stock options that are first
exercisable by the optionee during the calendar year does not exceed $100,000
(taking into account all incentive stock options granted under any stock option
plan of the Bank or any Affiliate or the Bank, or any predecessor of any such
corporation). If permitted under regulations promulgated by the Treasury
Department or by a ruling of the Internal Revenue service, the optionee may
choose, among the options granted under the Plan that are otherwise first
exercisable by the optionee in a calendar year, those options the optionee
wishes to exercise subject to the $100,000 limitation. If such a choice is not
permitted ( as determined by the Board of Directors or the Committee, in its
sole discretion), the optionee may exercise an incentive stock option in a
calendar year, either in whole or in part, only if the aggregate initial fair
market value of the shares that the optionee may acquire under incentive stock
options that were prior to the first mentioned option and which first become
exercisable in such year (without regard to the $100,000 limitation) does not
exceed $100,000. If an optionee does not exercise an incentive stock option (or
portion thereof) that is first exercisable in a calendar year under the $100,000
limitation, the optionee may exercise that option (or portion thereof) in
subsequent years without regard to the $100,000 limitation.
3
<PAGE>
(d) MEDIUM AND TIME OF PAYMENT. To the extent the right to
purchase Shares has vested under an optionee's stock option agreement, options
may be exercised from time to time by delivering payment in full at the Option
Price for the number of Shares being purchased in cash, or by certified check,
official bank check or the equivalent thereof acceptable to the Bank, together
with written notice to the Secretary of the Bank identifying the option or part
thereof being exercised and specifying the number of Shares for which payment is
being tendered. The Bank shall deliver to the optionee, which delivery shall be
not less than fifteen (15) days and not more than thirty (30) days after the
giving of such notice unless an earlier or later date shall be mutually agreed
upon, without transfer or issue tax to the optionee (or other person entitled to
exercise the option) at the principal office of the Bank, or such other place as
shall be mutually acceptable, a certificate or certificates for such Shares
dated the date the options were validly exercised; provided, however, that the
time of such delivery may be postponed by the Bank for such period as may be
required for it with reasonable diligence to comply with any requirements of
law. If an option covers incentive and nonstatutory stock options, separate
stock certificates shall be issued, one or more for stock acquired upon exercise
of the incentive stock options and one or more for the stock acquired upon
exercise of the nonstatutory stock options.
(e) TERMINATION OF EMPLOYMENT OR OFFICER OR DIRECTOR STATUS. Upon
the termination of an optionee's status as an employee, officer or director of
the Bank, his or her rights to exercise any option held at termination shall be
only as follows:
(1) DEATH OR DISABILITY: If an optionee's employment or
status as an officer or director is terminated by death or disability, such
optionee or such optionee's qualified representative (in the event of the
optionee's mental disability) or the optionee's estate (in the event of
optionee's death) shall have the right for a period of twelve (12) months
following the date of such death or disability to exercise the option to the
extent the optionee was entitled to exercise such option on the date of the
optionee's death or disability, provided the actual date of exercise is in no
event after the expiration of the term of the option.
An optionee's "estate" shall mean the optionee's legal representative
or any person who acquires the right to exercise an option by reason of the
optionee's death.
(2) CAUSE: If an employee, officer or director is
determined by the Board of Directors to have committed an act of embezzlement,
fraud, dishonesty, breach of fiduciary duty to the Bank, or to have deliberately
disregarded the rules of the Bank which resulted in loss, damage or injury to
the Bank, or if an optionee makes any unauthorized disclosure of any of the
secrets or confidential information of the Bank, induces any client or customer
of the Bank to break any contract with the Bank or induces any principal for
whom the Bank acts as agent to terminate such agency relations, or engages in
any conduct which constitutes unfair competition with the Bank, or if any
optionee is removed from any office of the Bank by any regulatory agency,
neither the optionee nor the optionee's estate shall be entitled to exercise any
option with respect to any Shares whatsoever after termination of employment or
officer or director status, whether or not after termination of employment or
officer or director status, the optionee may receive payment from the Bank for
vacation pay, for services rendered prior to termination, for services for the
day on which termination occurred, for salary in lieu of notice, or for other
benefits. For the purposes of this paragraph, termination of employment or
officer or director status shall be deemed to occur at the
4
<PAGE>
time the Bank dispatches notice or advice of termination to the optionee and not
upon the optionee's receipt of such notice or advice.
(3) OTHER REASONS: If an optionee's employment or status
as an officer or director is terminated for any reason other than those
mentioned above under "Death or Disability" and "Cause", the optionee may,
within three (3) months following such termination, exercise the option to the
extent such option was exercisable by the otpionee on the date of termination of
the optionee's employment or status as an officer or director, provided the date
of exercise is in no event after the expiration of the term of the option.
(4) EXTENSION OF GRACE PERIOD: If an optionee's
employment or status as an officer or director is terminated for any reason
other than those mentioned above under "Death or Disability" and "Cause" and the
optionee dies or becomes disabled during the three (3) months following such
termination, such optionee or such optionee's qualified representative (in the
event of the optionee's mental disability) or the optionee's estate (in the
event of the optionee's death) shall have the right for a period of twelve (12)
months following the date of such death or disability to exercise the option to
the extent the optionee was entitled to exercise such option on the date of the
optionee's death or disability, provided the actual date of exercise is in no
event after the expiration of the term of the option.
(f) TRANSFERABILITY OF OPTION. Each option shall be transferable
only by Will or the laws of descent and distribution and shall be exercisable
during the optionee's lifetime only by the optionee.
(g) OTHERS TERMS AND CONDITIONS. Options may also contain such
other provisions, which shall not be inconsistent with any of the foregoing
terms, as the Board of Directors or the Committee shall deem appropriate. No
option, however, nor anything contained in the Plan, shall confer upon any
optionee any right to continue in the employ or in the status as an officer or
director of the Bank, nor limit in any way the right of the Bank to terminate an
optionee's employment or status as an officer or director at any time.
(h) USE OF PROCEEDS FROM STOCK. Proceeds from the sale of Shares
pursuant to the exercise of options granted under the Plan shall constitute
general funds of the Bank.
(i) RIGHTS AS A SHAREHOLDER. The optionee shall have no rights as
a shareholder with respect to any Shares until the date of issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date of such issuance, except
as provided in Section 6 hereof.
(j) WITHHOLDING. The Bank shall have the right upon the exercise
of an option to deduct any sums required to be withheld under federal, state or
local tax laws or regulations. The Bank may condition the issuance of Shares
upon exercise of any option upon the payment by the optionee of any sums
required to be withheld under applicable laws or regulations. The Bank has no
duty to advise any optionee of the existence of any tax or any amounts which may
be withheld.
5
<PAGE>
6. ADJUSTMENT OF AND CHANGES IN THE SHARES
In the event the shares of the Bank, as presently constituted, shall be
changed into or exchanged for a different number or kind of shares of stock or
other securities of the Bank or of another corporation (whether by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
split-up, combination of shares, or otherwise), or if the number of shares of
Common Stock of the Bank shall be increased through the payment of a stock
dividend or through a stock split, there shall be substituted for or added to
each share of Common Stock theretofore appropriated or thereafter subject to or
which may become subject to an option under the Plan, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock of the Bank shall be so changed, or for which each share shall be
exchanged, or to which each such share shall be entitled, as the case may be. In
addition, the Board of Directors or the Committee shall make appropriate
adjustment in the number and kind of shares as to which outstanding options, or
portions thereof then unexercised, shall be exercisable, so that any optionee's
proportionate interest in the Bank by reason of his or her rights under
unexercised portions of such options shall be maintained as before the
occurrence of such event. Such adjustment in outstanding options shall be made
without change in the total price of the unexercised portion of the option and
with a corresponding adjustment in the option price per share.
In the event of sale, dissolution or liquidation of the Bank or a
merger or consolidation in which the Bank is not the surviving or resulting
corporation, the Board shall have the power to cause the termination of every
option outstanding hereunder, except that the surviving or resulting corporation
may, in its absolute and uncontrolled discretion, tender an option or options to
purchase its shares on its terms and conditions, both as to the number of shares
and otherwise; provided, however, that in all events the optionee shall have the
right immediately prior to such sale, dissolution, liquidation, or merger or
consolidation in which the Bank is not the surviving or resulting corporation to
notification thereof as soon as practicable, and thereafter, to exercise the
optionee's option to purchase shares subject thereto to the extent of any
unexercised portion of the option, regardless of the vesting provisions of the
option. This right of exercise shall be conditioned upon the execution of a
final plan of dissolution or liquidation or a definitive agreement of merger or
consolidation.
In the event of an offer by any person or entity to all shareholders of
the Bank to purchase any or all shares of Bank Common Stock ( or shares of stock
or other securities which shall be substituted for such shares or to which such
shares shall be adjusted as provided in this Section (6), any optionee under the
Plan shall have the right upon the commencement of such offer to exercise the
option and purchase Shares subject thereto to the extent of any unexercised or
unvested portion of such option.
No right to purchase fractional shares shall result from any adjustment
in options pursuant to this Section 6. In case of any such adjustment, the
Shares subject to the option shall be rounded down to the nearest whole share.
Notice of any adjustment shall be given by the Bank to each holder of any option
which was in fact so adjusted and such adjustment (whether or not such notice is
given) shall be effective and binding for all purposes of the Plan.
6
<PAGE>
To the extent the foregoing adjustments relate to stock or securities
of the Bank, such adjustments shall be made by the Board of Directors or the
Committee, whose determination in that respect shall be final, binding and
conclusive.
Except as expressly provided in this Section 6, an optionee shall have
no rights by reason of any of the following events: (1) subdivision or
consolidation of shares of stock of any class; (2) payment of any stock
dividend; (3) any other increase or decrease in the number of shares of stock of
any class; (4) any dissolution, liquidation, merger, consolidation, spin-off of
assets or stock of another corporation. Any issue by the Bank of shares of stock
of any class, or securities convertible into shares of any class, shall not
affect the number or price of shares of Common Stock subject to the option, and
no adjustment by reason thereof shall be made.
The grant of an option pursuant to the Plan shall not affect in any way
the right or power of the Bank to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
7. LISTING OR QUALIFICATION OF SHARES
All options granted under the Plan are subject to the requirement that
if at any time the Bank shall determine in its discretion that the listing or
qualification of the Shares subject thereto on any securities exchange or under
any applicable law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of or in connection with the
issuance of Shares under the option, the option may not be exercised in whole or
in part unless such listing, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Bank.
Certificates for the Shares acquired through the exercise of an option
shall be delivered to the optionee involved as soon as possible after such
exercise and the Bank's receipt of payment for such Shares in accordance with
the terms of Section 5 hereof. Such certificates shall be subject to such
legends or other conditions as counsel for the Bank may require in order to
ensure the Bank's compliance with all applicable state and federal laws.
8. BINDING EFFECT OF CONDITIONS
The conditions and stipulations herein contained or in any option
granted pursuant to the Plan shall be and constitute a covenant running with all
of Shares acquired by the optionee pursuant to this Plan, directly or
indirectly, whether the same have been issued or not, and those Shares owned by
the optionee shall not be sold, assigned or transferred to any person save and
except in accordance with the terms and conditions herein provided, and the
optionee shall agree to use best efforts to cause the officers of the Bank to
refuse to record on the books of the Bank any assignment or transfer made or
attempted to be made except as provided in the Plan and to cause said officers
to refuse to cancel old certificates or to issue or deliver new certificates
therefore where the purchaser or assignee
7
<PAGE>
has acquired certificates or the Shares represented thereby, except strictly in
accordance with the provisions of the Plan.
9. AMENDMENT OF THE PLAN
The Board of Directors or the Committee shall have complete power and
authority to terminate or amend the Plan; provided, however, that the Board or
the Committee shall not, without the approval of the shareholders of the Bank:
(i) increase the maximum number of Shares for which options may be granted under
the Plan; (ii) change the computation as to minimum option prices set forth in
Section 5(b); (iii) extend the period during which options may be granted or
exercised; or (iv) amend the requirements as to the class of employees, officers
or directors eligible to receive options. Except as provided in Section 6, no
termination, modification or amendment of the Plan may, without the consent of
the optionee, adversely affect the rights of the optionee under any previously
granted option.
10. EFFECTIVENESS AND TERMINATION OF THE PLAN
(a) The Plan shall become effective only upon the adoption by the
Board. The exercise of any options granted pursuant to the Plan shall be
conditioned upon the approval of the Plan by the holders of a majority of the
outstanding shares of Bank Common Stock at a meeting of the shareholders of the
Bank duly held for this purpose and upon satisfaction of any other conditions of
such exercise as may be imposed by the Office of the Comptroller of the
Currency. The exercise of any options granted pursuant to the Plan shall be
conditioned upon the Registration of the Shares with the Securities and Exchange
Commission, unless in the opinion of counsel to the Bank such Registration is
not necessary. The Bank shall diligently endeavor to comply with all applicable
securities laws before any options are granted under the Plan and before any
Shares are issued pursuant to the exercise of such options.
(b) Unless the Plan shall have been terminated by action of the
Board of Directors prior thereto, the Plan shall terminate on June 17, 2003. The
termination of the Plan shall not alter the maximum term, the vesting provisions
or other terms or conditions of any option granted prior to termination of the
Plan.
11. NOTICE OF SALE
The optionee shall give the Bank notice of any sale or other
disposition of any such Shares not more than five (5) days after such sale or
other disposition.
12. INDEMNIFICATION
To the extent permitted by applicable law in effect from time to time,
no member of the Board or the Committee shall be liable for any action or
omission of any other member of the Board
8
<PAGE>
or Committee nor for any act or omission on the member's own part, excepting
only the member's own willful misconduct or gross negligence. The Bank shall pay
expenses incurred by, and satisfy a judgment or fine rendered or levied against,
a present or former Director or member of the Committee in any action against
such person (whether or not the Bank is joined as a party defendant) to impose a
liability or penalty on such person for an act alleged to have been committed by
such person while a Director or member of the Committee arising with respect to
the Plan or administration thereof or out of membership on the Committee or by
the Bank, or all or any combination of the preceding; provided, the Director or
Committee member was acting in good faith, within what such Director or
Committee member reasonably believed to have been within the scope of his or her
employment or authority and for a purpose which he or she reasonably believed to
be in the best interests of the Bank and its shareholders. Payments authorized
hereunder include amounts paid and expenses incurred in settling any such action
or threatened action. This section does not apply to any action instituted or
maintained in the right of the Bank by a shareholder or holder of a voting trust
certificate representing shares of the Bank. The provisions of this Section
shall apply to the estate, executor, administrator, heirs, legatees or devisees
of a Director or Committee member, and the term "person" as used in this Section
shall include the estate, executor, administrator, heirs, legatees, or devisees
of such person.
9
<PAGE>
STOCK OPTION STATUS AGREEMENT
This Stock Option Status Agreement ("Agreement") is made and entered
into effective this 21st day of June, 1993, by and among Countryside Bancshares,
a California corporation ("Bancshares"), the individuals executing this
Agreement identified below (collectively the "Optionees") and Roseville 1st
National Bank, a national banking association ("R1stNB").
RECITALS
A. During May and June, 1990, Bancshares issued to the Optionees
pursuant to a Capital Note and Stock Option Agreement and a Non-Qualified Stock
Option Agreement, non-qualified stock options in connection with the increase in
capitalization of Bancshares by the Optionees.
B. Bancshares and the Optionees desire to confirm the number and
exercise price of such options as of the end of business on July 31, 1992, the
date of the dissolution of Bancshares. Specifically, in light of the
reorganization (the "Reorganization") completed immediately prior to the
dissolution of Bancshares, and the conversion of Countryside Thrift and Loan
("CTL") and the assumption of the business and obligations of Bancshares and CTL
by R1stNB, the parties have determined that it is in their respective best
interest to confirm the status of such stock options and the obligations of the
parties with respect thereto.
AGREEMENT
The parties therefore agree as follows:
1. Attached as Exhibit A is a schedule of all outstanding
non-qualified stock options held by the Optionees as of the close of business on
July 31, 1992, following the Reorganization during which Bancshares was in
effect merged into CTL, which then converted into R1stNB. The parties hereto
agree and acknowledge that the number of outstanding stock options reflected for
each Optionee and the exercise price are true and accurate as of the effective
date of this Agreement and reflect what was in effect a reverse stock split
which was part of the Reorganization.
2. The parties hereto ratify the terms of the Non-qualified Stock
Option Agreements and the Capital Note and Stock Option Agreement, as amended,
and all other agreements and undertakings relating to the issuance by Bancshares
of stock options in May and June 1990. The parties further agree and acknowledge
that Bancshares' obligations under said agreements continue and have been
assumed by R1stNB pursuant to the conversion of, and as the
successor-in-interest to, CTL into R1stNB.
<PAGE>
The undersigned parties execute this Agreement on the dates set forth below,
effective as of the date set forth above.
ROSEVILLE 1ST NATIONAL BANK COUNTRYSIDE BANCSHARES
By By
---------------------------- --------------------------
Richard C. Seeba
OPTIONEES:
- -------------------------------- -------------------------------
Patrick I. Abare Stephen F. Caulkins
- -------------------------------- -------------------------------
Tom Chinn O.C. Engdol
- -------------------------------- -------------------------------
Neil Hagen Ernest E. Johnson
- -------------------------------- -------------------------------
Thomas J. Manz James E. Otto
- -------------------------------- -------------------------------
Randall H. Scagliotti Richard C. Seeba
- --------------------------------
Franklin K. Yee
2
<PAGE>
EXHIBIT A
SCHEDULE OF OUTSTANDING STOCK OPTIONS
This Schedule is attached to and made a part of the Stock Option Status
Agreement, dated June __, 1993, executed by and among Countryside Bancshares,
Roseville 1st National Bank and the below named Optionees.
<TABLE>
<CAPTION>
OPTIONS TO PURCHASE
NAME OF OPTIONEE NUMBER OF SHARES EXERCISE PRICE
- --------------------- ------------------- --------------
<S> <C> <C>
Patrick I. Abare 2,500 $7.50
Stephen F. Caulkins 2,500 $7.50
Tom Chinn 2,500 $7.50
O.C. Engdol 500 $7.50
Neil Hagen 1,000 $7.50
Ernest E. Johnson 2,500 $7.50
Thomas J. Manz 500 $7.50
James E. Otto 2,500 $7.50
Randall H. Scagliotti 2,500 $7.50
Richard C. Seeba 15,833 $7.50
Franklin K. Yee 500 $7.50
------
TOTAL 33,333
======
</TABLE>
<PAGE>
ROSEVILLE 1ST NATIONAL BANK
INCENTIVE STOCK OPTION AGREEMENT
Granting Date:_________________
To:______________________
We are pleased to notify you that Roseville 1st National Bank (the
"Bank") this day hereby grants to you an option to purchase all or any part of
__________ shares of the $5.00 par value Common Stock of the Bank (the "Shares")
at a price of _________ per share (the "Option Price") as a Stock Option under
the Bank's 1993 Stock Option Plan (the "Plan").
THIS OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS
OF THE PLAN. ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARIZED IN THIS
AGREEMENT. A COPY OF THE PLAN IS PROVIDED WITH THIS AGREEMENT.
1. PURPOSE OF THE OPTION
One of the purposes of the Plan is to advance the interests of the Bank
and its Affiliates (the "Bank") by stimulating the efforts of full-time salaried
officers and employees on behalf of the Bank by granting them financial
participation in the progress and success of the Bank.
2. SIGNATURE ON OPTION AGREEMENT
This option cannot be exercised unless you first sign this document in
the place provided and return it to the Secretary of the Bank. If you fail to do
so, this option will terminate and be of no effect. However, your signing and
delivering this letter will not bind you to purchase any of the Shares. Your
obligation to purchase the Shares will arise only if you exercise this option in
the manner set forth in Paragraph 3 below.
3. TERMS OF OPTION AND EXERCISE OF OPTION
You may exercise this option during a calendar year only to the extent
that the aggregate fair market value (determined at the times the options are
granted) of the stock that may be acquired pursuant to this option (or portion
thereof) and all other incentive stock options granted that are first
exercisable by you during the calendar year does not exceed $100,000 (taking
into account all incentive stock options under any stock option plan of the Bank
or any of its Affiliates or any predecessor of any such corporation. If
permitted in regulations promulgated by the Treasury Department or rulings of
the Internal Revenue Service, you may choose, among the incentive stock options
granted under the Plan that are otherwise first exercisable by you in a calendar
year, those options you wish to exercise subject to the $100,000 limitation. For
example, you may decide to exercise the options that have the lowest exercise
prices. If such a choice is not permitted (as determined by the Bank in its sole
discretion), you must exercise incentive stock options that become first
exercisable in a calendar year without regard to the $100,000 limitation, in the
order in which they were granted to you (up to the $100,000 limit). If you
choose not to exercise an option that is
<PAGE>
first exercisable in a calendar year under the $100,000 limitation, you may
exercise that option in subsequent years without regard to the $100,000
limitation.
Subject to the provisions of Paragraph 4 below and this Paragraph 3, this option
can be exercised by you at any time during a period of _________ (_____) months
from the granting date as follows:
(a) This option may be exercised immediately to the extent of not
more than ________ percent (_____%) of the Shares.
(b) After the expiration of _________ (_____) months from the
granting date, this option may be exercised to the extent of not more than
_________ percent (_____%) of the Shares.
(c) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(d) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(e) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(f) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(g) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(h) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(i) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(j) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
(k) After the expiration of __________ (_____) months from the
granting date, this option may be exercised to the extent of an additional
_________ percent (_____%) of the Shares.
Any portion of the option that you do not exercise shall accumulate and
can be exercised by you any time prior to the expiration of _________ (_____)
months from the granting date.
This option may be exercised by delivering to the Secretary of the Bank
payment in full at the Option Price for the number of Shares being purchased in
cash or by certified check or official bank check or the equivalent thereof
acceptable to the Bank, with a written notice in a form satisfactory to the
Bank, signed by you specifying the number of Shares you then desire to purchase
2
<PAGE>
and the time of delivery thereof, which shall not be less than fifteen (15) days
and not more than thirty (30) days after the giving of such notice unless an
earlier or later date is mutually agreed upon. At such time the Bank shall,
without transfer or issue tax to you (or such other person entitled to exercise
the option), deliver to you (or such other person entitled to exercise the
option) at the principal office of the Bank, or such other place as shall be
mutually acceptable, a certificate or certificates for such Shares dated the
date the options were validly exercised; provided, however, that the time of
such delivery may be postponed by the Bank for such period as may be required
for it with reasonable diligence to comply with any requirements of law. No
fractional Shares shall be issued or delivered.
As a holder of an option, you shall have the rights of a shareholder
with respect to the Shares subject to this option only after such Shares shall
have been issued to you upon the exercise of this option.
4. TERMINATION OF OFFICE OR EMPLOYMENT
If your status as an employee or officer of the Bank is terminated for
any reason other than death or disability or cause, this option may be exercised
within three (3) months from the date of such termination to the extent you were
entitled to exercise the option on the date of termination, but in no event may
this option be exercised after the expiration of the term of this option. If,
however, you are removed from your office or your employment with the Bank is
terminated for cause as defined in the Plan, this option shall expire at the
time notice or advice of such removal or termination is dispatched by the Bank,
and neither you nor your estate shall be entitled to exercise any option with
respect to any Shares whatever, whether after termination of employment or
officer status, you may receive payment from the Bank for vacation pay, for
services render prior to termination, for services for the day of termination,
for salary in lieu of other notice, or for other benefits.
5. DEATH OR DISABILITY
If you die or become disabled while an officer or employee of the Bank,
the option may be exercised in whole or in part by you or your qualified
representative (in the event of your mental disability) or by the duly
authorized executor of your Will or by the duly authorized administrator or
special administrator of your estate (in the event of your death) within twelve
(12) months from the date of your death or disability to the extent that you had
the right to exercise this option on the date of your death or disability, but
in no event after the expiration of the term of this option.
Disability shall be determined under Section 422A of the Internal
Revenue Code (the "Code") as in effect on the date of such disability.
Disability is currently defined in the Code as follows:
An individual is permanently and totally disabled if he is
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. An individual
shall not be considered to be permanently and totally disabled unless
he
3
<PAGE>
furnished proof of the existence thereof in such form and manner, and
at such times, as the Secretary may require.
6. NONTRANSFERABILITY OF OPTION
This option shall not be transferable except by Will or the laws of
descent and distribution, and this option may be exercised during your lifetime
only by you. Any purported transfer or assignment of this option shall be void
and of no effect, and shall give the Bank the right to terminate this option as
of the date of such purported transfer or assignment.
7. ADJUSTMENT OF AND CHANGES IN THE SHARES
In the event of any change in the outstanding Common Stock of the Bank,
without receipt by the Bank of additional consideration in lieu of such change
(whether by reason of stock dividends, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like),
the aggregate number or class of Shares subject to this option immediately prior
to such event shall be appropriately adjusted in accordance with the terms of
the Plan so that your proportionate interest in the Bank by reason of your
rights under any unexercised portions of such options shall be maintained as
before the occurrence of such event. Such adjustment shall be conclusive.
In the event of a dissolution or liquidation of the Bank or a merger or
consolidation in which the Bank is not the surviving corporation, the Board of
Directors shall have the power to cause each outstanding option to terminate,
except that the surviving or resulting corporation may tender an option to
purchase its shares; provided, however, that you shall have the right to
exercise this option as to all or any of the Shares subject to this option
immediately prior to such dissolution, liquidation, merger or consolidation, and
purchase Shares subject hereto to the extent of any unexercised portion of this
option, regardless of the vesting provisions of Paragraph 3 hereof. This right
of exercise shall be conditioned upon the execution of a final plan of
dissolution or liquidation or of a definitive agreement of merger or
consolidation, and the Bank shall provide you with notice thereof as soon as
practicable.
In the event of an offer by any person or entity to all shareholders of
the Bank to purchase any or all shares of Bank Common Stock (or shares of stock
or other securities which shall be substituted for such shares or to which such
shares shall be adjusted as provided in Paragraph 7), the person exercising this
option shall have the right upon commencement of such offer to exercise this
option to the extent of any unexercised portion and purchase Shares subject
hereto, regardless of the vesting provisions of Paragraph 3 hereof.
8. SUBJECT TO TERMS OF THE PLAN
This Agreement shall be subject in all respects to the terms and
conditions of the Plan. Your signature herein represents your acknowledgment of
receipt of a copy of the Plan. Any dispute or disagreement which shall arise
under or as a result of or pursuant to this Agreement shall be finally and
conclusively determined by the Board of Directors or a duly appointed Committee
in its sole discretion, and such determination shall be binding upon all
parties.
4
<PAGE>
9. GRANT AND EXERCISE OF OPTION: CONDITIONS
Exercise of this option is conditioned upon approval of the Plan by the
shareholders of the Bank in accordance with the requirements of the Comptroller
of the Currency.
10. TAX EFFECTS
THE FEDERAL TAX CONSEQUENCES OF EMPLOYEE STOCK OPTIONS ARE COMPLEX AND
SUBJECT TO CHANGE. ACCORDINGLY, AN OPTIONEE (OR HIS OR HER GUARDIAN, ESTATE OR
LEGATEE) SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR BEFORE EXERCISING ANY
OPTION OR DISPOSING OF ANY SHARES ACQUIRED UPON THE EXERCISE OF AN OPTION.
11. RIGHTS AS A SHAREHOLDER
You have no rights as a shareholder of the Bank with respect to any
Shares until the date of the issuance of a stock certificate to you for such
Shares.
12. NOTIFICATION OF SALE
You agree that you, or any person acquiring Shares upon exercise of
this Option, will notify the Bank not more than five (5) days after any sale or
disposition of such Shares.
ROSEVILLE 1ST NATIONAL BANK
By
---------------------------
Agreed to this __ day of
__________________, 19__.
- -----------------------------------
Signature of Optionee
5
<PAGE>
EXHIBIT 99.5
LAKE COMMUNITY BANK 1984 STOCK OPTION PLAN
STOCK OPTION AGREEMENTS
<PAGE>
LAKE COMMUNITY BANK
1984 STOCK OPTION PLAN
1. PURPOSE.
The purpose of this 1984 Stock Option Plan (the "Plan") of Lake
Community Bank and its affiliates (hereinafter collectively referred to as
the "Bank") is to secure for the Bank and its shareholders the benefits of
the incentive inherent in the ownership of Common Stock of the Bank by those
directors and key full-time, employees and officers of the Bank who will
share responsibility with management of the Bank for its future growth and
success.
The word "affiliate", as used in this Plan, means any bank or corporation
in an unbroken chain of banks or corporations beginning or ending with the
Bank, if at the time of the granting of an option, each such bank or
corporation other than the last in that chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other banks or corporations in the chain.
2. ADMINISTRATION.
The following provisions shall govern the administration of the Plan:
(a) The Plan shall be administered by the Board of Directors or a
committee of the Board of Directors appointed for this purpose by the Board
of Directors (the "Committee") composed of not less than three (3) directors.
The Board of Directors may from time to time remove members from or add
members to the Committee. Vacancies on the Committee, however caused, shall
be filled by the Board of Directors. The Board of Directors shall designate
a Chairman and Vice-Chairman of the Committee from among the Committee
members. Acts of the Committee (i) at a meeting, held at a time and place
and in accordance with rules adopted by the Committee, at which a quorum of
the Committee is present and acting, or (ii) reduced to and approved in
writing by a majority of the members of the Committee, shall be the valid
acts of the Committee.
(b) The Bank shall effect the grant of options under the Plan by
execution of instruments in writing in a form approved by the Board of
Directors or, if appointed, the Committee. Subject to the express terms and
conditions of the Plan and the terms of any option outstanding under the
Plan, the Board of Directors or, if appointed, the Committee, shall have full
power to construe the Plan and the terms of any option granted under the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan or such options and to make all other determinations necessary or
advisable for the administration of the Plan,
<PAGE>
including, without limitation, the power to: (i) determine which persons meet
the requirements of Section 3 hereof for selection as participants in the
Plan and which persons are considered to be "employees" for purposes of the
Internal Revenue Code of 1954, as amended (the "Code"), and therefore
eligible to receive incentive stock options under the Plan; (ii) determine to
whom of the eligible persons, if any, options shall be granted under the
Plan; (iii) establish the terms and conditions required or permitted to be
included in every option agreement or any amendments thereto, including
whether options to be granted thereunder shall be "incentive stock options,"
as defined in Section 422A of the Code, or "nonstatutory stock options"; (iv)
specify the number of shares to be covered by each option; (v) in the event a
particular option is to be an incentive stock option, determine and
incorporate such terms and provisions, as well as amendments thereto, as
shall be required in the judgment of the Board of Directors or the Committee,
so as to provide for or conform such option to any change in any law,
regulation, ruling or interpretation applicable thereto; and (vi) to make all
other determinations deemed necessary or advisable for administering the
Plan. The determination on the foregoing matters by the Board of Directors
or the Committee shall be conclusive.
(c) No member of the Stock Option Committee may be granted stock
options under the Plan.
3. PARTICIPANTS.
Participants in the Plan shall be those directors and key full-time
salaried employees and officers of the Bank to whom options may be granted
from time to time by the Board of Directors or the Committee.
4. THE SHARES.
The shares of stock subject to options authorized to be granted under
the Plan shall consist of 170,031 shares of the no par value Common Stock of
the Bank (the "Shares"), or the number and kind of shares of stock or other
securities which shall be substituted for such shares or to which such shares
shall be adjusted as provided in Section 6. 100,000 out of the 170,031
Shares reserved for issuance under the Plan shall be reserved for issuance to
nonemployee directors of the Bank in accordance with Section 5(a) hereof.
The Shares subject to the Plan may be set aside out of the authorized but
unissued shares of Common Stock of the Bank not reserved for any other
purpose or out of shares of Common Stock subject to an option which, for any
reason, terminates unexercised as to the Shares.
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<PAGE>
5. GRANT, TERMS AND CONDITIONS OF OPTIONS.
Options may be granted at any time prior to the termination of the Plan
to officers and other key, full-time salaried employees of the Bank who, in
the judgment of the Board of Directors or the Committee, contribute to the
successful conduct of the operation of the Bank through their judgment,
interest, ability and special efforts and to nonemployee directors; provided,
however, that: (i) an eligible officer or employee shall not participate in
the granting of his or her own option; (ii) the aggregate fair market value
of the stock (determined as of the date the option is granted) for which any
one employee may be granted incentive stock options in any calendar year
(under all stock option plans of the Bank) shall not exceed $100,000 plus any
unused limit carryover to such year as provided in Section 422A of the Code;
(iii) except in the case of termination by death or disability, as set forth
in Section 5(c) below, the granted option must be exercised by the optionee
no later than three (3) months after any termination of employment with the
Bank and said employment must have been continuous since the granting of the
option; and (iv) the total number of shares subject to options granted to any
one optionee, at any one time, shall not exceed ten percent (10%) of the
then issued and outstanding shares of Common Stock of the Bank. In addition,
options granted pursuant to the Plan shall be subject to the following terms
and conditions:
(a) NON-EMPLOYEE DIRECTOR PARTICIPANTS. One Hundred Thousand (100,000)
out of the one hundred seventy thousand thirty one (170,031) shares of the
Bank's Common Stock reserved for issuance under the Plan shall be reserved
for issuance and granted to non-employee directors of the Bank as follows:
Upon approval of the Plan by the affirmative vote of a majority of the
outstanding shares of Common Stock of the Bank, as of June 2, 1988, Ten
Thousand (10,000) of the Shares shall be granted to each non-employee
director of the Company who has been a member of the Board of Directors for
more than four (4) years for a total grant of One Hundred Thousand (100,000)
Shares as follows:
<TABLE>
<CAPTION>
Number of Shares
Director Subject to Option
- -------- -----------------
<S> <C>
Mildred K. Adams 10,000
Donald L. Browning, M.D. 10,000
Alastair S. Falconer 10,000
John H. Helms 10,000
Harriet E. Heth 10,000
-3-
<PAGE>
Billie L. Holmes 10,000
Harry C. Joliffe, O.D. 10,000
May G. Noble 10,000
Lawrence A. Rogers 10,000
Howard Van Lente 10,000
</TABLE>
Each nonstatutory option so granted as of June 2, 1988, to the
above-named non-employee directors of the Bank shall be granted at an
exercise price no less than one hundred percent (100%) of the fair market
value of the Bank's Common Stock on the date of grant. All such nonstatutory
options so granted shall be exercisable for a term not exceeding ten (10)
years and one (1) day from the date of grant and shall be exercisable in
twenty five percent (25%) cumulative annual installments commencing with the
first anniversary of the grant date. NO NON-EMPLOYEE DIRECTOR SHALL BE
ELIGIBLE TO RECEIVE ANY STOCK OPTION OTHER THAN AS EXPRESSLY SET FORTH IN
THIS SECTION 5(a).
(b) OPTION PRICE. The purchase price under each option shall be not
less than one hundred percent (100%) of the fair market value of the Shares
subject thereto on the date the option is granted, as such value is
determined by the Board of Directors or the Committee. The fair market value
of such stock shall be determined in accordance with any reasonable valuation
method, including the valuation methods described in Treasury Regulation
Section 20.2031-2. If, however, an employee owns stock of the Bank
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Bank, the option price of any incentive stock
option granted to such optionee shall be not less than 110 percent (110%) of
such fair market value at the time such option is granted.
(c) DURATION AND EXERCISE OF OPTIONS. Each option shall vest in such
manner and at such time up to but not exceeding ten (10) years from the date
the option is granted as the Board of Directors or the Committee shall
determine in its sole discretion; provided also, however, that the Board of
Directors or the Committee may, in its sole discretion, accelerate the time
of exercise of any option. No incentive stock option granted or otherwise
outstanding under the Plan shall be exercisable by any optionee while there
is outstanding (within the meaning of Section 422A of the Code) any
previously granted incentive stock option to such optionee to purchase stock
of the Bank or in a corporation which (at the time of the granting of the
later option) is a parent or affiliate corporation of the Bank, or in a
predecessor corporation of any such corporation. The termination of the Plan
shall not alter the maximum duration, the vesting
-4-
<PAGE>
provisions, or any other term or condition of any option granted prior to the
termination of the Plan.
To the extent the right to purchase Shares has vested under a
Participant's stock option agreement, options may be exercised from time to
time by delivering payment therefor in cash, certified check, official bank
check, or the equivalent thereof acceptable to the Bank, together with
written notice to the Secretary of the Bank identifying the option or part
thereof being exercised and specifying the number of Shares for which payment
is being tendered. The Bank shall deliver to the optionee, which delivery
shall be not less than fifteen (15) days and not more than thirty (30) days
after the giving of such notice unless an earlier or later date shall be
mutually agreed upon, without transfer or issue tax to the optionee (or other
person entitled to exercise the option) at the principal office of the Bank,
or such other place as shall be mutually acceptable, a certificate or
certificates for such Shares dated the date the options were validly
exercised; provided, however, that the time of such delivery may be postponed
by the Bank for such period as may be required for it with reasonable
diligence to comply with any requirements of law. If an option covers
incentive and nonstatutory stock options, separate stock certificates will be
issued; one or more for incentive stock options and one or more for the
nonstatutory stock options.
(d) TERMINATION OF EMPLOYMENT OR OFFICER STATUS. Upon the termination
of an optionee's status an an employee or officer of the Bank, his or her
rights to exercise an option then held shall be only as follows:
DEATH OR DISABILITY: If an optionee's employment or status as an officer
is terminated by death or disability, such optionee or such optionee's
qualified representative (in the event of the optionee's mental disability)
or the optionee's estate (in the event of the optionee's death) shall have
the right for a period of twelve (12) months following the date of such death
or disability to exercise the option to the extent the optionee was entitled
to exercise such option on the date of the optionee's death or disability,
provided the actual date of exercise is in no event after the expiration of
the term of the option.
An optionee's "estate" shall mean the optionee's legal representative or
any person who acquires the right to exercise an option by reason of the
optionee's death.
CAUSE: If an employee or officer is determined by the Board of Directors
to have committed an act of embezzlement, fraud, dishonesty, breach of
fiduciary duty to the Bank, or to have deliberately disregarded the rules of
the Bank which resulted in loss, damage or injury to the Bank, or if an
optionee makes any unauthorized disclosure of any of the secrets or
confidential
-5-
<PAGE>
information of the Bank, induces any client or customer of the Bank to break
any contract with the Bank or induces any principal for whom the Bank acts as
agent to terminate such agency relations, or engages in any conduct which
constitutes unfair competition with the Bank, or if an optionee is removed
from any office of the Bank by the Federal Deposit Insurance Corporation or
any other bank regulatory agency, neither the optionee nor the optionee's
estate shall be entitled to exercise any option with respect to any Shares
whatsoever after termination of employment or officer status, whether or not
after termination of employment or officer status, the optionee may receive
payment from the Bank for vacation pay, for services rendered prior to
termination, for services for the day on which termination occurred, for
salary in lieu of notice, or for other benefits. In making such
determination, the Board of Directors shall act fairly and shall give the
optionee an opportunity to appear and be heard at a hearing before the full
Board of Directors and present evidence on the optionee's behalf. For the
purpose of this paragraph, termination of employment or officer status shall
be deemed to occur when the Bank dispatches notice or advice to the optionee
that the optionee's employment or status as an officer is terminated and not
at the time of optionee's receipt thereof.
OTHER REASONS: If an optionee's employment or status as an officer is
terminated for any reason other than those mentioned above under "Death or
Disability" and "Cause", the optionee may, within three (3) months following
such termination, exercise the option to the extent such option was
exercisable by the optionee on the date of termination of the optionee's
employment or status as an officer, provided the date of exercise is in no
event after the expiration of the term of the option.
(e) TRANSFERABILITY OF OPTION. No option shall be transferable other
than by will or the laws of descent and distribution and shall be exercisable
during the optionee's lifetime only by the optionee.
(f) OTHER TERMS AND CONDITIONS. Options may also contain such other
provisions, which shall not be inconsistent with any of the foregoing terms,
as the Board of Directors or the Committee shall deem appropriate. No option,
however, nor anything contained in the Plan, shall confer upon any optionee
any right to continue in the employ or in the status as an officer of the
Bank, nor limit in any way the right of the Bank to terminate an optionee's
employment or status as an officer at any time.
(g) USE OF PROCEEDS FROM STOCK. Proceeds from the sale of Shares
pursuant to the exercise of options granted under the Plan shall constitute
general funds of the Bank.
-6-
<PAGE>
(g) RIGHTS AS A SHAREHOLDER. The optionee shall have no rights as a
shareholder with respect to any Shares until the date of issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date of such issuance,
except as provided in Section 6 hereof.
(i) WITHHOLDING. The Bank shall have the right upon the exercise of any
option to deduct any sums required to be withheld under federal, state or
local tax laws or regulations. The Bank may condition the issuance of Shares
upon exercise of any option upon the payment by the optionee of any sums
required to be withheld under applicable laws or regulations. The Bank has no
duty to advise any optionee of the existence of any tax or any amounts which
may be withheld.
6. ADJUSTMENT OF AND CHANGES IN THE SHARES.
In the event the shares of Common Stock of the Bank, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Bank or of another corporation
(whether by reason of reorganization, merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise), or if the number of shares of Common Stock of the Bank shall be
increased through the payment of a stock dividend, the Board of Directors
shall substitute for or add to each share of Common Stock of the Bank
theretofore appropriated or thereafter subject or which may become subject to
an option under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock of the Bank
shall be so changed, or for which each share shall be exchanged, or to which
each such share shall be entitled, as the case may be. In addition, the Board
of Directors shall make appropriate adjustment in the number and kind of
shares as to which outstanding options, or portions thereof then unexercised,
shall be exercisable, so that any optionee's proportionate interest in the
Bank by reason of his or her rights under unexercised portions of such
options shall be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change in the total
price to the unexercised portion of the option and with a corresponding
adjustment in the option price per share.
In the event of sale, dissolution or liquidation of the Bank or a merger
or consolidation in which the Bank is not the surviving or resulting
corporation, the Board of Directors may, in its discretion, provide for the
assumption by the surviving or resulting corporation of every option
outstanding hereunder on its terms and conditions, both as to the number of
shares and otherwise; provided, however, that, if the Board of Directors does
not provide for such assumption, the Board of Directors
-7-
<PAGE>
shall have the power to cause the termination of every option outstanding
hereunder, except that the surviving or resulting corporation may, in its
discretion, tender an option or options to purchase its shares on its terms
and conditions, both as to the number of shares and otherwise; provided,
further, that in all events the optionee shall have the right immediately
prior to such sale, dissolution, liquidation, or merger or consolidation in
which the Bank is not the surviving or resulting corporation to notification
thereof as soon as practicable and, thereafter, to exercise the optionee's
option to purchase Shares subject thereto to the extent of any unexercised
portion of the option, regardless of the vesting provisions of Section 5(b)
hereof. This right of exercise shall be conditioned upon the execution of a
final plan of dissolution or liquidation or a definitive agreement of merger
or consolidation.
In the event of an offer by any person or entity to all shareholders of
the Bank to purchase any or all shares of Common Stock of the Bank (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in Section 6 hereof), any
optionee under this Plan shall have the right upon the commencement of such
offer to exercise the option and purchase shares subject thereto to the extent
of any unexercised or unvested portion of such option.
No right to purchase fractional shares shall result from any adjustment
in options pursuant to this Section 6. In case of any such adjustment, the
shares subject to the option shall be rounded down to the nearest whole
share. Notice of any adjustment shall be given by the Bank to each holder of
an option which was in fact so adjusted and such adjustment (whether or not
such notice is given) shall be effective and binding for all purposes of the
Plan.
To the extent the foregoing adjustments relate to stock or securities of
the Bank, such adjustments shall be made by the Board of Directors or the
Committee, whose determination in that respect shall be final, binding and
conclusive.
Except as expressly provided in this Section 6, an optionee shall have no
rights by reason of any of the following events: (1) subdivision or
consolidation of shares of stock of any class; (2) payment of any stock
dividend; (3) any other increase or decrease in the number of shares of stock
of any class; (4) any dissolution, liquidation, merger, consolidation,
spin-off of assets or stock of another corporation. Any issue by the Bank of
shares of stock of any class, or securities convertible into shares of any
class, shall not affect the number or price of shares of Common Stock subject
to the option, and no adjustment by reason thereof shall be made.
-8-
<PAGE>
The grant of an option pursuant to the Plan shall not affect in any way
the right or power of the Bank to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge
or to consolidate or to dissolve, liquidate or sell, or transfer all or any
part of its business or assets.
7. LISTING OR QUALIFICATION OF SHARES.
All options granted under the Plan are subject to the requirement that
if at any time the Board of Directors or the Committee shall determine in its
discretion that the listing or qualification of the Shares subject thereto on
any securities exchange or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the issuance of Shares under the option,
the option may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained free
of any condition not acceptable to the Board of Directors or the Committee.
8. BINDING EFFECT OF CONDITIONS.
The conditions and stipulations herein contained, or in any option
granted pursuant to the Plan shall be, and constitute, a covenant running
with all of the Shares acquired by the optionee pursuant to this Plan,
directly or indirectly, whether the same have been issued or not, and those
Shares owned by the optionee shall not be sold, assigned or transferred by
any person save and except in accordance with the terms and conditions herein
provided, and the optionee shall agree to use the optionee's best efforts to
cause the officers of the Bank to refuse to record on the books of the Bank
any assignment or transfer made or attempted to be made except as provided in
the Plan and to cause said officers to refuse to cancel old certificates or
to issue or deliver new certificates therefor where the purchaser or assignee
has acquired certificates or the Shares represented thereby, except strictly
in accordance with the provisions of the Plan.
9. AMENDMENT AND TERMINATION OF THE PLAN.
The Board of Directors shall have complete power and authority to
terminate or amend the Plan; provided, however, that the Board of Directors
shall not, without the approval of the shareholders of the Bank and the
approval of the Superintendent of Banks, State of California, (i) increase
the maximum number of shares for which options may be granted under the Plan;
(ii) change the computation as to minimum option prices set forth in
Paragraph 5(b); (iii) extend the period during which options may be granted
or exercised; or (iv) amend the requirements as to the class of directors,
employees or officers eligible to receive options. Except as provided in
Section 6, no termination,
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<PAGE>
modification or amendment of the Plan may, without the consent of a director,
employee or officer to whom such option shall theretofore have been granted,
adversely affect the rights of such employee or officer under such option.
Unless the Plan shall have been terminated by action of the Board of
Directors prior thereto, it shall terminate ten (10) years after the earlier
of its adoption by the Board of Directors or approval by the shareholders.
10. EFFECTIVENESS OF THE PLAN.
The Plan shall become effective only upon approval by the Board of
Directors. The exercise of any options granted pursuant to the Plan shall be
conditioned upon the approval of the Plan, within 12 months before or after
the date such Plan is adopted, by the holders of a majority of the outstanding
shares of Common Stock of the Bank.
11. PRIVILEGES OF STOCK OWNERSHIP; SECURITIES LAW COMPLIANCE;
NOTICE OF SALE.
No optionee shall be entitled to the privileges of stock ownership as to
any Shares not actually issued and delivered to the optionee. No Shares
shall be purchased upon the exercise of any option unless and until any then
applicable requirements of any regulatory agencies having jurisdiction and of
any exchanges upon which the Common Stock of the Bank may be listed shall
have been fully complied with. The Bank shall diligently endeavor to comply
with all applicable securities laws before any options are granted under the
Plan and before any Shares are issued pursuant to the exercise of such
options. The optionee shall give the Bank notice of any sale or other
disposition of any such Shares not more than five (5) days after such sale or
other disposition.
12. INDEMNIFICATION.
To the extent permitted by applicable law in effect from time to time,
no member of the Board of Directors or the Committee shall be liable for any
action or omission of any other member of the Board of Directors or Committee
nor for any act or omission of any other member of the Board of Directors or
Committee nor for any act or omission on the member's own part, excepting
only the member's own willful misconduct or gross negligence. The Bank shall
pay expenses incurred by, and satisfy a judgment or fine rendered or levied
against, a present or former director or member of the Committee in any
action against such person (whether or not the Bank is joined as a party
defendant) to impose a liability or penalty on such person for an act alleged
to have been committed by such person while a director or member of the
Committee arising with respect to the Plan or administration thereof or out of
membership on the Committee or by the Bank, or all or any combination of the
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<PAGE>
preceding; provided, the Director or Committee member was acting in good
faith, within what such director or Committee member reasonably believed to
have been within the scope of his or her employment or authority and for a
purpose which he or she reasonably believed to be in the best interests of
the Bank or its shareholders. Payments authorized hereunder include amounts
paid and expenses incurred in settling any such action or threatened action.
This section does not apply to any action instituted or maintained in the
right of the Bank by a shareholder or holder of a voting trust certificate
representing shares of the Bank. The provisions of this section shall apply
to the estate, executor, administrator, heirs, legatees or devisees of a
director or Committee member, and the term "person" as used in this section
shall include the estate, executor, administrator, heirs, legatees, or
devisees of such person.
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<PAGE>
LAKE COMMUNITY BANK
INCENTIVE
STOCK OPTION AGREEMENT
Granting Date:
TO:
We are please to notify you that Lake Community Bank (the "Bank") this
day hereby grants to you an option to purchase all or any part of ____________
shares of the Common Stock of the Bank (the "Shares") at the Option Price of
____________ per share as a Stock Option under the Bank's 1984 Stock Option
Plan (the "Plan").
THIS OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS OF THE
PLAN. ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARIZED IN THIS AGREEMENT. A
COPY OF THE PLAN IS PROVIDED WITH THIS AGREEMENT.
THIS OPTION MAY BE EXERCISED ONLY IF THE PLAN IS APPROVED BY SHAREHOLDERS
HOLDING A MAJORITY OF THE VOTING POWER OF THE ISSUED AND OUTSTANDING SHARES
OF THE BANK.
1. PURPOSE OF THE OPTION.
One of the purposes of the Plan is to advance the interests of the Bank
and its affiliates (collectively the "Bank") by stimulating the efforts of
full-time salaried employees and officers on behalf of the Bank by granting
them financial participation in the progress and success of the Bank.
2. SIGNATURE ON OPTION AGREEMENT.
This option cannot be exercised unless you first sign this document in
the place provided and return it to the Secretary of the Bank. However, your
signing and delivering this letter will not bind you to purchase any of the
shares subject to the option. Your obligation to purchase the Shares can
arise only when you exercise this option in the manner set forth in Paragraph
3 below.
3. TERMS OF OPTION AND EXERCISE OF OPTION.
The option is not exercisable while there is outstanding (within the
meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code")) any incentive stock option which was granted to you before the
granting of this option, to
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<PAGE>
purchase stock of the Bank or in a corporation which (at the time of the
granting of such option) is a parent or subsidiary corporation (as defined
for purposes of Section 422A of the Code) of the Bank, or in a predecessor
corporation of any of such corporations.
Subject to the provisions of Paragraph 4 below and this Paragraph 3, this
option can be exercised by you at any time during a period of ___________
(____) months from the granting date as follows:
(a) This option may be exercised immediately to the extent of not
more than ____________ percent (______%) of the Shares;
(b) After the expiration of _________ (____) months from the granting
date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(c) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(d) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(e) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(f) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(g) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(h) After the expiration of ____________ (____) months from the
granting date, this option may be
-2-
<PAGE>
exercised to the extent of an additional ____________ percent
(______%) of the Shares;
(i) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(j) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(k) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares.
Any portion of the option that you do not exercise shall accumulate and
can be exercised by you any time prior to the expiration of _______________
(____) months from the granting date.
This option may be exercised by delivering to the Secretary of the Bank,
payment in full at the Option Price for the number of Shares being purchased
in cash or by certified check or official bank check or the equivalent
thereof acceptable to the Bank, together with a written notice in a form
satisfactory to the Bank, signed by you specifying the number of Shares you
then desire to purchase and the time of delivery thereof, which shall not be
less than fifteen (15) days and not more than thirty (30) days after the
giving of such notice unless an earlier or later date is mutually agreed
upon. At such time the Bank shall, without transfer or issue tax to you (or
such other person entitled to exercise the option), deliver to you (or such
other person entitled to exercise the option) at the principal office of the
Bank, or such other place as shall be mutually acceptable, a certificate or
certificates for such Shares dated the date the options were validly
exercised; provided, however, that the time of such delivery may be postponed
by the Bank for such period as may be required for it with reasonable
diligence to comply with any requirements of law. No fractional Shares shall
be issued or delivered.
As a holder of an option, you shall have the rights of a shareholder with
respect to the Shares subject to this option only after such Shares shall
have been issued to you upon the exercise of this option.
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<PAGE>
4. TERMINATION OF OFFICE OR EMPLOYMENT.
If your status as an employee or officer of the Bank is terminated for
any reason other than death or disability or cause, this option may be
exercised within three (3) months from the date of such termination to the
extent you were entitled to exercise the option on the date of termination,
but in no event may this option be exercised after the expiration of the term
of this option. If, however, you are removed from your office or your
employment with the Bank is terminated for cause as defined in the Plan, this
option shall expire at the time notice or advice of such removal or
termination is dispatched by the Bank and notwithstanding anything else
herein to the contrary, neither you nor your estate shall be entitled to
exercise any option with respect to any Shares whatsoever after such removal
or termination.
5. DEATH OR DISABILITY.
If you die or become disabled while an officer or employee of the Bank,
the option may be exercised in whole or in part by you or your qualified
representative (in the event of your mental disability) or by the duly
authorized executor of your will or by the duly authorized administrator or
special administrator of your estate (in the event of your death) within
twelve (12) months from the date of your death or disability to the extent
that you had the right to exercise this option on the date of your death or
disability, but in no event after the expiration of the term of this option.
Disability shall be determined under Section 422A of the Code as in
effect at the date of such disability. The Code currently defines disability
as follows:
An individual is permanently and totally disabled if he is 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. An individual shall not
be considered to be permanently and totally disabled unless he furnished
proof of the existence thereof in such form and manner, and at such times
as the Secretary may require.
6. NONTRANSFERABILITY OF OPTION.
This option shall not be transferable except by will or the laws of
descent and distribution, and this option may be exercised during your
lifetime only by you. Any purported transfer or assignment of this option
shall be void and of no
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<PAGE>
effect, and shall give the Bank the right to terminate this option as of the
date of such purported transfer or assignment.
7. ADJUSTMENT OF AND CHANGES IN THE SHARES.
In the event of any change in the outstanding Common Stock of the Bank,
without receipt by the Bank of additional consideration in lieu of such
change (whether by reason of stock dividends, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like),
the aggregate number or class of Shares subject to this option immediately
prior to such event shall be appropriately adjusted by the Board of Directors
in accordance with the terms of the Plan so that your proportionate interest
in the Bank by reason of your rights under any unexercised portions of such
options shall be maintained as before the occurrence of such event. Such
adjustment by the Board of Directors shall be conclusive.
In the event of a dissolution or liquidation of the Bank or a merger or
consolidation in which the Bank is not the surviving corporation, the Board
of Directors may, in its discretion, provide for the assumption by the
surviving or resulting corporation of every option outstanding hereunder,
provided that, if the Board of Directors does not provide for such
assumption, the Board of Directors shall have the power to cause the
termination of every option outstanding hereunder, except that the surviving
or resulting corporation may, in its discretion, tender an option or options
to purchase its shares on its terms and conditions, both as to the number of
shares and otherwise; provided, further, you shall have the right to exercise
this option as to all or any of the Shares subject to this option immediately
prior to such dissolution, liquidation, merger or consolidation, and to
purchase Shares subject hereto to the extent of any unexercised portion of
this option, regardless of the vesting provisions of Paragraph 3 hereof.
This right of exercise shall be conditioned upon the execution of a final
plan of dissolution or liquidation or of a definitive agreement of merger or
consolidation, and the Bank shall provide you with notice thereof as soon as
practicable.
In the event of an offer by any person or entity to all shareholders of
the Bank to purchase any or all shares of Common Stock of the Bank (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in this Paragraph 7), the
person exercising this option shall have the right upon commencement of such
offer to exercise this option to the extent of any unexercised portion and to
purchase Shares subject hereto, regardless of the vesting provisions of
Paragraph 3 hereof.
8. SUBJECT TO TERMS OF THE PLAN.
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<PAGE>
This Agreement shall be subject in all respects to the terms and
conditions of the Plan. Your signature herein represents your
acknowledgement of receipt of a copy of the Plan. Any dispute or
disagreement which shall arise under or as a result of or pursuant to this
Agreement shall be finally and conclusively determined by the Board of
Directors of the Bank or a duly appointed Committee in its sole discretion,
and such determination shall be binding upon all parties.
9. EXERCISE OF OPTION CONDITIONED ON APPROVAL.
Exercise of this option is conditioned upon approval of the Plan by the
shareholders of the Bank in accordance with the requirements of the
Superintendent of Banks of the State of California.
10. TAX EFFECTS.
THE FEDERAL TAX CONSEQUENCES OF EMPLOYEE STOCK OPTIONS ARE COMPLEX AND
SUBJECT TO CHANGE. ACCORDINGLY, AN OPTIONEE (OR HIS OR HER GUARDIAN, ESTATE
OR LEGATEE) SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR BEFORE EXERCISING
ANY OPTION OR DISPOSING OF ANY SHARES ACQUIRED UPON THE EXERCISE OF AN OPTION.
11. RIGHTS AS A SHAREHOLDER.
You have no rights as a shareholder of the Bank with respect to any
Shares until the date of the issuance of a stock certificate to you for such
Shares.
12. NOTIFICATION OF SALE.
You agree that you, or any person acquiring Shares upon exercise of this
Option, will notify the Bank not more than five (5) days after any sale or
disposition of such Shares.
LAKE COMMUNITY BANK
By
-----------------------------------
Agreed to this _____
day of ____________, 19__.
- --------------------------------
Signature of Optionee
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<PAGE>
LAKE COMMUNITY BANK
NONSTATUTORY STOCK OPTION AGREEMENT
Granting Date:
TO:
We are pleased to notify you that Lake Community Bank (the "Bank") this
day hereby grants to you an option to purchase all or any part of ____________
shares of the Common Stock of the Bank (the "Shares") at the Option Price of
____________ per share as a Stock Option under the Bank's 1984 Stock Option
Plan (the "Plan").
THIS OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS OF THE
PLAN. ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARIZED IN THIS AGREEMENT. A
COPY OF THE PLAN IS PROVIDED WITH THIS AGREEMENT.
THIS OPTION MAY BE EXERCISED ONLY IF THE PLAN IS APPROVED BY SHAREHOLDERS
HOLDING A MAJORITY OF THE VOTING POWER OF THE ISSUED AND OUTSTANDING SHARES
OF THE BANK.
1. PURPOSE OF THE OPTION.
One of the purposes of the Plan is to advance the interests of the Bank
by stimulating the efforts of directors, full-time salaried employees and
officers on behalf of the Bank and its affiliates (collectively the "Bank"),
by granting them financial participation in the progress and success of the
Bank.
2. SIGNATURE ON OPTION AGREEMENT.
This option cannot be exercised unless you first sign this document in
the place provided and return it to the Secretary of the Bank. However, your
signing and delivering this letter will not bind you to purchase any of the
shares subject to the option. Your obligation to purchase the Shares can
arise only when you exercise this option in the manner set forth in Paragraph
3 below.
3. TERMS OF OPTION AND EXERCISE OF OPTION.
Subject to the provisions of Paragraph 4 below and this Paragraph 3, this
option can be exercised by you at any time during a period of ___________
(____) months from the granting date as follows:
(a) This option may be exercised immediately to the extent of not
more than ____________ percent (______%) of the Shares;
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<PAGE>
(b) After the expiration of _________ (____) months from the granting
date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(c) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(d) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(e) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(f) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(g) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(h) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(i) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(j) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
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<PAGE>
(k) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not
more than ____________ percent (______%) of the Shares.
Any portion of the option that you do not exercise shall accumulate and
can be exercised by you any time prior to the expiration of _______________
(____) months from the granting date.
This option may be exercised by delivering to the Secretary of the Bank,
payment in full at the Option Price for the number of Shares being purchased
in cash or by certified check or official bank check or the equivalent thereof
acceptable to the Bank, together with a written notice in a form satisfactory
to the Bank, signed by you specifying the number of Shares you then desire to
purchase and the time of delivery thereof, which shall not be less than
fifteen (15) days and not more than thirty (30) days after the giving of such
notice unless an earlier or later date is mutually agreed upon. At such time
the Bank shall, without transfer or issue tax to you (or such other person
entitled to exercise the option), deliver to you (or such other person
entitled to exercise the option) at the principal office of the Bank, or such
other place as shall be mutually acceptable, a certificate or certificates
for such Shares dated the date the options were validly exercised; provided,
however, that the time of such delivery may be postponed by the Bank for such
period as may be required for it with reasonable diligence to comply with any
requirements of law. No fractional shares shall be issued or delivered.
As a holder of an option, you shall have the rights of a shareholder with
respect to the Shares subject to this option only after such Shares shall
have been issued to you upon the exercise of this option.
4. TERMINATION OF OFFICE OR EMPLOYMENT.
If your status as a director, employee or officer of the Bank is
terminated for any reason other than death or disability or cause this option
may be exercised within three (3) months from the date of such termination to
the extent you were entitled to exercise the option on the date of
termination, but in no event may this option be exercised after the
expiration of the term of this option. If, however, you are removed from your
office or your employment with the Bank is terminated for cause as defined in
the Plan, this option shall expire at the time notice or advice of such
removal or termination is dispatched by the Bank and notwithstanding anything
else herein to the contrary, neither you nor your estate shall be entitled to
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<PAGE>
exercise any option with respect to any Shares whatsoever after such removal
or termination.
5. DEATH OR DISABILITY.
If you die or become disabled while an officer or employee of the Bank,
the option may be exercised in whole or in part by you or your qualified
representative (in the event of your mental disability) or by the duly
authorized executor of your will or by the duly authorized administrator or
special administrator of your estate (in the event of your death) within
twelve (12) months from the date of your death or disability to the extent
that you had the right to exercise this option on the date of your death or
disability, but in no event after the expiration of the term of this option.
Disability shall be determined under Section 422A of the Code in effect
at the date of such disability. The Code currently defines disability as
follows:
An individual is permanently and totally disabled if he is 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. An individual shall not be
considered to be permanently and totally disabled unless he furnishes
proof of the existence thereof in such form and manner, and at such times,
as the Secretary may require.
6. NONTRANSFERABILITY OF OPTION.
This option shall not be transferable except by will or the laws of
descent and distribution, and this option may be exercised during your
lifetime only by you. Any purported transfer or assignment of this option
shall be void and of no effect, and shall give the Bank the right to
terminate this option as of the date of such purported transfer or assignment.
7. ADJUSTMENT OF AND CHANGES IN THE SHARES.
In the event of any change in the outstanding Common Stock of the Bank,
without receipt by the Bank of additional consideration in lieu of such
change (whether by reason of stock dividends, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like),
the aggregate number or class of Shares subject to this option immediately
prior to such event shall be appropriately adjusted by the Board of Directors
in accordance with the terms of the Plan so that your proportionate interest
in the Bank by reason of your rights under any unexercised portions of such
options shall be
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<PAGE>
maintained as before the occurrence of such event. Such adjustment by the
Board of Directors shall be conclusive.
In the event of a dissolution or liquidation of the Bank or a merger or
consolidation in which the Bank is not the surviving corporation, the Board
of Directors may, in its discretion, provide for the assumption by the
surviving or resulting corporation of every option outstanding hereunder,
provided that, if the Board of Directors does not provide for such
assumption, the Board of Directors shall have the power to cause the
termination of every option outstanding hereunder, except that the surviving
or resulting corporation may, in its discretion, tender an option or options
to purchase its shares on its terms and conditions, both as to the number of
shares and otherwise; provided, further, you shall have the right to exercise
this option as to all or any of the Shares subject to this option immediately
prior to such dissolution, liquidation, merger or consolidation, and to
purchase Shares subject hereto to the extent of any unexercised portion of
this option, regardless of the vesting provisions of Paragraph 3 hereof. This
right of exercise shall be conditioned upon the execution of a final plan of
dissolution or liquidation or of a definitive agreement of merger or
consolidation, and the Bank shall provide you with notice thereof as soon
practicable.
In the event of an offer by any person or entity to all shareholders of
the Bank to purchase any or all shares of Common Stock of the Bank (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in this Paragraph 7), the
person exercising this option shall have the right upon commencement of such
offer to exercise this option to the extent of any unexercised portion and to
purchase Shares subject hereto, regardless of the vesting provisions of
Paragraph 3 hereof.
8. SUBJECT TO TERMS OF THE PLAN.
This Agreement shall be subject in all respects to the terms and
conditions of the Plan. Your signature herein represents your acknowledgement
of receipt of a copy of the Plan. Any dispute or disagreement which shall
arise under or as a result of or pursuant to this Agreement shall be finally
and conclusively determined by the Board of Directors of the Bank or a duly
appointed Committee in its sole discretion, and such determination shall be
binding upon all parties.
9. EXERCISE OF OPTION CONDITIONED ON APPROVAL.
Exercise of this option is conditioned upon approval of the Plan by the
shareholders of the Bank in accordance with the requirements of the
Superintendent of Banks of the State of California.
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<PAGE>
10. TAX EFFECTS.
THE FEDERAL TAX CONSEQUENCES OF EMPLOYEE STOCK OPTIONS ARE COMPLEX AND
SUBJECT TO CHANGE. ACCORDINGLY, AN OPTIONEE (OR HIS OR HER GUARDIAN, ESTATE
OR LEGATEE) SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR BEFORE EXERCISING
ANY OPTION OR DISPOSING OF ANY SHARES ACQUIRED UPON THE EXERCISE OF AN OPTION.
11. RIGHTS AS A SHAREHOLDER.
You have no rights as a shareholder of the Bank with respect to any
Shares until the date of the issuance of a stock certificate to you for such
Shares.
12. NOTIFICATION OF SALE.
You agree that you, or any person acquiring Shares upon exercise of this
Option, will notify the Bank not more than five (5) days after any sale or
disposition of such Shares.
LAKE COMMUNITY BANK
By
-----------------------------------
Agreed to this _____
day of ____________, 19__.
- --------------------------------
Signature of Optionee
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