<PAGE> 1
As filed with the Securities and Exchange Commission on October 6, 1999.
Registration No. ______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20005
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CVB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
California 95-3629339
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
701 North Haven Avenue
Ontario, California 91764
(Address of principal executive offices) (Zip Code)
CVB FINANCIAL CORP. 1999 ORANGE NATIONAL BANCORP
1997 CONTINUATION STOCK OPTION PLAN
CVB FINANCIAL CORP. 1999 ORANGE NATIONAL BANCORP
1993 CONTINUATION STOCK OPTION PLAN
(Full title of plans)
D. Linn Wiley
President and Chief Executive Officer
701 North Haven Avenue
Ontario, California 91764
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (909) 980-4030
WITH A COPY TO:
William T. Quicksilver
Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, California 90064
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================================
Title of Amount Amount
Securities to to be Offering price Aggregate of
be registered registered Per unit Offering price registration fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock,
no par value 340,500 $6.62-$19.34(2) $4,676,864(2) $1,300.17
=============================================================================================================
</TABLE>
(1) This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, such indeterminate number of shares as may
become available under the Plans as a result of the adjustment provisions
thereof.
(2) Calculated pursuant to Rule 457(h) based on actual option grant prices.
<PAGE> 2
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3: INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by CVB Financial Corp. (the
"Registrant") with the Securities and Exchange Commission (the "Commission") are
incorporated in this Registration Statement by reference:
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or the latest prospectus filed by the Registrant as part of an effective
registration statement filed pursuant to Rule 424(b) promulgated under the
Securities Act of 1933, as amended (the "Securities Act") or (c) under the
Exchange Act, which contains, either directly or by incorporation by reference,
audited financial statements for the Registrant's latest fiscal year for which
such statements have been filed.
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the annual reports or the prospectus referred to in (a) above.
(c) The description of the class of securities which is contained in
a registration statement filed under the Exchange Act, including any amendment
or report filed for the purpose of updating such description.
All other documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicate that all securities offered have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
Any statement made in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which is also incorporated or deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such 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
Section 317 of the California General Corporation Las ("Section
317") provides a statutory framework covering indemnification of any officer or
director who has been or is threatened to be made a party to any legal
proceeding by reason of his or her service on behalf of the Company. Section
317 provides that indemnification against expenses actually and reasonably
incurred shall be made to any officer or director who has been successful on
the merits with respect to the defense of any proceeding but does not require
indemnification in other circumstances. Section 317 provides that a corporation
may indemnify any agent of the Company including officers and directors against
expenses, judgments, fines, settlements and other amount actually and
reasonably incurred in a third party proceedings against such person by reason
of that person's service on behalf of the Company, provided the person acted in
good faith and in a manner that the person reasonably believed to be in the
best interests of the Company.
Section 317 further provides that the Company may indemnify any
agent who was or is a party or is threatened to be made a party to any
threatened, pending or completed action by or in the right of the Company
against expenses actually and reasonably incurred by the agent in connection
with the defense or settlement of such action, provided that the person acted
in good faith and in a manner the person believed to be in the best interests
of the Company and its shareholders. However, in actions brought by or in the
right of the Company, indemnification is not available without court approval
for amounts paid in settling or otherwise disposing of a pending action or
expenses incurred in defending a pending action which is disposed of by
settlement or otherwise. Further, with respect to matters for which the agent
shall have been adjudged to be liable to the Company, indemnification for
expenses is permissible only to the extent the court shall determine that the
agent is fairly and reasonably entitled to indemnification. In addition,
Section 317 provides that the indemnification provided by the statute is not
exclusive of other rights to which those seeking indemnification may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise, to the extent additional rights are authorized in the
Company's Articles of Incorporation.
2
<PAGE> 3
Section 317 permits the advancing of expenses incurred in defending
any proceeding against an agent of the Company by reason of that person's
service on behalf of the Company upon the giving of an undertaking, or promise,
by the indemnified person to repay those sums in the event it is later
determined that the person is not entitled to be indemnified. Finally, Section
317 permits the Company to procure insurance on behalf of its directors,
officers, and other corporate agents against liability asserted against or
incurred by these individuals even if the Company would not otherwise have the
power under applicable law to indemnify them for their expenses.
The Company's Articles of Incorporation and Bylaws, as amended
respectively, authorize the Company to indemnify its agents to the fullest
extent permitted under California law. The Company has also adopted
indemnification agreements in order to implement the Articles of Incorporation
and Bylaws.
ITEM 7: EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable
ITEM 8: EXHIBITS
3.1 Articles of Incorporation of CVB Financial Corp., as amended.(1)
3.2 Bylaws of CVB Financial Corp. as amended(2)
5.1 Opinion of Manatt, Phelps & Phillips.
23.1 Consent of Manatt, Phelps & Phillips (see Exhibit 5.1).
23.2 Consent of Deloitte & Touche, LLP.
24.1 Power of Attorney (contained on signature page)
99.1 CVB Financial Corp. 1999 Orange National Bancorp 1997 Continuation
Stock Option Plan
99.2 CVB Financial Corp. 1999 Orange National Bancorp 1993 Continuation
Stock Option Plan
- ---------------
(1) Exhibit incorporated by reference from Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1998, File No.1-10394.
(2) Exhibit incorporated by reference from Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, File No.1-10394.
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) 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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(c) 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(a) and 1(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3
<PAGE> 4
3. To remove from registration by means of 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, each filing of the
Registrant's annual report pursuant to Section 13 or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing of 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 Ontario, State of California on October 4, 1999.
CVB FINANCIAL CORP.
By /s/ D. Linn Wiley
--------------------------------
D. Linn Wiley,
President
and Chief Executive Officer
5
<PAGE> 6
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints D. Linn Wiley and Edward J. Biebrich, Jr. his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement, and to
file the same with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
6
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ D. Linn Wiley President and Chief Executive October 4, 1999
- --------------------------- Officer (Principal Executive
D. Linn Wiley Officer), Director
/s/ Edward J. Biebrich, Jr. Executive Vice President and October 4, 1999
- --------------------------- Chief Financial Officer
Edward J. Biebrich, Jr. (Principal Financial Officer,
Principal Accounting Officer)
/s/George A. Borba Chairman of the Board October 4, 1999
- ---------------------------
George A. Borba
/s/ John A. Borba Director October 4, 1999
- ---------------------------
John A. Borba
/s/ Ronald O. Kruse Director October 4, 1999
- ---------------------------
Ronald O. Kruse
Director
- ---------------------------
John J. LoPorto
/s/ Charles M. Magistro Director October 4, 1999
- ---------------------------
Charles M. Magistro
/s/ James C. Seley Director October 4, 1999
- ---------------------------
James C. Seley
</TABLE>
7
<PAGE> 1
EXHIBIT 5.1
October 4, 1999
CVB Financial Corp.
701 North Haven Avenue
Ontario, California 91764
Re: CVB Financial Corp. 1999 Orange National Bancorp 1997
Continuation Stock Option Plan and CVB Financial Corp. 1999
Orange National Bancorp 1993 Continuation Stock Option Plan
(collectively, the "Plans")
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") being filed by CVB Financial Corp. (the
"Company") with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of up to 340,500
shares of the Company's Common Stock, no par value (the "Shares"), that may be
issued in the aggregate under the Plans.
In rendering this opinion, we have examined and reviewed only such
questions of law as we have deemed necessary or appropriate for the purpose of
rendering the opinions set forth herein. For the purpose of rendering the
opinions set forth herein, we have been furnished with and examined only the
following documents:
1. The Articles of Incorporation of the Company, as amended.
2. The Bylaws of the Company, as amended.
3. This Registration Statement.
4. Records of proceedings of the Board of Directors of CVB and
Orange National Bancorp ("ONB") pertaining to the Plans.
5. Records of proceedings of the shareholders of ONB pertaining
to the Plans.
6. The Agreement and Plan of Reorganization, dated May 18,
1999, by and between the Company and ONB.
With respect to all of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to originals of all documents submitted to us as
certified or reproduced copies. We also have obtained from the officers of the
Company certificates as to such factual matters as we consider necessary for the
purpose of this opinion, and insofar as this opinion is based on such matters of
fact, we have relied on such certificates.
8
<PAGE> 2
Based upon the foregoing and such further review of fact and law as we
have deemed necessary or appropriate under the circumstances, and assuming,
without further inquiry other than such certificates of officers, that (i) all
options granted under the Plans have been duly and validly granted by ONB
pursuant to the terms of the Plans, (ii) the consideration for the shares of
Common Stock issued pursuant to the exercise of such options will be received
prior to the issuance thereof, (iii) the Common Stock issued pursuant to the
exercise of options will be issued in accordance with the terms of the Plan and
the various agreements and (iv) the grant of such options and the issuance of
Shares upon the exercise thereof will comply with the securities laws of each
state or jurisdiction applicable thereto (other than the Securities Act of 1933,
as amended, as to which this opinion is addressed), upon which assumptions the
opinions contained herein are expressly conditioned, we are of the opinion that:
If, as and when the Shares have been issued and sold pursuant to
exercise of options granted under the terms of the Plans, the Shares will be
duly authorized, validly issued, fully paid and non-assessable.
This opinion is issued to you solely for use in connection with the
Registration Statement on Form S-8 and is not to be quoted or otherwise referred
to in any financial statements of the Company or related document, nor is it to
be filed with or furnished to any government agency or other person, without the
prior written consent of this Firm.
This opinion is limited to the current laws of the State of California
and the United States of America, to present judicial interpretations thereof
and to facts as they presently exist. In rendering this opinion, we have no
obligation to revise or supplement it should the current laws of the State of
California or the United States of America be changed by legislative action,
judicial decision or otherwise.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 which is being filed on behalf of the Company
in connection with the registration of the aforementioned Shares under the
Securities Act of 1933, as amended.
Very truly yours,
/s/ Manatt, Phelps & Phillips, LLP
9
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CVB Financial Corp. on Form S-8 of our report, dated January 29, 1999, on the
consolidated balance sheets of CVB Financial Corp. and subsidiaries as of
December 31, 1998 and 1997, and the related consolidated statements of
earnings, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1998, appearing in the Annual Report on Form 10-K
of CVB Financial Corp. for the year ended December 31, 1998.
/s/ DELOITTE & TOUCHE, LLP
October 6, 1999
Los Angeles, California
<PAGE> 1
EXHIBIT 99.1
CVB FINANCIAL CORP. 1999 ORANGE NATIONAL BANCORP
1993 CONTINUATION STOCK OPTION PLAN
1. BACKGROUND
(a) CVB Financial Corp. (the "Company") and Orange National Bancorp
("ONB") entered into that certain Agreement and Plan of Reorganization (the
"Agreement") dated as of May 18, 1999, which provides for the merger of ONB with
and into the Company.
(b) Section 7.9 of the Agreement provides as follows:
7.9.1 At and as of the Effective Time of the Merger, CVB shall
assume each and every outstanding option to purchase shares of ONB Stock ("ONB
Stock Option") and all obligations of ONB under the ONB Stock Option Plans. Each
and every ONB Stock Option so assumed by CVB under this Agreement shall continue
to have, and be subject to, the same terms and conditions set forth in the ONB
Stock Option Plans and in the other documents governing such ONB Stock Option
immediately prior to the Effective Time of the Merger, except that: (i) such ONB
Stock Option shall be exercisable for that number of whole shares of CVB Stock
equal to the product of (A) the number of shares of ONB Stock that were
purchasable under such ONB Stock Option immediately prior to the Effective Time
of the Merger multiplied by (B) the Conversion Ratio, rounded down to the
nearest whole number of shares of CVB Stock; and (ii) the per share exercise
price for the shares of CVB Stock issuable upon exercise of such ONB Stock
Option shall be equal to the quotient determined by dividing (A) the exercise
price per share of ONB Stock at which such ONB Stock Option was exercisable
immediately prior to the Effective Time of the Merger by (B) the Conversion
Ratio. Prior to the Effective Time of the Merger, CVB shall issue to each holder
of an outstanding ONB Stock Option a document evidencing the assumption of such
ONB Stock Option by CVB pursuant to this Section 7.9.
10
<PAGE> 2
7.9.2. CVB shall comply with the terms of the ONB Stock Option Plan
and use its reasonable best efforts so that, to the extent required by, and
subject to the provisions of, such Plans, ONB Stock Options which qualify as
incentive stock options prior to the Effective Time of the Merger qualify as
incentive stock options of CVB after the Effective Time of the Merger.
7.9.3 At or prior to the Effective Time of the Merger, CVB shall
take all corporate action necessary to reserve for issuance a sufficient number
of shares of CVB Stock for delivery upon exercise of CVB Stock Options assumed
by it in accordance with this Section 7.9. At the Effective Time, or as soon as
practicable thereafter, CVB shall, if necessary, file a registration statement
on Form S-8, as the case may be (or any successor or other appropriate forms);
or another appropriate form with respect to the shares of CVB Common Stock
subject to such options and shall use all reasonable efforts to maintain the
effectiveness of such registration statement (and maintain the current status of
the prospectus or prospectuses contained therein) for so long as such options
remain outstanding.
(c) The term "Effective Time," as used herein, shall mean the effective
time of the Merger as such term is defined in the Agreement. The Effective Time
occurred or is anticipated to occur on or about October 4, 1999.
(d) As of the Effective Time, there were options for 8,000 shares of ONB
common stock outstanding under the ONB 1993 Stock Option Plan (the "1993 ONB
Plan").
(e) By way of this CVB Financial Corp. 1999 Orange National Bancorp 1993
Continuation Stock Option Plan, the Company is assuming the 1993 ONB Plan to (i)
reflect the substitution of the Company for ONB; (ii) reflect the options to
purchase stock will be options to purchase the common stock of the Company
("Company Common Stock") with appropriate adjustment for the Conversion Ratio
determined according to the Agreement, (iii) reduce the number of shares
available for distribution under the 1993 ONB Plan to the number of shares
11
<PAGE> 3
subject to outstanding ONB Stock Options as of the Effective Time, and (iv) make
other appropriate revisions to the 1993 ONB Plan not inconsistent with the
provisions of the Agreement.
1. PURPOSE
The purpose of the 1999 Orange National Bancorp 1993 Continuation
Stock Option Plan (the "Plan") is to strengthen CVB Financial Corp.(the
"Company") and those corporations which are or may hereafter become subsidiaries
(the "Subsidiaries") by providing additional means of attracting and retaining
competent managerial personnel and by providing to participating officers and
key employees added incentive for high levels of performance and for unusual
efforts to increase the earnings of the Company and any subsidiaries. The Plan
seeks to accomplish these purposes and achieve these results by providing a
means whereby such officers and key employees may purchase shares of the common
stock (the "Common Stock") of the Company pursuant to Stock Options (the "Stock
Options") granted in accordance with this Plan.
Stock Options granted pursuant to this Plan are intended to be
Incentive Stock Options (defined below) as shall be designated by the Stock
Option Committee upon the grant of each Stock Option hereunder.
12
<PAGE> 4
2. DEFINITIONS
For purposes of this Plan, the following terms shall have the
following meanings:
(a) "Common Stock" - This term shall mean shares of the Company's
common stock, no par value, subject to adjustment pursuant to Paragraph 15,
"Adjustment Upon Changes in Capitalization", hereunder.
(b) "Company" - This term shall mean CVB Financial Corp., a
California corporation.
(c) "Eligible Participants" - This term shall mean (i) all
officers of the Company or any Subsidiary and all key employees (as such persons
may be determined by the Stock Option Committee from time to time) of the
Company or any Subsidiary.
(d) "Fair Market Value" - This term shall mean the fair market
value of the Common Stock as determined in accordance with any reasonable
valuation method selected by the Stock Option Committee.
(e) "Incentive Stock Option" - This term shall mean a Stock
Option which is an "incentive Stock Option" within the meaning of the Section
422A of the 1986 Internal Revenue Code, as amended.
(f) "Non-Qualified Stock Option" - This term shall mean a Stock
Option which is not an Incentive Stock Option.
(g) "Option Share" - This term shall mean Common Stock covered by
and subject to any outstanding unexercised Stock Option granted pursuant to this
Plan.
(h) "Optionee" - This term shall mean any Eligible Participant to
whom a Stock Option has been granted pursuant to this Plan, provided that at
least part of the Stock Option is outstanding and unexercised.
13
<PAGE> 5
(i) "Plan" - This term shall mean the CVB Financial Corp. 1999
CVB Financial Corp. 1993 Continuation Stock Option Plan as embodied herein and
as may be amended from time to time in accordance with the terms hereof and
applicable law.
(j) "Stock Option" - This term shall mean the right to purchase
Common Stock under this Plan in a specified number of shares, at a price and
upon the terms and conditions determined by the Stock Option Committee. The
maximum term of each option granted shall be 10 years from date of grant.
(k) "Stock Option Committee" - The full Board of Directors of the
Company will serve as the Stock Option Committee for purposes of administering
the Plan. All references in the Plan to the "Stock Option Committee" shall be
deemed to refer to the Board of Directors of the Company acting as a Stock
Option committee.
3. ADMINISTRATION
(a) Stock Option Committee. This Plan shall be administered by
the Stock Option Committee which shall be made up of the entire Board of
Directors of the Company.
(b) Administration of the Plan. Any action of the Stock Option
Committee with respect to the administration of the Plan shall be taken pursuant
to a majority vote, or pursuant to the unanimous written consent of its members,
provided that no member of the Board shall vote upon or in any manner influence
a vote concerning any action taken by the Stock Option Committee involving such
member or a Stock Option of such member. Any such action taken by the Stock
Option Committee in the administration of this Plan shall be valid and binding,
so long as the same is not inconsistent with the terms and conditions of this
Plan. Subject to the compliance with the terms, conditions and restrictions set
forth in this Plan, including the power to (i) establish the number of Stock
Options, if any, to be granted hereunder, in the aggregate and with regard to
each Eligible Participant; (ii) determine the time or times when such Stock
Options, or parts thereof may be exercised; (iii) determine the Eligible
Participants, if any, to whom Stock Options are granted; (iv) determine the
duration and purposes, if any, of leaves of absence which may be permitted to
holders of unexercised, unexpired Stock Options without such constituting a
termination of employment under this Plan;
14
<PAGE> 6
and (v) prescribe and amend the terms, provisions and form of each instrument
and agreement setting forth the terms and conditions of every Stock Option
granted hereunder.
(c) Decision and Determinations. Subject to the express
provisions of the Plan, the Stock Option Committee shall have the authority to
construe and interpret this Plant to define the terms used herein, to prescribe,
amend and rescind the rules and regulations relating to the administration of
the Plan, and to make all other determinations necessary or advisable for
administration of the Plan. Determinations of the Stock Option Committee on
matters referred to in this Section 3 shall be final and conclusive so long as
the same are not inconsistent with the terms of this Plan.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustments as provided in Section 15 hereof, the
maximum number of shares of Common Stock which may be issued upon exercise of
all Stock Options granted under this Plan is twelve thousand (12,000).
If a Stock Option shall be canceled, surrendered, or expire for
any reason without having been exercised in full, or an Optionee shall be
terminated, whether or not for cause, die or become disabled and such Stock
Option shall be deemed under this Plan to be exercisable only as to certain
increments, if any, then the Option Shares represented thereby which are not
purchased or which may not be purchased because the Stock Option is not fully
exercisable shall again be available for grants of Stock Options under this
Plan.
5. ELIGIBILITY
Only Eligible Participants shall be eligible to receive grants of
Stock Options under this Plan.
6. GRANTS OF STOCK OPTIONS
(a) Grant. Subject to the express provisions of the Plan, the
Stock Option Committee, in its sole and absolute discretion, may grant Stock
Options of the Company or any Subsidiary at the price(s) and time(s), on the
terms and conditions and to such Eligible Participants as it deems advisable and
specifies in the respective grants, subject to the limitations
15
<PAGE> 7
and restrictions set forth in the Plan and applicable approvals. An Eligible
Participant who has been granted a Stock Option may, if otherwise eligible, be
granted additional Stock Options if the Stock Option Committee shall so
determine.
(b) Date of Grant and Rights of Optionee. The determination of
the Stock Option Committee to grant a Stock Option shall not in any way
constitute or be deemed to constitute an obligation of the Company, or a right
of the Eligible Participant who is the proposed subject of the grant, and shall
not constitute or be deemed to constitute the grant of a Stock Option hereunder
unless and until both the Company and the Eligible Participant have executed and
delivered to the other a Stock Option agreement ("Stock Option Agreement") in
the form then required by the Stock Option Committee evidencing the grant of the
Stock Option, together with such other instrument or instruments as may be
required by the Stock Option Committee pursuant to this Plan; provided, however,
that the Stock Option Committee may fix the date of grant as any date on or
after the date of its final determination to grant the Stock Option (or if no
date is fixed, then the date of grant shall be the date on which the
determination was finally made by the Stock Option Committee to grant the Stock
Option), and such date shall be set forth in the Stock Option Agreement. The
date of grant as so determined shall be deemed the date of grant of the Stock
Option for purposes of this Plan.
(c) Shareholder-Employees. A Stock Option granted hereunder to an
Eligible Participant who is an employee of the Company or any Subsidiary, who
also owns, directly or indirectly, at the date of the grant of the Stock Option,
more than ten percent (10%) of the total combined voting power of all classes of
capital stock of the Company or a Subsidiary (if permitted in accordance with
the provisions of Section 5 herein) shall not qualify as an Incentive Stock
Option unless (i) the purchase price of the Option Shares subject to said Stock
Option is at least 110% of the Fair Market Value of the Option Shares,
determined as of the date said Stock Option is granted, and (ii) the Stock
Option by its terms is not exercisable after five (5) years from the date that
it is granted.
7. STOCK OPTION EXERCISE PRICE
Minimum Price. The exercise price of any Option Shares shall be
determined by the Stock Option Committee, in its sole and absolute discretion,
upon the grant of a Stock
16
<PAGE> 8
Option. Except as provided elsewhere herein, said exercise price shall not be
less than one hundred present (100%) of the Fair Market Value of the Common
Stock represented by the Option Shares on the date of grant of the related Stock
Option.
8. EXERCISE OF STOCK OPTION
(a) Exercise. Except as otherwise provided elsewhere herein, each
Stock Option shall be exercisable in such increments, which need not be equal,
and upon such contingencies as the Stock Option Committee shall determine at the
time of grant of the Stock Option; provided, however, that if an Optionee shall
not in any given period exercise such part of the Stock Option which has become
exercisable during that period, the Optionee's right to exercise such part of
the Stock Option shall continue until expiration of the Stock Option or any part
thereof as may be provided in the related Stock Option Agreement. No Stock
Option or part thereof shall be exercisable except with respect to whole shares
of Common Stock, and fractional share interests shall be disregarded except that
they may be accumulated.
(b) Notice and Payment. Stock Options granted hereunder shall be
exercised by written notice delivered to the Company specifying the number of
Option Shares with respect to which the Stock Option is being exercised,
together with concurrent payment in full of the exercise price as hereinafter
provided. If the Stock Option is being exercised by any person or persons other
than the Optionee, said notice shall be accompanied by proof, satisfactory to
the counsel for the Company, of the right of such person or persons to exercise
the Stock Option. The Company's receipt of notice of exercise without concurrent
receipt of the full amount of the exercise price shall not be deemed an exercise
of a Stock Option by an Optionee, and the Company shall have no obligation to an
Optionee for any Option Shares unless and until full payment of the exercise
price is received by the Company and all of the terms and provisions of the Plan
and the related Stock Option agreement have been fully complied with.
(c) Payment of Exercise Price. The exercise price of any Option
Share purchased upon the proper exercise of a Stock Option shall be paid in full
at the time of each exercise of a Stock Option in cash, by bank draft, cashiers
or certified check which has an aggregate Fair Market Value equal to the full
amount of the exercise price of the Stock Option, or part thereof, then being
exercised. Payment by an Optionee as provided herein shall be made
17
<PAGE> 9
in full in cash or by cashier's or certified check concurrently with the
Optionee's notification to the Company of his intention to exercise all or part
of a Stock Option.
(d) Minimum Exercise. Not less than ten (10) Option Shares may be
purchased at any one time upon exercise of a Stock Option unless the number of
shares purchased is the total number which remains to be purchased under the
Stock Option.
(e) Compliance with Law. No shares of Common Stock shall be
issued upon exercise of any Stock Option, and an Optionee shall have no right or
claim to such shares, unless and until: (a) payment in full as provided
hereinabove has been received by the Company; (b) in the opinion of the counsel
for the Company, all applicable requirements of law and of regulatory bodies
having jurisdiction over such issuance and delivery have been fully complied
with; and (c) if required by federal or state law or regulation, the Optionee
shall have paid to the Company the amount, if any, required to be withheld on
the amount deemed to be compensation to the Optionee as a result of the exercise
of his or her Stock Option, or made other arrangements satisfactory to the
Company in its sole discretion, to satisfy applicable income tax withholding
requirements.
(f) Reorganization. Notwithstanding any provision in any Stock
Option Agreement pertaining to the time of exercise of a Stock Option, or part
thereof, upon adoption by the requisite holders of the outstanding shares of
Common Stock of any plan of dissolution, liquidation, reorganization, merger,
consolidation or sale of all or substantially all of the assets of the Company
to another bank or Corporation which would, upon consummation, result in
termination of a Stock Option in accordance with Section 16 hereof, all Stock
Options previously granted may, in the discretion of the Option Committee,
become immediately exercisable as to all unexercised Option Shares for such
period of time as may be determined by the Stock Option Committee, but in any
event not less than 30 days, on the condition that the terminating event is
consummated. If such terminating event is not consummated, Stock Options granted
pursuant to the Plan shall be exercisable in accordance with their respective
terms.
9. NONTRANSFERABILITY OF STOCK OPTIONS
18
<PAGE> 10
Each Stock Option shall, by its terms, be nontransferable by the
Optionee other than by will or the laws of descent and distribution, and shall
be exercisable during the Optionee's lifetime only by the Optionee.
10. CONTINUATION OF AFFILIATION
Nothing contained in this Plan (or in any Stock Option Agreement)
shall obligate the Company or any Subsidiary to employ or continue to employ any
Optionee or any Eligible Participant for any period of time or interfere in any
way with the right of the Company or a Subsidiary to reduce or increase the
Optionee's or Eligible Participant's compensation.
11. CESSATION OF AFFILIATION
Except as provided in Section 12 hereof, if for any reason other
than disability or death, an Optionee ceases to be affiliated with the Company
or a Subsidiary, the Stock Options granted to such Optionee shall expire on the
expiration dates specified for said Stock Options at the time of their grant, or
three (3) months after the Optionee ceases to be so affiliated, whichever is
earlier. During such period after cessation of affiliation, such Stock Options
shall be exercisable only as to those increments, if any, which had become
exercisable as of the date on which such Optionee ceased to be affiliated with
the Company or the Subsidiary, and any Stock Options or increments which had not
become exercisable as of such date shall expire and terminate automatically on
such date.
12. TERMINATION FOR CAUSE
If the Stock Option Agreement so provides and if an Optionee's
employment or affiliation with the Company or a Subsidiary is terminated for
cause, the Stock Options granted to such Optionee shall automatically expire and
terminate in their entirety immediately upon such termination; provided,
however, that the Stock Option Committee may, in its sole discretion, within
thirty (30) days of such termination, reinstate such Stock Options by giving
written notice of such reinstatement to the Optionee. In the event of such
reinstatement, the Optionee may exercise the Stock Options only to such extent,
for such time, and upon such terms and conditions as if the Optionee has ceased
to be employed by or affiliated with the Company or a Subsidiary upon the date
of such termination for a reason other than cause, disability or
19
<PAGE> 11
death. Termination for cause shall include, but shall not be limited to,
termination for malfeasance or gross malfeasance in the performance of duties or
conviction of illegal activity in connection therewith and, in any event, the
determination of the Stock Option Committee with respect thereto shall be final
and conclusive.
13. DEATH OF OPTIONEE
If an Optionee dies while employed by or affiliated with the
Company or a Subsidiary or during the three month period referred to in Section
11 hereof, the Stock Options granted to such Optionee shall expire on the
expiration dates specified for said Stock Options at the time of their grant, or
one (1) year after the date of such death, whichever is earlier. After such
death, but before such expiration, subject to the terms and provisions of the
Plan and the related Stock Option Agreements, the person or persons to whom such
Optionee's rights under the Stock Options shall have passed by will or by the
applicable laws of descent and distribution, or the executor or administrator of
the Optionee's estate, shall have the right to exercise such Stock Options to
the extent that increments, if any, had become exercisable as of the date on
which the Optionee died.
14. DISABILITY OF OPTIONEE
If an Optionee is disabled while employed by or affiliated with
the Company or a Subsidiary or during the three month period referred to in
Section 11 hereof, the Stock Options granted to such Optionee shall expire on
the expiration dates specified for said Stock Options at the time of their
grant, or one (1) year after the date such disability occurred, whichever is
earlier. After such disability occurs, but before such expiration, the Optionee
or the guardian or conservator of the Optionee's estate, as duly appointed by a
court of competent jurisdiction, shall have the right to exercise such Stock
Options to the extent that increments, if any, had become exercisable as of the
date on which the Optionee became disabled or ceased to be employed by or
affiliated with the Company or a Subsidiary as a result of the disability. An
Optionee shall be deemed to be "disabled" if it shall appear to the Stock Option
Committee, upon written certification delivered to the Company of a qualified
licensed physician, that the Optionee has become permanently and totally unable
to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in
the
20
<PAGE> 12
Optionee's death, or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
15. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of Common Stock of the company are
increased or decreased, or changed into or exchanged for a different number or
kind of shares or securities of the Company, through a reorganization, merger
recapitalization, reclassification, stock split, stock dividend, stock
consolidation, or otherwise, without consideration to the Company, an
appropriate and proportionate adjustment shall be made in the number and kind of
shares as to which Stock Options may be granted. A corresponding adjustment
changing the number or kind of Option Shares and the exercise prices per share
allocated to unexercised Stock Options, or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Such adjustments
shall be made without change in the total price applicable to the unexercised
portion of the Stock Option, but with a corresponding adjustment in the price
for each Option Share subject to the Stock Option. Adjustments under this
Section shall be made by the Stock Option Committee, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final and
conclusive. No fractional shares of stock shall be issued or made available
under the Plan on account of such adjustments, and fractional share interests
shall be disregarded, except that they may be accumulated.
16. TERMINATING EVENTS
Upon consummation of a plan of dissolution of liquidation of the
Company, or upon consummation of a plan of reorganization, merger or
consolidation of the Company with one or more banks or corporations, as a result
of which the Company is not the surviving entity, or upon the sale of all or
substantially all the assets of the Company to another bank or corporation, all
Stock Options theretofore granted under the Plan shall become immediately
exercisable, unless provision is made in connection with such transaction for
assumption of Stock Options theretofore granted, or substitution for such Stock
Options with new Stock Options covering stock of a successor employer bank or
corporation, or a parent or subsidiary corporation thereof, with appropriate
adjustments as to the number and kind of shares and prices.
21
<PAGE> 13
Any such successor (or a parent or subsidiary) may also assume the Plan, in
which case the Plan will not terminate.
17. AMENDMENT AND TERMINATION
The Board of Directors of the Company may at any time and from
time to time suspend, amend or terminate the Plan and may, with the consent of
an Optionee, make such modifications of the terms and conditions of that
Optionee's Stock Option as it shall deem advisable; provided that, except as
permitted under the provisions of Section 15 hereof, no amendment or
modification may be adopted without the Company having first obtained the
approval of the holders of a majority of the Company's outstanding shares of
Common Stock present, or represented, and entitled to vote at a duly held
meeting of shareholders of the Company if the amendment or modification would:
(a) materially increase the number of securities which may be
issued under the Plan;
(b) materially modify the requirements as to eligibility for
participation in the Plan;
(c) increase or decrease the exercise price of any Stock Option
granted under the Plan;
(d) increase the maximum term of Stock Options provided herein;
(e) permit Stock Options to be granted to any person who is not
an Eligible Participant; or
(f) change any provision of the Plan which would affect the
qualification as an Incentive Stock Option under the internal revenue laws then
applicable of any Stock Option granted as an Incentive Stock Option under the
Plan.
No Stock Option may be granted during any suspension of the Plan
or after termination of the Plan. Amendment, suspension, or termination of the
Plan shall not (except
22
<PAGE> 14
as otherwise provided in Section 15 hereof), without the consent of the
Optionee, alter or impair any rights or obligations under the Stock Option
thereto granted.
18. RIGHT OF ELIGIBLE PARTICIPANTS AND OPTIONEES
No Eligible Participant, Optionee or other person shall have any
claim or right to be granted a Stock Option under this Plan, and neither this
Plan nor any action taken hereunder shall be deemed to give or be construed as
giving any Eligible Participant, Optionee or other person any right to be
retained in the employ of the Company or any subsidiary. Without limiting the
generality of the foregoing, no person shall have any rights as a result of his
or her classification as an Eligible Participant or Optionee, such
classification being made solely to describe, define and limit those persons who
are eligible for consideration for privileges under the Plan.
19. PRIVILEGES OF STOCK OWNERSHIP; REGULATORY LAW COMPLIANCE;
NOTICE OF SALE
No Optionee shall be entitled to the privileges of stock
ownership as to any Option Share not actually issued and delivered. No Option
Shares may be purchased upon the exercise of a Stock Option unless and until all
then applicable requirements of all regulatory agencies having jurisdiction and
all applicable requirements of the securities exchanges upon which securities of
the Company are listed (if any) shall have been fully complied with. The
Optionee shall, not more than five (5) days after each sale or other disposition
of shares of Common Stock acquired pursuant to the exercise of Stock Options,
give the Company notice in writing of such sale or other disposition.
20. EFFECTIVE DATE OF THE PLAN
The effective date of this Plan is March 18, 1993. The
affirmative vote of the holders of a majority of ONB (the Company's predecessor)
issued and outstanding shares of common stock was obtained on May 24, 1993
approving the Plan.
23
<PAGE> 15
21. TERMINATION
Unless previously terminated as aforesaid, the Plan shall
terminate ten (10) years from the earliest date of (i) adoption of the Plan by
the Board of Directors of the Company, or (ii) approval of the Plan by holders
of at least a majority of the outstanding shares of Common Stock present, or
represented, and entitled to vote at a duly held meeting of shareholders,
exclusive of shares held by eligible participants under the Plan. No Stock
Options shall be granted under the Plan thereafter, but such termination shall
not affect any Stock Option theretofore granted.
22. OPTION AGREEMENT
Each Stock Option granted under the Plan shall be evidenced by a
written Stock Option Agreement executed by the Company and the Optionee, and
shall contain each of the provisions and agreements herein specifically required
to be contained therein, and such other terms and conditions as are deemed
desirable by the Stock Option Committee and are not inconsistent with this Plan.
23. STOCK OPTION PERIOD
Each Stock Option and all rights and obligations thereunder shall
expire on such date as the Stock Option Committee may determine, but not later
than ten (10) years from the date such Stock Option is granted, and shall be
subject to earlier termination as provided elsewhere in this Plan.
24. EXCULPATION AND INDEMNIFICATION OF STOCK OPTION COMMITTEE
In addition to such other rights of indemnification which they
may have as directors of the Company or as members or the Stock Option
Committee, indemnification of the present, former and future members of the
Stock Option Committee, and each of them, shall be equivalent to then accepted
indemnification approved for the Board Of Directors and shareholders (if
required).
24
<PAGE> 16
25. NOTICES
All notices and demands of any kind which the Stock Option
Committee, any Optionee, Eligible Participant, or other person may be required
or desires to give under the terms of this Plan shall be in writing. Delivery by
mail shall be deemed made at the expiration of the third day after the day of
mailing, except for notice of the exercise of a Stock Option and payment of the
Stock Option exercise price, both of which must be actually received by the
Company.
26. LIMITATION ON OBLIGATIONS OF THE COMPANY
All obligations of the Company arising under or as a result of
this Plan or Stock Options granted hereunder shall constitute the general
unsecured obligations of the Company, any member thereof, the Stock Option
Committee, any member thereof, any officer of the Company, or any other person
or any Subsidiary, and none of the foregoing, except the Company, shall be
liable for any debt, obligation, cost or expense hereunder.
27. LIMITATION OF RIGHTS
The Stock Option Committee, in its sole and absolute discretion,
is entitled to determine who, if anyone, is an Eligible Participant under this
Plan, and which, if any, Eligible Participant shall receive any grant of Stock
Option. No oral or written agreement by any person on behalf of the Company
relating to this Plan or any Stock Option granted hereunder is authorized, and
such may not bind the Company or the Stock Option Committee to grant any Stock
Option to any person.
28. SEVERABILITY
If any provision of this Plan as applied to any person or to any
circumstances shall be adjudged by a court of competent jurisdiction to be void,
invalid, or unenforceable, the same shall in no way affect any other provision
hereof, the application of any such provision in any other circumstances, or the
validity of enforceability hereof.
25
<PAGE> 17
29. SUCCESSORS
This Plan shall be binding upon the respective successors,
assigns, heirs, executors, administrators, guardians and personal
representatives of the Company and Optionees.
30. EFFECTIVE DATE
The amendments to the 1993 ONB Plan incorporated within to create
this Plan shall become effective at the Effective Time.
ADOPTION OF AND RESERVATION OF SHARES
For valuable consideration, including the promises set forth and
the consideration provided for in the Agreement, as defined in the foregoing
Plan, and effective as of the Effective Time described in the foregoing Plan and
defined in the Agreement, the undersigned Company does hereby adopt the
foregoing Plan, does hereby reserve twelve thousand (12,000) shares of its
Common Stock for issuance upon exercise of options under the Plan, and agrees to
notify its transfer agent of such reservation.
Executed on September 29,1999, in Ontario, California effective
as of the Effective Time set forth in the foregoing Plan.
CVB FINANCIAL CORP.
By: /s/ D. Linn Wiley, President and
Chief Executive Officer
26
<PAGE> 1
EXHIBIT 99.2
CVB FINANCIAL CORP. 1999 ORANGE NATIONAL BANCORP
1997 CONTINUATION STOCK OPTION PLAN
2. BACKGROUND
(a) CVB Financial Corp. (the "Company") and Orange National Bancorp
("ONB") entered into that certain Agreement and Plan of Reorganization (the
"Agreement") dated as of May 18, 1999, which provides for the merger of ONB with
and into the Company.
(b) Section 7.9 of the Agreement provides as follows:
7.9.1 At and as of the Effective Time of the Merger, CVB shall
assume each and every outstanding option to purchase shares of ONB Stock ("ONB
Stock Option") and all obligations of ONB under the ONB Stock Option Plans. Each
and every ONB Stock Option so assumed by CVB under this Agreement shall continue
to have, and be subject to, the same terms and conditions set forth in the ONB
Stock Option Plans and in the other documents governing such ONB Stock Option
immediately prior to the Effective Time of the Merger, except that: (i) such ONB
Stock Option shall be exercisable for that number of whole shares of CVB Stock
equal to the product of (A) the number of shares of ONB Stock that were
purchasable under such ONB Stock Option immediately prior to the Effective Time
of the Merger multiplied by (B) the Conversion Ratio, rounded down to the
nearest whole number of shares of CVB Stock; and (ii) the per share exercise
price for the shares of CVB Stock issuable upon exercise of such ONB Stock
Option shall be equal to the quotient determined by dividing (A) the exercise
price per share of ONB Stock at which such ONB Stock Option was exercisable
immediately prior to the Effective Time of the Merger by (B) the Conversion
Ratio. Prior to the Effective Time of the Merger, CVB shall issue to each holder
of an outstanding ONB Stock Option a document evidencing the assumption of such
ONB Stock Option by CVB pursuant to this Section 7.9.
7.9.2. CVB shall comply with the terms of the ONB Stock Option Plan
and use its reasonable best efforts so that, to the extent required by, and
subject to the provisions of, such Plans, ONB Stock Options which qualify as
incentive stock options prior to the Effective Time of the Merger qualify as
27
<PAGE> 2
incentive stock options of CVB after the Effective Time of the Merger.
7.9.3 At or prior to the Effective Time of the Merger, CVB shall
take all corporate action necessary to reserve for issuance a sufficient number
of shares of CVB Stock for delivery upon exercise of CVB Stock Options assumed
by it in accordance with this Section 7.9. At the Effective Time, or as soon as
practicable thereafter, CVB shall, if necessary, file a registration statement
on Form S-8, as the case may be (or any successor or other appropriate forms);
or another appropriate form with respect to the shares of CVB Common Stock
subject to such options and shall use all reasonable efforts to maintain the
effectiveness of such registration statement (and maintain the current status of
the prospectus or prospectuses contained therein) for so long as such options
remain outstanding.
(c) The term "Effective Time," as used herein, shall mean the effective
time of the Merger as such term is defined in the Agreement. The Effective Time
occurred or is anticipated to occur on or about October 4, 1999.
(d) As of the Effective Time, there were options for two hundred
nineteen thousand (219,000) shares of ONB common stock outstanding under the ONB
1997 Stock Option Plan (the "1997 ONB Plan").
(e) By way of this CVB Financial Corp. 1999 Orange National Bancorp 1997
Continuation Stock Option Plan, the Company is assuming the ONB 1997 Plan to (i)
reflect the substitution of the Company for ONB; (ii) reflect the options to
purchase stock will be options to purchase the common stock of the Company
("Company Common Stock") with appropriate adjustment for the Conversion Ratio
determined according to the Agreement, (iii) reduce the number of shares
available for distribution under the 1997 ONB Plan to the number of shares
subject to outstanding ONB Stock Options as of the Effective Time, and (iv) make
other appropriate revisions to the 1997 ONB Plan not inconsistent with the
provisions of the Agreement.
3. PURPOSE
The purpose of the CVB Financial Corp. 1999 Orange National Bancorp
1997 Continuation Stock Option Plan (the "Plan") is to strengthen CVB Financial
Corp. (the Company") and those corporations which are or hereafter become
subsidiary corporations of the
28
<PAGE> 3
Company 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
Company 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.
4. 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
29
<PAGE> 4
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 Company and any successors-in-interest
to such parties.
5. 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.
(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 Company 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 Company who is
not also a full-time salaried officer or employee of the Company 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 Company's common stock
to any individual who, at the time of the grant, owns stock possessing more than
10% of the total combined voting
30
<PAGE> 5
power or value of all classes of stock of the Company 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 Company 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 Company 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
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.
6. 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 Company and the optionee.
31
<PAGE> 6
(b) Directors, full-time salaried officers and management level
employees of the Company 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 other-wise 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.
7. 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 Company'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 three hundred twenty eight thousand five hundred (328, 500). If any
option shall be canceled, surrendered or expire for any reason without having
been exercised in full, the underlying shares subject thereto shall again be
available for purposes of the Plan.
8. CONTINUATION OF EMPLOYMENT
Nothing contained in the Plan (or in any option agreement) shall
obligate the Company or a subsidiary corporation to employ any optionee for any
period or interfere in any
32
<PAGE> 7
way with the right of the Company or a subsidiary corporation to reduce the
optionee's compensation. However, the Company may not reduce the terms of any
option without the approval of the optionee.
9. 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 Company 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
Company'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 Company, of the right of such person to exercise the option; Optionees will
have no rights as shareholders with respect to stock of the Company subject to
their stock option agreements until the date of issuance of the stock
certificate to them.
10. 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.
11. CESSATION OF DIRECTORSHIP OR EMPLOYMENT
33
<PAGE> 8
Except as provided in Sections 10 and 20 hereof, if an optionee
ceases to be a director or an employee of the Company 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 Company 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.
12. TERMINATION OF EMPLOYMENT FOR CAUSE
If the stock option agreement so provides and if an optionee's
employment by the Company 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.
13. DISABILITY OR DEATH OF OPTIONEE
If any optionee dies while serving as a director or an employee of
the Company or a subsidiary corporation, the option shall expire one (1) year
after the date of such death, except as provided in 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 Company 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.
34
<PAGE> 9
14. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of the stock of the Company are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Company through reorganization, merger, recapitalization,
reclassification, stock split, stock dividend, stock consolidation or otherwise,
without consideration to the Company, 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.
15. TERMINATING EVENTS
A Terminating Event shall be defined as any one of the following
events: (i) a dissolution or liquidation of the Company, (ii) a reorganization,
merger or consolidation of the Company with one or more corporations, the result
of which (A) the Company is not the surviving corporation, or (B) the Company
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 Company);
(iii) a sale of substantially all the assets of the Company to another
corporation, or (iv) a sale of the equity securities of the Company representing
more than 80% of the aggregate voting power of all outstanding equity securities
of the Company to any person or entity, or any group of persons and/or entities
acting in concert. When the Company knows that a Terminating Event will occur
(i) the Company 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, which
successor may also assume the Plan, in which case the Plan will not terminate.
35
<PAGE> 10
16. 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
(d) permit options to be granted to anyone other than directors,
full-time salaried officers or management level employees of
the Company or a subsidiary corporation;
may be adopted without the Company 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.
17. 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
36
<PAGE> 11
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.
18. PRIVILEGES OF STOCK OWNERSHIP; SECURITIES LAW COMPLIANCE;
NOTICE OF SALE
No optionee shall be entitled to the privileges of stock ownership
as to any shares of stock not actually issued. No shares shall be purchased upon
the exercise of any option unless and until the Company has fully complied with
all applicable requirements of any regulatory agency having jurisdiction over
the Company including registration of the stock options and underlying shares,
as necessary, and all applicable requirements of any exchange upon which stock
of the Company may be listed. The optionee shall give the Company notice of any
sale or disposition of any such shares not more than five (5) days after such
sale or disposition.
19. EFFECTIVE DATE OF THE PLAN
The Plan shall be deemed adopted by the Board as of February 19,
1997. The affirmative vote of the holders of a majority of ONB (the Company's
predecessor) of the issued and outstanding shares of common stock required for
approval of the Plan was obtained on May 19, 1997.
20. TERMINATION
Unless previously terminated by the Board, the Plan shall terminate
at the close of business on February 19, 2007. No options shall be granted under
the Plan thereafter, but such termination shall not affect any option
theretofore granted.
21. OPTION AGREEMENT
Each option shall be evidenced by a written stock option agreement
executed by the Company 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.
22. OPTION PERIOD
37
<PAGE> 12
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.
23. 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 Company 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 Company is joined as a party defendant) to impose a liability or penalty on
such person while a member of the Board arising with 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 Company 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 Company by a shareholder or holder of a voting
trust certificate representing shares of the Company 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.
24. 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 Company, furnish evidence satisfactory to the Company (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 Company, 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
38
<PAGE> 13
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 Company that registration is not required.
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 Company 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.
25. INFORMATION TO EMPLOYEES
The Company shall provide optionees with financial statements of the
Company at least annually.
26. EFFECTIVE DATE
The amendments to the ONB 1997 Stock Option Plan incorporated within
and to create this Plan shall become effective at the Effective Time.
ADOPTION OF PLAN AND RESERVATION OF SHARES
For valuable consideration, including the promises set forth and
the consideration provided for in the Agreement, as defined in the foregoing
Plan, and effective as of the Effective Time described in the foregoing plan and
defined in the Agreement, the undersigned Company does hereby adopt the
foregoing Plan, does hereby reserve three hundred twenty eight thousand five
hundred (328,500) shares of its Common Stock for issuance upon the exercise of
options under the Plan, and agrees to notify its transfer agent of such
reservation.
39
<PAGE> 14
Executed on September 29, 1999 in Ontario, California, effective as
of the Effective Time set forth in the foregoing Plan.
CVB FINANCIAL CORP.
By: /s/ D. Linn Wiley, President and
Chief Executive Officer
40
