<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Professional Bancorp, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
743112104
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(CUSIP Number)
Joel W. Kovner, Dr. P.H., Chairman of the Board, Professional Bancorp, Inc.,
606 Broadway, Santa Monica, CA 90401 (310) 458-1521
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 31, 1994
------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the follow box. [ ]
Check the following box if a fee is being paid with the statement. [ ] (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class
of equity securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
(Continued on Following Pages)
(Page 1 of 4 Pages)
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* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities and
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE> 2
CUSIP NO. 743112104 SCHEDULE 13D Page 2 of 4 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Joel W. Kovner, Dr. P.H.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF SHARES 7. SOLE VOTING POWER 423,749 shares
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BENEFICIALLY OWNED 8. SHARED VOTING POWER -0- shares
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BY EACH REPORTING 9. SOLE DISPOSITIVE POWER 423,749 shares
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PERSON WITH 10. SHARED DISPOSITIVE POWER -0- shares
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
423,749 shares
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.9%
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14. TYPE OF REPORTING PERSON
IN
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<PAGE> 3
CUSIP NO. 743112104 SCHEDULE 13D Page 3 of 4 Pages
This Amendment No. 1 to the Schedule 13D, dated April 27, 1992, which
was filed with the Securities and Exchange Commission by Joel W. Kovner, Dr.
P.H. and relates to the shares of Common Stock of Professional Bancorp, Inc., a
Pennsylvania corporation, hereby amends Items 5, 6 and 7 of the Schedule 13D.
Item 5: Interest in Securities of the Issuer
Dr. Kovner is the beneficial owner of an aggregate of 423,749 shares
of Common Stock, representing approximately 27.9% of the Common Stock
outstanding. Such shares include 385,500 shares of Common Stock which are the
subject of currently exercisable options granted to Dr. Kovner under the
Company's 1982, 1990, and 1992 Stock Option Plans. Until such options are
exercised, Dr. Kovner has no voting or disposition powers with respect to the
underlying shares of Common Stock.
Except as described in the preceding sentence, Dr. Kovner has sole
power to vote and to dispose of all shares beneficially owned by him. Dr.
Kovner has not engaged in any transaction in the Common Stock in the past sixty
days. Dr. Kovner knows of no other person who has the right to receive, or the
power to direct the receipt, of dividends from, or the proceeds from the sale
of, the shares of Common Stock beneficially owned by him.
Item 6: Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
The 423,749 shares of Common Stock shown as beneficially owned by
Dr. Kovner include 385,500 shares that are the subject of currently exercisable
options granted to Dr. Kovner under the Company's 1982, 1990, and 1992 Stock
Option Plans.
Item 7: Material to be Filed as Exhibits
1. 1982 Stock Option Plan, previously filed with Dr. Kovner's
April 27, 1992 filing on Schedule 13D, incorporated herein by
reference.
2. 1990 Stock Option Plan, previously filed with Dr. Kovner's
April 27, 1992 filing on Schedule 13D, incorporated herein by
reference.
3. 1992 Stock Option Plan, filed as Exhibit 1.
<PAGE> 4
CUSIP NO. 743112104 SCHEDULE 13D Page 3 of 4 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
17 March 1995 /S/ JOEL W. KOVNER
- ---------------------- --------------------------------------------------
(Date) (Signature)
Joel W. Kovner, Dr. P.H.
Chairman of the Board, President and
Chief Executive Officer
--------------------------------------------------
(Name/Title)
<PAGE> 1
PROFESSIONAL BANCORP 1992 STOCK OPTION PLAN
Adopted March 25, 1992
1. Purpose
The purpose of the Professional Bancorp 1992 Stock Option Plan (the
"Plan") is to strengthen Professional Bancorp (the "Corporation") and those
banks and corporations which are or hereafter become subsidiary corporations
(the "Subsidiary" or "Subsidiaries") by providing additional means of
attracting and retaining qualified and competent managerial personnel and by
providing to participating officers and key employees added incentive for high
levels of performance and for special efforts to increase the earnings of the
Corporation 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 of the Corporation pursuant
to Stock Options granted in accordance with this Plan.
Stock Options granted pursuant to this Plan are intended to be
Incentive Stock Options or Non-Qualified Stock Options, as shall be determined
and designated by the Stock Option Committee upon the grant of each Stock
Option hereunder.
2. Definitions
For purposes of this Plan, the following terms shall have the
following meanings:
(a) "Common Stock." This term shall mean shares of the
Corporation's no par value common stock, subject to adjustment pursuant to
Section 15 (Adjustment Upon Changes in Capitalization) hereunder.
(b) "Corporation." This term shall mean Professional Bancorp, a
Pennsylvania corporation.
(c) "Eligible Participants." This term shall mean: (i) all
officers (whether or not they are also directors) of the Corporation or any
Subsidiary and (ii) all key employees (as such persons may be determined by the
Stock Option Committee from time to time) of the Corporation or any Subsidiary,
provided that such officers and key employees have a customary work week of at
least forty hours in the employ of the Corporation or a 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, including the
valuation methods described in Treasury Regulations Section 20.2031-2.
(e) "Incentive Stock Option." This term shall mean a Stock Option
which is an "incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended.
(f) "Non-Qualified Stock Option." This term shall mean a Stock
option which is not an Incentive Stock Option.
(g) "Option Shares." This term shall mean Common Stock covered By
and subject to any outstanding unexercised Stock Option granted pursuant to
this Plan.
<PAGE> 2
(h) "Optionee." This term shall mean any Eligible Participant to
whom a Stock Option has been granted pursuant to this Plan, provided that at
least part of the Stock Option is outstanding and unexercised.
(i) "Plan." This term shall mean the Professional Bancorp 1992
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.
(k) "Stock Option Committee." The Board of Directors of the
Corporation shall select and designate a Stock Option Committee consisting of
two or more disinterested directors of the Corporation, having full authority
to act in connection with this Plan. A "disinterested director" is a director
who is not, during one year prior to service as a member of the Stock Option
Committee, or during such service, granted or awarded equity securities
pursuant to the Plan or any other plan of the Company or its Subsidiary, except
that certain actions, described in Rule 16b-3(c)(2)(i)(A)-(D) promulgated under
the Securities Exchange Act of 1934 shall not disqualify such director from
qualifying as a disinterested director and serving as a member of the Stock
Option Committee.
(l) "Subsidiary." This term shall mean each "subsidiary
corporation" (treating the Corporation as the employer corporation) as defined
in Section 424(f) of the Internal Revenue Code of 1986, as amended.
3. Administration
(a) Stock Option Committee. This Plan shall be administered by
the Stock Option Committee. The Board of Directors of the Corporation shall
have the right, in its sole and absolute discretion, to remove or replace any
person from or on the Stock Option Committee at any time for any reason
whatsoever.
(b) Administration of the Plan. Any action of the Stock Option
Committee with respect to the administration of the Plan shall be taken
pursuant to a majority vote, or pursuant to the unanimous written consent, of
its members. Any such action taken by the Stock Option Committee in the
administration of this Plan shall be valid and binding, so long as the same is
not inconsistent with the terms and conditions of this Plan. Subject to
compliance with the terms, conditions and restrictions set forth in this Plan,
the Stock Option Committee shall have the exclusive right, in its sole and
absolute discretion, to establish the terms and conditions of all Stock Options
granted under the Plan, including, without meaning any limitation, 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 and designate which Stock Options granted under the
Plan shall be Incentive Stock Options and which shall be Non-Qualified Stock
Options; (iv) determine the Eligible Participants, if any, to whom Stock
Options are granted; (v) determine the duration and purposes, if any, of leaves
of absence which may be permitted to holders of unexercised, unexpired Stock
Options without such constituting a termination of employment under the Plan;
and (vi) 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.
<PAGE> 3
(c) Decisions and Determinations. Subject to the express
provisions of the Plan, the Stock Option Committee shall have the authority
to construe and interpret this Plan, to define the terms used herein, to
prescribe, amend, and rescind rules and regulations relating to the
administration of the Plan, and to make all other determinations necessary or
advisable for administration of the Plan. Determinations 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 limited to Three Hundred and
Seventy-Five Thousand (375,000) shares, in the aggregate. If any Stock Option
shall be canceled, surrendered, or expire for any reason without having been
exercised in full, the unpurchased Option Shares represented thereby shall
again be available for grants of Stock Options under this Plan.
5. Eligibility
Only Eligible Participants shall be eligible to receive grants of
Stock Options under this Plan.
6. Grants of Stock Options
(a) Grant. Subject to the express provisions of the Plan, the
Stock Option Committee, in its sole and absolute discretion, may grant Stock
Options:
(i) To Eligible Participants for a number of Option Shares,
at the price(s) and time(s), on the terms and conditions and to such Eligible
Participants as it deems advisable and specifies in the respective grants; and
(ii) The terms upon which and the times at which, or the
periods within which, the Option Shares subject to such Stock Options may
become acquired or such Stock Options may be acquired and exercised shall be as
set forth in the Plan and the related Stock Option Agreements.
(iii) Subject to the limitations and restrictions set forth
in the Plan, an Eligible Participant who has been granted a Stock Option may,
if otherwise eligible, be granted additional Stock Options if the Stock Option
Committee shall so determine. The Stock Option Committee shall designate in
each grant of a Stock Option whether the Stock Option is an Incentive Stock
Option or a Non-Qualified Stock Option.
(b) Date of Grant and Rights of Optionee. The determination of
the Stock Option Committee to grant a Stock Option shall not in any way
constitute or be deemed to constitute an obligation of the Corporation, or a
right of the Eligible Participant who is the proposed subject of the grant, and
shall not constitute or be deemed to constitute the grant of a Stock Option
hereunder unless and until both the Corporation and the Eligible Participant
have executed and delivered to the other a Stock Option Agreement in the form
then required by the Stock Option Committee as 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
<PAGE> 4
on or after the date of its final determination to grant the Stock Option (or
if no such date is fixed, then the date of grant shall be the date on which the
determination was finally made by the Stock Option Committee to grant the Stock
Option), and such date shall be set forth in the Stock Option Agreement. The
date of grant as so determined shall be deemed the date of grant of the Stock
Option for purposes of this Plan.
(c) Shareholder-Participants. A Stock Option may not be granted
hereunder to an Eligible Participant who owns, directly or indirectly, at the
date of the grant of the Stock Option, more than ten percent (10%) of the total
combined voting power of all classes of capital stock of the Corporation or a
Subsidiary unless the purchase price of the Option Shares subject to said Stock
Option is at least one hundred and ten percent (110%) of the Fair Market Value
of the Option Shares, determined as of the date said Stock Option is granted.
In addition, a Stock Option granted hereunder to an Eligible Participant who is
also an officer or key employee of the Corporation or any Subsidiary who owns
directly, or indirectly, at the date of the grant of the Stock Option, more
than ten percent (10%) of the total combined voting power of all classes of
capital stock of the Corporation or a Subsidiary (if permitted in accordance
with the provisions of Section 5 herein) shall not qualify as an Incentive
Stock Option unless the Stock Option by its terms is not exercisable after five
(5) years from the date that it is granted. The attribution rules of Section
424 (d) of the Internal Revenue Code of 1986, as amended, shall apply in the
determination of indirect ownership of stock.
(d) Maximum Value of Stock Options. No grant of Incentive Stock
Options hereunder may be made to the extent that it would cause the aggregate
fair market value of option Shares with respect to which Incentive Stock
Options (pursuant to this Plan or any other Incentive Stock Option Plan of the
Corporation or any Subsidiary) are exercisable for the first time by the
Eligible Participant during any calendar year to exceed $100,000 (determined at
the time of the grant).
(e) Substituted Stock Options. If all of the outstanding shares
of common stock of another corporation are changed into or exchanged solely for
Common Stock in a transaction to which Section 424(a) of the Internal Revenue
Code of 1986, as amended, applies, then, subject to the approval of the Board
of Directors of the Corporation, Stock Options under the Plan may be
substituted ("Substituted Options") in exchange for valid, unexercised and
unexpired stock options of such other corporation. Substituted Options shall
qualify as Incentive Stock Options under the Plan, provided that (and to the
extent) the stock options exchanged for the Substituted Options were "Incentive
Stock Options" within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended.
(f) Non-Qualified Stock Options. Stock Options and Substituted
Options granted by the Stock Option Committee shall be deemed Non-Qualified
Stock Options under this Plan if they: (i) are designated at the time of grant
as Incentive Stock Options but do not so qualify under the provisions of
Section 422 of the Code or any regulations or rulings issued by the Internal
Revenue Service for any reason; (ii) are in excess of the limitations on the
period of exercise set forth in Section 6(c); (iii) are in excess of the fair
market limitations set forth in Section 6(d); (iv) are granted to an Eligible
Participant who is not an officer or key employee of the Corporation or any
Subsidiary; or (v) are designated at the time of grant as NonQualified Stock
Options. Non-Qualified Stock Options granted or substituted hereunder shall be
so designated in the Stock Option Agreement entered into between the
Corporation and the Optionee.
<PAGE> 5
7. Stock Option Exercise Price
(a) Minimum Price. The exercise price of any Option Shares shall
be determined by the Stock Option Committee, in its sole and absolute
discretion, upon the grant of a Stock Option. In the case of a Non-Qualified
Stock Option, said exercise price shall not be less than the lesser of (i) an
amount equal to eighty-five percent (85%) of the Fair Market Value of the
Common Stock represented by the Option Shares; or (ii) an amount which under
the terms of the Stock Option may not be less than eighty-five percent (85%) of
the Fair Market Value of the Common Stock represented by the Option Shares on
the date of the exercise of the related Stock Option. In the case of an
Incentive Stock Option, except as provided elsewhere herein, said exercise
price shall not be less than one hundred percent (100%) of the Fair Market
Value of the Common Stock represented by the Option Shares on the date of grant
of the related Stock Option.
(b) Substituted Options. The exercise price of the Option Shares
subject to each Substituted Option may be fixed at a price less than the
minimum amount set forth in Section 7(a) above at the time such Substituted
Option is granted if said exercise price has been computed to be not less than
the exercise price set forth in the stock option of the other corporation for
which it was exchanged, with appropriate adjustment to reflect the exchange
ratio of the shares of stock of the other corporation into the shares of Common
Stock.
8. Exercise of Stock Options
(a) Exercise. Except as otherwise provided elsewhere herein, each
Stock Option shall be exercisable in such increments, which need not be equal,
and upon such contingencies as the Stock Option Committee shall determine at
the time of grant of the Stock Option; provided, however, that if an Optionee
shall not in any given period exercise any part of a Stock Option which has
become exercisable during that period, the Optionee's right to exercise such
part of the Stock Option shall continue until expiration of the Stock Option or
any part thereof as may be provided in the related Stock Option Agreement. No
Stock Option or part thereof shall be exercisable except with respect to whole
shares of Common Stock, and fractional share interests shall be disregarded
except that they may be accumulated.
(b) Prior Outstanding Incentive Stock Options. Incentive Stock
Options granted (or substituted) to an Optionee under the Plan may be
exercisable while such Optionee has outstanding and unexercised any Incentive
Stock Option previously granted (or substituted) to him or her pursuant to this
Plan or any other Incentive Stock Option Plan of the Corporation or any
Subsidiary. An Incentive Stock Option shall be treated as outstanding until it
is exercised in full or expires by reason of lapse of time.
(c) Notice and Payment. Stock Options granted hereunder shall be
exercised by written notice delivered to the Corporation specifying the number
of Option Shares with respect to which the Stock Option is being exercised,
together with concurrent payment in full of the exercise price as hereinafter
provided. 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 Corporation, of the right of such person or
persons to exercise the Stock Option. The Corporation's receipt of a notice of
exercise without concurrent receipt of the full amount of the exercise price
shall not be deemed an exercise of a Stock Option by an Optionee, and the
Corporation shall have no obligation to an Optionee for any option Shares
<PAGE> 6
unless and until full payment of the exercise price is received by the
Corporation and all of the terms and provisions of the Plan and the related
Stock Option agreement have been fully complied with.
(d) Payment of Exercise Price. The exercise price of any Option
Shares purchased upon the proper exercise of a Stock Option shall be paid in
full at the time of each exercise of a Stock Option in cash, (or bank,
cashier's or certified check) and/or, with the prior written approval of the
Stock Option Committee at or before the time of exercise, in Common Stock of
the Corporation which, when added to the cash payment, if any, 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 in full concurrently with the
Optionee's notification to the Corporation of his intention to exercise all or
part of a Stock Option. If all or any part of a payment is made in shares of
Common Stock as heretofore provided, such payment shall be deemed to have been
made only upon receipt by the Corporation of all required share certificates,
and all stock powers and all other required transfer documents necessary to
transfer the shares of Common Stock to the Corporation.
(e) 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.
(f) 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: (i) payment in full as provided
hereinabove has been received by the Corporation; (ii) in the opinion of the
counsel for the Corporation, all applicable requirements of law and of
regulatory bodies having jurisdiction over such issuance and delivery have been
fully complied with; and (iii) if required by federal or state law or
regulation, the Optionee shall have paid to the Corporation the amount, if any,
required to be withheld on the amount deemed to be compensation to the Optionee
as a result of the exercise of his or her Stock Option, or made other
arrangements satisfactory to the Corporation, in its sole discretion, to
satisfy applicable income tax withholding requirements.
(g) 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
Corporation to another corporation which would, upon consummation, result in
termination of a Stock Option in accordance with Section 16 hereof, all Stock
Options previously granted shall 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 described in Section 16 hereof is
consummated. If such terminating event is not consummated, Stock Options
granted pursuant to the Plan shall be exercisable in accordance with the terms
of their respective Stock Option Agreements.
9. Nontransferability of Stock Options
Each Stock Option shall, by its terms, be nontransferable by the
Optionee other than by will or the laws of descent and distribution, and shall
be exercisable during the Optionee's lifetime only by the Optionee.
<PAGE> 7
10. Continuation of Affiliation
Nothing contained in this Plan (or in any Stock
Option Agreement) shall obligate the Corporation or any Subsidiary to employ or
continue to employ or remain affiliated with any Optionee or any Eligible
Participant for any period of time or interfere in any way with the right of
the Corporation 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 Corporation 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 Corporation or the Subsidiary, and
any Stock Options or increments which had not become exercisable as of such
date shall expire automatically on such date.
12. Termination for Cause
If the Stock Option Agreement so provides and if an Optionee's
employment by or affiliation with the Corporation 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
had ceased to be employed by or affiliated with the Corporation or a Subsidiary
upon the date of such termination for a reason other than cause, disability or
death. Termination for cause shall include, but shall not be limited to,
termination for malfeasance or gross misfeasance in the performance of duties
or conviction of illegal activity in connection therewith and, in any event,
the determination of the Stock Option Committee with respect thereto shall be
final and conclusive.
13. Death of Optionee
If an Optionee dies while employed by or affiliated with the
Corporation 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.
<PAGE> 8
14. Disability of Optionee
If an Optionee is disabled while employed by or affiliated with
the Corporation 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 Corporation 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 Corporation 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 Optionee's death, or which has lasted or can be
expected to last for a continuous period of not less than twelve (12) months.
15. Adjustment Upon Changes in Capitalization
If the outstanding shares of Common Stock of the
Corporation are increased, decreased, or changed into or exchanged for at
different number or kind of shares or securities of the Corporation, through a
reorganization, merger, recapitalization, reclassification, stock split, stock
dividend, stock consolidation, or otherwise, without consideration to the
Corporation, an appropriate and proportionate adjustment shall be made in the
number and kind of shares as to which Stock Options may be granted. A
corresponding adjustment changing the number or kind of Option Shares and the
exercise prices per share allocated to unexercised Stock Options, or portions
thereof, which shall have been granted prior to any such change, shall likewise
be made. 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. Termination Events
Upon consummation of a plan of dissolution or liquidation of the
Corporation, or upon consummation of a plan of reorganization, merger or
consolidation of the Corporation with one or more corporations, as a result of
which the Corporation is not the surviving entity, or upon the sale of all or
substantially all the assets of the Corporation to another corporation, subject
to the provisions of Section 8(g) hereof the Plan shall automatically terminate
and all Stock Options theretofore granted shall be terminated, 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 corporation, or a parent or
subsidiary corporation thereof, solely at the discretion of such successor
corporation, or parent or subsidiary corporation, with appropriate adjustments
as to number and kind of shares and prices.
<PAGE> 9
17. Amendment and Termination
The Board of Directors of the Corporation may at any time and from
time to time suspend, amend, or terminate the Plan and may, with the consent of
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 Corporation having first obtained the
approval of the holders of a majority of the Corporation's outstanding shares
of Common Stock present, or represented, and entitled to vote at a duly held
meeting of shareholders of the Corporation, or by written consent, if the
amendment or modification would:
(a) materially increase the number of options which may be issued
under the Plan;
(b) 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 for
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 as otherwise provided in Section 15 hereof), without the
consent of the Optionee, alter or impair any rights or obligations under any
Stock Option theretofore granted.
18. Rights 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 Corporation 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
classifications 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 Shares not actually issued and delivered. No Option Shares
may be purchased upon the exercise of a Stock Option unless and until all then
applicable requirements of all regulatory agencies having jurisdiction and all
<PAGE> 10
applicable requirements of the securities exchanges upon which securities of
the Corporation are listed (if any) shall have been fully complied with. The
Optionee shall, not more than thirty (30) days after each sale or other
disposition of shares of Common Stock acquired pursuant to the exercise of
Stock Options, give the Corporation notice in writing of such sale or other
disposition.
20. Effective Date of the Plan
The Plan shall be deemed adopted as of __________ __, 1992, and
shall be effective immediately, subject to approval of the Plan-by the holders
of at least a majority of the Corporation's outstanding shares of Common Stock.
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 Corporation; or (ii) approval of the Plan by
holders of at least a majority of the outstanding shares of Common Stock. 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 Corporation and
the Optionee, and shall contain each of the provisions and agreements herein
specifically required to be contained therein, and such other terms and
conditions as are deemed desirable by the Stock Option Committee and are not
inconsistent with 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 any applicable coverage under any
directors and officers liability or similar insurance policy, the present,
former and future members of the Stock Option Committee, and each of them, who
is or was a director, officer or employee of the Corporation shall be
indemnified by the Corporation to the extent authorized in and permitted by the
Corporation's Certificate of Incorporation, and/or Bylaws in connection with
all actions, suits and proceedings to which they or any of them may be a party
by reason of any act or omission of any member of the Stock Option Committee
under or in connection with the Plan or any Stock Option granted thereunder.
25. Agreement and Representations of Optionee
Unless the shares of Common Stock covered by this Plan have been
registered with the Securities and Exchange Commission pursuant to the
registration requirements under the Securities Act of 1933, each Optionee
shall: (i) by and upon accepting a Stock Option, represent and agree in
writing, in the form of the letter attached hereto as Exhibit "A," for himself
<PAGE> 11
or herself and his or her transferees by will or the laws of descent and
distribution, that the Option Shares will be acquired for investment purposes
and not for resale or distribution; and (ii) by and upon the exercise of a
Stock Option, or a part thereof, furnish evidence satisfactory to counsel for
the Corporation, including written and signed representations in the form of
the letter attached hereto as Exhibit "B," to the effect that the Option Shares
are being acquired for investment purposes and not for resale or distribution,
and that the Option Shares being acquired shall not be sold or otherwise
transferred by the Optionee except in compliance with the registration
provisions under the Securities Act of 1933, as amended, or an applicable
exemption therefrom. Furthermore, the Corporation, at its sole discretion, to
assure itself that any sale or distribution by the Optionee complies with this
Plan and any applicable federal or state securities laws, may take all
reasonable steps, including placing stop transfer instructions with the
Corporation's transfer agent prohibiting transfers in violation of the Plan and
affixing the following legend (and/or such other legend or legends as the Stock
Option Committee shall require) on certificates evidencing the shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT OR A
WRITTEN OPINION OF COUNSEL FOR THE HOLDER THEREOF, WHICH
OPINION SHALL BE ACCEPTABLE TO PROFESSIONAL BANCORP, THAT
REGISTRATION IS NOT REQUIRED."
At any time that an Optionee contemplates the disposition of any of the Option
Shares (whether by sale, exchange, gift or other form of transfer), he or she
shall first notify the Corporation of such proposed disposition and shall
thereafter cooperate with the Corporation in complying with all applicable
requirements of law which, in the opinion of counsel for the Corporation, must
be satisfied prior to the making of such disposition. Before consummating such
disposition, the Optionee shall provide to the Corporation an opinion of
Optionee's counsel, of which both such opinion and such counsel shall be
satisfactory to the Corporation, that such disposition will not result in a
violation of any state or federal securities laws or regulations. The
Corporation shall remove any legend affixed to certificates for Option Shares
pursuant to this Section if and when all of the restrictions on the transfer of
the Option Shares, whether imposed by this Plan or federal or state law, have
terminated.
26. 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 and shall
be delivered in hand to the person or persons to whom addressed (in the case of
the Stock Option Committee, with the Chief Executive Officer, Chief Financial
Officer or Secretary of the Corporation), by leaving a copy of such notice or
demand at the address of such person or persons as may be reflected in the
records of the Corporation, or by mailing a copy thereof, properly addressed as
above, by certified or registered mail, postage prepaid, with return receipt
requested. Delivery by mail shall be deemed made upon receipt by the notifying
party of the return receipt request acknowledging receipt of the notice or
demand.
<PAGE> 12
27. Limitation on Obligations of the Corporation
All obligations of the Corporation arising under or as a result of
this Plan or Stock Options granted hereunder shall constitute the general
unsecured obligations of the Corporation, and not of the Board of Directors of
the Corporation, any member thereof, the Stock Option Committee, any member
thereof, any officer of the Corporation, or any other person or any Subsidiary,
and none of the foregoing, except the Corporation, shall be liable for any
debt, obligation, cost or expense hereunder.
28. Limitation of Rights
The Stock Option Committee, in its sole and absolute discretion,
is entitled to determine who, if anyone, is an Eligible Participant under this
Plan, and which, if any, Eligible Participant shall receive any grant of a
Stock Option. No oral or written agreement by any person on behalf of the
Corporation relating to this Plan or any Stock Option granted hereunder is
authorized, and such may not bind the Corporation or the Stock Option Committee
to grant any Stock Option to any person.
29. Severability
If any provision of this Plan as applied to any person or to any
circumstance 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 or enforceability hereof.
30. Construction
Where the context or construction requires, all words applied in
the plural herein shall be deemed to have been used in the singular and vice
versa, and the masculine gender shall include the feminine and the neuter and
vice versa.
31. Headings
The headings of the several paragraphs herein are inserted solely
for convenience of reference and are not intended to form a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.
32. Successors
This Plan shall be binding upon the respective successors,
assigns, heirs, executors, administrators, guardians and personal
representatives of the Corporation and Optionees.
33. Governing Law
To the extent not governed by the laws of the United States, this
Plan shall be governed by and construed in accordance with the laws of the
State of California.
34. Conflict
In the event of any conflict between the terms and provisions of
this Plan, and any other document, agreement or instrument, including, without
<PAGE> 13
meaning any limitation, any Stock Option Agreement, the terms and provisions of
this Plan shall control.
<PAGE> 14
SECRETARY'S CERTIFICATE OF ADOPTION
I, the undersigned, do hereby certify:
1. That I am the duly elected or appointed and acting Secretary of
Professional Bancorp; and
2. That the foregoing Professional Bancorp 1992 Stock
Option Plan was duly adopted by the Board of Directors of Professional Bancorp
as the Stock Option Plan for the Corporation at a meeting duly called as
required by law and convened on the ______ day of ____________, 1992.
IN WITNESS WHEREOF, I have hereunto subscribed my name this _____ day
of ______________, 1992.
______________________________________________________
____________________, Secretary
[SEAL]
<PAGE> 15
SECRETARY'S CERTIFICATE
OF SHAREHOLDER APPROVAL
I, the undersigned, do hereby certify:
1. That I am the duly elected or appointed and acting Secretary of
Professional Bancorp; and
2. That the Professional Bancorp 1992 Stock Option Plan was duly
adopted by the affirmative vote of the holders of at least a majority of the
outstanding shares of the Corporation's Common Stock at a meeting of the
shareholders duly called and noticed as required by law and convened on
___________________, 1992.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of the Corporation this _____ day of _________________, 1992.
______________________________________________________
____________________, Secretary
[SEAL]
<PAGE> 16
EXHIBIT "A"
__________________ 19__
Professional Bancorp
606 Broadway
Santa Monica, California 90401
Gentlemen:
On this _____ day of __________ 19__, the undersigned has received,
pursuant to the Professional Bancorp 1992 Stock Option Plan (the "Plan") and
the Stock Option Agreement (the "Agreement") by and between Professional
Bancorp (the "Corporation") and the undersigned, dated __________ 19__ an
option to purchase __________ shares of the no par value common stock of
Professional Bancorp (the "Stock").
In consideration of the grant of such option by Professional Bancorp:
1. I hereby represent and warrant to you that the Stock to be
acquired pursuant to the option will be acquired by me in good faith and for my
own personal account, and not with a view to distributing the Stock to others
or otherwise reselling the stock in violation of the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder.
2. I hereby acknowledge and agree that: (a) the Stock to be acquired
by me pursuant to the Plan has not been registered and that there is no
obligation on the part of Professional Bancorp to register such Stock under the
Securities Act of 1933, as amended, and the rules and regulations thereunder;
and (b) the Stock to be acquired by me will not be freely tradeable unless the
Stock is either registered under the Securities Act of 1933, as amended, or the
holder presents a legal opinion acceptable to Professional Bancorp that the
transfer will not violate the federal securities laws.
3. I understand that the Corporation is relying upon the truth and
accuracy of the representations and agreements contained herein in determining
to grant such options to me and upon subsequently issuing any Stock pursuant to
the Plan without Professional Bancorp first registering the same under the
Securities Act of 1933, as amended.
4. I understand that the certificate evidencing the Stock to be
issued pursuant to the Plan will contain a legend upon the face thereof to the
effect that the Stock is not registered under the Securities Act of 1933 and
that stop transfer orders will be placed against the shares with Professional
Bancorp's transfer agent.
5. In further consideration for the grant of an option to purchase
Stock of Professional Bancorp, the undersigned hereby agrees to indemnify you
and hold you harmless against all liability, cost, or expenses (including
reasonable attorney's fees) arising out of or as a result of any distribution
or resale of shares of Stock issued by the undersigned in violation of the
<PAGE> 17
securities laws. The agreements contained herein shall inure to the benefit of
and be binding upon the respective legal representatives, successors and
assigns of the undersigned and Professional Bancorp.
Very truly yours,
__________________________________________________
(Signature)
__________________________________________________
(Type or Print Name)
<PAGE> 18
EXHIBIT "B"
_______________, 19__
Professional Bancorp
606 Broadway
Santa Monica, California 90401
Gentlemen:
On this _____ day of __________, 19__, the undersigned has acquired,
pursuant to the Professional Bancorp 1992 Stock Option Plan (the "Plan") and
the Stock Option Agreement (the Agreement") by and between Professional Bancorp
(the "Corporation") and the undersigned, dated __________, 19__, __________
(__________) shares of the no par value Common Stock of Professional Bancorp
(the "Stock"). In consideration of the issuance by Professional Bancorp to the
undersigned of said shares of its Common Stock:
1. I hereby represent and warrant to you that the Stock is being
acquired by me in good faith for my own personal account, and not with a view
to distributing the Stock to others or otherwise reselling the Stock in
violation of the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder.
2. I hereby acknowledge and agree that: (a) the Stock being acquired
by me pursuant to the Plan has not been registered and that there is no
obligation on the part of Professional Bancorp to register such Stock under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder; and (b) the Stock being acquired by me is not freely tradeable and
must be held by me for investment purposes unless the Stock is either
registered under the Securities Act of 1933 or transferred pursuant to an
exemption from such registration, as accorded by the Securities Act of 1933 and
under the rules and regulations promulgated thereunder. I further represent
and acknowledge that I have been informed by legal counsel in connection with
said Plan of the restrictions on my ability to transfer the Stock and that I
understand the scope and effect of those restrictions.
3. I understand that the effects of the above representations are the
following: (i) that the undersigned does not presently intend to sell or
otherwise dispose of all or any part of the shares of the Stock to any person
or entity Professional Bancorp except in compliance with the terms described
above, in the Plan and in the Agreement; and (ii) that the Corporation is
relying upon the truth and accuracy of the representations and agreements
contained herein in issuing said shares of the Stock to me without first
registering the same under the Securities Act of 1933, as amended.
4. I hereby agree that the certificate evidencing the Stock may
contain the following legend stamped upon the face thereof to the effect that
the Stock is not registered under the Securities Act of 1933, as amended, and
that the Stock has been acquired pursuant to the representations and
restrictions in this letter, the Plan and in the Agreement:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
WITH RESPECT TO THEM UNDER THE ACT OR A WRITTEN OPINION OF COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION SHALL BE ACCEPTABLE TO PROFESSIONAL
BANCORP THAT REGISTRATION IS NOT REQUIRED."
<PAGE> 19
5. I hereby agree and understand that the Corporation will place a
stop transfer notice with its stock transfer agent to ensure that the
restrictions on transfer described herein will be observed.
6. In further consideration of the issuance of the Stock, the
undersigned does hereby agree to indemnify you and hold you harmless against
all liability, costs, or expenses (including reasonable attorney's fees)
arising out of or as a result of any distribution or resale by the undersigned
of any of the Stock. The Agreements contained herein shall inure to the
benefit of and be binding upon the respective legal representatives, successors
and assigns of the undersigned and Professional Bancorp.
Very truly yours,
__________________________________________________
(Signature)
__________________________________________________
(Type or Print Your Name)
<PAGE> 20
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF THE
CORPORATION'S COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE
CORPORATIONS 1992 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY THE
SHAREHOLDERS OF THE CORPORATION HOLDING NOT LESS THAN A MAJORITY OF THE
OUTSTANDING SHARES OF THE CORPORATION'S COMMON STOCK.
OPTIONEES TO WHOM INCENTIVE STOCK OPTIONS ARE GRANTED MUST MEET CERTAIN HOLDING
PERIOD AND EMPLOYMENT REQUIREMENTS FOR FAVORABLE TAX TREATMENT.
UNLESS OTHERWISE STATED, ALL TERMS DEFINED IN THE PLAN SHALL HAVE THE SAME
MEANING HEREIN AS SET FORTH IN THE PLAN.
PROFESSIONAL BANCORP
STOCK OPTION AGREEMENT
1992 STOCK OPTION PLAN
_____ Incentive Stock Option
_____ Non-Qualified Stock Option
THIS AGREEMENT, dated the _____ day of __________, 19__, by and
between Professional Bancorp, a Pennsylvania corporation (the "Corporation"),
and _______________ ("Optionee");
WHEREAS, pursuant to the Corporation's 1992 Stock Option Plan (the
"Plan"), the Stock Option Committee has authorized the grant to Optionee of a
Stock Option to purchase all or any part of __________ (__________) authorized
but unissued shares of the Corporation's no par value Common Stock at the price
of __________ Dollars ($__________) per share, such Stock Option to be for the
term and upon the terms and conditions hereinafter stated;
NOW, THEREFORE, it is hereby agreed:
1. Grant of Stock Option. Pursuant to said action of the Stock
Option Committee and pursuant to authorizations granted by all appropriate
regulatory and governmental agencies, the Corporation hereby grants to Optionee
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 __________ (__________) Option Shares of the Corporation's Common Stock at
the price of __________ Dollars ($__________) per share. For purposes of this
Agreement and the Plan, the date of grant shall be __________. At the date of
grant, Optionee does not own/owns stock possessing more than 10% of the total
combined voting power of all classes of capital stock of the Corporation or any
Subsidiary.
The Stock Option granted hereunder is/is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
2. Exercisability. This Stock Option shall be exercisable as to
__________ Option Shares on __________; as to __________ Option Shares on
__________; as to __________ Option Shares on __________; as to __________
Option Shares on __________; and as to __________ Option Shares on __________.
This Stock Option shall remain exercisable as to all of such Option Shares
until __________, 19__ (but not later than ten (10) years from the date
hereof), at which time it shall expire in its entirety, unless this Stock
<PAGE> 21
Option has expired or terminated earlier in accordance with the provisions
hereof or of the Plan. Option Shares as to which this Stock Option become
exercisable may be purchased at any time prior to expiration of this Stock
Option.
3. Exercise of Stock Option. Subject to the provision of Paragraph 4
hereof, this Stock Option may be exercised by written notice delivered to the
Corporation stating the number of Option Shares with respect to which this
Stock Option is being exercised, together with cash (or bank, cashier's or
certified check) and/or, if permitted at or before the time of exercise by the
Stock Option Committee, shares of Common Stock of the Corporation which when
added to the cash payment, if any, have an aggregate Fair Market Value equal to
the full amount of the purchase price of such Option Shares. Not less than ten
(10) Option Shares may be purchased at any one time unless the number purchased
is the total number which remains to be purchased under this Stock Option and
in no event may the Stock Option be exercised with respect to fractional
shares. Upon exercise, Optionee shall make appropriate arrangements and shall
be responsible for the withholding of all federal and state income taxes then
due, if any.
4. Prior Outstanding Stock Options. Pursuant to Section 8(b) of the
Plan, an Incentive Stock Option held by Optionee may be exercisable while the
Optionee has outstanding and unexercised any Incentive Stock Option previously
granted to him or her by the Corporation, or a bank or corporation which (at
the time of grant) is a parent or Subsidiary of the Corporation, or a
predecessor corporation of any such entity.
5. Cessation of Affiliation. Except as provided in Paragraph 6
hereof, if, for any reason other than Optionee's disability or death, Optionee
ceases to be employed by or affiliated with the Corporation or a Subsidiary,
this Stock Option shall expire three (3) months thereafter or on the date
specified in Paragraph 2 hereof, whichever is earlier. During such period
after cessation of employment or affiliation, this Stock Option shall be
exercisable only as to those increments, if any, which had become exercisable
as of the date on which the Optionee ceased to be employed by or affiliated
with the Corporation or Subsidiary, and any Stock Options or increments which
had not become exercisable as of such date shall expire and terminate
automatically on such date.
6. Termination for Cause. If Optionee's employment by or affiliation
with the Corporation or a Subsidiary is terminated for cause, this Stock Option
shall automatically expire unless reinstated by the Stock Option Committee
within thirty (30) days of such termination by giving written notice of such
reinstatement to Optionee. In the event of such reinstatement, Optionee may
exercise this Stock Option only to such extent, for such time, and upon such
terms and conditions as if Optionee had ceased to be employed by or affiliated
with the Corporation or a Subsidiary upon the date of such termination for a
reason other than cause, disability or death. Termination for cause shall
include, but shall not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of illegal activity in
connection therewith, or any conduct detrimental to the interests of the
Corporation or a Subsidiary, and, in any event, the determination of the Stock
Option Committee with respect thereto shall be final and conclusive.
7. Disability or Death of Optionee. If Optionee becomes disabled or
dies while employed by or affiliated with the Corporation or a Subsidiary, or
during the three-month period referred to in Paragraph 5 hereof, this Stock
Option shall automatically expire and terminate one (1) year after the date of
<PAGE> 22
Optionee's disability or death or on the day specified in Paragraph 2 hereof,
whichever is earlier. After Optionee's disability or death but before such
expiration, the person or persons to whom Optionee's rights under this Stock
Option shall have passed by order of a court of competent jurisdiction or by
will or the applicable laws of descent and distribution, or the executor,
administrator or conservator of Optionee's estate, subject to the provisions of
Paragraph 13 hereof, shall have the right to exercise this Stock Option to the
extent that increments, if any, had become exercisable as of the date on which
Optionee ceased to be employed by or affiliated with the Corporation or a
Subsidiary. For purposes hereof, "disability" shall have the same meaning as
set forth in Section 14 of the Plan.
8. Nontransferability. This Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during Optionee's lifetime only by Optionee.
9. Employment. This Agreement shall not obligate the Corporation or
a Subsidiary to employ Optionee for any period, nor shall it interfere in any
way with the right of the Corporation or a Subsidiary to increase or reduce
Optionee's compensation.
10. Privileges of Stock Ownership. Optionee shall have no rights as a
stockholder with respect to the Option Shares unless and until said Option
Shares are issued to Optionee as provided in the Plan. Except as provided in
Section 15 of the Plan, no adjustment will be made for dividends or other
rights in respect of which the record date is prior to the date such stock
certificates are issued.
11. Modification and Termination by Board of Directors. The rights of
Optionee are subject to modification and termination upon the occurrence of
certain events as provided in Sections 16 and 17 of the Plan. Upon adoption by
the requisite holders of the Corporation's outstanding shares of Common Stock
of any plan of dissolution, liquidation, reorganization, merger, consolidation
or sale of all or substantially all of the assets of the Corporation to another
corporation which would, upon consummation, result in termination of this Stock
Option in accordance with Section 16 of the Plan, this Stock Option shall
become immediately exercisable as to all unexercised Option Shares
notwithstanding the incremental exercise provisions of Paragraph 2 of this
Agreement, for a period then specified by the Stock Option Committee, but in
any event not less than thirty (30) days, in accordance with Section 8(g) of
the Plan, on the condition that the terminating event described in Section 16
of the Plan is consummated. If such terminating event is not consummated, this
Stock Option shall be exercisable in accordance with the terms of the
Agreement, excepting this Paragraph Il.
12. Notification of Sale. Optionee agrees that Optionee, or any
person acquiring Option Shares upon exercise of this Stock Option, will notify
the Corporation in writing not more than five (5) days after any sale or other
disposition of such Shares.
13. Approvals. This Agreement and the issuance of Option Shares
hereunder are expressly subject to the approval of the Plan and the form of
this Agreement by the holders of not less than a majority of the voting stock
of the Corporation. This Stock Option may not be exercised unless and until
all applicable requirements of all regulatory agencies having jurisdiction with
respect thereto, and of the securities exchanges upon which securities of the
Corporation are listed, if any, have been complied with.
<PAGE> 23
14. Notices. All notices to the Corporation provided for in this
Agreement shall be addressed to it in care of its Chief Executive Officer,
Chief Financial Officer or Secretary at its main office and all notices to
Optionee shall be addressed to Optionee's address on file with the Corporation
or a Subsidiary, or to such other address as either may designate to the other
in writing, all in compliance with the notice provisions set forth in
Section 26 of the Plan.
15. Incorporation of Plan. All of the provisions of the Plan are
incorporated herein by reference as if set forth in full in this Agreement. In
the event of any conflict between the terms of the Plan and any provision
contained herein, the terms of the Plan shall be controlling and the
conflicting provisions contained herein shall be disregarded.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PROFESSIONAL BANCORP
__________________________________________________
By
__________________________________________________
By
OPTIONEE
__________________________________________________
