SCHEDULE 14A
INFORMATION REQUIRED IN PROXY
STATEMENT
(Last amended in Exch Act Rel No. 35113, eff. 1/30/95.)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ x ] Filed by a Party other than the Registrant [ ]
Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for
use of the Commission Only (as permitted by Rule 14a-6(e)(2) [ x ] Definitive
Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material
Pursuant to paragraph 240.14a-11(c) or paragraph 240.14a-12
DELTA NATIONAL BANCORP
(Name of Registrant as Specified in its Charter)
N/A
Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(2) or Item 22(a)(2)
of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
SCHEDULE 14A CROSS REFERENCE INDEX
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Page
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Notice of Annual Meeting of Shareholders 4
Proxy Statement 6
Form of Proxy 22
Stock Option Plan 24
<PAGE>
DELTA NATIONAL BANCORP
P.O. Box 432
611 North Main Street
Manteca, CA 95336
(209) 824-4050
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 22, 1996
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NOTICE IS HEREBY GIVEN that, pursuant to the Bylaws of Delta National
Bancorp and the call of its Board of Directors, the 1996 Annual Meeting of
Shareholders (the "Meeting") of Delta National Bancorp (the "Company") will be
held at Delta National Bank, 611 North Main Street, Manteca, California on
Monday, April 22, 1996, at 5:00 p.m., for the purpose of considering and voting
upon the following matters:
1. Election of Directors. Electing the following five (5) persons to the
Board of Directors of the Company to serve until the 1997 Annual
Meeting of Shareholders and until their successors are elected and
have qualified:
Jack Dozier Andrew J. Rossi
Joseph A. Freitas Toinette Rossi
Theodore Poulos
2. 1996 Combined Incentive and Non-Qualified Stock Option Plan. Approving
the Company's 1996 Combined Incentive and Non-Qualified Stock Option
Plan covering thirty percent (30%) of the Company's outstanding Common
Stock.
3. Ratification of Appointment of Independent Public Accountants.
Ratifying the selection of Grant Thornton LLP as the Company's
independent public accountants for 1996.
4. Other Business. Transacting such other business as may properly come
before the Meeting and any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 31, 1996
as the record date for determination of shareholders entitled to notice of, and
the right to vote at, the Meeting.
Dated: April 3, 1996 By Order of the Board of Directors,
/s/ Theodore Poulos
Theodore Poulos
Chairman of the Board
<PAGE>
The Bylaws of the Company provide for the nomination of directors in the
following manner:
"Section 2.3 NOMINATIONS FOR DIRECTOR. Nominations for election of members
of the Board of Directors may be made by the Board of Directors or by any
shareholder of any outstanding class of voting stock of the Corporation entitled
to vote for the election of directors. Notice of intention to make any
nominations, other than by the Board of Directors, shall be made in writing and
shall be received by the President of the Corporation no more than sixty (60)
days prior to any meeting of shareholders called for the election of directors,
no more than ten (10) days after the date the notice of such meeting is sent to
shareholders pursuant to Section 2.2 of these bylaws, provided, however, that if
ten (10) days' notice of the meeting is given to shareholders, such notice of
intention to nominate shall be received by the President of the Corporation not
later than the time fixed in the notice of the meeting for the opening of the
meeting. Such notification shall contain the following information to the extent
known to the notifying shareholder: (a) the name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the number
of shares of voting stock of the Corporation owned by each proposed nominee; (d)
the name and residence address of the notifying shareholder; and (e) the number
of shares of voting stock of the Corporation owned by the notifying shareholder.
Nominations not made in accordance herewith shall be disregarded by the then
chairman of the meeting, and the inspectors of election shall then disregard all
votes case for each nominee."
SINCE IMPORTANT MATTERS ARE TO BE CONSIDERED AT THIS MEETING, IT IS VERY
IMPORTANT THAT EACH SHAREHOLDER VOTE.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. THE ENCLOSED PROXY IS
SOLICITED BY THE COMPANY'S BOARD OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY
MAY REVOKE IT PRIOR TO THE TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF THE
COMPANY IN WRITING OF REVOCATION OF SUCH PROXY, BY FILING A DULY EXECUTED PROXY
BEARING A LATER DATE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING
SO THAT WE CAN ARRANGE FOR ADEQUATE ACCOMMODATIONS.
<PAGE>
DELTA NATIONAL BANCORP
P.O. Box 432
611 North Main Street
Manteca, California 95336
Telephone: (209) 824-4050
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 22, 1996
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INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of Proxies by and on behalf of Delta National Bancorp (the "Company") for use at
the 1996 Annual Meeting of Shareholders (the "Meeting") of the Company, to be
held at Delta National Bank, 611 North Main Street, Manteca, California at 5:00
p.m. on Monday, April 22, 1996, and any and all adjournments thereof.
It is anticipated that this Proxy Statement and the accompanying notice
will be mailed on or about April 3, 1996 to shareholders eligible to receive
notice of and vote at the Meeting.
The matters to be considered and voted upon at the Meeting will be:
1. Election of Directors. Electing the following five (5) persons
to the Board of Directors of the Company to serve until the 1997 Annual Meeting
of Shareholders and until their successors are elected and have qualified:
Jack Dozier Andrew J. Rossi
Joseph A. Freitas Toinette Rossi
Theodore Poulos
2. 1996 Combined Incentive and Non-Qualified Stock Option Plan.
Approving the Company's 1996 Combined Incentive and Non-Qualified Stock Option
Plan covering thirty percent (30%) of the Company's outstanding Common Stock.
3. Ratification of Appointment of Independent Public Accountants.
Ratifying the selection of Grant Thornton LLP as the Company's independent
public accountants for 1996.
4. Other Business. Transacting such other business as may properly
come before the Meeting and any adjournment or adjournments thereof.
<PAGE>
Revocability of Proxies.
A form of Proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers such a Proxy has the right to revoke it at
any time before it is exercised by filing with the Corporate Secretary of the
Company an instrument revoking it or a duly executed Proxy bearing a later date.
In addition, the powers of the persons named as the Proxyholders in the Proxy
will be revoked if the person executing the Proxy is present at the meeting and
elects to vote in person by advising the Chairman of such election. Subject to
such revocation, all shares represented by a properly executed Proxy received in
time for the Meeting will be voted by the Proxyholders in accordance with the
instructions specified on the Proxy.
The Proxy card makes provisions to enable you to record your vote on
each matter. If you wish to withhold your vote for any one or more directors,
place an "X" in the box marked "AUTHORITY GIVEN" and enter the name of each of
the directors for whom you wish to withhold your vote in the space provided. You
may withhold authority to vote for all of the directors by placing an "X" in the
box marked "AUTHORITY WITHHELD." You may vote FOR or AGAINST the remaining items
by placing an "X" in the box appropriately marked. Please note that a vote to
ABSTAIN by shareholders and by brokers will count toward a quorum at the
Meeting, but will have the same effect as a vote AGAINST. Non-votes by brokers
will not count toward a quorum at the Meeting.
IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A PROPOSAL TO BE ACTED
UPON, THE SHARES REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED IN FAVOR OF
THE PROPOSALS LISTED ON THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED
AT THE MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS
OF THE PROXYHOLDERS.
Persons Making the Solicitation.
This solicitation of Proxies is being made by the Board of Directors of
the Company (the "Board of Directors"). The expense of preparing, assembling,
printing and mailing this Proxy Statement and the materials used in the
solicitation of Proxies for the Meeting will be borne by the Company. It is
contemplated that Proxies will be solicited principally through the use of the
mail, but officers, directors and employees of the Company may solicit Proxies
personally or by telephone, without receiving special compensation therefor.
Although there is no formal agreement to do so, the Company may reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding this Proxy Statement and its related materials
to shareholders whose stock in the Company is held of record by such entities.
In addition, the Company may use the services of individuals or companies it
does not regularly employ in connection with this solicitation of Proxies, if
Management determines it advisable.
<PAGE>
Proposals of Shareholders.
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. Any such proposal to be included in the Proxy
Statement for the Company's 1997 Annual Meeting of Shareholders must be
submitted to the Company prior to December 4, 1996.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
There were issued and outstanding 376,782 shares of the Company's
Common Stock (the "Common Stock") on March 31, 1996, which has been fixed as the
Record Date for the purpose of determining the shareholders entitled to notice
of and to vote at the Meeting. On any matter submitted to the vote of the
shareholders, each holder of shares is entitled to one (1) vote for each share
of Common Stock standing in his or her name on the books of the Company, except
that in connection with the election of directors, shares of the Company may be
voted cumulatively if a shareholder present and voting at the Meeting gives
notice at the Meeting and prior to the voting of his or her intention to so
vote. If any shareholder of the Company gives such notice, then all shareholders
will be entitled to cumulate their votes.
Cumulative voting allows a shareholder to cast a number of votes equal
to the number of shares held in his or her name as of the Record Date,
multiplied by the number of directors to be elected. This total number of votes
may be cast for one (1) nominee or in such proportions as the shareholder sees
fit. The candidates receiving the highest number of votes, up to the number of
directors to be elected, shall be elected. If cumulative voting is declared at
the Meeting, votes represented by Proxies delivered pursuant to this Proxy
Statement may be cumulated at the discretion of the Proxyholders, in accordance
with the recommendations of the Company's Management.
Except as set forth in the following table, management of the Company
does not know of any individual, group, corporation or any other entity who
owns, beneficially or of record, more than five percent (5%) of the Company's
outstanding Common Stock as of March 31, 1996.
Title Name and Address Amount and Percent
of of Nature of Beneficial of
Class Beneficial Owners Ownership Class
Common Andrew J. Rossi 94,509 25.08%
611 North Main Street
Manteca, California 95336
Common The Cede & Co. (Nominee of) 22,877 6.07%
The Depository Trust Company
P.O. Box 222
New York, New York 10041
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of March 31, 1996
concerning the stock ownership of the Company's outstanding Common Stock by each
of the directors and nominees for director of the Company and by all of the
executive officers1 and directors of the Company as a group.
Title Name and Address Amount and Percent
of of Nature of Beneficial of
Class Beneficial Owners Ownership Class
Common Ronald P. Dalben 100 0.03%
Vice President
Common Jack C. Dozier 5,190 1.38%
Director
Common Joseph A. Freitas 11,185 2.97%
Director
Common Theodore Poulos 13,242 3.52%
Chairman of the Board/Director
Common Andrew J. Rossi 94,509 25.08%
President & CEO/Director
Common Toinette Rossi 2,842 0.75%
V.P. & Manager/Director
Common Warren E. Wegge 130 0.03%
Executive Vice President
Common All directors and executive
officers as a group 127,198 33.76%
(8 in number)
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The Company's Bylaws provide for a range of five (5) to nine (9)
directors and further provide that the exact number of directors of the Company
shall be fixed at five (5) unless subsequently altered by an amendment to the
Articles of Incorporation or the Bylaws.
The persons named below, all of whom are currently members of the Board
of Directors, will be nominated for election as directors of the Company to
serve until the 1997 Annual Meeting of Shareholders and until their successors
are elected and have qualified. Votes will be cast in such a way as to effect
the election of all five (5) nominees, or as many thereof as possible under the
rules of cumulative voting. In the event that any of the nominees should be
unable to serve as a director, it is intended that each Proxy will be voted for
the election of such substitute nominees, if any, as shall be designated by the
Board of Directors. The Board of Directors has no reason to believe that any of
the nominees will be unavailable to serve if elected. Additional nominations can
only be made by complying with the notice provision set forth in the Bylaws of
the Company, an extract of which is included in the Notice of Annual Meeting of
Shareholders accompanying this Proxy Statement. This Bylaw provision is designed
to give the Board of Directors advance notice of competing nominations, if any,
and the qualifications of nominees, and may have the effect of precluding
third-party nominations if the notice provisions are not followed.
<PAGE>
None of the directors, nominees or executive officers of the Company
were selected pursuant to any arrangement or understanding, other than with the
directors and executive officers of the Company, acting within their capacities
as such. There are no family relationships between the directors and executive
officers of the Bank except that Toinette Rossi is the daughter of Andrew J.
Rossi, and none of the directors or executive officers of the Company serve as
directors of any company which has a class of securities registered under, or
which is subject to the periodic reporting requirements of, the Securities
Exchange Act of 1934 or any investment company registered under the Investment
Company Act of 1940.
The following table sets forth the names and certain information, as of
March 31, 1996, concerning the persons to be nominated at the Meeting by the
Board of Directors for election as directors of the Company:
Year First Elected
Name and Position or Appointed Business Experience During the
(other than Director) Age Director Past Five Years
Jack Dozier 81 1976 Attorney - Atherton & Dozier
Joseph A. Freitas 69 1973 Secretary to the Board
Public Relations - Delta National
Bank - Retired 1991
Theodore Poulos 68 1973 Chairman of the Board - Delta
National Bank Public Relations -
Delta National Bank
President - Manteca Drug, Inc. -
Retired 1994
Andrew J. Rossi 65 1973 President and Chief Executive
Officer - Delta National Bank
President - A. Rossi, Inc.
Toinette Rossi 38 1994 Vice President & Manager
Delta National Bank
The Board of Directors and Committees.
In 1995, the Board of Directors held twelve (12) regular meetings and
two (2) special meetings. All of the Company's directors attended at least 75%
of all Board of Directors meetings and meetings of committees of the Board of
Directors on which they served which were held in 1995.
<PAGE>
In addition to attending meetings of the Board of Directors, certain of
the directors serve on committees of the Board of Directors. The Board of
Directors has an Executive Committee, an Audit Committee and a Finance
Committee.
The Executive Committee is responsible for compensation matters
affecting the Bank as well as nominations of directors. The Executive Committee,
consisting of Directors Freitas, Poulos and A. Rossi, met four (4) times during
1995.
The Audit Committee is responsible for reviewing the adequacy of the
Bank's internal controls with management and the Bank's independent auditor. The
Audit Committee, consisting of Directors Dozier and Freitas, met eight (8) times
during 1995.
The Finance Committee is responsible for approving all loans made by
the Bank over a specified dollar limit. The Finance Committee also oversees the
Company's internal financial control systems and procedures, reviews and
approves the Company's financial statements and other matters relating to the
Bank. The Finance Committee, consisting of Directors Freitas, Poulos and A.
Rossi, met forty-nine (49) times during 1995.
The Company does not have a standing nominating committee, although the
Executive Committee acts as a nominating committee, and the Board of Directors,
as a whole, will consider nominees proposed by shareholders and submitted in
writing to the Board of Directors in accordance with the Company's Bylaws.
Recommendation of the Board of Directors.
THE PROXYHOLDERS INTEND TO VOTE ALL PROXIES HELD BY THEM FOR EACH OF
THE ABOVE-REFERENCED NOMINEES (UNLESS SHAREHOLDERS DIRECT OTHERWISE OR UNLESS
CUMULATIVE VOTING IS INVOKED). THE BOARD OF DIRECTORS URGES YOU TO VOTE
"AUTHORITY GIVEN" FOR PROPOSAL NUMBER ONE.
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT AND OTHERS
Executive Compensation.
During 1995, the Company did not pay any cash compensation, other than
directors fees as noted below, to its directors or executive officers and no
such cash compensation is intended to be paid by the Company during 1996.
However, several of the persons serving as directors of the Company are also
employees of the Bank, and they received during 1995, and are expected to
continue to receive in 1996, cash compensation in their capacities as executive
officers of the Bank.
No person serving as an executive officer of the Bank received
aggregate cash compensation of more than $100,000 during 1995 except for the
President/Chief Executive Officer of the Bank, Andrew J. Rossi and the Executive
Vice President of the Bank, Warren E. Wegge. The following table sets forth the
aggregate executive compensation for services in all capacities paid or accrued
by the Bank for the previous three (3) full fiscal years, ending with December
31, 1995, to Andrew J. Rossi, the Bank's President/Chief Executive Officer, and
to Warren E. Wegge, the Bank's Executive Vice President.
<PAGE>
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SUMMARY COMPENSATION TABLE
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Annual Compensation
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Name and Other Annual All Other
Principal Compensa- Compensa-
Position Year Salary ($) Bonus ($) tion ($)(1) tion ($)(2)
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Andrew J. Rossi 1995 $112,000 $ 10,000 -0- $ 13,944
President and 1994 $100,000 $ -0- -0- $ 4,081
Chief Executive 1993 $ 88,860 $ 10,000 -0- $ 3,897
Officer
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Warren E. Wegge 1995 $ 78,000 $ 13,500 -0- $ 9,680
Executive Vice 1994 $ 65,460 $ 2,500 -0- $ 2,397
President 1993 $ 60,660 $ 7,595 -0- $ 2,200
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(1) No amount is reported in this column because the aggregate amount of such
compensation did not exceed the lesser of $50,000 or ten percent (10%) of
total compensation. See "Other Compensation" below.
(2) Contribution by Bank to the Bank's Profit Sharing Plan for this person.
Compensation of Directors.
Each director of the Company, five (5) in total, was paid a fee of
$400.00 for each regularly scheduled Board of Directors meeting attended.
Additionally, the directors of the Company also serve as directors of the Bank.
Each outside director of the Bank, three (3) in total, was paid a fee of $600.00
for each regularly scheduled Board of Directors meeting attended. No fees were
paid for attendance at committee meetings; however, an annual fee of $15,600.00
is paid to the Chair of the Finance Committee of the Company. The following
table sets forth the aggregate information concerning compensation paid to
directors of the Company and the Bank in 1995.
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
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Annual Annual
Bancorp Bank Committee Other
Name Director Fees Director Fees Fees
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Jack Dozier $ 4,800 $ 7,200 -0- -0-
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Joseph A. Freitas $ 4,800 $ 7,200 -0- -0-
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Theodore Poulos $ 4,800 $ 7,200 $ 15,600(1) $ 1,650(2)
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Andrew J. Rossi $ 4,800 -0- -0- -0-
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Toinette Rossi $ 4,800 -0- -0- -0-
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(1) Finance Committee fees paid to the Chairman of the Committee at $300
per meeting.
(2) Represents compensation paid to the Chairman for attending monthly Bank
meetings regarding past due loans at $150 per meeting.
<PAGE>
Other Compensation.
The Company has, from time to time, provided certain personal benefits
to certain of its officers including automobile allowances, reimbursement of
travel and entertainment expenses, club memberships and life insurance, in
addition to Bank-wide group insurance coverage. The Company will continue to
follow a policy of providing such benefits when it is deemed necessary in order
to attract and retain key officers. No amount is stated in the Summary
Compensation Table for any of the foregoing, since Management has concluded that
the aggregate amount of such compensation did not exceed the lesser of $50,000
or ten percent (10%) of the total of annual salary and bonus reported under
"Executive Compensation" for each such person.
Indebtedness of Management.
The Company, through its subsidiary, Delta National Bank, has had, and
expects to have in the future, banking transactions in the ordinary course of
its business with directors, officers, principal shareholders and their
associates on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with others and which do not involve more than the normal risk of
collectability or present other unfavorable features.
The maximum aggregate level of indebtedness since January 1, 1995 was
$372,785.00 on December 31, 1995 which represented 3.81% of the Bank's equity
capital. The largest aggregate amount outstanding as of the most recent
practicable date was $236,449.00 on February 29, 1996 which represented 2.28% of
the Bank's equity capital.
The following tables set forth information for all directors and
officers (and their families) who had loans with the Bank, or who were otherwise
indebted to the Bank in an amount in excess of $60,000 during the last two (2)
years.
DIRECTOR ANDREW ROSSI
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Highest Interest Principal
Name of Relationship Date of Maturity Principal As Of Balance
Individual To Funding Date Balance December 31, As Of
Director Since 1995 December 31,
December 31, 1995
1994
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Val and Peter Daughter 12/23/91 4/23/97 $ 11,497.14 13.00% $ 7,978.89
Salas
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John Rossi Son 11/02/95 11/01/96 $ 303,250.00 11.00% $ -0-
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DIRECTOR TOINETTE ROSSI
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Highest Interest Principal
Name of Relationship Date of Maturity Principal As Of Balance
Individual To Funding Date Balance December 31, As Of
Director Since 1995 December 31,
December 31, 1995
1994
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Val and Peter Daughter 12/23/91 4/23/97 $ 11,497.14 13.00% $ 7,978.89
Salas
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John Rossi Son 11/02/95 11/01/96 $ 303,250.00 11.00% $ -0-
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<PAGE>
Transactions With Management.
Director Jack Dozier is an attorney and serves as legal counsel to both
the Company and the Bank. During 1995, Mr. Dozier was paid a retainer of
$28,800.00 for his legal services. Management of the Company believes that the
terms of this relationship are competitive and no less favorable to the Company
than comparable terms for representation by alternate legal counsel.
Director Theodore Poulos also serves the Bank in the capacity of public
relations. During 1995, Mr. Poulos was paid a fee of $24,000.00 for his work in
that capacity. Management of the Company believes that the terms of this
relationship are competitive and no less favorable than comparable terms for
representation by an alternate public relations agent.
In addition, the Bank waives certain fees on VISA, checking accounts,
safe deposit boxes, travelers and cashiers checks for its executive officers,
directors and employees.
COMPENSATION PLANS
Profit Sharing Plan.
The Bank adopted the Delta National Bank Profit Sharing Plan effective
January 1, 1987 as a means for participating employees to save for their
retirement. The Plan restates the previous profit sharing plan which was
established on January 1, 1984. The Plan is available to all employees who have
completed at least one (1) hour of service. Under the Plan, the Bank has the
power to make discretionary contributions, which are allocated to each eligible
employee in proportion to his or her compensation as a percentage of the
compensation of all eligible employees. Employer contributions vest at a
proportional rate based on each year of completed employment. No withdrawals of
a participant's contributions are permitted before the employee separates from
service with the Bank.
401(k) Plan.
The Bank adopted the Delta National Bank 401(k) Plan effective
September 1, 1995 as a means for participating employees to save for their
retirement. The Plan is available to all employees who have completed at least
six (6) months of service including 700 hours and allows them to defer up to 10%
of their annual income. Under the Plan, the Bank has the power to make
discretionary contributions. However, during the last fiscal year the Bank did
not make any contributions and no such contributions are contemplated at this
time. Any employer contributions will vest at a proportional rate based on each
year of completed employment. Withdrawals of a participant's contributions are
permitted before the employee separates from service with the Bank only in
hardship cases of immediate and heavy financial need.
<PAGE>
PROPOSAL NUMBER TWO
APPROVAL OF 1996 COMBINED INCENTIVE
AND NON-QUALIFIED STOCK OPTION PLAN
Introduction.
The Board of Directors of the Company has adopted, subject to
shareholder approval, the Delta National Bancorp 1996 Combined Incentive and
Non-Qualified Stock Option Plan (the "Plan"). The Plan provides for the grant of
"incentive stock options," as permitted under Section 422 of the Internal
Revenue Code of 1986 (the "Code"), and non-qualified stock options. The Plan is
not subject to any of the provisions of the Employee Retirement Income Security
Act of 1974, as amended.
The Plan provides for the issuance of up to thirty percent (30%) of the
outstanding shares of the Company's Common Stock at the time of adoption of the
Plan upon exercise of all stock options. One-third of such shares are reserved
exclusively for the grant of incentive stock options to all full-time salaried
officers and employees of the Company or any subsidiary who have completed one
year of service, subject to adjustment in the event of certain changes in the
capital structure of the Company. The remaining two-thirds of such shares are
reserved for the grant of non-qualified stock options to all directors and
full-time salaried officers and employees of the Company or any subsidiary,
subject to adjustment in the event of certain changes in the capital structure
of the Company.
The Company's Board of Directors believes it is advisable for the
shareholders to approve the adoption of the Plan in order to have options
available to encourage directors and full-time salaried officers and employees
to remain with the Company and to attract new, qualified directors, officers and
employees in today's competitive market. The Company intends to grant options
for shares of the Company's Common Stock to various directors, officers and
employees of the Company in the future, subject to shareholder approval of the
Plans; however, the amount of such options has not yet been determined.
Summary of the Plan.
The following description of the Plan is intended to highlight and
summarize the principal terms of the Plan, and is qualified in its entirety by
the text of the Plan, copies of which are available for inspection at the
Company.
Administration. The Plan will be administered by the Board of Directors
of the Company. Incentive Options under the Plan may be granted only to
full-time salaried officers and employees of the Company or any subsidiary who
have completed one year of service. Non-qualified Options under the Plan may be
granted to all directors and all full-time salaried officers and employees of
the Company or any subsidiary. Subject to the express provisions of the Plan,
the Board of Directors is authorized to construe and interpret the Plan, and
make all the determinations necessary or advisable for administration of the
Plan.
<PAGE>
Eligible Participants. All full-time salaried officers and employees of
the Company or any subsidiary who have completed one year of service shall be
eligible for selection to receive both Incentive and Non-Qualified Stock
Options. Directors of the Company or any subsidiary corporation, who are not
also full-time salaried officers or employees of the Company or a subsidiary
corporation, shall be eligible to receive only Non-Qualified Stock Options. The
Plan provides that, if options are granted to eligible participants who own,
directly or indirectly, 10% or more of the Company's outstanding shares, and the
options are intended to qualify as "incentive stock options," then the minimum
option price must be at least 110% of the stock's fair market value on the date
of grant and the term of the option grant may not exceed five years. The minimum
option price of Non-Qualified Stock Options granted to any eligible participant
who owns, directly or indirectly, 10% or more of the Company's outstanding
shares, must be at least 110% of the stock's fair value on the date of grant.
Subject to the foregoing limitations, the Board of Directors is
empowered to determine which eligible participants, if any, should receive
options, the number of shares subject to each option, and the terms and
provisions of the option agreements.
Shares Subject to the Plan. Thirty percent (30%) of the outstanding
shares of the Company's Common Stock as of March 31, 1996 (113,034 shares) are
covered by the Plan. Incentive Stock Options will be granted at no less than the
fair market value of the Company's Common Stock as of the date of grant.
Non-Qualified Stock Option will be granted at no less than the fair value of the
Common Stock as of the date of the grant. The Company's stock is traded
over-the-counter and, as of March 31, 1996, the fair market value of the Common
Stock was approximately $26.00 per share.
Incentive Stock Options. Incentive stock options granted under the Plan
are available only to persons who are officers and employees of the Company or
any subsidiary and are subject to limitations imposed by applicable sections of
the Code, including a $100,000 limit on the aggregate fair market value
(determined on the date the options are granted) of shares of the Company's
Common Stock with respect to which incentive stock options are exercisable for
the first time by an optionee during any calendar year (under the Plan and all
other "incentive stock option" plans of the Company, if any). Subject to the
foregoing and other limitations set forth in the Plan, the exercise price,
permissible time or times of exercise, and the remaining terms pertaining to any
option are determined by the Board of Directors; however, the per share exercise
price under any option may not be less than 100% of the fair market value of the
Company's Common Stock on the date of grant of the option.
Terms and Conditions of Options. Subject to the limitations set forth
in the Plan, options granted thereunder may be exercised in such increments,
which need not be equal, and upon such contingencies as the Board of Directors
may determine. If an optionee does not exercise an increment of an option in any
period during which such increment becomes exercisable, the unexercised
increment may be exercised at any time prior to expiration of the option unless
the respective stock option agreement provides otherwise.
Subject to earlier termination as may be provided in any optionee's
stock option agreement, options granted under the Plan will expire not later
than ten (10) years from the date of grant. Under the terms of the Plan, the
date of grant is deemed to be either: (i) the date fixed by the Board of
Directors to be the date of grant; or (ii) if no such date is fixed, the date on
which the Board of Directors made its final determination to grant a stock
option.
Options granted under the Plan may not be transferred otherwise than by
will or by the laws of descent and distribution, and during his or her lifetime,
only the optionee or, in the event of the disability of the optionee, his or her
guardian or the conservator of his or her estate may exercise the option for up
to one (1) year after the date the disability occurred or through the expiration
date of the option, whichever is earlier.
<PAGE>
Exercise of Options. Subject to the restrictions set forth in the Plan,
an option may be exercised in accordance with the terms of the individual stock
option agreement. Full payment by the optionee for all shares as to which the
option is being exercised is due and payable at the time of exercise of the
option. Payment must be made in cash or by cashier's or certified check.
An option may be exercised with respect to whole shares only, although
fractional share interests may be accumulated and exercised from time to time as
whole shares during the term of the option. Options may only be exercised with
respect to a minimum of one hundred (100) whole shares, unless the option
agreement requires that a larger number of shares be exercised at any one time
and unless fewer than one hundred (100) shares remain subject to the option at
the time of exercise. Any shares subject to an option which expires or
terminates without being exercised become available again for issuance under the
Plan.
Neither an eligible participant nor an optionee has any rights as a
shareholder with respect to the shares of Common Stock covered by any option
which may be or has been granted to such person, and which is thereafter
exercised, until date of issuance of the stock certificate by the Company to
such person.
Stock Option Agreement. Every grant of an option will be evidenced by a
written stock option agreement executed by the Company and the optionee. Subject
to the terms and conditions of the Plan, the stock option agreement will contain
the terms and provisions pertaining to each option so granted, such as exercise
price, permissible date or dates of exercise, termination date, and such other
terms and conditions as the Board of Directors deems desirable and not
inconsistent with the Plan.
Termination of Employment or Affiliation. In the event an optionee
ceases to be affiliated with the Company or any subsidiary for any reason other
than disability, death or termination for cause, the stock options granted to
such optionee shall expire at the earlier of the expiration dates specified for
the options, or thirty (30) days after the optionee ceases to be so affiliated.
During such period after cessation of affiliation, the optionee may exercise the
option to the extent that it was exercisable as of the date of such termination,
and thereafter the option expires in its entirety.
If an optionee's stock option agreement so provides, and if an
optionee's status as an eligible participant is terminated for cause, the option
held by such person will expire immediately upon such termination, although the
Board of Directors may, in its sole discretion, within thirty (30) days of such
termination, reinstate the option. If the option is reinstated, the optionee
will be permitted to exercise the option only to the extent, for such time, and
upon such terms and conditions as if the optionee's status as an eligible
participant had been terminated for a reason other than cause, disability or
death, as described above.
The Plan shall terminate under the dissolution or liquidation of the
Company, upon a consolidation, reorganization, or merger as a result of which
the Company is not the surviving corporation, upon a sale of all or
substantially all of the assets of the Company, or in the event of any other
transaction involving the Company where there is a change in ownership of at
least twenty-five percent (25%), except as may result from a transfer of shares
to another corporation in exchange for at least eighty percent (80%) control of
that corporation. However, all options theretofore granted become immediately
exercisable in their entirety upon not less than 30 days' notice of the
occurrence of any of the foregoing, and any option not exercised within thirty
(30) days after delivery of said notice will terminate unless provision is made
for the assumption or substitution thereof. As a result of this acceleration
provision, even if an outstanding option were not fully vested as to all
increments at the time of the event, that option will become fully vested and
exercisable.
<PAGE>
Amendment and Termination of the Plan. The Board of Directors of the
Company may at any time suspend, amend or terminate the Plan, and may, with the
consent of the respective optionee, make such modifications to the terms and
conditions of outstanding options as it shall deem advisable. Without
shareholder approval, however, the Board of Directors may not materially
increase the maximum number of shares of Common Stock which may be issued under
the Plan (except as described under "Adjustments Upon Changes in Capitalization"
below), 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),
materially increase benefits to any key employee who is subject to the
restrictions of Section 16 of the Securities Exchange Act of 1934, increase or
decrease the exercise price, increase the maximum term of options provided for
in the Plan, permit the granting of options to anyone other than eligible
participants, materially modify the requirements as to eligibility for
participation in the Plan, or change any provision of the Plan which would
affect the qualification of options granted thereunder as "incentive stock
options" within the meaning of Section 422 of the Code. The amendment,
suspension or termination of the Plan will not, without the consent of the
optionee, alter or impair any rights or obligations under any outstanding option
under the Plan.
Adjustments Upon Changes in Capitalization. The total number of shares
covered by the Plan and the price, kind and number of shares subject to
outstanding options thereunder, will be appropriately and proportionately
adjusted by the Board of Directors if the outstanding shares of Common 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 as provided in
the Plan. Fractional share interests of such adjustments may be accumulated,
although no fractional shares of stock will be issued under the Plan.
Federal Income Tax Consequences.
Certain stock options granted under the Plan are intended to be
"incentive stock options" as defined in Section 422 of the Code. No income will
be recognized by the optionee, and no deduction will be allowed to the Company,
by reason of the grant or exercise of an incentive stock option. However, the
excess of the fair market value of the shares at the time of exercise over the
option exercise price will be treated as a preference item for purposes of the
alternative minimum tax. If the optionee does not dispose of the shares of
Common Stock received upon exercise of an incentive stock option by payment in
cash within two (2) years from the date of the grant of the option or within one
(1) year after the transfer of the shares to the optionee, any gain realized by
the optionee upon such disposition of the shares will be long-term capital gain.
No deduction will be available to the Company upon such disposition by the
optionee. However, if the optionee disposes of such shares within the two (2)
year period from the date of the grant of the option or within the one (1) year
period from the transfer of the shares, gain realized by the optionee upon such
disposition will be ordinary income to the extent that the value of the shares
received at the date of exercise of the option exceeds the price paid for such
shares by the optionee. Such ordinary income will be recognized by the optionee
for the tax year in which the optionee disposes of the shares, and under
Temporary Treasury Regulations the Company will be entitled to a deduction in an
amount equal to the ordinary income recognized by the optionee for the tax year
of the Company in which the optionee recognizes such ordinary income, provided
that applicable income tax withholding requirements are satisfied. Gain realized
in excess of such ordinary income will be capital gain. Such capital gain will
be long-term or short-term depending upon whether the shares are held for more
than 12 months prior to the date of disposition. If the optionee disposes of the
shares within either the two (2) year period from the date of grant of the
option, or within one (1) year after the transfer of the shares, any ordinary
income recognized by the optionee will not exceed the gain realized on such
disposition by the optionee. If the optionee disposes of shares of Common Stock
received upon exercise of an option at a loss, such loss will be a capital loss,
long-term or short-term depending upon whether the shares are held for more than
one (1) year prior to the date of disposition.
<PAGE>
For incentive stock options granted after December 31, 1986, the Tax
Reform Act of 1986 has added a restriction limiting to $100,000 the aggregate
fair market value (determined at the time the options are granted) of the stock
with respect to which incentive stock options are exercisable by an individual
for the first time in any calendar year. The Plan provides that outstanding
options may become fully vested and exercisable in the event of a merger or
consolidation of the Company as a result of which the Company is not the
surviving corporation or upon the sale of all or substantially all of the
property of the Company, unless the Plan is continued and the outstanding
options are neither assumed nor replaced with new options. If, as a result of
this provision of the Plan, the amount of options granted after 1986 which
become exercisable by an optionee for the first time in any year exceeds the new
$100,000 limit, the amount of options exceeding the $100,000 limit will no
longer be treated as incentive stock options.
Certain Information Concerning All Options.
In addition to the foregoing, the Tax Reform Act of 1984 enacted an
excise tax of twenty percent (20%) and the disallowance of a deduction to a
corporation for compensation to its employees, officers, shareholders and others
that results in an "excess parachute payment" within the meaning of Code Section
280G(b). If such a person is granted an incentive stock option and there is a
change of control, the incentive stock option may be considered in the
determination of whether an excess parachute payment has been made.
The Tax Reform Act of 1986 repealed the deduction for 60% of net
long-term capital gains. Thus, capital gains are now taxable at ordinary income
rates. Capital losses, whether long-term or short-term, are fully deductible
against capital gains and up to $3,000 of ordinary income. Any unused capital
losses may be carried forward indefinitely.
The specific state tax consequences to each optionee under the Plan may
vary, depending upon the laws of the various states and the individual
circumstances of each optionee. It is suggested that each optionee consult his
or her personal tax advisor regarding both the federal and state tax
consequences of the grant and exercise of options.
Vote Required.
The Plan will become effective upon approval of a majority of the
outstanding shares of the Company's Common Stock and will terminate on or about
April 22, 2006.
Recommendation of the Board of Directors.
THE PROXYHOLDERS INTEND TO VOTE ALL PROXIES HELD BY THEM IN FAVOR OF
THE APPROVAL OF THE 1996 COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN.
THE BOARD OF DIRECTORS URGES YOU TO VOTE "FOR" PROPOSAL NUMBER TWO.
<PAGE>
PROPOSAL NUMBER THREE
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Grant Thornton LLP as the Company's
independent public accountants for the year ending December 31, 1996 and
recommends that said selection be ratified by the shareholders of the Company.
Grant Thornton LLP audited the Company's financial statements for the year ended
December 31, 1995.
The ratification of the appointment of Grant Thornton LLP as the Bank's
independent public accountants requires approval of the holders of a majority of
the total number of shares voting at the Meeting. In the event such appointment
is not ratified, the adverse vote will be deemed to be an indication to the
Board of Directors that it should consider selecting other independent public
accountants for 1996. Because of the difficulty and expense of making any
substitute of accounting firms after the beginning of the current year, it is
the intention of the Board of Directors that the appointment of Grant Thornton
LLP for the year 1996 will stand unless, for a reason other than such adverse
vote of the shareholders, the Board of Directors deems it necessary or
appropriate to make a change. The Board of Directors also retains the power to
appoint another independent public accounting firm to replace the accountants
ratified by the shareholders in the event the Board of Directors determines that
the interests of the Bank require such a change. Representatives from Grant
Thornton LLP will be present at the Annual Meeting of Shareholders, will be
afforded the opportunity to make a statement if they desire to do so, and will
be available to respond to appropriate questions.
THE PROXYHOLDERS INTEND TO VOTE ALL PROXIES HELD BY THEM IN FAVOR OF
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR 1996. THE BOARD OF DIRECTORS URGES YOU TO
VOTE "FOR" PROPOSAL NUMBER THREE.
<PAGE>
DISCLOSURE OF FINANCIAL AND OTHER INFORMATION
Copies of the Annual Report containing important information
regarding the financial condition of the Company and the Bank are available to
Shareholders at no charge. To obtain a copy of the Company's Annual Report, call
(209) 824-4050 or contact the Company at the following location:
Joseph A. Freitas
Secretary to the Board of Directors
Delta National Bancorp
611 North Main Street
Manteca, California 95336
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors, and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission.
Based solely on its review of the copies of such forms received by the
Company, or on written representations from certain reporting persons that no
other reports were required for such persons, the Company believes that, during
the fiscal year of 1995, all filing requirements applicable to its executive
officers and directors were complied with.
OTHER BUSINESS
Management does not know of any matters to be presented to the Meeting
other than those set forth above. However, if other matters properly come before
the Meeting, it is the intention of the persons named in the accompanying proxy
to vote said proxy in accordance with the recommendation of the Board of
Directors and authority to do so is included in the proxy.
DELTA NATIONAL BANCORP
By: /S/ THEODORE POULOS
Theodore Poulos
Chairman of the Board
Dated: April 3, 1996
Manteca, California
1 As used throughout this Proxy Statement, the term "executive officer"
means the President/Chief Executive Officer, Executive Vice President, Senior
Vice President/Credit Administrator, Vice President and Manager of the Manteca
Office, Vice President in charge of Investments and Appraisals, Vice President
of Operations and EDP and Vice President/Cashier.
<PAGE>
PROXY
DELTA NATIONAL BANCORP
ANNUAL MEETING OF SHAREHOLDERS, APRIL 22, 1996
The undersigned shareholder of Delta National Bancorp (the "Company") hereby
nominates, constitutes and appoints Ronald Dalben, Chad Meyer and Warren Wegge
(the "Proxyholders"), and each of them, the attorney, agent, and proxy of the
undersigned, each with full powers of substitution, to vote all stock of the
Company which the undersigned shareholder is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held on Monday, April 22, 1996 at
5:00 p.m. at Delta National Bank, 611 North Main Street, Manteca, California,
and at any and all adjournments thereof, as fully and with the same force and
effect as the undersigned shareholder might or could do if personally present
thereat, as follows:
1. Election of Directors. To elect the following five (5) persons to the Board
of Directors of the Company to serve until the 1997 Annual Meeting of
Shareholders and until their successors are elected and have qualified:
Jack Dozier, Joseph A. Freitas, Theodore Poulos, Andrew J.Rossi, Toinette Rossi.
|_| AUTHORITY GIVEN |_| AUTHORITY WITHHELD
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME BUT NOT ALL OF THE NOMINEES
NAMED ABOVE, YOU SHOULD CHECK THE BOX MARKED "AUTHORITY GIVEN" AND YOU SHOULD
ENTER THE NAME(S) OF THE NOMINEE(S) WITH RESPECT TO WHOM YOU WISH TO WITHHOLD
AUTHORITY TO VOTE IN THE FOLLOWING SPACE: __________________________________
2. 1996 Combined Incentive and Non-Qualified Stock Option Plan. To approve the
Company's 1996 Combined Incentive and Non-Qualified Stock Option Plan covering
thirty percent (30%) of the Company's outstanding Common Stock:
|_| FOR |_| AGAINST |_| ABSTAIN
3. Ratification of Appointment of Independent Public Accountants. To ratify
the selection of Grant Thornton LLP as the Company's independent public
accountants for 1996:
|_| FOR |_| AGAINST |_| ABSTAIN
PLEASE SIGN AND DATE OTHER SIDE
<PAGE>
4. Other Business. To transact such other business as may properly come before
said Meeting and any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON PROPOSAL NUMBER
ONE AND A VOTE OF "FOR" ON PROPOSAL NUMBERS TWO AND THREE. THE PROXY CONFERS
AUTHORITY AND SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE
PROXYHOLDERS UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS, IF
ANY, PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE PROXYHOLDERS.
PLEASE SIGN AND DATE BELOW:
_______________________________ Dated:______________________________, 1996
(Number of Shares)
- ---------------------------------- ---------------------------------------
(Please Print Your Name) (Signature of Shareholder)
- ---------------------------------- ---------------------------------------
(Please Print Your Name) (Signature of Shareholder)
(Please date this Proxy and sign your name as it appears on the stock
certificates. Executors, administrators, trustees, etc., should give their full
titles. All joint owners should sign.)
I do |_| do not |_| expect to attend the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, AND MAY BE REVOKED
BY THE SHAREHOLDER DELIVERING IT PRIOR TO ITS EXERCISE BY FILING WITH THE
CORPORATE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A DULY
EXECUTED PROXY BEARING A LATER DATE OR BY APPEARING IN PERSON AND VOTING AT THE
MEETING.
<PAGE>
DELTA NATIONAL BANCORP
1996 COMBINED INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
1. Purpose.
The purpose of the Delta National Bancorp 1996 Combined Incentive and
Non-Qualified Stock Option Plan (the "Plan") is to strengthen Delta National
Bancorp (the "Bancorp") and those corporations which are or may hereafter become
subsidiaries (the "Subsidiaries") by providing to participating directors and
other Eligible Plan Participants (as defined below) added incentive for high
levels of performance and for unusual efforts to increase the earnings of the
Bancorp and any Subsidiaries. The Plan seeks to accomplish these purposes and
achieve these results by providing a means whereby such persons may purchase
shares of the common stock (the "Common Stock") of the Bancorp pursuant to stock
options (the "Stock Options") granted in accordance with this Plan.
Stock Options granted pursuant to this Plan are intended to be either
Incentive Stock Options or Non-Qualified Stock Options (defined below) as shall
be designated by the Board of Directors 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
Bancorp's common stock, subject to adjustment pursuant to Paragraph 16,
"Adjustment Upon Changes in Capitalization," hereunder.
(b) "Bancorp" - This term shall mean Delta National Bancorp,
a California corporation.
(c) "Eligible Incentive Plan Participants" - This term shall
mean all full-time salaried officers and employees of the Bancorp or
any Subsidiary who have completed one year of service.
(d) "Eligible Non-Qualified Plan Participants" - This term
shall mean all full-time salaried officers and employees and all
Directors of the Bancorp or any Subsidiary.
(e) "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 Board of Directors.
(f) "Incentive Stock Option" - This term shall mean a Stock
Option which is an "incentive stock option" within the meaning of
Section 422A of the Internal Revenue Code of 1986, as amended.
(g) "Non-Qualified Stock Option" - This term shall mean a
Stock Option which does not qualify as an Incentive Stock Option.
(h) "Option Share" - This term shall mean Common Stock covered
by and subject to any outstanding unexercised Stock Option granted
pursuant to this Plan.
<PAGE>
(i) "Optionee" - This term shall mean any Eligible Incentive
or Non-Qualified Plan 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.
(j) "Plan" - This term shall mean the Delta National Bancorp
1996 Combine Incentive and Non-Qualified Stock Option Plan as embodied
herein and as may be amended from time to time in accordance with the
terms hereof and applicable law.
(k) "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 Board of
Directors. The maximum term of each option granted shall be 10 years
from date of grant.
3. Administration.
(a) Role of Board of Directors. This Plan shall be
administered by the Board of Directors of the Bancorp.
(b) Administration of the Plan. Any action of the Board of
Directors with respect to the administration of the Plan shall be taken
pursuant to a majority vote of its members, provided, however, that
with respect to action taken by the Board of Directors in granting an
option to an individual director, such action must be authorized by the
required number of directors without counting the interested director,
who shall abstain as to any vote on his option. An interested Director
may be counted in determining the presence of a quorum at a meeting of
the Board of Directors where such action will be taken. Any such action
taken by the Board of Directors 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 Incentive or Non-Qualified Plan Participant; (ii) determine
the time or times when such Stock Options, or parts thereof, may be
exercised; (iii) determine the Eligible Incentive or Non-Qualified Plan
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; 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 Board of Directors shall have the authority
to construe and interpret this Plan, 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 Board of Directors 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.
<PAGE>
4. Participation.
All full-time salaried officers and employees of the Bancorp and its
subsidiary corporations who have completed one year of service shall be eligible
for selection to receive both Incentive and Non-Qualified Stock Options.
Directors of the Bancorp and its subsidiary corporations who are not also
full-time salaried officers or employees of the Bancorp or a subsidiary
corporation shall be eligible to receive only Non-Qualified Stock Options.
Subject to the express provisions of the Plan, the Board of Directors shall
select from the eligible class and determine the individuals to whom Stock
Options shall be granted, whether such Stock Options shall be Incentive or
Non-Qualified Stock Options, and the terms and provisions of the respective
Stock Option Agreements (which need not be identical), the times at which such
Stock Options shall be granted, and the number of shares subject to each Stock
Option. An individual who has been granted a Stock Option may, if such
individual is otherwise eligible, be granted additional Stock Options if the
Board of Directors shall so determine. However, no Stock Options may be granted
to any individual who, immediately before the option is granted, owns
beneficially more than ten percent (10%) of the outstanding stock of the Bancorp
(whether acquired upon exercise of options or otherwise), unless: (i) with
regard to Incentive Stock Options, the option is not exercisable by its terms
after five (5) years from the date of its grant and the option price is at least
one hundred ten percent (110%) of the Fair Market Value (at the time the option
is granted) of the stock subject to option; or (ii) with regard to Non-Qualified
Stock Options, the option price is at least one hundred ten percent (110%) of
the Fair Value (at the time the option is granted) of the stock subject to
option. For this purpose, shares of stock subject to options may be considered
beneficially owned by an optionee but are not treated as outstanding stock of
the Bancorp.
The Board of Directors shall determine the individuals who shall
receive Stock Options and the terms and provisions of the Stock Options, and
shall grant such Options to such individuals.
5. Shares Subject to the Plan.
Subject to adjustments as provided in Section 16 hereof, the maximum
number of shares of Common Stock which may be issued upon exercise of all Stock
Options, whether Incentive or Non-Qualified Stock Options, granted under this
Plan is limited to thirty percent (30%) of the outstanding shares in the
aggregate at the time of adoption of the Plan. One-third of such shares shall be
reserved exclusively for the grant of Stock Options to Eligible Incentive Plan
Participants. The remaining two-thirds of such shares may be granted to Eligible
Non-Qualified Plan Participants.
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.
6. Eligibility.
Only Eligible Incentive Plan Participants shall be eligible to receive
grants of Incentive Stock Options under this Plan. Only Eligible Non-Qualified
Plan Participants shall be eligible to receive grants of Non-Qualified Stock
Options under this Plan.
<PAGE>
7. Grants of Stock Options.
(a) Grant. Subject to the express provisions of the Plan, the
Board of Directors in its sole and absolute discretion, may grant Stock
Options of the Bancorp at the price(s) and time(s), on the terms and
conditions and to such Eligible Incentive or Non-Qualified Plan
Participants as it deems advisable and specifies in the respective
grants, subject to the limitations and restrictions set forth in the
Plan and applicable approvals. All such grants must be exercisable at
the rate of at least twenty percent (20%) per year over five (5) years
from the date the option is granted. An Eligible Incentive or
Non-Qualified Plan Participant who has been granted an Incentive or
Non-Qualified Stock Option may, if otherwise eligible, be granted
additional Stock Options if the Board of Directors shall so determine.
(b) Date of Grant and Rights of Optionee. The determination of
the Board of Directors to grant a Stock Option shall not in any way
constitute or be deemed to constitute an obligation of the Bancorp, or
a right of the Eligible Incentive or Non-Qualified Plan 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 Bancorp and the Eligible Incentive or Non-Qualified Plan
Participant have executed and delivered to the other a stock option
agreement ("Stock Option Agreement") in the form then required by the
Board of Directors evidencing the grant of the Stock Option, together
with such other instrument or instruments as may be required by the
Board of Directors pursuant to this Plan; provided, however, that the
Board of Directors 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 Board of Directors 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 Incentive Plan Participant who is an employee of the
Bancorp or any Subsidiary, who also owns (within the meaning of Section
424(d) of the Internal Revenue Code) 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 Bancorp or a Subsidiary,
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.
8. Stock Option Exercise Price.
The exercise price of any Option Shares shall be determined by the
Board of Directors, in its sole and absolute discretion, upon the grant of a
Stock Option. Except as provided in Section 7 hereof, the exercise price of any
Incentive Stock Option 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. The Fair Market Value of such stock
shall be determined in accordance with any reasonable valuation method. The
exercise price of any Non-Qualified Stock Option shall not be less than one
hundred percent (100%) of the Fair Value of such stock. The Fair Value of such
stock shall be determined in accordance with Title 10 of the California Code of
Regulations, Section 260.140.50. As to any Stock Option granted to any
individual who, immediately before the option is granted, owns beneficially more
than ten percent (10%) of the outstanding stock of the Bancorp (whether acquired
upon exercise of options or otherwise), the exercise price must be at least one
hundred ten percent (110%) of the Fair Market Value (in the case of an Incentive
Stock Option) or the Fair Value (in the case of a Non-Qualified Stock Option) of
the stock at the time when such Stock Option is granted.
<PAGE>
9. 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 Board of Directors
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 a ten (10) day written notice delivered to the Bancorp
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 counsel for the
Bancorp, of the right of such person or persons to exercise the Stock
Option. The Bancorp'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 Bancorp shall have
no obligation to an Optionee for any Option Shares unless and until
full payment of the exercise price is received by the Bancorp 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, cashier's or certified check which has an aggregate Fair
Market Value or Fair 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 in cash
or by cashier's or certified check concurrently with the Optionee's
notification to the Bancorp of his intention to exercise all or part of
a Stock Option.
(d) Minimum Exercise. Not less than one hundred (100) 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: (i) payment in full as
provided hereinabove has been received by the Bancorp; (ii) in the
opinion of the counsel for the Bancorp, 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
Bancorp 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 Bancorp, in its sole discretion, to satisfy applicable income tax
withholding requirements.
<PAGE>
(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 Bancorp to another bank or
corporation which would, upon consummation, result in termination of a
Stock Option in accordance with Section 17 hereof, all Stock Options
previously granted may, in the discretion of the Board of Directors,
become immediately exercisable as to all unexercised Option Shares for
such period of time as may be determined by the Board of Directors, 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.
10. 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.
11. Continuation of Affiliation.
Nothing contained in this Plan (or in any Stock Option Agreement) shall
obligate the Bancorp or any Subsidiary to employ or continue to employ any
Optionee or any Eligible Incentive or Non-Qualified Plan Participant for any
period of time or interfere in any way with the right of the Bancorp or a
Subsidiary to reduce or increase the Optionee's or Eligible Incentive or
Non-Qualified Plan Participant's compensation.
12. Cessation of Affiliation.
Except as provided in Section 13 hereof, if for any reason other than
disability or death, an Optionee ceases to be employed by or affiliated with the
Bancorp or a Subsidiary, the Stock Options granted to such Optionee shall expire
not later than 30 days thereafter. 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 of on which such
Optionee ceased to be affiliated with the Bancorp 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. Except as provided in
Section 13 hereof, if an Optionee ceases to be employed by or affiliated with
the Bancorp or a Subsidiary by reason of disability, such Optionee's Stock
Options shall expire not later than one (1) year thereafter. 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 Bancorp 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.
13. Termination for Cause; Removal of Director for Cause.
If the Stock Option Agreement so provides and if an Optionee's
employment or affiliation with the Bancorp 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 Board of Directors 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 Bancorp or a Subsidiary upon the date
of such termination for a reason other than cause, disability or death. In the
case of an employee, 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 Board of Directors with respect thereto shall be
final and conclusive. In the case of a Director, termination for cause shall
include removal pursuant to Sections 302 and 304 of the California Corporations
Code or removal pursuant to the exercise of regulatory authority by the Office
of the Comptroller of the Currency, Federal Reserve Board or other bank
supervisory agency.
<PAGE>
14. Death of Optionee.
If an Optionee dies while employed by or affiliated with the Bancorp or
a Subsidiary or during the thirty (30) day period referred to in Section 12
hereof or the one (1) year period referred to in Section 15 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.
15. Disability of Optionee.
If an Optionee is disabled while employed by or affiliated with the
Bancorp or a Subsidiary or during the thirty day period referred to in Section
12 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 Bancorp or a Subsidiary as a result of the disability. An Optionee
shall be deemed to be "disabled" if it shall appear to the Board of Directors,
upon written certification delivered to the Bancorp of a qualified licensed
physician, that the Optionee has become disabled within the meaning of Section
442(c)(6) of the Internal Revenue Code.
16. Adjustment Upon Changes in Capitalization.
If the outstanding shares of Common Stock of the Bancorp are increased
or decreased, or changed into or exchanged for a different number or kind of
shares or securities of the Bancorp, through a reorganization, merger,
recapitalization, reclassification, stock split, stock dividend, stock
consolidation, or otherwise, without consideration to the Bancorp, an
appropriate and proportionate adjustment shall be made in the number and kind of
shares as to which 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 Board of Directors, 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.
<PAGE>
17. Terminating Events.
Not less than 30 days prior to dissolution or liquidation of the
Bancorp, or upon consummation of a plan of reorganization, merger or
consolidation of the Bancorp with one or more banks or corporations, as a result
of which the Bancorp is not the surviving entity, or upon the sale of all or
substantially all of the assets of the Bancorp to another bank or corporation,
or in the event of any other transaction involving the Bancorp where there is a
change in ownership of at least twenty-five percent (25%), except as may result
from a transfer of shares to another corporation in exchange for at least eighty
percent (80%) control of that corporation (a "Terminating Event"), the Board of
Directors shall notify each optionee of the pendency of the Terminating Event.
Upon delivery of said notice, any Option granted prior to the Terminating Event
shall be, notwithstanding the provisions of Section 9 hereof, exercisable in
full and not only as to those shares with respect to which installments, if any,
have then accrued, subject, however, to earlier expiration or termination as
provided elsewhere in the Plan. Upon the date thirty (30) days after delivery of
said notice, any Option or portion thereof not exercised shall terminate, and
upon the effective date of the Terminating Event, the Plan and any options
granted thereunder shall terminate, unless provision is made in connection with
the Terminating Event for assumption of Options or new options covering stock of
a successor employer bank or corporation, or a parent or subsidiary corporation
thereof, with appropriate adjustments as to number and kind of shares and
prices. 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.
18. Amendment and Termination.
The Board of Directors of the Bancorp 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 16 hereof, no amendment or modification may be
adopted without the Bancorp having first obtained the approval of the holders of
a majority of the Bancorp's outstanding shares of Common Stock entitled to vote
at a duly held meeting of shareholders of the Bancorp if the amendment or
modification would:
(a) Materially increase the number of securities which may be
issued under the Plan or 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) 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
either an Eligible Incentive Plan Participant or an Eligible
Non-Qualified Plan Participant;
(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; or
(g) Materially increase benefits to any key employee who is
subject to the restrictions of Section 16 of the Securities Exchange
Act of 1934.
Such amendment or modification shall be deemed adopted as of the date
of the action of the Board of Directors effecting such amendment or modification
and shall be effective immediately, unless otherwise provided therein, subject
to approval thereof within twelve (12) months before or after the effective date
by shareholders of the Bancorp holding not less than a majority of the voting
power of the Bank; provided, however, the Board of Directors may amend the Plan
in total without shareholder approval if the Plan has not yet been approved by
the shareholders.
<PAGE>
Notwithstanding the above, the Board of Directors may grant to an
Optionee, if such Optionee is otherwise eligible, additional Stock Options or,
with the consent of the Optionee, grant a new Stock Option in lieu of an
outstanding Option for a number of shares, at a purchase price and for a term
which in any respect is greater or less than that of the earlier Stock Option,
subject to the limitations of Section 8 and 24 hereof.
No Stock Option may be granted during any suspension of the Plan or
after termination of the Plan. Amendment, suspension, or termination of the Plan
shall not (except as otherwise provided in Section 16 hereof), without the
consent of the Optionee, alter or impair any rights or obligations under the
Stock Option thereto granted.
19. Rights of Eligible Participants and Optionees.
No Eligible Incentive or Non-Qualified Plan 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 Incentive or Non-Qualified Plan
Participant, Optionee or other person any right to be retained in the employ of
the Bancorp 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 Incentive or Non-Qualified Plan 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.
20. 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
Bancorp 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 Bancorp notice in writing of such sale or other disposition. In the event
that the Optionee disposes of any Common Stock acquired by the exercise of an
Incentive Stock Option within the two-year period following grant of the Stock
Option, or within the one-year period following exercise of the Stock Option,
the Bancorp shall have the right to require the Optionee to remit to the Bancorp
an amount sufficient to satisfy all federal, state and local withholding tax
requirements as a condition to registration of the transfer of such Common Stock
on the Bancorp's books.
21. Effective Date of Plan.
The Plan shall be deemed adopted as of ______________, 1996 and shall
be effective immediately, subject to approval of the Plan within twelve months
from such date by the holders of at least a majority of the Bancorp's
outstanding shares of Common Stock entitled to vote at a duly held meeting of
shareholders, exclusive of shares held by Optionees which have already been
exercised under the Plan, and by all applicable regulatory authorities, if any.
22. 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 Bancorp; or (ii) approval of the Plan by holders of at least a
majority of the outstanding shares of Common Stock as provided in Section 21 of
this Plan. No Stock Options shall be granted under the Plan thereafter, but such
termination shall not affect any Stock Options theretofore granted.
23. Option Agreement.
Each Stock Option granted under the Plan shall be evidenced by a
written Stock Option Agreement executed by the Bancorp and the Optionee, and
shall contain each of the provisions and agreements herein specifically required
to be contained therein, and such other terms and conditions as are deemed
desirable by the Board of Directors and are not inconsistent with this Plan.
<PAGE>
24. Stock Option Period.
Each Stock Option and all rights and obligations thereunder shall
expire on such date as the Board of Directors 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.
25. Exculpation and Indemnification of Board of Directors.
In addition to such other rights of indemnification which they may have
as officers and/or directors of the Bancorp, indemnification of the present,
former and future members of the Board of Directors, and each of them, with
regard to the administration of this Plan, shall be equivalent to the applicable
indemnification approved for the Board of Directors by the shareholders (if
required).
26. Notices.
All notices and demands of any kind which the Board of Directors, any
Optionee, Eligible Incentive or Non-Qualified Plan 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 Bancorp.
27. Limitations on Obligations of the Bancorp.
All obligations of the Bancorp arising under or as a result of this
Plan or Stock Options granted hereunder shall constitute general unsecured
obligations of the Bancorp, the Board of Directors, any member thereof, any
officer of the Bancorp, or any other person or any Subsidiary, and none of the
foregoing, except the Bancorp, shall be liable for any debt, obligation, cost or
expense hereunder.
28. Limitation of Rights.
The Board of Directors, in its sole and absolute discretion, is
entitled to determine who, if anyone, is an Eligible Incentive or Non-Qualified
Plan Participant under this Plan, and which, if any, Eligible Incentive or
Non-Qualified Plan Participant shall receive any grant of Stock Option. No oral
or written agreement by any person on behalf of the Bancorp relating to this
Plan or any Stock Option granted hereunder is authorized, and such may not bind
the Bancorp or the Board of Directors to grant any Stock Option to any person.
29. 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.
30. Successors.
This Plan shall be binding upon the respective successors, assigns,
heirs, executors, administrators, guardians and personal representatives of the
Bancorp and Optionees.
Dated: ____________________, 1996 DELTA NATIONAL BANCORP
By:___________________________________
Title:___________________________________
