As filed with the Securities and Exchange Commission on July 1, 1998.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
SJNB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
California 77-0058227
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One North Market Street
San Jose, California 95113
(Address of Principal (Zip Code)
Executive Offices)
1996 Stock Option Plan
(Full title of the plan)
JAMES R. KENNY Copy to:
President and Chief Executive Officer JONATHAN D. JOSEPH
SJNB Financial Corp. Pillsbury Madison & Sutro LLP
One North Market Street P.O. Box 7880
San Jose, California 95113 San Francisco, CA 94120
(408) 947-7562 (415) 983-1000
- --------------------------------------- --------------------------
(Name, address and telephone
number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Maximum Proposed Amount of
Securities To To Be Offering Price Maximum Aggregate Registration
Be Registered Registered(1) per Share(2) Offering Price(2) Fee(3)
Common Stock 150,000 $40.00 $6,000,000 $1,770.00
(1) Calculated pursuant to General Instruction E on Form S-8.
(2) Estimated solely for the purpose of calculating the registration fee
on the basis of the average of the high and low prices as reported on
the Nasdaq National Market on June 24, 1998.
(3) Calculated pursuant to Rule 457(h) under the Securities Act of 1933.
----------------------
The Registration Statement shall become effective upon filing in
accordance with Rule 462 under the Securities Act of 1933.
INFORMATION REQUIRED PURSUANT TO
GENERAL INSTRUCTION E TO FORM S-8
General Instruction E Information
This Registration Statement is being filed for the purpose of
increasing the number of securities of the same class as other securities for
which a Registration Statement of the Registrant on Form S-8 relating to the
same employee benefit plan is effective.
The Registrant's Form S-8 Registration Statement filed with the
Securities and Exchange Commission on July 30, 1996, File No. 33-09193, is
hereby incorporated by reference.
Incorporation of Documents by Reference
The following documents filed by Registrant with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(1) The Registrant's Annual Report on Form 10-K (File No. 0-11771) for
the fiscal year ended December 31, 1997, which contains, among other things, the
consolidated financial statements of Registrant and certain supplementary data
for the fiscal year ended December 31, 1997 together with the report thereon of
KPMG Peat Marwick LLP, independent auditors.
(2) The Registrant's Quarterly Report on Form 10-Q (File No. 0-11771)
for the quarter ended March 31, 1998.
(3) The Registrant's Common Stock became registered under Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), pursuant
to Exchange Act Rule 12g-3 (17 C.F.R. ss. 240.12g-3). The Registrant is the
successor issuer to San Jose National Bank. In lieu of incorporating a
description of securities from a registration statement filed pursuant to the
Exchange Act, a description setting forth setting forth the information required
by Item 202 of Regulation S-K is provided in the information delivered to
participants as described in Part I of the Registrant's Form S-8 Registration
Statement filed with the Securities and Exchange Commission on July 30, 1996,
File No. 33-09193.
In addition, all documents subsequently filed by the Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
INDEX TO EXHIBITS
Exhibit
Number Exhibit
5.1 Opinion regarding legality of securities to be offered.
23.1 Independent Auditors' Consent.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit 5.1).
24.1 Power of Attorney (see Page 4).
99.1 1996 Stock Option Plan of SJNB Financial Corp., as amended.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on June 24, 1998.
SJNB FINANCIAL CORP.
By: S/J.R. Kenny
James R. Kenny
President and Chief
Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James R. Kenny and Eugene E. Blakeslee,
and each of them, his true and lawful attorneys-in-fact and agents, each with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
S/J.R. Kenny President, Chief Executive Officer June 24, 1998
James R. Kenny (Principal Executive Officer) and Director
S/E.E. Blakeslee Executive Vice President and Chief June 24, 1998
Eugene E. Blakeslee Financial Officer (Principal Financial
Officer and Principal Accounting Officer)
S/R.S. Akamine Director June 24, 1998
Ray S. Akamine
S/R.A. Archer Chairman and Director June 24, 1998
Robert A. Archer
S/A. V. Bruno Director June 24, 1998
Albert V. Bruno
S/R. Diridon Director June 24, 1998
Rod Diridon
S/F.J. Gorry Director June 24, 1998
F. Jack Gorry
S/A.K. Lund Director June 24, 1998
Arthur K. Lund
S/L. Oneal Director June 24, 1998
Louis Oneal
S/D.P. Rubino Director June 24, 1998
Diane P. Rubino
S/D.L. Shen Director June 24, 1998
Douglas L. Shen
S/G.S. Vandeweghe Director June 24, 1998
Gary S. Vandeweghe
INDEX TO EXHIBITS
Exhibit
Number Exhibit
5.1 Opinion regarding legality of securities to be offered.
23.1 Independent Auditors' Consent.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit 5.1).
24.1 Power of Attorney (see Page 4).
99.1 1996 Stock Option Plan of SJNB Financial Corp., as amended.
EXHIBIT 5.1
PILLSBURY MADISON & SUTRO LLP
235 Montgomery Street
San Francisco, CA 94104
Tel: (415) 983-1000
July 1, 1998
SJNB Financial Corp.
One North Market Street
San Jose, CA 95113
Re: Registration Statement on Form S-8
Gentlemen:
With reference to the Registration Statement on Form S-8 to be filed by SJNB
Financial Corp., a California corporation (the "Company"), with the Securities
and Exchange Commission under the Securities Act of 1933, relating to 150,000
shares of the Company's Common Stock issuable pursuant to the Company's 1996
Stock Option Plan (the "Stock Plan"), it is our opinion that such shares of the
Common Stock of the Company, when issued and sold in accordance with the Stock
Plan, will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities and Exchange
Commission as Exhibit 5.1 to the Registration Statement.
Very truly yours,
S/PILLSBURY MADISON & SUTRO, LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
SJNB Financial Corp. on Form S-8 of our report dated January 15, 1998, appearing
in the Annual Report on Form 10-K of SJNB Financial Corp.
for the year ended December 31, 1997.
KPMG PEAT MARWICK LLP
San Jose, California
June 25, 1998
EXHIBIT 99.1
1996 Stock Option Plan of SJNB Financial Corp., as Amended
1996 STOCK OPTION PLAN OF
SJNB FINANCIAL CORP.
(as amended on May 27, 1998)
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board on March 27, 1996, effective as of May 22,
1996. The Plan replaces the SJNB Financial Corp. 1992 Employee Stock Option Plan
and the SJNB Financial Corp. 1992 Director Stock Option Plan.
The purpose of the Plan is to promote the long-term success of the Company and
the creation of shareholder value by (a) encouraging Key Employees to focus on
critical long-range objectives, (b) encouraging the attraction and retention of
Key Employees with exceptional qualifications and (c) linking Key Employees
directly to shareholder interests through increased stock ownership. The Plan
seeks to achieve this purpose with grants of Options, which may constitute
incentive stock options or nonstatutory stock options.
The Plan shall be governed by, and construed in accordance with, the laws of the
State of California (except their choice-of-law provisions).
ARTICLE 2. ADMINISTRATION
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the Committee. The
Committee shall consist exclusively of two or more directors of the
Company, who shall be appointed by the Board. In addition, the composition
of the Committee shall satisfy:
(a) Such requirements as the Securities and Exchange Commission
may establish for administrators acting under plans intended
to qualify for exemption under Rule 16b-3 (or its successor)
under the Exchange Act; and
(b) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to
qualify for exemption under section 162(m)(4)(C) of the Code.
The Board may also appoint one or more separate committees of the Board,
each consisting of two or more directors of the Company who need not
satisfy the foregoing requirements. Such committees may administer the Plan
with respect to Key Employees who are not subject to section 16 of the
Exchange Act or section 162(m) of the Code, may grant Options under the
Plan to such Key Employees and may determine all terms of such Options.
2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the Key
Employees who are to receive Options under the Plan, (b) determine the
type, number, vesting requirements and other features and conditions of
such Options, (c) interpret the Plan and (d) make all other decisions
relating to the operation of the Plan. The Committee may adopt such rules
or guidelines as it deems appropriate to implement the Plan. The
Committee's determinations under the Plan shall be final and binding on all
persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.
3.1 BASIC LIMITATIONS. The aggregate number of Options awarded under the
Plan shall not exceed 460,000, subject to Section 3.2. No grants shall
be made under the Predecessor Plan after May 22, 1996. The limitation
of this Section shall be subject to all adjustment pursuant to Article
7.
3.2 ADDITIONAL SHARES. If an Option granted under this Plan or the
Predecessor Plan is forfeited or terminates for any other reason before
being exercised in full, then the Common Shares corresponding to the
unexercised portion of such Option shall become available for new
grants under this Plan.
ARTICLE 4. ELIGIBILITY
4.1 GENERAL RULES. Only Key Employees shall be eligible for designation as
Optionees by the Committee. Key Employees who are Outside Directors
shall only be eligible for the grant of the NSOs described in Section
4.2 and for making an election described in Article 8.
4.2 OUTSIDE DIRECTORS. Any other provision of the Plan notwithstanding, the
participation of Outside Directors in the Plan shall be subject to the
following conditions:
(a) Outside Directors shall receive no Options except as described
in this Section 4.2 and Article 8.
(b) Each Outside Director who serves as a member of the Board on
June 1, 1996, shall receive a one-time grant of an NSO
covering 5,000 Common Shares (subject to adjustment under
Article 7). Such NSO shall be granted on June 1, 1996.
(c) Each Outside Director who serves as a member of the Board on
March 1 of any year after 1996 shall receive an NSO covering
5,000 Shares (subject to adjustment under Article 7).
(d) Each NSO granted to an Outside Director under this Section 4.2
shall become exercisable in four installments at 12-month
intervals over the 48-month period following the date of
grant. The first installment shall consist of 40% of the
Common Shares subject to such NSO, and each of the three
subsequent installments shall consist of 20% of the Common
Shares subject to such NSO. All NSOs granted to an Outside
Director under this Section 4.2 shall become exercisable in
full in the event of:
(i) The termination of such Outside Director's service
because of death, total and permanent disability or
retirement at or after age 70; or
(ii) A Change in Control with respect to the Company.
(e) The Exercise Price under all NSOs granted to an Outside
Director under this Section 4.2 shall be equal to 100% of the
Fair Market Value of a Common Share on the date of grant,
payable in one of the forms described in Sections 6.1, 6.2,
6.3 and 6.4.
(f) All NSOs granted to an Outside Director under this Section 4.2
shall terminate on the earliest of:
(i) The 10th anniversary of the date of grant;
(ii) The date three months after the termination of such
Outside Director's service for any reason other than
death or total and permanent disability; or
(iii) The date 12 months after the termination of such
Outside Director's service because of death or total
and permanent disability.
4.3 INCENTIVE STOCK OPTIONS. A Key Employee who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the
Company or any of its Parents or Subsidiaries shall not be eligible for
the grant of an ISO unless the requirements set forth in section
422(c)(6) of the Code are satisfied.
ARTICLE 5. OPTION GRANTS.
5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the
Plan and may be subject to any other terms that are not inconsistent
with the Plan. The Stock Option Agreement shall specify whether the
Option is an ISO or an NSO. The provisions of the various Stock Option
Agreements entered into under the Plan need not be identical. Options
may be granted in consideration of a cash payment or in consideration
of a reduction in the Optionee's other compensation. A Stock Option
Agreement may provide that new Options will be granted automatically to
the Optionee when he or she exercises the prior Options and pays the
exercise price in the form described in Section 6.2.
5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the number
of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 7. Options granted
to any Optionee in a single calendar year shall in no event cover more
than 100,000 Common Shares, subject to adjustment in accordance with
Article 7.
5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise
Price; provided that the Exercise Price under an ISO shall in no event
be less than 100% of the Fair Market Value of a Common Share on the
date of grant. In the case of an NSO, a Stock Option Agreement may
specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding.
5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of
the Option; provided that the term of an ISO shall in no event exceed
10 years from the date of grant. A Stock Option Agreement may provide
for accelerated exercisability in the event of the Optionee's death,
disability or retirement or other events and may provide for expiration
prior to the end of its term in the event of the termination of the
Optionee's service.
5.5 EFFECT IF CHANGE IN CONTROL. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become
fully exercisable as to all Common Shares subject to such Option in the
event that a Change in Control occurs with respect to the Company.
5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or
may accept the cancellation of outstanding options (whether granted by
the Company or by another issuer) in return for the grant of new
options for the same or a different number of shares and at the same or
a different exercise price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee,
alter or impair his or her rights or obligations under such Option.
ARTICLE 6. PAYMENT FOR OPTION SHARES.
6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash at the time when such
Common Shares are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be
made only pursuant to the express provisions of the applicable
Stock Option Agreement. The Stock Option Agreement may specify
that payment may be made in any form(s) described in this
Article 6.
(b) In the case of an NSO, the Committee may at any time accept
payment in any form(s) described in this Article 6.
6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is applicable,
payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the Optionee for more
than six months. Such Common Shares shall be valued at their Fair
Market Value on the date when the new Common Shares are purchased under
the Plan.
6.3 EXERCISE/SALE To the extent that this Section 6.3 is applicable,
payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by
the Company to sell Common Shares and to deliver all or part of the
sales proceeds to the Company in payment of all or part of the Exercise
Price and any withholding taxes.
6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Common Shares to a
securities broker or lender approved by the Company, as security for a
loan, and to deliver all or part of the loan proceeds to the Company
in payment of all or part of the Exercise Price and any withholding
taxes.
6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
payment may be made with a full-recourse promissory note.
6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent
with applicable laws, regulations and rules.
ARTICLE 7. PROTECTION AGAINST DILUTION.
7.1 ADJUSTMENTS. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares
in an amount that has a material effect on the price of Common Shares,
a combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise) into a lesser number of Common Shares,
a recapitalization, a spin-off or a similar occurrence, the Committee
shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of (a) the number of Options available for
future grants under Article 3, (b) the limitation set forth in Section
5.2, (c) the number of NSOs to be granted to Outside Directors under
Section 4.2, (d) the number of Common Shares covered by each
outstanding Option or (e) the Exercise Price under each outstanding
Option. Except as provided in this Article 7, an Optionee shall have
no rights by reason of any issue by the Company of stock of any class
or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any
stock dividend or any other increase or decrease in the number of
shares of stock of any class.
7.2 REORGANIZATIONS. In the event that the Company is a party to a merger
or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement may provide,
without limitation, for the assumption of outstanding Options by the
surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated
vesting and accelerated expiration, or for settlement in cash.
ARTICLE 8. PAYMENT OF DIRECTOR'S FEES IN OPTIONS.
8.1 EFFECTIVE DATE. No provision of this Article 8 shall be effective
unless and until the Board has determined to implement such provision.
8.2 ELECTIONS TO RECEIVE NSOs. An Outside Director may elect to receive his
or her annual retainer payments and meeting fees from the Company in
the form of cash or NSOs, or a combination thereof, as determined by
the Board. Such NSOs shall be issued under the Plan. An election under
this Article 8 shall be filed with the Company on the prescribed form.
8.3 NUMBER AND TERMS OF NSOs. The number of NSOs to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would
otherwise be paid in cash shall be calculated in a manner determined by
the Board. The terms of such NSOs shall also be determined by the
Board.
ARTICLE 9. LIMITATION ON RIGHTS.
9.1 RETENTION RIGHTS. Neither the Plan nor any Option granted under the
Plan shall be deemed to give any individual a right to remain an
employee or director of the Company, a Parent or a Subsidiary. The
Company and its Parents and Subsidiaries reserve the right to terminate
the service of any employee or director at any time, with or without
cause, subject to applicable laws, the Company's certificate of
incorporation and by-laws and a written employment agreement (if any).
9.2 SHAREHOLDERS' RIGHTS. An Optionee shall have no dividend rights, voting
rights or other rights as a shareholder with respect to any Common
Shares covered by his or her Option prior to the issuance of a stock
certificate for such Common Shares. No adjustment shall be made for
cash dividends or other rights for which the record date is prior to
the date when such certificate is issued, except as expressly provided
in Article 7.
9.3 REGULATORY REQUIREMENTS. other provision of the Plan notwithstanding,
the obligation of the Company to issue Common Shares under the Plan
shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company
reserves the right to restrict, in whole or in part, the delivery of
Common Shares pursuant to any Option prior to the satisfaction of all
legal requirements relating to the issuance of such Common Shares, to
their registration, qualification or listing or to an exemption from
registration, qualification or listing.
ARTICLE 10. LIMITATION ON PAYMENTS
10.1 BASIC RULE. Plan to the contrary notwithstanding, in the event that the
independent auditors most recently selected by the Board (the
"Auditors") determine that any payment or transfer by the Company under
the Plan to or for the benefit of an Optionee (a "Payment") would be
nondeductible by the Company for federal income tax purposes because of
the provisions concerning "excess parachute payments" in section 280G
of the Code, then the aggregate present value of all Payments shall be
reduced (but not below zero) to the Reduced Amount; provided that the
Committee, at the time of granting an Option or at any time thereafter,
may specify in writing that such Option shall not be so reduced and
shall not be subject to this Article 10. For purposes of this Article
10, the "Reduced Amount" shall be the amount, expressed as a present
value, which maximizes the aggregate present value of the Payments
without causing any Payment to be nondeductible by the Company because
of section 280G of the Code.
10.2 REDUCTION OF PAYMENTS If the Auditors determine that any Payment would
be nondeductible by the Company because of section 280G of the Code,
then the Company shall promptly give the Optionee notice to that effect
and a copy of the detailed calculation thereof and of the Reduced
Amount, and the Optionee may then elect, in his or her sole discretion,
which and how much of the Payments shall be eliminated or reduced (as
long as after such election the aggregate present value of the Payments
equals the Reduced Amount) and shall advise the Company in writing of
his or her election within 10 days of receipt of notice. If no such
election is made by the Optionee within such 10-day period, then the
Company may elect which and how much of the Payments shall be
eliminated or reduced (as long as after such election the aggregate
present value of the Payments equals the Reduced Amount) and shall
notify the Optionee promptly of such election. For purposes of this
Article 10, the present value shall be determined in accordance with
section 280G(d)(4) of the Code. All determinations made by the Auditors
under this Article 10 shall be binding upon the Company and the
Optionee and shall be made within 60 days of the date when a Payment
becomes payable or transferable. As promptly as practicable following
such determination and the elections hereunder, the Company shall pay
or transfer to or for the benefit of the Optionee such amounts as are
then due to him or her under the Plan and shall promptly pay or
transfer to or for the benefit of the Optionee in the future such
amounts as become due to him or her under the Plan.
10.3 OVERPAYMENTS AND UNDER PAYMENTS. As a result of uncertainty in the
application of section 280G of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that Payments
will have been made by the Company which should not have been made (an
"Overpayment") or that additional Payments which will not have been
made by the Company could have been made (an "Underpayment"),
consistent in each case with the calculation of the Reduced Amount
hereunder. In the event that the Auditors, based upon the assertion of
a deficiency by the Internal Revenue Service against the Company or the
Optionee which the Auditors believe has a high probability of success,
determine that an Overpayment has been made, such Overpayment shall be
treated for all purposes as a loan to the Optionee which he or she
shall repay to the Company, together with interest at the applicable
federal rate provided in section 7872(f)(2) of the Code; provided,
however, that no amount shall be payable by the Optionee to the Company
if and to the extent that such payment would not reduce the amount
which is subject to taxation under section 4999 of the Code. In the
event that the Auditors determine that an Underpayment has occurred,
such Underpayment shall promptly be paid or transferred by the Company
to or for the benefit of the Optionee, together with interest at the
applicable federal rate provided in section 7872(f)(2) of the Code.
10.4 RELATED CORPORATIONS. For purposes of this Article 10, the term
"Company" shall include affiliated corporations to the extent
determined by the Auditors in accordance with section 280G(d)(5) of the
Code.
ARTICLE 11. WITHHOLDING TAXES.
11.1 GENERAL. To the extent required by applicable federal, state, local or
foreign law, an Optionee or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any
withholding tax obligations that arise in connection with the Plan. The
Company shall not be required to issue any Common Shares until such
obligations are satisfied.
11.2 SHARE WITHHOLDING. The Committee may permit an Optionee to satisfy all
or part of his or her withholding or income tax obligations by having
the Company withhold all or a portion of any Common Shares that
otherwise would be issued to him or her or by surrendering all or a
portion of any Common Shares that he or she previously acquired. Such
Common Shares shall be valued at their Fair Market Value on the date
when taxes otherwise would be withheld in cash. Any payment of taxes by
assigning Common Shares to the Company may be subject to restrictions,
including any restrictions required by rules of the Securities and
Exchange Commission.
ARTICLE 12. ASSIGNMENT OR TRANSFER OF OPTIONS.
Except as provided in Article 11, an Option granted under the Plan shall not be
anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor's process, whether voluntarily, involuntarily or by
operation of law. An Option may be exercised during the lifetime of the Optionee
only by him or her or by his or her guardian or legal representative. Any act in
violation of this Article 12 shall be void. However, this Article 12 shall not
preclude an Optionee from designating a beneficiary who will receive any
outstanding Options in the event of the Optionee's death, nor shall it preclude
a transfer of Options by will or by the laws of descent and distribution.
ARTICLE 13. FUTURE OF THE PLAN.
13.1 TERM OF THE PLAN The Plan, as set forth herein, was adopted on March
27, 1996, subject to the approval of the Company's shareholders at the
1996 annual meeting. The Plan shall become effective on May 22, 1996.
The Plan shall remain in effect until it is terminated under Section
13.2, except that no ISOs shall be granted after May 21, 2006.
13.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan, except that the provisions of
Section 4.2 relating to the amount, price and timing of Option grants
to Outside Directors shall not be amended more often than permitted by
Rule 16b-3 under the Exchange Act. An amendment of the Plan shall be
subject to the approval of the Company's shareholders only to the
extent required by applicable laws, regulations or rules. No Options
shall be granted under the Plan after the termination thereof. The
termination of the Plan, or any amendment thereof, shall not affect any
Option previously granted under the Plan.
ARTICLE 14. DEFINITIONS.
14.1 "Board" means the Company's Board of Directors, as constituted from
time to time.
14.2 "Change in Control" shall mean the occurrence of any of the following.
events:
(a) Approval by the shareholders of the Company of a merger or
consolidation of the Company with or into another entity or
any other corporate reorganization, if either:
(A) The Company is not the continuing or surviving
entity; or
(B) More than 50% of the combined voting power of the
Company's securities outstanding immediately after
such merger, consolidation or other reorganization is
owned by persons who were not shareholders of the
Company immediately prior to such merger,
consolidation or other reorganization;
(b) A change in the composition of the Board, as a result of which
fewer than one-half of the incumbent directors are directors
who either:
(A) Had been directors of the Company 24 months prior to
such change; or
(B) Were elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of
the directors who had been directors of the Company
24 months prior to such change and who were still in
office at the time of the election or nomination; or
(c) Any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) by the acquisition or aggregation of securities
is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding
securities ordinarily (and apart from rights accruing under
special circumstances) having the right to vote at elections of
directors (the "Base Capital Stock"); except that any change in
the relative beneficial ownership of the Company's securities by
any person resulting solely from a reduction in the aggregate
number of outstanding shares of Base Capital Stock, and any
decrease thereafter in such person's ownership of securities,
shall be disregarded until such person increases in any manner,
directly or indirectly, such person's beneficial ownership of any
securities of the Company.
14.3 "Code" means the Internal Revenue Code of 1986, as amended.
14.4 "Committee" means a committee of the Board, as described in Article 2.
14.5 "Common Share" means one share of the common stock of the Company.
14.6 "Company" means SJNB Financial Corp., a California corporation.
14.7 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
14.8 "Exercise Price" means the amount for which one Common Share may be
purchased upon exercise of an Option, as specified in the applicable
Stock Option Agreement.
14.9 "Fair Market Value" means the market price of Common Shares, determined
by the Committee as follows:
(a) If the Common Shares are traded over-the-counter on the date
in question but are not classified as a national market issue,
then the Fair Market Value shall be equal to the mean between
the last reported representative bid and asked prices quoted
by the Nasdaq system for such date;
(b) If the Common Shares are traded over-the-counter on the date
in question and are classified as a national market issue,
then the Fair Market Value shall be equal to the last
transaction price quoted by the Nasdaq system for such date;
(c) If the Common Shares are traded on a stock exchange on the
date in question, then the Fair Market Value shall be equal to
the closing price reported by the applicable composite
transactions report for such date; and
(d) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in the Western Edition
of The Wall Street Journal. Such determination shall be conclusive and
binding on all persons.
14.10 "ISO" means an incentive stock option described in section 422(b) of
the Code.
14.11 "Key Employee" means (a) a common-law employee of the Company, a Parent
or a Subsidiary or (b) an Outside Director. Service as an Outside
Director shall be considered employment for all purposes of the Plan,
except as provided in Sections 4.2 and 4.3.
14.12 "NSO" means a stock option not described in sections 422 or 423 of
the Code.
14.13 "Option" means an ISO or NSO granted under the Plan and entitling the
holder to purchase one Common Share.
14.14 "Optionee" means an individual or estate who holds an Option.
14.15 "Outside Director" shall mean a member of the Board who is not a
common-law employee of the Company, a Parent or a Subsidiary.
14.16 "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of
the other corporations in such chain. A corporation that attains the
status of a Parent on a date after the adoption of the Plan shall be
considered a Parent commencing as of such date.
14.17 "Plan" means this 1996 Stock Option Plan of SJNB Financial Corp., as
amended from time to time.
14.18 "Predecessor Plan" means the SJNB Financial Corp. 1992 Employee Stock
Option Plan and 1992 Director Stock Option Plan.
14.19 "Stock Option Agreement" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions
pertaining to his or her Option.
14.20 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of
the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of
such date.
ARTICLE 15. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused its duly
authorized officer to affix the corporate name and seal hereto.
SJNB Financial Corp.
S/J. Kenny
James R. Kenny
President &
Chief Executive Officer
