As filed with the Securities and Exchange Commission on June 15, 1999.
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 of SJNB Financial Corp.
(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 $28.25 $4,237,500 $1,179.00
(1) Calculated pursuant to General Instruction E to 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 10, 1999.
(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. The Registrant's Form S-8 Registration Statement
filed with the Securities and Exchange Commission on July 1, 1998, File No.
333-58371, is hereby incorporated by reference.
Incorporation of Documents by Reference
The following documents filed by the 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, 1998, which contains, among other things, the
consolidated financial statements of Registrant and certain supplementary data
for the fiscal year ended December 31, 1998 together with the report thereon of
KPMG LLP, independent auditors.
(2) The Registrant's Quarterly Report on Form 10-Q (File No. 0-11771) for
the quarter ended March 31, 1999.
(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. S 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 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 Exchange Act, 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 Consent of KPMG LLP, Independent Auditors.
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 15, 1999.
SJNB FINANCIAL CORP.
By: /s/ James 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:
/s/J.R. Kenny President and Chief Executive Officer June 15, 1999
James R. Kenny (Principal Executive Officer) and Director
/s/E.E. Blakeslee Executive Vice President and Chief June 15, 1999
Eugene E. Blakeslee Financial Officer (Principal Financial
Officer and Principal Accounting Officer)
/s/R.S. Akamine Director June 9, 1999
Ray S. Akamine
/s/R.A. Archer Chairman and Director June 10, 1999
Robert A. Archer
/s/A.V. Bruno Director June 13, 1999
Albert V. Bruno
/s/R. Diridon Director June 9, 1999
Rod Diridon
/s/F.G. Gorry Director June 9, 1999
F. Jack Gorry
/s/A.K. Lund Director June 9, 1999
Arthur K. Lund
/s/L. Oneal Director June 14, 1999
Louis Oneal
/s/D.P. Rubino Director June 15, 1999
Diane P. Rubino
/s/D.L. Shen Director June 15, 1999
Douglas L. Shen
/s/G.S. Vandeweghe Director June 10, 1999
Gary S. Vandeweghe
INDEX TO EXHIBITS
Exhibit
Number Exhibit
5.1 Opinion regarding legality of securities to be offered.
23.1 Consent of KPMG LLP, Independent Auditors.
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
June 14, 1999
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, as amended (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
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement on
Form S-8 of SJNB Financial Corp. of our report dated January 14, 1999, relating
to the consolidated balance sheets of SJNB Financial Corp. and subsidiary as of
December 31, 1998 and 1997, and the related consolidated statements of income,
shareholders' equity and comprehensive income, and cash flows for each of the
years in the three-year period ended December 31, 1998, which report appears in
the December 31, 1998, annual report on Form 10-K of SJNB Financial Corp.
/s/ KPMG LLP
San Francisco, California
June 14, 1999
EXHIBIT 99.1
1996 Stock Option Plan of SJNB Financial Corp., as Amended
1996 STOCK OPTION PLAN OF
SJNB FINANCIAL CORP
(as amended May 26, 1999)
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 610,000, subject to Section 3.2. No grants shall be made
under the Predecessor Plan after May 22, 1996. The limitation of this
Section 3.1 shall be subject to 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
