As filed with the Securities and Exchange Commission on November 6, 1996.
Registration No. 333-
---------------------------------------------------------------------------
United States
Securities and Exchange Commission
Washington, D.C. 20005
FORM S-8
Registration Statement Under The Securities Act of 1933
CUPERTINO NATIONAL BANCORP
(Exact name of registrant as specified in its charter)
California 33-0060898
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
20230 Stevens Creek Boulevard 95014
Cupertino, California
(Address of principal executive offices) (Zip Code)
Cupertino National Bancorp Employee Stock Purchase Plan
Cupertino National Bancorp 1989 Non-Qualified Stock Option Plan
(Full title of plans)
C. Donald Allen
Chief Executive Officer
Cupertino National Bancorp
20230 Stevens Creek Boulevard
Cupertino, California 95014
(Name and address of agent for service)
Telephone number, including area code, of agent for service:
(408) 996-1144
WITH A COPY TO:
Eileen Lyon
Manatt, Phelps & Phillips
11355 West Olympic Boulevard
Los Angeles, California 90064
This registration statement shall hereafter become effective in accordance
with Rule 462 promulgated under the Securities Act of 1933, as amended.
<PAGE>
<TABLE>
<CAPTION>
Calculation of Registration Fee
- --------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount maximum maximum Amount
securities to to be offering price aggregate of registra-
be registered registered per unit <F1> offering price tion fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employee Stock
Purchase Plan
Common Stock 60,000 $13.28 $ 796,800 $241.45
1989 Non-Qualified
Stock Option Plan
Common Stock 35,000 $15.625 $ 546,875 $165.72
TOTAL 95,000 $1,343,675 $407.17
- --------------------------------------------------------------------------------------------------------------------------------
In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plans
described herein and such indeterminate number of shares as may become
available as a result of the adjustment provisions thereof.
<FN>
<F1> Estimated pursuant to Rule 457 solely for purposes of calculating
the registration fee. As to shares subject to outstanding but unexercised
options under the Cupertino National Bancorp 1989 Non-Qualified Stock
Option Plan, the price is computed on the basis of the exercise price. As
to shares under the Cupertino National Bancorp Employee Stock Purchase
Plan, this plan establishes a purchase price equal to 85% of the fair
market value of the Company's Common Stock and, therefore, the price for
purchase rights under this plan is based upon 85% of the average of the
high and low prices of the Common Stock on November 4, 1996, as reported on
the National Association of Securities Dealers Automated Quotations System.
</FN>
</TABLE>
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
-----------------------------------------------
The following documents filed by Cupertino National
Bancorp (the "Registrant") with the Commission are incorporated
in this Registration Statement by reference:
(a) The Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(b) All other reports filed by the Registrant
pursuant to Section 13(a) or 15(d) of the Exchange Act since
December 31, 1995.
(c) The description of the class of securities which
is contained in the Registrant's Registration Statement on Form
8-A, as amended, including any amendment or report filed for the
purpose of updating such information.
All other documents filed by the Registrant pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Registration Statement and prior to the
filing of a post-effective amendment to this Registration
Statement which indicate that all securities offered have been
sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of
filing of such documents.
Any statement made in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in
any other subsequently filed document which is also incorporated
or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
-------------------------
Not applicable.
Item 5. Interests of Named Experts And Counsel
--------------------------------------
Not applicable.
<PAGE>
Item 6. Indemnification of Directors And Officers
-----------------------------------------
The Company's Articles of Incorporation provide that
the liability of the directors for monetary damages shall be
eliminated to the fullest extent permissible under California
law. Pursuant to California law, the Company's directors shall
not be liable for monetary damages for breach of the directors'
fiduciary duty of care to the Company and its shareholders.
However, this provision does not eliminate the duty of care, and
in appropriate circumstances, equitable remedies such as
injunctive or other forms of non-monetary relief will remain
available under California law. In addition, each director will
continue to be subject to liability for (i) acts or omissions
that involve intentional misconduct or a knowing and culpable
violation of law, (ii) acts or omissions that a director believes
to be contrary to the best interests of the Company or its
shareholders or that involve the absence of good faith on the
part of the director, (iii) any transaction from which a director
derived an improper personal benefit, (iv) acts or omissions that
show a reckless disregard for the director's duty to the Company
or its shareholders in circumstances in which the director was
aware, or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to
the Company or its shareholders, (v) acts or omissions that
constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Company or its
shareholders, (vi) any transaction that constitutes an illegal
distribution or dividend under California law, and (vii) any
transaction involving an unlawful conflict of interest between
the director and the Company under California law. The provision
also does not affect a director's responsibilities under any
other law, such as the federal securities laws or state or
federal environmental laws.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
See Exhibit Index.
Item 9. Undertakings
------------
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
<PAGE>
(a) To include any prospectus required by Sec
tion 10(a)(3) of the Securities Act;
(b) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(c) To include any material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement.
Provided, however, that paragraphs 1(a) and 1(b) do not
apply if the Registration Statement is on Form S-3 or Form S-8
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the
Registration Statement.
2. That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section
13 or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid
<PAGE>
by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes to deliver
or cause to be delivered with the Prospectus, to each person the
Prospectus is sent or given, the latest Annual Report to security
holders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Securities Exchange Act of 1934; and,
where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus,
to deliver or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to
provide such interim financial information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements of
filing of Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cupertino, State of
California on October 17, 1996.
CUPERTINO NATIONAL BANCORP
By /s/ C. Donald Allen
---------------------------
C. Donald Allen,
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints C. Donald Allen
and Steven C. Smith his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities,
to sign any or all amendments to this Registration Statement, and
to file the same with all exhibits thereto, and all other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, as amended, this Registration Statement has been signed by
the following persons in the capacities indicated on October 17,
1996.
Signature Title
/s/ C. Donald Allen
- ---------------------------
C. Donald Allen Chief Executive Officer,
President and Director
(Principal Executive Officer)
<PAGE>
/s/ Steven C. Smith
- ---------------------------
Steven C. Smith Executive Vice President, Chief
Financial Officer and Chief
Operating Officer (Principal
Financial and Accounting
Officer)
/s/ David K. Chui
- ---------------------------
David K. Chui Director
/s/ Carl E. Cookson
- ---------------------------
Carl E. Cookson Director
/s/ Jerry R. Crowley
- ---------------------------
Jerry R. Crowley Director
/s/ Janet M. DeCarli
- ---------------------------
Janet M. DeCarli Director
/s/ John M. Gatto
- ---------------------------
John M. Gatto Director
/s/ William H. Guengerich
- ---------------------------
William H. Guengerich Director
/s/ James E. Jackson
- ---------------------------
James E. Jackson Director
<PAGE>
/s/ Rex D. Lindsay
- ---------------------------
Rex D. Lindsay Director and
Vice Chairman of the Board
- ---------------------------
Glen McLaughlin Director and
Chairman of the Board
/s/ Norman Meltzer
- ---------------------------
Norman Meltzer Director
/s/ Dick J. Randall
- ----------------------------
Dick J. Randall Director
/s/ Dennis S. Whittaker
- ----------------------------
Dennis S. Whittaker Director
<PAGE>
EXHIBIT INDEX
5.1 Opinion of Manatt, Phelps & Phillips
23.1 Consent of Manatt, Phelps & Phillips (see Exhibit 5.1).
23.2 Consent of Independent Public Accountants
25.1 Power of Attorney (included on signature page hereof)
99.1 Cupertino National Bancorp Employee Stock Purchase Plan,
as amended
99.2 Cupertino National Bancorp 1989 Non-Qualified Stock Option
Plan, as amended
Exhibit 5.1
Opinion of Manatt, Phelps & Phillips
MANATT
- --------
PHELPS
- --------
PHILLIPS
- --------
ATTORNEYS AT LAW
November 5, 1996
Cupertino National Bancorp
20230 Stevens Creek Boulevard
Cupertino, California 95014
RE: CUPERTINO NATIONAL BANCORP REGISTRATION STATEMENT ON
FORM S-8 REGISTERING SHARES ISSUABLE UNDER THE
CUPERTINO NATIONAL BANCORP EMPLOYEE STOCK PURCHASE PLAN
AND THE CUPERTINO NATIONAL BANCORP 1989 NON-QUALIFIED
STOCK OPTION PLAN
Ladies and Gentlemen:
At your request, we have examined the Registration Statement
on Form S-8 (the "Registration Statement") being filed by
Cupertino National Bancorp ("Company") with the Securities and
Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended,of up to 95,000 shares of the
Common Stock, without par value, of the Company which may be
issued pursuant to the exercise of options and purchase rights
granted under the Cupertino National Bancorp Employee Stock
Purchase Plan and the Cupertino National Bancorp 1995 Stock
Option Plan (the "Plans").
We have examined all instruments, documents and records
which we deemed relevant and necessary for the basis of our
opinion hereinafter expressed. In such examination, we have
assumed the genuineness of all signatures and the authenticity of
all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the
95,000 shares of Common Stock which may be issued upon exercise
of options and purchase rights granted under the Plans are duly
authorized shares of the Company's Common Stock, and, when issued
against payment of the purchase price therefor in accordance with
<PAGE>
the provisions of the Plans, will be validly issued, fully paid
and non-assessable.
This opinion is issued to you solely for use in connection
with the Registration Statement on Form S-8 and is not to be
quoted or otherwise referred to in any financial statements of
the Company or related document, nor is it to be filed with or
furnished to any government agency or other person, without the
prior written consent of this Firm.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement on Form S-8 which is being
filed on behalf of the Company in connection with the
registration of the aforementioned shares of Common Stock under
the Securities Act of 1933, as amended.
Very truly yours,
MANATT, PHELPS & PHILLIPS, LLP
MANATT, PHELPS & PHILLIPS, LLP
11355 West Olympic Boulevard, Los Angeles, California 90064-1614
310-312-4000 FAX 310-312-4224
Los Angeles - Washington, D.C. - Nashville
EXHIBIT 23.2
Consent of Independent Public Accountants
We consent to the incorporation by reference in the registration
statement of Cupertino National Bancorp and Subsidiary on Forms
S-8 (re: Employee Stock Purchase Plan and 1989 Non-Qualified
Stock Option Plan) of our report dated January 26, 1996, on our
audit of the consolidated financial statements of Cupertino
National Bancorp and Subsidiary as of and for the year ended
December 31, 1995 which report is included in Cupertino National
Bancorp and Subsidiary's 1995 Annual Report on Form 10-K.
Coopers & Lybrand L.L.P.
San Francisco, California
November 5, 1996
EXHIBIT 99.1
Cupertino National Bancorp Employee Stock Purchase Plan
As amended effective May 16, 1996
CUPERTINO NATIONAL BANCORP
EMPLOYEE STOCK PURCHASE PLAN
(As Amended Effective May 16, 1996)
A. PURPOSE, HISTORY AND DESCRIPTION
The Employee Stock Purchase Plan (the "Purchase Plan") of
Cupertino National Bancorp (the "Company") provides eligible
employees of the Company and its Designated Subsidiaries with an
opportunity to purchase shares of the Company's Common Stock
through payroll deductions.
The Purchase Plan, under which 133,934(1) shares of the
Company's Common Stock are reserved for issuance to all employees
of the Company and its Designated Subsidiaries who meet certain
minimum employment criteria, was adopted in its original form by
the Board of Directors of Cupertino National Bancorp (the
"Board") on February 21,1991, and amended from time to time.
The following terms shall have the meanings defined below:
(a) "Code" means the Internal Revenue Code of 1986, as
amended.
(b) "Continuous Status as an Employee" shall mean the
absence of any interruption or termination of service as an
Employee. Continuous Status as an Employee shall not be
considered interrupted in the case of a leave of absence agreed
to in writing by the Company, provided that such leave is for a
period of not more than 90 days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
(c) "Designated Subsidiaries" means the Subsidiaries
which have been designated by the Board from time to time in its
sole discretion as eligible to participate in the Purchase Plan.
(d) "Employee" means any person, including an officer,
who is customarily employed for at least twenty (20) hours per
week and more than five (5) months in a calendar year by the
Company or one of its Designated Subsidiaries.
(1) The number of shares is 55,000 adjusted for stock dividends
subsequent to the date of the original approval of the Purchase
Plan.
<PAGE>
(e) "Parent" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the
Company, if at the time of the granting of the option, each of
the corporations other than the Company owns stock possessing 50
percent or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
(f) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if, at the time of the granting of the option, each of
the corporations other than the last corporation in the unbroken
chain owns stock possessing at least 50 percent or more of the
total combined voting power of all classes of stock in one of the
other corporations in such chain.
B. SHARE RESERVE
The maximum number of shares which may be issued under the
Purchase Plan is 133,934(2) shares of the Company's authorized
but unissued Common Stock (the "Shares") subject to adjustment
upon changes in capitalization of the Company as provided in
paragraph N below. In the event that any option granted under
the Purchase Plan (a "Plan Option") for any reason expires or is
terminated, the Shares allocable to the unexercised portion of
such Plan Option may again be made subject to a Plan Option. The
Shares to be sold to participants in the Purchase Plan may be, at
the election of the Company, either treasury shares or shares
authorized but unissued. If the total number of Shares which
would otherwise be subject to Plan Options granted pursuant to
paragraph G hereof on the Offering Date of an Offering Period
exceeds the number of Shares then available under the Purchase
Plan (after deduction of all Shares for which options have been
exercised or are then outstanding), the Company shall make a pro
rata allocation of the Shares remaining available for option
grant in as uniform and equitable a manner as is practicable. In
such event, the Company shall give written notice of such
reduction of the number of Shares subject to a Plan Option to
each Participant affected thereby and shall return any excess
funds accumulated in each Participant's account as soon as
practicable after the termination of such Offering Period.
(2) The number of shares is 55,000 adjusted for stock dividends
subsequent to the date of the original approval of the Purchase
Plan.
<PAGE>
C. ADMINISTRATION
The Purchase Plan may be administered by the Board or by a
duly appointed committee of the Board. Any subsequent references
to the Board shall also mean the committee if it has been
appointed. All questions of interpretation of the Purchase Plan
or of any Plan Options shall be determined by the Board, and such
determinations shall be final, binding and conclusive upon all
persons having an interest in the Purchase Plan and/or any Plan
Option. Subject to the provisions of the Purchase Plan, the
Board shall determine all of the relevant terms and conditions of
Plan Options granted pursuant to the Purchase Plan; provided,
however, that all Participants granted Plan Options pursuant to
the Purchase Plan shall have the same rights and privileges
within the meaning of section 423(b)(5) of the Code. All
expenses incurred in connection with the administration of the
Purchase Plan shall be paid by the Company.
D. ELIGIBILITY
Any Employee is eligible to participate in the Purchase Plan
and any Offering under the Purchase Plan except the following:
(i) an Employee who has not completed three months of
continuous employment with the Company or Designated Subsidiary
as of the commencement of the Offering Period (as hereinafter
defined); and
(ii) an Employee who (a) owns or (b) holds options to
purchase, or who, as a result of participation in the Purchase
Plan, would (a) own or (b) hold options to purchase, stock of the
Company possessing five percent or more of the total combined
voting power or value of all classes of the Company within the
meaning of section 423(b)(3) of the Code.
E. OFFERING DATES
(i) OFFERING PERIODS. The Purchase Plan shall be
implemented by four annual offering periods of three months'
duration (each of which referred to herein as an "Offering
Period"), commencing on the first day of each calendar quarter
(January 1, April 1, July 1, and October 1) and ending on the
last day of each calendar quarter (March 31, June 30, September
30, and December 31). The first Offering Period shall commence
on July 1, 1991. The Board may, however, establish a different
term for one or more future Offerings and/or different commencing
and/or ending dates for such Offerings without Shareholder
approval, if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to
be affected. An employee who becomes eligible to participate in
the Purchase Plan after an Offering Period has commenced shall
not be eligible to participate during such Offering Period. The
first day of an Offering Period shall be the "Offering Date" for
such Offering Period.
<PAGE>
(ii) GOVERNMENT APPROVAL; SHAREHOLDER APPROVAL.
Notwithstanding any other provisions of the Purchase Plan to the
contrary, any Plan Option granted pursuant to the Purchase Plan
shall be subject to (a) obtaining all necessary governmental
approvals and/or qualifications of the sale and/or issuance of
the Plan Options and/or the Shares, and (b) in the case of Plan
Options with an Offering date after an amendment to the Purchase
Plan, obtaining any necessary approval of the shareholders of the
Company required by paragraph R below.
F. PARTICIPATION IN THE PURCHASE PLAN
(i) INITIAL PARTICIPATION. An eligible Employee may elect
to become a Participant effective on the first Offering Date
after satisfying the eligibility requirements set forth in
paragraph D above by delivering a subscription agreement
authorizing payroll deductions (a "Subscription Agreement") to
the Company's payroll office at such time at least seven (7) days
prior to an Offering Date as may be established by the Company
(the "Enrollment Date"). An eligible Employee who does not
deliver a Subscription Agreement to the Company's payroll office
prior to the Enrollment Date for the first Offering Date after
becoming eligible to participate in the Purchase Plan shall not
participate in the Purchase Plan for that Offering Period or for
any subsequent Offering Period unless such Employee subsequently
enrolls in the Purchase Plan by filing a Subscription Agreement
with the Company prior to the applicable Enrollment Date for such
subsequent Offering Date.
(ii) AUTOMATIC PARTICIPATION IN SUBSEQUENT OFFERINGS. A
participant shall automatically participate in each succeeding
Offering Period until such time as such Participant withdraws
from the Purchase Plan pursuant to paragraph K below or
terminates employment with the Company. A Participant is not
required to file an additional Subscription Agreement for such
Offering Periods in order to automatically participate therein.
G. RIGHT TO PURCHASE SHARES
Subject to the limitations set forth in paragraphs B,
I(iii), I(v), and J(ii), on each Offering Date, each Participant
shall be granted a Plan Option to purchase (at the purchase price
determined under paragraph H) a number of whole Shares arrived at
by dividing (a) an amount equal to 10% of the Participant's base
Compensation for the Offering Period beginning on such Offering
Date determined at the rate of such Participant's base
Compensation in effect as of such Offering Date by (b) 85% of the
fair market value of a share of the Company's Common Stock on the
Offering Date. "Compensation" includes all amounts paid in cash
and includable as "wages" subject to tax under section 3101(a) of
the Code without applying the dollar limitation of section
3121(a) of the Code. Accordingly, "Compensation" includes
salaries, commissions, bonuses and contributions made at the
direction of the Participant pursuant to certain qualified cash
<PAGE>
or deferred arrangements. "Compensation" does not include
reimbursements of expenses, allowances, or any amount deemed
received by a Participant without the actual transfer of cash or
any amounts directly paid pursuant to the Purchase Plan or any
other stock purchase or stock option plan. The fair market value
of a share of the Company's Common Stock shall be determined in
accordance with paragraph H.
H. PURCHASE PRICE
The purchase price at which Shares may be acquired in any
Offering under the Purchase Plan shall be set by the Board.
Unless otherwise provided by the Board before the commencement of
an Offering Period, the purchase price for the Offering Period
shall be 85% of the lesser of (i) the fair market value of the
Company's Common Stock, as determined by the Board, on the
Offering Date of such Offering Period or (ii) the fair market
value of the Company's Common Stock, as determined by the Board,
on the last day of the Offering Period. In no event may the
purchase price be lower than the price specified in the previous
sentence. The fair market value of the Company's Common Stock at
any point in time has been determined to be the average of the
high and low sales prices of the Company's Common Stock on such
date as reported on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") National Market System.
I. PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
(i) ACCUMULATION OF PAYROLL DEDUCTIONS. The purchase price
of Shares to be acquired in an Offering Period shall be
accumulated by payroll deductions over the Offering Period.
Except as set forth below, the amount of Compensation to be
withheld from a Participant's Compensation during each pay period
shall be determined by the Participant's subscription agreement.
(ii) DECREASE OF PAYROLL DEDUCTIONS. During an Offering
Period, a Participant may elect to decrease the rate of payroll
deductions from his or her Compensation by filing an amended
Subscription Agreement with the Company on or before the "Change
Notice Date". The "Change Notice Date" shall initially be the
seventh day prior to the end of the first pay period for which
such election is to be effective; however, the Company may change
such Change Notice Date from time to time.
(iii) MAXIMUM DEDUCTIONS. The amount of payroll
deductions with respect to the Purchase Plan for any Participant
during any pay period shall not exceed 10%, or such other rate as
may be determined from time to time by the Board, of the
Participant's Compensation (as hereinabove defined) for such pay
period; provided, however, that in the event the Offering Period
is shorter than 13 weeks, the maximum withholding percentage
shall be adjusted to equal 10%, or such other rate as may be
determined from time to time by the Board, multiplied by 13 and
divided by the number of weeks in the Offering Period.
<PAGE>
(iv) COMMENCEMENT OF PAYROLL DEDUCTIONS. Payroll deductions
shall commence on the first payday following the Offering Date of
an Offering Period and shall continue to the end of such Offering
Period unless sooner altered or terminated as provided in the
Purchase Plan.
(v) CERTAIN RULES TO BE ESTABLISHED BY COMPANY. The
Company may, from time to time, establish (i) a minimum required
amount of payroll deductions for participation in any Offering,
(ii) limitations on the frequency and/or number of changes in the
amount of payroll deductions during an Offering, (iii) such other
limitations or procedures as deemed advisable by the Company in
the Company's sole discretion which are consistent with the
Purchase Plan.
(vi) NO INTEREST ON PAYROLL DEDUCTION. Interest shall not
be accrued or paid on payroll deductions from a Participant's
Compensation.
(vii) PARTICIPANT ACCOUNTS. Individual accounts shall
be maintained for each Participant. All payroll deductions from
a Participant's compensation shall be credited to the
Participant's account under the Purchase Plan and shall be
deposited with the general funds of the Company. All payroll
deductions received or held by the Company may be used by the
Company for any corporate purpose.
J. PURCHASE OF SHARES
(i) PURCHASE. On the last day of an Offering Period, each
Participant who has not withdrawn from the Offering or whose
employment has not terminated on or before such last day shall
automatically purchase that number of whole Shares arrived at by
dividing the total amount credited to Participant's account
pursuant to paragraph I(vii) above by the Purchase Price
established pursuant to paragraph H above (subject to the
limitation in paragraph J(ii) below). All additional cash
remaining in the Participant's account for such completed
Offering shall be refunded to the Participant as soon as
practicable after the last day of the Offering Period. In the
event the cash to be returned to a Participant pursuant to the
preceding sentence is an amount less than the amount necessary to
purchase a whole Share, the Company shall maintain such cash in
the Participant's account to be applied toward the purchase of
Shares in the next subsequent Offering.
(ii) FAIR MARKET VALUE LIMITATION. No participant shall be
granted a Plan Option which would permit the Participant to
purchase Shares under the Purchase Plan (and all similar plans of
the Company and any Subsidiary) at a rate which exceeds $25,000
of the fair market value of such Shares (determined at the time
of grant) for each calendar year in which such Plan Option is
outstanding.
<PAGE>
(iii) RIGHTS AS A SHAREHOLDER AND EMPLOYEE. A
Participant shall have no rights as a shareholder by virtue of
the Participant's participation in the Purchase Plan until the
date of issuance of a certificate or certificates for the Shares
being purchased pursuant to the exercise of the Participant's
Plan Option. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior
to the date such certificate or certificates is issued. Nothing
in the Purchase Plan shall confer upon a Participant any right to
continue in the employ of the Company or interfere in any way
with any right of the Company to terminate the Participant's
employment at any time.
(iv) WITHHOLDING TAX. At the time the Shares are purchased
for a Participant, the Company shall withhold from the
Participant's Compensation the amount necessary to make adequate
provision for federal and state withholding obligations of the
Company, if any, which arise upon such purchase.
K. WITHDRAWAL
(i) NOTICE OF WITHDRAWAL. A participant may withdraw all,
but not less than all, of the payroll deductions credited to his
account under the Purchase Plan by signing and delivering to the
Company's payroll office a written notice of withdrawal on a form
provided by the Company for such purpose. Such withdrawal may be
elected at any time prior to the end of the Offering Period.
Unless otherwise indicated, withdrawal from an Offering does not
result in a withdrawal from the Purchase Plan or any succeeding
Offering pursuant to the Purchase Plan. A Participant is
prohibited from again participating in the current Offering upon
withdrawal from such Offering at any time.
(ii) RETURN OF PAYROLL DEDUCTIONS. Upon withdrawal from an
Offering the Participant's interest in that Offering shall
terminate, and, as soon as practical after the withdrawal, the
withdrawn Participant's accumulated payroll deductions shall be
returned to the Participant.
(iii) WITHDRAWAL FROM THE PURCHASE PLAN; SUBSEQUENT
PARTICIPATION. A Participant may withdraw from the Purchase Plan
by signing and delivering to the Company's payroll office a
written notice of withdrawal on a form provided by the Company
for such purpose. In the event a Participant voluntarily elects
to withdraw from the Purchase Plan, the Participant may not
resume participation in the Purchase Plan during the same
Offering Period, but may participate in any succeeding Offering
under the Purchase Plan by filing a new authorization for payroll
deductions in the same manner as set forth above for initial
participation in the Purchase Plan.
<PAGE>
L. TERMINATION OF EMPLOYMENT
Termination of a Participant's Continuous Status as an
Employee for any reason, including retirement or death, or the
failure of a Participant to remain an Employee eligible to
participate in the Purchase Plan, shall terminate the
Participant's participation in the Purchase Plan immediately.
Upon such termination, the payroll deductions credited to the
Participant's account shall be returned to the Participant (or in
the case of the Participant's death, to the Participant's legal
representative) and all rights under the Purchase Plan shall
terminate. A Participant whose participation has been so
terminated may again become eligible to participate in the
Purchase Plan by again satisfying the requirements of paragraph D
above.
M. DESIGNATION OF BENEFICIARY
A Participant may file a written designation of a
beneficiary who is to receive Shares and/or cash, if any, from
such Participant's account under the Purchase Plan in the event
of such Participant's death at a time when cash or Shares are
held for his account. Such designation of beneficiary may be
changed by the Participant at any time by written notice. In the
event of the death of a Participant in the absence of a valid
designation of a beneficiary who is living at the time of such
Participant's death, the Company shall deliver such Shares and/or
cash to the executor or administrator of the estate of the
Participant; or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such Shares and/or cash to the spouse or
to any one or more dependents or relatives of the Participant; or
if no spouse, dependent or relative is known to the Company, to
such other person as the Company may reasonably designate.
N. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Subject to any required action by the shareholders of the
Company, the number of Shares covered by each Plan Option under
the Purchase Plan which has not been exercised and the number of
shares of Common Stock which have been authorized for issuance
under the Purchase Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share of
Common Stock covered by each Plan Option under the Purchase Plan
which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, stock
dividend, combination or reclassification of the Common Stock or
any other increase or decrease in the number of shares of Common
Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities
of the Company shall not be deemed to have been "effected without
receipt of consideration." Such adjustment shall be made by the
Board, whose determination in that respect shall be final,
<PAGE>
binding and conclusive. Except as expressly provided herein, no
issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject
to a Plan Option.
In the event of a proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to
the consummation of such proposed action, unless otherwise
provided by the Board. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, each outstanding
Plan Option under the Purchase Plan shall be assumed or an
equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor
corporation (the "Acquiring Corporation"). If the Acquiring
Corporation elects not to assume or substitute for the
outstanding Plan Options, the Board may, in its sole discretion
and notwithstanding any other provision herein to the contrary,
adjust the ending date of the then current Offering Period to a
date on or before the effective date of such proposed
transaction. If the Board makes such an adjustment to the ending
date of the Offering Period, the Board shall notify the
Participants of such new ending at least ten days in advance
thereof.
The board may, if it so determines in the exercise of its
sole discretion, also make provision for adjusting the Reserves,
as well as the price per share of Common Stock covered by each
outstanding Plan Option, in the event that the Company effects
one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding
Common Stock, and in the event of the Company being consolidated
with or merged into any other corporation.
O. TRANSFERABILITY
Neither payroll deductions credited to a Participant's
account nor any rights with regard to the exercise of a Plan
Option or to receive Shares under the Purchase Plan may be
assigned, transferred, pledged or otherwise disposed of in any
way (other than by will, the laws of descent and distribution, or
as provided in paragraph M hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition
shall be without effect, except that the Company may treat such
act as an election to withdraw funds in accordance with paragraph
K.
P. REPORTS
Each Participant who purchases Shares in an Offering period
shall receive as soon as practical after the last day of each
Offering Period a report of such Participant's account setting
<PAGE>
forth the total payroll deductions accumulated, the number of
Shares purchased and the remaining cash balance to be refunded or
retained in the Participant's account pursuant to paragraph J(i)
above, if any.
Q. TERM OF THE PURCHASE PLAN
The Purchase Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the
shareholders of the Company. The Purchase Plan shall continue
until terminated by the Board or until all of the Shares reserved
for issuance under the Purchase Plan have been issued, whichever
shall come first.
R. AMENDMENT OR TERMINATION OF THE PURCHASE PLAN
The Board may at any time amend or terminate the Purchase
Plan, except that such termination cannot affect Plan Options
previously granted under the Purchase Plan, nor may any amendment
make any change in a Plan Option previously granted under the
Purchase Plan which would adversely affect the right of any
Participant (except as may be necessary to qualify the Purchase
Plan pursuant to section 423 of the Code), nor may any amendment
be made without obtaining the approval of the shareholders of the
Company within 12 months of the adoption of such amendment if
such amendment would authorize the sale of more shares than are
authorized for issuance under the Purchase Plan, or change the
designation of the employees (or class of employees) eligible for
participation in the Purchase Plan, or materially increase the
benefits which may accrue to Participants under the Purchase
Plan.
S. NOTICES
All notices or other communications by a Participant to the
Company in connection with the Purchase Plan shall be deemed to
have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the
Company for the receipt thereof.
T. SHAREHOLDER APPROVAL
The Purchase Plan and any increase in the number of shares
reserved under the Purchase Plan must be approved by the holders
of a majority of the outstanding shares of voting stock of the
Company within twelve months before or after the date the
Purchase Plan has been adopted or the increase in the number of
Shares reserved under the Purchase Plan has been approved by the
Board.
U. CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to a Plan Option
unless the exercise of such Plan Option and the issuance and
<PAGE>
delivery of such Shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the Shares
may then be listed, and shall be further subject to the approval
of counsel for the Company with respect to such compliance.
As a condition to the exercise of a Plan Option and if
required by applicable securities laws, the Company may require
the Participant for whose account the Plan Option is being
exercised to represent and warrant at the time of such exercise
that the Shares are being purchased only for investment and
without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned
applicable provisions of law.
V. ERISA AND INTERNAL REVENUE CODE SECTION 401
The Purchase Plan is not subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended and
is not qualified under section 401(a) of the Code.
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
Page 1 of 6
EXHIBIT 99.2
Cupertino National Bancorp 1989 Non-Qualified Stock Option Plan
As amended effective May 16, 1996
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
(As Amended Effective May 16, 1996)
Section 1. DESCRIPTION OF PLAN. This is the Non-
Qualified Stock Option Plan, dated as of January 19, 1989 (the
"Plan") of Cupertino National Bancorp, a California corporation
(the "Company"). Under this Plan, directors of the Company or
any of its subsidiaries, to be selected as below set forth, may
be granted common options ("Options") to purchase shares of the
Common Stock of the Company ("Common Stock"). For purposes of
this Plan, the term "subsidiary" means any corporation 50% or
more of the voting stock of which is owned by the Company or by a
subsidiary (as so defined) of the Company. It is intended that
the Options under this Plan will not qualify for treatment as
incentive stock options under Section 422A of the Internal
Revenue Code of 1954, as amended (the "Code").
Section 2. PURPOSE OF PLAN. The purpose of this Plan
and of granting Options to directors who are not bank employees
is to further the growth, development and financial success of
the Company and its subsidiaries by providing additional
incentives to such directors by assisting them to acquire shares
of Common Stock and to benefit directly from the Company's
growth, development and financial success.
Section 3. ELIGIBILITY. The persons shall be eligible
to receive grants of Options under this Plan shall be the
directors of the Company or any of its subsidiaries. A person
who holds an Option is herein referred to as an "Optionee". More
than one Option may be granted to any one Optionee.
Section 4. ADMINISTRATION. The Plan shall be
administered by a committee (the "Non-Qualified Option Committee"
or "Option Committee" herein) to be composed of not less than
three persons who shall be members of the Board of Directors (the
"Board"). Members of the Option Committee shall be appointed
originally and as vacancies occur by the Board, to serve at the
pleasure of the Board. The Board may serve as the Option
Committee. The initial Option Committee shall be the three
members of the Executive Committee who are not also bank
employees. The Option Committee shall meet at such times and
places as it determines. A majority of its members shall
constitute a quorum, and the decision of a majority of those
present at any meeting where a quorum is present shall constitute
<PAGE>
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
Page 2 of 6
the decision of the Option Committee. A memorandum signed by all
of its members shall constitute the decision of the Option
Committee without necessity, in such event, for holding an actual
meeting. The Option Committee is authorized and empowered to
administer the Plan and, subject to the Plan, (i) to select the
Optionees, to specify the number of shares of Common Stock with
respect to which Options are granted to each Optionee, to specify
the Option Price and the terms of Options, and in general to
grant Options; (ii) to determine the dates upon which Options
shall be granted and the terms and conditions thereof in a manner
consistent with this Plan, which terms and conditions need not be
identical as to the various Options granted; (iii) to interpret
the Plan; (iv) to prescribe, amend and rescind rules relating to
the Plan; and (v) to determine the rights and obligations of
participants under the Plan. The interpretation and construction
by the Option Committee of any provision of the Plan or of any
Option granted under it shall be final. No member of the Option
Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Option granted under
it shall be final. No member of the Option Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any Option granted under it.
Section 5. SHARES SUBJECT TO THE PLAN. The aggregate
number of shares of Common Stock which may be purchased pursuant
to the exercise of Options granted under the Plan shall not
exceed 110,000(1) shares. Upon the expiration or termination for
any reason of an outstanding Option which shall not have been
exercised in full, any shares of Common Stock then remaining
unissued which shall have been reserved for issuance upon such
exercise shall again become available for the granting of
______________________
(1) 75,000 shares, adjusted for stock dividends subsequent
to the date of the original approval of the Plan, plus 35,000
shares pursuant to an amendment to the Plan effective May 16,
1996.
<PAGE>
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
Page 3 of 6
additional Options under the Plan. Stocks remaining in the Plan
upon its expiration shall be returned to the status of authorized
but unissued shares.
Section 6. EXERCISE OF OPTIONS. Subject to all other
provision of this Plan, each Option shall be exercisable for the
full number of shares of Common Stock subject thereto, or any
part thereof, in such installments and at such intervals as the
Option Committee may determine in granting such Option. Each
Option shall terminate and expire, and shall no longer be subject
to exercise, as the Option Committee may determine in granting
such option, but in no event later than ten (10) calendar years
after the date of grant thereof. The Option shall be exercised
by the Optionee by giving written notice to the Company
specifying the number of full shares to be purchased and
accompanied by payment of the full purchase price therefore in
cash, by check or in such other form of lawful consideration as
the Board may approve from time to time, including without
limitation the assignment and transfer by the Optionee to the
Company of outstanding shares of the Company's Common Stock
theretofore held by the Optionee in a manner intended to comply
with the provision of Rule 16b-3 under the Securities Exchange
Act of 1934.
Section 7. ISSUANCE OF COMMON STOCK. The Company's
obligation to issue shares of its Common Stock upon exercise of
an Option granted under the Plan is expressly conditioned upon
the completion of the Company of any registration or other
qualification of such shares under any state and/or federal law
or rulings or regulations or other representations and
undertakings by the Optionee (or his legal representative, heir
or legatee, as the case may be) in order to comply with the
requirements of any exemption from any such registration or other
qualification of such share which the Company in its sole
discretion shall deem necessary or advisable. Such required
representations and undertakings may include representations and
agreements that such Optionee (or his legal representative, heir
or legatee): (a) is purchasing such shares for investment and
not with any present intention of selling or otherwise disposing
thereof; and (b) agrees to have placed upon the face and reverse
of any certificates evidencing such shares a legend setting forth
(i) any representations and undertakings which such Optionee has
given to the Company or a reference thereto, and (ii) that, prior
to effecting any sale or other disposition, Optionee will not
violate the applicable requirements of state and federal laws and
regulatory agencies.
Section 8. NONTRANSFERABILITY. No Option shall be
assignable or transferable except by will or by the laws of
descent and distribution. During the lifetime of an Optionee,
any Option granted to him shall be exercisable only by him.
After the death of an Optionee, the Option granted to him may be
exercised, prior to its termination, only by his legal
representative, his legatee or a person who acquired the right to
exercise the Option by reason of the death of the Optionee.
Section 9. RECAPITALIZATION, REORGANIZATION, MERGER OR
CONSOLIDATION. If the outstanding shares of Common Stock of the
Company are increased, decreased or exchanged for different
securities through reorganization, merger, consolidation,
recapitalization, reclassification, stock split, stock dividend
or like capital adjustment, a proportionate adjustment shall be
<PAGE>
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
Page 4 of 6
made: (a) in the aggregate number of shares of Common Stock
which may be purchased pursuant to the exercise of Options
granted under the Plan, as provided in Section 5, and (b) in the
number, price and kind of share subject to any outstanding Option
granted under the Plan.
Upon the dissolution or liquidation of the Company or upon
any reorganization, merger or consolidation in which the Company
does not survive, the Plan and each outstanding Option shall
terminate, provided that in such event: (a) each Optionee to
whom no Option has been tendered by the surviving corporation in
accordance with all of the terms of provision (b) immediately
below shall have the right until five (5) days before the
effective date of such dissolution, liquidation, reorganization,
merger or consolidation, in which the Company is not the
surviving corporation, to exercise, in whole or in part, any
unexpired Option or Options issued to him without regard to the
installment of Section 6 of the Plan or any option agreement; or
(b) in its sole and absolute discretion, the surviving
corporation may, but shall not be so obligated, tender to any
Optionee an Option or Options to purchase shares of the surviving
corporation, and such new Option or Options shall contain such
terms and provisions as shall be required substantially to
preserve the rights and benefits of any option then outstanding
under the Plan.
To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made by
the Board, whose determination in that respect shall be final,
binding and conclusive. Except as hereinbefore expressly
provided in this Section 9, the Optionee shall have no rights by
reason of any subdivision or consolidation of shares of stock of
any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any
class, and the number or price of shares of Common Stock subject
to any Option shall not be affected by, and no adjustment shall
be made by reason of, any dissolution, liquidation,
reorganization, merger or consolidation, or any issue by the
Company of shares of stock of any class, or rights to purchase or
subscribe for stock of any class, or securities convertible into
share of stock of any class.
The grant of an Option under the Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications or changes in its capital or business
structures or to merge, consolidate, dissolve, or liquidate or to
sell or transfer all or any part of its business or assets.
Section 10. SUBSTITUTE OPTIONS. If the Company at any
time should succeed to the Business of another corporation
<PAGE>
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
Page 5 of 6
through a merger or consolidation, or through the acquisition of
stock or assets of such corporation, Options may be granted under
the Plan to those directors of such corporation or its
subsidiaries who, in connection with such succession, become
employees of the Company or its subsidiaries, in substitution for
Options to purchase stock of such corporation held by them at the
time of the succession. The Option Committee shall in its sole
and absolute discretion determine the extent to which such
substitute Options shall be granted (if at all), the persons to
receive such substitute Options (who need not be all Optionees of
such corporation), the number of Options to be received by such
person, the Option Price of such Option and the terms and
conditions of such substitute; provided, however, that the Option
Price of each such substituted Option shall be an amount such
that, in the sole and absolute judgement of the Option Committee
and in compliance with Section 425(a) of the Code, the economic
benefit provided by such Option is not greater than the economic
benefit represented by the option in the acquired corporation as
of the date of the Company's acquisition of such corporation.
Any Option substituted for another option in accordance with this
Section 19 shall expire upon the earlier of the expiration date
of such other option or ten (10) years from the date such Option
is granted, and, notwithstanding, the provisions of Section 6
hereof will be exercisable during the period in which the other
option would have been exercisable. Any provision of this
Section 10 to the contrary notwithstanding, no Option shall be
granted, nor any action taken, permitted or omitted, which would
have the effect of causing the Plan, or any Option granted
hereunder as to which Rule 16b-3 under the Securities and
Exchange Act of 1934 may apply, not to comply with such Rule.
Section 11. OPTION AGREEMENT. Each Option granted under
the Plan shall be evidenced by a written stock option agreement
executed by the Company and accepted by the Optionee, which (a)
shall contain each of the provision and agreements herein
specifically required to be contained therein, including, without
limitation, in the case of Options granted prior to the approval
of the Plan by the shareholders of the Company as set forth in
Section 15, a provision specifically stating that such Option may
not be exercised unless and until such approval is obtained; (b)
shall contain such other terms and conditions as the Option
Committee may deem desirable and which are not inconsistent with
the Plan.
Section 12. RIGHTS AS SHAREHOLDER. Any Optionee or a
transferee of an Option shall have no rights as a shareholder
with respect to any shares covered by his Option until the date
of issuance of a stock certificate to him for such shares. No
adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
<PAGE>
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
Page 6 of 6
distributions or other rights for which the record date is prior
to the date such stock certificate is issued, except as expressly
provided in Section 6.
Section 13. TERMINATION OF OPTIONS. Each Option granted
under the Plan shall set forth a termination date thereof, which
date shall not be later than ten (10) years from the date such
Option is granted. In any event, all Options shall terminate and
expire upon the first to occur of the following events:
a) the expiration of three (3) months from the date an
Optionee is no longer serving as a director, except that if an
Optionee is then disabled (within the meaning of Section
105(d)(4) of the Code), the expiration of one (1) year from the
date such Optionee is no longer serving as a director;
b) The expiration of twelve (12) months from the date of
the death of an Optionee if his death occurs while he is a
director of the Company or any of its subsidiaries, or
c) the termination of the Option pursuant to Section 10 of
the Plan.
The termination of service as a director or an Optionee by
death or otherwise shall not accelerate or otherwise affect the
number of shares with respect to which an option may only be
exercised; provided, however, that an Option may only be
exercised with respect to that number of shares which could have
been purchased under the Option had the Option been exercised by
the Optionee on the date of such termination.
Section 14. WITHHOLDING OF TAXES. The Company shall
deduct and withhold from the wages, salary, bonus and other
compensation paid by the Company to the Optionee the requisite
tax upon the amount of taxable income, if any, recognized by the
Optionee in connection with the exercise in whole or in part of
any Option or the sale of Common Stock issued to the Optionee
upon exercise of the Option, all as may be required from time to
time under any federal or state tax laws and regulations. This
withholding of tax shall be made from the Company's concurrent or
next payment of wages, salary, bonus or other income to the
Optionee of the required withholding tax, as the Option Committee
may determine.
Section 15. EFFECTIVENESS AND TERMINATION OF PLAN. The
Plan shall be effective as of the date on which it is adopted by
the Board of Directors of the Company; provided, however, that no
Option shall be exercisable unless and until the Plan has been
approved by the affirmative vote of the holders of a majority of
that voting stock of the Company which is represented and is
<PAGE>
CUPERTINO NATIONAL BANCORP
1989 Non-Qualified Stock Option Plan
Page 7 of 6
entitled to vote at a duly held meeting of the Company's
shareholders; provided, further, that no Option may be granted
hereunder on or after that date which is ten (10) years from the
effective date of the Plan. The Plan shall terminate when all
Options granted hereunder either have been fully exercised, and
all share of Common Stock which may be purchased pursuant to the
exercise of such Options have been so purchased, or have expired;
provided, however, that the Board of Directors of the Company may
in its absolute discretion terminate the Plan at any time. No
such termination, other than as provided for in Section 9 hereof,
shall in any way affect any Option then outstanding.
Section 16. AMENDMENT OF PLAN. The Board may make such
amendments to the Plan, and, with the consent of each Optionee
affected, in the terms and conditions of granted Options, as it
shall deem advisable, including but not limited to, accelerating
the time at which an Option may be exercised, but may not,
without the written consent of approval of the holders of a
majority of that voting stock of the Company which is represented
and is entitled to vote at a duly held shareholders' meeting, (a)
increase the maximum number of shares subject to Options, except
pursuant to Section 9 of the Plan; (b) change the designation of
the class of persons eligible to receive Options; or (c) in any
manner materially increase the benefits accruing to participants
under the Plan, or otherwise modify the Plan such that it fails
to meet the requirements of Rule 16b-3 of the Securities and
Exchange Commission for the exemption of the acquisition,
cancellation, expiration or surrender of Options from the
operation of Section 16(b) of the Securities Exchange Act of
1934.
