<PAGE>
As filed with the Securities and Exchange Commission on April 23, 1998.
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMMERCE SECURITY BANCORP, INC.
(Exact name of issuer as specified in its charter)
Delaware 33-0720548
(State or other jurisdiction (I.R.S. employer identification no.)
of incorporation or organization) Commerce Security Bancorp, Inc.
24012 Calle de la Plata, Suite 150, Laguna Hills, CA 92653
(Address of principal executive offices)
1997 STOCK OPTION PLAN
(Full title of plan)
Robert P. Keller Copy to:
Commerce Security Bancorp, Inc. Michael K. Krebs, Esq.
24012 Calle de la Plata, Suite 150 Nutter, McClennen & Fish, LLP
Laguna Hills, CA 92653 One International Place
(714) 699-4344 Boston, Massachusetts 02110-2699
(Name, address and telephone (617) 439-2000
number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of each class of securities to Amount being offering price aggregate offering Amount of
be registered registered(1) per share(2) price registration fee
- ------------------------------------ ---------------- -------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Class B Common Stock, 1,018,600 Shares $5.841 $5,949,642.60
$.01 par value per share 438,600 Shares $4.626 $2,028,963.60
Total 1,457,200 Shares $5.475 $7,978,606.20 $2,353.69
</TABLE>
(1) This Registration Statement covers 1,457,200 shares of Class B Common Stock
subject to the 1997 Stock Option Plan (the "Plan"). In addition, this
Registration Statement also covers an indeterminate number of additional
shares of Class B Common Stock which may be issued under said Plan as a
result of a stock split, stock dividend or other similar transaction.
(2) Calculated pursuant to Rule 457(h) under the Securities Act of 1933 based
upon the average exercise price of options to purchase 1,018,600 shares of
Class B Common Stock and the book value per share of the Class B Common
Stock as of December 31, 1997 with respect to 438,600 shares of Class B
Common Stock.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Commerce Security Bancorp, Inc. (the "Company") hereby incorporates by
reference in this Registration Statement the following documents and information
heretofor filed with the Securities and Exchange Commission (the "Commission")
pursuant to Section 15(d) of the Exchange Act:
(a) The Company's Annual Report on Form 10-K, as amended, for the
fiscal year ended December 31, 1997; and
(b) The Company's Report on Form 8-K filed with the Commission on April
10, 1998.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of any post-effective amendment which
indicates that all securities offered hereunder 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 such documents. Any statement contained 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 any other subsequently filed document which also is 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.
Incorporated by reference to the Company's Current Report on Form 8-K
dated March 10, 1998.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Class B Common Stock offered hereunder
has been passed upon by Nutter, McClennen & Fish, LLP. Michael K. Krebs, a
partner of Nutter, McClennen & Fish, LLP, is Secretary of Commerce Security
Bancorp, Inc.
Item 6. Indemnification of Directors and Officers.
The Company is a Delaware corporation. Reference is made to Section 145
of the Delaware General Corporation Law, as amended, which provides that a
corporation may indemnify any person who was or is a party to or is threatened
to be made a party to any
2
<PAGE>
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful. Section 145 further
provides that a corporation similarly may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Delaware Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite an adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
The Company's Certificate of Incorporation provides that the Company's
directors shall not be liable to the Company or its stockholders for monetary
damages for any breach of fiduciary duty as a director, except to the extent
that exculpation from liability is not permitted under the Delaware General
Corporation Law. The provision does not eliminate liability of a director for
any act or omission occurring prior to the date on which the provision became
effective.
The Company maintains an indemnification insurance policy covering all
directors and officers of the Company and its subsidiaries.
Item 7. Exemption from Registration.
Not Applicable
Item 8. Exhibits.
See the Exhibit Index immediately preceding the exhibits attached
hereto.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
3
<PAGE>
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) 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; and
(iii) 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 (a)(1)(i) and (a)(1)(ii) 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 with or furnished to the Commission 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 a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) 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(a) 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.
(c) 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 provisions of the Delaware General Corporation
Law and the registrant's certificate of incorporation and by-laws, 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 by a director, officer or a 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
4
<PAGE>
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.
5
<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 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 Laguna Hills, State of California, on the 15th
day of April, 1998.
COMMERCE SECURITY BANCORP, INC.
By: /s/ Robert P. Keller
-------------------------------------
Robert P. Keller
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below on this Registration Statement hereby constitutes and appoints
Robert P. Keller, Curt A. Christianssen and Michael K. Krebs, and each of them,
with full power to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments (including
post-effective amendments and amendments thereto) to this Registration Statement
on Form S-8 of the registrant, and to file the same, with all 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 fully to all intents and purposes as he or she might or
could do in person thereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitute or substitutes,
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 and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert P. Keller President, Chief Executive April 15, 1998
---------------------- Officer and Director
Robert P. Keller
/s/ Curt A. Christianssen Senior Vice President, April 15, 1998
---------------------- Treasurer and Chief
Curt A. Christianssen Financial Officer
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director
---------------------
Ernest J. Boch
/s/ James A. Conroy Director April 15, 1998
---------------------
James A. Conroy
/s/ Edward A. Fox Director April 15, 1998
-------------------
Edward A. Fox
Director
---------------------
Charles E. Hugel
Director
---------------------
Mitchell A. Johnson
/s/ K. Thomas Kemp Director April 15, 1998
--------------------
K. Thomas Kemp
/s/ Jefferson W. Kirby Director April 15, 1998
------------------------
Jefferson W. Kirby
/s/ John B. Pettway Director April 15, 1998
---------------------
John B. Pettway
/s/ Henry T. Wilson Director April 15, 1998
---------------------
Henry T. Wilson
Director
---------------------
Paul R. Wood
</TABLE>
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Title
- ----------- -----
<S> <C>
Exhibit 4.1 1997 Stock Option Plan
Exhibit 5.1 Opinion of Nutter, McClennen & Fish, LLP
Exhibit 23.1 Consent of Nutter, McClennen & Fish, LLP (contained in Exhibit 5.1)
Exhibit 23.2 Consent of Price Waterhouse LLP
Exhibit 24 Power of Attorney (contained in Part II of the Registration Statement)
</TABLE>
8
<PAGE>
Exhibit 4.1
COMMERCE SECURITY BANCORP, INC.
1997 STOCK OPTION PLAN
(as amended and restated)
Section 1. Purpose and Duration
1.1 Purposes. The purposes of the Commerce Security Bancorp, Inc. 1997
Stock Option Plan (the "Plan") are to attract, retain and motivate employees and
consultants of the Company, its Parent (if any), and any present or future
Subsidiaries and to enable them to participate in the growth of the Company by
providing for or increasing the proprietary interests of such persons in the
Company. All Options granted under the Plan shall be Nonqualified Stock Options.
1.2 Effective Date. The Plan is effective as of February 4, 1997,
subject to approval. Prior to such stockholder approval, the Committee may grant
Options conditioned on stockholder approval. If such stockholder approval is not
obtained at or before the first annual meeting of stockholders to occur after
the adoption of the Plan by the Board but in any event within twelve months
after adoption by the Board, the Plan and any Options granted thereunder shall
be null and void.
1.3 Expiration Date. The Plan shall expire one day less than ten years
from the date of the adoption of the Plan by the Board. In no event shall any
Options be granted under the Plan after the expiration of the Plan.
Section 2. Definitions
As used in the Plan, the following capitalized words shall have the
meanings indicated below:
"1934 Act" means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended. Reference
to a specific section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.
<PAGE>
"Committee" means the Compensation Committee appointed by the Board to
administer the Plan in accordance with Section 3.1.
"Common Stock" means, unless otherwise specified, all classes of
Company common stock.
"Common Stock Equivalent" means a security of the Company convertible
into or exchangeable for shares of Common Stock and defined as a common stock
equivalent for purposes of GAAP, excluding Options issued under this Plan.
"Company" means Commerce Security Bancorp, Inc., a Delaware
corporation, or a successor corporation.
"Director" means any individual who is a member of the Board.
"Fair Market Value" means, with respect to a Share, the fair market
value thereof as of the relevant date of determination determined in accordance
with a valuation methodology approved by the Committee in good faith, but in no
event less than the book value per Share.
"GAAP" means Generally Accepted Accounting Principles as in effect in
the United States, consistently applied.
"Grant Date" means the effective date of an Option as specified by the
Committee and set forth in the applicable Option Agreement.
"Nonqualified Stock Option" means an Option which is not intended to
meet the requirements for incentive stock options pursuant to Section 422 of the
Code.
"Option" means, individually or collectively, an option to purchase
Shares awarded to a participant under Section 6 of the Plan.
"Option Agreement" means the written agreement setting forth the terms
and provisions applicable to each grant of Options under the Plan.
"Parent" means a "parent corporation" as that term is defined in
Section 424 of the Code.
"Participant" means an individual selected by the Committee to receive
an Option under the Plan.
"Person" means a person as defined in Section 3(a)(9) of the 1934 Act,
which definition shall include a "person" within the meaning of Section 13(d)(3)
of the 1934 Act.
"Plan" means the 1997 Stock Option Plan set forth in this document, as
hereafter amended from time to time in accordance with Section 8.
2
<PAGE>
"Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, as
amended, and any future regulation amending, supplementing or superseding such
regulation.
"Section 16 Individual" means a person who, with respect to Shares, is
subject to Section 16 of the 1934 Act.
"Shares" means, as of the adoption of the Plan by the Board, the shares
of the Company common stock, par value $.01 per share and, upon the filing of
the Amended and Restated Certificate of Incorporation contemplated by that
certain Securities Purchase Agreement, dated February 13, 1997, among the
Company and the other parties named therein, the shares of Company Class B
Common Stock, par value $.01 per share.
"Subsidiary" means a "subsidiary corporation" as that term is defined
in Section 424 of the Code.
"Tier 1 Capital" means Tier 1 Capital as defined in Appendix A of
Section 225 of Regulation Y promulgated by the Board of Governors of the Federal
Reserve System (12 C.F.R. ss.225, Appendix A), and any comparable provision of
any future legislation or regulation amending, supplementing or superseding such
definition.
Section 3. Administration of the Plan
3.1 The Committee. The Plan shall be administered by the Committee,
which shall consist of no fewer than two Directors, who shall be appointed and
serve at the pleasure of the Board. The Committee shall be comprised solely of
Directors who are "non-employee directors" under Rule 16b-3 and who are "outside
directors" under Section 162(m) of the Code.
3.2 Authority of the Committee. The Committee shall have the authority
to adopt, alter and repeal such administrative rules, guidelines and practices
governing the operation of the Plan as it shall from time to time consider
advisable, to interpret the provisions of the Plan and any Option Agreement, and
to decide all disputes arising in connection with the Plan. The Committee's
decisions and interpretations shall be final and binding.
Section 4. Eligibility
4.1 Employees. All directors, employees and consultants of the Company,
its Parent (if any), and any present and future Subsidiaries shall be eligible
to be Participants in the Plan.
3
<PAGE>
Section 5. Stock Available for Options
5.1 Number of Shares. (a) The maximum number of Shares as to which
Options may be granted is referred to as the "Option Pool." As of December 31,
1997, the Option Pool shall be equal to 1,457,200 Shares, which is approximately
equal to six percent (6.0%) of the sum of (i) the shares of Common Stock issued
and outstanding as of December 31, 1997 and (ii) the number of Shares in the
Option Pool as of that date.
(b) After the adoption of this Plan by the Board and until such time as
the Company has Tier 1 Capital of $125.0 million or more, if the Company issues
any additional Common Stock or Common Stock Equivalents, the number of Shares in
the Option Pool shall increase, automatically and without any further action by
the Committee, the Board or the shareholders of the Company, such that the
number of Shares in the Option Pool shall be equal to six percent (6.0%) of the
sum of (i) the shares of Common Stock (and common stock equivalents) issued and
outstanding immediately following such issuance and (ii) the number of Shares in
the Option Pool, as increased pursuant to this subsection (b).
(c) Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
5.2 Lapsed, Forfeited or Expired Options. If any Option expires or is
terminated before exercise or is forfeited for any reason, the Shares subject to
such Option, to the extent of such expiration, termination or forfeiture, shall
again be available for award under the Plan.
5.3 Maximum Number of Shares to a Single Participant in any 12-month
Period. In no event shall any Participant receive in any 12-month period Options
under the Plan for more than one-half of the greatest number of Shares in the
Option Pool during such 12-month period.
Section 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
the Committee may award Options and determine the number of Shares to be covered
by each Option, the exercise price therefor and any other conditions and
limitations applicable to the exercise of the Option; provided, however, that
unless the Committee otherwise determines, (i) the term of the Option shall be
six years and (ii) the Shares that are the subject of the Option shall vest as
follows:
4
<PAGE>
<TABLE>
<CAPTION>
Months Cumulative
from Grant Percentage Vested
---------- -----------------
<S> <C>
6 0.0%
12 0.0%
18 16.7%
24 33.3%
30 50.0%
36 66.7%
42 83.3%
48 100.0%
</TABLE>
6.2 Exercise Price. The exercise price for each Option shall be
determined by the Committee in its sole discretion.
6.3 Restrictions on Option Transferability and Exercisability. Unless
the Committee otherwise provides, no Option shall be transferable by the
Participant other than by will or the laws of descent and distribution, and all
Options shall be exercisable, during the Participant's lifetime, only by the
Participant.
Section 7. General Provisions Applicable to Awards
7.1 Investment Representations. Each Option shall be conditioned on the
Participant making any representations required in the applicable Option
Agreement. Each Option shall also be conditioned upon the making of any filings
and the receipt of any authorizations required to comply with, or required to be
obtained under, applicable law.
7.2 Written Option Agreement. The terms and provisions of an Option
shall be set forth in a written Option Agreement approved by the Committee and
delivered or made available to the Participant as soon as practicable following
the Grant Date. Each Option Agreement shall specify that the Option is a
Nonqualified Stock Option.
7.3 Determination of Restrictions on the Award. Unless the Plan
otherwise provides, the vesting, exercisability, payment and other restrictions
applicable to an Option (which may include, without limitation, restrictions on
transferability or provision for mandatory resale to the Company) shall be
determined by the Committee and set forth in the applicable Option Agreement.
Notwithstanding the foregoing, the Committee may accelerate (i) the vesting of
any Option or (ii) the date on which any Option first becomes exercisable.
7.4 Change in Control. (a) Unless the Committee otherwise determines,
if (i) there is a Change in Control (as hereinafter defined) of the Company and
(ii) within two (2) years following such Change in Control, a Participant's
employment by the Company is terminated
5
<PAGE>
without cause, then the portion of any outstanding Options held by such
Participant which was unvested at the date of termination shall vest
immediately, and the Options shall be exercisable by such Participant in
accordance with the terms of the Plan and the Option Agreements representing
such Options for a period of one (1) year following cessation of employment, but
in no event after the expiration of the term of such Options.
(b) For the purposes of the Plan, a Change in Control shall be deemed
to have occurred if:
(i) the Company consummates a reorganization, merger or
consolidation of the Company, or sale or other disposition of all or
substantially all of the assets of the Company (each a "Business
Combination"), in each case unless immediately following the
consummation of such Business Combination all of the following
conditions are satisfied: (x) Persons, who, immediately prior to such
Business Combination, were the beneficial owners of the voting
securities entitled to vote generally in the election of directors of
the Company (the "Outstanding Voting Securities"), beneficially own
(within the meaning of Rule 13d-3 promulgated under the 1934 Act),
directly or indirectly, more than one-third (1/3) of, respectively, the
then outstanding shares of common stock and the combined voting power
of the then Outstanding Voting Securities entitled to vote generally in
the election of directors, as the case may be, of the entity (the
"Resulting Entity") resulting from such Business Combination
(including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries);
(y) no Person (other than any limited partner of Dartmouth Capital
Group, L.P. or shareholder of Dartmouth Capital Group, Inc., any
employee benefit plan (or related trust) of the Company or the
Resulting Entity) beneficially owns (within the meaning of Rule 13d-3),
directly or indirectly, more than twenty percent (20.0%) of,
respectively, the then outstanding shares of common stock of the
Resulting Entity or the combined voting power of the then Outstanding
Voting Securities of the Resulting Entity, except to the extent that
such Person's beneficial ownership of the Company immediately prior to
the Business Combination exceeded such threshold; and (z) at least
one-half (1/2) of the members of the board of directors of the
Resulting Entity were members of the Board of Directors of the Company
at the time the Company's Board of Directors authorized the Company to
enter into the definitive agreement providing for such Business
Combination; or
(ii) any Person (other than a limited partner of Dartmouth
Capital Group, L.P. or a shareholder of Dartmouth Capital Group, Inc.)
acquires beneficial ownership (within the meaning of Rule 13d-3) of
more than twenty percent (20.0%) of the combined voting power
(calculated as provided in Rule 13d-3 in the case of rights to acquire
securities) of the then Outstanding Voting Securities of the Company;
provided, however, that for purposes of this clause, the following
acquisitions shall not constitute a Change in Control: (x) any
acquisition directly from the Company, (y) any acquisition by the
6
<PAGE>
Company and (z) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any entity
controlled by the Company; or
(iii) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company.
(c) Notwithstanding any other provision of this Plan to the contrary,
no Option shall become exercisable for any Shares as a result of the application
of this Section 7.4, if for purposes of Section 280G of the Code and any
temporary or final regulations promulgated thereunder, such a change in the
vesting or cancellation provisions of the Option would result in the holder of
the Option being deemed to receive, in the reasonable opinion of the Company's
tax advisor, compensation constituting a "parachute payment" (as defined in
Section 280G(b)(2) of the Code), which under the Code would not be deductible by
the Company as an expense. The Committee, in its reasonable discretion, may
modify the application of this Section 7.4 by reducing or eliminating the number
of shares of Common Stock for which the Option would become exercisable as a
result of this Section 7.4 or by deferring the acceleration of the vesting of
such Option, in order to maximize consistent with the immediately preceding
sentence, the number of Shares for which the Option will be exercisable
following a Change of Control without giving rise to a parachute payment.
7.5 Termination of Employment.
7.5.1 Definitions. For purposes of the Plan and the Options
granted hereunder, the following events shall not be deemed a termination of
employment of a Participant: (i) a transfer to the employment of the Company
from the Company's Parent (if any) or from a Subsidiary, or from the Company to
a Parent (if any) or to a Subsidiary, or from one Subsidiary to another; or (ii)
an approved leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the Participant's right to employment is
guaranteed either by a statute or by contract or under the policy pursuant to
which the leave of absence was granted or if the Committee otherwise so provides
in writing. For purposes of the Plan, the following events shall be deemed a
termination of employment of a Participant without cause: (x) if the Company
informs the Participant that it intends to change the nature or scope of the
Participants responsibilities, title, authority, powers, functions or duties in
a manner that from the Participant's perspective would represent a material
adverse change from the responsibilities, title, authority, powers, functions or
duties of the Participant immediately prior to the change or (y) if the Company
involuntarily relocates the office of the Participant to any place outside a
twenty-five (25) mile radius of the office in which the Participant works at the
time the Option is granted.
7.5.2 Date of Termination of Employment. The date of a
Participant's termination of employment for any reason shall be determined in
the sole discretion of the Committee, provided that, for purposes of the Plan,
the employment of employees of a Subsidiary or Parent (if any) shall be deemed
to be terminated on the date on which such
7
<PAGE>
Subsidiary or Parent ceases to be a Subsidiary or Parent of the Company, as the
case may be.
7.5.3 Effect of Termination of Employment. Subject to the
terms of Section 7.4 hereof, the Committee shall have full authority to
determine and specify in the applicable Option Agreement the effect, if any,
that a Participant's termination of employment for any reason will have on the
vesting, exercisability, payment or lapse of restrictions applicable to an
outstanding Option, provided, however, that unless the Committee otherwise
determines, a Participant shall be able to exercise an Option for a period of
not less than ninety (90) days following the termination of the Participant's
employment by the Company or a Subsidiary or Parent of the Company.
7.6 Grant of Options. Each Option grant may be made alone, in addition
to or in relation to any other grant. The terms of each Option grant need not be
identical, and the Committee need not treat Participants uniformly.
7.7 Settlement of Options. No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the price therefor, if any, is
received by the Company. Such payment may be made in whole or in part in cash or
by certified or bank check or, to the extent permitted by the Committee at or
after the Grant Date, by delivery of a note or Shares valued at their Fair
Market Value on the date of delivery, or such other lawful consideration as the
Committee shall determine.
7.8 Withholding Requirements and Arrangements. The Participant shall
pay to the Company or make provision satisfactory to the Committee for payment
of any taxes required by law to be withheld in respect of Options granted under
the Plan no later than the date of the event creating the tax liability. In the
Committee's discretion, such tax obligations may be paid in whole or in part in
Shares, including Shares retained from the Option exercise creating the tax
obligation, valued at their Fair Market Value on the date of delivery. The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to the Participant.
7.9 Securities Law Restrictions on Awards to Section 16 Persons.
Notwithstanding any other provision of the Plan, but subject always to Section
6.3, to the extent required to qualify for the exemption provided by Rule 16b-3
under the 1934 Act, (i) any Shares or other equity security offered under the
Plan to a Section 16 Individual may not be sold for at least six (6) months
after acquisition and (ii) any Option or other right related to an equity
security issued under the Plan to a Section 16 Individual shall not be
transferable other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder, shall
not be exercisable for at least six (6) months, and shall be exercisable during
the Participant's lifetime only by the Participant or the Participant's guardian
or legal representative.
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7.10 No Effect on Employment. The Plan shall not give rise to any right
on the part of any Participant to continue in the employ of the Company, its
Parent (if any) or any Subsidiary.
7.11 No Rights as Shareholder. Subject to the provisions of the Plan and
the applicable Option Agreement, no Participant shall have any rights as a
shareholder with respect to any Shares to be distributed under the Plan until he
or she becomes the holder thereof.
7.12 Adjustments. Upon the happening of any of the following described
events, a Participant's rights with respect to Options granted hereunder shall
be adjusted as hereinafter provided, unless otherwise specifically provided in
the Option Agreement between the Participant and the Company.
7.12.1 Recapitalizations. In the event Shares shall be
subdivided or combined into a greater or smaller number of Shares or if, upon a
merger, consolidation, reorganization, split-up, liquidation, combination,
recapitalization or the like of the Company, Shares shall be exchanged for other
securities of the Company or of another corporation, each Participant shall be
entitled, subject to the conditions herein stated, to purchase such number of
Shares or amount of other securities of the Company or such other corporation as
were exchangeable for the number of Shares that such Participant would have been
entitled to purchase except for such action, and appropriate adjustments shall
be made in the purchase price per Share to reflect such subdivision,
combination, or exchange.
7.12.2 Stock Dividends. In the event the Company shall issue
any of its shares as a stock dividend upon or with respect to the Shares at the
time subject to Option hereunder, each Participant upon exercising an Option
shall be entitled to receive (for the purchase price paid upon such exercise)
the Shares as to which he is exercising his Option and, in addition thereto (at
no additional cost), such number of shares of the class or classes in which such
stock dividend or dividends were declared or paid, and such amount of cash in
lieu of fractional shares, as he would have received if he had been the holder
of the Shares as to which he is exercising his Option at all times between the
date of grant of such Option and the date of its exercise.
7.12.3 Fractional Shares. No fractional Shares shall actually
be issued under the Plan. Any fractional Shares which, but for this Section,
would have been issued shall be deemed to have been issued and immediately sold
to the Company for their Fair Market Value, and the Participant shall receive
from the Company cash in lieu of such fractional Shares.
7.12.4 Further Adjustment. Upon the happening of any of the
events described in Sections 7.12.1 or 7.12.2, the class and aggregate number of
shares set forth in Sections 5.1 and 5.3 hereof that are subject to awards which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the
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events described in such Sections 7.12.1 or 7.12.2. The Committee shall
determine the specific adjustments to be made under Sections 7.12.1 and 7.12.2.
Section 8. Amendment and Termination
8.1 Amendment, Suspension, Termination of the Plan. The Board or the
Committee may modify, amend, suspend or terminate the Plan in whole or in part
at any time; provided, however, that no modification, amendment, termination or
suspension of the Plan shall be made without shareholder approval if such
approval is necessary to comply with any applicable tax or regulatory
requirement, including, without limitation, any requirement for exemptive relief
under Section 16(b) of the 1934 Act; provided, further, that such modification,
amendment, or termination shall not, without a Participant's consent, affect
adversely the rights of such Participant with respect to any Option grant
previously made.
8.2 Amendment, Suspension, Termination of an Option. The Committee may
modify, amend, or terminate any outstanding Option, including, without
limitation, substituting therefor another Option or changing the date of
exercise or vesting; provided, however, that the Participant's consent to such
action shall be required unless the Committee reasonably determines that the
action, taking into account any related action, would not adversely affect the
Participant.
Section 9. Legal Construction
9.1 Captions. The captions provided herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan or serve as a basis for interpretation or construction of
the Plan.
9.2 Severability. In the event any provision of the Plan shall be held
invalid or illegal for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
9.3 Governing Law. The Plan and all rights hereunder shall be construed
in accordance with and governed by the internal laws of the State of Delaware.
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Exhibit 5.1
[NUTTER, McCLENNEN & FISH LETTERHEAD]
April 15, 1998
Commerce Security Bancorp, Inc.
24012 Calle de la Plata, Suite 150
Laguna Hills, CA 92653
Gentlemen/Ladies:
Reference is made to the registration statement on Form S-8 (the
"Registration Statement") which Commerce Security Bancorp, Inc. (the "Company")
is filing concurrently herewith with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to (i) an aggregate of 1,457,200 shares of the Company's Class B Common
Stock, $0.01 par value (the "Class B Common Stock"), issuable pursuant to the
Company's 1997 Stock Option Plan (the "1997 Plan"), and (ii) an indeterminate
number of shares of such Class B Common Stock which may be issued or become
issuable under the 1997 Plan, by reason of stock dividends, stock splits or
other recapitalizations executed hereafter (collectively, the "Option Shares").
We acted as legal counsel for the Company in connection with the
adoption of the 1997 Plan, are familiar with the Company's Certificate of
Incorporation, as amended and restated to date, and By-Laws, and have examined
such other documents as we deemed necessary for this opinion.
Based upon the foregoing, we are of the opinion that:
1. When issued and paid for in compliance with the terms of the
1997 Plan, the 1,457,200 Option shares will be duly and validly issued, fully
paid and non-assessable; and
2. The additional Option shares which may become issuable by
reason of stock dividends, stock splits or other recapitalizations hereafter
executed, if and when issued in accordance with the terms of the 1997 Plan and
upon compliance with the applicable provisions of law and of the Company's
Certificate of Incorporation, as amended and restated to date, and By-Laws, will
be duly and validly issued, fully paid and non-assessable.
We understand that this opinion letter is to be used in
connection with the Registration Statement and hereby consent to the filing of
this opinion letter with and as a part of the Registration Statement and of any
amendments thereto. It is understood that this opinion letter is to be used in
connection with the offer and sale of the aforesaid shares only while the
Registration Statement, as it may be amended from time to time as contemplated
by Section 10(a)(3) of the Securities Act, is effective under the Securities
Act.
Very truly yours,
/s/ Nutter, McClennen & Fish, LLP
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Nutter, McClennen & Fish, LLP
<PAGE>
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated March 27, 1998 appearing on page
F-1 of Commerce Security Bancorp, Inc. and its subsidiaries Annual Report on
Form 10-K for the year ended December 31, 1997. However, it should be noted
that Price Waterhouse LLP has not prepared or certified such ""Selected
Financial Data.''
/s/ Price Waterhouse LLP
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PRICE WATERHOUSE LLP
Los Angeles, California
April 23, 1998
