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EXHIBIT 99.1
ORANGE NATIONAL BANCORP
1997 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Orange National Bancorp 1997 Stock Option Plan (the
"Plan") is to strengthen Orange National Bancorp (the "Bancorp") and those
corporations which are or hereafter become subsidiary corporations of the
Bancorp by providing an additional means of attracting and retaining competent
directors, officers and management level employees and by providing to
participating directors, officers and management level employees added incentive
for high levels of performance. The Plan seeks to accomplish these purposes and
achieve these results by providing a means whereby such directors, officers and
management level employees may purchase shares of the common stock of the
Bancorp pursuant to options granted in accordance with the Plan.
Options granted pursuant to the Plan are intended to be either
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or
"nonqualified stock options", as shall be determined and designated upon the
grant of each option hereunder.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors (the "Board").
Any action of the Board with respect to the administration of the Plan shall be
taken pursuant to a majority vote, or the unanimous written consent, of its
members. Subject to the express provisions of the Plan, the Board shall have the
authority to construe and interpret the Plan, define the terms used herein,
prescribe, amend and rescind, the rules and regulations relating to
administration of the Plan, and make all other determinations necessary or
advisable for administration of the Plan.
All decisions, determinations, interpretations or other actions by the
Board shall be final, conclusive and binding on all persons, optionees,
grantees, subsidiary corporations of the Bancorp and any successors-in-interest
to such parties.
3. INCENTIVE STOCK OPTIONS
All options granted which are designated at the time of grant as an
"incentive stock option" shall be deemed an incentive stock option.
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(a) Incentive stock options granted under the Plan are intended to be
qualified under Section 422 of the Code.
(b) Full-time salaried officers and management level employees of the
Bancorp or a subsidiary corporation (as that term is defined in Section 424(f)
of the Code), shall be eligible for selection to participate in the incentive
stock option portion of the Plan. No director of the Bancorp who is not also a
full-time salaried officer or employee of the Bancorp or a subsidiary
corporation, may be granted an incentive stock option hereunder. Subject to the
express provisions of the Plan, the Board shall (i) select from the eligible
class of employees and determine to whom incentive stock options shall be
granted, (ii) determine the discretionary terms and provisions of the respective
incentive stock option agreements (which need not be identical), (iii) determine
the times at which such incentive stock options shall be granted, (iv) determine
the number of shares subject to each incentive stock option, and (v) grant such
incentive stock options to such individuals. An individual who has been granted
an incentive stock option may, if he or she is otherwise eligible under the
Plan, be granted additional incentive stock options if the Board shall so
determine.
(c) Except as described in subsection (e) below, the Board shall not
grant an incentive stock option to purchase shares of the Bancorp's common stock
to any individual who, at the time of the grant, owns stock possessing more than
10% of the total combined voting power or value of all classes of stock of the
Bancorp or a subsidiary corporation. The attribution rules of Section 424(d) of
the Code shall apply in the determination of ownership of stock for these
purposes.
(d) The aggregate fair market value (determined as of the time the
incentive stock option is granted) of stock with respect to which incentive
stock options are exercisable for the first time by an individual during any
calendar year (under all plans of the Bancorp and its subsidiary corporations,
if any) shall not exceed $100,000, plus any greater amount as may be permitted
under subsequent amendments to the Code.
(e) The purchase price of stock subject to each incentive stock option
shall be determined by the Board but shall not be less than one hundred percent
(100%) of the fair market value of such stock at the time such option is
granted, except, in the case of optionees who at the time of the grant own more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Bancorp or a subsidiary corporation, in which case the purchase
price of the stock shall not be less than one hundred ten percent (110%) of the
fair market value of such stock at the time such option is granted and the term
of such option shall be for no more than five (5) years. The fair market value
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of such stock shall be determined in accordance with any reasonable valuation
method, including the valuation methods described in Treasury Regulation Section
20.2031-2.
4. NONQUALIFIED STOCK OPTIONS
(a) All options granted which are (i) in excess of the aggregate fair
market value limitations set forth in Section 3(d) hereof, (ii) designated at
the time of the grant as "nonqualified", or (iii) intended to be incentive stock
options but do not meet the requirements of incentive stock options, shall be
deemed nonqualified stock options. Nonqualified stock options granted hereunder
shall be so designated in the nonqualified stock option agreement entered into
between the Bancorp and the optionee.
(b) Directors, full-time salaried officers and management level
employees of the Bancorp or a subsidiary corporation shall be eligible for
selection to participate in the nonqualified stock option portion of the Plan.
Subject to the express provisions of the Plan, the Board shall (i) select from
the eligible class of individuals and determine to whom nonqualified stock
options shall be granted, (ii) determine the discretionary terms and provisions
of the respective nonqualified stock option agreements (which need not be
identical), (iii) determine the times at which such nonqualified stock options
shall be granted, (iv) determine the number of shares subject to each
nonqualified stock option and (v) grant such nonqualified stock options to such
individuals. An individual who has been granted a nonqualified stock option may,
if he or she is otherwise eligible under the Plan, be granted additional
nonqualified stock options if the Board shall so determine.
(c) The purchase price of stock subject to each nonqualified stock
option shall be determined by the Board but shall not be less than one hundred
percent (100%) of the fair market value of such stock at the time such option is
granted. The fair market value of such stock shall be determined in accordance
with any reasonable valuation method, including the valuation methods described
in Treasury Regulation 20.2031-2.
5. STOCK SUBJECT TO THE PLAN
Subject to adjustments as provided in Section 12, hereof, the stock to
be offered under the Plan shall be shares of the Bancorp's authorized but
unissued common stock (hereinafter called "stock") and the aggregate amount of
stock to be delivered upon exercise of all options granted under the Plan shall
not exceed 414,250 shares. If any option shall be canceled, surrendered or
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expire for any reason without having been exercised in full, the underlying
shares subject thereto shall again be available for purposes of the Plan.
6. CONTINUATION OF EMPLOYMENT
Nothing contained in the Plan (or in any option agreement) shall
obligate the Bancorp or a subsidiary corporation to employ any optionee for any
period or interfere in any way with the right of the Bancorp or a subsidiary
corporation to reduce the optionee's compensation. However, the Bancorp may not
reduce the terms of any option without the approval of the optionee.
7. EXERCISE OF OPTIONS
No option shall be exercisable until all necessary regulatory and
shareholder approvals of the Plan are obtained. Except as otherwise provided in
this section, each option shall be exercisable in such installments, which need
not be equal, and upon such contingencies as the Board shall determine;
provided, however, that if an optionee shall not in any given installment period
purchase all of the shares which the optionee is entitled to purchase in such
installment period, the optionee's right to purchase any shares not purchased in
such installment period shall continue until expiration or termination of such
option. Notwithstanding the foregoing, the options shall vest at the rate of at
least 20% per year over a five year period from the date the option is granted.
Fractional share interests shall be disregarded, except that they may
be accumulated. Not less than ten (10) shares may be purchased at any one time
unless the number of shares purchased is the total number of shares which is
exercisable at such time. Options may be exercised by written notice delivered
to the Bancorp stating the number of shares with respect to which the option is
being exercised, together with the full purchase price for such shares. Payment
of the option price in full, for the number of shares to be delivered, must be
made (a) in cash or (b) subject to applicable law, with the Bancorp's stock
previously acquired by the optionee and held by the optionee for a period of at
least six months. Notwithstanding the foregoing, in the event an optionee who
has an incentive stock option does exercise the incentive stock option by
utilizing (b) above, the optionee should obtain tax advice as to the
consequences of such action. The equivalent dollar value of shares used to
effect a purchase shall be the fair market value of the shares on the date of
exercise. If the option is being exercised by any person other than the
optionee, said notice shall be accompanied by proof, satisfactory to counsel for
the Bancorp, of the right of such person to exercise the option. Optionees will
have no rights as shareholders with respect to stock of the
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Bancorp subject to their stock option agreements until the date of issuance of
the stock certificate to them.
8. NONTRANSFERABILITY OF OPTIONS
Each option shall, by its terms, be nontransferable by the optionee
other than by will or the laws of descent and distribution, and shall be
exercisable during his or her lifetime only by the optionee.
9. CESSATION OF DIRECTORSHIP OR EMPLOYMENT
Except as provided in Sections 10 and 20 hereof, if an optionee ceases
to be a director or an employee of the Bancorp or a subsidiary corporation for
any reason other than his or her disability (as defined in Section 22(e)(3) of
the Code) or death, the optionee's option shall expire three (3) months after
the date of termination of such directorship or employment. During the period
after cessation of directorship or employment, such option shall be exercisable
only as to those installments, if any, which have accrued and/or vested as of
the date on which the optionee ceased to be a director or an employee of the
Bancorp or a subsidiary corporation. If an optionee is both a director and an
employee, then unless otherwise provided for in the optionee's option grant or
option agreement, such option shall expire three (3) months after the latter of
the date of termination of the optionee's directorship or employment.
10. TERMINATION OF EMPLOYMENT FOR CAUSE
If the stock option agreement so provides and if an optionee's
employment by the Bancorp or a subsidiary corporation is terminated for cause,
the optionee's option shall expire thirty (30) days from the date of such
termination. Termination for cause shall include, but not be limited to,
termination for malfeasance or gross misfeasance in the performance of duties or
conviction of a crime involving moral turpitude, and, in any event, the
determination of the Board with respect thereto shall be final and conclusive.
11. DISABILITY OR DEATH OF OPTIONEE
If any optionee dies while serving as a director or an employee of the
Bancorp or a subsidiary corporation, the option shall expire one (1) year after
the date of such death, except as provided in Section 20 hereof. After such
death but before such expiration, the persons to whom the optionee's
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rights under the option shall have passed by will or by the laws of descent and
distribution or the executor or administrator of optionee's estate shall have
the right to exercise such option to the extent that installments, if any, had
accrued and/or vested as of the date on which the optionee ceased to be a
director or an employee of the Bancorp or a subsidiary corporation.
If the optionee shall terminate his or her directorship or employment
because of disability (as defined in Section 22(e)(3) of the Code), the optionee
may exercise this option to the extent he or she is entitled to do so at the
date of termination, at any time within one (1) year of the date of termination,
except as provided in Section 20 hereof.
If any optionee dies during the three (3) month period referred to in
Section 9 hereof, the option shall expire one (1) year after the date of such
death, except as provided in Section 20 hereof.
12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of the stock of the Bancorp are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Bancorp through reorganization, merger, recapitalization,
reclassification, stock split, stock dividend, stock consolidation or otherwise,
without consideration to the Bancorp, an appropriate and proportionate
adjustment shall be made in the number and kind of shares as to which options
may be granted. A corresponding adjustment changing the number or kind of shares
and the exercise price per share allocated to unexercised options or portions
thereof, which shall have been granted prior to any such change shall likewise
be made. Any such adjustment, however, in an outstanding option shall be made
without change in the total price applicable to the unexercised portion of the
option, but with a corresponding adjustment in the price for each share subject
to the option. Any adjustment under this Section 12 shall be made by the Board,
whose determination as to what adjustments shall be made, and the extent
thereof, shall be final and conclusive. No fractional shares of stock shall be
issued or made available under the Plan on account of any such adjustment, and
fractional share-interests shall be disregarded, except that they may be
accumulated.
13. TERMINATING EVENTS
A Terminating Event shall be defined as any one of the following
events: (i) a dissolution or liquidation of the Bancorp; (ii) a reorganization,
merger or consolidation of the Bancorp with one or more corporations, the result
of which (A) the Bancorp is not the surviving corporation, or (B) the Bancorp
becomes a subsidiary of another corporation (which shall be deemed to have
occurred
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if another corporation shall own directly or indirectly, over 80% of the
aggregate voting power of all outstanding equity securities of the Bancorp);
(iii) a sale of substantially all the assets of the Bancorp to another
corporation; or (iv) a sale of the equity securities of the Bancorp representing
more than 80% of the aggregate voting power of all outstanding equity securities
of the Bancorp to any person or entity, or any group of persons and/or entities
acting in concert. When the Bancorp knows that a Terminating Event will occur
(i) the Bancorp shall deliver to each optionee no less than thirty (30) days
prior to the Terminating Event, written notification of the Terminating Event
and the optionee's right to exercise all options granted pursuant to the Plan,
whether or not vested under the Plan or applicable stock option agreement, and
(ii) all outstanding options granted pursuant to the Plan shall completely vest
and become immediately exercisable as to all shares granted pursuant to the
option immediately prior to such Terminating Event. This right of exercise shall
be conditional upon execution of a final plan of dissolution or liquidation or a
definitive agreement of consolidation or merger. Upon the occurrence of the
Terminating Event all outstanding options and the Plan shall terminate;
provided, however, that any outstanding options not exercised as of the
occurrence of the Terminating Event shall not terminate if there is a successor
corporation which assumes the outstanding options or substitutes for such
options, new options covering the stock of the successor corporation with
appropriate adjustments as to the number and kind of shares and prices.
14. AMENDMENT AND TERMINATION
The Board may at any time suspend, amend or terminate the Plan and may,
with the consent of the optionee, make such modification of the terms and
conditions of the option as it shall deem advisable; provided that, except as
permitted under the provisions of Sections 12 and 13 hereof, no amendment or
modification which would:
(a) increase the maximum number of shares which may be purchased
pursuant to options granted under the Plan either in the
aggregate or by an individual;
(b) change the minimum option price;
(c) increase the maximum term of options provided for herein; or
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(d) permit options to be granted to anyone other than directors,
full-time salaried officers or management level employees of
the Bancorp or a subsidiary corporation;
may be adopted without the Bancorp having first obtained any necessary
regulatory and shareholder approvals required by law.
No option may be granted during any suspension or after termination of
the Plan. Amendment, suspension or termination of the Plan shall not (except as
otherwise provided in Section 12 hereof), without the consent of the optionee,
alter or impair any rights or obligations under any option theretofore granted.
15. TIME OF GRANTING OPTIONS
The time an option is granted, sometimes referred to as the date of
grant, shall be the day of the action of the Board described in Sections 3(b)
and 4(b) hereof; provided, however, that if appropriate resolutions of the Board
indicate that an option is granted as of and on some future date, the time such
option is granted shall be such future date. If action by the Board is taken by
unanimous written consent of its members, the action of the Board shall be
deemed to be at the time the last member of the Board signs the consent.
16. PRIVILEGES OF STOCK OWNERSHIP;
SECURITIES LAW COMPLIANCE; NOTICE OF SALE
No optionee shall be entitled to the privileges of stock ownership as
to any shares of stock not actually issued. No shares shall be purchased upon
the exercise of any option unless and until the Bancorp has fully complied with
all applicable requirements of any regulatory agency having jurisdiction over
the Bancorp including registration of the stock options and underlying shares,
as necessary, and all applicable requirements of any exchange upon which stock
of the Bancorp may
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be listed. The optionee shall give the Bancorp notice of any sale or disposition
of any such shares not more than five (5) days after such sale or disposition.
17. EFFECTIVE DATE OF THE PLAN
The Plan shall be deemed adopted by the Board as of February 19, 1997
and shall be effective immediately subject to approval by the shareholders of
the Bancorp within twelve months of the date the Plan is adopted, by the vote of
a majority of the outstanding shares represented and voting at a duly held
meeting of shareholders at which a quorum is present, or by the written consent
vote of the holders of a majority of the outstanding shares of the Bancorp's
stock. No option under the Plan shall be exercised prior to the shareholders'
approval of the Plan.
18. TERMINATION
Unless previously terminated by the Board, the Plan shall terminate at
the close of business on February 19, 2007. No options shall be granted under
the Plan thereafter, but such termination shall not affect any option
theretofore granted.
19. OPTION AGREEMENT
Each option shall be evidenced by a written stock option agreement
executed by the Bancorp and the optionee and shall contain each of the
provisions and agreements herein specifically required to be contained therein,
and such other terms and conditions as are deemed desirable and are not
inconsistent with the Plan. Each incentive stock option agreement shall contain
such terms and provisions as the Board may determine to be necessary in order to
qualify such option as an incentive stock option within the meaning of Section
422 of the Code.
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20. OPTION PERIOD
Each option and all rights and obligations thereunder shall expire on
such date as the Board may determine, but not later than ten (10) years from the
date such option is granted, and shall be subject to earlier termination as
provided elsewhere in the Plan.
21. EXCULPATION AND INDEMNIFICATION
To the extent permitted by applicable law in effect from time to time,
no member of the Board shall be liable for any act or omission of any other
member of the Board nor for any act or omission on the member's own part, except
the member's own willful misconduct or gross negligence. The Bancorp and its
subsidiary corporations shall pay expenses incurred by, and satisfy a judgment
or fine rendered or levied against, a present or former member of the Board in
any action brought by a third party against such person (whether or not the
Bancorp is joined as a party defendant) to impose a liability or penalty on such
person while a member of the Board arising with respect to the Plan or
administration thereof or out of membership on the Board or all or any
combination of the preceding; provided, the Board determines in good faith that
such member of the Board was acting in good faith, within what such member of
the Board reasonably believed to be the scope of his or her employment or
authority, and for a purpose which he or she reasonably believed to be in the
best interests of the Bancorp or its shareholders. Payments authorized hereunder
include amounts paid and expenses incurred in settling any such action or
threatened action. This Section 21 does not apply to any action instituted or
maintained in the right of the Bancorp by a shareholder or holder of a voting
trust certificate representing shares of the Bancorp or a subsidiary corporation
thereof. The provisions of this Section 21 shall apply to the estate, executor,
administrator, heirs, legatees or devisees of a member of the Board and the term
"person"
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as used in this Section 21 shall include the estate, executor, administrator,
heirs, legatees or devisees of such person.
22. AGREEMENT AND REPRESENTATIONS OF OPTIONEE
Unless the shares of stock covered by the Plan have been registered
with the Securities Exchange Commission, each optionee shall, by accepting an
option, represent and agree, for himself or herself and his or her transferees
by will or the laws of descent and distribution, that all stock will be acquired
for investment and not for resale or distribution. Upon such exercise of any
portion of an option, the person entitled to exercise the same shall, upon
request of the Bancorp, furnish evidence satisfactory to the Bancorp (including
a written and signed representation) to the effect that the stock is being
acquired in good faith for investment and not for resale or distribution.
Furthermore, the Bancorp, at its sole discretion, may take all reasonable steps,
including affixing the following legend (and/or such other legend or legends as
counsel shall require) on certificates embodying the shares:
The shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be sold, pledged,
hypothecated or otherwise transferred or offered for sale in the
absence of an effective registration statement with respect to them
under the Securities Act of 1933 or a written opinion of counsel for
the optionee which opinion shall be acceptable to counsel for the
Bancorp that registration is not required.
to assure itself against any sale or distribution by the optionee which does not
comply with the Plan or any federal or state securities laws.
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The Bancorp agrees to remove any legend affixed to the certificates
embodying the shares pursuant to this Section 22 when all of the restrictions on
the transfer of the shares, whether imposed by the Plan or federal or state law,
have terminated.
23. INFORMATION TO EMPLOYEES
The Bancorp shall provide optionees with financial statements of the
Bancorp at least annually.
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NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF ORANGE
NATIONAL BANCORP'S COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE
ORANGE NATIONAL BANCORP 1997 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY
THE SHAREHOLDERS OF ORANGE NATIONAL BANCORP.
ORANGE NATIONAL BANCORP
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement (the "Agreement") is made and
entered into as of the ______ day of __________, _____, by and between Orange
National Bancorp, a California corporation (the "Bancorp"), and ________________
("Optionee");
WHEREAS, pursuant to the Orange National Bancorp 1997 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Board of Directors of the
Bancorp has authorized granting to Optionee an incentive stock option to
purchase all or any part of ______________ (_____) authorized but unissued
shares of the Bancorp's common stock at the price of ________ Dollars and
_______ Cents ($__.__) per share, such option to be for the term and upon the
terms and conditions hereinafter stated;
NOW, THEREFORE, it is hereby agreed:
1. GRANT OF OPTION. Pursuant to said action of the Board of Directors,
the Bancorp hereby grants to Optionee the option to purchase, upon and subject
to the terms and conditions of the Plan which is incorporated in full herein by
this reference, all or any part of ______________ (_____) shares of the
Bancorp's common stock (hereinafter called "stock") at the price of
_____________ Dollars and _______ Cents ($__.__) per share, which price is not
less than one hundred percent (100%) of the fair market value of the stock (or
not less than 110% of the fair market value of the stock for
Optionee-shareholders who own securities possessing more than ten percent (10%)
of the total combined voting power of all classes of securities of the Bancorp)
as of the date of action of the Board of Directors granting this option.
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2. EXERCISABILITY. This option shall be exercisable as to ___________
________________________________________________________________________________
________________________________________________________________________________
______________________________________. This option shall remain exercisable as
to all vested shares until ______________ __, _____ (but not later than ten (10)
years from the date this option is granted) unless this option has expired or
terminated earlier in accordance with the provisions hereof or in the Plan.
Subject to paragraphs 4 and 5, shares as to which this option becomes
exercisable pursuant to the foregoing provision may be purchased at any time
prior to expiration of this option.
3. EXERCISE OF OPTION. This option may be exercised by written notice
(substantially in the form as that which is attached as Exhibit A) delivered to
the Bancorp stating the number of shares with respect to which this option is
being exercised, together with (a) cash in the amount of the purchase price of
such shares, or (b) subject to applicable law, with the Bancorp's stock
previously acquired by Optionee and held by Optionee for a period of at least
six months. Notwithstanding the foregoing, in the event Optionee does exercise
the option by utilizing (b) above, Optionee should obtain tax advice as to the
consequences of such action. Not less than ten (10) shares may be purchased at
any one time unless the number purchased is the total number which may be
purchased under this option and in no event may the option be exercised with
respect to fractional shares. Upon exercise, Optionee shall make appropriate
arrangements and shall be responsible for the withholding of any federal and
state taxes then due.
4. CESSATION OF EMPLOYMENT. Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be an employee of the Bancorp or a subsidiary
corporation for any reason other than Optionee's death or disability [as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended from time
to time (the "Code")], this option shall expire three (3) months thereafter.
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During the three (3) month period this option shall be exercisable only as to
those installments, if any, which had accrued as of the date when Optionee
ceased to be an employee of the Bancorp or a subsidiary corporation.
5. TERMINATION OF EMPLOYMENT FOR CAUSE. If Optionee's employment with
the Bancorp or a subsidiary corporation is terminated for cause, this option
shall expire thirty (30) days from the date of such termination. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of a crime involving
moral turpitude, and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.
6. NONTRANSFERABILITY; DEATH OR DISABILITY OF OPTIONEE. This option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during Optionee's lifetime only by
Optionee. If Optionee dies while serving as an employee of the Bancorp or a
subsidiary corporation, or during the three (3) month period referred to in
Paragraph 4 hereof, this option shall expire one (1) year after the date of
Optionee's death or on the day specified in Paragraph 2 hereof, whichever is
earlier. After Optionee's death but before such expiration, the persons to whom
Optionee's rights under this option shall have passed by will or by the laws of
descent and distribution or the executor or administrator of Optionee's estate
shall have the right to exercise this option as to those shares for which
installments had accrued under Paragraph 2 hereof as of the date on which
Optionee ceased to be an employee of the Bancorp or a subsidiary corporation.
If Optionee terminates his or her employment because of disability (as
defined in Section 22(e)(3) of the Code), Optionee may exercise this option to
the extent he or she is entitled to do so at the date of termination, at any
time within one (1) year of the date of termination, or before the expiration
date specified in Paragraph 2 hereof, whichever is earlier.
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7. EMPLOYMENT. This Agreement shall not obligate the Bancorp or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
8. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock certificates to Optionee. Except as provided in the
Plan, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
9. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification and termination upon the occurrence of certain events as provided
in Sections 13 and 14 of the Plan.
10. NOTIFICATION OF SALE. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
11. REPRESENTATIONS OF OPTIONEE. No shares issuable upon the exercise
of this option shall be issued and delivered unless and until the Bancorp has
complied with all applicable requirements of California and federal law and of
the Securities and Exchange Commission and the California Department of
Corporations pertaining to the issuance and sale of such shares, and all
applicable listing requirements of the securities exchanges, if any, on which
shares of the Bancorp of the same class are then listed. Optionee agrees to
ascertain that such requirements shall have been complied with at the time of
any exercise of this option. In addition, if the Optionee is an "affiliate" for
purposes of the Securities Act of 1933, there may be additional restrictions on
the resale of stock, and Optionee therefore agrees to ascertain what those
restrictions are and to abide by the restrictions and other applicable federal
and state securities laws.
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Furthermore, the Bancorp may, if it deems appropriate, issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any certificate representing such shares the legends
which the Bancorp deems appropriate.
Optionee represents that the Bancorp, its directors, officers,
employees and agents have not and will not provide tax advice with respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax consequences of the option, including the application and
effect of federal, state, local and other tax laws.
12. NOTICES. Any notice to the Bancorp provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial Officer at
its main office and any notice to Optionee shall be addressed to Optionee's
address on file with the Bancorp or a subsidiary corporation, or to such other
address as either may designate to the other in writing. Any notice shall be
deemed to be duly given if and when enclosed in a properly sealed envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal Service. In lieu of giving notice by mail as aforesaid, any written
notice under this Agreement may be given to Optionee in person, and to the
Bancorp by personal delivery to its President or Chief Financial Officer.
13. INCENTIVE STOCK OPTION. This Agreement is intended to be an
incentive stock option agreement as defined in Section 422 of the Code;
provided, however, that if the option shall fail to constitute an incentive
stock option for any reason, the option shall thereafter be governed by the
provisions of the Plan regarding nonqualified stock options.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
OPTIONEE ORANGE NATIONAL BANCORP
By_______________________ By_________________________
By_________________________
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EXHIBIT A
NOTICE OF STOCK OPTION EXERCISE
Mr. Kenneth J. Cosgrove
President
Orange National Bancorp
1201 East Katella Avenue
Orange, California 92667
Dear Mr. Cosgrove:
Pursuant to my incentive stock option agreement dated _______________, I am
exercising my stock option to acquire ____________ shares of common stock of
Orange National Bancorp. I am also enclosing payment by means of (cash in the
amount of $_________, or ________ qualifying shares of Orange National Bancorp
having a fair market value) equal to the sum of the option exercise price.
I further acknowledge that Orange National Bancorp makes no representations as
to federal or state tax matters, and that I am to consult with my own tax
attorney or tax accountant for advice with respect to the exercise of my stock
option and the effect of the sale of the option shares. [(For executive officers
of the Bancorp or insiders of the Bancorp) I further acknowledge that I am an
affiliate or insider of Orange National Bancorp and that federal securities laws
are applicable to the exercise of the stock option and any subsequent sale of
the option shares including the applicability of the Securities Act of 1933 and
Rule 144 (both dealing with the sale of shares by an affiliate). I agree to
comply with such securities laws and rules.]
Sincerely,
---------------------------
Name of Optionee
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NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF ORANGE
NATIONAL BANCORP'S COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE
ORANGE NATIONAL BANCORP 1997 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY
THE SHAREHOLDERS OF ORANGE NATIONAL BANCORP.
ORANGE NATIONAL BANCORP
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made and
entered into as of the ______ day of _____________, _____, by and between Orange
National Bancorp, a California corporation (the "Bancorp"), and _______________,
("Optionee");
WHEREAS, pursuant to the Orange National Bancorp 1997 Stock Option Plan
(the "Plan"), a copy of which is attached hereto, the Board of Directors of the
Bancorp has authorized granting to Optionee a nonqualified stock option to
purchase all or any part of _______________ (_________) authorized but unissued
shares of the Bancorp's common stock at the price of ________ Dollars and
_______ Cents ($__.__) per share, such option to be for the term and upon the
terms and conditions hereinafter stated;
NOW, THEREFORE, it is hereby agreed:
1. GRANT OF OPTION. Pursuant to said action of the Board of Directors,
the Bancorp hereby grants to Optionee the option to purchase, upon and subject
to the terms and conditions of the Plan which is incorporated in full herein by
this reference, all or any part of _______________ (______) shares of the
Bancorp's common stock (hereinafter called "stock") at the price of ________
Dollars and _______ Cents ($__.__) per share, which price is not less than one
hundred percent (100%) of the fair market value of the stock as of the date of
action of the Board of Directors granting this option.
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2. EXERCISABILITY. This option shall be exercisable as to ___________
________________________________________________________________________________
________________________________________________________________________________
______________________________________. This option shall remain exercisable as
to all vested shares until __________ __, _____ (but not later than ten (10)
years from the date this option is granted) unless this option has expired or
terminated earlier in accordance with the provisions hereof or in the Plan.
Subject to paragraphs 4 and 5, shares as to which this option becomes
exercisable pursuant to the foregoing provision may be purchased at any time
prior to expiration of this option.
3. EXERCISE OF OPTION. This option may be exercised by written notice
(substantially in the form as that which is attached as Exhibit A) delivered to
the Bancorp stating the number of shares with respect to which this option is
being exercised, together with (a) cash in the amount of the purchase price of
such shares, or (b) subject to applicable law, with the Bancorp's stock
previously acquired by Optionee and held by Optionee for a period of at least
six months. Notwithstanding the foregoing, in the event Optionee does exercise
the option by utilizing (b) above, Optionee should obtain tax advice as to the
consequences of such action. Not less than ten (10) shares may be purchased at
any one time unless the number purchased is the total number which may be
purchased under this option and in no event may the option be exercised with
respect to fractional shares. Upon exercise, Optionee shall make appropriate
arrangements and shall be responsible for the withholding of any federal and
state taxes then due.
4. CESSATION OF DIRECTORSHIP OR EMPLOYMENT. Except as provided in
Paragraphs 2 and 5 hereof, if Optionee shall cease to be a director or an
employee of the Bancorp or a subsidiary corporation for any reason other than
Optionee's death or disability [as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended from time to time (the "Code")], this option
shall expire three (3) months thereafter. During the three (3) month period this
option shall be exercisable
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only as to those installments, if any, which had accrued as of the date when
Optionee ceased to be a director or an employee of the Bancorp or a subsidiary
corporation. If Optionee is both a director and an employee, then such option
shall expire three (3) months after the latter of the date of termination of
Optionee's directorship or employment.
5. TERMINATION OF EMPLOYMENT FOR CAUSE. If Optionee's employment with
the Bancorp or a subsidiary corporation is terminated for cause, this option
shall expire thirty (30) days from the date of such termination. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of a crime involving
moral turpitude, and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.
6. NONTRANSFERABILITY; DEATH OR DISABILITY OF OPTIONEE. This option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during Optionee's lifetime only by
Optionee. If Optionee dies while serving as a director or an employee of the
Bancorp or a subsidiary corporation, or during the three (3) month period
referred to in Paragraph 4 hereof, this option shall expire one (1) year after
the date of Optionee's death or on the day specified in Paragraph 2 hereof,
whichever is earlier. After Optionee's death but before such expiration, the
persons to whom Optionee's rights under this option shall have passed by will or
by the laws of descent and distribution or the executor or administrator of
Optionee's estate shall have the right to exercise this option as to those
shares for which installments had accrued under Paragraph 2 hereof as of the
date on which Optionee ceased to be a director or an employee of the Bancorp or
a subsidiary corporation.
If Optionee terminates his or her directorship or employment because of
disability (as defined in Section 22(e)(3) of the Code), Optionee may exercise
this option to the extent he or she
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is entitled to do so at the date of termination, at any time within one (1) year
of the date of termination, or before the expiration date specified in Paragraph
2 hereof, whichever is earlier.
7. EMPLOYMENT. This Agreement shall not obligate the Bancorp or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bancorp or a subsidiary corporation to reduce
Optionee's compensation.
8. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall have no rights as a
shareholder with respect to the Bancorp's stock subject to this option until the
date of issuance of stock certificates to Optionee. Except as provided in the
Plan, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificates are issued.
9. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification and termination upon the occurrence of certain events as provided
in Sections 13 and 14 of the Plan.
10. NOTIFICATION OF SALE. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this option, will notify the Bancorp not more
than five (5) days after any sale or other disposition of such shares.
11. REPRESENTATIONS OF OPTIONEE. No shares issuable upon the exercise
of this option shall be issued and delivered unless and until the Bancorp has
complied with all applicable requirements of California and federal law and of
the Securities and Exchange Commission and the California Department of
Corporations pertaining to the issuance and sale of such shares, and all
applicable listing requirements of the securities exchanges, if any, on which
shares of the Bancorp of the same class are then listed. Optionee agrees to
ascertain that such requirements shall have been complied with at the time of
any exercise of this option. In addition, if the Optionee is an "affiliate" for
purposes of the Securities Act of 1933, there may be additional restrictions on
the resale of stock, and Optionee therefore agrees to ascertain what those
restrictions are and to abide by the restrictions and other applicable federal
and state securities laws.
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Furthermore, the Bancorp may, if it deems appropriate, issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any certificate representing such shares the legends
which the Bancorp deems appropriate.
Optionee represents that the Bancorp, its directors, officers,
employees and agents have not and will not provide tax advice with respect to
the option, and Optionee agrees to consult with his or her own tax advisor as to
the specific tax consequences of the option, including the application and
effect of federal, state, local and other tax laws.
12. NOTICES. Any notice to the Bancorp provided for in this Agreement
shall be addressed to it in care of its President or Chief Financial Officer at
its main office and any notice to Optionee shall be addressed to Optionee's
address on file with the Bancorp or a subsidiary corporation, or to such other
address as either may designate to the other in writing. Any notice shall be
deemed to be duly given if and when enclosed in a properly sealed envelope and
addressed as stated above and deposited, postage prepaid, with the United States
Postal Service. In lieu of giving notice by mail as aforesaid, any written
notice under this Agreement may be given to Optionee in person, and to the
Bancorp by personal delivery to its President or Chief Financial Officer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
OPTIONEE ORANGE NATIONAL BANCORP
By__________________________ By_____________________________
By_____________________________
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EXHIBIT A
NOTICE OF STOCK OPTION EXERCISE
Mr. Kenneth J. Cosgrove
President
Orange National Bancorp
1201 East Katella Avenue
Orange, California 92667
Dear Mr. Cosgrove:
Pursuant to my nonqualified stock option agreement dated _______________, I am
exercising my stock option to acquire ____________ shares of common stock of
Orange National Bancorp. I am also enclosing payment by means of (cash in the
amount of $_________, or ________ qualifying shares of Orange National Bancorp
having a fair market value) equal to the sum of the option exercise price.
I further acknowledge that Orange National Bancorp makes no representations as
to federal or state tax matters, and that I am to consult with my own tax
attorney or tax accountant for advice with respect to the exercise of my stock
option and the effect of the sale of the option shares. [(For executive officers
of the Bancorp or insiders of the Bancorp) I further acknowledge that I am an
affiliate or insider of Orange National Bancorp and that federal securities laws
are applicable to the exercise of the stock option and any subsequent sale of
the option shares including the applicability of the Securities Act of 1933 and
Rule 144 (both dealing with the sale of shares by an affiliate). I agree to
comply with such securities laws and rules.]
Sincerely,
---------------------------
Name of Optionee
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