Exhibit 4.1
SAN JOAQUIN BANCORP STOCK OPTION PLAN
MAY 1, 1989
(Amended September 26, 1989)
(Amended March 22, 1994)
(Amended July 19, 1994)
(Amended May 20, 1997)
(Amended July 31, 2006)
1. Purpose.
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The purpose of the San Joaquin Bancorp Stock Option Plan (the "Plan") is to
strengthen San Joaquin Bank (the "Bank"), and those corporations which are or
hereafter become subsidiary corporations of the Bank, by providing to
participating employees and directors added incentive for high levels of
performance and for unusual efforts to increase the earnings of the Bank and its
subsidiary corporations. The Plan seeks to accomplish these purposes and results
by providing a means whereby such employees and directors may purchase shares of
the common stock of San Joaquin Bancorp pursuant to options granted under the
Plan.
Effective July 31, 2006, San Joaquin Bancorp has assumed sponsorship of the
Plan for the purpose of administering any and all outstanding option awards
under the Plan on a prospective basis.
2. Administration.
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This Plan shall be administered by the Board of Directors of San Joaquin
Bancorp (the "Board of Directors"). Any action of the Board of Directors with
respect to administration of the Plan shall be taken pursuant to a majority
vote, or to the unanimous written consent, of its members.
Subject to the express provisions of the Plan, the Board of Directors shall
have the authority to construe and interpret the Plan and to define the terms
used therein, to prescribe, amend, and rescind rules and regulations relating to
administration of the Plan, to determine the duration and purposes of leaves of
absence which may be granted to participants without constituting a termination
of their employment for purposes of the Plan, and to make all other
determinations necessary or advisable for administration of the Plan.
Determinations of the Board of Directors on matters referred to in this
paragraph shall be final and conclusive.
3. Participation.
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All full-time, salaried officers and employees of the Bank and its
subsidiary corporations (the "Employees") and all members of the Board of
Directors of the Bank or a subsidiary corporation of the Bank (the "Directors")
shall be eligible for selection to participate in the Plan. Employees of the
Bank (including Directors who are Employees) will be granted "Incentive Stock
Options." Directors of the Bank or of a subsidiary corporation, who are not
Employees of the Bank or of a subsidiary corporation (the "Non-Employee
Directors"), will be granted Non-Qualified Options under the Plan. Subject to
the express provisions of the Plan, the Board of Directors shall select
individuals from the eligible class to whom stock option agreements shall be
granted and shall determine the terms and provisions of the respective stock
option agreements (which need not be identical), the times at which such options
Exhibit 4.1
shall be granted, and the number of shares subject to each option. An individual
who has been granted an option may, if otherwise eligible, be granted additional
options if the Board of Directors shall so determine.
(a) Except as otherwise provided in the Plan, each option shall be
exercisable on each of the first, second, third, fourth and fifth anniversary
dates after the date of the grant as to twenty percent (20%) of the shares
subject to the grant.
(b) Subject to earlier termination as provided elsewhere in the Plan, each
option, and all rights or obligations thereunder, by its terms shall expire not
less than five (5) years nor more than ten (10) years from the date the option
was granted.
(c) Options granted to Non-Employee Directors shall not exceed in any
calendar year an option to buy more than five hundred (500) shares of San
Joaquin Bancorp's stock.
4. Stock Subject to the Plan.
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Subject to adjustment as provided in paragraph "13" hereof, the stock to be
offered under the Plan shall be shares of the San Joaquin Bancorp's authorized
but unissued common stock (hereafter called "stock"), and the aggregate amount
of stock to be delivered upon exercise of all options granted under the Plan
shall not exceed 463,000 shares. All shares of stock reserved for issuance under
the Plan are available for grants of Incentive Stock Options. If any option
shall expire for any reason without having been exercised in full, the
unpurchased shares subject thereto shall again be available for purposes of the
Plan.
To the extent required by Section 260.140.45 of Title 10 of the California
Code of Regulations, the total number of shares of stock issuable upon exercise
of all outstanding options granted under this Plan or under any other
outstanding options or warrants issued by San Joaquin Bancorp and the total
number of shares of stock provided for under any stock bonus or similar plan of
San Joaquin Bancorp shall not exceed the applicable percentage as calculated in
accordance with the conditions and exclusions of Section 260.140.45 of Title 10
of the California Code of Regulations, based on the securities of San Joaquin
Bancorp that are outstanding at the time the calculation is made.
5. Option Price.
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The purchase price of stock subject to each option shall be determined by
the Board of Directors, 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 Section 20.2031-2. The purchase price of any shares purchased shall
be paid in full in cash at the time of each purchase.
6. Option Period.
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Each option and all rights or obligations thereunder shall expire on such
date as the Board of Directors may determine, but not later than ten (10) years
Exhibit 4.1
from the date of grant, and shall be subject to earlier termination as provided
elsewhere in the Plan.
7. Continuation of Employment.
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Nothing contained in the Plan (or in any stock option agreement) shall
obligate the Bank, San Joaquin Bancorp or any subsidiary corporation to employ
any option holder ("optionee") for any period, or interfere in any way with the
right of the Bank, San Joaquin Bancorp or any subsidiary corporation to reduce
optionee's compensation or assure any optionee of remaining on the Bank's, San
Joaquin Bancorp's or any subsidiary corporation's Board of Directors.
8. Exercise of Options.
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Each option shall be exercisable in such installments, which need not be
equal, and upon such contingencies as the Board of Directors shall determine. No
option or installment thereof shall be exercisable except in respect of whole
shares, and fractional share interests shall be disregarded except that they may
be accumulated. In any given installment period, if an optionee does not
purchase all the shares which the optionee is entitled to purchase in such
installment period or a fractional share interest remains, the optionee's right
to purchase the remaining shares or fractional shares shall continue until
expiration of such option.
Not less than ten (10) shares may be purchased at one time unless the
number purchased is the total number which may be purchased under the option.
9. Nontransferability of Options.
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Each option shall, by its terms, be nontransferable by the optionee other
than by will or the laws of descent and distribution, and during the optionee's
lifetime shall be exercisable only by the optionee.
10. Cessation of Employment.
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Except as provided in paragraphs "6" and "11" hereof, if an optionee who is
an Employee ceases to be employed by the Bank or a subsidiary corporation (or in
the case of a Non-Employee Director, such person ceases to be a Director of the
Bank or a subsidiary corporation), for any reason other than his or her death or
disability, the optionee's option shall expire not later than thirty (30) days
thereafter. During the thirty-day period, such option shall be exercisable only
as to those installments, if any, which accrued as of the date on which the
optionee ceased to be employed by the Bank or such subsidiary corporation or
ceased to be a Director of the Bank or subsidiary corporation. In the event of
the termination of the employment of an Employee of the Bank or subsidiary
corporation who shall remain on the Board of Directors of the Bank or a
subsidiary corporation, such person's option shall continue in force in the same
manner as options for other Directors, even as to shares in excess of those
which could originally have been issued to a Non-Employee Director, but any new
options granted to such person shall comply with the limits on options granted
to Directors.
Exhibit 4.1
11. Termination of Employment for Cause.
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If an optionee's employment by the Bank or a subsidiary corporation is
terminated for cause (or in the case of a Non-Employee Director, such optionee
is removed as a Director for cause), his or her option shall expire immediately.
However, the Board of Directors may, in its sole discretion, within thirty (30)
days of such termination, reinstate the option by giving written notice of such
reinstatement to the optionee at his or her last known address. In the event of
such reinstatement, the optionee may exercise the option only to such extent,
for such time, and upon such terms and conditions, as if he or she had ceased to
be employed by the Bank or such subsidiary corporation (or ceased to be a
Director, as the case may be), upon the date of such termination for a reason
other than cause or death. Termination for cause shall include termination for
malfeasance or gross malfeasance or gross misfeasance in the performance of
duties or conviction of illegal activity in connection therewith or any
significant conduct detrimental to the interests of the Bank or a subsidiary
corporation; and in any event, the determination of the Board of Directors with
respect thereto shall be final and conclusive.
12. Death or Disability of Optionee.
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Except as provided in paragraph "6" hereof, if any optionee dies or becomes
disabled while employed by the Bank or a subsidiary corporation (or while acting
as a Director), or during the thirty-day period referred to in paragraph
"10"hereof, his or her option shall expire one (1) year after the date of such
death or disability. After such death but before such expiration, the persons to
whom the optionee rights under the option shall have passed by will or by the
applicable laws of descent and distribution shall have the right to exercise
such option to the extent that installments, if any, had accrued as of the date
on which the optionee ceased to be employed by the Bank or such subsidiary
corporation (or ceased to be a Director).
13. Adjustments Upon Changes in Capitalization.
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If the outstanding shares of the stock of San Joaquin Bancorp are
increased, decreased, changed into, or exchanged for a different number or kind
of shares or securities of San Joaquin Bancorp, without receipt of consideration
by San Joaquin Bancorp, through reorganization, merger, recapitalization,
reclassification, stock split-up, stock dividend, stock consolidation, or
otherwise, 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 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.
Adjustments under this paragraph shall be made by the Board of Directors, 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
under the Plan on account of any such adjustment.
14. Terminating Events.
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Not less than thirty (30) days prior to dissolution or liquidation of the
Bank, or a reorganization, merger, or consolidation of the Bank with one or more
corporations, as a result of which the Bank will not be the surviving
Exhibit 4.1
corporation, or a sale of substantially all the assets and property of the Bank
to another person, or in the event of any other transaction involving the Bank
where there is a change in ownership of at least twenty-five percent (25%),
except as may result from a transfer of shares to another corporation in
exchange for at least eighty percent (80%) control of that corporation (a
"Terminating Event"),the Board of Directors shall notify each optionee of the
pendency of the Terminating Event. Upon delivery of said notice, any option
granted prior to the Terminating Event shall be, notwithstanding the provisions
of paragraph "8"hereof, exercisable in full and not only as to those shares with
respect to which installments, if any, have then accrued, subject, however, to
earlier expiration or termination as provided elsewhere in the Plan. Upon the
date thirty (30) days after delivery of said notice, any option or portion
thereof not exercised shall terminate; and upon the happening of the Terminating
Event the Plan shall terminate, unless provision be made in connection with the
Terminating Event for assumption of options theretofore granted, or substitution
for such options of new options covering stock of a successor employer
corporation, or a parent or subsidiary corporation thereof, solely at the option
of such successor corporation or parent or subsidiary corporation, with
appropriate adjustments as to number and kind of shares and prices.
15. Amendment and Termination by Board of Directors.
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The Board of Directors 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 his or her option as it shall deem advisable; provided
that, except as permitted under the provisions of paragraph "13" hereof, any
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
(d) permit options to be granted to anyone other than a full-time,
salaried officer or employee of the Bank or a subsidiary corporation, or a
Director of the Bank or a subsidiary corporation;
shall be deemed adopted and shall be effective on the date specified by action
of the Board of Directors, subject to approval thereof by shareholders of San
Joaquin Bancorp holding not less than a majority of the voting power of San
Joaquin Bancorp voting in person or by proxy at a duly held stockholders'
meeting, and subject to approval thereof of a majority of the "disinterested"
shareholders voting in person or by proxy at a duly held stockholders' meeting
at which a quorum of "disinterested" shareholders is present or represented by
proxy. Shareholder approval may be made retroactive.
The Board of Directors may grant to an optionee, if he or she is otherwise
eligible, additional options or, with the consent of the optionee, may grant a
new option in lieu of an outstanding option for a number of shares, at a
purchase price and for a term which is greater or less than that of the earlier
option, subject to the limitations of paragraphs "5" and "6" hereof.
Exhibit 4.1
No option may be granted during any suspension of the Plan or after the
Plan's termination. Amendment, suspension, or termination of the Plan shall not,
without the consent of the optionee, alter or impair any rights or obligations
under any option theretofore granted, except as provided in paragraph "13"
hereof.
16. Time of Granting Options.
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The time an option is granted, sometimes referred to as the date of grant,
shall be the day of the action of the Board of Directors; provided that, if
appropriate resolutions of the Board of Directors indicate that an option is to
be granted as of a future date, the time such option is granted shall be such
future date. If action by the Board of Directors is taken by unanimous written
consent of its members, the action of the Board of Directors shall be deemed to
be at the time the last Board member signs the consent.
17. Privileges of Stock Ownership; Securities Law Compliance; Notice of
Sale.
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No optionee shall be entitled to the privileges of stock ownership as to
any shares of stock not actually issued and delivered. No shares shall be
purchased upon the exercise of any option unless and until any then applicable
requirements of any regulatory agencies having jurisdiction, and of any
exchanges upon which stock of San Joaquin Bancorp may be listed, shall have been
fully complied with. San Joaquin Bancorp will diligently endeavor to comply with
all applicable securities laws before any options are granted under the Plan and
before any stock is issued pursuant to options. The optionee shall give San
Joaquin Bancorp notice of any sale or other disposition of any such shares not
more than five (5) days after such sale or disposition.
18. Effective Date of the Plan.
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The Plan shall be deemed adopted as of the date first shown herein and
shall be effective immediately, subject to approval hereof by shareholders of
the Bank holding not less than a majority of the voting power of the Bank voting
in person or by proxy at a duly held stockholder's meeting, and subject to
approval hereof by a majority of the "disinterested" shareholders voting in
person or by proxy at a duly held stockholders' meeting at which a quorum of
"disinterested" shareholders is present or represented by proxy.
19. Termination.
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The Plan terminated at the close of business on May 1, 1999, and no options
shall be granted under the Plan thereafter, but such termination shall not
affect any option theretofore granted.
20. Option Agreement.
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Each option shall be evidenced by a written stock option agreement, 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.
Exhibit 4.1
21. Exculpation and Indemnification.
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San Joaquin Bancorp shall indemnify members of the Board of Directors, and
of the Bank's board of directors, in any action brought against any such member
or members to the maximum extent permitted by the applicable law.
22. Incentive and Non-Qualified Options.
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Notwithstanding anything to the contrary herein set forth, the following
provisions shall be applicable to this Plan:
(a) All full-time, salaried officers and employees of the Bank and its
subsidiary corporations, Employee Directors and Non-Employee Directors of the
Bank and its subsidiary corporations are eligible to participate in the Plan,
and Employees and Employee Directors are eligible to receive Incentive and
Non-Qualified Options. Non-Employee Directors are only eligible to receive
Non-Qualified Options. However, no person shall be eligible for a grant of
options if, at the time of grant, such person owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
San Joaquin Bancorp or any of its subsidiaries. Incentive stock options may be
issued provided the aggregate fair market value (determined at the time the
incentive stock option is granted) of the stock with respect to which incentive
stock options are exercisable for the first time by the optionee during any
calendar year (under all incentive stock option plans of the Bank) shall not
exceed One Hundred Thousand Dollars ($100,000.00). Should it be determined that
any incentive stock option granted pursuant to the Plan exceeds such maximum,
such incentive stock option shall be considered to be a non-qualified option and
not to qualify for treatment as an incentive stock option under Section 422 of
the Internal Revenue Code of 1986, as amended, to the extent, but only to the
extent, of such excess.
(b) All options must be granted within ten (10) years from the date such
Plan was originally adopted by the Board of Directors of the Bank or approved by
the shareholders of the Bank, whichever is earlier;
(c) No option granted pursuant to the Plan is exercisable after the
expiration of ten (10) years from the date such option is granted;
(d) All options granted prior to March 22, 1994 are intended to be
Incentive Options. All options granted on or after March 22, 1994 shall be
clearly labeled "Incentive Options" or "Non-Incentive Options".
(e) In no event shall the option price under any option be less than the
fair market value of the stock at the time the option is granted;
(f) Such options are not transferable by any individual, otherwise than by
will or by the laws of descent and distribution, and are exercisable during the
lifetime of the optionee, and only by the optionee;
(g) No option shall be granted to an Employee or Director at a time when
the Employee or Director possesses more than ten percent (10%) of the total
combined voting power of all classes of stock of the Bank;
Exhibit 4.1
(h) The aggregate fair market value (determined as of the time the options
are granted) of the stock for which any Employee or Director may be granted
options in any calendar year shall not exceed One Hundred Thousand Dollars
($100,000.00) plus any unused limit carryover to such year; and
(i) In the case of all options granted as "Incentive Options," the
provisions of this paragraph and of all other provisions of the Plan shall be
interpreted in a manner consistent with the provisions of Section 422 of the
Internal Revenue Code of 1986, as amended, in order that such options shall
constitute Incentive Stock Options as defined in that Section and the
regulations thereunder. San Joaquin Bancorp shall keep accurate records of the
numbers of Incentive Options and Non-Qualified Options issued under this Plan
and at any time outstanding under the Plan.