COAST COMMERCIAL BANK
1995 STOCK OPTION PLAN
INDEX
ARTICLE DESCRIPTION COMMENCING
NO. ON PAGE
1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . 1
3. PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. THE SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. GRANTS, TERMS AND CONDITIONS OF OPTIONS . . . . . . . . . . . . 4
6. ADJUSTMENT OF AND CHANGES IN THE SHARES . . . . . . . . . . . .13
7. LISTING OR QUALIFICATION OF SHARES. . . . . . . . . . . . . . .16
8. AMENDMENT AND TERMINATION OF THE PLAN . . . . . . . . . . . . .17
9. BINDING EFFECT OF CONDITIONS. . . . . . . . . . . . . . . . . .18
10. EFFECTIVENESS OF THE PLAN . . . . . . . . . . . . . . . . . . .18
11. PRIVILEGES OF STOCK OWNERSHIP; SECURITIES LAW
COMPLIANCE; NOTICE OF SALE. . . . . . . . . . . . . . . . . . .19
12. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . .19
13. INFORMATION TO OPTIONEES. . . . . . . . . . . . . . . . . . . .20
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COAST COMMERCIAL BANK
1995 STOCK OPTION PLAN
___________ oOo ____________
1. PURPOSE
The purpose of this 1995 Stock Option Plan (the "Plan") of Coast Commercial
Bank and its Affiliates (hereinafter collectively referred to as the "Company"),
is to secure for the Company and its stockholders the benefits of the incentive
inherent in the ownership of Common Stock of Coast Commercial Bank by those key,
full-time employees and officers of the Company who will share responsibility
with management of the Company for its future growth and success. Options may
also be granted to non-employee directors of the Company.
The word "Affiliate", as used in this Plan, means any bank or corporation
in an unbroken chain of banks or corporations beginning or ending with the
Company, if at anytime, each such bank or corporation other than the last in
that chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one or the other banks or
corporations in the chain.
2. ADMINISTRATION
The following provisions shall govern the administration of the Plan:
(a) The Plan shall be administered by a committee of the Board of
Directors duly appointed by the Board (the
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"Committee") composed of two (2) or more directors, each of whom is a
"disinterested person" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or successor rule or
regulation, i.e. each Committee member has not, during the one year prior to
service as a Committee member, received the grant of an option under the Plan or
any other plan of the Company, except that participation in a formula plan
meeting the conditions of Rule 16b-3 under the 1934 Act shall not disqualify a
director from being a "disinterested person". The Board of Directors may from
time to time remove members from or add members to the Committee. Vacancies on
the Committee, however caused, shall be filled by the Board of Directors. The
Board of Directors shall designate a Chairman of the Committee from among the
Committee members. Acts of the Committee (i) at a meeting, held at a time and
place and in accordance with rules adopted by the Committee, at which a quorum
of the Committee is present and acting, or (ii) reduced to and approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee.
(b) The Company shall effect the grant of options under the Plan by
execution of instruments in writing in a form approved by the Committee.
Subject to the express terms and conditions of the Plan and the terms of any
option outstanding under the Plan, the Committee shall have full
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power to construe the Plan and the terms of any option granted under the Plan,
to prescribe, amend and rescind rules and regulations relating to the Plan or
such options and to make all other determinations necessary or advisable for the
Plan's administration, including, without limitation, the power to (i) determine
which persons meet the requirements of Section 3 hereof for selection as
participants in the Plan and which persons are considered to be "employees" for
purposes of the Internal Revenue Code of 1986, as amended (the "Code"), and
therefore eligible to receive incentive stock options under the Plan; (ii)
determine to whom of the eligible persons, if any, options shall be granted
under the Plan; (iii) establish the terms and conditions required or permitted
to be included in every option agreement or any amendments thereto, including
whether options to be granted thereunder shall be "incentive stock options", as
defined in the Code, or "nonstatutory stock options"; (iv) specify the number of
shares to be covered by each option; (v) in the event a particular option is to
be an incentive stock option, determine and incorporate such terms and
provisions, as well as amendments thereto, as shall be required in the judgement
of the Board of Directors or the Committee, so as to provide for or conform such
option to any change in any law, regulation, ruling or interpretation applicable
thereto; and (vi) to make all other determinations deemed necessary or
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advisable for administering the Plan. The Committee's determination on the
foregoing matters shall be conclusive.
3. PARTICIPANTS
Participants in the Plan shall be those, non-employee directors, officers
and key, full-time, salaried employees of the Company to whom options may be
granted from time to time by the Committee.
4. THE SHARES
The shares of stock initially subject to options authorized to be granted
under the Plan shall consist of four hundred thousand (400,000) shares of Common
Stock (the "Shares") of the Company, or the number and kind of shares of stock
or other securities which shall be substituted for such shares or to which such
shares shall be adjusted as provided in Section 6. The Shares subject to the
Plan may be set aside out of the authorized but unissued shares of Common Stock
of the Company not reserved for any other purpose or out of shares of Common
Stock subject to an option which, for any reason, terminates unexercised as to
the Shares.
5. GRANTS, TERMS AND CONDITIONS OF OPTIONS
Options may be granted at any time prior to the termination of the Plan to
non-employee directors, officers and other key, full-time, salaried employees of
the Company who, in the judgment of the Committee, contribute to the successful
conduct of the Company's operation through their judgment, interest, ability and
special efforts; provided,
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however, that: (i) for incentive stock options, the aggregate fair market value
of the stock (determined as of the date the option is granted) which is
exercisable for the first time in any calendar year (under all stock option
plans of the Company, its Affiliates or any predecessor of any such corporation)
shall not exceed $100,000; (ii) except in the case of termination by death or
disability or cause or cessation of status as a director, as set forth in
Section 5(c) below, the granted option must be exercised by optionee no later
than three (3) months after any termination of employment or status as a
director with the Company and said employment or status as a director must have
been continuous since the granting of the option. Further, incentive stock
options may only be granted to full-time, salaried employees of the Company.
In addition, options granted pursuant to the Plan shall be subject to the
following terms and conditions:
(a) Number of Shares.
(i) Each agreement evidencing an option granted under the Plan shall
state the number of Shares subject to the option.
(ii) Each person who is a non-employee Director of the Company
("Director") on the date of adoption of the Plan by the Board of Directors of
the Company (the "Commencement Date") shall be entitled to a grant of an option
to purchase two thousand (2,000) Shares (an "Initial Grant"). On or
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after the Commencement date, options may be granted to Directors (the "Date of
Grant"), which grant shall become effective as of the day following approval of
the Plan by the Shareholders of the Company at the Company's 1995 Annual Meeting
of Shareholders and compliance with applicable securities laws; and which shall
thereafter vest as provided in Section 5(d) hereof.
(iii) on each anniversary date of the Date of Grant (the "Anniversary
Grant Date"), each Director who has been a Director continuously for the
preceding calendar year shall be entitled to a grant of an option to purchase an
additional two thousand (2,000) Shares (an "Annual Grant"). Notwithstanding the
foregoing, the maximum number of Shares for which options may be granted under
the Plan to any Director shall be ten thousand (10,000) Shares.
(iv) In the event a Director who is entitled to an Initial Grant or
Annual Grant on the Date of Grant or Anniversary of Grant Date, respectively,
ceases to be a Director for any reason other than by reason of death of said
Director prior to the Date of Grant or Anniversary Grant Date, such Director
shall not be entitled to receive such Initial Grant or Annual Grant.
(v) In the event of the death, prior to the Date of Grant or
Anniversary Grant Date, of a Director who is entitled to an Initial Grant or
Annual Grant on the Date of Grant or Anniversary Grant Date, respectively, the
personal
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representative of said Director shall be entitled to receive the Initial Grant
of Annual Grant to which said Director was entitled on such Date of Grant or
Anniversary Grant Date, but shall not be entitled to receive any further grants
under the Plan.
(vi) No proration of an Annual Grant shall be made to any Director
based on a partial year of service as a Director.
(b) Vesting Period of options. With respect to each option granted
pursuant to Section 5(a) above, each optionee shall agree to remain as a
director and to render his or her services for a period of at least six (6)
months from the respective Date of Grant or Anniversary Grant Date, but such
agreement shall not impose upon the Company any obligation to retain the
optionee as a director for any period. No option may be exercised by any
optionee unless and until the optionee has served continuously as a director,
officer or employee for a period of six (6) months from the date of grant of
such option (the "Vesting Period"), except as set forth in Sections 5(e) and 6
hereof. Upon the expiration of six (6) months from each respective Date of
Grant or Anniversary Grant Date, each option granted pursuant to Section
5(a)(ii) thru (iv) shall become immediately exercisable in full.
(c) Option Price. The purchase price (the "Option Price") under each
option shall be not less than one hundred
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percent (100%) of the fair market value of the Shares subject thereto on the
date the option is granted, as such value is determined by the Committee. 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. If, however, an employee owns stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, the option price of any incentive
stock option granted to such optionee shall be not less than one hundred ten
percent (110%) of such fair market value at the time such option is granted.
(d) Duration and Exercise of options. Each option shall vest in such
manner and at such time at the rate of at least 20% per year up to but not
exceeding five (5) years from the date the option is granted for all
Participants as the Committee shall determine in its sole discretion; provided,
however, that the Committee may, in its sole discretion, accelerate the time of
exercise of any option; provided, further, that if an incentive stock option is
granted to an employee owning stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company, such
option by its terms is not exercisable after the expiration of five (5) years
from the date such option is granted. Each option may be exercised for a period
of up to one hundred twenty (120)
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months from the date of grant, subject to the vesting provisions set forth
herein and to a determination of the Committee that an option may expire in such
lesser period of time as they may determine in their sole discretion. The
termination of the Plan shall not alter the maximum duration, the vesting
provisions, or any other term or condition of any option granted prior to the
termination of the Plan.
To the extent the right to purchase Shares has vested under a Participant's
stock option agreement, options may be exercised from time to time by delivering
payment in full at the option Price for the number of Shares being purchased by
either: (i) cash, certified check, official bank check or the equivalent thereof
acceptable to the Company; or (ii) shares of the Company's Common Stock with a
fair market value on the date of exercise equal to the Option Price; or (iii) a
combination of (i) and (ii) above; together with written notice to the Secretary
of the Company identifying the option or part thereof being exercised and
specifying the number of Shares for which payment is being tendered. The
Company shall deliver to the Optionee, which delivery shall be not less than
fifteen (15) days and not more than thirty (30) days after the giving of such
notice, without transfer or issue tax to the Optionee (or other person entitled
to exercise the option) at the principal office of the Company, or such other
place as shall be mutually acceptable, a certificate or certificates for such
Shares dated the date
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the options were validly exercised; provided, however, that the time of such
delivery may be postponed by the Company for such period as may be required for
it with reasonable diligence to comply with any requirements of law. If an
option covers incentive and non-statutory stock options, separate stock
certificates shall be issued; one or more for stock acquired upon exercise of
the incentive stock options and one or more for the stock acquired upon exercise
of the non-statutory stock options.
(e) Termination of Employment, or Director or Officer Status. Upon the
termination of an Optionee's status as an employee, director or officer of the
Company, his or her rights to exercise an option then held shall be only as
follows:
DEATH OR DISABILITY: If an Optionee's employment or status as an
officer or director is terminated by death or disability, such Optionee or such
Optionee's qualified representative (in the event of the Optionee's mental
disability) or the Optionee's estate (in the event of the Optionee's death)
shall have the right for a period of twelve (12) months following the date of
such death or disability to exercise the option to the extent the Optionee was
entitled to exercise such option on the date of the Optionee's death or
disability, provided the actual date of exercise is in no event after the
expiration of the term of the option.
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An Optionee's "estate" shall mean the Optionee's legal representative
or any person who acquires the right to exercise an option by reason of the
Optionee's death.
CAUSE: If an employee or officer is determined by the Board of
Directors to have committed an act of embezzlement, fraud, dishonesty, breach of
fiduciary duty to the Company, or to have deliberately disregarded the rules of
the Company which resulted in loss, damage or injury to the Company, or if an
Optionee (other than a director) makes any unauthorized disclosure of any of the
secrets or confidential information of the Company, induces any client or
customer of the Company to break any contract with the Company or induces any
principal for whom the Company acts as agent to terminate such agency relations,
or engages in any conduct which constitutes unfair competition with the Company,
or if an Optionee is removed from any office of the Company by any bank
regulatory agency or by judicial process, the Optionee or the Optionee's estate
shall be entitled to exercise any option with respect to any Shares for a period
of thirty (30) days after termination of employment or status as a director or
officer. The Optionee may receive payment from the Company for vacation pay,
for services rendered prior to termination, for services for the day on which
termination occurred, for salary in lieu of notice, or for other benefits. In
making such determination, the Board of Directors shall act fairly and shall
give the Optionee an
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opportunity to appear and be heard at a hearing before the full Board of
Directors and present evidence on the Optionee's behalf. For the purpose of
this paragraph, termination of employment or officer status shall be deemed to
occur when the Company dispatches notice or advice to the Optionee that the
Optionee's employment or status as an officer is terminated and not at the time
of Optionee's receipt thereof.
OTHER REASONS: If an Optionee's employment or status as a director or
officer is terminated for any other reason other than those mentioned above
under "Death or Disability" and "Cause", the Optionee may, within three (3)
months following such termination, exercise the option to the extent such option
was exercisable by the Optionee on the date of termination of the Optionee's
employment or status as a director or officer, provided the date of exercise is
in no event after the expiration of the term of the option.
(f) Transferability of option. Each option shall be transferable only by
will or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code and shall be exercisable during the
Optionee's lifetime only by the Optionee.
(g) Other Terms and Conditions. Options may also contain such other
provisions, which shall not be inconsistent with any of the foregoing terms, as
the Committee shall deem appropriate. No option, however, nor
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anything contained in the Plan, shall confer upon any Optionee any right to
continue in the employ or in the status as an officer of the Company, nor limit
in any way the right of the Company to terminate an Optionee's employment or
status as an officer at any time.
Nor shall any option, nor anything contained in the Plan, obligate the
Company or any Affiliate to continue any Optionee's status as a director or to
vote any shares held by the Company's proxy holders in favor of any Optionee at
any shareholders, meeting of the Company at which directors are to be elected.
(h) Use of Proceeds from Stock. Proceeds from the sale of Shares pursuant
to the exercise of options granted under the Plan shall constitute general funds
of the Company.
(i) Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any Shares until the date of issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date of such issuance, except
as provided in Section 6 hereof.
(j) Exercisability of Incentive Stock Options. The aggregate fair market
value (determined at the time the option is granted) of the stock with respect
to which incentive stock options are exercisable for the first time by an
optionee during any calendar year (under all such plans of the Company) shall
not exceed $100,000. Any option not
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complying with this Section 5(j) shall be a non-qualified stock option.
(k) Tax Withholding. The Company may determine that is required to
withhold taxes relating to the exercise of any option and that such tax
withholding shall be satisfied in a manner satisfactory to the Company before
Shares pursuant to the exercise of an option are delivered to an Optionee. The
Optionee may elect to pay such tax upon the exercise of a stock option by
surrendering a sufficient number of previously issued shares. The value of
Shares surrendered shall be the fair market value of such Shares on the date the
exercise becomes taxable. The election to withhold shares otherwise deliverable
upon exercise of the option, or to surrender previously issued shares, shall be
subject to the approval of the Committee and must be made pursuant to rules
established by the Committee.
6. ADJUSTMENT OF AND CHANGES IN THE SHARES
In the event the shares of Common Stock of the Company, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another corporation
(whether by reason of reorganization, merger, consolidation, recapitalization,
reclassification, split-up, combination of shares or otherwise), or if the
number of shares of Common Stock of the Company shall be increased through the
payment of a stock dividend or increased or decreased through a stock
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split, the Board of Directors shall substitute for or add to each share of
Common Stock of the Company theretofore appropriated or thereafter subject or
which may become subject to an option under the Plan, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock of the Company shall be so changed, or for which each share shall be
exchanged, or to which each such share shall be entitled, as the case may be.
In addition, the Committee shall make appropriate adjustment in the number and
kind of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable so that any Optionee's proportionate interest
in the Company by reason of his rights under unexercised portions of such
options shall be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change in the total
price of the unexercised portion of the option and with a corresponding
adjustment in the option price per share.
In the event of sale, dissolution or liquidation of the Company or a merger
or consolidation in which the Company is not the surviving or resulting
corporation, the Committee shall have the power to cause the termination of
every option outstanding hereunder, except that the surviving or resulting
corporation may, in its absolute and uncontrolled discretion, tender an option
or options to purchase its shares on its terms and conditions, both as to the
number of shares and
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otherwise; provided, however, that in all events the Optionee shall have the
right immediately prior to such sale, dissolution, liquidation, or merger or
consolidation in which the Company is not the surviving or resulting corporation
to notification thereof as soon as practicable and, thereafter, to exercise the
Optionee's option to purchase Shares subject thereto to the extent of any
unexercised portion of the option, regardless of the vesting provision of
Section 5(b) hereof. This right of exercise shall be conditioned upon the
execution of a final plan of dissolution or liquidation or a definitive
agreement of merger or consolidation.
In the event of an offer by any person or entity to all shareholders of the
Company to purchase any or all shares of Common Stock of the Company (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in Section 6 hereof), any
Optionee under this Plan shall have the right upon the commencement of such
offer to exercise the option and purchase shares subject thereto subject to the
vesting provisions of Section 5(b) and (d) hereof.
No right to purchase fractional shares shall result from any adjustment in
options pursuant to this Section 6. In case of any such adjustment, the shares
subject to the option shall be rounded down to the nearest whole share. Notice
of any adjustment shall be given by the Company to each holder of an option
which was in fact so adjusted and such
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adjustment (whether or not such notice is given) shall be effective and binding
for all purposes of the Plan.
To the extent the foregoing adjustments relate to stock or securities of
the Company, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive. Any issue
by the Company of shares of stock of any class, or securities convertible into
shares of any class, shall not affect the number or price of shares of Common
Stock subject to the option, and no adjustment by reason thereof shall be made.
The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassification,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
7. LISTING OR QUALIFICATION OF SHARES
All options granted under the Plan are subject to the requirement that if
at any time the Board of Directors or the Committee shall determine in its
discretion that the listing or qualification of the Shares subject thereto on
any securities exchange or under any applicable law, or the consent or approval
of any governmental regulatory body, is necessary or desirable as a condition of
or in connection with the issuance of Shares under the option, the option may
not be exercised in whole or in part unless such listing,
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qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Board of Directors or the Committee.
8. AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors shall have complete power and authority to terminate
or amend the Plan; provided, however, that the Board of Directors shall not,
without the approval of the shareholders of the Company, (i) materially increase
the benefits accruing to Participants under the Plan; (ii) increase the number
of securities which may be issued under the Plan; or (iii) modify the
requirements as to eligibility for participation in the Plan; and provided
further that the terms set forth in Section 5 of the Plan shall not be amended
more than once every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder. Except as provided in Section 6, no termination, modification or
amendment of the Plan may, without the consent of an employee, director or
officer to whom such option shall theretofore have been granted, adversely
affect the rights of such employee, director or officer under such option.
Unless the Plan shall have been terminated by action of the Board of Directors
prior thereto, it shall terminate ten (10) years from the earlier of its
adoption by the Board of Directors or approval by the Company's shareholders,
unless earlier terminated by the Board of Directors.
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Unless the Plan shall have been terminated by action of the Board of
Directors prior thereto, the Plan shall terminate on ______, 2005 (ten years
from its adoption).
9. BINDING EFFECT OF CONDITIONS
The conditions and stipulations herein contained, or in any option granted
pursuant to the Plan shall be, and constitute, a covenant running with all of
the Shares acquired by the optionee pursuant to this Plan, directly or
indirectly, whether the same have been issued or not, and those Shares owned by
the optionee shall not be sold, assigned or transferred by any person save and
except in accordance with the terms and conditions herein provided, and the
optionee shall agree to use best efforts to cause the officers of the Company to
refuse to record on the books of the Company any assignment or transfer made or
attempted to be made except as provided in the Plan and to cause said officers
to refuse to cancel old certificates or to issue or deliver new certificates
therefor where the purchaser or assignee has acquired certificates or the Shares
represented thereby, except strictly in accordance with the provisions of the
Plan.
10. EFFECTIVENESS OF THE PLAN
The Plan shall become effective only upon approval by the Board of
Directors. The grant of any options pursuant to the Plan shall be conditioned
upon the registration of the
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Shares with the Securities and Exchange Commission and Qualification of the
offer and sale of the Shares pursuant to the Plan with the Commissioner of
Corporations of the State of California, unless in the opinion of counsel to the
Company such registration or qualification is not necessary.
11. 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 not actually issued and delivered to the optionee. No Shares shall
be purchased upon the exercise of any option unless and until any applicable
requirements of any regulatory agencies having jurisdiction, and of any
exchanges upon which the Common Stock of the Company may be listed, shall have
been satisfied. The Company shall diligently endeavor to comply with all
applicable securities laws before any options are granted under the Plan and
before any Shares are issued pursuant to the exercise of such options. The
optionee shall give the Company notice of any sale or other disposition of any
such Shares not more than five (5) days after such sale or other disposition.
12. INDEMNIFICATION
The Company shall indemnify its "agents", as defined in Section 317 of the
California Corporations Code, to the full extent permitted by Section 317, as
amended from time to
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time, or as permitted by any successor statute to Section 317, and by the
Company's Articles of Incorporation.
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13. INFORMATION TO OPTIONEES
The Company shall provide to each optionee during the period for which he
or she has one or more options outstanding, copies of all annual reports and
other information which are provided to all shareholders of the Company. The
Company shall not be required to provide such information to directors or key
employees whose duties in connection with the Company assure their access to
equivalent information.
Adopted: ______, 1995.
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