EXHIBIT 4b
HERITAGE OAKS BANCORP
STOCK OPTION AGREEMENT UNDER 1997 STOCK OPTION PLAN
To: Granting Date:
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We are pleased to notify you that Heritage Oaks Bancorp (the "Company")
hereby grants to you an option to purchase all or any part of ________________
shares of the Common Stock of the Company (the "Shares") at the exercise price
of $__________ (the "Exercise Price") per Share as a stock option under the
Company's 1997 Stock Option Plan (the "Plan").
THIS OPTION IS:
A. AN INCENTIVE OPTION ONLY IF THIS BLANK IS INITIALED BY THE
COMPANY AT THE SAME TIME THIS AGREEMENT IS DELIVERED TO YOU
_______.
OTHERWISE, IT IS A NON-QUALIFIED OPTION.
B. A "DIRECTOR OPTION" ONLY IF THIS BLANK IS INITIALED AT THE TIME
THIS AGREEMENT IS DELIVERED TO YOU ___________ . ALL DIRECTOR
OPTIONS ARE NON-QUALIFIED OPTIONS, REGARDLESS OF ANY OTHER TERMS
SET FORTH HEREIN.
THE OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS OF THE PLAN.
ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARIZED IN THIS STOCK OPTION
AGREEMENT (THIS "AGREEMENT").
1. PURPOSE OF THE OPTION.
One of the purposes of the Plan is to advance the interests of the Company
and its subsidiaries by stimulating the efforts of directors, officers and
full-time salaried employees on behalf of the Company, by granting them
financial participation in the progress of the Company.
2. SIGNATURE ON OPTION AGREEMENT.
This option cannot be exercised unless you first sign this document in the
place provided and return it to the Secretary of the Company. It should be
returned before the close of business on the 20th day after the granting of this
option. If you fail to do so, this option may terminate and be of no effect.
However, your signing and delivering this letter will not bind you to purchase
any Shares subject to the option. Your obligation to purchase the Shares can
arise only when you exercise this option in the manner set forth in Paragraph 3
below.
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3. TERMS OF OPTION AND EXERCISE OF OPTION.
Subject to the provisions of Paragraph 4 and this Paragraph 3, this option
shall vest and become exercisable as to the following shares on the following
dates:
Number of Months Number
Following Grant Of Shares
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Any portion of this option that you do not exercise shall accumulate and
can be exercised by you any time prior to the expiration of _______________
(_____) months from the granting date.
This option may be exercised by delivering to the Chief Financial Officer
of the Company payment in full of the Exercise Price for the number of Shares
being purchased in cash or by certified check or official Company check or the
equivalent thereof acceptable to the Company or in Shares of Company common
stock, together with a written notice in a form satisfactory to the Company,
signed by you specifying the number of Shares you then desire to purchase and
the time of delivery thereof, which shall not be less than five (5) days and not
more than thirty (30) days after the giving of such notice unless an earlier or
later date is mutually agreed upon. (Common Stock utilized in full or partial
payment of the Exercise Price shall be valued at its market value (determined in
accordance with the Plan) at the date of exercise.) At such time the Company
shall, without transfer or issue tax to you (or such other person entitled to
exercise this option), deliver to you (or such person entitled to exercise this
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 of this option was 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. No
fractional shares shall be issued or delivered.
As a holder of this option, you shall have the rights of a shareholder with
respect to the Shares subject to this option only after such Shares shall have
been issued and delivered to you upon the exercise of this option.
4. TERMINATION OF OFFICE OR EMPLOYMENT.
Except to the extent otherwise provided in more restrictive terms of this
Agreement, this option may be exercised by you only with respect to the vested
portion of your option and only while you are an Employee or Director and have
maintained Continuous Service (all as defined in the Plan) from the date of the
grant of this option, or within three months after termination of such
Continuous
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Service (but not later than the date on which this option would otherwise
expire), except if the Employee's or Director's Continuous Service terminates by
reason of:
(a) "Just Cause" which for purposes hereof shall mean termination because
of the Employee's or Director's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, then your rights to exercise this option shall expire on
the date of such termination;
(b) death, then all of your options shall become immediately exercisable
and may be exercised within one year from the date of your death (but not later
than the date on which the option would otherwise expire) by your personal
representatives of your estate or person or persons to whom your rights under
this option shall have passed by will or by laws of descent and distribution;
(c) Permanent and Total Disability (as such term is defined in Section
22(e)(3) of the Internal Revenue Code), then your options shall become
immediately exercisable and may be exercised within one year from the date of
such Permanent and Total Disability, but not later than the date on which the
option would otherwise expire.
The Company's determination whether your Continuous Service has ceased, and the
effective date thereof, shall be final and conclusive on all persons affected
thereby.
5. NONTRANSFERABILITY OF OPTION.
Your option may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent and
distribution, or pursuant to the terms of a "qualified domestic relations order"
(within the meaning of Section 414(p) of the Internal Revenue Code and the
regulations and rulings thereunder). This option may be exercised only by you,
your personal representative or a permitted transferee.
6. ADJUSTMENT OF AND CHANGES IN THE SHARES.
(a) The number and kind of shares reserved for issuance under the Plan,
and the number and kind of shares subject to this option (and the Exercise Price
thereof), shall be proportionately adjusted for any increase, decrease, change
or exchange of Shares for a different number or kind of shares or other
securities of the Company which results from a merger, consolidation,
recapitalization, reorganization, reclassification, stock dividend, split-up,
combination of shares, or similar event in which the number or kind of shares is
changed without the receipt or payment of consideration by the Company.
(b) In the event of (i) the liquidation or dissolution of the Company,
(ii) a merger or consolidation in which the Company is not the surviving entity,
(iii) the sale or disposition of all or substantially all of the Company's
assets or (iv) a tender offer or acquisition by one person or a group
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of persons acting in concert of more than 50% of the Company's outstanding
Shares (any of the foregoing to be referred to herein as a "Transaction"), the
Company shall notify you of the pendency of the Transaction. Upon delivery of
said notice, this option shall be, notwithstanding provisions to the contrary,
exercisable in full and not only as to those Shares with respect to which
installments, if any, have vested, subject, however, to earlier expiration or
termination as provided elsewhere in this option. Upon the date thirty (30)
days after delivery of such notice, this option or any portion thereof not
exercised shall terminate, unless provision is made in connection with the
Transaction for assumption of this option, or payment therefor, or substitution
for this option of a new option covering stock of a successor 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.
(c) Any adjustment made pursuant to subparagraphs (a) or (b) hereof shall
be made in such a manner as not to constitute a modification, within the meaning
of Section 424(h) of the Internal Revenue Code, of an outstanding Incentive
Option.
(d) If, by reason of any adjustment made pursuant to this Paragraph, you
become entitled to new, additional or different shares of stock or securities,
such new, additional or different shares of stock or securities shall thereupon
be subject to all of the conditions and restrictions which were applicable to
the Shares pursuant to this option before the adjustment was made.
(e) Except as expressly provided in this Paragraph, the issuance by the
Company or an Affiliate of shares of stock of any class, or of securities
convertible into Shares or stock of another class, for cash or property or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, shall not affect and no adjustment shall be made
with respect to, the number, class, or Exercise Price of Shares then subject to
this option.
7. SUBJECT TO TERMS OF THE PLAN.
This Agreement and the option granted hereby shall be subject in all
respects to the terms and conditions of the Plan. In the event of any conflict
or inconsistency between this Agreement and the terms of the Plan, the terms of
the Plan shall control. Your signature herein represents your acknowledgment of
receipt of a copy of the Plan. Any dispute or disagreement which shall arise
under, or as a result of, or pursuant to, this Agreement shall be finally and
conclusively determined by the Board of Directors of the Company or duly
appointed Committee in its sole discretion, and such determination shall be
binding upon all parties.
8. TAX EFFECTS.
THE FEDERAL TAX CONSEQUENCES OF STOCK OPTIONS ARE COMPLEX AND SUBJECT TO
CHANGE. A TAXPAYER'S PARTICULAR SITUATION MAY BE SUCH THAT SOME VARIATION OF
THE GENERAL RULE IS APPLICABLE. ACCORDINGLY, AN
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OPTIONEE SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR BEFORE EXERCISING ANY
OPTION OR DISPOSING OF ANY SHARES ACQUIRED UPON THE EXERCISE OF AN OPTION.
9. RIGHTS AS A SHAREHOLDER OR EMPLOYEE.
You have no rights as a shareholder of the Company with respect to any
Shares until the date of the issuance and delivery of a stock certificate to you
for such Shares. The existence of this option shall neither create nor imply a
right to continued employment with the Company.
10. NOTIFICATION OF SALE.
You agree that you, or any person acquiring Shares upon exercise of this
option, will notify the Company not more than five (5) days before any sale or
disposition of such Shares. If this option is a non-qualified option, you may,
in addition to the exercise price, be required to pay to the Company an amount
equal to the withholding taxes imposed.
HERITAGE OAKS BANCORP
By:
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Name:
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Title:
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Agreed to as of this ______ day
of ______________________.
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Optionee
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