EXHIBIT 10.1
NAPA NATIONAL BANCORP
---------------------
1992 STOCK OPTION PLAN
----------------------
ARTICLE 1. INTRODUCTION.
---------- ------------
The Plan was adopted by the Board on June 30, 1992, subject to approval by
the Company's shareholders at the 1992 annual meeting of shareholders. The
purpose of the Plan is to promote the long-term success of the Company and the
creation of shareholder value by (a) encouraging Non-Employee Directors and Key
Employees to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Non-Employee Directors and Key Employees with
exceptional qualifications and (c) linking Non-Employee Directors and Key
Employees directly to shareholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for awards in the form of
Options, which may constitute incentive stock options or nonstatutory stock
options.
The Plan shall be governed by, and construed in accordance with, the laws
of the State of California.
ARTICLE 2. ADMINISTRATION.
---------- --------------
2.1 The Committee. The Plan shall be administered by the Committee
-------------
appointed by the Board.
2.2 Committee Responsibilities. The Committee shall select the Non-
--------------------------
Employee Directors and Key Employees who are to receive Options under the Plan,
determine the number, vesting requirements and other conditions of such Options,
interpret the Plan, and make all other decisions relating to the operation of
the Plan. The Committee may adopt such rules or guidelines as it deems
appropriate to implement the Plan. The Committee's determinations under the
Plan shall be final and binding on all persons.
ARTICLE 3. LIMITATION ON AWARDS.
---------- --------------------
3.1 Basic Limitation. The aggregate number of Common Shares subject to
----------------
Options awarded under the Plan shall be 67,550; increased by any shares
attributable to options that are forfeited, lapse, or terminate for any reason
before being exercised under the Napa National Bancorp 1982 Stock Option Plan.
In no event will the number of Common Shares subject to Options awarded under
the Plan that are attributable to options that were forfeited, lapsed or
terminated for any other reason before being exercised under the Napa National
Bancorp 1982 Stock Option Plan exceed 158,800.
3.2 Additional Shares. If any Options are forfeited, lapse, or terminate
-----------------
for any other reason before being exercised,
-1-
then the Common Shares subject to such Options shall again become available for
the purposes of the Plan. The limitation of this Article 3 shall be subject to
adjustment pursuant to Article 7.
ARTICLE 4. ELIGIBILITY.
---------- -----------
4.1 General Rule. Only Non-Employee Directors and Key Employees shall be
------------
eligible for designation as Optionees by the Committee. In addition, only Key
Employees shall be eligible for the grant of ISOs.
4.2 Non-Employee Directors. Any other provision of the Plan
----------------------
notwithstanding, the participation of Non-Employee Directors in the Plan shall
be subject to the following restrictions:
(a) Non-Employee Directors shall receive no grants other than the NSOs
described in this Section 4.2.
(b) Each Non-Employee Director who first joins the Board after July 14,
1992, shall receive an NSO covering 10,000 Common Shares on the first
business day after his or her initial election or appointment to the Board.
(The number of Common Shares included in an NSO granted under this
Subsection (b) shall be subject to adjustment under Article 7.)
(c) NSOs granted under Subsection (b) above shall become exercisable
immediately.
(d) The Exercise Price under all NSOs granted to a Non-Employee
Director under this Section 4.2 shall be equal to 100 percent of the Fair
Market Value of a Common Share on the date of grant, payable in cash or in
one of the forms described in Sections 6.2 or 6.3.
(e) All NSOs granted to a Non-Employee Director under this Section 4.2
shall terminate on the earliest of (i) the 10th anniversary of the date of
grant, (ii) the date of the termination of such Non-Employee Director's
service for any reason other than death or total and permanent disability
or (iii) the date 30 days after the termination of such Non-Employee
Director's service because of death or total and permanent disability.
4.3 Ten-Percent Shareholders. A Key Employee who owns more than 10
------------------------
percent of the total combined voting power of all classes of outstanding stock
of the Company or any of its Subsidiaries shall not be eligible for the grant of
an ISO unless (a) the Exercise Price under such ISO is at least 110 percent of
the Fair Market Value of a Common Share on the date of grant and (b) such ISO by
its terms is not exercisable after the expiration of five years from the date of
grant.
-2-
4.4 Attribution Rules. For purposes of Section 4.3, in determining stock
-----------------
ownership, a Key Employee shall be deemed to own the stock owned (directly or
indirectly) by or for his or her brothers, sisters, spouse, ancestors and lineal
descendants. Stock owned (directly or indirectly) by or for a corporation,
partnership, estate or trust shall be deemed to be owned proportionately by or
for its shareholders, partners or beneficiaries. Stock with respect to which
the Key Employee holds an option shall not be counted.
4.5 Outstanding Stock. For purposes of Section 4.3, "outstanding stock"
-----------------
shall include all stock actually issued and outstanding immediately after the
grant of the ISO to the Key Employee. "Outstanding stock" shall not include
shares authorized for issuance under outstanding options held by the Key
Employee or by any other person.
ARTICLE 5. TERMS OF OPTIONS.
---------- ----------------
5.1 Stock Option Agreement. Each grant of an Option under the Plan shall
----------------------
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical. If the Optionee is a Key Employee,
the Committee may designate all or any part of the Option as an ISO.
5.2 Options Nontransferable. No Option or interest therein may be
-----------------------
transferred, assigned, pledged or hypothecated by the Optionee during his or her
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
5.3 Number of Shares; Tax Status. Each Stock Option Agreement shall
----------------------------
specify the number of Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 7. The Stock Option
Agreement shall also specify whether the Option is an ISO or an NSO.
5.4 Exercise Price. Each Stock Option Agreement shall specify the
--------------
Exercise Price. The Exercise Price under an ISO shall not be less than 100
percent of the Fair Market Value of a Common Share on the date of grant, except
as otherwise provided in Section 4.3. The Exercise Price under an NSO shall not
be less than 100 percent of the Fair Market Value of a Common Share on the date
of grant. Subject to the preceding two sentences, the Exercise Price under any
Option shall be determined by the Committee. The Exercise Price shall be
payable in accordance with Article 6.
-3-
5.5 Exercisability and Term. Each Stock Option Agreement shall specify
-----------------------
the date when all or any installment of the Option is to become exercisable and
shall provide for immediate exercisability of the entire Option in the event of
a Change in Control with respect to the Company. The Stock Option Agreement
shall also specify the term of the Option. The term of an Option shall in no
event exceed 10 years from the date of grant, and Section 4.3 may require a
shorter term for an ISO. Subject to this Section 5.5, the Committee shall
determine when all or any part of an Option is to become exercisable and when
such Option is to expire. A Stock Option Agreement may provide for accelerated
exercisability upon the Optionee's death, disability or retirement or other
events and may provide for expiration prior to the end of its term in the event
of the termination of the Optionee's service.
5.6 Modification, Extension and Assumption of Options. Within the
-------------------------------------------------
limitations of the Plan, the Committee may modify, extend or assume outstanding
options or may accept the cancellation of outstanding options (whether granted
by the Company or by another issuer) in return for the grant of new options for
the same or a different number of shares and at the same or a different exercise
price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, alter or impair his or her rights or
obligations under such Option.
ARTICLE 6. PAYMENT FOR OPTION SHARES.
---------- -------------------------
6.1 General Rule. The entire Exercise Price of Common Shares issued upon
------------
exercise of Options shall be payable in cash at the time when such Common Shares
are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be made
only pursuant to the express provisions of the applicable Stock Option
Agreement. However, the Committee may specify in the Stock Option Agreement
that payment may be made pursuant to Section 6.2, 6.3 or 6.4.
(b) In the case of an NSO, the Committee may at any time accept payment
pursuant to Section 6.2, 6.3 or 6.4.
6.2 Surrender of Stock. To the extent that this Section 6.2 is
------------------
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the Optionee for more than six
months and which are surrendered to the Company. Such Common Shares shall be
valued at their Fair Market Value on the date when the new Common Shares are
purchased under the Plan.
6.3 Exercise/Sale. To the extent that this Section 6.3 is applicable,
-------------
payment may be made by the delivery (on a form
-4-
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Common Shares and to deliver all or part of the
sales proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
6.4 Other Forms of Payment. To the extent that this Section 6.4 is
----------------------
applicable, payment may be made in any other form approved by the Committee,
consistent with applicable laws, regulations and rules.
ARTICLE 7. PROTECTION AGAINST DILUTION.
---------- ---------------------------
7.1 General. In the event of a subdivision of the outstanding Common
-------
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by reclassification or otherwise) into a lesser
number of Common Shares, a recapitalization, a spinoff or a similar occurrence,
the Committee may make appropriate adjustments in one or more of (a) the number
of' Options available for future awards under Article 3, (b) the number of
Options included in awards to Non-Employee Directors under Section 4.2, (c) the
number of Common Shares covered by each outstanding Option or (d) the Exercise
Price under each outstanding Option.
7.2 Reorganizations. In the event that the Company is a party to a merger
---------------
or other reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization. Such agreement shall provide for the assumption or
substitution of outstanding Options by the surviving corporation or its parent,
for their continuation by the Company (if the Company is a surviving
corporation), for accelerated vesting or for settlement in cash.
7.3 Reservation of Rights. Except as provided in this Article 7, an
---------------------
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of Common
Shares subject to an Option. 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,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
-5-
ARTICLE 8. LIMITATION OF RIGHTS.
---------- --------------------
8.1 Employment Rights. Neither the Plan nor any Option granted under the
-----------------
Plan shall be deemed to give any individual a right to remain an employee or
director of the Company or a Subsidiary. The Company and its Subsidiaries
reserve the right to terminate the service of any employee or director at any
time, with or without cause, subject only to a written employment agreement (if
any) or applicable by-law provisions.
8.2 Shareholders' Rights. An Optionee shall have no dividend rights,
--------------------
voting rights or other rights as a shareholder with respect to any Common Shares
covered by his or her Option prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Article 7.
8.3 Government Regulations. Any other provision of the Plan
----------------------
notwithstanding, the obligations of the Company with respect to Common Shares to
be issued pursuant to the Plan shall be subject to all applicable laws, rules
and regulations and such approvals by any governmental agencies or stock
exchanges as may be required. The Company reserves the right to restrict, in
whole or in part, the delivery of Common Shares pursuant to any Option until
such time as any legal requirements or regulations have been met relating to the
issuance of such Common Shares, to their registration or qualification (or
exemption from registration or qualification) under the Securities Act of 1933,
as amended, or any applicable state securities laws, or to their listing on any
stock exchange.
ARTICLE 9. WITHHOLDING TAXES.
---------- -----------------
9.1 General. To the extent required by applicable federal, state, local
-------
or foreign law, an Optionee shall make arrangements satisfactory to the Company
for the satisfaction of any withholding tax obligations that arise by reason of
an Option. The Company shall not be required to issue any Common Shares under
the Plan until such obligations are satisfied.
9.2 Share Withholding. The Committee may permit an Optionee to satisfy
-----------------
all or part of his or her withholding tax obligations by having the Company
withhold a portion of any Common Shares that otherwise would be issued to him or
her or by surrendering a portion of any Common Shares that previously were
issued to him or her. Such Common Shares shall be valued at their Fair Market
Value on the date when taxes otherwise would be withheld in cash. The payment
of withholding taxes by assigning Common Shares to the Company, if permitted by
the Committee, shall be subject to such restrictions as the Committee may
impose.
-6-
ARTICLE 10. FUTURE OF THE PLAN.
----------- ------------------
10.1 Term of the Plan. The Plan, as set forth herein, shall become
----------------
effective on June 30, 1992, subject to the approval of the Company's
shareholders. In the event that the shareholders fail to approve the Plan at
the 1992 annual meeting, or any adjournment thereof, any Options granted prior
to such meeting shall be null and void, and no additional Options shall be
granted after such meeting. Any other provision of the Plan notwithstanding, no
Option shall be exercisable prior to such meeting. The Plan shall remain in
effect until it is terminated under Section 10.2, except that no new Options
shall be granted after June 29, 2002.
10.2 Amendment or Termination. The Board may, at any time and for any
------------------------
reason, amend or terminate the Plan, except that the provisions of Section 4.2
relating to the amount, price and timing of Option grants to Non-Employee
Directors shall not be amended more than once in any six-month period. An
amendment of the Plan shall be subject to the approval of the Company's
shareholders only to the extent required by applicable laws, regulations or
rules.
10.3 Effect of Amendment or Termination. No Options shall be granted
----------------------------------
under the Plan after the termination thereof. The termination of the Plan, or
any amendment thereof, shall not affect any Option previously granted under the
Plan.
ARTICLE 11. DEFINITIONS.
----------- -----------
11.1 "Board" means the Company's Board of Directors, as constituted from
-----
time to time.
11.2 "Change in Control" means the occurrence of either of the following
-----------------
events:
(a) A change in the composition of the Board, as a result of which
fewer than one-half of the incumbent directors are directors who either:
(i) Had been directors of the Company 24 months prior to such
change; or
(ii) Were elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the directors who had
been directors of the Company 24 months prior to such change and who
were still in office at the time of the election or nomination; or
(b) Any "person" (as such term is used in sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) by the acquisition or
aggregation of securities is or becomes the beneficial owner, directly or
indirectly, of
-7-
securities of the Company representing 20 percent or more of the combined
voting power of the Company's then outstanding securities ordinarily (and
apart from rights accruing under special circumstances) having the right to
vote. at elections of directors (the "Base Capital Stock"); except that any
change in the relative beneficial ownership of the Company's securities by
any person resulting solely from a reduction in the aggregate number of
outstanding shares of Base Capital Stock, and any decrease thereafter in
such person's ownership of securities, shall be disregarded until such
person increases in. any manner, directly or indirectly, such person's
beneficial ownership of any securities of the Company.
11.3 "Code" means the Internal Revenue Code of 1986, as amended.
11.4 "Committee" means the committee designated by the
---------
Board, which is authorized to administer the Plan under Article 2 hereof. The
Committee shall have membership composition which enables the Plan to qualify
under Rule 16b-3 with regard to Options awarded to persons who are subject to
Section 16 of the Exchange Act.
11.5 "Common Share" means one share of the common stock of the
------------
Company.
11.6 "Company" means Napa National Bancorp, a California
--------
corporation.
11.7 "Exercise Price" means the amount for which one Common
--------------
Share may be purchased upon exercise of an Option, as specified by the Committee
in the applicable Stock Option Agreement.
11.8 "Fair Market Value" shall mean the fair market value of a
-----------------
Common Share, as determined by the Committee in good faith.
11.9 "ISO" means an incentive stock option described in section
---
422(b) of the Code.
11.10 "Key Employee" means a key common-law employee of the
------------
Company or of a Subsidiary, as determined by the Committee.
11.11 "Non-Employee Director" means a member of the Board who is
---------------------
not a common-law employee of the Company or of a Subsidiary.
11.12 "NSO" means an employee stock option not described in
---
section 422 or 423 of the Code.
11.13 "Option" means an ISO or NSO granted under the Plan and
------
entitling the holder to purchase one Common Share.
-8-
11.14 "Optionee" means an individual or estate who holds an
--------
Option.
11.15 "Plan" means this Napa National Bancorp 1992 Stock Option
----
Plan, as it may be amended from time to time.
11.16 "Stock Option Agreement" means the agreement between the
----------------------
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her Option.
11.17 "Subsidiary" means any corporation, if the Company and/or
----------
one or more other Subsidiaries own not less than 50 percent of the total
combined voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.
ARTICLE 12. EXECUTION.
----------- ---------
To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to affix the corporate name and seal hereto.
NAPA NATIONAL BANCORP
By ______________________________
As its __________________________
-9-