BAY AREA BANCSHARES
1996
STOCK APPRECIATION RIGHTS PLAN
1. PURPOSE
(a) The purpose of this Stock Appreciation Rights ("Plan") is to provide a
means whereby full-time employees of Bay Area Bancshares ("Corporation"),
or of other corporations which are or may hereafter become subsidiaries of
the Corporation (Subsidiaries"), including Bay Area Bank ("Bank"), may be
given an opportunity to participate in the appreciation in the value of the
Corporation's common stock ("Common Stock").
(b) The Plan is intended to advance the profits and prosperity of the
Corporation and the Subsidiaries by enabling the Corporation and the
Subsidiaries to secure and retain the services of highly qualified
employees, by providing such employees with an additional incentive to make
every effort to enhance the success of the Corporation and the
Subsidiaries, and by providing a means whereby employees may be compensated
for significant contributions to the success of the Corporation and the
Subsidiaries.
2. STOCK APPRECIATION RIGHTS AVAILABLE
(a) Subject to adjustment as provided in Section 6(i) hereof, the maximum
number of units for which Stock Appreciation Rights ("SARs") may be awarded
to participants under the Plan is 200,000 units.
(b) Any or all of the SARs subject to the Plan may be allocated to one or
more Subsidiaries, including the Bank, in which case the award of such SARs
to eligible employees of such Subsidiary shall be subject to approval of
the Board of Directors of such Subsidiary and shall be payable by such
Subsidiary when exercised.
3. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors of the Corporation
("Board") or by a Committee of the Board ("Committee") to which the Board
delegates such administration. If the administration is delegated to a
Committee, the Committee shall be responsible to the Board for the
operation of the Plan, and shall make recommendations to the Board with
respect to participation in the Plan and with respect to the extent of that
participation. The Board of Directors (or the Executive Committee of the
Board of Directors) of any Subsidiary may submit a recommendation to the
Board of Directors of the Corporation (or its delegated Committee) for SARs
to be awarded to an eligible employee of such Subsidiary.
(b) In administering the terms of the Plan as they apply to any participant
who is also a director, the vote of such director shall not be counted in
determining the vote required in connection with the award of SARs to such
director or in connection with any other determination with respect to SARs
awarded to such director. Minutes of the meetings of the Board with respect
to the award of SARs and the administration of the Plan shall be kept as
minutes of any other meeting, and the names of the directors who vote or
who abstain from voting shall be noted therein.
(c) The Board shall have plenary authority in its discretion to
determine the employees of the Corporation and/or the Subsidiaries who are
within that class set forth herein as participants, to whom SARs shall be
awarded, the number of SAR units to be awarded, the time or times at which any
SAR shall be awarded or exercisable, to interpret the Plan, and to prescribe,
amend, and rescind rules and regulations relating to it. All questions of
interpretation and application of the Plan and of any SARs awarded under it
shall be determined by the Board and such determination shall be final and
binding upon all persons. No member of the Board shall be liable for any action
or determination made in good faith, and the members shall be entitled to
indemnification and reimbursement in the manner and to the extent permitted by
applicable law.
4. PARTICIPANTS
All full-time employees of the Corporation and the Subsidiaries shall
be eligible to be awarded SARs under the Plan, as and when selected by the Board
("Participants"). SARs may be awarded by the Board at any time and from time to
time to new Participants, or to then Participants.
5. AWARD OF STOCK APPRECIATION RIGHTS
SARs may be awarded under the Plan from time to time, but not after
June 30, 2006. In making any determination as to the employees of the
Corporation and/or the Subsidiaries to whom SARs shall be awarded and as to the
number SAR units awarded, the Board shall take into account the duties of the
respective Participants, their present and potential contributions to the
success of the Corporation or the Subsidiaries, and such other factors as the
Board shall deem relevant in connection with accomplishing the purposes of the
Plan.
6. TERMS AND CONDITIONS OF SARS
SARs awarded pursuant to the Plan shall be evidenced by SARs agreements
in such form, not inconsistent with the Plan, as the Board shall from time to
time approve. Such agreements shall comply with and be subject to the following
terms and conditions:
(a) Base Price. Each SARs agreement shall state the total number of units
to which it pertains and the Base Price per unit applicable to the SARs
awarded. The Base Price shall be established in its discretion by the
Board. The Base Price may be lower than, may be higher than, or may be
based on the fair market value of the shares of Common Stock of the
Corporation at the time of the award of the SARs. Unless otherwise set by
the Board at the time of an award, the Base Price shall be seventy five
percent (75%) of the fair market value of the shares of Common Stock of the
Corporation.
(b) Amount of Appreciation. Each SAR unit shall entitle a Participant to
the following amount of appreciation: the excess of the fair market value
of a share of Common Stock of the Corporation on the exercise date over the
Base Price. The total appreciation available to a Participant from any
exercise of SARs shall be equal to the number of units of SARs being
exercised, multiplied by the amount of appreciation per unit as determined
above.
(c) Fair Market Value. For purposes of the Plan, the fair market value of
the shares of Common Stock of the Corporation shall be established by the
Board by use of any reasonable valuation method, taking into consideration
prices at which shares of the Corporation's Common Stock have recently
traded, the number of shares traded and other relevant factors as
determined by the Board. Unless otherwise determined by the Board at the
time of an award, the fair market value of the shares of Common Stock of
the Corporation shall be the weighted average price of the shares traded
during the prior ninety (90) days.
(d) Term of SARs. Each SAR awarded under the Plan shall expire not more
than ten (10) years from the date the SAR is awarded. Any unit of SAR awarded,
but not exercised prior to termination shall be terminated and returned to the
number of units available to be awarded under the Plan.
(e) Exercise of SARs. Each unit of SAR may be exercised upon such terms
and conditions as the Board shall determine; provided, however, that if any SAR
is not fully exercisable at the time it is awarded, such SAR shall become fully
exercisable within five (5) years from the date it is awarded, at a rate of at
least 20% per year following the date of award. Installments shall be
cumulative.
(f) Manner of Exercise. To the extent that the right to exercise SARs
has accrued hereunder, SARs may be exercised from time to time by written notice
to the Corporation stating the number of units with respect to which the SAR is
being exercised. The Board may require that a partial exercise of SARs be for no
less than one hundred (100) units.
(g) Non-Assignability of SARs. No SAR shall be assignable or
transferable otherwise than by will or the laws of descent and distribution.
During the life of a Participant, a SAR shall be exercisable only by the
Participant.
(a) Termination of Employment.
(1) In the event that a Participant is no longer an employee of
the Corporation or one of the Subsidiaries for any reason, his or her SAR
shall terminate immediately; provided, however, that the Participant shall
have the right, subject to the provisions of Section 6(d) hereof with
respect to the maximum term of the SAR, to exercise the SAR, at any time
within three (3) months from the day he or she ceases to be an employee to
the extent that he or she was entitled to exercise the same immediately
prior to such day, except as provided below. Whether an authorized leave of
absence on military or government service or for other reasons shall
constitute a termination of employment or service as a director or
consultant for purposes of the Plan shall be determined by the Board, and
such determination of the Board shall be final and conclusive.
(2) In the case of a Participant who is disabled, the
three (3) month period specified in Subsection (h)(1) shall be six (6)
months.
(3) If a Participant shall die while an employee, or within
not more than three (3) months from the date when he or she ceases to be an
employee, his or her estate, personal representative, or beneficiary shall have
the right, subject to the provisions of Section 6(d) hereof, to exercise his or
her SARs, at any time within six (6) months from the date of death, to the
extent that he or she was entitled to exercise the same immediately prior to
death.
(i) Adjustments or Changes in Stock; Change in Control.
(1) In the event that the outstanding shares of Common Stock of
the Corporation are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of
the Corporation or of another corporation, by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
combination of shares, dividend payable in common stock, or acquisition, or
any similar transaction, in which the Corporation receives no additional
consideration other than shares or other securities, appropriate adjustment
shall be made by the Board in the number of SARs units which may be awarded
under the Plan. In addition, the Board shall make appropriate adjustment in
the Base Price for unexercised SARs awarded under the Plan so that
Participants' total appreciation to date shall be maintained as before the
occurrence of such event.
(2) In the event of a dissolution or liquidation of the
Corporation, a merger, consolidation, acquisition, or other reorganization
involving the Corporation or a principal subsidiary, in which the Corporation or
such principal subsidiary is not the surviving or resulting corporation, or a
sale by the Corporation or by a principal subsidiary of all or substantially all
of its assets, the Board shall cause the termination of all SARs outstanding
hereunder as of the effective date of such transaction, provided, however, that
advance notice of the expected effective date of such transaction shall be given
to each Participant, to the extent practicable, and each Participant shall have
the right to exercise his or her SARs until the date of such termination as to
all or any part of the SARs which is at that time exercisable.
7. RIGHTS AS A SHAREHOLDER
The Participant shall have no rights as a shareholder with respect to
any shares of Common Stock of the Corporation by virtue of participation in the
Plan. No adjustment shall be made for dividends or other rights, except as
otherwise provided in Section 6(i) hereof.
8. WITHHOLDING TAXES
Whenever the Corporation or a Subsidiary proposes or is required to
make payment to a Participant as a result of an exercise of SARs under the Plan,
the Corporation or applicable Subsidiary shall have the right to withhold
amounts sufficient to satisfy any Federal, state and/or local withholding tax
requirements prior to the payment of the balance of the amount to the
Participant
9. EFFECTIVE DATE AND TERMINATION OF PLAN
The Plan shall become effective, and SARs may be awarded and exercised
hereunder, upon approval of the Board of Directors of the Corporation. The Plan
shall terminate on June 30, 2006, and no further SARs may be awarded thereafter
under the Plan. Termination of the Plan shall not, without the written consent
of the Participant, alter or impair any of the rights or obligations under any
SAR theretofore awarded under the Plan.
10. AMENDMENTS
The Board may terminate the Plan at any time and from time to time
modify or amend the Plan in such respects as it shall deem advisable, or to
conform to any requirements of the laws and regulations relating to the
Corporation or in any other respect.
11. RIGHT TO TERMINATE EMPLOYMENT
Nothing in the Plan or in any agreement entered into pursuant to the
Plan shall confer upon any Participant the right to continue in the employment
of the Corporation or any of the Subsidiaries or effect any right which the
Corporation or any of the Subsidiaries may have to terminate the employment of
such Participant.
BAY AREA BANK
STOCK APPRECIATION RIGHT AGREEMENT
THIS STOCK APPRECIATION RIGHT AGREEMENT ("Agreement") is made
as of the day of , 19 , by and between Bay Area Bank, a California
state-chartered banking corporation ("Bank"),
and ("Participant").
RECITAL
The Board of Directors (the "Board") of the Bay Area
Bancshares (the "Corporation") and the Board of Directors of Bank, pursuant to
the Bay Area Bancshares 1996 Stock Appreciation Right Plan ("Plan"), has
determined to grant to Participant, pursuant to the Plan and as an incentive for
increased efforts during his or her service in the employ of Bank, a stock
appreciation right on the terms and conditions set forth below.
NOW, THEREFORE, the parties agree as follows:
1. Grant of Stock Appreciation Rights. The Corporation hereby grants and the
Bank hereby approves and joins in granting to Participant, under and pursuant to
the Plan, a stock appreciation right ("SAR"), on the terms and conditions
hereinafter set forth, for an aggregate of (_____) units.
2. Exercise. The SAR may be exercised [EITHER: at any time, in whole or in part,
during the term hereof, as provided in Section 4 herein. OR: during the term
hereof, as provided in Section 4 below, upon such terms and conditions as the
Board shall determine; provided, however, that describe vesting schedule
determined by Board . CONTINUE IN EITHER CASE] The SAR shall be exercisable only
when the fair market value of a share of common stock ("Common Stock") of the
Corporation, determined as provided in subsection 6(c) of the Plan, exceeds the
base price of the SAR specified in Section 3 below.
3. Base Price. The base price per unit upon exercise of the SAR shall be
$__________ per share.
4. Term of SAR. The term of this Agreement and the SAR shall commence on the
date hereof, and expire ten (10) years from the date hereof, that is, at 5:00
p.m. Pacific Time, on , , or at such earlier time as provided herein.
5. Manner of Exercise of SARs.
(a) Exercise by Notice. To the extent the right to exercise the
SAR has vested under this Agreement, the SAR may be exercised from time to
time by written notice to the Bank stating the number of units with respect
to which the SAR is being exercised. A partial exercise shall be for no
less than one hundred (100) units. The date the Bank receives such notice
shall be the Exercise Date. Within fifteen (15) days after receipt of such
notice, the Bank shall deliver to the person exercising such right a
certified or official bank check in an amount determined as set forth in
Subsection 5(b) below.
(b) Amount of Payment. The amount of payment to which
Participant shall be entitled upon the exercise of the SAR shall be equal to
100% of the amount, if any, by which the fair market value of a share of Common
Stock on the Exercise Date, determined as provided in subsection 6(c) of the
Plan, exceeds the base price provided in this Agreement, times the number of
units as to which the SAR is being exercised.
6. Non-Assignability of SAR Rights. During Participant's
lifetime, the SAR may be exercised only by Participant, and the SAR is
non-assignable, except by will or comparable testamentary instrument, or by the
laws of descent and distribution. In the event of any attachment, execution, or
similar process upon the SAR, the Bank shall, as soon as practicable, notify
Participant of such process and, if Participant does not within a reasonable
time (but not to exceed sixty (60) days) obtain an appropriate release of the
SAR from such process, the Bank may exercise its right to terminate the SAR by
notice to Participant. The SAR shall thereupon become null and void.
7. Termination of Employment.
(a) In the event that Participant is no longer an employee of the
Bank or any subsidiary of the Bank for any reason, the SAR shall terminate
immediately; provided, however, that Participant shall have the right,
subject to the provisions of Section 4 hereof with respect to the maximum
term of the SAR, to exercise the SAR, at any time within three (3) months
from the day he or she ceases to be an employee to the extent that he or
she was entitled to exercise the same immediately prior to such day, except
as provided below. Whether an authorized leave of absence on military or
government service or for other reasons shall constitute a termination of
employment or service as a director or consultant for purposes of the Plan
shall be determined by the Board, and such determination of the Board shall
be final and conclusive.
(b) If Participant becomes disabled, the three (3) month period specified in
Subsection 7(a) shall be six (6) months.
(c) If Participant shall die while an employee, or within not more than three
(3) months from the date when he or she ceases to be an employee, his or her
estate, personal representative, or beneficiary shall have the right, subject to
the provisions of Section 4 hereof, to exercise the SARs, at any time within six
(6) months from the date of death, to the extent that he or she was entitled to
exercise the same immediately prior to death.
8. Adjustments or Changes in Stock; Dissolution or Acquisition.
(a) In the event that the outstanding shares of common stock of
the Corporation are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of
the Corporation or of another corporation, by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
combination of shares, dividend payable in common stock, or acquisition, or
any similar transaction, in which the Corporation receives no additional
consideration other than shares or other securities, appropriate adjustment
shall be made by the Board under the Plan in the number of units as to
which the SAR or portion thereof then unexercised shall be exercisable,
with a corresponding adjustment, if necessary, in the base price, so that
Participant's total appreciation immediately after such event and
adjustment with respect to the unexercised portion of the SAR shall be
maintained as before the occurrence of such event and adjustment.
(b) In the event of a dissolution or liquidation of the
Corporation, a merger, consolidation, acquisition, or other reorganization
involving the Corporation or a principal subsidiary, in which the Corporation or
such principal subsidiary is not the surviving or resulting corporation, or a
sale by the Corporation or by a principal subsidiary of all or substantially all
of its assets, the Board shall cause the termination of the SAR as of the
effective date of such transaction, provided, however, that advance notice of
the expected effective date of such transaction shall be given to Participant,
to the extent practicable, and Participant shall have the right to exercise the
SAR until the date of such termination as to all or any part of the SAR which is
at that time exercisable.
9. Rights as a Shareholder. Participant shall have no rights
as a shareholder with respect to any shares of common stock of the Corporation.
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 otherwise provided in
Section 8 herein.
10. Withholding Taxes. Whenever the Bank proposes or is
required to make a payment under this Agreement, the Bank shall have the right
to withhold an amount sufficient to satisfy any Federal, state and/or local
withholding tax requirements prior to the payment of the balance of the amount
to Participant.
11. No Obligation to Exercise. The granting of the SAR hereunder shall impose no
obligation upon Participant to exercise the SAR as to the shares or any portion
thereof covered thereby.
12. Incorporation of Bay Area Bancshares 1996 Stock
Appreciation Plan. This SAR is granted by the Corporation and the Bank pursuant
to the Plan, adopted by the Board of the Corporation. The parties hereby agree
that the terms and conditions of the Plan, as now in effect, shall by this
reference be incorporated in this Agreement as though set forth in full.
Participant acknowledges receipt of a copy of the Plan. A copy of the Plan shall
also be maintained at the principal office of the Corporation and made available
to Participant for inspection during the business hours of the Corporation. In
the event of any conflict between the provisions of this Agreement and the
provisions of the Plan, then the provisions of the Plan shall be controlling.
13. Notices. Any notices required or permitted to be given
under this Agreement shall be sufficient if in writing and if sent by registered
or certified mail to the address indicated on the signature page of this
Agreement for such party, or such other address as one may communicate to the
other in writing.
14. Waiver of Breach. The waiver by either party of the breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any such party.
15. Assignment. The rights and obligations of the parties under this Agreement
shall inure to the benefit of and shall be binding upon their successors and
assigns, except that the right to exercise the SAR herein provided for shall not
be assignable except to the extent set forth in Section 6 hereof.
16. Arbitration. The parties shall submit all disputes relating to this
Agreement (whether contract, tort or both) to binding arbitration, in accordance
with California Code of Civil Procedure sections 1280 through 1294.2 in the
County of San Mateo, California. Either party may enforce the award of the
arbitrator under Section 1285 of the Code. The parties understand that they are
waiving their rights to a jury trial.
17. Entire Agreement. This instrument contains the entire Agreement of the
parties. It may not be changed orally, but only by agreement in writing signed
by the parties against whom enforcement of any waiver, change, modification,
extension, or discharge is sought.
18. Right to Terminate Employment. Nothing in the Plan or this Agreement shall
confer upon Participant the right to continue in the employment of the Bank or
any of the Subsidiaries or effect any right which the Bank or any of the
Subsidiaries may have to terminate the employment of Participant.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day of ,
19 .
BAY AREA BANCSHARES, BAY AREA BANK
a California corporation a California state-chartered bank
900 Veterans Blvd. 900 Veterans Blvd.
Redwood City, CA 94063 Redwood City, CA 94063
By By
Its Its
[Name of Participant]
[Address of Participant]
-----------------
[Signature of Participant]
AMENDMENT NO. 1
TO
BAY AREA BANCSHARES
1996 STOCK APPRECIATION RIGHTS PLAN
THIS AMENDMENT NO. 1 to the Bay Area Bancshares 1996 Stock Appreciation
Rights Plan ("Plan") is adopted by the Board of Directors of Bay Area Bancshares
(the "Corporation") with reference to the following:
RECITALS
A. The Board of Directors of the Corporation previously adopted and approved the
Plan, which is currently outstanding and effective.
B. The Board of Directors of the Corporation desires to amend the Plan to
provide that Stock Appreciation Rights ("SARs") will partially vest upon a
change in control of the Corporation.
THEREFORE, the Plan is hereby amended as follows:
1. Subsection 6 (i) is amended to read in full as follows:
(i) Adjustments or Changes in Stock; Reorganization, or Change in
Control.
(1) In the event that the outstanding shares of Common Stock of
the Corporation are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of
the Corporation or of another corporation, by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
combination of shares, dividend payable in common stock, or acquisition, or
any similar transaction, in which the Corporation receives no additional
consideration other than shares or other securities, appropriate adjustment
shall be made by the Board in the number of SARs units which may be awarded
under the Plan. In addition, the Board shall make appropriate adjustment in
the Base Price for unexercised SARs awarded under the Plan so that
Participants' total appreciation to date shall be maintained as before the
occurrence of such event.
(2) In the event of a dissolution or liquidation of the
Corporation; a merger, consolidation, acquisition, or other reorganization
involving the Corporation or a principal subsidiary, in which the Corporation or
such principal subsidiary is not the surviving or resulting corporation; or a
sale by the Corporation or by a principal subsidiary of all or substantially all
of its assets, the Board shall cause the termination of all SARs outstanding
hereunder as of the effective date of such transaction, provided, however, that
advance notice of the expected effective date of such transaction shall be given
to each Participant, to the extent practicable, and each Participant shall have
the right to exercise his or her SARs from the date of such notice until the
date of such termination, as to all or any part of the SARs which is at that
time exercisable plus 50% of the unexercisable portion of the SARs.
(3) In the event of a change in control in which the
Corporation or a principal subsidiary survives or results from the transaction,
50% of all unexercisable SARs shall vest and become exercisable on the effective
date of such change in control. Provided the Participant remains eligible,
subsequent vesting installments shall continue at the same rate that such SAR
would have vested prior to such event, with the effect that the accelerated
portion of such SAR shall be the portion that would have vested last in time.
For purposes of this subparagraph, "change in control" is defined as a merger,
acquisition or change in control that requires notice to or approval of State or
Federal banking regulators.
2. Except as amended herein, the Plan shall remain in full force and effect.