[For options which are granted as
non-incentive stock options
to nonemployee-directors or consultants]
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made as of the
day of ,19 , by and between BAY AREA BANCSHARES, a California
corporation ("Corporation"), and ("Optionee").
RECITAL
The Board of Directors (the "Board") of the Corporation,
pursuant to the Bay Area Bancshares 1993 Stock Option Plan ("Plan"), has
determined that it desires to grant to Optionee, pursuant to the Plan and as an
incentive for increased efforts during his or her service [as a director/ as a
consultant] of , an option to purchase shares of the common stock of the
Corporation on the terms and conditions set forth below.
NOW, THEREFORE, the parties agree as follows:
1. Stock Subject to Option. The Corporation hereby grants to
Optionee, under and pursuant to the Plan, the right and option ("Option") to
purchase, on the terms and conditions hereinafter set forth, an aggregate of
shares of the Corporation's common stock, no par value. The Option is granted as
a "non-incentive stock option".
2. Exercise of Option. The Option may be exercised at any
time, in whole or in part, during the term of the Option, as provided for in
Section 4 herein. OR The Option may be exercised upon such terms and conditions
as the Board shall determine; provided, however, that the Option shall vest and
be exercisable in installments as follows: [state installment schedule, if any]
. [If there is an installment schedule, add sections 7(d) and 8(c).] CONTINUE IN
EITHER CASE: In no event, however, shall the Corporation be required to issue
fractional shares.
3. Option Price. The purchase price for shares upon exercise
of the Option shall be $ per share, which is [85%-100%] of the per share fair
market value [110% of the per share fair market value, in
the case of a 10% shareholder,] of the shares of the Corporation's common stock
as of the date of grant of the Option, said value having been established by the
Board pursuant to the Plan. Optionee is in agreement that $ is the fair market
value of the shares of the Corporation's common stock as of the date of the
grant of the Option.
4. Term of Option. The term of this Agreement and Option 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. To the extent that the right to
purchase shares has accrued hereunder, the Option may be exercised from time to
time by written notice to the Corporation stating the number of shares with
respect to which the Option is being exercised, and the time of the delivery
thereof, which shall not be less than fifteen (15) days and not more than thirty
(30) days after the giving of such notice, unless an earlier date shall have
been mutually agreed upon. Shares of common stock purchased pursuant to the
exercise of the Option shall, at the time of the notice specifying the date of
delivery, be paid for in full, with cash or common stock that is owned by
Optionee, or by delivery of the Optionees's Note in the form of Exhibit A and
Stock Pledge Agreement in the form of Exhibit B to this Agreement. To the extent
payment is being made with cash, Optionee shall deliver a certified or official
bank check or the equivalent thereof acceptable to the Corporation. If shares of
common stock are tendered as payment, such shares shall be valued at their fair
market value, as determined by the Corporation, on the date of the notice given
to the Corporation by Optionee with respect to such exercise. At the time
specified in the notice for delivery of the certificate, the Corporation shall,
without transfer or issue tax to Optionee (or other person entitled to exercise
the Option), deliver to Optionee (or other person entitled to exercise the
Option) at the principal office of the Corporation, or such other place as shall
be mutually acceptable, a certificate or certificates for such shares; provided,
however, that the time of such delivery may be postponed by the Corporation for
such period as may be required for it with reasonable diligence to comply with
any requirements of law. If Optionee (or other person entitled to exercise the
Option) fails to pay for all or any part of the number of shares specified in
such notice or fails to accept delivery of such shares upon tender of delivery
thereof, the right to exercise the Option with respect to such undelivered
shares may be terminated.
6. Non-Assignability of Option Rights. During Optionee's
lifetime, the Option may be exercised only by Optionee, and the Option 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 Option, the Corporation shall, as soon as practicable,
notify Optionee of such process and, if Optionee does not within a reasonable
time (but not to exceed sixty (60) days) obtain an appropriate release of the
Option from such process, the Corporation may exercise its right to terminate
the Option by notice to Optionee. The Option shall thereupon become null and
void.
7. Termination Service as a Director or Consultant. (a) In the
event that Optionee is [no longer a consultant/ and no longer a director] of the
Corporation or one of its subsidiaries for any reason, the Option shall
terminate immediately; provided, however, that Optionee shall have the right,
subject to the provisions of Section 4 hereof with respect to the maximum term
of the Option, to exercise the Option, at any time within three (3) months from
the day he or she ceases to be a [director and/or consultant] 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
service as a director or consultant for purposes of this Agreement shall be
determined by the Board, and such determination of the Board shall be final and
conclusive.
[for director optionees: (b) If Optionee shall retire, die or become disabled,
the three (3) month period specified in Subsection 7(a)(1) shall be five (5)
years. If Optionee shall die within five (5) years from the date when he or she
ceases to be a director, his or her estate, personal representative, or
beneficiary shall have the right, subject to the provisions of Section 4 hereof,
to exercise the Option until the expiration of such five (5) year period, to the
extent that he or she was entitled to exercise the same immediately prior to
death.]
[for consultant (not also director) optionees: (b) If Optionee shall become
disabled, the three (3) month period specified in Subsection 7(a) shall be six
(6) months.
(c) If Optionee shall die while a consultant or within not
more than three (3) months from the date when he or she ceases to be a
consultant, his or her estate, personal representative, or beneficiary shall
have the right, subject to the provisions of Section (4) hereof, to exercise the
Option, at any time within six (6) months from the date of death, to the extent
that he or she was entitled to exercise the Option immediately prior to death.]
[for options granted with installment schedules: (c) Notwithstanding the
foregoing, if the service of Optionee as a [director/consultant] is "Terminated
or Modified", as defined below, as a result of and within 24 months of a Change
of Control, as defined below, and if this Option is not fully vested at the time
of such Termination or Modification, the remaining installments may vest
immediately upon such Termination or Modification. For purposes of this
paragraph, "Terminated or Modified" is defined as a change in the Optionee's
service terms that results in a reduction of economic benefits to the optionee
from the Corporation, including but not limited to a reduction in compensation,
and "Change of Control"
is defined as a merger, acquisition or change of control that requires notice to
or approval of State or Federal banking regulators.]
8. Adjustments or Changes in Stock; Change in Control. (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 and kind of shares as to which the Option or portion thereof then
unexercised shall be exercisable, so that Optionee's proportionate interest in
the Corporation by reason of rights under unexercised portions of the Option
shall be maintained as before the occurrence of such event. Such adjustment in
the Option shall be made without change in the total price applicable to the
unexercised portion of the Option and with a corresponding adjustment, if
necessary, in the option price per share.
(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 Option 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 Optionee, to the extent
practicable, and Optionee shall have the right to exercise the Option until the
date of such termination as to all or any part of the shares as to which the
Option is at that time exercisable.
[for options granted with installment schedules: (c) In the
event this Option is terminated under paragraph (b) immediately above, any
portion of this Option that is not vested as of the date of the advance notice
to Optionee of the expected effective date of the transaction shall become
vested and the Option shall be exercisable in full from the date of such notice
until the date the Option terminates.]
9. Rights as a Shareholder. Optionee shall have no rights as a
shareholder with respect to any shares of common stock of the Corporation until
the date of issuance of a stock certificate to Optionee 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 otherwise provided in Paragraph
8 herein.
10. Notification of Sale. Optionee shall promptly notify the
Corporation in writing of any sale, transfer or other disposition of any shares
acquired by Optionee as a result of exercising all or any part of the Option
granted hereunder, which are sold, transferred or otherwise disposed of within
two (2) years from the date of grant of the Option and/or within one (1) year
from the date of the acquisition of shares by Optionee through exercise of the
Option.
11. Withholding Taxes. Whenever the Corporation proposes or is
required to issue or transfer shares of common stock under this Agreement, the
Corporation shall have the right to require Optionee to remit to the Corporation
an amount sufficient to satisfy any Federal, state and/or local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. Alternatively, the Corporation may issue or transfer such shares of
common stock net of the number of shares sufficient to satisfy the withholding
tax requirements. For withholding tax purposes, the shares of common stock shall
be valued on the date the withholding obligation is incurred.
12. No Obligation to Exercise. The granting of the Option
hereunder shall impose no obligation upon Optionee to exercise the Option as to
the shares or any portion thereof covered thereby.
13. Incorporation of Bay Area Bancshares 1993 Stock Option
Plan. The Option is granted by the Corporation pursuant to the Plan, adopted by
the Board and approved by the shareholders 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 Stock Option Agreement as though set
forth in full. Optionee 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 Optionee 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.
14. Restrictions on Transferability. (a) If the shares of
stock covered by the Plan have been registered with the Securities and Exchange
Commission pursuant to Section 5 of the Securities Act of 1933 and qualified or
registered under any applicable blue sky laws, the restrictions on
transferability of such shares set forth in Section 14(b) shall not apply.
(b) Unless the shares of stock covered by the Plan have been
registered with the Securities and Exchange Commission pursuant to Section 5 of
the Securities Act of 1933 and qualified or registered under any applicable blue
sky laws, Optionee by accepting the Option represents and agrees, for himself or
herself and his or her transferees, that all stock will be acquired for
investment and not for resale or distribution. Upon exercise of any portion of
the Option, the person entitled to exercise the same shall, upon request of the
Corporation, furnish evidence satisfactory to the Corporation (including a
written and signed representation) to the effect that the stock is being
acquired in good faith for investment and not for resale or distribution.
Furthermore, the Corporation, at its sole discretion, may take all reasonable
steps, including affixing a legend, which may be in substantially the following
form, on certificates embodying the shares:
The shares represented by this certificate have not been registered
under the Securities Act of 1933 [or qualified under the California
Corporate Securities Law of 1968] and may not be sold, pledged,
hypothecated or otherwise transferred or offered for sale in the
absence of an effective registration statement with respect to them
under the Act and qualification under applicable blue sky law, or a
written opinion of counsel for the optionee which opinion shall be
acceptable to counsel for the issuer that registration and
qualification are not required.
to assure itself against any sale or distribution by Optionee which does not
comply with the Plan or any federal or state securities laws. In the event that
Optionee at any time contemplates the disposition of any of the stock acquired
upon the exercise of the Option (whether by sale, exchange, gift or other form
of transfer), he or she shall first notify the Corporation of such proposed
disposition and shall thereafter cooperate with the Corporation in complying
with all applicable requirements of law which, in the opinion of the
Corporation, must be satisfied prior to the making of such disposition. Before
consummating such disposition, Optionee shall provide to the Corporation an
opinion of Optionee's counsel, of which both such opinion and such counsel shall
be satisfactory to the Corporation, that such disposition will not result in a
violation of any state or federal securities laws or regulations.
15. 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 , in the case of Optionee, and to its principal office in
the case of the Corporation, or such other address as one may communicate to the
other in writing.
16. 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.
17. Assignment. The rights and obligations of the Corporation
and Optionee 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 Option herein
provided shall not be assignable except to the extent set forth in Paragraph 6
hereof.
18. 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day of , 19 .
BAY AREA BANCSHARES,
a California corporation
By
Its
Optionee