EXHIBIT 4.1
FIRST REGIONAL BANCORP
1991 STOCK OPTION PLAN
Adopted April 18, 1991
Amended July 18, 1996
1. Purpose
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The purpose of the First Regional Bancorp 1981 Stock Option Plan (the
"Plan") is to strengthen First Regional Bancorp (the "Corporation") and those
corporations which are or hereafter become subsidiary corporations (the
"Subsidiary" or "Subsidiaries") by providing additional means of attracting and
retaining competent managerial personnel and by providing to participating
directors, officers and key employees added incentive for high levels of
performance and for unusual efforts to increase the earnings of the Corporation
and any Subsidiaries. The Plan seeks to accomplish these purposes and achieve
these results by providing a means whereby such directors, officers and key
employees may purchase shares of the Common Stock of the Corporation pursuant to
Stock Options granted in accordance with this Plan.
Stock Options granted pursuant to this Plan are intended to be Incentive
Stock Options or Non-Qualified Stock Options, as shall be determined and
designated by the Stock Option Committee upon the grant of each Stock Option
hereunder.
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EXHIBIT 4.1
2. Definitions
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For purposes of this Plan, the following terms shall have the following
meanings:
(a) "Common Stock." This term shall mean shares of the Corporation's
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common stock, no par value, subject to adjustment pursuant to Paragraph 15
(Adjustment Upon Changes in Capitalization) hereunder.
(b) "Corporation." This term shall mean First Regional Bancorp, a
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California Corporation.
(c) "Eligible Participants." This term shall mean: (i) all directors
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of the Corporation or any Subsidiary; (ii) all officers (whether or not they are
also directors) of the Corporation or any Subsidiary; and (iii) all key
employees (as such persons may be determined by the Stock Option Committee from
time to time) of the Corporation or any Subsidiary; provided that such officers
and key employees have a customary work week of at least forty hours in the
employ of the Corporation or a Subsidiary.
(d) "Fair Market Value." This term shall mean the fair market value
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of the Common Stock as determined in accordance with any reasonable valuation
method selected by the Stock Option Committee, including the valuation methods
described in Treasury Regulations Section 20.2031-2.
(e) "Incentive Stock Option." This term shall mean a Stock Option
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which is an "incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended.
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(f) "Non-Qualified Stock Option." This term shall mean a Stock
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Option which is not an Incentive Stock Option.
(g) "Option Shares." This term shall mean Common Stock covered by
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and subject to any outstanding unexercised Stock Option granted pursuant to this
Plan.
(h) "Optionee." This term shall mean any Eligible Participant to
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whom a Stock Option has been granted pursuant to this Plan, provided that at
least part of the Stock Option is outstanding and unexercised.
(i) "Plan." This term shall mean the First Regional Bancorp 1991
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Stock Option Plan as embodied herein and as may be amended from time to time in
accordance with the terms hereof and applicable law.
(j) "Stock Option." This term shall mean the right to purchase
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Common Stock under this Plan in a specified number of shares, at a price and
upon the terms and conditions determined by the Stock Option Committee.
(k) "Stock Option Committee." The Board of Directors of the
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Corporation may select and designate a Stock Option Committee consisting of
three or more directors of the Corporation, having full authority to act in the
matter. Regardless of whether a Stock Option Committee is selected, the Board of
Directors of the Corporation may act as the Stock Option Committee and any
action taken by said Board as such shall be deemed to be action taken by the
Stock Option Committee. All references in the Plan to the "Stock Option
Committee" shall be
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deemed to refer to the Board of Directors of the Corporation acting as the Stock
Option Committee and to a duly appointed Stock Option Committee, if there be
one. In the event of any conflict between action taken by the Board acting as a
Stock Option Committee and action taken by a duly appointed Stock Option
Committee, the action taken by the Board shall be controlling and the action
taken by the duly appointed Stock Option Committee shall be disregarded.
(l) "Subsidiary." This term shall mean each "subsidiary corporation"
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(treating the Corporation as the employer corporation) as defined in Section
425(f) of the Internal Revenue Code.
3. Administration
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(a) Stock Option Committee. This Plan shall be administered by the
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Stock Option Committee. The Board of Directors of the Corporation shall have the
right, in its sole and absolute discretion, to remove or replace any person from
or on the Stock Option Committee at any time for any reason whatsoever.
(b) Administration of the Plan. Any action of the Stock Option
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Committee with respect to the administration of the Plan shall be taken pursuant
to a majority vote, or pursuant to the unanimous written consent, of its
members. Any such action taken by the Stock Option Committee in the
administration of this Plan shall be valid and binding, so long as the same is
not inconsistent with the terms and conditions of this Plan. Subject
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to compliance with the terms, conditions and restrictions set forth in this
Plan, the Stock Option Committee shall have the exclusive right, in its sole and
absolute discretion, to establish the terms and conditions of all Stock Options
granted under the Plan, including, without meaning any limitation, the power
to: (i) establish the number of Stock Options, if any, to be granted hereunder,
in the aggregate and with regard to each Eligible Participant; (ii) determine
the time or times when such Stock Options, or parts thereof, may be exercised;
(iii) determine and designate which Stock Options granted under the Plan shall
be Incentive Stock Options and which shall be Non-Qualified Stock Options; (iv)
determine the Eligible Participants, if any, to whom Stock Options are granted;
(v) determine the duration and purposes, if any, of leaves of absence which may
be permitted to holders of unexercised, unexpired Stock Options without such
constituting a termination of employment under the Plan; and (vi) prescribe and
amend the terms, provisions and form of each instrument and agreement setting
forth the terms and conditions of every Stock Option granted hereunder.
(c) Decisions and Determinations. Subject to the express provisions
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of the Plan, the Stock Option Committee shall have the authority to construe and
interpret this Plan, to define the terms used herein, to prescribe, amend, and
rescind rules and regulations relating to the administration of the Plan, and to
make all other determinations necessary or advisable for
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administration of the Plan. Determinations of the Stock Option Committee on
matters referred to in this Section 3 shall be final and conclusive so long as
the same are not inconsistent with the terms of this Plan.
4. Shares Subject to the Plan
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Subject to adjustments as provided in Section 15 hereof, the maximum
number of shares of Common Stock which may be issued upon exercise of all Stock
Options granted under this Plan is limited to Three Hundred and Fifty Thousand
(350,000) shares, in the aggregate. If any Stock Option shall be cancelled,
surrendered, or expire for any reason without having been exercised in full, the
unpurchased Option Shares represented thereby shall again be available for
grants of Stock Options under this Plan.
5. Eligibility
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Only Eligible Participants shall be eligible to receive grants of Stock
Options under this Plan.
6. Grants of Stock Options
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(a) Grant. Subject to the express provisions of the Plan, the Stock
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Option Committee, in its sole and absolute discretion, may grant Stock Options:
(i) In the case of grants to Eligible Participants who are
officers or key employees of the Corporation or any Subsidiary, for a
number of Option Shares, at the price(s) and time(s), on the terms and
conditions and to such Eligible Participants as it
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deems advisable and specifies in the respective grants; provided, however,
that such grants shall vest at least at the rate of twenty percent (20%)
annually over five (5) years from the date of grant; and
(ii) In the case of grants to Eligible Participants who are
directors and who are not officers or key employees of the Corporation or
any Subsidiary, for a number of Option Shares, at the price(s) and time(s),
and on the terms and conditions as it deems advisable and specifies in the
respective grants; provided, however, that such grants may not exceed a
maximum aggregate of One Hundred Thousand (100,000) Option Shares to all
directors who are not officers or key employees of the Corporation or any
Subsidiary; and provided further, that such grants shall vest at least at
the rate of twenty percent (20%) annually over five (5) years from the date
of grant. The foregoing maximum aggregate number of Option Shares which
may be granted to all directors of the Corporation or any Subsidiary who
are not officers or key employees thereof shall be adjusted in accordance
with the provisions of Section 15 hereof.
The terms upon which and the times at which, or the periods within which,
the Option Shares subject to such Stock Options may become acquired or such
Stock Options may be acquired and exercised shall be as set forth in the Plan
and the related Stock Option Agreements.
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Subject to the limitations and restrictions set forth in the Plan, an
Eligible Participant who has been granted a Stock Option may, if otherwise
eligible, be granted additional Stock Options if the Stock Option Committee
shall so determine. The Stock Option Committee shall designate in each grant of
a Stock Option whether the Stock Option is an Incentive Stock Option or a Non-
Qualified Stock Option.
(b) Date of Grant and Rights of Optionee. The determination of the
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Stock Option Committee to grant a Stock Option shall not in any way constitute
or be deemed to constitute an obligation of the Corporation, or a right of the
Eligible Participant who is the proposed subject of the grant, and shall not
constitute or be deemed to constitute the grant of a Stock Option hereunder
unless and until both the Corporation and the Eligible Participant have executed
and delivered to the other a Stock Option Agreement in the form then required by
the Stock Option Committee as evidencing the grant of the Stock Option, together
with such other instrument or instruments as may be required by the Stock Option
Committee pursuant to this Plan; provided, however, that the Stock Option
Committee may fix the date of grant as any date on or after the date of its
final determination to grant the Stock Option (or if no such date is fixed, then
the date of grant shall be the date on which the determination was finally made
by the Stock Option Committee to grant the Stock Option), and such date shall be
set forth in the Stock Option Agreement. The date of grant as so determined
shall be deemed the date of grant of the Stock Option for purposes of this Plan.
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(c) Shareholder-Employees. A Stock Option may not be granted
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hereunder to an Eligible Participant who is also an officer or key employee of
the Corporation or any Subsidiary, who owns, directly or indirectly, at the date
of the grant of the Stock Option, more than ten percent (10%) of the total
combined voting power of all classes of capital stock of the Corporation or a
Subsidiary (if permitted in accordance with the provisions of Section 5 herein)
unless: (i) the purchase price of the Option Shares subject to said Stock
Option is at least one hundred and ten percent (110%) of the Fair Market Value
of the Option Shares, determined as of the date said Stock Option is granted;
and (ii) the Stock Option by its terms is not exercisable after five (5) years
from the date that it is granted. The attribution rules of Section 425(d) of
the Internal Revenue Code of 1986, as amended, shall apply in the determination
of indirect ownership of stock.
(d) Maximum Value of Stock Options. No grant of Incentive Stock
------------------------------
Options hereunder may be made when the aggregate fair market value of Option
Shares with respect to which Incentive Stock Options (pursuant to this Plan or
any other Incentive Stock Option Plan of the Corporation) or any Subsidiary are
exercisable for the first time by the Eligible Participant during any calendar
year exceeds $100,000.
(e) Substituted Stock Options. If all of the outstanding shares of
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common stock of another corporation are changed into or exchanged solely for
Common Stock in a transaction to which Section 425(a) of the Internal Revenue
Code of 1986, as
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amended, applies, then, subject to the approval of the Board of Directors of the
Corporation, Stock Options under the Plan may be substituted ("Substituted
Options") in exchange for valid, unexercised and unexpired stock options of such
other corporation. Substituted Options shall qualify as Incentive Stock Options
under the Plan, provided that (and to the extent) the stock options exchanged
for the Substituted Options were "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.
(f) Non-Qualified Stock Options. Stock Options and Substituted
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Options granted by the Stock Option Committee shall be deemed Non-Qualified
Stock Options under this Plan if they: (i) are designated at the time of grant
as Incentive Stock Options but do not so qualify under the provisions of Section
422 of the Code or any regulations or rulings issued by the Internal Revenue
Service for any reason; (ii) are not granted in accordance with the provisions
of Section 6(c); (iii) are in excess of the fair market value limitations set
forth in Section 6(d); (iv) are granted to an Eligible Participant who is not an
officer or key employee of the Corporation or any Subsidiary; or (v) are
designated at the time of grant as Non-Qualified Stock Options. Non-Qualified
Stock Options granted or substituted hereunder shall be so designated in the
Stock Option Agreement entered into between the Corporation and the Optionee.
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7. Stock Option Exercise Price
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(a) Minimum Price. The exercise price of any Option Shares shall be
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determined by the Stock Option Committee, in its sole and absolute discretion,
upon the grant of a Stock Option. In the case of a Non-Qualified Stock Option,
said exercise price shall not be less than an amount equal to one hundred
percent (100%) of the Fair Market Value of the Common Stock represented by the
Option Shares on the date of the grant of the related Stock Option. In the case
of an Incentive Stock Option, except as provided elsewhere herein, said exercise
price shall not be less than one hundred percent (100%) of the Fair Market Value
of the Common Stock represented by the Option Shares on the date of grant of the
related Stock Option.
(b) Substituted Options. The exercise price of the Option Shares
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subject to each Substituted Option may be fixed at a price less than the minimum
amount set forth in Section 7(a) above at the time such Substituted Option is
granted if said exercise price has been computed to be not less than the
exercise price set forth in the stock option of the other corporation for which
it was exchanged, with appropriate adjustment to reflect the exchange ratio of
the shares of stock of the other corporation into the shares of Common Stock.
(c) Ten Percent Shareholders. Notwithstanding the provisions of
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Section 7(a) or Section 7(b), the exercise price of the Option Shares shall not
be less than one hundred and ten percent (110%) of the Fair Market Value in the
case of any Optionee
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who, at the time of grant, owns more than ten percent (10%) of the Common Stock.
8. Exercise of Stock Options
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(a) Exercise. Except as otherwise provided elsewhere herein, each
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Stock Option shall be exercisable in such increments, which need not be equal,
and upon such contingencies as the Stock Option Committee shall determine at the
time of grant of the Stock Option; provided, however, that if an Optionee shall
not in any given period exercise any part of a Stock Option which has become
exercisable during that period, the Optionee's right to exercise such part of
the Stock Option shall continue until expiration of the Stock Option or any part
thereof as may be provided in the related Stock Option Agreement. No Stock
Option or part thereof shall be exercisable except with respect to whole shares
of Common Stock, and fractional share interests shall be disregarded except that
they may be accumulated.
(b) Prior Outstanding Incentive Stock Options. Incentive Stock
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Options granted (or substituted) to an Optionee under the Plan may be
exercisable while such Optionee has outstanding and unexercised any Incentive
Stock Option previously granted (or substituted) to him or her by the
Corporation or a corporation which (at the time of grant) is a parent or
Subsidiary of the Corporation, or a predecessor corporation of any such entity.
An Incentive Stock Option shall be treated as outstanding until it is exercised
in full or expires by reason of lapse of time.
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(c) Notice and Payment. Stock Options granted hereunder shall be
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exercised by written notice delivered to the Corporation specifying the number
of Option Shares with respect to which the Stock Option is being exercised,
together with concurrent payment in full of the exercise price as hereinafter
provided. If the Stock Option is being exercised by any person or persons other
than the Optionee, said notice shall be accompanied by proof, satisfactory to
the counsel for the Corporation, of the right of such person or persons to
exercise the Stock Option. The Corporation's receipt of a notice of exercise
without concurrent receipt of the full amount of the exercise price shall not be
deemed an exercise of a Stock Option by an Optionee, and the Corporation shall
have no obligation to an Optionee for any Option Shares unless and until full
payment of the exercise price is received by the Corporation and all of the
terms and provisions of the Plan and the related Stock Option agreement have
been fully complied with.
(d) Payment of Exercise Price. The exercise price of any Option
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Shares purchased upon the proper exercise of a Stock Option shall be paid in
full at the time of each exercise of a Stock Option in cash, (or bank, cashier's
or certified check) and/or, with the prior written approval of the Stock Option
Committee at or before the time of exercise, in Common Stock of the Corporation
which, when added to the cash payment, if any, which has an aggregate Fair
Market Value equal to the full amount of the exercise price of the Stock Option,
or part thereof, then being exercised. Payment by an Optionee as provided
herein shall be made
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in full concurrently with the Optionee's notification to the Corporation of his
intention to exercise all or part of a Stock Option. If all or any part of a
payment is made in shares of Common Stock as heretofore provided, such payment
shall be deemed to have been made only upon receipt by the Corporation of all
required share certificates, and all stock powers and all other required
transfer documents necessary to transfer the shares of Common Stock to the
Corporation.
(e) Minimum Exercise. Not less than ten (10) Option Shares may be
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purchased at any one time upon exercise of a Stock Option unless the number of
shares purchased is the total number which remains to be purchased under the
Stock Option.
(f) Compliance With Law. No shares of Common Stock shall be issued
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upon exercise of any Stock Option, and an Optionee shall have no right or claim
to such shares, unless and until: (i) payment in full as provided hereinabove
has been received by the Corporation; (ii) in the opinion of the counsel for the
Corporation, all applicable requirements of law and of regulatory bodies having
jurisdiction over such issuance and delivery have been fully complied with; and
(iii) if required by federal or state law or regulation, the Optionee shall have
paid to the Corporation the amount, if any, required to be withheld on the
amount deemed to be compensation to the Optionee as a result of the exercise of
his or her Stock Option, or made other arrangements satisfactory to the
Corporation, in its sole discretion, to satisfy applicable income tax
withholding requirements.
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9. Nontransferability of Stock Options
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Each Stock Option shall, by its terms, be nontransferable by the Optionee
other than by will or the laws of descent and distribution, and shall be
exercisable during the Optionee's lifetime only by the Optionee.
10. Continuation of Affiliation
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Nothing contained in this Plan (or in any Stock Option Agreement) shall
obligate the Corporation or any Subsidiary to employ or continue to employ or
remain affiliated with any Optionee or any Eligible Participant for any period
of time or interfere in any way with the right of the Corporation or a
Subsidiary to reduce or increase the Optionee's or Eligible Participant's
compensation.
11. Cessation of Affiliation
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Except as provided in Section 12 hereof, if, for any reason other than
disability or death, an Optionee ceases to be affiliated with the Corporation or
a Subsidiary, the Stock Options granted to such Optionee shall expire on the
expiration dates specified for said Stock Options at the time of their grant, or
three (3) months after the Optionee ceases to be so affiliated, whichever is
earlier. During such period after cessation of affiliation, such Stock Options
shall be exercisable only as to those increments, if any, which had become
exercisable as of the date on which such Optionee ceased to be affiliated with
the Corporation or the Subsidiary and any Stock Options or increments which had
not become exercisable as of such date shall expire automatically on such date.
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12. Termination for Cause
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If the Stock Option Agreement so provides and if an Optionee's employment
by or affiliation with the Corporation or a Subsidiary is terminated for cause,
the Stock Options granted to such Optionee shall expire on the expiration dates
specified for said Stock Options at the time of their grant, or thirty (30) days
after termination for cause, whichever is earlier; provided, however, that the
Stock Option Committee may, in its sole discretion, within thirty (30) days of
such termination, reinstate such Stock Options by giving written notice of such
reinstatement to the Optionee. In the event of such reinstatement, the Optionee
may exercise the Stock Options only to such extent, for such time, and upon such
terms and conditions as if the Optionee had ceased to be employed by or
affiliated with the Corporation or a Subsidiary upon the date of such
termination for a reason other than cause, disability or death. Termination for
cause shall include, but shall not be limited to, termination for malfeasance or
gross misfeasance in the performance of duties or conviction of illegal activity
in connection therewith and, in any event, the determination of the Stock Option
Committee with respect thereto shall be final and conclusive.
13. Death of Optionee
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If an Optionee dies while employed by or affiliated with the Corporation or
a Subsidiary or during the three-month period referred to in Section 11 hereof,
the Stock Options granted to such Optionee shall expire on the expiration dates
specified for said
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Stock Options at the time of their grant, or one (1) year after the date of such
death, whichever is earlier. After such death, but before such expiration,
subject to the terms and provisions of the Plan and the related Stock Option
Agreements, the person or persons to whom such Optionee's rights under the Stock
Options shall have passed by will or by the applicable laws of descent and
distribution, or the executor or administrator of the Optionee's estate, shall
have the right to exercise such Stock Options to the extent that increments, if
any, had become exercisable as of the date on which the Optionee died.
14. Disability of Optionee
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If an Optionee is disabled while employed by or affiliated with the
Corporation or a Subsidiary or during the three-month period referred to in
Section 11 hereof, the Stock Options granted to such Optionee shall expire on
the expiration dates specified for said Stock Options at the time of their
grant, or one (1) year after the date such disability occurred, whichever is
earlier. After such disability occurs, but before such expiration, the Optionee
or the guardian or conservator of the Optionee's estate, as duly appointed by a
court of competent jurisdiction, shall have the right to exercise such Stock
Options to the extent that increments, if any, had become exercisable as of the
date on which the Optionee became disabled or ceased to be employed by or
affiliated with the Corporation or a Subsidiary as a result of the disability.
An Optionee shall be deemed to be "disabled" if it shall appear to the Stock
Option Committee, upon written
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certification delivered to the Corporation of a qualified licensed physician,
that the Optionee has become permanently and totally unable to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in the Optionee's death, or
which has lasted or can be expected to last for a continuous period of not less
than 12 months.
15. Adjustment Upon Changes in Capitalization
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If the outstanding shares of Common Stock of the Corporation are
increased, decreased, or changed into or exchanged for a different number or
kind of shares or securities of the Corporation, through a reorganization,
merger, recapitalization, reclassification, stock split, stock dividend, stock
consolidation, or otherwise, without consideration to the Corporation, an
appropriate and proportionate adjustment shall be made in the number and kind of
shares as to which Stock Options may be granted. A corresponding adjustment
changing the number or kind of Option Shares and the exercise prices per share
allocated to unexercised Stock Options, or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Such adjustments
shall be made without change in the total price applicable to the unexercised
portion of the Stock Option, but with a corresponding adjustment in the price
for each Option Share subject to the Stock Option. Adjustments under this
Section shall be made by the Stock Option Committee, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final and
conclusive.
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No fractional shares of stock shall be issued or made available under the Plan
on account of such adjustments, and fractional share interests shall be
disregarded, except that they may be accumulated.
16. Terminating Events
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Upon consummation of a plan of dissolution or liquidation of the
Corporation, or upon consummation of a plan of reorganization, merger or
consolidation of the Corporation with one or more corporations, as a result of
which the Corporation is not the surviving entity, or upon the sale of all or
substantially all the assets of the Corporation to another corporation, the Plan
shall automatically terminate and all Stock Options theretofore granted shall be
terminated, unless provision is made in connection with such transaction for
assumption of Stock Options theretofore granted, or substitution for such Stock
Options with new stock options covering stock of a successor employer
corporation, or a parent or subsidiary corporation thereof, solely at the
discretion of such successor corporation, or parent or subsidiary corporation,
with appropriate adjustments as to number and kind of shares and prices.
17. Amendment and Termination
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The Board of Directors of the Corporation may at any time and from time to
time suspend, amend, or terminate the Plan and may, with the consent of an
Optionee, make such modifications of the terms and conditions of that Optionee's
Stock Option as it shall deem advisable; provided that, except as permitted
under the
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provisions of Section 15 hereof, no amendment or modification may be adopted
without the Corporation having first obtained the approval of the holders of a
majority of the Corporation's outstanding shares of Common Stock present, or
represented, and entitled to vote at a duly held meeting of shareholders of the
Corporation, or by written consent, if the amendment or modification would:
(a) materially increase the number of securities which may be issued
under the Plan;
(b) materially modify the requirements as to eligibility for
participation in the Plan;
(c) increase or decrease the exercise price of any Stock Option
granted under the Plan;
(d) increase the maximum term of Stock Options provided for herein;
(e) permit Stock Options to be granted to any person who is not an
Eligible Participant; or
(f) change any provision of the Plan which would affect the
qualification as an Incentive Stock Option under the internal revenue laws then
applicable of any Stock Option granted as an Incentive Stock Option under the
Plan.
No Stock Option may be granted during any suspension of the Plan or after
termination of the Plan. Amendment, suspension, or termination of the Plan
shall not (except as otherwise provided in Section 15 hereof), without the
consent of the Optionee, alter or impair any rights or obligations under any
Stock Option theretofore
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granted.
18. Rights of Eligible Participants and Optionees
---------------------------------------------
No Eligible Participant, Optionee or other person shall have any claim or
right to be granted a Stock Option under this Plan, and neither this Plan nor
any action taken hereunder shall be deemed to give or be construed as giving any
Eligible Participant, Optionee or other person any right to be retained in the
employ of the Corporation or any Subsidiary. Without limiting the generality of
the foregoing, no person shall have any rights as a result of his or her
classification as an Eligible Participant or Optionee, such classifications
being made solely to describe, define and limit those persons who are eligible
for consideration for privileges under the Plan.
19. Privileges of Stock Ownership; Regulatory Law Compliance; Notice of
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Sale.
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No Optionee shall be entitled to the privileges of stock ownership as to
any Option Shares not actually issued and delivered. No Option Shares may be
purchased upon the exercise of a Stock Option unless and until all then
applicable requirements of all regulatory agencies having jurisdiction and all
applicable requirements of the securities exchanges upon which securities of the
Corporation are listed (if any) shall have been fully complied with. The
Optionee shall, not more than five (5) days after each sale or other disposition
of shares of Common Stock acquired pursuant to the exercise of Stock Options,
give the Corporation notice in writing of such sale or other disposition.
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20. Effective Date of the Plan
--------------------------
The Plan shall be deemed adopted as of April 18, 1991, and shall be
effective immediately, subject to approval of the Plan by the holders of at
least a majority of the Corporation's outstanding shares of Common Stock.
21. Termination
-----------
Unless previously terminated as aforesaid, the Plan shall terminate ten
(10) years from the earliest date of: (i) adoption of the Plan by the Board of
Directors of the Corporation; or (ii) approval of the Plan by holders of at
least a majority of the outstanding shares of Common Stock. No Stock Options
shall be granted under the Plan thereafter, but such termination shall not
affect any Stock Option theretofore granted.
22. Option Agreement
----------------
Each Stock Option granted under the Plan shall be evidenced by a written
Stock Option Agreement executed by the Corporation and the Optionee, and shall
contain each of the provisions and agreements herein specifically required to be
contained therein, and such other terms and conditions as are deemed desirable
by the Stock Option Committee and are not inconsistent with this Plan.
23. Stock Option Period
-------------------
Each Stock Option and all rights and obligations thereunder shall expire on
such date as the Stock Option Committee may determine, but not later than ten
(10) years from the date such Stock Option is granted, and shall be subject to
earlier termination as provided elsewhere in this Plan.
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24. Exculpation and Indemnification of Stock Option Committee
---------------------------------------------------------
The present, former and future members of the Stock Option Committee, and
each of them, who is or was a director, officer or employee of the Corporation
shall be indemnified by the Corporation to the extent authorized in and
permitted by the Corporation's Certificate of Incorporation, and/or Bylaws in
connection with all actions, suits and proceedings to which they or any of them
may be a party by reason of any act or omission of any member of the Stock
Option Committee under or in connection with the Plan or any Stock Option
granted thereunder.
25. Agreement and Representations of Optionee
-----------------------------------------
Unless the shares of Common Stock covered by this Plan have been
registered with the Securities and Exchange Commission pursuant to the
registration requirements under the Securities Act of 1933, each Optionee
shall: (i) by and upon accepting a Stock Option, represent and agree in
writing, in the form of the letter attached hereto as Exhibit "A," for himself
or herself and his or her transferees by will or the laws of descent and
distribution, that the Option Shares will be acquired for investment purposes
and not for resale or distribution; and (ii) by and upon the exercise of a Stock
Option, or a part thereof, furnish evidence satisfactory to counsel for the
Corporation, including written and signed representations in the form of the
letter attached hereto as Exhibit "B," to the effect that the Option Shares are
being acquired for investment purposes and not for resale or distribution, and
that the Option Shares being acquired shall not
23
be sold or otherwise transferred by the Optionee except in compliance with the
registration provisions under the Securities Act of 1933, as amended, or an
applicable exemption therefrom. Furthermore, the Corporation, at its sole
discretion, to assure itself that any sale or distribution by the Optionee
complies with this Plan and any applicable federal or state securities laws, may
take all reasonable steps, including placing stop transfer instructions with the
Corporation's transfer agent prohibiting transfers in violation of the Plan and
affixing the following legend (and/or such other legend or legends as the Stock
Option Committee shall require) on certificates evidencing the shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, 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 OR A
WRITTEN OPINION OF COUNSEL FOR THE HOLDER THEREOF, WHICH OPINION SHALL BE
ACCEPTABLE TO FIRST REGIONAL BANCORP, THAT REGISTRATION IS NOT REQUIRED."
At any time that an Optionee contemplates the disposition of any of the Option
Shares (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 counsel for the Corporation, must
be satisfied prior to the making of such disposition. Before consummating such
disposition, the Optionee shall provide to the Corporation an opinion of
Optionee's counsel, at the Corporation's expense, of which both such opinion and
such counsel shall be
24
satisfactory to the Corporation, that such disposition will not result in a
violation of any state or federal securities laws or regulations. The
Corporation shall remove any legend affixed to certificates for Option Shares
pursuant to this Section if and when all of the restrictions on the transfer of
the Option Shares, whether imposed by this Plan or federal or state law, have
terminated.
26. Notices
-------
All notices and demands of any kind which the Stock Option Committee, any
Optionee, Eligible Participant, or other person may be required or desires to
give under the terms of this Plan shall be in writing and shall be delivered in
hand to the person or persons to whom addressed (in the case of the Stock Option
Committee, with the Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer or Secretary of the Corporation), by leaving a copy of such
notice or demand at the address of such person or persons as may be reflected
in the records of the Corporation, or by mailing a copy thereof, properly
addressed as above, by certified or registered mail, postage prepaid, with
return receipt requested. Delivery by mail shall be deemed made upon receipt by
the notifying party of the return receipt request acknowledging receipt of the
notice or demand.
27. Limitation on Obligations of the Corporation
--------------------------------------------
All obligations of the Corporation arising under or as a result of this
Plan or Stock Options granted hereunder shall constitute the general unsecured
obligations of the Corporation,
25
and not of the Board of Directors of the Corporation, any member thereof, the
Stock Option Committee, any member thereof, any officer of the Corporation, or
any other person or any Subsidiary, and none of the foregoing, except the
Corporation, shall be liable for any debt, obligation, cost or expense
hereunder.
28. Limitation of Rights
--------------------
The Stock Option Committee, in its sole and absolute discretion, is
entitled to determine who, if anyone, is an Eligible Participant under this
Plan, and which, if any, Eligible Participant shall receive any grant of a Stock
Option. No oral or written agreement by any person on behalf of the Corporation
relating to this Plan or any Stock Option granted hereunder is authorized, and
such may not bind the Corporation or the Stock Option Committee to grant any
Stock Option to any person.
29. Severability
------------
If any provision of this Plan as applied to any person or to any
circumstance shall be adjudged by a court of competent jurisdiction to be void,
invalid, or unenforceable, the same shall in no way affect any other provision
hereof, the application of any such provision in any other circumstances, or
the validity or enforceability hereof.
30. Construction
------------
Where the context or construction requires, all words applied in the plural
herein shall be deemed to have been used in the singular and vice versa, and the
masculine gender shall include the feminine and the neuter and vice versa.
26
31. Headings
--------
The headings of the several paragraphs herein are inserted solely for
convenience of reference and are not intended to form a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.
32. Successors
----------
This Plan shall be binding upon the respective successors, assigns, heirs,
executors, administrators, guardians and personal representatives of the
Corporation and Optionees.
33. Governing Law
-------------
To the extent not governed by the laws of the United States, this Plan
shall be governed by and construed in accordance with the laws of the State of
California.
34. Conflict
--------
In the event of any conflict between the terms and provisions of this
Plan, and any other document, agreement or instrument, including, without
meaning any limitation, any Stock Option Agreement, the terms and provisions of
this Plan shall control.
* * * *
27
EXHIBIT "A"
______________, 19__
First Regional Bancorp
1801 Century Park East
Eighth Floor
Los Angeles, California 90067
Gentlemen:
On this ___ day of ____________, 19__, the undersigned has received,
pursuant to the First Regional Bancorp 1991 Stock Option Plan (the "Plan") and
the Stock Option Agreement (the "Agreement") by and between First Regional
Bancorp (the "Corporation") and the undersigned, dated ______________, 19__ an
option to purchase ______ shares of the common stock, no par value, of First
Regional Bancorp (the "Stock").
In consideration of the grant of such option by First Regional Bancorp:
1. I hereby represent and warrant to you that the Stock to be acquired
pursuant to the option will be acquired by me in good faith and for my own
personal account, and not with a view to distributing the Stock to others or
otherwise reselling the stock in violation of the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder.
2. I hereby acknowledge and agree that: (a) the Stock to be acquired by
me pursuant to the Plan has not been registered and that there is no obligation
on the part of Corporation to register such Stock under the Securities Act of
1933, as amended, and the rules and regulations thereunder; and (b) the Stock to
be acquired by me will not be freely tradeable unless the Stock is either
registered under the Securities Act of 1933, as amended, or the holder presents
a legal opinion acceptable to the Corporation that the transfer will not violate
the federal securities laws.
3. I understand that the Corporation is relying upon the truth and
accuracy of the representations and agreements contained herein in determining
to grant such options to me and upon subsequently issuing any Stock pursuant to
the Plan without the Corporation first registering the same under the Securities
Act of 1933, as amended.
4. I hereby agree that the certificate evidencing the Stock may contain
the following legend stamped upon the face thereof to the effect that the Stock
is not registered under the Securities Act of 1933, as amended, and that the
Stock has been acquired pursuant to the representations and restrictions in this
letter, the Plan and in the Agreement:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, 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 OR A
WRITTEN OPINION OF COUNSEL FOR THE HOLDER HEREOF, WHICH OPINION SHALL BE
ACCEPTABLE TO FIRST REGIONAL BANCORP, THAT REGISTRATION IS NOT REQUIRED."
5. I hereby agree and understand that the Corporation will place a stop
transfer notice with its stock transfer agent to ensure that the restrictions on
the transfer described herein will be observed.
6. In further consideration of the issuance of the Stock, the undersigned
does hereby agree to indemnify you and hald you harmless against all liability,
costs, or expenses (including reasonable attorney's fees) arising out of or as a
result of any distribution or resale by the undersigned of any of the Stock.
The Agreements contained herein shall inure to the benifit of and be binding
upon the respective legal representatives, successors and assigns of the
undersigned and the Corporation.
Very truly yours,
_________________________________
(Signature)
_________________________________
(Type or Print Name)
EXHIBIT "B"
________________, 19__
First Regional Bancorp
1801 Century Park East
Eighth Floor
Los Angeles, California 90067
Gentlemen:
On this ______ day of ________________, 19__, the undersigned has acquired,
pursuant to the First Regional Bancorp 1991 Stock Option Plan (the "Plan") and
the Stock Option Agreement (the "Agreement") by and between First Regional
Bancorp (the "Corporation") and the undersigned, dated _____________, 19__,
_______________ (_________) shares of the Common Stock, no par value, of First
Regional Bancorp (the "Stock"). In consideration of the issuance by First
Regional Bancorp to the undersigned of said shares of its Common Stock:
1. I hereby represent and warrant to you that the Stock is being acquired
by me in good faith for my own personal account, and not with a view to
distributing the Stock to others or otherwise reselling the Stock in violation
of the Securities Act of 1933, as amended, or the rules and regulations
promulgated thereunder.
2. I hereby acknowledge and agree that: (a) the Stock being acquired by
me pursuant to the Plan has not been registered and that there is no obligation
on the part of the Corporation to register such Stock under the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder; and
(b) the Stock being acquired by me is not freely tradeable and must be held by
me for investment purposes unless the Stock is either registered under the
Securities Act of 1933 or transferred pursuant to an exemption from such
registration, as accorded by the Securities Act of 1933 and under the rules and
regulations promulgated thereunder. I further represent and acknowledge that I
have been informed by legal counsel in connection with said Plan of the
restrictions on my ability to transfer the Stock and that I understand the scope
and effect of those restrictions.
3. I understand that the effects of the above representations are the
following: (i) that the undersigned does not presently intend to sell or
otherwise dispose of all or any part of the shares of the Stock to any person or
entity except in compliance with the terms described above, in the Plan and in
the Agreement; and (ii) that the Corporation is relying upon the truth and
accuracy of the representations and agreements contained herein in issuing said
shares of the Stock to me without first registering the same under the
Securities Act of 1933, as amended.
Page 2
4. I understand that the certificate evidencing the Stock to be issued
pursuant to the Plan will contain a legend upon the face thereof to the effect
that the Stock is not registered under the Securities Act of 1933 and that stop
transfer orders will be placed against the shares with the Corporation's
transfer agent.
5. In further consideration for the grant of an option to purchase Stock
of Corporation, the undersigned hereby agrees to indemnify you and hold you
harmless against all liability, cost, or expenses (including reasonable
attorney's fees) arising out of or as a result of any distribution or resale of
share of Stock issued by the undersigned in violation of the securities laws.
The agreements contained herein shall inure to the benefit of and be binding
upon the respective legal representives, successors and assigns of the
undersigned and the Corporation.
Very truly yours,
_________________________________
(Signature)
_________________________________
(Type or Print Your Name)