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EXHIBIT 4(a)
CU BANCORP
1993 EMPLOYEE STOCK OPTION PLAN
Adopted October 17, 1993
Approved by the Shareholders on December 17, 1993
i. PURPOSE.
(1) The purpose of the CU Bancorp 1993
Employee Stock Option Plan (the "1993
Employee Plan") is to strengthen CU Bancorp
(the "Company") by providing to employees
(the "Employees") of the Company or its
subsidiaries added incentives for high levels
of performance and to encourage stock
ownership in the Company. The 1993 Employee
Plan seeks to accomplish these goals by
providing a means whereby the Employees may
be given an opportunity to purchase by way of
option common stock of the Company.
(2) The Company, by means of the 1993
Employee Plan, seeks to secure and retain the
services of such Employees, and to provide
incentives for such persons to exert maximum
efforts for the success of the Company and
its subsidiaries.
(3) The Company intends that the options
issued under the 1993 Employee Plan shall, in
the discretion of the Committee (as defined
in paragraph 2(a)), be either incentive stock
options as that term is used in Section 422
of the Internal Revenue Code of 1986, as
amended (the "Code") or any successor thereto
("incentive stock options"), or options which
do not qualify as incentive stock options
("non-qualified stock options"). All options
shall be separately designated as incentive
stock options or non-qualified stock options
at the time of grant, and a separate
certificate or certificates shall be issued
for shares purchased on the exercise of each
type of option.
ii. ADMINISTRATION.
(1) The 1993 Employee Plan shall be
administered by the committee (the
"Committee") designated by the Board of
Directors of the Company (the "Board"), which
shall be composed of not fewer than two (2)
members of the Board. All of the members of
the Committee shall be
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"disinterested persons" as provided in Rule
16b-3(c)(2)(i) promulgated pursuant to the
Securities Exchange Act of 1934, as amended
(the "1934 Act"). The Committee shall have,
in connection with the administration of the
1993 Employee Plan, the powers set forth in
subparagraph 2(b), subject, however, to such
resolutions, not inconsistent with the
provisions of the 1993 Employee Plan, as may
be adopted from time to time by the Board.
Any action of the Committee with respect to
administration of the 1993 Employee Plan
shall be taken pursuant to a majority vote or
to the unanimous written consent of its
members.
(2) The Committee shall have the power,
subject to, and within the limitations of,
the express provisions of the 1993 Employee
Plan:
(a) To determine from time to time
which of the persons eligible under
the 1993 Employee Plan shall be
granted an option; when and how the
option shall be granted; whether the
option will be an incentive stock
option or a non-qualified stock
option; the provisions of each
option granted (which need not be
identical), including, without
limitation, the term of the option;
the duration of and purposes of
leaves of absence which may be
granted to participants without
constituting a termination of their
employment for purposes of the 1993
Employee Plan; and the number of
shares for which an option shall be
granted to each such person.
(b) To determine any conditions or
restrictions imposed on stock
acquired pursuant to the exercise of
an option (including, but not
limited to, repurchase rights,
forfeiture restrictions and
restrictions on transferability).
(c) To construe and interpret the 1993
Employee Plan and the options
granted under it, to construe and
interpret any conditions or
restrictions imposed on stock
acquired pursuant to the exercise of
an option, to define the terms used
herein, and to establish, amend and
revoke rules and regulations for its
administration. The Committee, in
the exercise of this power, may
correct any defect, omission or
inconsistency in the 1993 Employee
Plan or in any option agreement in a
manner and to the extent it
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shall deem necessary or expedient to
make the 1993 Employee Plan fully
effective.
(d) To cancel, at any time and from
time to time, with the consent of
the affected optionee or optionees,
any or all outstanding options
granted under the 1993 Employee Plan
and the grant and substitution
therefor of new options under the
1993 Employee Plan (subject to
limitations hereof) covering the
same or different number of shares
of stock at an option price per
share in all events not less than
the fair market value on the new
grant date.
(e) Generally, to exercise such powers
and to perform such acts as it deems
necessary or expedient to promote
the best interests of the Company.
(3) The Committee shall comply with the
provisions of Rule 16b-3 promulgated pursuant
to the 1934 Act, as in effect from time to
time, to the extent applicable to the 1993
Employee Plan.
(4) The determinations of the Committee on
matters referred to in this paragraph 2 shall
be final and conclusive.
iii. SHARES SUBJECT TO THE 1993 EMPLOYEE PLAN.
Subject to the provisions of paragraph 9 relating to adjustments upon
changes in stock, the stock that may be offered pursuant to options granted
under the 1993 Employee Plan shall not exceed the aggregate of 400,000 shares
of the Company's common stock. If any option granted under the 1993 Employee
Plan shall for any reason expire, be cancelled or otherwise terminate without
having been exercised in full, the stock not purchased under such option shall
again become available for the 1993 Employee Plan.
iv. ELIGIBILITY.
(1) All Employees of the Company or its
subsidiaries shall be eligible to receive
incentive and/or non- qualified stock
options, at the discretion of the Committee.
(2) The Company may issue incentive stock
options provided that the aggregate fair
market value (determined at the time the
incentive stock option is granted) of the
stock with respect to which incentive stock
options are exercisable for the first time by
the optionee during any
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calendar year (under all incentive stock
option plans of the Company) shall not exceed
One Hundred Thousand Dollars ($100,000).
Should it be determined that any incentive
stock option granted pursuant to the 1993
Employee Plan exceeds such maximum, such
incentive stock option shall be considered to
be a non-qualified option and not to qualify
for treatment as an incentive stock option
under Section 422 of the Code to the extent,
but only to the extent, of such excess.
v. OPTION PROVISIONS.
Each option shall be in such form and shall contain such terms and
conditions as the Committee shall deem appropriate. The provisions of separate
options need not be identical, but each option shall include (through
incorporation of provisions hereof by reference in the option or otherwise) the
substance of each of the following provisions:
(1) Each option granted and all rights or
obligations thereunder by its terms shall
expire on such date as the Committee may
determine as set forth in such stock option
agreement, but not later than ten (10) years
from the date the option was granted and
shall be subject to earlier termination as
provided elsewhere in the 1993 Employee Plan.
Notwithstanding the foregoing, any incentive
stock option granted to an optionee who owns
(or is deemed to own pursuant to Section
424(d) of the Code) stock possessing more
than ten percent (10%) of the total combined
voting power of all classes of stock of the
Company or any of its affiliates shall expire
not later than five (5) years from the date
of grant. For purposes of the 1993 Employee
Plan, the date of grant of an option shall be
the date on which the Committee takes final
action approving the award of the option,
notwithstanding the date the optionee accepts
the option, the date of execution of the
option agreement, or any other date with
respect to such option.
(2) None of the options will be exercisable
during the first 12 months from the date of
the grant. Each option shall become
exercisable in the following four cumulative
annual installments: 25% on the first
anniversary date of the grant; an additional
25% on the second anniversary date of the
grant; an additional 25% on the third
anniversary date of the grant; and the last
25% on the fourth anniversary date of the
grant. From time to time during each of such
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installment periods, the option may be
exercised with respect to some or all of the
shares allotted to that period, and/or with
respect to some or all of the shares allotted
to any prior period as to which the option
was not fully exercised. During the
remainder of the term of the option (if its
term extends beyond the end of the
installment periods), the option may be
exercised from time to time with respect to
any shares then remaining subject to the
option. The provisions of this subparagraph
5(b) are subject to any option provisions
governing the minimum number of shares as to
which an option may be exercised.
(3) The exercise price of each option shall
be not less than one hundred percent (100%)
of the fair market value of the stock subject
to the option on the date the option is
granted; provided, however, that the purchase
price of common stock subject to an incentive
stock option may not be less than one hundred
ten percent (110%) of such fair market value
(without regard to any restriction other than
a restriction which, by its terms, will never
lapse) where the optionee owns (or is deemed
to own pursuant to Section 424(d) of the
Code) stock possessing more than ten percent
(10%) of the total combined voting power of
all classes of stock of the Company. The
fair market value of such stock shall be
determined by the Committee in accordance
with any reasonable valuation method,
including the valuation method described in
Treasury Regulation Section 20.2031-2.
(4) The purchase price of stock acquired
pursuant to an option shall be paid at the
time the option is exercised in cash or check
payable to the order of the Company in an
amount equal to the option price for the
shares being purchased, in whole shares of
stock of the Company owned by the optionee
having a fair market value on the exercise
date (determined by the Committee in
accordance with any reasonable evaluation
method, including the evaluation method
described in Treasury Regulation Section
20.2031-2) equal to the option price for the
shares being purchased, or a combination of
stock and cash or check payable to the order
of the Company, equal in the aggregate to the
option price for the shares being purchased.
Payments of stock shall be made by delivery
of stock certificates properly endorsed for
transfer in negotiable form. If other than
the optionee, the person or persons
exercising the option shall be required to
furnish the Company appropriate
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documentation that such person or persons
have the full legal right and power to
exercise the option on behalf of and for the
optionee.
(5) An option by its terms may only be
transferred by will or by the laws of descent
and distribution upon the death of the
optionee, shall not be transferable during
the optionee's lifetime, and shall be
exercisable during the lifetime of the person
to whom the option is granted only by such
person.
(6) The Company may require any optionee, or
any person to whom an option is transferred
under subparagraph 5(e), as a condition of
exercising any such option, to give written
assurances satisfactory to the Company
stating that such person is acquiring the
stock subject to the option for such person's
own account and not with any present
intention of selling or otherwise
distributing the stock. The requirement of
providing written assurances, and any
assurances given pursuant to the requirement,
shall be inoperative if (i) the shares to be
issued upon the exercise of the option are
then registered or qualified under the then
applicable federal or state securities laws,
or (ii) a determination is made by counsel
for the Company that such written assurances
are not required in the circumstances under
the then applicable federal or state
securities laws.
(7) If an optionee ceases to be employed by
the Company or its subsidiaries, then such
optionee's option shall terminate three (3)
months thereafter, and during such three (3)
month period, such option shall be
exercisable only as to those shares with
respect to which installments, if any, had
accrued as of the date on which the optionee
ceased to be employed by the Company or its
subsidiaries, unless:
(a) Such termination is due to such
person's permanent and total
disability, within the meaning of
Section 22(e)(3) of the Code, in
which case the stock option
agreement may, but need not, provide
that it may be exercised at any time
within one (1) year following such
termination of employment, and
provided further that if such
optionee dies during such specified
period following such termination of
employment, then the stock option
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agreement may, but need not, provide
that such option may be exercised at
any specified time up to one (1)
year following the death of the
optionee by the person or persons to
whom the optionee's rights under
such option pass by will or by the
laws of descent and distribution,
but only to the extent that the
optionee was entitled to exercise
said option immediately prior to the
termination of the optionee's
employment;
(b) The optionee dies while in the
employ of the Company or its
subsidiaries (which shall constitute
termination of employment), or
within not more than three (3)
months after termination of such
employment, in which case the option
may, but need not, provide that it
may be exercised at any time within
one (1) year following the death of
the optionee by the person or
persons to whom the optionee's
rights under such option pass by
will or by the laws of descent and
distribution, but only to the extent
that the optionee was entitled to
exercise said option immediately
prior to the termination of
optionee's employment;
(c) The option by its terms specifies
either (a) that it shall terminate
sooner than three (3) months after
termination of the optionee's
employment, or (b) that in the case
of non-qualified stock options it
may be exercised more than three (3)
months after termination of the
optionee's employment, but only to
the extent that the optionee was
entitled to exercise said option
immediately prior to the termination
of optionee's employment; or
(d) The optionee's employment is
terminated for cause, whereupon the
option terminates immediately unless
such termination is waived by the
Committee. Termination for cause
shall include termination for
malfeasance or gross misfeasance in
the performance of duties, or
conviction of illegal activity in
connection therewith, conviction for
a felony, or any conduct detrimental
to the interests of the Company or
any of its subsidiaries, and the
determination of the Committee with
respect thereto shall be final and
conclusive.
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This subparagraph 5(g) shall not be construed to extend the term
of any option or to permit anyone to exercise the option after expiration
of its term, nor shall it be construed to increase the number of shares as
to which any option is exercisable from the amount exercisable on the date
of termination of the optionee's employment.
(8) Options may be exercised by ten (10) days
written notice delivered to the Company
stating the number of shares with respect to
which the option is being exercised together
with payment for such shares. Not less than
ten (10) shares may be purchased at any one
time unless the number purchased is the total
number of shares which may be purchased under
the option.
(9) Any option granted hereunder shall
provide as determined by the Committee for
appropriate arrangements for the satisfaction
by the Company or its subsidiaries and the
optionee of all federal, state, local or
other income, excise or employment taxes or
tax withholding requirements applicable to
the exercise of the option or the later
disposition of the shares of stock thereby
acquired. Such arrangements shall include,
without limitation, the right of the Company
or any subsidiary thereof to deduct or
withhold in the form of cash or, if permitted
by law, shares of stock from any transfer or
payment to an optionee or, if permitted by
law, to receive transfers of shares of stock
or other property from the optionee, in such
amount or amounts deemed required or
appropriate by the Committee in its
discretion. Any shares of stock issued
pursuant to the exercise of an option and
transferred by the optionee to the Company
for purposes of satisfying any withholding
obligation shall not again be available for
purposes of the Plan.
vi. COVENANTS OF THE COMPANY.
(1) During the terms of the options granted
under the 1993 Employee Plan, the Company
shall keep available at all times the number
of shares of stock required to satisfy such
options.
(2) The Company shall seek to obtain from
each regulatory commission or agency having
jurisdiction over the 1993 Employee Plan or
the Company such authority as may be required
to issue and sell shares of stock upon
exercise of the options granted under the
1993 Employee Plan; provided, however, that
this undertaking shall not
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require the Company to register under the
Securities Act of 1933, as amended, either
the 1993 Employee Plan, any option granted
under the 1993 Employee Plan or any stock
issued or issuable pursuant to any such
option or grant. If the Company is unable to
obtain from any such regulatory commission or
agency the authority which counsel for the
Company deems necessary for the lawful
issuance and sale of stock under the 1993
Employee Plan, the Company shall be relieved
from any liability for failure to issue and
sell stock upon grant or upon exercise of
such options unless and until such authority
is obtained.
(3) The Company shall indemnify and hold
harmless the members of the Committee in any
action brought against any member in
connection with the administration of the
1993 Employee Plan to the maximum extent
permitted by then applicable law, except in
the case of willful misconduct or gross
misfeasance by such member in connection with
the 1993 Employee Plan and its
administration.
vii. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the
1993 Employee Plan shall constitute general funds of the Company.
viii. MISCELLANEOUS.
(1) Neither an optionee nor any person to
whom an option is transferred under
subparagraph 5(e) shall be deemed to be the
holder of, or to have any of the rights of a
holder with respect to, any shares subject to
such option unless and until such person has
satisfied all requirements for exercise of
the option pursuant to its terms.
(2) Nothing contained in the 1993 Employee
Plan, or in any option granted pursuant to
the 1993 Employee Plan, shall obligate the
Company or any of its subsidiaries to employ
any employee for any period or interfere in
any way with the right of the Company or any
of its subsidiaries to reduce the
compensation of any employee.
ix. ADJUSTMENTS UPON CHANGES IN STOCK.
If the outstanding shares of the stock of the Company are increased,
decreased, or changed into, or exchanged for a different number or kind of
shares or
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securities of the Company, without receipt of consideration by the Company,
through reorganization, merger, recapitalization, reclassification, stock
split, stock dividend, stock consolidation, or otherwise, an appropriate and
proportionate adjustment shall be made in the number and kind of shares as to
which options may be granted. A corresponding adjustment changing the number
or kind of shares and the exercise price per share allocated to unexercised
options, or portions thereof, which shall have been granted prior to any such
change shall likewise be made. Any such adjustment, however, in an outstanding
option shall be made without change in the total price applicable to the
unexercised portion of the option but with a corresponding adjustment in the
price for each share subject to the option. Adjustments under this section
shall be made by the Committee whose determination as to what adjustments shall
be made, and the extent thereof, shall be final and conclusive. No fractional
shares of stock shall be issued under the 1993 Employee Plan on account of any
such adjustment.
x. TERMINATING EVENTS.
Not less than thirty (30) days prior to the dissolution or liquidation
of the Company, or a reorganization, merger, or consolidation of the Company
with one or more corporations as a result of which the Company will not be the
surviving or resulting corporation, or a sale of substantially all the assets
of the Company to another person, or a reverse merger in which the Company is
the surviving corporation but the shares of the Company's stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property (a "Terminating Event"), the Committee shall notify each
optionee of the pendency of the Terminating Event. Upon delivery of said
notice, any option granted prior to the Terminating Event shall be,
notwithstanding the provisions of paragraph 5 hereof, exercisable in full and
not only as to those shares with respect to which installments, if any, have
then accrued, subject, however, to earlier expiration or termination as
provided elsewhere in the 1993 Employee Plan. Upon the date thirty (30) days
after delivery of said notice, any option or portion thereof not exercised
shall terminate, and upon the effective date of the Terminating Event, the 1993
Employee Plan shall terminate, unless provision is made in connection with the
Terminating Event for assumption of options theretofore granted, or
substitution for such options of new options covering stock of a successor
employer corporation, or a parent or subsidiary corporation thereof, solely at
the option of such successor corporation or parent or subsidiary corporation,
with appropriate adjustments as to number and kind of shares and prices.
xi. AMENDMENT OF THE 1993 EMPLOYEE PLAN.
(1) The Committee, at any time, and from time
to time, may amend the 1993 Employee Plan.
However, except as provided in paragraph 9
relating to adjustments upon changes in
stock, no amendment shall be effective unless
approved by the affirmative vote of a
majority of the shares of the Company
present, or represented, and entitled to vote
at a duly held meeting at which a quorum is
present or by
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the written consent of the holders of a
majority of the outstanding shares of the
Company entitled to vote, where the amendment
will:
(a) Materially increase the number of
shares reserved for options under
the 1993 Employee Plan;
(b) Materially modify the requirements
as to eligibility for participation
in the 1993 Employee Plan; or
(c) Materially increase the benefits
accruing to participants under the
1993 Employee Plan;
provided, however, that approval at a meeting or by written consent need not be
obtained or may be obtained by a lesser degree of shareholder approval if the
Committee determines, in its discretion after consultation with the Company's
legal counsel, that such approval is not required under, or such lesser degree
of shareholder approval will comply with, all applicable laws, including Rule
16b-3 promulgated pursuant to the 1934 Act, and will not adversely affect the
qualification of the 1993 Employee Plan under Section 422A of the Code. It is
expressly contemplated that the Committee, in its sole discretion, may amend
the 1993 Employee Plan in any respect the Committee deems necessary or
advisable to provide optionees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to incentive stock options and/or to bring the 1993
Employee Plan and/or options granted under it into compliance therewith.
(2) Rights and obligations under any option
granted pursuant to the 1993 Employee Plan,
while the 1993 Employee Plan is in effect,
shall not be altered or impaired by
suspension or termination of the 1993
Employee Plan, except with the consent of the
person to whom the stock or option was
granted.
xii. TERMINATION OR SUSPENSION OF THE 1993
EMPLOYEE PLAN.
(1) The Committee may suspend or terminate
the 1993 Employee Plan at any time. Unless
sooner terminated, the 1993 Employee Plan
shall terminate ten years from the Effective
Date (as defined in paragraph 13) of the 1993
Employee Plan. No options may be granted
under the 1993 Employee Plan while the 1993
Employee Plan is suspended or after it is
terminated.
(2) Rights and obligations under any option
granted pursuant to the 1993 Employee
Plan, while the 1993
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Employee Plan is in effect, shall not be
altered or impaired by suspension or
termination of the 1993 Employee Plan, except
with the consent of the person to whom the
stock or option was granted.
xiii. EFFECTIVE DATE OF PLAN.
The 1993 Employee Plan shall become effective on October 27, 1993,
1993 (the "Effective Date") but no options granted under the 1993 Employee Plan
shall be exercised unless and until the 1993 Employee Plan has been approved by
the affirmative vote of a majority of the outstanding shares of the Company
present, or represented, and entitled to vote at a duly held meeting at which a
quorum is present or by the written consent of the holders of a majority of the
outstanding shares of the Company entitled to vote, and, if required, an
appropriate permit has been issued by the appropriate state securities
authorities and approval has been obtained from the appropriate federal or
state and/or federal regulatory authorities.
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