Exhibit 10.5 Cerritos Valley Bancorp 1993 Stock Purchase Plan
CERRITOS VALLEY BANCORP
1993 STOCK PURCHASE PLAN
1. PURPOSE
The purpose of the Cerritos Valley Bancorp 1993 Stock Purchase Plan (the
"Plan") is to benefit Cerritos Valley Bancorp (the "Bancorp") and those
corporations which are or hereafter become subsidiary corporations of the
Bancorp by providing a supplemental compensation benefit to participating
directors, officers and management level employees for high levels of
performance. The Plan seeks to accomplish this purpose and achieve these
results by providing participating directors, officers and management level
employees the ability to purchase Bancorp's common stock at a cost fixed at the
fair market price of the Bancorp's common stock at the time the participant is
granted rights to purchase such stock.
The Plan is intended to be a stock purchase plan that complies with Section
260.140.42 of Title 10 of the California Administrative Code.
2. ADMINISTRATION
This Plan shall be administered by the Board of Directors (the "Board").
The Board in its sole discretion may from time to time appoint a committee (the
"Committee") to administer the Plan and exercise all of the powers, authority
and discretion of the Board under this Plan. The Board may from time to time
remove members from, or add members to, the Committee, and vacancies on the
Committee shall be filled by the Board. The Board may abolish the Committee at
any time and/or revest in the Board the administration of the Plan.
Any action of the Board, or the Committee, if applicable, with respect to
the administration of the Plan shall be taken pursuant to a majority vote, or
the unanimous written consent, of its members. Subject to the express
provisions of the Plan, the Board, or the Committee, if applicable, shall have
the authority to construe and interpret the Plan, define the terms used therein,
prescribe, amend and rescind, the rules and regulations relating to
administration of the Plan, and make all other determinations necessary or
advisable for administration of the Plan.
All decisions, determinations, interpretations or other actions by the
Board, or the Committee, if applicable, shall be final, conclusive and binding
on all persons, subsidiary corporations of the Bancorp and any
successors-in-interest to such parties.
With regard to the granting of a right to a member of the Board, or the
Committee, if applicable, such member must abstain from voting.
3. RIGHTS TO PURCHASE SHARES OF BANCORP COMMON STOCK
Directors, full-time salaried officers and management level employees of
the Bancorp or of subsidiary corporations shall be eligible for selection to
participate in the Plan. Subject to the express provisions of the Plan, the
Committee or the Board, as applicable, shall select from the eligible class of
employees and make recommendations to the Board concerning the individuals to
whom rights shall be granted, the terms and provisions of the respective rights
agreements, the times at which such rights shall be granted and the number of
shares subject to each right. An individual who has been granted a right
hereunder may, if he or she is otherwise eligible, be granted additional rights
if the Board shall so determine.
The Board shall determine the individuals who shall receive rights and the
terms and provisions of the rights and shall grant such rights to such
individuals. Notwithstanding the above sentence, however, the Board may
delegate to the Committee the power to determine the individuals who shall
receive rights and the terms and provisions of such rights, and the power to
grant rights to such individuals.
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The purchase price of stock subject to each right shall be determined by
the Board (or the Committee, if authorized), but shall not be less than one
hundred percent (100%) of the fair market value of such stock at the time such
right is granted. The fair market value of such stock shall be determined in
accordance with any reasonable valuation method, including the valuation methods
described in Treasury Regulation Section 20.2031-2.
4. STOCK SUBJECT TO THE PLAN
Subject to adjustments as provided in Section 11, hereof, the stock to be
offered under the Plan shall be shares of the Bancorp's authorized but unissued
common stock (hereinafter called "stock") and the aggregate amount of stock to
be delivered upon exercise of all rights granted under this Plan shall not
exceed 150,000 shares. If any right shall be cancelled, surrendered or expire
for any reason without having been exercised in full, the underlying shares
subject thereto shall again be available for purposes of this Plan.
5. CONTINUATION OF EMPLOYMENT
Nothing contained in the Plan (or in any right agreement) shall obligate
the Bancorp or any subsidiary corporation to employ any participant for any
period or interfere in any way with the right of the Bancorp or a subsidiary
corporation to reduce the participant's compensation. However, the Bancorp may
not reduce the terms of any right without the approval of the participant.
6. EXERCISE OF RIGHTS
No right shall be exercisable until all necessary regulatory and
shareholder approvals are obtained. Except as otherwise provided in this
section, each right shall be exercisable in such installments, which need not be
equal, and upon such contingencies as the Board (or the Committee, if
authorized) shall determine; provided, however, that if a participant shall not
in any given installment period purchase all of the shares which the participant
is entitled to purchase in such installment period, the participant's right to
purchase any shares not purchased in such installment period shall continue
until expiration or termination of such right.
Fractional share interests shall be disregarded, except that they may be
accumulated. Not less than five thousand (5,000) shares may be purchased at any
one time unless the number of shares purchased is the total number of shares
which is exercisable at such time. Rights may be exercised by written notice
delivered to the Bancorp stating the number of shares with respect to which the
right is being exercised, together with the full purchase price for such shares.
Payment of the right purchase price in full, for the number of shares to be
delivered, must be made in cash. If the right is being exercised by any person
other than the participant, said notice shall be accompanied by proof,
satisfactory to counsel for the Bancorp, of the right of such person to exercise
the right.
7. NONTRANSFERABILITY OF RIGHTS
Each right shall, by its terms, be nontransferable by the participant other
than by will or the laws of descent and distribution, and shall be exercisable
during his or her lifetime only by the participant.
8. CESSATION OF DIRECTORSHIP OR EMPLOYMENT
Except as provided in Sections 9 and 19 hereof, if a participant ceases to
be a director or an employee of the Bancorp or a subsidiary corporation for any
reason other than his or her disability (as defined in Section 22(e)(3) of the
Code) or death, the participant's right shall expire ninety (90) days after the
date of termination of such directorship or employment. During the period after
cessation of directorship or employment, such right shall be exercisable only as
to those installments,
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if any, which have accrued and/or vested as of the date on which the participant
ceased to be a director or employee of the Bancorp or a subsidiary corporation.
9. TERMINATION OF EMPLOYMENT FOR CAUSE
If the right agreement so provides and if a participant's employment by the
Bancorp or a subsidiary corporation is terminated for cause, the participant's
right shall expire thirty (30) days from the date of such termination.
Termination for cause shall include, but not be limited to, termination for
malfeasance or gross misfeasance in the performance of duties or conviction of
illegal activity in connection therewith or any conduct detrimental to the
interests of the Bancorp or a subsidiary corporation, and, in any event, the
determination of the Board with respect thereto shall be final and conclusive.
10. DISABILITY OR DEATH OF PARTICIPANT
If any participant dies while serving as a director or employee of the
Bancorp or a subsidiary corporation, the right shall expire ninety (90) days
after the date of such death, except as provided in Section 19 hereof. After
such death but before such expiration, the persons to whom the participant's
rights under the right shall have passed by will or by the laws of descent and
distribution or the executor or administrator of participant's estate shall have
the right to exercise such right to the extent that installments, if any, had
accrued and/or vested as of the date on which the participant ceased to be
director or employee of the Bancorp or a subsidiary corporation.
If the participant shall terminate his or her directorship or employment
because of disability (as defined in Section 22(e)(3) of the Code), the
participant may exercise this right to the extent he or she is entitled to do so
at the date of termination, at any time within ninety (90) days of the date of
termination, except as provided in Section 19 hereof.
If any participant dies or becomes disabled during the ninety (90) day
period referred to in Section 8 hereof, the right shall expire ninety (90) days
after the date of such death or disability, except as provided in Section 19
hereof.
11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of the stock of the Bancorp are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Bancorp through reorganization, merger, recapitalization,
reclassification, stock split, stock dividend, stock consolidation or otherwise,
without consideration to the Bancorp, an appropriate and proportionate
adjustment shall be made in the number and kind of shares as to which rights may
be granted. A corresponding adjustment changing the number or kind of shares
and the exercise price per share allocated to unexercised rights or portions
thereof, which shall have been granted prior to any such change shall likewise
be made. Any such adjustment, however, in an outstanding right shall be made
without change in the total price applicable to the unexercised portion of the
right, but with a corresponding adjustment in the price for each share subject
to the right. Any adjustment under this section shall be made by the Board,
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 or made available under the Plan on account of any such adjustment, and
fractional share-interests shall be disregarded, except that they may be
accumulated.
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12. TERMINATING EVENTS
A Terminating Event shall be defined as any one of the following events:
(i) a dissolution or liquidation of the Bancorp; (ii) a reorganization, merger
or consolidation of the Bancorp with one or more corporations, the result of
which (A) the Bancorp is not the surviving corporation, or (B) the Bancorp
becomes a subsidiary of another corporation (which shall be deemed to have
occurred if another corporation shall own directly or indirectly, over 80% of
the aggregate voting power of all outstanding equity securities of the Bancorp);
(iii) a sale of substantially all the assets of the Bancorp to another
corporation; or (iv) a sale of the equity securities of the Bancorp representing
more than 80% of the aggregate voting power of all outstanding equity securities
of the Bancorp to any person or entity, or any group of persons and/or entities
acting in concert. Upon a Terminating Event (i) the Bancorp shall deliver to
each participant no less than thirty (30) days prior to the Terminating Event,
written notification of the Terminating Event and the participant's right to
exercise all rights granted pursuant to this Plan, whether or not vested under
this Plan or applicable stock right agreement, and (ii) all outstanding rights
granted pursuant to this Plan shall completely vest and become immediately
exercisable as to all shares granted pursuant to the right immediately prior to
such Terminating Event. This right of exercise shall be conditional upon
execution of a final plan of dissolution or liquidation or a definitive
agreement of consolidation or merger. Upon the occurrence of the Terminating
Event all outstanding rights and the Plan shall terminate; provided, however,
that any outstanding rights not exercised as of the occurrence of the
Terminating Event shall not terminate if there is a successor corporation which
assumes the outstanding rights or substitutes for such rights, new rights
covering the stock of the successor corporation with appropriate adjustments as
to the number and kind of shares and prices.
13. AMENDMENT AND TERMINATION
The Board may at any time suspend, amend or terminate the Plan and may,
with the consent of the participant, make such modification of the terms and
conditions of the right as it shall deem advisable; provided that, except as
permitted under the provisions of Sections 11 and 12 hereof, no amendment or
modification which would:
(a) increase the maximum number of shares which may be purchased pursuant
to rights granted under the Plan either in the aggregate or by an
individual;
(b) change the minimum right price;
(c) increase the maximum term of rights provided for herein; or
(d) permit rights to be granted to anyone other than directors, full-time
salaried officers (including a full-time salaried officer who is also
a director) or management level employees of the Bancorp or a
subsidiary corporation;
may be adopted without the Bancorp having first obtained any necessary
regulatory and shareholder approvals required by law.
No right may be granted during any suspension or after termination of the
Plan. Amendment, suspension or termination of the Plan shall not (except as
otherwise provided in Section 11 hereof), without the consent of the
participant, alter or impair any rights or obligations under any right
theretofore granted.
14. TIME OF GRANTING RIGHTS
The time a right is granted, sometimes referred to as the date of grant,
shall be the day of the action of the Board (or Committee, if authorized)
described in Section 3; provided, however, that if appropriate resolutions of
the Board (or the Committee, if authorized) indicate that a right is granted as
of and on some future date, the time such right is granted shall be such future
date. If action by the Board (or the Committee, if authorized) is taken by
unanimous written consent of its
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members, the action of the Board (or the Committee) shall be deemed to be at the
time the last Board (or Committee) member signs the consent.
15. PRIVILEGES OF STOCK OWNERSHIP;
SECURITIES LAW COMPLIANCE; NOTICE OF SALE
No participant shall be entitled to the privileges of stock ownership as to
any shares of stock not actually issued. No shares shall be purchased upon the
exercise of any right unless and until the Bancorp has fully complied with all
applicable requirements of any regulatory agency having jurisdiction over the
Bancorp, and all applicable requirements of any exchange upon which stock of the
Bancorp may be listed. The participant shall give the Bancorp notice of any
sale or disposition of any such shares not more than five (5) days after such
sale or disposition.
16. EFFECTIVE DATE OF THE PLAN
The Plan shall be deemed adopted by the Board as of November 16, 1993.
However, the Plan will not be effective as of November 16, 1993 unless and until
the Plan is approved by the shareholders of the Bancorp within twelve months of
the date the Plan is adopted, by the vote of a majority of the outstanding
shares represented and voting at a duly held meeting of shareholders at which a
quorum is present, or by the written consent vote of the holders of a majority
of the outstanding shares of the Bancorp stock. No right under the Plan shall
be granted prior to the shareholders' approval of the Plan.
17. TERMINATION
Unless previously terminated by the Board, the Plan shall terminate at the
close of business on a date ten (10) years from the earlier of the date of
approval by the Bancorp's outstanding shares or the date of adoption of this
Plan by the Board. No rights shall be granted under the Plan thereafter, but
such termination shall not affect any right theretofore granted.
18. RIGHT AGREEMENT
Each right shall be evidenced by a written right agreement executed by the
Bancorp and the participant 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 and are not inconsistent with the
Plan.
19. RIGHT PERIOD
Each right and all rights and obligations thereunder shall expire on such
date as the Board (or the Committee, if authorized) may determine, but not later
than ten (10) years from the date such right is granted, and shall be subject to
earlier termination as provided elsewhere in the Plan.
20. EXCULPATION AND INDEMNIFICATION
To the extent permitted by applicable law in effect from time to time, no
member of the Board or Committee shall be liable for any act or omission of any
other member of the Board or Committee nor for any act or omission on the
member's own part, except the member's own willful misconduct or gross
negligence. The Bancorp and its subsidiary corporations shall pay expenses
incurred by, and satisfy a judgment or fine rendered or levied against, a
present or former member of the Board or Committee in any action brought by a
third party against such person (whether or not the Bancorp is joined as a party
defendant) to impose a liability or penalty on such person while a member of the
Board or Committee arising with respect to the Plan or administration thereof or
out of membership on the Board or Committee, or all or any combination of the
preceding; provided,
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the Board determines in good faith that such member of the Board or Committee
was acting in good faith, within what such member of the Board or Committee
reasonably believed to be the scope of his or her employment or authority, and
for a purpose which he or she reasonably believed to be in the best interests of
the Bancorp or its shareholders. Payments authorized hereunder include amounts
paid and expenses incurred in settling any such action or threatened action.
This Section 20 does not apply to any action instituted or maintained in the
right of the Bancorp by a shareholder or holder of a voting trust certificate
representing shares of the Bancorp or any subsidiary corporation thereof. The
provisions of this Section 20 shall apply to the estate, executor,
administrator, heirs, legatees or devisees of a member of the Board or
Committee, and the term "person" as used in this Section 20 shall include the
estate, executor, administrator, heirs, legatees or devisees of such person.
21. AGREEMENT AND REPRESENTATIONS OF PARTICIPANT
Unless the shares of stock covered by this Plan have been registered with
the Securities Exchange Commission, each participant shall, by accepting a
right, represent and agree, for himself and his transferees by will or the laws
of descent and distribution, that all stock will be acquired for investment and
not for resale or distribution. Upon such exercise of any portion of a right,
the person entitled to exercise the same shall, upon request of the Bancorp,
furnish evidence satisfactory to the Bancorp (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 Bancorp, at its
sole discretion, may take all reasonable steps, including affixing the following
legend (and/or such other legend or legends as counsel shall require) on
certificates embodying the shares:
The shares represented by this certificate have not been registered
under the Securities Act of 1933 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 Securities Act of 1933 or a written opinion of counsel for
the participant which opinion shall be acceptable to counsel for the
Bancorp that registration is not required.
to assure itself against any sale or distribution by the participant which does
not comply with this Plan or any federal or state securities laws.
The Bancorp agrees to remove any legend affixed to the certificates
embodying the shares pursuant to this Section 21 when all of the restrictions on
the transfer of the shares, whether imposed by this Plan or federal or state
law, have terminated.
22. NONEXEMPT PLAN UNDER SECTION 16b-3
This Plan is not a Section 16b-3 exempt plan. The Bancorp and participants
of the Plan will be subject to additional rules and conditions when the
Bancorp's common stock is registered under the Securities and Exchange Act of
1934.
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23. INFORMATION TO PARTICIPANTS
Bancorp agrees to provide participants of the Plan its financial statements
on an annual basis or more frequently.
CERRITOS VALLEY BANCORP
By /s/ Kay Toma
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By /s/ James N. Koury
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By
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