VALLEY COMMERCE BANCORP Stock Option Award Agreement
Exhibit
4.2
2007
EQUITY INCENTIVE PLAN
Valley
Commerce Bancorp, a California corporation and a registered bank holding company
under the Bank Holding Company Act of 1956 (the “Company”), and the undersigned
person (the “Optionee”)
have entered into this Stock Option Award Agreement (the “Award Agreement”)
effective as of the Grant Date set forth below. The Company has
granted to Optionee the option (the “Option”) to purchase the
number of shares (the “Shares”) of common stock, no
par value, of the Company (the “Stock”) set forth below at
the per Share purchase price (the “Exercise Price”) set forth
below, pursuant to the terms of this Award Agreement. The Option was
granted under the Company’s 2007 Equity Incentive Plan, as the same may be
amended, modified, supplemented or interpreted from time to time (the “Plan”), which is incorporated
herein by reference and to which this Option is subject in all
respects.
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Optionee
Name:
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_____________________
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Grant
Date:
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_____________________
MM/DD/YYYY
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Expiration
Date:
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_____________________
MM/DD/YYYY
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Type
of Option:
Number
of Shares:
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_____________
_____________
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Exercise
Price:
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$______
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1. Terms of Plan. All
capitalized terms used in this Award Agreement and not otherwise defined shall
have the meanings ascribed thereto in the Plan. Optionee confirms and
acknowledges that Optionee has received and reviewed a copy of the
Plan. The Plan is administered by the Compensation Committee of
the Board of Directors (the “Committee”) which has complete authority to make
all determinations with respect to each Award, to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of Award Agreements, and to make all other
determinations under the Plan.
2. Nature of the
Option. The Option has been granted as an incentive to
Optionee’s Continuous Service, and is in all respects subject to such Continuous
Service and all other terms and conditions of this Award
Agreement. The Option is intended to be an [Incentive/Nonstatutory]
Option.
3. Vesting, Exercise and Term of
Option. The Option shall vest and become exercisable during
its term in accordance with the following provisions:
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(a)
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Vesting
and Right of Exercise.
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(i) The
Option shall vest and become exercisable with respect to 25% of the Shares at
each of the first 4 annual anniversaries of the Grant Date until all of the
Shares have vested, subject to Optionee’s Continuous Service.
(ii) In
the event of Optionee’s death, disability or other termination of Optionee’s
Continuous Service, the Option shall be exercisable in the following
manner:
(I) Termination of
Employment: the Option ceases to be exercisable 90 days
following termination of employment, during which time it shall be exercisable
only to the extent exercisable at the date of termination, except that the
Option shall not be exercised after its expiration date;
(II) Disability: if
Optionee was in Continuous Service from the Grant Date until the date of
termination of service due to disability, the Option ceases to be exercisable
twelve months following the date of termination of Continuous Service from
disability, during which time it shall be exercisable only to the extent
exercisable at the date of termination due to disability, except that the Option
shall not be exercised after its expiration date; and
(III) Death: if the
Optionee was in Continuous Service from the Grant Date until the date of death,
the Option ceases to be exercisable twelve months following the date of death,
during which time it shall be exercisable by the Optionee’s estate or by a
person who acquired the right to exercise the Option by bequest, inheritance or
otherwise as a result of the Optionee’s death only to the extent exercisable at
the date of death, except that the Option shall not be exercised after its
expiration date.
(b) Method of
Exercise. In order to exercise any vested portion of the
Option, Optionee shall notify the Company in writing by executing and delivering
the Notice of Exercise of Stock Option in the form attached hereto as Exhibit A
(the “Exercise
Notice”). The certificate or certificates representing Shares
as to which the Option has been exercised shall be registered in the name of
Optionee or otherwise as the Optionee may request and the Company shall
permit.
(c) Restrictions on Exercise; Term of
Option.
(i) Optionee
may exercise the Option only with respect to Shares that have vested in
accordance with Section 3(a) of this Award Agreement.
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(ii) Optionee
may not exercise the Option if the issuance of the Shares upon such exercise or
the method of payment of consideration for such Shares would constitute a
violation of any applicable federal or state securities law or other law or
regulation.
(iii) The
method and manner of payment of the Exercise Price will be subject to the
prohibition on loans to directors and executive officers in Section 402 of the
Xxxxxxxx-Xxxxx Act of 2002, to the rules under Part 221 of Title 12 of the Code
of Federal Regulations as promulgated by the Federal Reserve Board, and to any
other applicable laws, rules or regulations.
(iv) As
a condition to the exercise of the Option, the Company may require certain
representations and warranties as the Company may request pursuant to Section
9.3 of the Plan. Prior to or subsequent to exercise of the Option, the Company
may require the Optionee to enter into certain lock-up arrangements as provided
in Section 9.4 of the Plan.
(v) Optionee
may only exercise the Option upon, and the obligations of the Company under this
Award Agreement to issue Shares to Optionee upon any exercise of the Option is
conditioned on, satisfaction of all federal, state, local or other withholding
tax obligations associated with such exercise (whether so required to secure for
the Company a tax deduction or otherwise) (“Withholding
Obligations”). The Company reserves the right to require Optionee to
remit to the Company an amount sufficient to satisfy all Withholding Obligations
prior to the issuance of any Shares upon any exercise of the
Option. In addition, Optionee authorizes the Company to deduct any
such Withholding Obligations from any payments of any kind due to Optionee
(whether in connection with the Option or otherwise). The Optionee may elect to
satisfy Withholding Obligations, in whole or in part, by having the Company
withhold shares of Stock otherwise due to the Optionee upon exercise of the
Option, or by submitting shares of Stock previously owned by the Optionee.
(vi) No
fraction of a Share shall be purchasable or deliverable upon exercise of the
Option, but in the event any such Shares shall include a fraction of a Share
(whether due to net exercise, payment of the Exercise Price by having Shares
withheld or by submitting previously owned shares, by adjustment of the Option
as provided in the Plan, or otherwise), such number of Shares shall be rounded
down to the nearest smaller whole number of Shares.
(vii) The
Option may not be exercised more than 10 years after the Grant Date, and may be
exercised during such term only in accordance with the terms of this Award
Agreement.
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4. Transferability
of Option.
(a) The
Option may not be transferred in any manner other than by will or pursuant to
the laws which would apply if the Optionee dies without leaving a
will.
(b) The
terms of this Award Agreement shall bind the Optionee and his or her spouse or
domestic partner and the respective Permitted Transferees, executors,
administrators, heirs, personal representatives and successors of the
foregoing.
5. Method of
Payment.
(a) Upon
exercise, Optionee shall pay the aggregate Exercise Price of the Shares
purchased and the Withholding Obligations by any of the following methods, or a
combination thereof, at the election of Optionee:
(i) cash;
(ii) certified
or bank cashier’s check;
(iii) if
shares of Stock are traded on an established stock market or exchange on the
date of exercise, by surrender of whole shares of Stock having a Market Value
equal to the portion of the Exercise Price to be paid by such surrender, provided that if such
shares of Stock to be surrendered were acquired upon exercise of an Incentive
Option, Optionee must have first satisfied the holding period requirements under
Section 422(a)(1) of the Code;
(iv) by
a “net exercise” of the Option, in which the Company will not require a payment
of the Exercise Price but will reduce the number of shares of Stock issued upon
the exercise by the largest number of whole shares that have a Fair Market Value
that does not exceed the aggregate Exercise Price of the Shares as to which the
Option is being exercised. With respect to any remaining balance of the
aggregate Exercise Price, the Company will accept a cash payment from the
Optionee. The number of shares of Stock underlying the Option will decrease
following exercise to the extent of (i) Shares used to pay the Exercise
Price of an Option under the “net exercise” feature, (ii) Shares actually
delivered to the Optionee as a result of such exercise and (iii) Shares
withheld to pay the Withholding Obligations; or
(v) if
shares of Stock are traded on an established stock market or exchange on the
date of exercise, pursuant to and under the terms and conditions of any formal
cashless exercise program authorized by the Company entailing the sale of the
Stock subject to an Option in a brokered transaction (other than to the
Company).
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(b) Payment in
Stock. If Optionee shall pay all or a portion of the aggregate
Exercise Price and Withholding Obligations due upon an exercise of the Option by
surrendering shares of Stock pursuant to Section 5(a)(iii), then
Optionee:
(i) shall
accompany the Exercise Notice with a duly endorsed blank stock power (with an
appropriate signature guarantee if requested by the Company) with respect to the
number of shares of Stock to be surrendered and shall deliver the certificate(s)
representing such surrendered shares to the Company at its principal offices
within two business days after the date of the Exercise Notice;
(ii) authorizes
the Company to transfer so many whole number of Shares represented by such
certificate(s) that have a Fair Market Value that does not exceed the aggregate
Exercise Price for the Shares as to which the Option is being exercised. With
respect to any remaining balance of the aggregate Exercise Price, the Company
will accept a cash payment from the Optionee; and
(iii) may
not surrender any fractional share as payment of any portion of the Exercise
Price.
6. Adjustments to
Option. Pursuant to Section 8.1 of the Plan, in certain cases
the number of Shares covered by the Option and the Exercise Price will be
proportionately adjusted if the outstanding number of shares of Stock are
increased, decreased, or exchanged for a different number or kind of shares or
other securities, or if additional shares or new or different shares or other
securities are distributed with respect to the outstanding Stock, through
merger, consolidation, sale of all or substantially all the property of the
Company, reorganization, combination, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, or other similar distribution of the
Company’s equity securities without the receipt of consideration by the
Company.
7. Not an Employment
Contract. Nothing in the Plan or this Award Agreement shall
confer upon Optionee any right to continuation of the Optionee’s employment or
other association with the Company or shall interfere with or restrict in any
way the rights of the Company, which are hereby expressly reserved, to modify
the terms of Optionee’s employment or to terminate Optionee’s employment at any
time for any reason whatsoever, with or without cause.
8. Tax Consequences
Generally. Optionee acknowledges that Optionee may suffer
adverse tax consequences as a result of exercise of the
Option. Optionee acknowledges that the Company advises Optionee to
consult with the Optionee’s tax advisers in connection with the tax implications
relating to the Option including but not limited to the acquisition, disposition
or transfer of the Option or of any securities or property in connection
therewith, and that Optionee is not relying on the Company for any tax advice in
connection therewith. Any adverse consequences incurred by an
Optionee in connection with the Option, including, without limitation, from the
use of shares of Stock to pay any part of the Exercise Price or any tax in
connection with the exercise of the Option, and any adverse tax consequences
arising from a disqualifying disposition within the meaning of Section 422
of the Code, shall be the sole responsibility of Optionee.
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9. Cancellation of Option For Improper
Acts of Optionee. If, at any time during the course of the Optionee’s
employment with the Company or any Affiliates or within six months after
termination of Continuous Service, the Optionee engages in any activity in
competition with any business activity of the Company or of any Affiliates, or
inimical, contrary or harmful to the interests of the Company or any Affiliates,
then (1) the Option and all other Awards under the Plan made to the Optionee
shall terminate and be forfeited, (2) any cash, security or other property
acquired by the Optionee pursuant to the Option and pursuant to all other Awards
under the Plan, which cash, security or property was acquired by the Optionee
during the Forfeiture Period shall be forfeited, and (3) any gain realized by
the Optionee from the sale of any security acquired under the Option or any
other Award during the Forfeiture Period shall be paid by the Optionee to the
Company. The “Forfeiture Period” shall mean the period commencing on
the Grant Date of the Option or any other Award and ending six months from
termination of Continuous Service.
10. Consent of Spouse/Domestic
Partner. Optionee agrees that Optionee’s spouse’s or domestic
partner’s interest in the Option is subject to this Award Agreement and such
spouse or domestic partner is irrevocably bound by the terms and conditions of
this Award Agreement. Optionee agrees that all community property
interests of Optionee and Optionee’s spouse or domestic partner in the Option,
if any, shall similarly be bound by this Award Agreement. Optionee
agrees that this Award Agreement is binding upon Optionee’s and Optionee’s
spouse’s or domestic partner’s executors, administrators, heirs and
assigns. Optionee represents and warrants to the Company that
Optionee has the authority to bind Optionee’s spouse/domestic partner with
respect to the Option. Optionee agrees to execute and deliver such
documents as may be necessary to carry out the intent of this Section 10 and the
consent of Optionee’s spouse/domestic partner.
11. Receipt of
Plan. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof, and
hereby accepts the grant of Options made pursuant to this Award Agreement
subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Award Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Award
Agreement, and fully understands all provisions of the Award
Agreement. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions arising under the Plan or this Award Agreement.
IN
WITNESS WHEREOF, Optionee and the Company have entered into this Award Agreement
as of the Grant Date.
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By:
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[Optionee
Signature]
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Name:
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[Optionee
Name] (please
print)
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Title:
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