EXHIBIT 10.2
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE STOCK OPTION AGREEMENT (the "Agreement"), made
and entered into as of this _____ day of __________, 19 __, by and
between Napa National Bancorp, a California corporation (the
"Company"), and _____________, an employee (the "Optionee") of Napa
National Bank, a wholly-owned subsidiary of the Company (the "Bank").
WITNESSETH
----------
WHEREAS, the Company has adopted the Napa National Bancorp 1982
Stock Option Plan, as amended and restated, effective July 15, 1988 (the
"Plan"), providing for the grant to the officers and key full-time salaried
employees of the Bank of options to purchase shares of its common stock,
without par value (the "Common Stock"); and
WHEREAS, the Plan provides for the grant of certain stock options
which are intended to be incentive stock options ("incentive stock options"
or "options") within the meaning of Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code"); and
WHEREAS, the Optionee is an officer or key employee of the Bank
who is in a position to make an important contribution to the future growth
and success of the Company;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants hereinafter set forth, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. The Company hereby grants to the Optionee an incentive stock
option to purchase ___________ shares of the Common Stock at the price set
forth in Section 2, on the terms and subject to the conditions hereinafter
stated. In consideration of the grant of this option and the other rights
which are being concurrently granted to him or her, the Optionee hereby
agrees to continue his or her employment with the Bank for a period of at
least one year from the date of grant of this option.
2. The purchase price per share is __________ dollars
($____________) (the "Option Price"), which is hereby agreed to be 100%
[110% if the Optionee is a more-than-10% shareholder] or more of the Fair
Market Value, as defined in Section 4 hereof, of such Common Stock at the
date of
grant. The Option Price be subject to adjustment as hereinafter provided.
3. Subject to the provisions of this Agreement, this option can
be exercised at any time during a period of _______ (__) months from the
date of grant, as follows:
(a) This option may be exercised immediately to the extent of
not more than ___________ percent (_______%) of the shares of
Common Stock covered hereby.
(b) After the expiration of ________ (___) months from the
date of grant, this option may be exercised to the extent of not
more than _____________________ percent (_______%) of the shares
of Common Stock covered hereby.
(c) After the expiration of ________ (___) months from the
date of grant, this option may be exercised to the extent of an
additional ______________________ percent (______%) of the shares
of Common Stock covered hereby.
(d) After the expiration of ________ (___) months from the
date of grant, this option may be exercised to the extent of an
additional _____________________ percent (%) of the shares of
Common Stock covered hereby.
(e) After the expiration of ________ (___) months from the
date of grant, this option may be exercised to the extent of an
additional ____________________ percent (______%) of the shares
of Common Stock covered hereby.
(f) After the expiration of ________ (___) months from the
date of grant, this option may be exercised to the extent of an
additional _____________________ percent (_____%) of the shares
of Common Stock covered hereby.
(g) After the expiration of ________ (___) months from the
date of grant, this option may be exercised to the extent of an
additional _____________________ percent (___) of the shares of
Common Stock covered hereby.
(h) After the expiration of ________ (___) months from the
date of grant, this option may be exercised to the extent of an
2
additional _____________________ percent (_______%) of the shares of
Common Stock covered hereby.
(i) After the expiration of _______ (___) months from the date
of grant, this option may be exercised to the extent of an
additional _____________________ percent (_____%) of the shares of
Common Stock covered hereby.
(j) After the expiration of _______ (___) months from the date
of grant, this option may be exercised to the extent of an additional
_____________________ percent (_____%) of the shares of Common Stock
covered hereby.
(k) After the expiration of ________ (___) months from the date
of grant, this option may be exercised to the extent of an additional
_____________________ percent (______%) of the shares of Common Stock
covered hereby.
Notwithstanding any other provision of this Agreement, this option is
not exercisable after the expiration of ten (10) years [five (5) years if the
Optionee is a more-than-10% shareholder] from the date of grant.
4. For the purposes of this Agreement, "Fair Market Value," when used
in reference to the date of grant of this option or the date of any surrender of
Common Stock in payment for the purchase of shares pursuant to the exercise of
this option or in satisfaction of any withholding tax requirements, as the case
may be, shall be determined by the Stock Option Committee of the Board of
Directors of the Company (the "Committee") in accordance with any reasonable
valuation method, including the valuation methods set forth in Section 20.2031-2
of the regulations promulgated under the Code.
5. The number of shares of Common Stock covered hereby and the price
per share thereof shall be proportionately adjusted for any increase or decrease
in the number of issued and outstanding shares of Common Stock resulting from a
subdivision or consolidation of shares or the payment of a stock dividend, or
any other increase or decrease in the number of issued and outstanding shares of
Common Stock effected without receipt of consideration by the Company. If the
shares of Common Stock are changed into or exchanged for a different number or
kind of shares of stock or securities of the Company or another corporation
(whether by reason of reorganization, merger, consolidation, capitalization,
classification, split-up, combination of shares, or
3
otherwise), the Optionee shall receive in substitution for each share of Common
Stock issuable upon the exercise of this option the number and kind of shares
of stock or other securities into which each outstanding share of Common Stock
shall be so changed or for which each share shall be exchanged, or to which
each such share shall be entitled, as the case may be. In addition, the
Committee shall make appropriate adjustments in the number and kind of shares
as to which this option, or portion thereof then unexercised, shall be
exercisable so that the Optionee' 5 proportionate interest in the securities of
the Company by reason of the Optionee' 5 rights hereunder shall be maintained
as before the occurrence of such event.? Such adjustment shall be made without
change in the total price as to the unexercised portion of this -option and
with a corresponding adjustment in the Option Price.
In the event of a sale, dissolution or liquidation of the Company or
a merger or consolidation in which the Company is not the surviving or resulting
corporation (unless the Company's obligations hereunder are assumed by the
surviving or resulting corporation), options granted hereunder may be terminated
by the Committee; provided, however, that immediately prior to such sale,
--------- -------
dissolution, or liquidation, or merger or consolidation in which the Company is
not the surviving or resulting corporation, the Company shall notify the
Optionee as soon as practicable and, thereafter, this option may be exercised in
whole or in part to the extent of any unexercised portion of this option,
regardless of the vesting provisions of Section 3 of this Agreement; and,
provided, further, that such right of exercise shall be conditioned upon the
--------- -------
execution of a final plan of dissolution or liquidation or a definitive
agreement of merger or consolidation.
In the event of an offer by any person or entity to all shareholders
of the Company to purchase any or all shares of Common Stock (or shares of stock
or other securities which are substituted for such shares or to which such
shares are adjusted as provided in this Section 5), the option granted hereunder
may be exercised upon the commencement of such offer to the extent of any
unexercised or unvested portion of such option.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive. No
fractional shares shall be issued or delivered.
The grant of the option granted hereunder shall not affect in any way
the right or power of the Company to make
4
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
6. No partial exercise of this option will be permitted for fewer than
__________ shares of Common Stock.
7. The Company shall have the right to cancel this option at any time
before it otherwise would have expired by its terms and to grant to the Optionee
in substitution therefor a new option stating an Option Price which is lower
(but not higher) than the Option Price stated in Section 2 of this Agreement and
which, in any case, shall be no less than the Fair Market Value of the shares
subject hereto on the date the new option is granted. The substituted option
shall not be exercisable after the expiration of ten (10) years [five (5) years
if the Optionee is a more-than-1O% shareholder] from the date of grant of this
option.
8. If the Optionee's status as an officer or employee of the Bank is
terminated due to total or partial disability within the meaning of Section
22(e)(3) of the Code (as determined by the Committee), this option may be
exercised for a period of twelve (12) months after the date of such disability,
provided the actual date of exercise is in no event after the expiration of the
term of this option.
If the Optionee' 5 status as an officer or employee of the Bank is
terminated by death, the executors or administrators of the Optionee' 5 estate,
or any person or persons who have acquired this option directly from the
Optionee by the Optionee' 5 will or the applicable laws of descent and
distribution, shall have the right to exercise this option, for a period of
twelve (12) months, commencing with the death of the Optionee, provided the
actual date of exercise is in no event after the expiration of the term of this
option.
If the Optionee's status as an officer or employee of the Bank is
terminated for any of the reasons set forth in the paragraph captioned "CAUSE"
under subsection 5(c)(3) of the Plan, this option shall expire at the time
notice or advice of such termination is dispatched by the Company pursuant to
the Plan and, notwithstanding anything else herein to the contrary, neither the
Optionee nor the Optionee' 5 estate shall be entitled to exercise this option
with respect to any shares whatsoever after such termination.
If the Optionee's status as an officer or employee of the Bank is
terminated for any reason other than those
5
specified in this Section 8, this option may be exercised within three (3)
months following such termination to the extent this option was exercisable on
the date of such termination, provided the date of exercise is in no event after
the expiration of the term of this option.
9. This option shall be exercisable during the Optionee's lifetime
only by the Optionee and shall be transferable by the Optionee only by will or
the laws of descent and distribution.
10. Except as otherwise provided herein, the option herein granted and
the rights and privileges conferred hereby shall not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to sale under execution attachment or similar process
upon the rights and privileges conferred hereby. Upon any attempt to transfer,
assign, pledge or otherwise dispose of said option, or of any right or privilege
conferred hereby, contrary to the provisions hereof 1 or upon any attempted sale
under any execution, attachment or similar process upon the rights and
privileges conferred hereby, said option and the rights and privileges conferred
hereby shall immediately become null and void.
11. This option may be exercised by delivering to the Secretary of the
Company payment in full at the Option Price for the number of shares of Common
Stock being purchased. The Option Price may be paid by delivering, at the
discretion of the Committee, (a) cash, a certified check, an official bank check
or the equivalent thereof acceptable to the Company; (b) shares of Common Stock
with a Fair Market Value as of the date of exercise equal to the Option Price,
or (c) shares of Common Stock, with a Fair Market Value as of the date of
exercise less than the full amount of the Option Price plus cash, a certified
check, an official bank check or the equivalent thereof acceptable to the
Company equal to the remaining amount of the Option Price, in each case together
with a written notice identifying this option or the part thereof being.
exercised and specifying the number of shares of Common Stock for which payment
is being tendered. The Company shall deliver to the Optionee, which delivery
shall be not less than fifteen (15) days and not more than thirty (30) days
after the giving of such notice, without transfer or issue tax to the Optionee
(or other person entitled to exercise this option), at the principal office of
the Company, or such other place as shall be mutually acceptable, a certificate
or certificates for such shares of Common Stock dated the date that this option
was validly exercised; provided, however, that the time of such delivery
--------- -------
may be postponed by the Company for such period as may be required for it with
reasonable
6
diligence to comply with any requirements of law. If the Option Price
is satisfied in whole or in part by delivery of shares of Common Stock, separate
stock certificates shall be issued, one or more for the number of shares of
stock received equal to the number of shares of Common Stock delivered and one
or more for the remainder of the shares received upon the exercise.
12. Neither the Optionee nor any person claiming under or through him
shall be or have any of the rights of a shareholder of the Company in respect of
any of the shares issuable upon the exercise of this option until the date of
issuance of a stock certificate for such shares by the Company. The Optionee
shall not be entitled to the privileges of stock ownership as to any shares not
actually issued and delivered to the Optionee.
13. Any notice to be given to the Company under the terms of this
Agreement shall be addressed to Napa National Bankcorp, in care of its
Secretary, at 0000 Xxxxx Xxxxxx, X.X. Xxx 000, Xxxx, Xxxxxxxxxx 00000-0000, or
at such other address as the Company may hereafter designate in writing. Any
notice to be given to the Optionee shall be addressed to the Optionee at the
address set forth beneath his or her signature hereto, or at any such other
address as the Optionee may hereafter designate in writing. Any such notice
shall be deemed to have been duly given if and when enclosed in a properly
sealed envelope, addressed as aforesaid, registered and deposited, postage and
registry fee prepaid, in a post office or branch post office regularly
maintained by the United States government.
14. Subject to the limitations on transferability contained herein,
this Agreement shall be binding upon and inure to the benefit of the heirs,
legal representatives, successors and assigns of the parties hereto.
15. The option granted hereby is subject to the requirement that if
at any time the Board of Directors or the Committee shall determine in its
discretion that the listing or qualification of the shares of Common Stock
subject to such option on any securities exchange or under any applicable law,
or the consent or approval of any government regulatory body, is necessary or
desirable as a condition of, or in connection with, the issuance of shares under
this option, such option may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any condition not acceptable to the Board of Directors or the Committee.
7
16. Unless the Optionee is required to give the notice required by
Section 17 hereof, the Optionee shall give the Company notice of any sale or
other disposition of any shares issued pursuant to the exercise of this option
not more than five (5) days after such sale or other disposition.
The exercise of this option shall be conditioned upon the registration
of the Plan with the Securities and Exchange Commission and qualification of the
Plan with the Commissioner of Corporations of the State of California unless in
the opinion of counsel to the Company such registration and qualification is not
necessary. Further, unless the shares of Common Stock to be issued upon exercise
of this option have been effectively registered under the Securities Act of 1933
and qualified under the California Corporate Securities Law of 1968, as each is
now in force or hereafter amended, the Company shall be under no obligation to
issue any shares of Common Stock covered by this option unless the person who'
exercises such option, in whole or in part, shall give a written representation
and undertaking to the Company which is satisfactory in form and scope to
counsel to the Company and upon which, in the opinion of such counsel, the
Company may reasonably rely, that he or she is acquiring the shares of Common
Stock issued to him or her pursuant to such exercise of this option for his or
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of any such shares of Common Stock, and that
he or she will make no transfer of the same except in compliance with any rules
and regulations in force at the time of such transfer under the Securities Act
of 1933, the California Corporate Securities Law of 1968, or any other
applicable law, and that if shares of Common Stock are issued without such
registration or qualification, a legend to this effect shall be endorsed upon
the securities so issued.
17. Section 16 hereof notwithstanding, in the event the Optionee sells
or otherwise disposes of any of the shares that may be acquired hereunder within
two (2) years of the date hereof or within one (1) year of the date such shares
are acquired hereunder, the Optionee agrees to notify the Company in writing
within ten (10) days of the date of such sale or other disposition of the number
of shares sold or disposed of, the nature of the transaction, and the amount
received (if any) upon such sale or other disposition. The Optionee understands
that such a sale or other disposition may result in imposition of withholding
taxes, and agrees to remit to the Company on request any amounts requested to
satisfy any withholding tax liability.
18. The Optionee agrees to notify in writing the Corporate Secretary
of the Company of his or her intention, if
8
any, to terminate his or her employment within ten (10) days after said
intention is formed.
19. Subject to any employment contract with the Optionee, the terms
of employment of the Optionee shall be determined from time to time by the Bank
and the Bank shall have the right, which is hereby expressly reserved, to
terminate the employee or change the terms of the employment at any time for any
reason whatsoever, with or without good cause.
20. Whenever shares of Common Stock are to be issued to the Optionee
in satisfaction of the rights conferred hereby, the Company shall have the right
to require the Optionee to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such shares. Whenever the Optionee is
required to pay to the Company an amount required to be withheld under
applicable federal and state income tax laws in connection with receipt of
shares of Common Stock upon exercise of this option, the Committee may, in its
absolute discretion, permit the Optionee to satisfy such obligation, in whole or
in part, by electing to have the Company withhold shares of Common Stock having
a value equal to the amount required to be withheld or by delivering to the
Company already-owned shares to satisfy the withholding requirement. The amount
of the withholding requirement shall include any amount agreed to be withheld at
the time the election is made, not in excess of the maximum federal and state
income tax rates applicable to the Optionee on the date that the amount of tax
to be withheld is to be determined (the "Tax Date"). The value of the shares to
be withheld or delivered will be based on their Fair Market Value on the Tax
Date. Such elections will be subject to the following restrictions: (1) the
election must be made on or before the Tax Date; (2) the election will be
irrevocable; and (3) the election will be subject to the disapproval of the
Committee. Each election by an optionee whose transactions in shares of Common
Stock are subject to Section 16(b) of the Securities Exchange Act of 1934 will
be subject to the following additional restrictions: (1) the election may not be
made within six (6) months of the grant of this option (except that this
limitation will not apply in the event death or disability of the optionee
occurs prior to the expiration of the six-month period), and (2) the election
must be made either at least six (6) months before the Tax Date or within a ten
(10) day period beginning on the third day following the release of the Company'
5 quarterly or annual summary statement of earnings.
9
21. The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the committee in good faith shall be final and binding upon Optionee,
the Company and all other interested persons. No member of the Board of
Directors or of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
this Agreement.
22. In the event that any provisiuon of this Agreemetn shall be
invalid or unenforceable, such provision shall be severable from, and such
invalidity or unenforceability shall not be construed to have any effect on, the
remaining provisions of this agreement.
IN WITNESS HEREOF, the parties hereto have executed this Agreement,
in duplicate, the day and year first above written.
NAPA NATIONAL BANCORP
By _________________________
Its______________________
ACCEPTED:
___________________________
Optionee
___________________________
___________________________
(Address)
10
