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EXHIBIT 10.5
REDDING BANCORP
1998 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Redding Bancorp, a California corporation ("Bancorp"), hereby grants an
option to purchase Shares of its common stock to the optionee named below. The
terms and conditions of the option are set forth in this cover sheet, in the
attachment and in Bancorp's 1998 Stock Option Plan (the "Plan").
Date of Option Grant: __________, 199__
Name of Optionee: ___________________________________
Optionee's Social Security Number: _____-____-_____
Number of Shares of Common Stock Covered by Option:
Exercise Price per Share:(1) $_______________________
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THIS COVERSHEET, THE ATTACHED AGREEMENT AND IN
THE PLAN, A COPY OF WHICH IS ALSO ENCLOSED.
Optionee:______________________________________________________________________
(Signature)
Bancorp:_______________________________________________________________________
(Signature)
Title:__________________________________________________________
Attachment
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(1) Must not be less than 85% of the fair market value of Bancorp's common stock
on the date of grant and must not be less than 110% of the fair market value of
Bancorp's common stock on the date of grant for option holders who own 10% or
more of the outstanding common stock of Bancorp.
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REDDING BANCORP
1998 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
NONSTATUTORY This option is not intended to be an incentive stock option
STOCK OPTION under section 422 of the Internal Revenue Code and will be
interpreted accordingly.
VESTING Your right to exercise this option begins to vest on the Date of
Option Grant, as shown on the cover sheet. The option will vest
at the rate of ____% [not less than 20%] per year on each
anniversary of the Date of Grant over _____ years of your
continuous employment beginning on the Date of Option Grant. The
resulting number of Shares will be rounded to the nearest whole
number. No additional Shares will vest after your service with
Bancorp has terminated for any reason. However, this option will
be 100% vested upon a Change in Control or if you terminate
employment by reason of death, Disability (as defined below)[,
AN INVOLUNTARY TERMINATION WITHOUT CAUSE,] or mandatory
retirement, provided that you are an Outside Director. The terms
"Cause," "Change in Control" and "Outside Director" are defined
in the Plan.
TERM This option will expire in any event at the close of business at
Bancorp headquarters on the day before the 10th anniversary of
the Date of Grant, as shown on the cover sheet. (It will expire
earlier if your service with Bancorp terminates, as described
below.)
REGULAR If your service as an employee of Bancorp (or any
TERMINATION Subsidiary) terminates for any reason except death or
Disability, then this option will expire at the close of
business at Bancorp headquarters no less than 30 days after your
termination date.
[NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT TO THE
CONTRARY, IN THE EVENT THAT YOU CEASE TO BE EMPLOYED BY BANCORP
WITHIN ONE YEAR FROM THE DATE OF GRANT FOR ANY REASON ALL RIGHTS
TO PURCHASE SHARES UNDER THIS OPTION SHALL IMMEDIATELY
TERMINATE.]
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DEATH If you die as an employee of Bancorp (or any Subsidiary), then
this option will expire at the close of business at Bancorp
headquarters on a date no less than six months after the date of
death. During that interim period, your estate or heirs may
exercise the vested portion of this option.
DISABILITY If your service as an employee of Bancorp (or any Subsidiary)
terminates because of your Disability, then this option will
expire at the close of business at Bancorp headquarters on a
date not less than six months after your termination date.
"Disability" means that you are unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months.
LEAVES OF For purposes of this option, your service does not terminate
ABSENCE when you go on a military leave, a sick leave or another bona
fide leave of absence, if the leave was approved by Bancorp in
writing. Your service terminates in any event when the approved
leave ends, unless you immediately return to active work.
Bancorp determines which leaves count for this purpose, whether
this option continues to vest during a leave and when your
service terminates for all purposes under the Plan.
RESTRICTIONS ON Bancorp will not permit you to exercise this option if the
EXERCISE issuance of Shares at that time would violate any law or
regulation.
NOTICE OF When you wish to exercise this option, you must notify Bancorp
EXERCISE by filing the proper "Notice of Exercise" form at the address
given on the form. Your notice must specify how many Shares you
wish to purchase. Your notice must also specify how your Shares
should be registered (in your name only or in your and your
spouse's names as community property or as joint tenants with
right of survivorship). The notice will be effective when it is
received by Bancorp.
If someone else wants to exercise this option after your death,
that person must prove to Bancorp's satisfaction that he or she
is entitled to do so.
FORM OF PAYMENT When you submit your notice of exercise, you must
include payment of the option price for the Shares you are
purchasing.
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Payment may be made [IN ONE OF (OR A COMBINATION) THE
FOLLOWING FORMS:]
o Your personal check, a cashier's check or a money
order.
o [TO THE EXTENT THAT A PUBLIC MARKET FOR THE
SHARES EXISTS AS DETERMINED BY BANCORP, BY
DELIVERY (ON A FORM PRESCRIBED BY THE COMMITTEE)
OF AN IRREVOCABLE DIRECTION TO A SECURITIES
BROKER TO SELL SHARES AND TO DELIVER ALL OR PART
OF THE SALE PROCEEDS TO BANCORP IN PAYMENT OF
THE AGGREGATE EXERCISE PRICE]. [OPTIONAL]
WITHHOLDING You will not be allowed to exercise this option unless
TAXES you make acceptable arrangements to pay any withholding
or other taxes that may be due as a result of the option
exercise or the sale of Shares acquired upon exercise of
this option.
PERIODS OF By signing this Agreement, you agree not to
NONEXERCISABILITY sell any Shares acquired by exercise of this Option at a
time when applicable laws, regulations or underwriter
trading policies prohibit exercise or a sale. In
particular, Bancorp shall have the right to designate
one or more periods of time, each of which shall not
exceed 180 days in length, during which this option
shall not be exercisable if Bancorp determines (in its
sole discretion) that such limitation on exercise could
in any way facilitate a lessening of any restriction on
transfer pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), or any state securities
laws with respect to any issuance of securities by
Bancorp, facilitate the registration or qualification of
any securities by Bancorp under the Securities Act or
any state securities laws, or facilitate the perfection
of any exemption from the registration or qualification
requirements of the Securities Act or any applicable
state securities laws for the issuance or transfer of
any securities. Such limitation on exercise shall not
alter the vesting schedule set forth in this Agreement
other than to limit the periods during which this option
shall be exercisable.
If the sale of Shares under the Plan is not registered
under the Securities Act, but an exemption is available
which requires an investment or other representation,
you shall represent and agree at the time of exercise
that the Shares being acquired upon exercising this
option are being acquired for investment, and not with a
view to the sale or distribution thereof, and shall make
such other representations as are deemed necessary or
appropriate by Bancorp and its counsel.
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BANCORP'S RIGHT OF In the event that you propose to sell, pledge or
FIRST REFUSAL otherwise transfer to a third party any Shares acquired
under this Agreement, or any interest in such Shares,
Bancorp shall have the "Right of First Refusal" with
respect to all (and not less than all) of such Shares.
If you desire to transfer Shares acquired under this
Agreement, you must give a written "Transfer Notice" to
Bancorp describing fully the proposed transfer,
including the number of Shares proposed to be
transferred, the proposed transfer price and the name
and address of the proposed transferee. The Transfer
Notice shall be signed both by you and by the proposed
new transferee and must constitute a binding commitment
of both parties to the transfer of the Shares. Bancorp
shall have the right to purchase all, and not less than
all, of the Shares on the terms of the proposal
described in the Transfer Notice (subject, however, to
any change in such terms permitted in the next
paragraph) by delivery of a notice of exercise of the
Right of First Refusal within 30 days after the date
when the Transfer Notice was received by Bancorp.
Bancorp's rights under this paragraph shall be freely
assignable, in whole or in part.
If Bancorp fails to exercise its Right of First Refusal
within 30 days after the date when it received the
Transfer Notice, you may, not later than 90 days
following receipt of the Transfer Notice by Bancorp,
conclude a transfer of the Shares subject to the
Transfer Notice on the terms and conditions described in
the Transfer Notice. Any proposed transfer on terms and
conditions different from those described in the
Transfer Notice, as well as any subsequent proposed
transfer by you, shall again be subject to the Right of
First Refusal and shall require compliance with the
procedure described in the paragraph above. If Bancorp
exercises its Right of First Refusal, the parties shall
consummate the sale of the Shares on the terms set forth
in the Transfer Notice within 60 days after the date
when Bancorp received the Transfer Notice (or within
such longer period as may have been specified in the
Transfer Notice); provided, however, that in the event
the Transfer Notice provided that payment for the Shares
was to be made in a form other than lawful money paid at
the time of transfer, Bancorp shall have the option of
paying for the Shares with lawful money equal to the
present value of the consideration described in the
Transfer Notice.
Bancorp's Right of First Refusal shall inure to the
benefit of its successors and assigns and shall be
binding upon any transferee of the Shares.
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Bancorp's Right of First Refusal shall terminate in the
event that Stock is listed or traded on an established
stock exchange.
RIGHT OF REPURCHASE Following termination of your employment
for any reason, Bancorp shall have the right to purchase
all of the Shares that you have acquired or will acquire
under this option. If Bancorp exercises its right to
purchase such Shares, the purchase price shall be the
higher of the Fair Market Value of those Shares on the
date of purchase or the aggregate Exercise Price for
those Shares and shall be paid in cash. Bancorp will
notify you of its intention to purchase such shares, and
will consummate the purchase within the period
established by applicable law. Bancorp's right of
repurchase shall terminate in the event Bancorp's Common
Stock is listed on an established stock exchange or is
quoted regularly on the Nasdaq National Market.
TRANSFER OF OPTION Prior to your death, only you may exercise
this option. You cannot transfer or assign this option.
For instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these
things, this option will immediately become invalid. You
may, however, dispose of this option in your will.
Regardless of any marital property settlement agreement,
Bancorp is not obligated to honor a notice of exercise
from your spouse or former spouse, nor is Bancorp
obligated to recognize such individual's interest in
this option in any other way.
RETENTION RIGHTS This option or this Agreement do not give you
the right to be retained by Bancorp (or any Subsidiary)
in any capacity. Bancorp (and any Subsidiary) reserve
the right to terminate your service at any time and for
any reason.
SHAREHOLDER RIGHTS You, or your estate or heirs, have no rights
as a shareholder of Bancorp until a certificate for your
option Shares has been issued. No adjustments are made
for dividends or other rights if the applicable record
date occurs before your stock certificate is issued,
except as described in the Plan.
ADJUSTMENTS In the event of a stock split, a stock dividend or a
similar change in the Stock, the number of Shares
covered by this option and the exercise price per share
may be adjusted pursuant to the Plan. This option shall
be subject to the terms of the agreement of merger,
liquidation or reorganization in the event Bancorp is
subject to such corporate activity.
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LEGENDS All certificates representing the Shares issued upon exercise
of this option shall, where applicable, have endorsed thereon
the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO
PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN
THE CORPORATION AND THE REGISTERED HOLDER, OR HIS OR HER
PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND WILL
BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF
THE CORPORATION BY THE HOLDER OF RECORD OF THE SHARES
REPRESENTED BY THIS CERTIFICATE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO
THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION
IS NOT REQUIRED."
APPLICABLE This Agreement will be interpreted and enforced under the laws
LAW of the State of California.
THE PLAN AND The text of the Plan is incorporated in this Agreement by
OTHER AGREEMENTS reference. Certain capitalized terms used in this Agreement
are defined in the Plan.
This Agreement and the Plan constitute the entire
understanding between you and Bancorp regarding this option.
Any prior agreements, commitments or negotiations concerning
this option are superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
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