CENTENNIAL BANCORP
NONSTATUTORY (NONQUALIFIED) STOCK OPTION AGREEMENT
EFFECTIVE DATE: November 22, 1995
BETWEEN: Centennial Bancorp, an Oregon
corporation (the "Company")
AND: Xxxxxxx X. Xxxxxxxx (the "Optionee")
Pursuant to the Company's 1995 Stock Incentive Plan (the "Plan"), the
Compensation Committee of the Board of Directors (the "Committee") has granted
to the Optionee an option to purchase shares of the Company's Common Stock, $2
par value (the "Stock"), in the amount indicated below.
NOW, THEREFORE, the parties agree as follows:
1. GRANT; TERMS OF OPTION. Subject to the terms and conditions of this
Agreement and the Plan, the Company grants to the Optionee the right and option
(the "Option") to purchase any part of an aggregate of 60,000 shares of the
Company's authorized but unissued Stock at a purchase price of $11.625 per
share, this price being the fair market value of the shares as determined
pursuant to the Plan on the date of the grant of the Option. It is the intent of
the Committee that the Option be a nonstatutory (nonqualified) stock option and,
therefore, not qualify as an "incentive stock option" under the tax laws. The
Option is granted upon the following terms and conditions:
(a) TERM OF OPTION. Subject to reductions in the Option term provided in
subparagraphs (c) and (g) below, the Option shall continue in effect
through November 21, 2015.
(b) TIMING OF RIGHT TO EXERCISE. Except as provided in subparagraph (c)
hereof, the Option may be exercised from time to time over the term of
the Option by the purchase of shares in the following amounts:
Prior to September 30, 1996: None
On September 30, 1996: 20,000 shares
On September 30, 1997: An additional 20,000 shares
On September 30, 1998: The remaining 20,000
shares subject to the
Option
If the Optionee does not purchase in any one year the full number of
shares that he is then entitled to purchase, the Optionee's rights
shall be cumulative, and, subject to the other provisions of this
Agreement, the Optionee may purchase those shares thereafter during the
term of the Option.
(c) TERMINATION OF EMPLOYMENT. Except as provided in this subparagraph
(c), the Option shall not be exercised unless at the time of such
exercise the Optionee is in the employ of the Company or a parent or
subsidiary corporation of the Company and shall have so served
continuously since the effective date of this Agreement. Vesting of
the Option shall continue during approved absences or leaves
(including an extended illness). If the employment of the Optionee
with the Company or a parent or subsidiary corporation of the Company
terminates by reason of the Optionee's death or disability, or is
terminated by the Company without "cause" (as defined in the
Employment Agreement between the Optionee and the Company, dated
effective October 1, 1996 (the "Employment Agreement")), or is
terminated by the Optionee with "good reason" (as defined in the
Employment Agreement), or terminates at the end of the "Employment
Period" (as defined in the Employment Agreement), the Option shall
become fully exercisable as of the date of such termination, and the
Option shall continue to be exercisable during the remainder of its
term (subject to subparagraph (g) below). If the employment of the
Optionee by the Company or a parent or subsidiary corporation of the
Company terminates for any other reason, the Option may be exercised
by the Optionee at any time prior to the expiration date of the Option
or the expiration of three months after the date of such termination,
whichever is the shorter period, but only if and to the extent the
Optionee was entitled to exercise the Option at the date of such
termination. In such event, to the extent that the Option is not
exercised within the three-month period, all further rights to
purchase shares pursuant to the Option shall cease and terminate at
the expiration of such period.
(d) CERTAIN TRANSFERS PERMITTED. The Option shall not be assignable or
transferable by the Optionee, either voluntarily or by operation of
law, except as follows: (i) by will or by the laws of descent and
distribution of the state or country of the Optionee's domicile at the
time of death; (ii) pursuant to a qualified
domestic relations order; (iii) to members of the Optionee's immediate
family (i.e., children, grandchildren and spouse); (iv) to trusts for
the benefit of such family members; and (v) to partnerships whose only
partners are such family members. The Optionee understands and agrees
that: (i) no consideration may be paid for the transfer of the Option;
and (ii) the Option, after any permitted transfer, shall continue to be
subject to the same terms and conditions as were applicable to the
Option immediately prior to its transfer and, upon the request of the
Committee, the Optionee will obtain from the transferee the
transferee's agreement in writing to be so bound. Once such conditions
are satisfied, the Optionee may, at any time, effect a permitted
transfer. After any permitted transfer, whenever the word "Optionee" is
used in this Agreement under circumstances where the provision should
logically be construed to apply to the transferee, the word "Optionee"
shall be deemed to include such transferee.
(e) MANNER OF EXERCISE. Shares may be purchased pursuant to the Option
only upon receipt by the Company of written notice from the Optionee
of the Optionee's desire to purchase, specifying the number of shares
the Optionee desires to purchase and the date on which the Optionee
desires to complete the purchase. The Option may not be exercised for
a fraction of a share. If required to comply with any applicable
federal or state securities laws, the notice also shall contain a
representation that it is the Optionee's intention to acquire the
shares for investment and not for resale. On the date specified for
completion of the purchase of the shares, the Optionee shall pay the
Company the full purchase price of the shares in cash or by such other
method of payment as shall be approved by the Committee. No shares
shall be issued until full payment has been made, and the Optionee
shall have none of the rights of a shareholder until shares are
issued.
(f) WITHHOLDING OBLIGATIONS. The Optionee shall, upon notification of the
amount due and prior to or concurrently with delivery of the
certificate representing the shares, pay to the Company any amounts
necessary to satisfy applicable federal, state and local tax
withholding requirements. If additional withholding is or becomes
required beyond any amount deposited before delivery of the
certificates, the Optionee shall pay such amount to the Company on
demand.
(g) CHANGES IN CAPITAL STRUCTURE. Except as provided in the final sentence
of this subparagraph (g), if the
outstanding shares of Stock are increased or decreased or changed into
or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, plan of exchange,
recapitalization, reclassification, stock split-up, combination of
shares or dividend payable in shares, the Committee shall make
appropriate adjustment in the number and kind of shares as to which the
Option, or portion thereof then unexercised, shall be exercisable, in
order that the Optionee's proportionate interest shall be maintained as
before the occurrence of such event. Such adjustment in the Option
shall be made without change in the total price applicable to the
unexercised portion of the Option and with a corresponding adjustment
in the option price per share. Any such adjustment made by the
Committee shall be conclusive. In the event of the dissolution of the
Company or a merger, consolidation, plan of exchange or similar
transaction affecting the Company, in lieu of adjusting the Option as
described above, the Committee may, in its sole discretion, provide a
30-day period immediately prior to such event during which the Optionee
shall have the right to exercise the Option in whole or in part without
any limitation on exercisability.
2. CONDITIONS. The obligations of the Company under this Agreement shall be
subject to: (i) the approval of such state or federal authorities or agencies as
may have jurisdiction in the matter; and (ii) the approval of the Plan by the
Company's shareholders. The Company shall use its best efforts to take such
steps as may be required by state or federal law or applicable regulations,
including rules and regulations of the Securities and Exchange Commission, any
quotation system on which the Stock may then be traded and any stock exchange on
which the Stock may then be listed, in connection with the issuance or sale of
any shares acquired pursuant to this Agreement or the trading or listing of such
shares on any such system or exchange. The Company shall not be obligated to
issue or deliver shares under this Agreement if, upon advice of its legal
counsel, such issuance or delivery would violate state or federal securities
laws. The Option shall not be exercisable until the Plan has been approved by
the Company's shareholders; and, if the Plan terminates as a result of failure
to receive shareholder approval, the Option shall be null and void.
3. LEGENDS. Certificates representing the shares subject to this Agreement
shall bear such legends as the Company shall deem appropriate to reflect any
restrictions on transfer imposed by federal or applicable state securities laws.
4. CONTINUING RELATIONSHIP. Nothing in the Plan or in this Agreement shall
confer upon the Optionee any right to continue as an employee of the Company or
any parent or subsidiary corporation of the Company or interfere in any way with
the right of the Company or parent or subsidiary to terminate the Optionee's
employment at any time for any reason.
5. BINDING EFFECT. This Agreement shall be binding upon and shall inure to
the benefit of any successor of the Company, but except as provided above, the
Option shall not be assigned or otherwise disposed of by the Optionee.
6. THE PLAN. The Option is subject to the terms and conditions of the Plan.
In the event of a conflict between the Plan and this Agreement, the terms of the
Plan shall control. The Optionee agrees to be bound by the rules and regulations
for the administration of the Plan, as presently prescribed or hereafter
amended, and by any amendment, construction or interpretation of the Plan
properly adopted by the Company's Board of Directors or by the Committee.
7. NOTICES. Parties to this Agreement shall give all notices to the other
parties concerning this Agreement by personal delivery, by telecopier or by
registered or certified mail, return receipt requested, addressed as follows:
If to the Company: Centennial Bancorp
000 Xxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Chairman
If to Optionee: Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxx 00000
Any party may, by written notice to the other parties, designate a new address
to which notices shall thereafter be delivered. Notice hereunder shall be deemed
effective upon the earlier of actual receipt or three days after being sent by
registered or certified mail.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date stated above.
CENTENNIAL BANCORP
By /s/Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
Director and Secretary
/s/Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx
Address: 0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxx 00000
