SARATOGA BANCORP
INCENTIVE STOCK OPTION AGREEMENT
Saratoga Bancorp, a California corporation (the "Company") , has granted to
______________ (the "Optionee"), an option (the "Option") to purchase a total of
______ shares of Common Stock, at the price determined as provided herein, and
in all respects subject to the terms, definitions and provisions of the Saratoga
Bancorp 1994 Stock Option Plan (the "Plan"). The terms defined in the Plan shall
have the same defined meanings herein.
1. Nature of the Option. This Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Code.
2. Exercise Price. The exercise price is $ ________ for each share of Common
Stock, which price is not less than the fair market value per share of the
Common Stock on the date of grant.
3. Exercise of Option. This Option shall be exercisable during its term in
accordance with the provisions of Section 6 of the Plan as follows:
(a) Right to Exercise.
(i) This Option shall vest cumulatively from the date of grant of the
Option, exercisable during a period of ____months after the date of
grant as follows:____% of the Shares subject to the Option shall be
vested on the first anniversary of the date of grant, and an
additional ____% of the Shares subject to the option shall vest on
each anniversary of the date of grant thereafter. [insert other
vesting provisions as determined by the committee, not less than 20%
per year over a five year term.]
(ii) This Option may not be exercised for less than 10 shares nor for
a fraction of a share.
(iii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is
governed by Xxxxxxxx 0, 0, 0 xxx 0 xxxxx.
(x) Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise the Option, the number of shares
in respect of which the Option is being exercised, and such other
representations and agreements as may be required by the Company pursuant
to the provisions of the Plan. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company accompanied by payment of the exercise price.
No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange or inter-dealer quotation system
upon which the shares of the Company's Common Stock may then be listed or
quoted. Assuming such compliance, the shares shall be considered
transferred to the Optionee on the date on which the Option is exercised
with respect to such Shares. An Optionee shall have no rights as a
shareholder of the Company with respect to any shares until the issuance of
a stock certificate to the Optionee for such shares.
4. Method of Payment. Payment of the exercise price shall be by cash, certified
check, official bank check, or the equivalent thereof acceptable to the Company,
or by the delivery of previously owned shares of the Company's Common Stock held
for the requisite period necessary to avoid a charge to the Company's reported
earnings and with a fair market value on the date of surrender equal to the
exercise price.
5. Termination of Status as an Employee For Any Reason Other Than Cause. If
Optionee ceases to serve as an Employee, he may, but only within three months
after the date he ceases to be an Employee of the Company, exercise this Option
to the extent that the Option was vested as of the date of such termination;
provided that in no event is the date of exercise beyond expiration of the
option. To the extent that the Option was not vested as of the date of such
termination, or if Optionee does not exercise this Option within the time
specified herein, the Option shall terminate.
6. Termination of Status as an Employee For Cause. If Optionee's status as an
Employee is terminated for Cause, as provided in Section 6(d) of the Plan, this
Option shall terminate on the thirtieth day after the date of termination of
employment. "Cause" may consist of an act of embezzlement; fraud; dishonesty;
breach of fiduciary duty to the Company; deliberate disregard of the rules of
the Company which result in loss, damage or injury to the Company; the
unauthorized disclosure of any of the secrets or confidential information of the
Company; the inducement of any client or customer of the Company to break any
contract with the Company or the inducement of any principal for whom the
Company acts as agent to terminate such agency relations; engagement in any
conduct which constitutes unfair competition with the Company; or the removal of
Optionee from any office of the Company by any bank regulatory agency.
7. Disability of Optionee. Notwithstanding the provisions of Section 5 above, if
Optionee is unable to continue his employment with the Company as a result of
his disability (as defined below), he may, within twelve months from the date of
termination of employment, exercise his Option to the extent the Option was
vested as of the date of such termination; provided that in no event is the date
of exercise beyond expiration of the Option; and, provided further, that, in
certain situations, an exercise after three months following such termination
may preclude favorable tax treatment normally accorded incentive stock options
(i.e., the option will be taxed as a non-qualified stock option). To the extent
that the Option was not vested as of the date of termination, or if Optionee
does not exercise such Option within the time specified herein, the Option shall
terminate. For purposes of this provision, "disability" shall mean the inability
of Optionee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment and shall be determined by
the Board of Directors or the Committee on the basis of such medical evidence as
the Board of Directors or Committee deems warranted under the circumstances.
8. Death of Optionee. In the event of the death of Optionee while Optionee is an
Employee of the Company, the Option may be exercised, at any time within twelve
(12) months following the date of death, by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent the Option was vested as of the date of death; provided that in no
event is the date of exercise beyond expiration of the Option.
9. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
10. Term of Option. Subject to earlier termination as provided in the Plan, this
Option shall terminate 10 years from the date of grant of this Option, and may
be exercised during such term only in accordance with the Plan and the terms of
this Option.
11. Early Disposition of Stock. Optionee understands that if he disposes of any
shares received under this Option within two (2) years after the date of this
Agreement or within one (1) year after such shares were transferred to him, he
will be treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount generally measured by the
difference between the exercise price and the lower of the fair market value of
the shares at the date of the exercise or the fair market value of the shares at
the date of disposition. Optionee agrees to notify the Company in writing within
5 days after the date of any such disposition. Optionee understands that if he
disposes of such shares at any time after the expiration of such two-year and
one-year holding periods, any gain on such sale will be taxed as long-term
capital gain.
12. Qualification as an Incentive Stock Option. Optionee understands that the
option is intended to qualify as an "incentive stock option" within the meaning
of Section 422 of the Code. Optionee understands, further, that: (a) under the
Code , if an optionee is unable to continue his or her employment with the
Company as a result of a total and permanent disability (as defined in Section
22(e)(3) of the Code), and if the other requirements for incentive stock option
treatment contained in Section 422 of the Code are satisfied, Optionee will be
entitled to exercise the Option within twelve (12) months of such termination
without defeating incentive stock option treatment; but (b) if Optionee is
unable to continue his or her employment with the Company as a result of his or
her disability, and such disability is not a total and permanent disability (as
defined in Section 22(e)(3) of the Code), the Option will not qualify as an
incentive stock option unless it is exercised within three (3) months of the
date of termination (i.e., while the Option may be exercised for a period of
twelve (12) months after such termination, the exercise more than three (3)
months following termination will result in the Option being taxed as a
non-qualified stock option). Finally, Optionee understands that: (a) the
exercise price for the shares subject to this option has been determined in
accordance with the Plan at a price not less than 100% (or, if Optionee owned at
the time of grant more than 10% of the voting securities of the Company, 110%)
of the fair market value of the shares at the time of grant; (b) the Company
believes that the methodology by which the fair market value was determined at
such time represented a good faith attempt, as defined in the Code and the
regulations thereunder, at reaching an accurate appraisal of the fair market
value of the shares; and (c) the Company shall not be responsible for any
additional tax liability incurred by Optionee in the event that the Internal
Revenue Service were to determine that the Option does not qualify as an
incentive stock option, for any reason, including a determination that the
valuation did not represent a good faith attempt to value the shares.
DATE OF GRANT:
Saratoga Bancorp
By:
Duly Authorized on Behalf
of Saratoga Bancorp
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board of Directors and the committee upon any
questions arising under the Plan.
Dated:
Optionee:
SARATOGA BANCORP
NONSTATUTORY STOCK OPTION AGREEMENT
Saratoga Bancorp, a California corporation (the "Company"), has granted to
______________ (the "Optionee"), an option (the "Option") to purchase a total of
_______ shares of Common Stock, at the price determined as provided herein, and
in all respects subject to the terms, definitions and provisions of the Saratoga
Bancorp 1994 Stock Option Plan, as amended (the "Plan"). The terms defined in
the Plan shall have the same defined meanings herein.
1. NATURE OF THE OPTION.
This Option is intended by the Company and the Optionee to be a
nonstatutory stock option and does not qualify for any special tax benefits to
the Optionee. This option is not an Incentive Stock Option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.
2. EXERCISE PRICE.
The exercise price is $______ for each share of Common Stock, which price
is not less than the fair market value per share of the Common Stock on the date
of grant.
3. EXERCISE OF OPTION.
This Option shall be exercisable during its term in accordance with the
provisions of Section 5 of the Plan as follows:
(a) Right to Exercise.
(i) This Option shall be immediately exercisable.
(ii) This Option may not be exercised for less than ten shares nor for
a fraction of a share.
(iii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the option is
governed by Xxxxxxxx 0, 0, 0 xxx 0 xxxxx.
(x) Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise the Option, the number of
shares in respect of which the option is being exercised, and such
other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. Such written notice shall be
signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company.
No shares will be issued pursuant to the exercise of an option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange or inter-dealer quotation system upon
which the Shares may then be listed or quoted. Assuming such compliance, the
shares shall be considered transferred to the Optionee on the date on which the
option is exercised with respect to such shares. An Optionee shall have no
rights as a shareholder of the Company with respect to any shares, until the
issuance of a stock certificate to the Optionee for such shares.
4. METHOD OF PAYMENT.
Payment of the exercise price shall be by cash, certified check, official
bank check, or by the delivery of previously owned shares of the Company's
Common Stock held for the requisite period to avoid a charge to the Company's
reported earnings and with a fair market value on the date of surrender equal to
the exercise price. In addition, the Optionee may exercise the Option by
delivering to the Company, together with the exercise notice, (i) a copy of
irrevocable written instructions provided by the Optionee to a designated
brokerage firm to effect the immediate sale of the purchased Shares and remit to
the Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the purchased
Shares plus all applicable federal, state and local income and employment taxes
required to be withheld by the Company by reason of such purchase and (ii)
written instructions to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to complete the sale
transaction.
5. TERMINATION OF STATUS AS AN EMPLOYEE OR DIRECTOR FOR ANY REASON OTHER THAN
CAUSE.
If an Optionee ceases to serve as an Employee or Director, he may, but only
within three months after the date he ceases to be an Employee or Director of
the Company, exercise this Option to the extent that the Option was vested as of
the date of such termination; provided that in no event is the date of the
exercise beyond expiration of the Option. To the extent that the option was not
vested as of the date of such termination, or if Optionee does not exercise this
option within the time specified herein, the Option shall terminate.
6. TERMINATION OF STATUS AS AN EMPLOYEE FOR CAUSE.
If an Optionee's status as an Employee is terminated for Cause, as provided
in Section 5(d) of the Plan, this Option shall terminate on the thirtieth day
after the date of termination of employment. "Cause" may consist of an act of
embezzlement; fraud; dishonesty; breach of fiduciary duty to the Company;
deliberate disregard of the rules of the Company which result in loss, damage or
injury to the Company; the unauthorized disclosure of any of the secrets or
confidential information of the Company; the inducement of any client or
customer of the Company to break any contract with the Company or the inducement
of any principal for whom the Company acts as agent to terminate such agency
relations; engagement in any conduct which constitutes unfair competition with
the Company; or the removal of Optionee from any office of the Company by any
bank regulatory agency.
7. DISABILITY OF OPTIONEE.
Notwithstanding the provisions of Section 5 above, if Optionee is unable to
continue his employment with the Company as a result of his disability (as
defined below), he may, within twelve months from the date of termination of
employment, exercise his option to the extent the Option was vested as of the
date of such termination; provided that in no event is the date of exercise
beyond expiration of the Option. To the extent that the Option was not vested as
of the date of termination, or if he does not exercise such Option within the
time specified herein, the option shall terminate. For purposes of this
provision, "disability" shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment and shall be determined by the Board of Directors or the
Committee on the basis of such medical evidence as the Board of Directors or
Committee deems warranted under the circumstances.
8. DEATH OF OPTIONEE.
In the event of the death of Optionee while Optionee is an Employee or
Director or during the period referred to in Section 5 above, the option my be
exercised, at any time within twelve (12) months following the date of death (or
such longer period as the committee determines), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent the Option was vested as of the date of death; provided
that in no event is the date of exercise beyond expiration of the option.
9. NON-TRANSFERABILITY OF OPTION.
This Option may not be transferred in any manner otherwise than by will or
by the laws of descent or distribution and may be exercised during the lifetime
of Optionee only by him. The terms of this option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.
10. TERM OF OPTION.
Subject to earlier termination as provided in the Plan, the Option shall
terminate ten (10) years from the date of grant of this Option, any may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
11. TAXATION UPON EXERCISE OF OPTION.
Optionee understands that upon exercise of this Option, he will generally
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares over the exercise price. The Company will be
required to withhold tax from Optionee's current compensation with respect to
such income; to the extent that Optionee's current compensation is insufficient
to satisfy the withholding tax liability, the company may require the Optionee
to make a cash payment to cover such liability as a condition of exercise of
this Option. (The Optionee may elect to pay such tax by (i) requesting the
Company to withhold a sufficient number of shares from the shares otherwise due
upon exercise or (ii) by delivering a sufficient number of shares of the
Company's Common Stock which have been previously held by the Optionee for such
period of time as the Committee may require. The aggregate value of the shares
withheld or delivered, as determined by the Committee must be sufficient to
satisfy all such applicable taxes, except as otherwise permitted by the
Committee. If the Optionee is subject to Section 16 of the Securities Exchange
Act of 1934, as amended, the Optionee's election must be made in compliance with
rules and procedures established by the Committee.)
Date of Grant: SARATOGA BANCORP
By:
Name:
Duly authorized on behalf of
Saratoga Bancorp
Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board of Directors or the Committee upon any
questions arising under the Plan.
Dated:
Optionee:
SARATOGA BANCORP
NONSTATUTORY STOCK OPTION AGREEMENT
FOR OUTSIDE DIRECTORS
Pursuant to the automatic nondiscretionary terms of Section 5 of the
Saratoga Bancorp 1994 Stock Option Plan (the "Plan"), Saratoga Bancorp, a
California corporation (the "Company"), hereby grants to _________________ (the
"Optionee"), an option (the "Option") to purchase a total of ________ shares of
Common Stock, at the price determined as provided herein, and in all respects
subject to the terms, definitions and provisions of the Plan. The terms defined
in the Plan shall have the same defined meanings herein.
1. Nature of the Option. This Option is intended by the Company and the
Optionee to be a nonstatutory stock option and does not qualify for any special
tax benefits to the Optionee. This option is not an Incentive Stock Option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
2. Exercise Price. The exercise price is $ _______ for each share of Common
Stock, which price is not less than the fair market value per share of the
Common Stock on the date of grant.
3. Exercise of Option. This Option shall be immediately exercisable in
accordance with Section 5(c) of the Plan. This Option may not be exercised for
less than ten shares nor for a fraction of a share. In the event of Optionee's
death, disability or other termination of his status as an Outside Director, the
exercisability of the Option is governed by Sections 6, 7 and 8 below.
4. Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise the Option, the number of shares in
respect of which the Option is being exercised, and such other representations
and agreements as may be required by the Company pursuant to the provisions of
the Plan. Such written notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company.
No shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange or inter-dealer quotation system upon
which the Shares may then be listed or quoted. Assuming such compliance, the
shares shall be considered transferred to the Optionee on the date on which the
Option is exercised with respect to such shares. An Optionee shall have no
rights as a shareholder of the Company with respect to any shares until the
issuance of a stock certificate to the Optionee for such shares.
5. Method of Payment. Payment of the exercise price shall be by cash,
certified check, official bank check, or by the delivery of previously owned
shares of the Company's Common Stock held for the requisite period to avoid a
charge to the Company's reported earnings and with a fair market value on the
date of surrender equal to the exercise price. In addition, the Optionee may
exercise the Option by delivering to the Company, together with the exercise
notice, (i) a copy of irrevocable written instructions provided by the Optionee
to a designated brokerage firm to effect the immediate sale of the purchased
Shares and remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased Shares plus all applicable federal, state and local income and
employment taxes required to be withheld by the Company by reason of such
purchase and (ii) written instructions to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order
to complete the sale transaction.
6. Termination of Status as an outside Director For Any Reason Other Than
Cause. If an Optionee ceases to serve as an outside Director, he may, but only
within three months after the date he ceases to be an outside Director, exercise
this Option; provided that in no event is the date of exercise beyond expiration
of the option. To the extent that Optionee does not exercise this option within
the time specified herein, the Option shall terminate.
7. Disability of Optionee. Notwithstanding the provisions of section 6
above, if Optionee is unable to continue his service as an outside Director as a
result of his disability, he may, within twelve months from the date of such
disability exercise this Option; provided that in no event is the date of
exercise beyond expiration of the Option. To the extent that Optionee does not
exercise this Option within the time specified herein, the option shall
terminate.
8. Death of Optionee. In the event of the death of Optionee while Optionee
is an Outside Director, the option may be exercised, at any time within twelve
(12) months following the date of death by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance; provided
that in no event is the date of exercise beyond expiration of the Option. To the
extent that this Option is not exercised within the time specified herein, the
option shall terminate.
9. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the optionee.
10. Term of Option. Subject to earlier termination as provided in the Plan,
this Option shall terminate ten years from the date of grant of this option, and
may be exercised during such term only in accordance with the Plan and the terms
of this Option.
DATE OF GRANT:
Saratoga Bancorp
By:
Duly Authorized on Behalf of Saratoga Bancorp
Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board of Directors or the Committee upon any
questions arising under the Plan.
Dated: By:
-----------------------------
Optionee
