EXHIBIT 10.3
NONSTATUTORY STOCK OPTION AGREEMENT
NONSTATUTORY 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")]
[a nonemployee director of the Company].
WITNESSETH
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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 its nonemployee
directors and the officers and key full-time salaried employees of
the [Napa National] Bank [, a wholly-owned subsidiary of the Company
(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 not intended to be incentive stock options
("nonstatutory 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 a nonemployee director of the
Company or 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 a
nonstatutory 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. If the Optionee is an
employee of the Bank, 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. If the Optionee is a nonemployee director of
the Company, 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 directorship with the Company
during the term for which he or she was elected.
2. The purchase price per share is _________ dollars ($_________.__)
(the "Option Price"), which is hereby agreed to be 100% or more of the Fair
Market Value, as defined in Paragraph 4 hereof, of such Common Stock at the
date of grant. The Option Price shall 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.
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(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
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 and one (1)
month 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
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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, recapitalization, reclassification, split-up, combination of
shares, or 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's 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
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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
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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.
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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 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. Unless the Optionee is a nonemployee director of the Company,
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 and one (1)
month from the date of grant of this option.
8. If the Optionee's status as a nonemployee director of the
Company or 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's status as a nonemployee director of the Company
or an officer or employee of the Bank is terminated by death, the executors or
administrators of the Optionee's estate, or any person or persons who have
acquired this option directly from the Optionee by the Optionee's 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 a nonemployee director of the Company
or an officer or employee of the Bank is terminated for any of the reasons set
forth in the paragraph
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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 a nonemployee director of the Company or
an officer or employee of the Bank is terminated for any reason other than
those 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.
Notwithstanding the foregoing provisions of this Section 8, if the
status of the Optionee as a nonemployee director is terminated because it is
determined that the Optionee is, or in the view of a Federal bank regulatory
agency would be, precluded from continuing service as a member of the Board of
Directors of the Company by virtue of a concurrent relationship of the Optionee
with an organization primarily engaged in the issue, underwriting or
distribution of securities and if that Optionee shall, as an independent
advisor or consultant, provide without other remuneration advice, services or
other assistance to the Company or the Bank of at least the same quality or
quantity as the Optionee rendered as a director, then this option shall remain
in full force until the earlier of (i) expiration according to the terms of
this option, (ii) termination because of death, disability or cause as
described above and in accordance with those paragraphs applicable to such
reasons for termination, or (iii) a determination made by the Board of
Directors of the Company in its sole discretion that the Optionee's assistance
to the Company or Bank has ceased to be of at least the same quality or
quantity as the Optionee rendered while a director. In the event that this
option is terminated pursuant to such a Board of Directors' determination, the
Optionee may within three (3) months of that determination exercise this option
to the extent this option was exercisable by the Optionee on the date of such
determination.
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
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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, 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
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may be postponed by the Company for such period as may be required for it with
reasonable 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
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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.
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
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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 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
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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's quarterly or
annual summary statement of earnings.
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 provision of this Agreement shall be
invalid or unenforceable, such provision shall be severable from, and such
invalidity or
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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)
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