1
EXHIBIT 10.5
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF THE BANK'S
STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS: THE BANKS 1989 STOCK OPTION PLAN
SHALL HAVE FIRST BEEN APPROVED BY THE SHAREHOLDERS OF THE BANK HOLDING NOT LESS
THAN A MAJORITY OF THE OUTSTANDING SHARES OF THE BANK'S COMMON STOCK.
WESTERN SIERRA NATIONAL BANK
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated the 11th day of April, 1995, by and between
Western Sierra National Bank, a California corporation (the "Bank"), and
("Optionee).
WHEREAS, pursuant to the 1989 Stock Option Plan of the Bank (the
"Plan"). The Board of Directors of the Bank (or the Stock Option Committee, if
authorized by the Board of Directors) has authorized granting to Optionee a
stock Option to purchase all or any part of one thousand (1,000) authorized but
unissued shares of the Bank's common stock for cash at the price of Six Dollars
($6.00) per share, such Option to be for the term and upon the terms and
conditions hereinafter stated;
NOW THEREFORE, it is hereby agreed:
1. Grant of Option. Pursuant to said action of the Board of Directors
(or the Stock Option Committee) and pursuant to authorizations granted by all
appropriate regulatory and governmental agencies, the Bank hereby grants to
Optionee the Option to purchase, upon and subject to the terms and conditions of
the Plan, which is incorporated in full herein by this reference, all or any
part of one thousand (1,000) shares of the Bank's Common Stock (hereinafter
called "stock") at the price of Six Dollars ($6.00) per share, which price is
not less than one hundred percent (100%) of the fair market value of the stock
as of the date of action of the Board of Directors (or the Stock Option
Committee) granting this Option.
2. Exercisability. This Option shall be exercisable as to the granted
shares in whole or in part immediately. This Option shall remain exercisable as
to all of such shares until May 10, 2005 (but not after the expiration of ten
(10) years from the date this Option is granted) unless this Option has expired
or terminated earlier in accordance with the provisions hereof. Shares as to
which this Option becomes exercisable pursuant to the foregoing provision may be
purchased at any time prior to expiration of this Option.
3 . Exercise of Option. This Option may be exercised by written notice
delivered to the Bank stating the number of shares with respect to which this
Option is being exercised, together with cash in the
1
2
amount of the purchase price of such shares. Not less than ten (10) shares may
be purchased at any one time unless the number purchased is the total number
which may be purchased under this Option and in no event may the Option be
exercised with respect to fractional shares. Upon exercise, Optionee shall make
appropriate arrangements and shall be responsible for the withholding of any
federal and state taxes then due.
4. Cessation of Employment. Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be employed by the Bank or a subsidiary
corporation for any reason other than Optionee's death or disability (as defined
in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended from time
to time), this Option shall expire three (3) months thereafter. During the three
month period this Option shall be exercisable only as to those installments, if
any, which had accrued as of the date when Optionee ceased to be employed by the
Bank or the subsidiary corporation.
5. Termination of Employment for Cause. If Optionee's employment by the
Bank or a subsidiary corporation is terminated for cause, this Option shall
expire immediately, unless reinstated by the Board of Directors within thirty
(30) days of such termination by giving written notice of such reinstatement to
Optionee at his last known address. In the event of such reinstatement, Optionee
may exercise this Option only to such extent, for such time, and upon such terms
and conditions as if Optionee had ceased to be employed by the Bank or a
subsidiary corporation upon the date of such termination for a reason other than
cause or death. Termination for cause shall include termination for malfeasance
or gross misfeasance in the performance of duties or conviction of illegal
activity in connection therewith or any conduct detrimental to the interests of
the Bank or a subsidiary corporation and, in any event, the determination of the
Board of Directors with respect thereto shall be final and conclusive.
6. Nontransferability, Disability or Death of Optionee. This Option
shall not be transferable except by Will or by the laws of descent and
distribution and shall be exercisable during Optionee's lifetime only by
Optionee. If Optionee dies while employed by the Bank or a subsidiary
corporation, or during the three-month period referred to in Paragraph 4 hereof,
this Option shall expire one (1) year after the date of Optionee's death or on
the day specified in Paragraph 2 hereof, whichever is earlier. After Optionee's
death but before such expiration, the persons to whom Optionee's rights under
this Option shall have passed by Will or by the applicable laws of descent and
distribution or the executor or administrator of Optionee's estate shall have
the right to exercise this Option as to those shares for which installments had
accrued under Paragraph 2 hereof as of the date on which Optionee ceased to be
employed by the Bank or a subsidiary corporation.
If Optionee shall terminate employment because of disability (as defined
in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended from time
to time), Optionee may exercise this Option to the
2
3
extent he or she is entitled to do so at the date of termination, at any time
within 12 months of the date of termination, but in no event later than
expiration date in paragraph 2.
7. Employment. This Agreement shall not obligate the Bank or a
subsidiary corporation to employ Optionee for any period, nor shall it interfere
in any way with the right of the Bank or a subsidiary corporation to reduce
Optionee's compensation.
8. Privileges of Stock Ownership. Optionee shall have no rights as a
stockholder with respect to the Bank's stock subject to this Option until the
date of issuance of stock certificates to Optionee. Except as provided in
Section 13 of the Plan, no adjustment will be made for dividends or other rights
for which the record date is prior to the date such stock certificates are
issued.
9. Modification and Termination by Board of Directors. The rights of
Optionee are subject to modification and termination upon the occurrence of
certain events as provided in Sections 13 and 14 of the Plan.
10. Notification of Sale. Optionee agrees that Optionee, or any person
acquiring shares upon exercise of this Option, will notify the Bank not more
than five (5) days after any sale or other disposition of such shares.
11. Representations of Optionee. No shares issuable upon the exercise of
this option shall be issued and delivered unless and until all applicable
requirements of federal law and of the Securities and Exchange Commission
pertaining to the issuance and sale of such shares, and all applicable listing
requirements of the securities exchanges, if any, on which shares of the Bank of
the same class are then listed shall have been complied with. Upon exercise of
any portion of this option, the person entitled to execute the same shall
execute the letter attached hereto as Exhibit "A". The Bank may require a letter
from counsel acceptable to the Bank that all federal and state securities laws
have been complied with, prior to the issuance of any shares under this option.
In addition, if the Optionee is an "affiliate" for purposes of the Securities
Act of 1933, there may be additional restrictions on the resale of stock, and
Optionee therefore agrees to ascertain what those restrictions are and to abide
by the restrictions and other applicable federal and state securities laws.
Furthermore, the Bank may, if it deems appropriate, issue stop transfer
instructions against any shares of stock purchased upon the exercise of this
option and affix to any certificate representing such shares the legends which
the Bank deems appropriate.
12. Notices. Any notice to the Bank provided for in this Agreement shall
be addressed to it in care of its President or Chief Financial Officer at its
main office and any notice to Optionee shall be addressed to Optionee's address
on file with the Bank or a subsidiary corporation, or to such other address
3
4
as either may designate to the other in writing. Any notice shall be deemed to
be duly given if and when enclosed in a properly sealed envelope and addressed
as stated above and deposited, postage prepaid, with the United States Postal
Service. In lieu of giving notice by mail as aforesaid, any written notice under
this Agreement may be given to Optionee in person, and to the Bank by personal
delivery to its President or Chief Financial Officer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
OPTIONEE WESTERN SIERRA NATIONAL BANK
By /s/ XXXX X. XXXX By /s/ O. I. XXXXXXX
------------------------------- -----------------------------------
XXXX X. XXXX O. I. XXXXXXX, CORPORATE SECRETARY
By /s/ XXXXXX XXXXX
-----------------------------------
XXXXXX XXXXX, CHAIRMAN
DATE MAY 18, 1995
-----------------------------------
4
