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EXHIBIT 10.4
REDDING BANCORP
1998 STOCK OPTION PLAN
INCENTIVE 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 100% 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
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE STOCK This option is intended to be an incentive stock option
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 the anniversary date 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), or [AN INVOLUNTARY
TERMINATION WITHOUT CAUSE]. The terms "Cause" and "Change in
Control" 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 on the 30th day 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.]
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 the date six months after the date
of death. During that six-month period, your estate or heirs
may exercise this option.
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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 the date six months after your termination
date. (However, if your Disability is not due to a physical
or mental impairment which results in your inability to
engage in any substantial gainful activity or is not
expected to result in death or last for a continuous period
of at least 12 months, this option will be eligible for ISO
tax treatment only if it is exercised within three months
following the termination of your service.)
"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 ABSENCE For purposes of this option, your service does not terminate
when you go on a bona fide leave of absence that was
approved by Bancorp in writing, if the terms of the leave
provide for continued service crediting, or when continued
service crediting is required by applicable law. However,
for purposes of determining whether this option is entitled
to ISO status, your service will be treated as terminating
90 days after you went on leave, unless your right to return
to active work is guaranteed by law or by a contract. 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, 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 EXERCISE When you wish to exercise this option, you must notify
Bancorp 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.
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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.
PERIODS OF Any other provision of this Agreement notwithstanding,
NONEXERCISABILITY 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.
FORM OF PAYMENT When you submit your notice of exercise, you must include
payment of the option price for the Shares you are
purchasing. Payment may be made [IN ONE (OR A COMBINATION)
OF THE FOLLOWING FORMS:]
o Your personal check, a cashier's check or a money
order.
o [IF PERMITTED BY THE COMMITTEE IN ITS SOLE DISCRETION
AND 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 TAXES You will not be allowed to exercise this option unless 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 and
the sale of the Shares.
RESTRICTIONS ON By signing this Agreement, you agree not to exercise this
RESALE option or 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
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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 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.
BANCORP'S RIGHT OF In the event that you propose to sell, pledge or otherwise
FIRST REFUSAL 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
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Notice by Xxxxxxx, 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.
Bancorp's Right of First Refusal shall terminate in the
event that the 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
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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 share 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 share 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.
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,
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SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
APPLICABLE LAW This Agreement will be interpreted and enforced under the
laws of the State of California.
THE PLAN AND OTHER The text of the Plan is incorporated in this Agreement by
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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