Exhibit 10.4
YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
This Agreement is made as of the Grant Date, (the "Grant Date") as set forth on
the Certificate of Stock Option Grant available from the Xxxxx Xxxxxx Stock Plan
Services website (XXX.XXXXXXXXXXXX.XXX) (the "Certificate") between UnionBanCal
Corporation (the "Company") and the Optionee.
WITNESSETH:
WHEREAS, the Company has adopted the Year 2000 UnionBanCal Corporation
Management Stock Plan (the "Plan") as an amendment and restatement of the
predecessor UnionBanCal Corporation Management Stock Plan authorizing the
issuance of options to purchase the common stock of the Company ("Stock") to
eligible individuals in connection with the performance of services for the
Company and its Subsidiaries (as defined in the Plan). The Plan is administered
by the Executive Compensation and Benefits Committee ("Committee") of the
Company's Board of Directors and is incorporated in this Agreement by reference
and made a part of it; and
WHEREAS, the Company regards Optionee as a valuable contributor to the Company,
and has determined that it would be to the advantage and interest of the Company
and its shareholders to grant the options provided for in this Agreement to
Optionee as an inducement to remain in the service of the Company and as an
incentive for increased efforts during such service;
NOW, THEREFORE, in consideration of the foregoing premises, and the mutual
covenants herein contained, the parties to this Agreement hereby agree as
follows:
1. (a) OPTION GRANT. The Company hereby grants to Optionee the right and
option to purchase from the Company on the terms and conditions
hereinafter set forth and in the applicable Certificate and the Plan,
all or any part of an aggregate number of Shares of Stock shown on the
Certificate. This option is not intended to satisfy the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
(b) OPTION PRICE. The purchase price of the Stock subject to this option
shall be the Option Price per share, as shown on the Certificate,
which price is not less than the per share Fair Market Value as
defined in the Plan of such Stock as of the Grant Date. The term
"Option Price" as used in this Agreement refers to the purchase price
of the Stock subject to option.
2. OPTION PERIOD. This option will be exercisable only during the Option
Period, and during such Option Period, the exercisability of the option
shall be subject to the limitations of paragraph 3 and the vesting
provisions of paragraph 4. The Option Period shall commence on the Grant
Date and except as provided in paragraph 3, shall end on the Terminal Date
which shall be seven years from the Grant Date.
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YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
3. LIMITS ON OPTION PERIOD. The Option Period may end before the Terminal
Date, as follows:
(a) If Optionee ceases to be a bona fide employee of the Company or any of
its Subsidiaries for any reason other than cause, retirement, death or
disability (as each is defined in this section 3) during the Option
Period, the Option Period shall terminate three (3) months after the
date of such cessation of employment or on the Terminal Date,
whichever shall first occur, and Optionee may exercise the option only
to the extent exercisable under paragraph 4 on the date of Optionee's
cessation of employment. Notwithstanding the foregoing, if the
Optionee's employment is terminated under the provisions of the
Company's Separation Pay Plan, the Option Period shall end three (3)
years after such termination or on the Terminal Date, whichever shall
first occur, and during such extended Option Period, Optionee may
exercise the entire unexercised portion of the option, provided,
however, that this sentence shall not apply to the option if the Grant
Date is less than six (6) months prior to the date of such termination
of employment.
(b) If Optionee's employment terminates by reason of retirement, the
Option Period shall end three (3) years after such termination or on
the Terminal Date, whichever shall first occur, and Optionee may
exercise the entire unexercised portion of this option (or any lesser
amount). For this purpose, "retire" means termination of employment
with the Company or its Subsidiaries after attaining age sixty (60)
with ten (10) years of service or age sixty-two (62) with five (5)
years of service with the Company or any of its Subsidiaries.
(c) If Optionee's employment terminates by reason of death, or Optionee
becomes entitled to long-term disability benefits under the Union Bank
of California Long Term Disability Plan while in the employ of the
Company or its Subsidiary, the Option Period shall end one year after
such event or on the Terminal Date, whichever shall first occur, and
Optionee (or Optionee's executor, administrator, trustee or the person
or persons to whom Optionee's rights under this option shall pass by
will or the applicable laws of descent and distribution) may exercise
the entire unexercised portion of this option (or any lesser amount).
(d) If Optionee is on a leave of absence from the Company or a Subsidiary
because of disability, or for the purpose of serving the government of
the country in which the principal place of employment of Optionee is
located, either in a military or civilian capacity, or for such other
purpose or reason as the Committee may approve, Optionee shall not be
deemed during the period of such absence, by virtue of such absence
alone, to have terminated employment with the Company or a Subsidiary
except as the Committee may otherwise expressly provide.
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YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
(e) If Optionee's employment with the Company or a Subsidiary terminates
for cause during the Option Period, the Option Period shall terminate
on the date of such termination of employment and shall not thereafter
be exercisable to any extent. Optionee's employment shall be
terminated "for cause" if it is because of:
(i) theft or embezzlement by Optionee from, or common law fraud
committed by Optionee against, the Company or its
Subsidiaries;
(ii) conviction of Optionee of a felony involving moral
turpitude;
(iii)material breach by Optionee of any obligation he or she may
have as an employee of the Company (or its Subsidiaries)
with respect to confidential information, unfair
competition, or the ownership of intellectual property; or
(iv) material breach by Optionee of any other obligation he or
she may have as an employee of the Company or its
Subsidiaries.
4. VESTING OF RIGHT TO EXERCISE OPTIONS. The shares covered by this option
shall vest thirty-three and one-third percent (33-1/3%) on each one year
anniversary of the Grant Date such that all of the shares shall be fully
vested after three (3) years from the Grant Date. Any portion of the option
that is not exercised shall accumulate and may be exercised at any time
during the Option Period prior to the Terminal Date. No partial exercise of
this option may be for less than 5 percent (5%) of the total number of
shares then available under this option. In no event shall the Company be
required to issue fractional shares.
5. METHOD OF EXERCISE. Optionee may exercise the option with respect to all or
any part of the shares of Stock then subject to such exercise as follows:
(a) By giving the Company or its designated representative written notice
of such exercise, specifying the number of such shares as to which
this option is exercised. Such notice shall be accompanied by an
amount equal to the Option Price of such shares, in the form of: (i)
cash; a certified check, bank draft, postal or express money order
payable to the order of the Company in lawful money of the United
States; (ii) by delivery (on a form prescribed by the Committee) of an
irrevocable direction to a securities broker approved by the Committee
to sell shares and deliver all or a portion of the proceeds to the
Company in payment for the Common Stock; (iii) Common Stock; or (iv)
in any combination of the foregoing.
(b) In the event that the shares are subject to any obligations or
restrictions, the Optionee (and Optionee's spouse, if any) shall be
required, as a condition precedent to acquiring Stock through exercise
of the option, to execute one or more agreements relating to
obligations in connection with ownership of the
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YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
Stock or restrictions on transfer of the Stock no less restrictive
than the obligations and restrictions to which the other shareholders
of the Company are subject at the time of such exercise.
(c) If required by the Company, Optionee shall give the Company
satisfactory assurance in writing, signed by the Optionee or his legal
representative, as the case may be, that such shares are being
purchased for investment and not with a view to the distribution
thereof, provided that such assurance shall be deemed inapplicable to
(i) any sale of such shares by such Optionee made in accordance with
the terms of a registration statement covering such sale, which may
hereafter be filed and become effective under the Securities Act of
1933, as amended, and with respect to which no stop order suspending
the effectiveness thereof has been issued, and (ii) any other sale of
such shares with respect to which, in the opinion of counsel for the
Company, such assurance is not required to be given in order to comply
with the provisions of the Securities Act of 1933, as amended.
As soon as practicable after receipt of the notice required in
paragraph 5(a) and satisfaction of the conditions set forth in
paragraphs 5(b) and 5(c), if applicable, the Company or its designated
representative shall, without transfer or issue tax and without other
incidental expense to Optionee, deliver to Optionee at the office of
the Company, at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx,
attention of the Secretary, or such other place as may be mutually
acceptable to the Company and Optionee, a certificate or certificates
of such shares of Stock; provided, however, that the time of such
delivery may be postponed by the Company for such period as may be
required for it with reasonable diligence to comply with applicable
registration requirements under the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, any
applicable listing requirements of any national securities exchange,
and requirements under any other law or regulation applicable to the
issuance or transfer of such shares.
6. WITHHOLDING OF TAXES. Optionee agrees to make appropriate arrangements with
the Company (or Subsidiary that employs the participant) or its designated
representative for satisfaction of any applicable federal, state or local
income and employment tax withholding requirements. This may include the
withholding of shares of Stock from the exercise of the option pursuant to
such rules and procedures as the Committee may establish. Any shares
withheld to satisfy such withholding requirements shall not be available
for subsequent grants under the Plan.
7. CORPORATE TRANSACTIONS. (a) If there should be any change in a class of
Stock subject to this option, through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock
dividend (in excess of 2 percent) or other change in the corporate
structure of the Company, the Board and the Committee shall make
appropriate adjustments in order to preserve, but not to increase, the
benefit to Optionee, including adjustments in the number of shares of such
Stock subject to this option and in the price per
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YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
share. (b) Upon the consummation of a "Change of Control" (as defined in
this paragraph 7(b)), this option shall vest and/or become immediately
exercisable, without regard to the vesting provisions of paragraph 4. For
the purposes of this paragraph 7(b), "Change of Control" means:
consummation of a reorganization, merger or consolidation or sale or other
disposition of the stock or all or substantially all of the assets of the
Company or the acquisition of the assets or stock of another entity
("Business Combination"); excluding, however, such a Business Combination
pursuant to which a Permitted Holder (as defined in this paragraph 7(b))
will beneficially own, directly or indirectly, 30% or more of,
respectively, the outstanding shares of common stock, and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors (together, the "Company Stock"), as
the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries), and
no individual, entity or group (within the meaning of Section 13(d) (3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended), has a greater
beneficial interest, directly or indirectly, in the Company Stock than a
Permitted Holder. For purposes of this definition, "Permitted Holder" shall
mean (i) The Bank of Tokyo-Mitsubishi, Ltd. or any successor thereto
("BTM"), (ii) an employee benefit plan of BTM or (iii) a corporation
controlled by BTM.
8. LIMITATIONS ON TRANSFER. In general, this option shall, during Optionee's
lifetime, be exercisable only by Optionee, and neither this option nor any
right hereunder shall be transferable by Optionee except as provided by
law, or with the consent of the Company, or by will or the laws of descent
and distribution; provided, however, that the option may be transferred to
a trust established by the Optionee for the primary benefit of the Optionee
and Optionee's spouse, if married, provided that the trust is revocable
during the lifetime of the Optionee and that the trustee on behalf of the
trust agrees in writing to be bound by the terms and conditions of this
Agreement. In the event of any attempt by Optionee or the Optionee's
transferee to gift, transfer, alienate, assign, pledge, hypothecate, or
otherwise dispose of this option or of any right hereunder, except as
provided for in this Agreement, or in the event of the levy of any
attachment, execution, or similar process upon the rights or interest
hereby conferred, the Company at its election may terminate this option by
notice to Optionee and this option shall thereupon become null and void.
9. NO SHAREHOLDER RIGHTS. Neither Optionee nor any person entitled to exercise
Optionee's rights in the event of his death shall have any of the rights of
a shareholder with respect to the shares of Stock subject to this option
except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.
10. NO EFFECT ON TERMS OF EMPLOYMENT. Nothing in this Agreement shall affect
the right of the Company (or Subsidiary which employs Optionee) to
terminate or change the terms of employment of Optionee at any time and for
any reason, with or without cause.
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YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
11. NO EFFECT ON OTHER PLANS. In the year in which Optionee exercises an option
or disposes of his or her interest in shares of Stock acquired under an
option, benefits received under this Plan shall not affect participation
in, or the computation of benefits under any other employee benefit plan of
the Company or its Subsidiaries. For purposes of any bonus or incentive
program for which the Optionee is eligible and for purposes of any employee
benefit plans, to the extent permitted by applicable laws and by pertinent
provisions of such plans, the Company or its Subsidiaries shall disregard
any options, shares of Stock and any other benefits received by Optionee
under this Plan.
12. NOTICE. Any notice or other paper required to be given or sent pursuant to
the terms of this Agreement shall be sufficiently given or served hereunder
to any party when transmitted by registered or certified mail, postage
prepaid, addressed to the party to be served as follows:
Company: Executive Vice President and Director of Human Resources
UnionBanCal Corporation
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Optionee: At Optionee's address in the Company's files, or to such other
address as Optionee may specify in writing to the Company.
Plan Administrator: Xxxxx Xxxxxx Stock Plan Services
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
XXX.XXXXXXXXXXXX.XXX
Any party may designate another address for receipt of notices so long as
notice is given in accordance with this paragraph.
13. COMMITTEE DECISIONS CONCLUSIVE. All decisions, determinations and
interpretations of the Committee upon any question arising under the Plan
or under this Agreement shall be conclusive and binding on all parties.
14. MANDATORY ARBITRATION. Any dispute arising out of or relating to this
Agreement or the Certificate, including its meaning or interpretation,
shall be resolved solely by arbitration before an arbitrator selected in
accordance with the rules of the American Arbitration Association. The
location for the arbitration shall be in San Francisco, Los Angeles or San
Diego as selected by the Company in good faith. Judgment on the award
rendered may be entered in any court having jurisdiction. The party the
arbitrator determines is the prevailing party shall be entitled to have the
other party pay the expenses of the prevailing party, and in this regard
the arbitrator shall have the power to award recovery to such prevailing
party of all costs and fees (including attorneys fees and a reasonable
allocation
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YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
for the costs of the Company's in-house counsel), administrative fees,
arbitrator's fees and court costs, all as determined by the arbitrator.
Absent such award of the arbitrator, each party shall pay an equal share of
the arbitrator's fees. All statutes of limitation which would otherwise be
applicable shall apply to any arbitration proceeding under this paragraph.
The provisions of this paragraph are intended by Optionee and the Company
to be exclusive for all purposes and applicable to any and all disputes
arising out of or relating to this Agreement and the Certificate. The
arbitrator who hears and decides any dispute shall have jurisdiction and
authority only to award compensatory damages to make whole a person or
entity sustaining foreseeable economic damages, and shall not have
jurisdiction and authority to make any other award of any type, including
without limitation, punitive damages, unforeseeable economic damages,
damages for pain, suffering or emotional distress, or any other kind or
form of damages. The remedy, if any, awarded by the arbitrator shall be the
sole and exclusive remedy for any dispute which is subject to arbitration
under this paragraph.
15. SUCCESSORS. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Where the context permits,
"Optionee" as used in this Agreement shall include Optionee's transferee or
executor, administrator or other legal representative or the person or
persons to whom Optionee's rights pass by will or the applicable laws of
descent and distribution. Nothing contained in the Plan or this Agreement
shall be interpreted as imposing any liability on the Company or the
Committee in favor of any Optionee or transferee of options with respect to
any loss, cost or expense which such Optionee or transferee may incur in
connection with, or arising out of any transaction involving any options
granted hereunder.
16. INTEGRATION. The terms of the Plan, this Agreement and the Certificate are
intended by the Company and Optionee to be the final expression of their
contract with respect to the options and other amounts received hereunder
and may not be contradicted by evidence of any prior or contemporaneous
agreement. The Company and Optionee further intend that the Plan, this
Agreement and the Certificate shall constitute the complete and exclusive
statement of their terms and that no extrinsic evidence whatsoever may be
introduced in any arbitration, judicial, administrative or other legal
proceeding involving the Plan, this Agreement or the Certificate.
Accordingly, the Plan, this Agreement and the Certificate contain the
entire understanding between the parties and supersede all prior oral,
written and implied agreements, understandings, commitments and practices
among the parties. In the event of any conflict among the provisions of the
Plan document, this Agreement and the Certificate, the Plan document shall
prevail. The Company and Optionee shall have the right to amend this
Agreement in writing as they mutually agree.
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YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
17. WAIVERS. Any failure to enforce any terms or conditions of the Plan, this
Agreement or the Certificate by the Company or Optionee shall not be deemed
a waiver of that term or condition, nor shall any waiver or relinquishment
of any right or power at any one time or times be deemed a waiver or
relinquishment of that right or power for all or any other times.
18. SEVERABILITY OF PROVISIONS. If any provision of the Plan, this Agreement or
the Certificate shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision thereof; and the
Plan, this Agreement and the Certificate shall be construed and enforced as
if none of them included such provision.
19. CALIFORNIA LAW. The Plan, this Agreement and the Certificate shall be
construed and enforced according to the laws of the State of California to
the extent not preempted by the federal laws of the United States of
America. In the event of any arbitration proceedings, actions at law or
suits in equity in relation to the Plan, this Agreement or the Certificate,
the prevailing party in such proceeding, action or suit shall receive from
the losing party its attorneys' fees and all other costs and expenses of
such proceeding, action or suit.
By accepting the Option Grant on the Xxxxx Xxxxxx Stock Plan Services website,
the Participant accepts the terms of the Management Stock Plan and this
Non-Qualified Stock Option Agreement. The Participant also hereby acknowledges
receipt of a copy of the Prospectus and the Year 2000 UnionBanCal Corporation
Management Stock Plan, effective January 1, 2000.
UNIONBANCAL CORPORATION
By /S/ XXXX XXXXXX
----------------------------------------
Xxxx Xxxxxx, Executive Vice President
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