EXHIBIT 10.38
PLUMAS BANK
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is made and
entered into as of the 21st day of November, 2001, by and between Plumas Bank, a
California corporation (the "Bank"), and Xxxxxx Xxxxxx ("Optionee");
WHEREAS, pursuant to the Plumas Bank 2001 Stock Option Plan, which was
approved by the shareholders of Plumas Bank on May 16, 2001, a copy of which is
attached hereto, the Board of Directors of the Bank has authorized granting to
Optionee, a nonqualified stock option to purchase all or any part of Two
Thousand Five Hundred (2,500) authorized but unissued shares of the Bank's
common stock for cash at the price of Twelve Dollars and Forty-Four Cents
($12.44) 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
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 Two Thousand
Five Hundred (2,500) shares of the Bank's common stock (hereinafter called
"stock") at the price of Twelve Dollars and Forty-Four Cents ($12.44) 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 granting this
option.
2. EXERCISABILITY. This option shall be exercisable as to 500 shares on
November 21, 2002, 500 shares on November 21, 2003, 500 shares on November 21,
2004, 500 shares on November 21, 2005, and 500 shares on November 21, 2006. This
option shall remain exercisable as to all of such shares until November 21,
2011, (but not later than 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 or subject to applicable law, with
Bank common stock previously acquired by the optionee and held by the optionee
for a period of at least
six months in the amount of the purchase price of such shares. The equivalent
dollar value of shares of Bank common stock used to effect an exercise shall be
the fair market value of such shares on the date of the applicable exercise.
Payment of the option price in full, for the number of shares to be delivered,
must be made in cash or by cashier's check or the equivalent dollar value of
qualifying Bank common stock. Not fewer than ten (10) shares may be purchased at
any one time unless the number of shares purchased is the total number of
shares, which is exercisable at such time, 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 DIRECTORSHIP OR EMPLOYMENT. Except as provided in
Paragraphs 2 and 5 hereof, if Optionee shall cease to be a director or an
employee of the Bank or a subsidiary corporation for any reason other than
Optionee's death or disability [as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended from time to time (the "Code")], this option
shall expire three (3) months thereafter. During the three (3) 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 a director or an employee of
the Bank or a subsidiary corporation.
5. TERMINATION OF EMPLOYMENT FOR CAUSE. If Optionee's employment with
the Bank or a subsidiary corporation is terminated for cause, this option shall
expire immediately, unless reinstated by the Board of Directors within thirty
days (30) days of such termination by giving written notice of such
reinstatement to Optionee at his or her 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 an
employee of the Bank or a subsidiary corporation upon the date of such
termination for a reason other than cause, death or disability. Termination for
cause shall include, but not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of a crime involving
moral turpitude, and, in any event, the determination of the Board of Directors
with respect thereto shall be final and conclusive.
6. NONTRANSFERABILITY; DEATH OR DISABILITY OF OPTIONEE. This option
shall not be transferable except by will or by the applicable laws of descent
and distribution and shall be exercisable during Optionee's lifetime only by
Optionee. If Optionee dies while serving as a director or an employee of the
Bank or a subsidiary corporation, or during the three (3) 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
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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 a director or an employee of the Bank or a subsidiary
corporation.
If Optionee terminates his or her directorship or employment because of
disability, Optionee may exercise this option to the extent he or she is
entitled to do so at the date of termination, at any time within one (1) year of
the date of termination, or before the expiration date specified in Paragraph 2
hereof, whichever is earlier.
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
shareholder 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 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. 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. No shares
issuable upon the exercise of this option shall be issued and delivered unless
and until the Bank has fully complied with all applicable requirements of any
regulatory agency having jurisdiction over the Bank, and all applicable
requirements of any exchange upon which stock of the Bank may be listed.
11. 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 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
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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 as
of the day and year first above written.
OPTIONEE PLUMAS BANK
/s/ XXXXXX XXXXXX By /s/ XXXXX X. XXXX
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Xxxxxx Xxxxxx Xxxxx X. Xxxx, Chairman of the Board
By /s/ XXXXXX XXXXXXXXX
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Xxxxxx Xxxxxxxxx, Vice Chairman
Of the Board
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