EXHIBIT 99.5
LAKE COMMUNITY BANK 1984 STOCK OPTION PLAN
STOCK OPTION AGREEMENTS
LAKE COMMUNITY BANK
1984 STOCK OPTION PLAN
1. PURPOSE.
The purpose of this 1984 Stock Option Plan (the "Plan") of Lake
Community Bank and its affiliates (hereinafter collectively referred to as
the "Bank") is to secure for the Bank and its shareholders the benefits of
the incentive inherent in the ownership of Common Stock of the Bank by those
directors and key full-time, employees and officers of the Bank who will
share responsibility with management of the Bank for its future growth and
success.
The word "affiliate", as used in this Plan, means any bank or corporation
in an unbroken chain of banks or corporations beginning or ending with the
Bank, if at the time of the granting of an option, each such bank or
corporation other than the last in that chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other banks or corporations in the chain.
2. ADMINISTRATION.
The following provisions shall govern the administration of the Plan:
(a) The Plan shall be administered by the Board of Directors or a
committee of the Board of Directors appointed for this purpose by the Board
of Directors (the "Committee") composed of not less than three (3) directors.
The Board of Directors may from time to time remove members from or add
members to the Committee. Vacancies on the Committee, however caused, shall
be filled by the Board of Directors. The Board of Directors shall designate
a Chairman and Vice-Chairman of the Committee from among the Committee
members. Acts of the Committee (i) at a meeting, held at a time and place
and in accordance with rules adopted by the Committee, at which a quorum of
the Committee is present and acting, or (ii) reduced to and approved in
writing by a majority of the members of the Committee, shall be the valid
acts of the Committee.
(b) The Bank shall effect the grant of options under the Plan by
execution of instruments in writing in a form approved by the Board of
Directors or, if appointed, the Committee. Subject to the express terms and
conditions of the Plan and the terms of any option outstanding under the
Plan, the Board of Directors or, if appointed, the Committee, shall have full
power to construe the Plan and the terms of any option granted under the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan or such options and to make all other determinations necessary or
advisable for the administration of the Plan,
including, without limitation, the power to: (i) determine which persons meet
the requirements of Section 3 hereof for selection as participants in the
Plan and which persons are considered to be "employees" for purposes of the
Internal Revenue Code of 1954, as amended (the "Code"), and therefore
eligible to receive incentive stock options under the Plan; (ii) determine to
whom of the eligible persons, if any, options shall be granted under the
Plan; (iii) establish the terms and conditions required or permitted to be
included in every option agreement or any amendments thereto, including
whether options to be granted thereunder shall be "incentive stock options,"
as defined in Section 422A of the Code, or "nonstatutory stock options"; (iv)
specify the number of shares to be covered by each option; (v) in the event a
particular option is to be an incentive stock option, determine and
incorporate such terms and provisions, as well as amendments thereto, as
shall be required in the judgment of the Board of Directors or the Committee,
so as to provide for or conform such option to any change in any law,
regulation, ruling or interpretation applicable thereto; and (vi) to make all
other determinations deemed necessary or advisable for administering the
Plan. The determination on the foregoing matters by the Board of Directors
or the Committee shall be conclusive.
(c) No member of the Stock Option Committee may be granted stock
options under the Plan.
3. PARTICIPANTS.
Participants in the Plan shall be those directors and key full-time
salaried employees and officers of the Bank to whom options may be granted
from time to time by the Board of Directors or the Committee.
4. THE SHARES.
The shares of stock subject to options authorized to be granted under
the Plan shall consist of 170,031 shares of the no par value Common Stock of
the Bank (the "Shares"), or the number and kind of shares of stock or other
securities which shall be substituted for such shares or to which such shares
shall be adjusted as provided in Section 6. 100,000 out of the 170,031
Shares reserved for issuance under the Plan shall be reserved for issuance to
nonemployee directors of the Bank in accordance with Section 5(a) hereof.
The Shares subject to the Plan may be set aside out of the authorized but
unissued shares of Common Stock of the Bank not reserved for any other
purpose or out of shares of Common Stock subject to an option which, for any
reason, terminates unexercised as to the Shares.
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5. GRANT, TERMS AND CONDITIONS OF OPTIONS.
Options may be granted at any time prior to the termination of the Plan
to officers and other key, full-time salaried employees of the Bank who, in
the judgment of the Board of Directors or the Committee, contribute to the
successful conduct of the operation of the Bank through their judgment,
interest, ability and special efforts and to nonemployee directors; provided,
however, that: (i) an eligible officer or employee shall not participate in
the granting of his or her own option; (ii) the aggregate fair market value
of the stock (determined as of the date the option is granted) for which any
one employee may be granted incentive stock options in any calendar year
(under all stock option plans of the Bank) shall not exceed $100,000 plus any
unused limit carryover to such year as provided in Section 422A of the Code;
(iii) except in the case of termination by death or disability, as set forth
in Section 5(c) below, the granted option must be exercised by the optionee
no later than three (3) months after any termination of employment with the
Bank and said employment must have been continuous since the granting of the
option; and (iv) the total number of shares subject to options granted to any
one optionee, at any one time, shall not exceed ten percent (10%) of the
then issued and outstanding shares of Common Stock of the Bank. In addition,
options granted pursuant to the Plan shall be subject to the following terms
and conditions:
(a) NON-EMPLOYEE DIRECTOR PARTICIPANTS. One Hundred Thousand (100,000)
out of the one hundred seventy thousand thirty one (170,031) shares of the
Bank's Common Stock reserved for issuance under the Plan shall be reserved
for issuance and granted to non-employee directors of the Bank as follows:
Upon approval of the Plan by the affirmative vote of a majority of the
outstanding shares of Common Stock of the Bank, as of June 2, 1988, Ten
Thousand (10,000) of the Shares shall be granted to each non-employee
director of the Company who has been a member of the Board of Directors for
more than four (4) years for a total grant of One Hundred Thousand (100,000)
Shares as follows:
Number of Shares
Director Subject to Option
-------- -----------------
Xxxxxxx X. Xxxxx 10,000
Xxxxxx X. Xxxxxxxx, M.D. 10,000
Xxxxxxxx X. Xxxxxxxx 10,000
Xxxx X. Xxxxx 10,000
Xxxxxxx X. Xxxx 10,000
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Xxxxxx X. Xxxxxx 10,000
Xxxxx X. Xxxxxxx, O.D. 10,000
May X. Xxxxx 10,000
Xxxxxxxx X. Xxxxxx 10,000
Xxxxxx Xxx Xxxxx 10,000
Each nonstatutory option so granted as of June 2, 1988, to the
above-named non-employee directors of the Bank shall be granted at an
exercise price no less than one hundred percent (100%) of the fair market
value of the Bank's Common Stock on the date of grant. All such nonstatutory
options so granted shall be exercisable for a term not exceeding ten (10)
years and one (1) day from the date of grant and shall be exercisable in
twenty five percent (25%) cumulative annual installments commencing with the
first anniversary of the grant date. NO NON-EMPLOYEE DIRECTOR SHALL BE
ELIGIBLE TO RECEIVE ANY STOCK OPTION OTHER THAN AS EXPRESSLY SET FORTH IN
THIS SECTION 5(a).
(b) OPTION PRICE. The purchase price under each option shall be not
less than one hundred percent (100%) of the fair market value of the Shares
subject thereto on the date the option is granted, as such value is
determined by the Board of Directors or the Committee. The fair market value
of such stock shall be determined in accordance with any reasonable valuation
method, including the valuation methods described in Treasury Regulation
Section 20.2031-2. If, however, an employee owns stock of the Bank
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Bank, the option price of any incentive stock
option granted to such optionee shall be not less than 110 percent (110%) of
such fair market value at the time such option is granted.
(c) DURATION AND EXERCISE OF OPTIONS. Each option shall vest in such
manner and at such time up to but not exceeding ten (10) years from the date
the option is granted as the Board of Directors or the Committee shall
determine in its sole discretion; provided also, however, that the Board of
Directors or the Committee may, in its sole discretion, accelerate the time
of exercise of any option. No incentive stock option granted or otherwise
outstanding under the Plan shall be exercisable by any optionee while there
is outstanding (within the meaning of Section 422A of the Code) any
previously granted incentive stock option to such optionee to purchase stock
of the Bank or in a corporation which (at the time of the granting of the
later option) is a parent or affiliate corporation of the Bank, or in a
predecessor corporation of any such corporation. The termination of the Plan
shall not alter the maximum duration, the vesting
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provisions, or any other term or condition of any option granted prior to the
termination of the Plan.
To the extent the right to purchase Shares has vested under a
Participant's stock option agreement, options may be exercised from time to
time by delivering payment therefor in cash, certified check, official bank
check, or the equivalent thereof acceptable to the Bank, together with
written notice to the Secretary of the Bank identifying the option or part
thereof being exercised and specifying the number of Shares for which payment
is being tendered. The Bank 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 unless an earlier or later date shall be
mutually agreed upon, without transfer or issue tax to the optionee (or other
person entitled to exercise the option) at the principal office of the Bank,
or such other place as shall be mutually acceptable, a certificate or
certificates for such Shares dated the date the options were validly
exercised; provided, however, that the time of such delivery may be postponed
by the Bank for such period as may be required for it with reasonable
diligence to comply with any requirements of law. If an option covers
incentive and nonstatutory stock options, separate stock certificates will be
issued; one or more for incentive stock options and one or more for the
nonstatutory stock options.
(d) TERMINATION OF EMPLOYMENT OR OFFICER STATUS. Upon the termination
of an optionee's status an an employee or officer of the Bank, his or her
rights to exercise an option then held shall be only as follows:
DEATH OR DISABILITY: If an optionee's employment or status as an officer
is terminated by death or disability, such optionee or such optionee's
qualified representative (in the event of the optionee's mental disability)
or the optionee's estate (in the event of the optionee's death) shall have
the right for a period of twelve (12) months following the date of such death
or disability to exercise the option to the extent the optionee was entitled
to exercise such option on the date of the optionee's death or disability,
provided the actual date of exercise is in no event after the expiration of
the term of the option.
An optionee's "estate" shall mean the optionee's legal representative or
any person who acquires the right to exercise an option by reason of the
optionee's death.
CAUSE: If an employee or officer is determined by the Board of Directors
to have committed an act of embezzlement, fraud, dishonesty, breach of
fiduciary duty to the Bank, or to have deliberately disregarded the rules of
the Bank which resulted in loss, damage or injury to the Bank, or if an
optionee makes any unauthorized disclosure of any of the secrets or
confidential
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information of the Bank, induces any client or customer of the Bank to break
any contract with the Bank or induces any principal for whom the Bank acts as
agent to terminate such agency relations, or engages in any conduct which
constitutes unfair competition with the Bank, or if an optionee is removed
from any office of the Bank by the Federal Deposit Insurance Corporation or
any other bank regulatory agency, neither the optionee nor the optionee's
estate shall be entitled to exercise any option with respect to any Shares
whatsoever after termination of employment or officer status, whether or not
after termination of employment or officer status, the optionee may receive
payment from the Bank for vacation pay, for services rendered prior to
termination, for services for the day on which termination occurred, for
salary in lieu of notice, or for other benefits. In making such
determination, the Board of Directors shall act fairly and shall give the
optionee an opportunity to appear and be heard at a hearing before the full
Board of Directors and present evidence on the optionee's behalf. For the
purpose of this paragraph, termination of employment or officer status shall
be deemed to occur when the Bank dispatches notice or advice to the optionee
that the optionee's employment or status as an officer is terminated and not
at the time of optionee's receipt thereof.
OTHER REASONS: If an optionee's employment or status as an officer is
terminated for any reason other than those mentioned above under "Death or
Disability" and "Cause", the optionee may, within three (3) months following
such termination, exercise the option to the extent such option was
exercisable by the optionee on the date of termination of the optionee's
employment or status as an officer, provided the date of exercise is in no
event after the expiration of the term of the option.
(e) TRANSFERABILITY OF OPTION. No option shall be transferable other
than by will or the laws of descent and distribution and shall be exercisable
during the optionee's lifetime only by the optionee.
(f) OTHER TERMS AND CONDITIONS. Options may also contain such other
provisions, which shall not be inconsistent with any of the foregoing terms,
as the Board of Directors or the Committee shall deem appropriate. No option,
however, nor anything contained in the Plan, shall confer upon any optionee
any right to continue in the employ or in the status as an officer of the
Bank, nor limit in any way the right of the Bank to terminate an optionee's
employment or status as an officer at any time.
(g) USE OF PROCEEDS FROM STOCK. Proceeds from the sale of Shares
pursuant to the exercise of options granted under the Plan shall constitute
general funds of the Bank.
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(g) RIGHTS AS A SHAREHOLDER. The optionee shall have no rights as a
shareholder with respect to any Shares until the date of issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date of such issuance,
except as provided in Section 6 hereof.
(i) WITHHOLDING. The Bank shall have the right upon the exercise of any
option to deduct any sums required to be withheld under federal, state or
local tax laws or regulations. The Bank may condition the issuance of Shares
upon exercise of any option upon the payment by the optionee of any sums
required to be withheld under applicable laws or regulations. The Bank has no
duty to advise any optionee of the existence of any tax or any amounts which
may be withheld.
6. ADJUSTMENT OF AND CHANGES IN THE SHARES.
In the event the shares of Common Stock of the Bank, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Bank or of another corporation
(whether by reason of reorganization, merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise), or if the number of shares of Common Stock of the Bank shall be
increased through the payment of a stock dividend, the Board of Directors
shall substitute for or add to each share of Common Stock of the Bank
theretofore appropriated or thereafter subject or which may become subject to
an option under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock of the Bank
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 Board
of Directors shall make appropriate adjustment in the number and kind of
shares as to which outstanding options, or portions thereof then unexercised,
shall be exercisable, so that any optionee's proportionate interest in the
Bank by reason of his or her rights under unexercised portions of such
options shall be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change in the total
price to the unexercised portion of the option and with a corresponding
adjustment in the option price per share.
In the event of sale, dissolution or liquidation of the Bank or a merger
or consolidation in which the Bank is not the surviving or resulting
corporation, the Board of Directors may, in its discretion, provide for the
assumption by the surviving or resulting corporation of every option
outstanding hereunder on its terms and conditions, both as to the number of
shares and otherwise; provided, however, that, if the Board of Directors does
not provide for such assumption, the Board of Directors
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shall have the power to cause the termination of every option outstanding
hereunder, except that the surviving or resulting corporation may, in its
discretion, tender an option or options to purchase its shares on its terms
and conditions, both as to the number of shares and otherwise; provided,
further, that in all events the optionee shall have the right immediately
prior to such sale, dissolution, liquidation, or merger or consolidation in
which the Bank is not the surviving or resulting corporation to notification
thereof as soon as practicable and, thereafter, to exercise the optionee's
option to purchase Shares subject thereto to the extent of any unexercised
portion of the option, regardless of the vesting provisions of Section 5(b)
hereof. This right of exercise shall be conditioned 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 Bank to purchase any or all shares of Common Stock of the Bank (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in Section 6 hereof), any
optionee under this Plan shall have the right upon the commencement of such
offer to exercise the option and purchase shares subject thereto to the extent
of any unexercised or unvested portion of such option.
No right to purchase fractional shares shall result from any adjustment
in options pursuant to this Section 6. In case of any such adjustment, the
shares subject to the option shall be rounded down to the nearest whole
share. Notice of any adjustment shall be given by the Bank to each holder of
an option which was in fact so adjusted and such adjustment (whether or not
such notice is given) shall be effective and binding for all purposes of the
Plan.
To the extent the foregoing adjustments relate to stock or securities of
the Bank, such adjustments shall be made by the Board of Directors or the
Committee, whose determination in that respect shall be final, binding and
conclusive.
Except as expressly provided in this Section 6, an optionee shall have no
rights by reason of any of the following events: (1) subdivision or
consolidation of shares of stock of any class; (2) payment of any stock
dividend; (3) any other increase or decrease in the number of shares of stock
of any class; (4) any dissolution, liquidation, merger, consolidation,
spin-off of assets or stock of another corporation. Any issue by the Bank of
shares of stock of any class, or securities convertible into shares of any
class, shall not affect the number or price of shares of Common Stock subject
to the option, and no adjustment by reason thereof shall be made.
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The grant of an option pursuant to the Plan shall not affect in any way
the right or power of the Bank 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.
7. LISTING OR QUALIFICATION OF SHARES.
All options granted under the Plan are 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 subject thereto on
any securities exchange or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the issuance of Shares under the option,
the 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.
8. BINDING EFFECT OF CONDITIONS.
The conditions and stipulations herein contained, or in any option
granted pursuant to the Plan shall be, and constitute, a covenant running
with all of the Shares acquired by the optionee pursuant to this Plan,
directly or indirectly, whether the same have been issued or not, and those
Shares owned by the optionee shall not be sold, assigned or transferred by
any person save and except in accordance with the terms and conditions herein
provided, and the optionee shall agree to use the optionee's best efforts to
cause the officers of the Bank to refuse to record on the books of the Bank
any assignment or transfer made or attempted to be made except as provided in
the Plan and to cause said officers to refuse to cancel old certificates or
to issue or deliver new certificates therefor where the purchaser or assignee
has acquired certificates or the Shares represented thereby, except strictly
in accordance with the provisions of the Plan.
9. AMENDMENT AND TERMINATION OF THE PLAN.
The Board of Directors shall have complete power and authority to
terminate or amend the Plan; provided, however, that the Board of Directors
shall not, without the approval of the shareholders of the Bank and the
approval of the Superintendent of Banks, State of California, (i) increase
the maximum number of shares for which options may be granted under the Plan;
(ii) change the computation as to minimum option prices set forth in
Paragraph 5(b); (iii) extend the period during which options may be granted
or exercised; or (iv) amend the requirements as to the class of directors,
employees or officers eligible to receive options. Except as provided in
Section 6, no termination,
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modification or amendment of the Plan may, without the consent of a director,
employee or officer to whom such option shall theretofore have been granted,
adversely affect the rights of such employee or officer under such option.
Unless the Plan shall have been terminated by action of the Board of
Directors prior thereto, it shall terminate ten (10) years after the earlier
of its adoption by the Board of Directors or approval by the shareholders.
10. EFFECTIVENESS OF THE PLAN.
The Plan shall become effective only upon approval by the Board of
Directors. The exercise of any options granted pursuant to the Plan shall be
conditioned upon the approval of the Plan, within 12 months before or after
the date such Plan is adopted, by the holders of a majority of the outstanding
shares of Common Stock of the Bank.
11. PRIVILEGES OF STOCK OWNERSHIP; SECURITIES LAW COMPLIANCE;
NOTICE OF SALE.
No optionee shall be entitled to the privileges of stock ownership as to
any Shares not actually issued and delivered to the optionee. No Shares
shall be purchased upon the exercise of any option unless and until any then
applicable requirements of any regulatory agencies having jurisdiction and of
any exchanges upon which the Common Stock of the Bank may be listed shall
have been fully complied with. The Bank shall diligently endeavor to comply
with all applicable securities laws before any options are granted under the
Plan and before any Shares are issued pursuant to the exercise of such
options. The optionee shall give the Bank notice of any sale or other
disposition of any such Shares not more than five (5) days after such sale or
other disposition.
12. INDEMNIFICATION.
To the extent permitted by applicable law in effect from time to time,
no member of the Board of Directors or the Committee shall be liable for any
action or omission of any other member of the Board of Directors or Committee
nor for any act or omission of any other member of the Board of Directors or
Committee nor for any act or omission on the member's own part, excepting
only the member's own willful misconduct or gross negligence. The Bank shall
pay expenses incurred by, and satisfy a judgment or fine rendered or levied
against, a present or former director or member of the Committee in any
action against such person (whether or not the Bank is joined as a party
defendant) to impose a liability or penalty on such person for an act alleged
to have been committed by such person while a director or member of the
Committee arising with respect to the Plan or administration thereof or out of
membership on the Committee or by the Bank, or all or any combination of the
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preceding; provided, the Director or Committee member was acting in good
faith, within what such director or Committee member reasonably believed to
have been within the scope of his or her employment or authority and for a
purpose which he or she reasonably believed to be in the best interests of
the Bank or its shareholders. Payments authorized hereunder include amounts
paid and expenses incurred in settling any such action or threatened action.
This section does not apply to any action instituted or maintained in the
right of the Bank by a shareholder or holder of a voting trust certificate
representing shares of the Bank. The provisions of this section shall apply
to the estate, executor, administrator, heirs, legatees or devisees of a
director or Committee member, and the term "person" as used in this section
shall include the estate, executor, administrator, heirs, legatees, or
devisees of such person.
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LAKE COMMUNITY BANK
INCENTIVE
STOCK OPTION AGREEMENT
Granting Date:
TO:
We are please to notify you that Lake Community Bank (the "Bank") this
day hereby grants to you an option to purchase all or any part of ____________
shares of the Common Stock of the Bank (the "Shares") at the Option Price of
____________ per share as a Stock Option under the Bank's 1984 Stock Option
Plan (the "Plan").
THIS OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS OF THE
PLAN. ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARIZED IN THIS AGREEMENT. A
COPY OF THE PLAN IS PROVIDED WITH THIS AGREEMENT.
THIS OPTION MAY BE EXERCISED ONLY IF THE PLAN IS APPROVED BY SHAREHOLDERS
HOLDING A MAJORITY OF THE VOTING POWER OF THE ISSUED AND OUTSTANDING SHARES
OF THE BANK.
1. PURPOSE OF THE OPTION.
One of the purposes of the Plan is to advance the interests of the Bank
and its affiliates (collectively the "Bank") by stimulating the efforts of
full-time salaried employees and officers on behalf of the Bank by granting
them financial participation in the progress and success of the Bank.
2. SIGNATURE ON OPTION AGREEMENT.
This option cannot be exercised unless you first sign this document in
the place provided and return it to the Secretary of the Bank. However, your
signing and delivering this letter will not bind you to purchase any of the
shares subject to the option. Your obligation to purchase the Shares can
arise only when you exercise this option in the manner set forth in Paragraph
3 below.
3. TERMS OF OPTION AND EXERCISE OF OPTION.
The option is not exercisable while there is outstanding (within the
meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code")) any incentive stock option which was granted to you before the
granting of this option, to
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purchase stock of the Bank or in a corporation which (at the time of the
granting of such option) is a parent or subsidiary corporation (as defined
for purposes of Section 422A of the Code) of the Bank, or in a predecessor
corporation of any of such corporations.
Subject to the provisions of Paragraph 4 below and this Paragraph 3, this
option can be exercised by you at any time during a period of ___________
(____) months from the granting date as follows:
(a) This option may be exercised immediately to the extent of not
more than ____________ percent (______%) of the Shares;
(b) After the expiration of _________ (____) months from the granting
date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(c) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(d) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(e) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(f) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(g) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(h) After the expiration of ____________ (____) months from the
granting date, this option may be
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exercised to the extent of an additional ____________ percent
(______%) of the Shares;
(i) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(j) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares;
(k) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of an
additional ____________ percent (______%) of the Shares.
Any portion of the option that you do not exercise shall accumulate and
can be exercised by you any time prior to the expiration of _______________
(____) months from the granting date.
This option may be exercised by delivering to the Secretary of the Bank,
payment in full at the Option Price for the number of Shares being purchased
in cash or by certified check or official bank check or the equivalent
thereof acceptable to the Bank, together with a written notice in a form
satisfactory to the Bank, signed by you specifying the number of Shares you
then desire to purchase and the time of delivery thereof, which shall not be
less than fifteen (15) days and not more than thirty (30) days after the
giving of such notice unless an earlier or later date is mutually agreed
upon. At such time the Bank shall, without transfer or issue tax to you (or
such other person entitled to exercise the option), deliver to you (or such
other person entitled to exercise the option) at the principal office of the
Bank, or such other place as shall be mutually acceptable, a certificate or
certificates for such Shares dated the date the options were validly
exercised; provided, however, that the time of such delivery may be postponed
by the Bank for such period as may be required for it with reasonable
diligence to comply with any requirements of law. No fractional Shares shall
be issued or delivered.
As a holder of an option, you shall have the rights of a shareholder with
respect to the Shares subject to this option only after such Shares shall
have been issued to you upon the exercise of this option.
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4. TERMINATION OF OFFICE OR EMPLOYMENT.
If your status as an employee or officer of the Bank is terminated for
any reason other than death or disability or cause, this option may be
exercised within three (3) months from the date of such termination to the
extent you were entitled to exercise the option on the date of termination,
but in no event may this option be exercised after the expiration of the term
of this option. If, however, you are removed from your office or your
employment with the Bank is terminated for cause as defined in the Plan, this
option shall expire at the time notice or advice of such removal or
termination is dispatched by the Bank and notwithstanding anything else
herein to the contrary, neither you nor your estate shall be entitled to
exercise any option with respect to any Shares whatsoever after such removal
or termination.
5. DEATH OR DISABILITY.
If you die or become disabled while an officer or employee of the Bank,
the option may be exercised in whole or in part by you or your qualified
representative (in the event of your mental disability) or by the duly
authorized executor of your will or by the duly authorized administrator or
special administrator of your estate (in the event of your death) within
twelve (12) months from the date of your death or disability to the extent
that you had the right to exercise this option on the date of your death or
disability, but in no event after the expiration of the term of this option.
Disability shall be determined under Section 422A of the Code as in
effect at the date of such disability. The Code currently defines disability
as follows:
An individual is permanently and totally disabled if he is 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. An individual shall not
be considered to be permanently and totally disabled unless he furnished
proof of the existence thereof in such form and manner, and at such times
as the Secretary may require.
6. NONTRANSFERABILITY OF OPTION.
This option shall not be transferable except by will or the laws of
descent and distribution, and this option may be exercised during your
lifetime only by you. Any purported transfer or assignment of this option
shall be void and of no
-4-
effect, and shall give the Bank the right to terminate this option as of the
date of such purported transfer or assignment.
7. ADJUSTMENT OF AND CHANGES IN THE SHARES.
In the event of any change in the outstanding Common Stock of the Bank,
without receipt by the Bank of additional consideration in lieu of such
change (whether by reason of stock dividends, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like),
the aggregate number or class of Shares subject to this option immediately
prior to such event shall be appropriately adjusted by the Board of Directors
in accordance with the terms of the Plan so that your proportionate interest
in the Bank by reason of your rights under any unexercised portions of such
options shall be maintained as before the occurrence of such event. Such
adjustment by the Board of Directors shall be conclusive.
In the event of a dissolution or liquidation of the Bank or a merger or
consolidation in which the Bank is not the surviving corporation, the Board
of Directors may, in its discretion, provide for the assumption by the
surviving or resulting corporation of every option outstanding hereunder,
provided that, if the Board of Directors does not provide for such
assumption, the Board of Directors shall have the power to cause the
termination of every option outstanding hereunder, except that the surviving
or resulting corporation may, in its discretion, tender an option or options
to purchase its shares on its terms and conditions, both as to the number of
shares and otherwise; provided, further, you shall have the right to exercise
this option as to all or any of the Shares subject to this option immediately
prior to such dissolution, liquidation, merger or consolidation, and to
purchase Shares subject hereto to the extent of any unexercised portion of
this option, regardless of the vesting provisions of Paragraph 3 hereof.
This right of exercise shall be conditioned upon the execution of a final
plan of dissolution or liquidation or of a definitive agreement of merger or
consolidation, and the Bank shall provide you with notice thereof as soon as
practicable.
In the event of an offer by any person or entity to all shareholders of
the Bank to purchase any or all shares of Common Stock of the Bank (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in this Paragraph 7), the
person exercising this option shall have the right upon commencement of such
offer to exercise this option to the extent of any unexercised portion and to
purchase Shares subject hereto, regardless of the vesting provisions of
Paragraph 3 hereof.
8. SUBJECT TO TERMS OF THE PLAN.
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This Agreement shall be subject in all respects to the terms and
conditions of the Plan. Your signature herein represents your
acknowledgement of receipt of a copy of the Plan. Any dispute or
disagreement which shall arise under or as a result of or pursuant to this
Agreement shall be finally and conclusively determined by the Board of
Directors of the Bank or a duly appointed Committee in its sole discretion,
and such determination shall be binding upon all parties.
9. EXERCISE OF OPTION CONDITIONED ON APPROVAL.
Exercise of this option is conditioned upon approval of the Plan by the
shareholders of the Bank in accordance with the requirements of the
Superintendent of Banks of the State of California.
10. TAX EFFECTS.
THE FEDERAL TAX CONSEQUENCES OF EMPLOYEE STOCK OPTIONS ARE COMPLEX AND
SUBJECT TO CHANGE. ACCORDINGLY, AN OPTIONEE (OR HIS OR HER GUARDIAN, ESTATE
OR LEGATEE) SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR BEFORE EXERCISING
ANY OPTION OR DISPOSING OF ANY SHARES ACQUIRED UPON THE EXERCISE OF AN OPTION.
11. RIGHTS AS A SHAREHOLDER.
You have no rights as a shareholder of the Bank with respect to any
Shares until the date of the issuance of a stock certificate to you for such
Shares.
12. NOTIFICATION OF SALE.
You agree that you, or any person acquiring Shares upon exercise of this
Option, will notify the Bank not more than five (5) days after any sale or
disposition of such Shares.
LAKE COMMUNITY BANK
By
-----------------------------------
Agreed to this _____
day of ____________, 19__.
--------------------------------
Signature of Optionee
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LAKE COMMUNITY BANK
NONSTATUTORY STOCK OPTION AGREEMENT
Granting Date:
TO:
We are pleased to notify you that Lake Community Bank (the "Bank") this
day hereby grants to you an option to purchase all or any part of ____________
shares of the Common Stock of the Bank (the "Shares") at the Option Price of
____________ per share as a Stock Option under the Bank's 1984 Stock Option
Plan (the "Plan").
THIS OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS OF THE
PLAN. ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARIZED IN THIS AGREEMENT. A
COPY OF THE PLAN IS PROVIDED WITH THIS AGREEMENT.
THIS OPTION MAY BE EXERCISED ONLY IF THE PLAN IS APPROVED BY SHAREHOLDERS
HOLDING A MAJORITY OF THE VOTING POWER OF THE ISSUED AND OUTSTANDING SHARES
OF THE BANK.
1. PURPOSE OF THE OPTION.
One of the purposes of the Plan is to advance the interests of the Bank
by stimulating the efforts of directors, full-time salaried employees and
officers on behalf of the Bank and its affiliates (collectively the "Bank"),
by granting them financial participation in the progress and success of the
Bank.
2. SIGNATURE ON OPTION AGREEMENT.
This option cannot be exercised unless you first sign this document in
the place provided and return it to the Secretary of the Bank. However, your
signing and delivering this letter will not bind you to purchase any of the
shares subject to the option. Your obligation to purchase the Shares can
arise only when you exercise this option in the manner set forth in Paragraph
3 below.
3. TERMS OF OPTION AND EXERCISE OF OPTION.
Subject to the provisions of Paragraph 4 below and this Paragraph 3, this
option can be exercised by you at any time during a period of ___________
(____) months from the granting date as follows:
(a) This option may be exercised immediately to the extent of not
more than ____________ percent (______%) of the Shares;
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(b) After the expiration of _________ (____) months from the granting
date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(c) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(d) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(e) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(f) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(g) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(h) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(i) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
(j) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not more than
____________ percent (______%) of the Shares;
-2-
(k) After the expiration of ____________ (____) months from the
granting date, this option may be exercised to the extent of not
more than ____________ percent (______%) of the Shares.
Any portion of the option that you do not exercise shall accumulate and
can be exercised by you any time prior to the expiration of _______________
(____) months from the granting date.
This option may be exercised by delivering to the Secretary of the Bank,
payment in full at the Option Price for the number of Shares being purchased
in cash or by certified check or official bank check or the equivalent thereof
acceptable to the Bank, together with a written notice in a form satisfactory
to the Bank, signed by you specifying the number of Shares you then desire to
purchase and the time of delivery thereof, which shall not be less than
fifteen (15) days and not more than thirty (30) days after the giving of such
notice unless an earlier or later date is mutually agreed upon. At such time
the Bank shall, without transfer or issue tax to you (or such other person
entitled to exercise the option), deliver to you (or such other person
entitled to exercise the option) at the principal office of the Bank, or such
other place as shall be mutually acceptable, a certificate or certificates
for such Shares dated the date the options were validly exercised; provided,
however, that the time of such delivery may be postponed by the Bank for such
period as may be required for it with reasonable diligence to comply with any
requirements of law. No fractional shares shall be issued or delivered.
As a holder of an option, you shall have the rights of a shareholder with
respect to the Shares subject to this option only after such Shares shall
have been issued to you upon the exercise of this option.
4. TERMINATION OF OFFICE OR EMPLOYMENT.
If your status as a director, employee or officer of the Bank is
terminated for any reason other than death or disability or cause this option
may be exercised within three (3) months from the date of such termination to
the extent you were entitled to exercise the option on the date of
termination, but in no event may this option be exercised after the
expiration of the term of this option. If, however, you are removed from your
office or your employment with the Bank is terminated for cause as defined in
the Plan, this option shall expire at the time notice or advice of such
removal or termination is dispatched by the Bank and notwithstanding anything
else herein to the contrary, neither you nor your estate shall be entitled to
-3-
exercise any option with respect to any Shares whatsoever after such removal
or termination.
5. DEATH OR DISABILITY.
If you die or become disabled while an officer or employee of the Bank,
the option may be exercised in whole or in part by you or your qualified
representative (in the event of your mental disability) or by the duly
authorized executor of your will or by the duly authorized administrator or
special administrator of your estate (in the event of your death) within
twelve (12) months from the date of your death or disability to the extent
that you had the right to exercise this option on the date of your death or
disability, but in no event after the expiration of the term of this option.
Disability shall be determined under Section 422A of the Code in effect
at the date of such disability. The Code currently defines disability as
follows:
An individual is permanently and totally disabled if he is 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. An individual shall not be
considered to be permanently and totally disabled unless he furnishes
proof of the existence thereof in such form and manner, and at such times,
as the Secretary may require.
6. NONTRANSFERABILITY OF OPTION.
This option shall not be transferable except by will or the laws of
descent and distribution, and this option may be exercised during your
lifetime only by you. Any purported transfer or assignment of this option
shall be void and of no effect, and shall give the Bank the right to
terminate this option as of the date of such purported transfer or assignment.
7. ADJUSTMENT OF AND CHANGES IN THE SHARES.
In the event of any change in the outstanding Common Stock of the Bank,
without receipt by the Bank of additional consideration in lieu of such
change (whether by reason of stock dividends, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like),
the aggregate number or class of Shares subject to this option immediately
prior to such event shall be appropriately adjusted by the Board of Directors
in accordance with the terms of the Plan so that your proportionate interest
in the Bank by reason of your rights under any unexercised portions of such
options shall be
-4-
maintained as before the occurrence of such event. Such adjustment by the
Board of Directors shall be conclusive.
In the event of a dissolution or liquidation of the Bank or a merger or
consolidation in which the Bank is not the surviving corporation, the Board
of Directors may, in its discretion, provide for the assumption by the
surviving or resulting corporation of every option outstanding hereunder,
provided that, if the Board of Directors does not provide for such
assumption, the Board of Directors shall have the power to cause the
termination of every option outstanding hereunder, except that the surviving
or resulting corporation may, in its discretion, tender an option or options
to purchase its shares on its terms and conditions, both as to the number of
shares and otherwise; provided, further, you shall have the right to exercise
this option as to all or any of the Shares subject to this option immediately
prior to such dissolution, liquidation, merger or consolidation, and to
purchase Shares subject hereto to the extent of any unexercised portion of
this option, regardless of the vesting provisions of Paragraph 3 hereof. This
right of exercise shall be conditioned upon the execution of a final plan of
dissolution or liquidation or of a definitive agreement of merger or
consolidation, and the Bank shall provide you with notice thereof as soon
practicable.
In the event of an offer by any person or entity to all shareholders of
the Bank to purchase any or all shares of Common Stock of the Bank (or shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in this Paragraph 7), the
person exercising this option shall have the right upon commencement of such
offer to exercise this option to the extent of any unexercised portion and to
purchase Shares subject hereto, regardless of the vesting provisions of
Paragraph 3 hereof.
8. SUBJECT TO TERMS OF THE PLAN.
This Agreement shall be subject in all respects to the terms and
conditions of the Plan. Your signature herein represents your acknowledgement
of receipt of a copy of the Plan. Any dispute or disagreement which shall
arise under or as a result of or pursuant to this Agreement shall be finally
and conclusively determined by the Board of Directors of the Bank or a duly
appointed Committee in its sole discretion, and such determination shall be
binding upon all parties.
9. EXERCISE OF OPTION CONDITIONED ON APPROVAL.
Exercise of this option is conditioned upon approval of the Plan by the
shareholders of the Bank in accordance with the requirements of the
Superintendent of Banks of the State of California.
-5-
10. TAX EFFECTS.
THE FEDERAL TAX CONSEQUENCES OF EMPLOYEE STOCK OPTIONS ARE COMPLEX AND
SUBJECT TO CHANGE. ACCORDINGLY, AN OPTIONEE (OR HIS OR HER GUARDIAN, ESTATE
OR LEGATEE) SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR BEFORE EXERCISING
ANY OPTION OR DISPOSING OF ANY SHARES ACQUIRED UPON THE EXERCISE OF AN OPTION.
11. RIGHTS AS A SHAREHOLDER.
You have no rights as a shareholder of the Bank with respect to any
Shares until the date of the issuance of a stock certificate to you for such
Shares.
12. NOTIFICATION OF SALE.
You agree that you, or any person acquiring Shares upon exercise of this
Option, will notify the Bank not more than five (5) days after any sale or
disposition of such Shares.
LAKE COMMUNITY BANK
By
-----------------------------------
Agreed to this _____
day of ____________, 19__.
--------------------------------
Signature of Optionee
-6-
