EXHIBIT 99.3
FIRST FINANCIAL BANCORP
NONSTATUTORY STOCK OPTION AGREEMENT
1. Grant. First Financial Bancorp, a California corporation (the
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"Company"), hereby grants to ______________________________ (the "Optionee"), an
option (the "Option") to purchase a total of __________________ shares of common
stock of the Company, at the price determined as provided herein, and in all
respects subject to the terms, definitions and provisions of the First Financial
Bancorp 1997 Stock Option Plan (the "Plan"). The capitalized terms defined in
the Plan shall have the same defined meanings herein.
2. Nature of the Option. This Option is intended by the Company and the
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Optionee to be a nonstatutory stock option and does not qualify for any special
tax benefits to the Optionee. This option is not an Incentive Stock Option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
3. Exercise Price. The Exercise Price is $_______________ for each
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share of common stock, which price is not less than eighty-five percent (85%) of
the Fair Market Value per share of the common stock of the Company on the Grant
Date.
4. Term of Option. Subject to earlier termination as provided in the
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Plan, this Option shall terminate on ______________________, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.
5. Exercise of Option. This Option shall be exercisable during its term
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in accordance with the provisions of Section 5 of the Plan as follows:
(a) Right to Exercise. This Option shall vest cumulatively
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from the date of grant of the Option, exercisable during a period of __________
months after the Grant Date as follows:
(1) This Option may be exercised immediately to the
extent of not more than ____ percent (__%) of the Shares;
(2) Upon or after the expiration of _________ (__)
months from the Grant Date, this Option may be exercised to
the extent of an additional ____ percent (__%) of the Shares;
(3) Upon or after the expiration of _________ (__)
months from the Grant Date, this Option may be exercised to the
extent of an additional ____ percent (__%) of the Shares;
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(4) Upon or after the expiration of _________ (__)
months from the Grant Date, this Option may be exercised to the
extent of an additional ____ percent (__%) of the Shares; and
(5) Upon or after the expiration of _________ (__)
months from the Grant Date, this Option may be exercised to the
extent of an additional ____ percent (__%) of the Shares.
Any portion of the Option not exercised shall accumulate and can be
exercised any time prior to or upon the expiration of _________ (__) months from
the Grant Date.
(b) Minimum Exercise. This Option may not be exercised for less
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than 10 Shares nor for a fraction of a Share.
(c) Method of Exercise. This Option shall be exercisable by
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written notice which shall state the election to exercise the Option and specify
the number of whole Shares in respect of which the Option is being exercised.
Such written notice shall be signed by the Optionee and shall be delivered, in
person or by certified mail, to the Secretary of the Company accompanied by
payment of the Exercise Price as specified below.
No Shares will be issued pursuant to the exercise of the Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange or inter-dealer quotation system upon
which the shares of the Company's common stock may then be listed or quoted.
Assuming such compliance, the Shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to such
Shares. An Optionee shall have no rights as a shareholder of the Company with
respect to any Shares until the issuance of a stock certificate to the Optionee
for such Shares.
(d) Method of Payment. The entire Exercise Price of Shares
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issued under this Option shall be payable in cash or by certified check,
official bank check, or the equivalent thereof acceptable to the Company at the
time when such Shares are purchased. Such payment also shall include the amount
of any withholding tax obligation which may arise in connection with the
exercise, as determined by the Company. In addition, payment may be made in any
of the following forms as indicated by an "x" in the preceding parenthesis:
( ) Surrender of Stock. Payment of all or part of the
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Exercise Price and any withholding taxes may be made all or in part with Shares
which have already been owned by the Optionee or Optionee's representative for
more than 6 months and which are surrendered to the Company in good form for
transfer. Such Shares shall be valued at their Fair Market Value on the date
when the new Shares are purchased pursuant to exercise of the Option.
( ) Exercise/Sale. Payment may be made by the delivery
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(on a form prescribed by the Company) of an irrevocable direction to a
securities broker approved by the
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Company to sell Shares and to deliver all or part of the sales proceeds to the
Company in payment of all or part of the Exercise Price and any withholding
taxes.
( ) Exercise/Pledge. Payment may be made by the delivery
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(on a form prescribed by the Company) of an irrevocable direction to pledge
Shares to a securities broker or lender approved by the Company, as security for
a loan, and to deliver all or part of the loan proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
(e) Termination of Service. In the event that the Optionee's
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Service as an Employee terminates:
(i) As a result of such Optionee's death or Total and
Permanent Disability, the term of the Option shall expire twelve
months after such death or Total and Permanent Disability but
not later than the expiration date specified in Section 4 above.
(ii) As a result of termination by the Company for
cause, the term of the Option shall expire thirty days after the
Company's notice or advice of such termination is dispatched to
Optionee, but not later than the expiration date specified in
Section 4 above. For purposes of this paragraph (ii), "cause"
shall mean an act of embezzlement, fraud, dishonesty, breach of
fiduciary duty to the Company, or the deliberate disregard of
rules of the Company which results in loss, damage or injury to
the Company, the unauthorized disclosure of any of the secrets
or confidential information of the Company, the inducement of
any client or customer of the Company to break any contract with
the Company, or the inducement of any principal for whom the
Company acts as agent to terminate such agency relationship, the
engagement in any conduct which constitutes unfair competition
with the Company, the removal of Optionee from office by any
court or bank regulatory agency, or such other similar acts
which the Committee in its discretion determines to constitute
good cause for termination of Optionee's Service. As used in
this paragraph (ii), Company includes Subsidiaries of the
Company.
(iii) As a result of termination for any reason other
than Total and Permanent Disability, death or cause, the term of
the Option shall expire three months after such termination, but
not later than the original expiration date specified in Section
4 above.
Neither the Plan nor this Option shall be deemed to give Optionee a
right to remain an Employee or consultant of the Company or a Subsidiary. The
Company and its Subsidiaries reserve the right to terminate the service of any
Employee or consultant at any time, with or without cause, subject to applicable
laws and the terms of any written employment agreement.
6. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will, by written beneficiary designation or by the
laws of descent and distribution, and may be exercised during the lifetime of
Optionee only by Optionee. The terms
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of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
7. Adjustment of Shares. In the event of a subdivision of the
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outstanding shares of common stock of the Company, a declaration of a dividend
payable in Shares, a declaration of a dividend payable in a form other than
Shares in an amount that has a material effect on the value of Shares, a
combination or consolidation of the outstanding shares of common stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Company shall make
appropriate adjustments in the number of Shares covered by the Option and in the
Exercise Price of the Option.
In the event that the Company is a party to a merger or other
reorganization, the Option shall be subject to the agreement of merger or
reorganization. Subject to the provisions of Section 5(e)(i) of the Plan, such
agreement may provide, without limitation, for the assumption of all outstanding
options by the surviving corporation or its parent, for their continuation by
the Company (if the Company is a surviving corporation), for payment of a
per-Share cash settlement equal to the difference between the amount to be paid
for one Share under such agreement and the Exercise Price, or for the
acceleration of the exercisability followed by the cancellation of any option
not exercised, in all cases without the optionees' consent. Any cancellation
shall not occur until after such acceleration is effective and optionees have
been notified of such acceleration and have had reasonable opportunity to
exercise their options.
Except as provided in this Section, Optionee shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend or any other increase or decrease in the number of
shares of stock of any class. Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or Exercise Price of Shares subject to the Option. The grant of this
Option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
8. Taxation Upon Exercise of Option. Optionee understands that upon
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exercise of this Option, he will generally recognize income for tax purposes in
an amount equal to the excess of the then Fair Market Value of the Shares over
the exercise price. The Company will be required to withhold tax from Optionee's
current compensation with respect to such income; to the extent that Optionee's
current compensation is insufficient to satisfy the withholding tax liability,
the Company may require the Optionee to make a cash payment to cover such
liability as a condition of exercise of this Option. The Optionee may elect to
pay such tax by (i) requesting the Company to withhold a sufficient number of
shares from the shares otherwise due upon exercise or (ii) by delivering a
sufficient number of shares of the Company's common stock which have been
previously held by the Optionee for such period of time as the Committee may
require. The aggregate value of the shares withheld or delivered, as determined
by the Committee must be
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sufficient to satisfy all such applicable taxes, except as otherwise permitted
by the Committee. If the Optionee is subject to Section 16 of the Securities
Exchange Act of 1934, as amended, the Optionee's election must be made in
compliance with rules and procedures established by the Committee.
GRANT DATE: ______________
FIRST FINANCIAL BANCORP
By: ______________________________
___________________, Duly
Authorized on Behalf of
First Financial Bancorp
Optionee represents that Optionee is familiar with the terms and
provisions of this Option and hereby accepts the same subject to all the terms
and provisions hereof. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board of Directors or its duly
appointed Committee upon any questions arising under the Plan.
Dated: ____________________
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Optionee
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