FIRST NORTHERN BANK OF DIXON
1997 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
Annual Vesting Over Four Years
First Northern Bank of Dixon, a California banking corporation (the
"Bank"), hereby grants an Option to purchase Shares of its common stock to the
Optionee named below. The terms and conditions of the Option are set forth in
this cover sheet, in the attachment and in the Bank's 1997 Stock Option Plan
(the "Plan").
Date of Option Grant: August 13, 1997
Name of Optionee:
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Optionee's Social Security Number: _____-____-_____
Number of Shares of Common Stock Covered by Option:
Price per Share: $
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Vesting Start Date: The later of (i) approval by the shareholders of the Bank
of the amendments to the preemptive rights clause in the Bank's Articles of
Incorporation and (ii) August 13, 1997.
By signing this cover sheet, you agree to all of the terms and
conditions described in the attached Agreement and in the Plan,
a copy of which is also enclosed.
Optionee:
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(Signature)
Bank:
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(Signature)
Title:
Attachment
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FIRST NORTHERN BANK OF XXXXX
1997 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
Annual Vesting Over Four Years
Incentive Stock Option This Option is intended to be an incentive stock
Option under section 422 of the Code and will be
interpreted accordingly.
Vesting and Exercise This Option may be exercised to the extent that
Shares have been vested. Beginning on the Vesting
Start Date, you will be twenty percent (20%) vested in
the Shares granted under this Option. Thereafter, the
Shares under this Option will vest annually at a rate
of 20 percent (20%) per year. All of the Shares
shall be fully vested on the fourth anniversary of the
Vesting Start Date as shown on the cover sheet. No
additional Shares will vest after your Service has
terminated for any reason. "Service" means your
service as employee, consultant or advisor of the
Bank or an affiliated company.
Notwithstanding of the vesting schedule set forth
above, in the event of a Change in Control of the
Bank during the period you remain in Service, all of
the Shares which are unvested as of the effective
date of such Change in Control shall immediately
become vested. For the purposes hereof, a "Change in
Control" shall have the meaning set forth in Section
2(b) of the Plan.
Term This Option will expire in any event at the close of
business at Bank headquarters on the fifth
anniversary of the Date of Grant, as shown on the
cover sheet. (It will expire earlier if your Service
terminates, as described below.)
Regular Termination If your Service terminates for any reason
except death, Total and Permanent Disability, or for
cause then this Option will expire at the close of
business at Bank headquarters on the 90th day after
your termination date. During that 90-day period
you may exercise the vested portion of this Option.
Termination for If your Service terminates for cause, as determined
Cause by the Committee, then this Option will expire upon
your termination of Service.
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Death In the event of your death while in Service,
then this Option will expire at the close of
business at Bank headquarters on the date which is
one year after the date of death. During that
one-year period, your estate or heirs may exercise the
vested portion of this Option.
Total and If your Service terminates because of your
Permanent Disability Total and Permanent Disability, then this Option will
expire at the close of business at Bank headquarters
on the date which is one year after your
termination date. During that one-year period you may
exercise the vested portion of this Option.
"Total and Permanent Disability" means that you are
unable to work as determined in accordance with
the Bank's Long Term Disability Plan.
Leaves of Absence For purposes of this Option, your Service does not
terminate when you go on a bona fide leave of absence
that was approved by the Bank in writing, if the terms
of the leave provide for continued service crediting,
or when continued service crediting is required by
applicable law. However, for purposes of determining
whether this Option is entitled to ISO status, your
Service will be treated as terminating 90 days after
you went on leave, unless your right to return to
active work is guaranteed by law or by a contract.
Your Service terminates in any event when the
approved leave ends unless you immediately return to
active work.
The Bank determines which leaves count for this
purpose, and when your Service terminates for all
purposes under the Plan.
Restrictions The Bank will not permit you to exercise this Option
on Exercise if the issuance of Shares at that time would violate
any law or regulation.
Notice of Exercise When you wish to exercise this Option, you must notify
the Bank by filing the proper "Notice of Exercise"
form attached hereto. Your notice must specify how
many Shares you wish to purchase. Your notice must
also specify how your Shares should be registered (in
your name only or in your and your spouse's names as
community property or as joint tenants with right of
survivorship). The notice will be effective when it
is received by the Bank.
If someone else wants to exercise this Option after
your death, that person must prove to the Bank's
satisfaction that he or she is entitled to do so.
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Periods of Any other provision of this Agreement notwithstanding,
Nonexercisability the Bank shall have the right to designate one or more
periods of time, each of which shall not exceed 180
days in length, during which this Option shall not be
exercisable if the Bank determines (in its sole
discretion) that such limitation on exercise could in
any way facilitate any issuance of securities by the
Bank, facilitate the registration or qualification of
any securities by the Bank under applicable law,
or facilitate the perfection of any exemption from the
registration or qualification requirements under any
applicable law for the issuance or transfer of any
securities. Such limitation on exercise shall not
alter the vesting schedule set forth in this Agreement
other than to limit the periods during which this
Option shall be exercisable.
Form of Payment When you submit your notice of exercise, you must
include payment of the Option price for the Shares
you are purchasing. Payment may be made in one (or
a combination) of the following forms:
o Your personal check, a cashier's check or a
money order.
o Shares which have already been owned by you for
any time period specified by the Committee
and which are surrendered to the Bank. The
value of the Shares, determined as of the
effective date of the Option exercise, will be
applied to the Option price.
Withholding Taxes To the extent that any withholding or other taxes may
be due as a result of the Option exercise or the sale
of shares acquired upon exercise of this Option and
the sale of the shares, you will not be allowed to
exercise this Option unless you make acceptable
arrangements to pay such withholding or other taxes.
Restrictions on Resale By signing this Agreement, you agree not to sell any
Option Shares at a time when applicable laws,
regulations or Bank or underwriter trading policies
prohibit a sale. In connection with any underwritten
public offering by the Bank of its equity securities,
you agree not to sell, make any short sale of, loan,
hypothecate, pledge, grant any Option for the purchase
of, or otherwise dispose or transfer for value or
agree to engage in any of the foregoing transactions
with respect to any shares without the prior written
consent of the Bank or its underwriters, for such
period of time after the effective date of such
registration statement as may be requested by the
Bank or such underwriters.
In order to enforce the provisions of this paragraph,
the Bank may
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impose stop-transfer instructions with respect to
the shares until the end of the applicable
stand-off period.
Transfer of Option Prior to your death, only you may exercise this
Option. You cannot transfer or assign this Option.
For instance, you may not sell this Option or use it
as security for a loan. If you attempt to do any of
these things, this Option will immediately become
invalid. You may, however, dispose of this Option in
your will.
Regardless of any marital property settlement
agreement, the Bank is not obligated to honor a
notice of exercise from your spouse or former spouse,
nor is the Bank obligated to recognize such
individual's interest in this Option in any other way.
Retention Rights Neither this Option nor this Agreement give you the
right to be retained by the Bank (or any subsidiaries)
in any capacity. The Bank (and any subsidiaries)
reserve the right to terminate your Service
at any time and for any reason.
Shareholder Rights You, or your estate or heirs, have no rights as
a shareholder of the Bank until a certificate for the
Option Shares has been issued. No adjustments are
made for dividends or other rights if the applicable
record date occurs before your stock certificate is
issued, except as described in the Plan.
Adjustments In the event of a stock split, a stock dividend or
a similar change in the Bank stock, the number of
Shares covered by this Option and the exercise price
per share may be adjusted pursuant to the Plan. This
Option shall be subject to the terms of the agreement
of merger, liquidation or reorganization in the event
the Bank is subject to such corporate activity.
Applicable Law This Agreement will be interpreted and enforced under
the laws of the State of California.
The Plan and Other The text of the Plan is incorporated in this
Agreements Agreement by reference. Certain capitalized terms used
in this Agreement are defined in the Plan.
This Agreement and the Plan constitute the entire
understanding between you and the Bank regarding this
Option. Any prior agreements, commitments or
negotiations concerning this Option are superseded.
By signing the cover sheet of this Agreement, you agree to all of the
terms and conditions described above and in the Plan.
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NOTICE OF EXERCISE OF STOCK OPTION
First Northern Bank of Dixon
000 X. Xxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Corporate Secretary
Re: Exercise of Stock Option to Purchase Shares of Bank Stock
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Dear Sir or Madam:
Pursuant to the Stock Option Agreement dated August 13, 1997 (the "Stock
Option Agreement"), between First Northern Bank of Dixon, a California banking
corporation (the "Bank"), and the undersigned, I hereby elect to purchase
_____________ shares of the common stock of the Bank (the "Shares"), at the
price of $__________ per Share. My check in the amount of $______________ is
enclosed. The Shares are to be issued in _____ certificate(s) and registered in
the name(s) of:
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The undersigned understands there may be tax consequences as a result of
the purchase or disposition of the Shares. To the extent that an amount is
required to be withheld for any taxes that may be due as a result of this
exercise, I will comply with the Bank's requirements with respect to the payment
of such withholding. The undersigned represents that he has consulted with any
tax consultants he deems advisable in connection with the purchase or
disposition of the Shares and the Undersigned is not relying on the Bank for any
tax advice.
The undersigned acknowledges that he has received, read and understood the
Stock Option Agreement and agrees to abide by and be bound by their terms and
conditions.
Dated: ________________, 19___
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(Signature)
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(Please Print Name)
Social Security No.
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(Full Address)
