1ST CENTURY BANCSHARES, INC. DIRECTOR AND EMPLOYEE STOCK OPTION PLAN STOCK OPTION AGREEMENT
EXHIBIT
4.4
Grant
No.
DIRECTOR
AND EMPLOYEE STOCK OPTION PLAN
1st
Century Bancshares, Inc. (the “Company”) hereby grants
to the Optionholder named below an option to purchase the number of shares
of
the Company’s common stock set forth below (the “Common
Stock”). The terms and conditions of the Option are set
forth in this Stock Option Agreement
(the “Agreement”) and in the 1st Century
Bancshares, Inc.’s Director and Employee Stock Option Plan (the
“Plan”) and the Notice of Exercise, all of which are
enclosed herewith and incorporated herein in their
entirety. Capitalized terms not defined herein shall have the
meanings assigned to them in the Plan.
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Optionholder:
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Date
of Grant:
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,20
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Number
of Shares Subject to Option:
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Exercise
Price Per Share:
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$
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Expiration
Date:
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,20
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Type
of Grant:
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¨ Incentive
Stock Option
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¨ Nonstatutory
Stock Option
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Vesting
Schedule:
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[____%
of the total number of shares subject to this Option shall vest
on [insert
vesting start date] and, thereafter, ____% of the shares subject
to this
Option shall vest on each anniversary of the Date of Grant until
fully
vested.]
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Exercise
Schedule:
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Same
as Vesting Schedule
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Payment:
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By
one or a combination of the following items (as described in Section
3 of
this Agreement or in such other manner (including a net issue exchange)
approved by the Board or
Committee):
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By
cash or check
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Pursuant
to a Regulation T Program if the Shares are publicly
traded
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By
delivery of already-owned shares if the Shares are publicly
traded
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Acknowledgements: By
signing this cover sheet, you acknowledge receipt of, and understand and
agree
to, all of the terms and conditions described in this Agreement and in the
Plan
and Notice of Exercise, copies of which are also enclosed. Further,
you acknowledge that as of the Date of Grant, this Agreement and the Plan
and
Notice of Exercise set forth the entire understanding between you and the
Company regarding the acquisition of stock in the Company and supersede all
prior oral and written agreements (including, without limitation, any
employment agreement with the Company) on that subject. You
further acknowledge that you as an executive officer or director of the Company
have received a copy of the most recent financial statements of the Company
and
a copy of its most recent public reports filed with the Company’s
regulators.
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OPTIONHOLDER:
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By:
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Signature |
Signature
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Name:
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Date:
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Title:
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Date:
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ENCLOSURES:
Copy of the Director and Employee Stock Option Plan and Notice of Stock Option
Exercise
DIRECTOR
AND EMPLOYEE STOCK OPTION PLAN
The
details of your Option are as follows:
1.
Vesting. Subject to the
limitations contained herein, your Option will vest as provided in the cover
sheet of this Agreement, provided that vesting will cease upon the termination
of your Continuous Service.
2.
Number of Shares and Exercise Price. The
number of shares subject to your Option and your exercise price per share
referenced in the cover sheet of this Agreement may be adjusted from time
to
time for capitalization adjustments, as provided in the Plan.
3.
Method of Payment. Payment of the
exercise price is due in full upon exercise of all or any part of your
Option. You may elect to make payment of the exercise price in cash
or by check or in any other manner permitted in the cover sheet of this
Agreement or by the Board of Directors, which may include one or more of
the following:
(a) In
the Company’s sole discretion at the time your Option is exercised and provided
that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board which, prior
to
the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.
(b) Provided
that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by delivery of already-owned
shares of Common Stock that either have been held for the period required
to
avoid a charge to the Company’s reported earnings (generally six months) or were
not acquired, directly or indirectly from the Company, that are owned free
and
clear of any liens, claims, encumbrances or security interests, and that
are
valued at Fair Market Value on the date of exercise. “Delivery” for
these purposes, in the sole discretion of the Company at the time your Option
is
exercised, shall include delivery to the Company of your attestation of
ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, your Option may not be
exercised by tender to the Company of Common Stock to the extent such tender
would constitute a violation of the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock.
4.
Whole Shares. Your Option may only be
exercised for whole shares.
5.
Securities Law Compliance. Notwithstanding
anything to the contrary contained herein, your Option may not be exercised
unless the shares issuable upon exercise of your Option are then registered
under the Securities Act or, if such shares are not then so registered, the
Company has determined that such exercise and issuance would be exempt from
the
registration requirements of the Securities Act. The exercise of your
Option must also comply with other applicable laws and regulations governing
the
Option, and the Option may not be exercised if the Company determines that
the
exercise would not be in material compliance with such laws and
regulations.
6.
Term. The term of your
Option commences on the Date of Grant and expires upon the earliest of
the following:
2
(a) The
date of termination of your employment relationship with the Company or
any of
its Affiliates or status as an officer or director of the Company or any
of its
Affiliates, as applicable, if such termination is for Cause (as such term
is
hereinafter defined). For purposes of this Agreement, the term
“Cause” means termination for any of the following
reasons: (i) your willful failure substantially to perform your
duties and responsibilities to the Company or deliberate violation of a
Company
policy; (ii) your commission of any act of fraud, embezzlement, dishonesty
or
any other willful misconduct that is caused or is reasonably expected to
result
in material injury to the Company; (iii) unauthorized use or disclosure
by you
of any proprietary information or trade secrets of the Company, or any
other
party to whom you owe an obligation of nondisclosure as a result of your
relationship with the Company; or (iv) your willful breach of any of your
obligations under any written agreement or covenant with the
Company. The determination as to whether you are being terminated for
Cause shall be made in good faith by the Company and shall be final and
binding
on you. The foregoing definition does not in any way limit the
Company’s ability to terminate your employment relationship and/or status as a
director or officer with the Company at any time as provided in Section
9
below. For purposes of this Section 6(a), the term “Company” will be
interpreted to include any of its Affiliates, if appropriate.
(b) three
(3) months after the termination of your Continuous Service for any reason
other
than a termination for Cause or by reason of Disability or death, provided
that
if during any part of such three (3) month period the Option is not exercisable
solely because of the condition set forth in paragraph 6, the Option shall
not
expire until the earlier of the Expiration Date or until it shall have been
exercisable for an aggregate period of three (3) months after the termination
of
your Continuous Service;
(c) twelve
(12) months after the termination of your Continuous Service due to Disability
(as defined in the Plan);
(d) twelve
(12) months after your death if you die either during your Continuous Service
or
within three (3) months after your Continuous Service terminates;
(e) the
Expiration Date indicated in the cover sheet of this Agreement; or
(f) the
tenth (10th) anniversary of the Date of Grant.
If
your
Option is an Incentive Stock Option, note that, to obtain the federal income
tax
advantages associated with an “Incentive Stock Option,” the Code requires that
at all times beginning on the date of grant of the Option and ending on the
day
three (3) months before the date of the Option’s exercise, you must be an
employee of the Company or an Affiliate, except in the event of your death
or
your Disability. The Company has provided for extended exercisability
of your Option under certain circumstances for your benefit, but cannot
guarantee that your Option will necessarily be treated as an “Incentive Stock
Option” if you provide services to the Company or any Affiliate as a Director or
if you exercise your Option more than three (3) months after the date your
employment with the Company or an Affiliate terminates.
7.
Exercise.
(a) You
may exercise the vested portion of your Option during its term by delivering
a
Notice of Exercise (in a form designated by the Company) together with the
exercise price to the Secretary of the Company, or to such other person as
the
Company may designate, during regular business hours, together with such
additional documents as the Company may then require.
(b) By
exercising your Option you agree that, as a condition to any exercise of
your
Option, the Company may require you to enter an arrangement providing for
the
payment by you to the Company of any tax withholding obligation of the Company
arising by reason of (1) the exercise of your Option, (2) the lapse of any
substantial risk of forfeiture to which the shares are subject at the time
of
exercise or (3) the disposition of shares acquired upon such
exercise.
3
(c) If
your Option is an Incentive Stock Option, by exercising your Option you agree
that you will notify the Company in writing within fifteen (15) days after
the
date of any disposition of any of the shares of the Common Stock issued upon
exercise of your Option that occurs within two (2) years after the date of
your
Option grant or within one (1) year after such shares of Common Stock are
transferred upon exercise of your Option.
(d) By
exercising your Option you agree that the Company (or a representative of
the
underwriters) may, in connection with the first underwritten registration
of the
offering of any securities of the Company under the Securities Act, as
applicable to national banks, require that you not sell, dispose of, transfer,
make any short sale of, grant any option for the purchase of, or enter into
any
hedging or similar transaction with the same economic effect as a sale, any
shares of Common Stock or other securities of the Company held by you, for
a
period of time specified by the underwriter(s) following the effective date
of
the registration statement of the Company filed under the Securities Act,
as
applicable to national banks. You further agree to execute and
deliver such other agreements as may be reasonably requested by the Company
and/or the underwriter(s) which are consistent with the foregoing or which
are
necessary to give further effect thereto. In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to your Common Stock until the end of such period.
8. Transferability. Your
Option is not transferable, except by will or by the laws of descent and
distribution, and is exercisable during your life only by you; provided,
however, and to the extent permitted by applicable law and regulation,
Nonstatutory Stock Options may be transferred for no value to any intervivos
or
terminating trust, which shall agree in writing to be bound by the terms
of this
Agreement and the Plan, established for estate planning purposes for the
sole
and exclusive benefit of such owner of the Option, one or more members of
such
owners’ family that are related to such owner (which member shall include,
without limitation, the spouse, adopted children and stepchildren of such
owner)
and/or any other lineal descendants of such owner and in which such owner
is a
trustee thereof. Notwithstanding anything to the contrary, by
delivering written notice to the Company, in a form satisfactory to the Company,
you may designate a third party who, in the event of your death, shall
thereafter be entitled to exercise your Option.
9.
Option Not a Service
Contract. Your Option is not an employment or service
contract, and nothing in your Option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your Option shall obligate the
Company or an Affiliate, their respective shareholders, Boards of Directors,
Officers or Employees to continue any relationship that you might have as
a
Director for the Company or an Affiliate.
10. Withholding
Obligations.
(a) At
the time your Option is exercised, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding
from
payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “cashless exercise” pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy
the
federal, state, local and foreign tax withholding obligations of the Company
or
an Affiliate, if any, which arise in connection with your Option.
(b) Upon
your request and subject to approval by the Company, in its sole discretion,
and
compliance with any applicable conditions or restrictions of law, the Company
may withhold from fully vested shares of Common Stock otherwise issuable
to you
upon the exercise of your Option a number of whole shares having a Fair Market
Value, determined by the Company as of the date of exercise, not in excess
of
the minimum amount of tax required to be withheld by law. If the date
of determination of any tax withholding obligation is deferred to a date
later
than the date of exercise of your Option, share withholding pursuant to the
preceding sentence shall not be permitted unless you make a proper and timely
election under Section 83(b) of the Code, covering the aggregate number of
shares of Common Stock acquired upon such exercise with respect to which
such
determination is otherwise deferred, to accelerate the determination of such
tax
withholding obligation to the date of exercise of your
Option. Notwithstanding the filing of such election, shares shall be
withheld solely from fully vested shares of Common Stock determined as of
the
date of exercise of your Option that are otherwise issuable to you upon such
exercise. Any adverse consequences to you arising in connection with
such share withholding procedure shall be your sole responsibility.
4
(c) Your
Option is not exercisable unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able
to exercise your Option when desired even though your Option is vested, and
the
Company shall have no obligation to issue a certificate for such shares or
release such shares from any escrow provided for herein.
11. Notices. Any
notices provided for in your Option or the Plan shall be given in writing
and
shall be deemed effectively given upon receipt or, in the case of notices
delivered by the Company to you, five (5) days after deposit in the United
States mail, postage prepaid, addressed to you at the last address you provided
to the Company.
12. Governing
Plan Document. Your Option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your Option,
and
is further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated and adopted pursuant to the
Plan. In the event of any conflict between the provisions of your
Option and those of the Plan, the provisions of the Plan shall
control.
By
signing the cover sheet of this Agreement, you agree to all of the term and
conditions described above and in the Plan.
5
NOTICE
OF STOCK OPTION EXERCISE
DIRECTOR
AND EMPLOYEE STOCK OPTION PLAN (THE “PLAN”)
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1st
Century
Bancshares, Inc.
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Date
of Exercise:
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Ladies
and Gentlemen:
This
constitutes notice under my Option that I elect to purchase the number of
shares
for the price set forth below.
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Type
of option (check one):
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Incentive
¨
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Nonstatutory
¨
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Stock
option dated:
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Number
of shares as to which option is exercised:
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Certificates
to be issued in name of:
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Total
exercise price:
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Cash
payment delivered herewith:
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Options
surrendered (for net issue exercise):
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By
this
exercise, I as a director or executive officer of the Company agree (a) to
provide such additional documents as you may require pursuant to the terms
of
the 1st Century Bancshares, Inc. Director and Employee Stock Option Plan,
(b) to
provide for the payment by me to you (in the manner designated by you) of
your
withholding obligation, if any, relating to the exercise of this option,
and (c)
if this exercise relates to an Incentive Stock Option, to notify you in writing
within fifteen (15) days after the date of any disposition of any of the
shares
of Common Stock issued upon exercise of this option that occurs within two
(2)
years after the date of grant of this option or within one (1) year after
such
shares of Common Stock are issued upon exercise of this option.
I
hereby
make the following certifications and representations with respect to the
number
of shares of Common Stock of the Company listed above (the
“Shares”), which are being acquired by me for my own
account upon exercise of the Option as set forth above:
I
acknowledge that the Shares have not been registered under the Securities
Act of
1933, as amended (the “Securities Act”), and are
deemed to constitute “restricted securities” under the Securities Act, and, if I
am an “affiliate” of the Company (as such term is defined in Rule 144 of the
Securities Act) control securities” under Rule 144. I warrant and
represent to the Company that I have no present intention of distributing
or
selling said Shares, except as permitted under the Securities Act and any
applicable state securities laws. I further warrant and represent
that I have received the most recent copy of the Company’s financial statements
and its most recent public reports.
I
further
acknowledge that I will not be able to resell the Shares for at least ninety
days (90) after the stock of the Company becomes publicly traded (i.e.,
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934) under Rule 701 and that more restrictive
conditions apply to affiliates of the Company under Rule 144.
I
further
acknowledge that all certificates representing any of the Shares subject
to the
provisions of the Option shall have endorsed thereon appropriate legends
reflecting the foregoing limitations, as well as any legends reflecting
restrictions pursuant to the Company’s Articles of Association, Bylaws and/or
applicable securities laws.
I
further
acknowledge that there may be tax consequences as a result of the purchase
or
disposition of the Shares, and I have consulted with any tax consultants
I
wished to consult and I am not relying on the Company for any tax
advise.
I
further
agree that, if required by the Company (or a representative of the underwriters)
in connection with the first underwritten registration of the offering of
any
securities of the Company under the Securities Act, I will not sell, dispose
of,
transfer, make any short sale of, grant any option for the purchase of, or
enter
into any hedging or similar transaction with the same economic effect as
a sale
of any shares of Common Stock or other securities of the Company during such
period following the effective date of the registration statement of the
Company
filed under the Securities Act as may be requested by the Company or the
representative of the underwriters. I further agree to execute and
deliver such other agreements as may be reasonably requested by the Company
and/or the underwriters which are consistent with the foregoing or which
are
necessary to give further effect thereto and that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
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Very
truly yours,
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