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EXHIBIT 10.15
COWLITZ BANCORPORATION
1997 STOCK OPTION PLAN
NONSTATUTORY OPTION AWARD AGREEMENT
This Nonstatutory Option Award Agreement ("Award Agreement") is made and
entered into by and between Cowlitz Bancorporation, a Washington corporation
(the "Corporation"), and Xxxxxxx X. Xxxxxxx (the "Optionee"), as of the 30th day
of September, 1997 (the "Date of Grant"), pursuant to the Cowlitz Bancorporation
1997 Stock Option Plan (the "Plan").
In consideration of the mutual covenants and conditions hereinafter set
forth and for other good and valuable consideration, the Corporation and the
Optionee agree as follows:
1. Grant of the Option. The Corporation hereby grants to the
Optionee the right and option (the "Option") to purchase an aggregate of 11,000
shares (such number being subject to adjustment as provided in the Plan) of
Stock (the "Shares") on the terms and conditions herein set forth. The Option
awarded hereunder may be exercised in whole or in part and from time to time as
hereinafter provided.
The Option granted under this Award Agreement is not intended to
qualify as an "incentive stock option" under section 422 of the Code and shall
be not so construed.
2. Exercise Price. The price at which the Optionee shall be entitled
to purchase the Shares covered by the Option shall be One Hundred Dollars
($100.00) per Share, subject to adjustment as provided in paragraph 10 below.
3. Term of the Option.
(i) The unexercised portion of the Option, if any, will automatically
and without notice terminate upon the earlier of (A) ten years following the
Date of Grant or (B) the date determined pursuant to paragraph 8 hereof.
(ii) The Option will cease to be exercisable with respect to a Share
when the Optionee purchases the Share.
4. Vesting.
(i) Except as otherwise provided in paragraph 8 hereof, the Option
granted hereunder shall vest and become exercisable with respect to Shares as
follows:
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NONSTATUTORY OPTION AWARD AGREEMENT
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Number
Vesting Date of the Shares
------------ -------------
Date of Grant 3,000
December 31, 1998 1,600
December 31, 1999 1,600
December 31, 2000 1,600
December 31, 2001 1,600
December 31, 2002 1,600
Date as of Which a Change of Control All Shares as to Which the Vesting Date
Occurs Had Not Occurred Previously
Shares as to which the Vesting Date has occurred shall be referred to as "Vested
Shares." Shares as to which the Vesting Date has not occurred shall be referred
to as "Nonvested Shares."
In general, Shares shall become Vested Shares only if the Optionee has
been continuously employed as a full-time employee of the Corporation or any
Subsidiary from the Date of Grant to and including the respective Vesting Date.
In addition, Shares may become Vested Shares in accordance with death,
Disability, Normal Retirement or pursuant to Section 9 of the Plan.
Notwithstanding the foregoing, no Shares shall be Vested Shares unless and until
the Optionee shall have made any and all required filings with and received any
and all required approvals from applicable Federal and state regulators with
respect to such shares relating to change in control of the Corporation or any
subsidiary.
5. Method of Exercising Option.
(i) The Optionee may exercise the Option at any time prior to the
termination of the Option with respect to all or any part of the Vested Shares.
Subject to the terms and conditions of this Award Agreement, the Option may be
exercised by timely delivery to the Secretary of the Corporation of an Exercise
Notice, which notice shall be effective, subject to the requirements herein, on
the date received by the Corporation.
(ii) The Exercise Notice shall state the Optionee's election to exercise
the Option, the number of Vested Shares in respect of which an election to
exercise has been made, the method of payment elected and the exact name or
names in which the Vested Shares then being purchased will be registered.
(iii) The Exercise Notice must be signed by the Optionee and must be
accompanied by payment of the aggregate Exercise Price of the Vested Shares then
being purchased.
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NONSTATUTORY OPTION AWARD AGREEMENT
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(iv) In the event the Option must be exercised by a person or persons
other than the Optionee pursuant to paragraph 8 below, the Exercise Notice must
be signed by such other person or persons and must be accompanied by proof
acceptable to the Committee of the legal right of such person or persons to
exercise the Option and the Shares issued upon such exercise shall be subject to
the limitations applicable to such Shares in the hands of the Optionee.
6. Method of Payment for Options. The Exercise Price of an Option
shall be payable in full upon the exercise of the Option (a) in cash or by an
equivalent means acceptable to the Committee, (b) if permitted by applicable
laws and regulations (including but not limited to federal tax and securities
laws), with shares of Stock owned by Optionee (including shares received upon
exercise of the Option or restricted shares already held by Optionee) and having
a Fair Market Value at least equal to the aggregate Exercise Price payable in
connection with such exercise, or (c) by any combination of clauses (a) and (b).
If shares of Stock are used in payment of all or any portion of the Exercise
Price, then (for purposes of payment of the Exercise Price) those shares of
Stock shall be deemed to have a cash value equal to their aggregate Fair Market
Value determined as of the date the certificate for such shares is delivered to
the Corporation. If shares of restricted Stock are used in payment of all or any
portion of the Exercise Price, then an equal number of shares issued pursuant to
the exercise shall be restricted on the same terms and for the restriction
period remaining on the shares used for payment.
In addition, at the request of Optionee and if permitted by applicable
laws and regulations (including but not limited to federal tax and securities
laws), the Committee may (but shall not be required to) approve arrangements
with a brokerage firm under which that brokerage firm, on behalf of Optionee,
shall pay to the Corporation the Exercise Price of the Option being exercised
and the Corporation shall promptly deliver the exercised shares of Stock to the
brokerage firm. To accomplish this transaction, Optionee must deliver to the
Corporation an Exercise Notice containing irrevocable instructions from Optionee
to the Corporation to deliver the Stock certificates representing the shares of
Stock directly to the broker. Upon receiving a copy of the Exercise Notice
acknowledged by the Corporation, the broker shall sell that number of shares of
Stock or loan Optionee an amount sufficient to pay the Exercise Price and any
withholding obligations due. The broker then shall deliver to the Corporation
that portion of the sale or loan proceeds necessary to cover the Exercise Price
and any withholding obligations due. The Committee shall not approve any
transaction of this nature if the Committee believes that the transaction would
give rise to Optionee's liability for short-swing profits under Section 16(b) of
the Exchange Act.
The Optionee shall pay to the Corporation (or the Corporation's
Subsidiary if Optionee is an employee of a Subsidiary of the Corporation), at
the time of the exercise of an Option, the amount that the Committee deems
necessary to satisfy the Corporation's or its Subsidiary's current or future
obligation to withhold federal, state, or local income or other taxes that
Optionee incurs by exercising an Option. In connection with the exercise of an
Option requiring tax withholding, a Optionee may (a) direct the Corporation to
withhold from the shares of Stock to be issued to Optionee the number of shares
necessary to satisfy the Corporation's obligation to withhold taxes, that
determination to be based on the shares' Fair Market Value as of the date
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of exercise; (b) deliver to the Corporation sufficient shares of Stock (based
upon the Fair Market Value as of the date of such delivery) to satisfy the
Corporation's tax withholding obligation, which tax withholding obligation is
based on the shares' Fair Market Value as of the later of the date of exercise;
or the date as of which the shares of Stock issued in connection with such
exercise become includible in the income of Optionee; (c) deliver sufficient
cash to the Corporation to satisfy its tax withholding obligations. If Optionee
elects to use such a stock withholding feature, Optionee must make the election
at the time and in the manner that the Committee prescribes. In the event the
Committee subsequently determines that the aggregate Fair Market Value (as
determined above) of any shares of Stock withheld or delivered as payment of any
tax withholding obligation is insufficient to discharge that tax withholding
obligation, then Optionee shall pay to the Corporation, immediately upon the
Committee's request, the amount of that deficiency in the form of payment
requested by the Committee.
7. Delivery of Shares. No Shares shall be delivered to the
Optionee upon exercise of the Option until (i) the Exercise Price for such
Shares being purchased is paid in full in the manner herein provided; (ii) all
the applicable taxes required to be withheld have been paid or withheld in full;
(iii) approval of any governmental authority required in connection with the
Option, or the issuance of such Shares thereunder, has been received by the
Corporation; and (iv) if required by the Committee, the Optionee has delivered
to the Committee an "Investment Letter" in form and content satisfactory to the
Corporation as provided in paragraph 11 below.
8. Termination of Employment. In the event of the Optionee's
termination of employment for reasons other than Normal Retirement, Disability
or death, the Optionee's right to exercise the Option will be limited to Shares
that are Vested Shares on the date of such termination and, subject to earlier
termination in accordance with paragraph 3(i) hereof, will expire as to such
Vested Shares on the date which is 180 calendar days following the date of such
termination. In the event of the Optionee's termination of employment for
reasons of Normal Retirement, Disability or death, then all Shares as to which
the Option is unexercised as of the date of such termination shall become Vested
Shares as of such date, and, subject to earlier termination in accordance with
paragraph 3(i) hereof, the Option will expire as to all Vested Shares on the
date which is 180 calendar days following the date of such Normal Retirement,
Disability or death. Upon the Disability or death of a Optionee, any and all
Vested Shares may be exercised by the Optionee or his guardian, legal
representative, legatees, distributees or heirs for the periods prescribed
herein. The Committee has the right to require whatever evidence it deems
necessary to establish the rights of any person or persons seeking to exercise
the Option in the event of a Optionee's Disability or death.
9. Nontransferability. Except as provided in paragraph 8 above,
the Option granted by this Award Agreement shall be exercisable only by the
Optionee during his or her lifetime and while an employee of the Corporation. No
Option granted by this Award Agreement is transferable by the Optionee other
than by will or pursuant to applicable laws of descent and distribution. The
Option, and any rights and privileges in connection therewith, cannot be
transferred, assigned, pledged or hypothecated by the Optionee, or by any other
person or persons, in any way, whether by operation of law, or otherwise, and
may not be
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subject to execution, attachment, garnishment or similar process. In the event
of any such occurrence, this Award Agreement will automatically terminate and
will thereafter be null and void.
10. Adjustments. If there is any change in the capital structure
of the Corporation through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or combination of shares, each
remaining Share subject to this Option or the Exercise Price with respect to
such Share shall be proportionately adjusted to prevent dilution or enlargement
of the Shares subject to the Option or of the Exercise Price, as provided in
Section 9 of the Plan.
11. Securities Act. The Corporation will not be required to
deliver any Shares pursuant to the exercise of all or any part of the Option if,
in the opinion of counsel for the Corporation, such issuance would violate the
Securities Act or any other applicable federal or state securities laws or
regulations. The Committee may require that the Optionee, prior to the issuance
of any such Shares pursuant to exercise of the Option, sign and deliver to the
Corporation a written statement ("Investment Letter") stating that (i) the
Optionee is purchasing the Shares for his or her own account and not with a view
to, or for sale in connection with, any distribution thereof, he or she has no
present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof and he or she
does not currently have any reason to anticipate a change in the foregoing; (ii)
the Optionee understands that the Shares have not been registered under the
Securities Act or any applicable state securities laws or regulations and,
therefore, cannot be offered or resold unless the Shares are so registered or an
applicable exemption from registration is available; and (iii) agrees that the
certificates representing the Shares may bear a legend to the effect set forth
in clause (ii) above. Such Investment Letter must be in form and substance
acceptable to the Committee in its sole discretion.
12. Section 16(b) Matters. If Optionee is a director or officer
of the Corporation or any of its Subsidiaries who is subject to Section 16(b) of
the Exchange Act, Awards shall be exercisable during Optionee's lifetime only by
Optionee or Optionee's guardian or legal representative, but not for at least
six months after grant, unless (a) (and to the extent that) the Board of
Directors expressly authorizes that an Award shall be exercisable before the
expiration of the six-month period or (b) the death or disability of Optionee
occurs before the expiration of the six-month period. In addition, if Optionee
is such an officer or director, Optionee may not have shares of Stock withheld
to pay tax withholding obligations within the first six months of the term of an
Award and any election by Optionee to have tax withholding obligations satisfied
by the withholding of shares of Stock shall be irrevocable and shall be
communicated to the Committee during the period beginning on the third day
following the date of release of quarterly or annual summary statements of sales
and earnings and ending on the twelfth business day following such date or by an
irrevocable election communicated to the Committee at least six months before
the date of exercise of the Award for which such withholding is desired.
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13. Notice. All notices required or permitted under this Award
Agreement, including an Exercise Notice, must be in writing and personally
delivered or sent by mail and shall be deemed to be delivered on the date on
which it is actually received by the Corporation properly addressed to the
person who is to receive it. An Exercise Notice shall be effective when actually
received by the Corporation, in writing and in conformance with this Award
Agreement and the Plan. Until changed in accordance herewith, the Corporation
and the Optionee specify their respective addresses as set forth below:
Corporation: Cowlitz Bancorporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chairman of Board of Directors
Optionee: As indicated on the signature page hereto.
14. Information Confidential. As partial consideration for the
granting of this Option, the Optionee agrees that he or she will keep
confidential all information and knowledge that he or she has relating to the
manner and amount of his or her participation in the Plan; provided, however,
that such information may be disclosed as required by law and may be given in
confidence to the Optionee's spouse, tax and financial advisors, or a financial
institution to the extent that such information is necessary to obtain a loan.
15. Definitions; Copy of Plan. To the extent not specifically
provided herein or otherwise required by context, all capitalized terms used in
this Award Agreement but not defined herein shall have the same meanings
ascribed to them in the Plan. However, any reference herein to the "Committee"
shall refer to the Committee or the Plan Administrator, as appropriate. By the
execution of this Award Agreement, the Optionee acknowledges that he or she has
received and reviewed a copy of the Plan.
16. Administration. This Award Agreement is subject to the terms
and conditions of the Plan. The Plan will be administered by the Committee in
accordance with its terms. The Committee has sole and complete discretion with
respect to all matters reserved to it by the Plan, and decisions of the
Committee with respect to the Plan and to this Award Agreement shall be final
and binding upon the Optionee and the Corporation. In the event of any conflict
between the terms and conditions of this Award Agreement and the Plan, the
provisions of the Plan shall control.
17. Continuation of Employment. This Award Agreement shall not be
construed to confer upon the Optionee any right to continue in the employ of the
Corporation or its Subsidiaries and shall not limit the right of the Corporation
or its Subsidiaries, in their sole discretion, to terminate the employment of
the Optionee at any time.
18. Amendments. This Award Agreement may be amended only by a
written agreement executed by the Corporation and the Optionee.
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19. Termination. The Corporation may terminate the Plan at any
time; however, such termination will not modify the terms and conditions of the
Option awarded under this Agreement without the Optionee's consent.
20. Shareholder Approval. Notwithstanding any provisions of the
Award Agreement, no Option may be exercised before the date ("Approval Date")
the stockholders of the Corporation, at a meeting at which a quorum is present,
shall have approved the Plan by the affirmative vote of a majority of the shares
of the Corporation's common voting thereon. In the event of the occurrence of
any event described in paragraph 8 hereof prior to the Approval Date, the 180
day-period referred to in paragraph 8 hereof applicable to Vested Shares shall
be tolled until the Approval Date.
IN WITNESS WHEREOF, the partners hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COWLITZ BANCORPORATION
By: _____________________________________
Its: ________________________________
OPTIONEE
_________________________________________
Address:
_________________________________________
_________________________________________
1997 STOCK OPTION PLAN
NONSTATUTORY OPTION AWARD AGREEMENT
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