-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FVgVjNUz4seetl4tpmeDOQ3GluCX8wyb7XILmDEz3GJyP9/YzjSF22Fb5zj9jqqv m+FLYI47vxEFLiUlg7P4UQ== 0000702700-98-000011.txt : 19980529 0000702700-98-000011.hdr.sgml : 19980529 ACCESSION NUMBER: 0000702700-98-000011 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980528 EFFECTIVENESS DATE: 19980528 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SARATOGA BANCORP CENTRAL INDEX KEY: 0000702700 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 942817587 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-53823 FILM NUMBER: 98633270 BUSINESS ADDRESS: STREET 1: 12000 SARATOGA SUNNYVALE RD CITY: SARATOGA STATE: CA ZIP: 95070 BUSINESS PHONE: 4089731111 S-8 1 As filed with the Securities and Exchange Commission on May , 1998 Registration No. 333-___________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ FORM S-8 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 _______________ SARATOGA BANCORP (Exact name of issuer as specified in its charter) California 94-2817587 (State of Incorporation) (I.R.S. Employer Identification No.) 12000 Saratoga-Sunnyvale Road, Saratoga, California 95070 (Address of principal executive office) ________________________________________ Saratoga Bancorp 1994 Stock Option Plan (Amended) (Full title of the plan) __________________________________ Richard L. Mount, President and Chief Executive Officer Saratoga Bancorp 12000 Saratoga-Sunnyvale Road, Saratoga, California 95070 (Name and address of agent for service) _______________ (408) 973-1111 (Telephone number, including area code, of agent for service of process) CALCULATION OF REGISTRATION FEE Proposed Proposed Maximum Maximum Title of Securities Amount to Offering Aggregate Amount of to be Registered be registered Price per Share Offering Price Registration Fee Common Stock, no par value 277,011(1) $15.375(2) $4,259,044 $1,256.42 1 Maximum number of shares issuable upon exercise of options to be granted under the Saratoga Bancorp 1994 Stock Option Plan (Amended). 2 Estimated solely for the purpose of determining the registration fee, based upon the average of the bid and asked prices for the Common Stock on May 21, 1998, pursuant to Rule 457(h). This registration statement, including exhibits, consists of 20 sequentially numbered pages. The Exhibit Index is located at page 7. 2 PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The information required to be included in the Section 10(a) prospectus is not required to be included herein. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Certain Documents by Reference The documents listed in (a) through (c) below filed or to be filed by the Company with the Commission are incorporated in this registration statement by reference: (a) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 filed pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the "1934 Act"); The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998, filed pursuant to Section 13 of the Exchange Act. (a) The Company's Current Report(s) on Form 8-K, dated [February 27, 1998. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold, or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement, and to be a part hereof from the date of such filing. Item 4. DESCRIPTION OF SECURITIES The stock of the Company being registered is 277,011 shares of Common Stock, no par value, of which the Company is authorized to issue 20,000,000 shares. Each shareholder is entitled to one vote for each share of Common Stock held on all matters to be voted on by shareholders. In any election of directors each shareholder has a right to cumulate the shareholder's votes, giving one candidate a number of votes equal to the number of directors to be elected multiplied by the number of shares held by the shareholder, or distributing such number of votes among as many candidates as the shareholder shall see fit. Holders of Common Stock have no pre-emptive rights or other rights to subscribe for additional shares. There are no conversion rights, redemption rights, or sinking fund provisions with respect to shares of Common Stock. Subject to preferences that may be applicable to any shares of any preferred stock outstanding at that time, holders of Common Stock of the Company are entitled to receive ratably such dividends as may be declared by the Board of Directors out of funds legally available therefor, and in the event of liquidation, dissolution or winding up of the Company, are entitled to share ratably in all assets remaining after the payment of all liabilities. Item 5. Interest of Named Experts and Counsel Not applicable. 3 Item 6. Indemnification of Directors and Officers The California General Corporation Law provides for the indemnification of officers and directors who are made or are threatened to be made a party to any legal proceeding by reason of their service to the Company. The Articles of Incorporation and Bylaws of the Company permit indemnification of directors and officers to the maximum extent permitted by California law. The Company has in effect director and officer liability insurance policies indemnifying the Company and the officers, directors and certain assistant officers of the Company and officers and directors of the Company's subsidiaries within specific limits for certain liabilities incurred by reason of their being or having been directors or officers. The Company pays the entire premium for these policies. In addition, the Company has entered into indemnification agreements with all directors and officers to provide indemnification to the maximum extent permitted by the Company's Bylaws. Item 7. Exemption from Registration Claimed Not applicable. Item 8. Exhibits See the Index of Exhibits, which is incorporated in this item by reference. Item 9. Undertakings (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 4 (h) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Saratoga, State of California, on May 27, 1998. SARATOGA BANCORP (Registrant) By Richard L. Mount President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Date: May 27, 1998 Richard L. Mount, President and Chief Executive Officer Date: May 27, 1998 Mary Page Rourke, Treasurer (Principal Financial and Accounting Officer) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard L. Mount and Mary Page Rourke, and each or any one of them, his true and lawful attorney-in-fact and agent, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in- fact and agents, and each of them, full power and authority to do and perform all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Date: May 27, 1998 Victor E. Aboukhater, Director Date: May 27, 1998 Robert G. Egan, Director Date: May 27, 1998 William D. Kron, Director 6 Date: May 27, 1998 John F. Lynch, III, Director Date: May 27, 1998 Richard L. Mount, Chairman of the Board Date: May 27, 1998 V. Ronald, Mancuso, Director 7 INDEX OF EXHIBITS Exhibit Sequential No. Exhibit Name Page No. 5 Opinion of Counsel: Coudert Brothers 8 23.1 Consent of Counsel (See Exhibit 5) 23.2 Consent of Independent Auditors: Deloitte & Touche, L.L.P. 9 24 Power of Attorney (see signature pages) 99 Saratoga Bancorp 1994 Stock Option Plan (Amended) 10-20 FormS-8rec.doc EX-5 2 8 Exhibit 5 May 27, 1998 Board of Directors Saratoga Bancorp 12000 Saratoga-Sunnyvale Road Saratoga, Ca 95070 Re: Saratoga Bancorp 1994 Stock Option Plan (Amended) Gentlemen: We refer to the Registration Statement on Form S-8 to be filed by Saratoga Bancorp (the "Company") with the Securities and Exchange Commission under the Securities Act of 1933, as amended, relating to a maximum of 277,011 shares of the Company's Common Stock, no par value, issuable under the Company's 1994 Stock Option Plan(Amended). As counsel to the Company, we have examined such questions of law and such corporate records and other documents as we have considered necessary or appropriate for the purpose of this opinion. Upon the basis of such examination, we advise you that in out opinion these shares have been duly and validly authorized and, when issued and sold in the manner contemplated by the Registration Statement, will be validly issued, fully paid and nonassessable. We consent to the filing of this opinion as an exhibit to the Registration Statement. Very Truly Yours, /s/ Coudert Brothers EX-23 3 9 Exhibit 23.2 We consent to the incorporation by reference in this Registration Statement of Saratoga Bancorp on Form S-8 of our report dated January 20, 1998 appearing in the Annual Report on Form 10-K of Saratoga Bancorp for the period ended December 31, 1997. DELOITTE & TOUCHE LLP Monterey, Ca May 27, 1998 EX-99 4 12 SARATOGA BANCORP 1994 STOCK OPTION PLAN (AMENDED) 1. PURPOSE. The purpose of this Saratoga Bancorp 1994 Stock Option Plan ("the "Plan") is to provide a method whereby those key employees, directors and consultants of Saratoga Bancorp and its affiliates (hereinafter collectively referred to as the "Company"), who are primarily responsible for the management and growth of the Company's business and who are presently making and are expected to make substantial contributions to the Company's future management and growth, may be offered incentives in addition to those presently available, and may be stimulated by increased personal involvement in the fortunes and success of the Company to continue in its service, thereby advancing the interests of the Company and its shareholders. The word "affiliate," as used in the Plan, means any bank or corporation in any unbroken chain of banks or corporations beginning or ending with the Company, 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) Subject to paragraphs (b) and (c) below, the Plan shall be administered by the Board of Directors or a duly appointed committee of the Board consisting of Non-Employee Directors. The term "Non-Employee Director" as used in the Plan shall have the meaning set forth in Rule 16b-3 as promulgated by the Securities and Exchange Commission ("SEC") under Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as such rule may be amended from time to time, and as interpreted by the SEC ("Rule 16b-3"). The committee required by this paragraph shall consist of the minimum number of Non-Employee Directors from time to time required by Rule 16b-3. (b) The Board and any such committee is referred to hereinafter as the "Committee," except where otherwise expressly provided or where the context requires otherwise. 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 may 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 all members of the Committee, shall be the valid acts of the Committee. 13 (c) Options granted to employees or directors of the Company subject to Section 16(b) of the Exchange Act shall be approved by the Committee or shall be approved or ratified, in compliance with Section 14 of the Exchange Act, by the affirmative votes of the holders of a majority of the voting securities of the Company present or represented and entitled to vote at a meeting of shareholders duly called and hold pursuant to law, provided that any such ratification shall occur not later than the date of the next annual meeting of shareholders following the grant. (d) The grant of options under the Plan shall be affected by execution of instruments in writing in a form approved by the Committee. Subject to the express terms and conditions of the Plan, 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 Plan's administration, including, without limitation, the power to (i) determine which persons meet the requirements of Section 3 hereof for selection as participants in 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 422 of the Internal Revenue Code of 1986, as amended (the "Code") or nonstatutory stock options not described in Section 422; (iv) specify the number of shares to be covered by each option; (v) determine the fair market value of shares of the Company's common stock for any purpose under this Plan; (vi) grant options in exchange for cancellation of options granted earlier at different exercise prices; (vii) take appropriate action to amend any option hereunder, provided that no such action may be taken without the written consent of the affected optionee; and (viii) make all other determinations deemed necessary or advisable for administering the Plan. The Committee's determination on the foregoing matters shall be conclusive. 3. ELIGIBILITY. The persons who shall be eligible to receive the discretionary grant of options under this Plan shall be those key employees and officers of the Company (including officers who may also be directors of the Company), persons who became employees of the Company within thirty days of the date of grant of an option, consultants of the Company who render bona fide services to the Company other than in connection with the offer or sale of securities in a capital raising transaction ("Consultants"), and directors. Notwithstanding any other provision of this Plan no person shall be granted options to purchase more than an aggregate of 100,000 shares under this Plan. 4. THE SHARES. The shares of stock subject to options authorized to be granted under the Plan shall consist of three hundred twenty-eight thousand five hundred eighty- two (328,582) shares of the Company's 14 no par value common stock (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 7 hereof, provided that, such number of Shares shall be adjusted downward to the extent necessary to conform to the requirements of Section 260.140.45 of the Rules of the California Commissioner of Corporations, so that at no time shall the total number of shares issuable upon exercise of all outstanding options and the total number of shares provided for under any stock bonus or similar plan of the Company exceed the applicable percentage as calculated in accordance with the conditions and exclusions of such Rule. Upon the expiration or termination for any reason of an outstanding option under the Plan (or under the Company's expired 1982 Amended Stock Option Plan) which has not been exercised in full, all unissued Shares thereunder shall again become available for the grant of options under the Plan. Shares of the Company's common stock which are (i) delivered by an optionee in payment of the exercise price of an option pursuant to Section 7(a), or (ii) delivered by an optionee, or withheld by the Company from the shares otherwise due upon exercise of a nonstatutory stock option, in satisfaction of applicable withholding taxes as permitted by Section 7(c) shall again become available for the grant of options under the Plan only to those eligible participants who are not subject to Section 16 of the Exchange Act. The aggregate amount of Shares subject to options granted to all Non- Employee Directors as a group (not including such options which terminate unexercised) shall not exceed fifty percent (50%) of the Shares, as adjusted pursuant to Section 7. 5. OPTION GRANTS. Options, in the discretion of the Committee, may be granted at any time prior to the termination of the Plan to persons who are employees of the Company, including employees who are also directors of the Company, to Consultants of the Company or to Non-Employee Directors. Options granted by the Committee shall be subject to the following terms and conditions: (a) Grant of Options. Options granted to employees pursuant to the Plan may be either incentive stock options or nonstatutory stock options. If the aggregate fair market value of the shares issuable upon exercise of incentive stock options which are exercisable for the first time during any one calendar year under all incentive stock options held by an optionee exceeds $100,000 (determined at the time of the grant of the options), such options shall be treated as nonstatutory stock options to the extent of such excess. Options granted to Non-Employee Directors and to Consultants shall be nonstatutory stock options. (b) Option Price. The purchase price under each option shall not be less than one hundred percent of the fair market value of the Shares subject thereto on the date the option is granted; provided, however, that the purchase price of an option granted to an individual who owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company shall not be less than one hundred ten percent of the fair market value of the Shares 15 subject thereto on the date the option is granted. For any purposes under this Plan, fair market value per share shall mean, where there is a public market for the Company's common stock, the mean of the bid and asked prices (or the closing price if listed on a stock exchange or the Nasdaq National Market) of the Company's common stock for the date of grant, as reported in the Wall Street Journal (or, if not so reported, as otherwise reported by the Nasdaq Stock Market or the National Quotation Bureau). If such information is not available for the date of grant, then such information for the last preceding date for which such information is available shall be considered as the fair market value. (c) Duration of Options. Each option shall be for a term determined by the Committee; provided, however, that the term of any option may not exceed ten years and, provided further, that the term of any incentive stock option granted to an individual who owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company shall not exceed five years. Each option shall vest in such manner and at such time as the Committee shall determine and the Committee may accelerate the time of exercise of any option; provided, however, that no option shall vest for exercise at a rate of less than twenty percent per year during the five year period following the date of grant of an option. (d) Termination of Director, Employment or Consultant Status. Upon the termination of an optionee's status as an employee or Consultant or member of the Board of Directors of the Company, his or her rights to exercise an option then held shall be only as follows: DEATH OR DISABILITY: If an optionee's employment or consulting relationship or tenure on the Board of Directors 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 optionee's death) shall have the right for a period of twelve (12) months (or such longer period as the Committee may determine at the date of grant or during the term of the option) 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. To the extent the option is not exercised within such period the option will terminate. 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 optionee's employment or consulting relationship is terminated because such optionee is determined by the Board to have committed an act of embezzlement, fraud, dishonesty, breach of fiduciary duty to the Company, or to have deliberately disregarded the rules of the Company which resulted in loss, damage or injury to the Company, or if an optionee makes any unauthorized disclosure of any of the secrets or confidential information of the Company, induces any client or customer of the Company to break any contract with the Company or induces any principal for whom the Company acts as agent to 16 terminate such agency relations, or engages in any conduct which constitutes unfair competition with the Company, or if an optionee is removed from any office of the Company by any bank regulatory agency, the optionee shall have the right for a period of thirty days to exercise the option to the extent the option was exercisable on the date of termination; provided that the date of exercise is in no event after the expiration of the term of the option. To the extent the option is not exercised within such period the option will terminate. In making the determination pursuant to this paragraph, the Board shall act fairly and shall give the optionee whose employment or Consultant status has been terminated an opportunity to appear and be heard at a hearing before the full Board and present evidence on the optionee's behalf. For the purpose of this paragraph, termination of employment or Consultant status shall be deemed to occur when the Company dispatches notice or advice to the optionee that the optionee's employment or status as a Consultant is terminated, and not at the time of optionee's receipt thereof. OTHER REASONS: If an optionee's employment or consulting relationship or tenure on the Board of Directors is terminated for any reason other than those mentioned above under "Death or Disability" and "Cause," the optionee may, within three months (or such longer period as the Committee may determine at the date of grant or during the term of the option) following such termination, exercise the option to the extent such option was exercisable on the date of termination of the optionee's employment or status as a Consultant; provided the date of exercise is in no event after the expiration of the term of the option and provided further that any option which is exercised more than three months following termination shall be treated as a nonstatutory option whether or not it was designated as such at the time it was granted. To the extent the option is not exercised within such period the option will terminate. 6. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS. The following terms and conditions shall apply to all options granted pursuant to the Plan: (a) Exercise of Options. To the extent the right to purchase Shares has vested under an optionee'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 Company, together with written notice to the Secretary of the Company, identifying the option or part thereof being exercised and specifying the number of Shares for which payment is being tendered. An optionee may also exercise an option by the delivery and surrender of shares of Company Common Stock which (a) have been owned by the optionee for at least six months or such other period as the Committee may require; and (b) have an aggregate fair market value on the date of surrender equal to the exercise price. In addition, an option may be exercised by delivering to the Company (i) an exercise notice instructing the Company to deliver the certificates for the Shares 17 purchased to a designated brokerage firm and (ii) a copy of irrevocable instructions delivered to the brokerage firm to sell the Shares acquired upon exercise of the option and to deliver to the Company from the sale proceeds sufficient cash to pay the exercise price and applicable withholding taxes arising as a result of the exercise. The Company 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, without transfer or issue tax to the optionee (or other person entitled to exercise the option), at the principal office of the Company, 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 Company for such period as may be required for it with reasonable diligence to comply with any requirements of law. (b) Transferability of Option and Shares. Each option shall be transferrable only by will or the laws of descent and distribution and shall be exercisable during the optionee's lifetime only by the optionee, or in the event of disability, the optionee's qualified representative. In addition, in order for Shares acquired upon exercise of incentive stock options to receive the tax treatment afforded such Shares, the Shares may not be disposed of within two years from the date of the option grant nor within one year after the date of transfer of such Shares to the optionee. (c) Withholding. The Company shall have the right to condition the issuance of Shares upon exercise of an option upon payment by the optionee of any applicable taxes required to be withheld under federal, state or local tax laws or regulations in connection with such exercise. An optionee may elect to pay such tax by (i) requesting the Company to withhold a sufficient number of Shares from the total number of Shares issuable upon exercise of the option or (ii) delivering a sufficient number of shares of Company common stock which have been held by the optionee for at least six months (or such other period as the Committee may require) to the Company. The value of shares withheld or delivered shall be the fair market value of such shares on the date the exercise becomes taxable as determined by the Committee. Such an election is subject to approval or disapproval by the Committee, and if the optionee is subject to Section 16 of the Exchange Act, the timing of the election must satisfy the requirements of Rule 16b-3. (d) Other Terms and Conditions. Options may also contain such other provisions, which shall not be inconsistent with any of the foregoing terms, as 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 a director or Consultant of the Company, nor limit in any way the right of the Company to terminate an optionee's employment or status as a Consultant at any time. 18 7. ADJUSTMENT OF, AND CHANGES IN, THE SHARES. (a) Changes in Capitalization. In the event the shares of Common Stock of the Company, as presently constituted, shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether by reason of reorganization, merger, consol- idation, recapitalization, reclassification, stock split, reverse stock split, combination of shares, or otherwise), or if the number of Shares of common stock of the Company shall be increased through the payment of a stock dividend, there shall be substituted for or added to each Share of common stock of the Company 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 Company 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, appropriate adjustment shall be made 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 Company 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. (b) Dissolution, Liquidation, Sale or Merger. In the event of a proposed dissolution or liquidation of the Company, options outstanding under the Plan shall terminate immediately before the consummation of such proposed action. The Board will, in such circumstances, provide written notice to the optionees of the expected dates of termination of outstanding options and consummation of the proposed dissolution or liquidation. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation in a transaction in which the Company is not the surviving corporation, outstanding options may be assumed or equivalent options may be substituted by the successor corporation (or a parent or subsidiary of the successor corporation), unless the successor corporation does not agree to assume the options or to substitute equivalent options. If outstanding options are not assumed or substituted by equivalent options, all outstanding options shall terminate immediately before the consummation of such sale or merger (subject to the actual consummation of the sale or merger) and the Company shall provide written notice to the optionees of the expected dates of termination of the options and consummation of such transaction. If the transaction is not consummated, unexercised options shall continue in accordance with their original terms. (c) Notice of Adjustments, Fractional Shares. To the extent the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. No right to purchase fractional shares shall result from any adjustment in options pursuant to this Section 8. 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 Company to each holder of an option 19 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. 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 this Section. Any issue by the Company 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. The grant of an 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 or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets. 8. AMENDMENT, EFFECTIVENESS AND TERMINATION OF THE PLAN. The Board shall have complete power and authority to terminate or amend the Plan; provided, however, that the Board shall not, without the approval of the shareholders of the Company, amend the Plan in a manner that requires shareholder approval for continued compliance with the terms of Rule 16b-3, as promulgated under the Exchange Act, Section 422 of the Code, any successor rules, or other regulatory authority. Except as provided in Section 8, no termination, modification or amendment of the Plan may, without the consent of the optionee to whom such option was previously granted under the Plan, adversely affect the rights of such optionee. Any consent required by the preceding sentence may be obtained in any manner deemed appropriate by the Committee. The Plan became effective upon adoption by the Board of Directors and approval by the shareholders of the Company at the Company's 1994 annual meeting of shareholders. The Plan, unless sooner terminated, shall terminate on March 18, 2004, ten years from the date the Plan was originally adopted by the Board. An option may not be granted under the Plan after the Plan is terminated. 9. INFORMATION TO OPTIONEES. The Company shall provide to each optionee, during the period for which he or she has one or more outstanding options, copies of all annual reports and all other information which is provided to shareholders of the Company. The Company shall not be required to provide such information to key employees whose duties in connection with the Company assure their access to equivalent information. 20 10. PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE AND 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. The exercise of any option under the Plan shall be conditioned upon the registration of the Shares with the SEC and qualification of the options and underlying Shares under the California securities laws, unless in the opinion of counsel to the Company such registration or qualification is not necessary. The Company shall diligently endeavor to comply with all applicable securities laws applicable to the Plan. 11. NOTICE OF SALE. The optionee shall give the Company notice of any sale or other disposition of any Shares acquired upon exercise of an incentive stock option not more than five days after such sale or disposition. 12. INDEMNIFICATION. To the extent permitted by applicable law in effect from time to time, no member of the Board or the Committee shall be liable for any action or omission of any other member of the Board 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 Company 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 Company is joined as a party defendant) to impose liability or a 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 Company, or all or any combination of the 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 Company 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 Company by a shareholder or holder of a voting trust certificate representing shares of the Company. 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. 1 SARATOGA BANCORP 1994 STOCK OPTION PLAN (AMENDED) 2 SARATOGA BANCORP 1994 STOCK OPTION PLAN (AMENDED) TABLE OF CONTENTS Page 1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . 1 2. ADMINISTRATION . . . . . . . . . . . . . . . . . . 1 3. ELIGIBILITY. . . . . . . . . . . . . . . . . . . . 2 4. THE SHARES . . . . . . . . . . . . . . . . . . . . 2 5. OPTION GRANTS. . . . . . . . . . . . . . . . . . . 3 6. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS . . 5 7. ADJUSTMENT OF, AND CHANGES IN, THE SHARES. . . . . 7 8. AMENDMENT, EFFECTIVENESS AND TERMINATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . 8 9. INFORMATION TO OPTIONEES . . . . . . . . . . . . . 8 10. PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE AND NOTICE OF SALE. . . . . . . . . . . 8 11. NOTICE OF SALE . . . . . . . . . . . . . . . . . . 9 12. INDEMNIFICATION. . . . . . . . . . . . . . . . . . 9 -----END PRIVACY-ENHANCED MESSAGE-----