-----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, RVsVvh+aekZRovDcqcFfF7zaM3XTcgue5hRpep+hWewcA9ZM1dp4NGYg5ya1crX+ MuhXyytXqKubp4UwwSqwKA== 0000906903-96-000044.txt : 19961111 0000906903-96-000044.hdr.sgml : 19961111 ACCESSION NUMBER: 0000906903-96-000044 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19961108 EFFECTIVENESS DATE: 19961108 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CUPERTINO NATIONAL BANCORP CENTRAL INDEX KEY: 0000757790 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 330060898 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-15779 FILM NUMBER: 96656394 BUSINESS ADDRESS: STREET 1: 20230 STEVENS CREEK BLVD CITY: CUPERTINO STATE: CA ZIP: 95014 BUSINESS PHONE: 4089961144 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on November 6, 1996. Registration No. 333- --------------------------------------------------------------------------- United States Securities and Exchange Commission Washington, D.C. 20005 FORM S-8 Registration Statement Under The Securities Act of 1933 CUPERTINO NATIONAL BANCORP (Exact name of registrant as specified in its charter) California 33-0060898 (State or other jurisdiction (I.R.S. Employer incorporation or organization) Identification No.) 20230 Stevens Creek Boulevard 95014 Cupertino, California (Address of principal executive offices) (Zip Code) Cupertino National Bancorp Employee Stock Purchase Plan Cupertino National Bancorp 1989 Non-Qualified Stock Option Plan (Full title of plans) C. Donald Allen Chief Executive Officer Cupertino National Bancorp 20230 Stevens Creek Boulevard Cupertino, California 95014 (Name and address of agent for service) Telephone number, including area code, of agent for service: (408) 996-1144 WITH A COPY TO: Eileen Lyon Manatt, Phelps & Phillips 11355 West Olympic Boulevard Los Angeles, California 90064 This registration statement shall hereafter become effective in accordance with Rule 462 promulgated under the Securities Act of 1933, as amended.
Calculation of Registration Fee - -------------------------------------------------------------------------------------------------------------------------------- Proposed Proposed Title of Amount maximum maximum Amount securities to to be offering price aggregate of registra- be registered registered per unit offering price tion fee - -------------------------------------------------------------------------------------------------------------------------------- Employee Stock Purchase Plan Common Stock 60,000 $13.28 $ 796,800 $241.45 1989 Non-Qualified Stock Option Plan Common Stock 35,000 $15.625 $ 546,875 $165.72 TOTAL 95,000 $1,343,675 $407.17 - -------------------------------------------------------------------------------------------------------------------------------- In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plans described herein and such indeterminate number of shares as may become available as a result of the adjustment provisions thereof. Estimated pursuant to Rule 457 solely for purposes of calculating the registration fee. As to shares subject to outstanding but unexercised options under the Cupertino National Bancorp 1989 Non-Qualified Stock Option Plan, the price is computed on the basis of the exercise price. As to shares under the Cupertino National Bancorp Employee Stock Purchase Plan, this plan establishes a purchase price equal to 85% of the fair market value of the Company's Common Stock and, therefore, the price for purchase rights under this plan is based upon 85% of the average of the high and low prices of the Common Stock on November 4, 1996, as reported on the National Association of Securities Dealers Automated Quotations System.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Certain Documents by Reference ----------------------------------------------- The following documents filed by Cupertino National Bancorp (the "Registrant") with the Commission are incorporated in this Registration Statement by reference: (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (b) All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 1995. (c) The description of the class of securities which is contained in the Registrant's Registration Statement on Form 8-A, as amended, including any amendment or report filed for the purpose of updating such information. All other documents filed by the Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment to this Registration Statement which indicate that all securities offered 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 filing of such documents. Any statement made in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which is also incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities ------------------------- Not applicable. Item 5. Interests of Named Experts And Counsel -------------------------------------- Not applicable. Item 6. Indemnification of Directors And Officers ----------------------------------------- The Company's Articles of Incorporation provide that the liability of the directors for monetary damages shall be eliminated to the fullest extent permissible under California law. Pursuant to California law, the Company's directors shall not be liable for monetary damages for breach of the directors' fiduciary duty of care to the Company and its shareholders. However, this provision does not eliminate the duty of care, and in appropriate circumstances, equitable remedies such as injunctive or other forms of non-monetary relief will remain available under California law. In addition, each director will continue to be subject to liability for (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the Company or its shareholders or that involve the absence of good faith on the part of the director, (iii) any transaction from which a director derived an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the director's duty to the Company or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the Company or its shareholders, (v) acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the Company or its shareholders, (vi) any transaction that constitutes an illegal distribution or dividend under California law, and (vii) any transaction involving an unlawful conflict of interest between the director and the Company under California law. The provision also does not affect a director's responsibilities under any other law, such as the federal securities laws or state or federal environmental laws. Item 7. Exemption from Registration Claimed ----------------------------------- Not applicable. Item 8. Exhibits -------- See Exhibit Index. Item 9. Undertakings ------------ 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: (a) To include any prospectus required by Sec tion 10(a)(3) of the Securities Act; (b) 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; (c) 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 1(a) and 1(b) 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 post- effective amendment any of the securities being registered which remain unsold at the termination of the offering. 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 or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to 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. 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 foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the 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 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. The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the Prospectus, to each person the Prospectus is sent or given, the latest Annual Report to security holders that is incorporated by reference in the Prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing of 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 Cupertino, State of California on October 17, 1996. CUPERTINO NATIONAL BANCORP By /s/ C. Donald Allen --------------------------- C. Donald Allen, Chief Executive Officer KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints C. Donald Allen and Steven C. Smith his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, and to file the same with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated on October 17, 1996. Signature Title /s/ C. Donald Allen - --------------------------- C. Donald Allen Chief Executive Officer, President and Director (Principal Executive Officer) /s/ Steven C. Smith - --------------------------- Steven C. Smith Executive Vice President, Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) /s/ David K. Chui - --------------------------- David K. Chui Director /s/ Carl E. Cookson - --------------------------- Carl E. Cookson Director /s/ Jerry R. Crowley - --------------------------- Jerry R. Crowley Director /s/ Janet M. DeCarli - --------------------------- Janet M. DeCarli Director /s/ John M. Gatto - --------------------------- John M. Gatto Director /s/ William H. Guengerich - --------------------------- William H. Guengerich Director /s/ James E. Jackson - --------------------------- James E. Jackson Director /s/ Rex D. Lindsay - --------------------------- Rex D. Lindsay Director and Vice Chairman of the Board - --------------------------- Glen McLaughlin Director and Chairman of the Board /s/ Norman Meltzer - --------------------------- Norman Meltzer Director /s/ Dick J. Randall - ---------------------------- Dick J. Randall Director /s/ Dennis S. Whittaker - ---------------------------- Dennis S. Whittaker Director EXHIBIT INDEX 5.1 Opinion of Manatt, Phelps & Phillips 23.1 Consent of Manatt, Phelps & Phillips (see Exhibit 5.1). 23.2 Consent of Independent Public Accountants 25.1 Power of Attorney (included on signature page hereof) 99.1 Cupertino National Bancorp Employee Stock Purchase Plan, as amended 99.2 Cupertino National Bancorp 1989 Non-Qualified Stock Option Plan, as amended EX-5 2 EX. 5.1 OPINION OF MANATT, PHELPS & PHILLIPS Exhibit 5.1 Opinion of Manatt, Phelps & Phillips MANATT - -------- PHELPS - -------- PHILLIPS - -------- ATTORNEYS AT LAW November 5, 1996 Cupertino National Bancorp 20230 Stevens Creek Boulevard Cupertino, California 95014 RE: CUPERTINO NATIONAL BANCORP REGISTRATION STATEMENT ON FORM S-8 REGISTERING SHARES ISSUABLE UNDER THE CUPERTINO NATIONAL BANCORP EMPLOYEE STOCK PURCHASE PLAN AND THE CUPERTINO NATIONAL BANCORP 1989 NON-QUALIFIED STOCK OPTION PLAN Ladies and Gentlemen: At your request, we have examined the Registration Statement on Form S-8 (the "Registration Statement") being filed by Cupertino National Bancorp ("Company") with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended,of up to 95,000 shares of the Common Stock, without par value, of the Company which may be issued pursuant to the exercise of options and purchase rights granted under the Cupertino National Bancorp Employee Stock Purchase Plan and the Cupertino National Bancorp 1995 Stock Option Plan (the "Plans"). We have examined all instruments, documents and records which we deemed relevant and necessary for the basis of our opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. Based on such examination, we are of the opinion that the 95,000 shares of Common Stock which may be issued upon exercise of options and purchase rights granted under the Plans are duly authorized shares of the Company's Common Stock, and, when issued against payment of the purchase price therefor in accordance with the provisions of the Plans, will be validly issued, fully paid and non-assessable. This opinion is issued to you solely for use in connection with the Registration Statement on Form S-8 and is not to be quoted or otherwise referred to in any financial statements of the Company or related document, nor is it to be filed with or furnished to any government agency or other person, without the prior written consent of this Firm. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement on Form S-8 which is being filed on behalf of the Company in connection with the registration of the aforementioned shares of Common Stock under the Securities Act of 1933, as amended. Very truly yours, MANATT, PHELPS & PHILLIPS, LLP MANATT, PHELPS & PHILLIPS, LLP 11355 West Olympic Boulevard, Los Angeles, California 90064-1614 310-312-4000 FAX 310-312-4224 Los Angeles - Washington, D.C. - Nashville EX-23 3 EX. 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS EXHIBIT 23.2 Consent of Independent Public Accountants We consent to the incorporation by reference in the registration statement of Cupertino National Bancorp and Subsidiary on Forms S-8 (re: Employee Stock Purchase Plan and 1989 Non-Qualified Stock Option Plan) of our report dated January 26, 1996, on our audit of the consolidated financial statements of Cupertino National Bancorp and Subsidiary as of and for the year ended December 31, 1995 which report is included in Cupertino National Bancorp and Subsidiary's 1995 Annual Report on Form 10-K. Coopers & Lybrand L.L.P. San Francisco, California November 5, 1996 EX-99 4 EX. 99.1 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 99.1 Cupertino National Bancorp Employee Stock Purchase Plan As amended effective May 16, 1996 CUPERTINO NATIONAL BANCORP EMPLOYEE STOCK PURCHASE PLAN (As Amended Effective May 16, 1996) A. PURPOSE, HISTORY AND DESCRIPTION The Employee Stock Purchase Plan (the "Purchase Plan") of Cupertino National Bancorp (the "Company") provides eligible employees of the Company and its Designated Subsidiaries with an opportunity to purchase shares of the Company's Common Stock through payroll deductions. The Purchase Plan, under which 133,934(1) shares of the Company's Common Stock are reserved for issuance to all employees of the Company and its Designated Subsidiaries who meet certain minimum employment criteria, was adopted in its original form by the Board of Directors of Cupertino National Bancorp (the "Board") on February 21,1991, and amended from time to time. The following terms shall have the meanings defined below: (a) "Code" means the Internal Revenue Code of 1986, as amended. (b) "Continuous Status as an Employee" shall mean the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Company, provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute. (c) "Designated Subsidiaries" means the Subsidiaries which have been designated by the Board from time to time in its sole discretion as eligible to participate in the Purchase Plan. (d) "Employee" means any person, including an officer, who is customarily employed for at least twenty (20) hours per week and more than five (5) months in a calendar year by the Company or one of its Designated Subsidiaries. (1) The number of shares is 55,000 adjusted for stock dividends subsequent to the date of the original approval of the Purchase Plan. (e) "Parent" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if at the time of the granting of the option, each of the corporations other than the Company owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (f) "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing at least 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. B. SHARE RESERVE The maximum number of shares which may be issued under the Purchase Plan is 133,934(2) shares of the Company's authorized but unissued Common Stock (the "Shares") subject to adjustment upon changes in capitalization of the Company as provided in paragraph N below. In the event that any option granted under the Purchase Plan (a "Plan Option") for any reason expires or is terminated, the Shares allocable to the unexercised portion of such Plan Option may again be made subject to a Plan Option. The Shares to be sold to participants in the Purchase Plan may be, at the election of the Company, either treasury shares or shares authorized but unissued. If the total number of Shares which would otherwise be subject to Plan Options granted pursuant to paragraph G hereof on the Offering Date of an Offering Period exceeds the number of Shares then available under the Purchase Plan (after deduction of all Shares for which options have been exercised or are then outstanding), the Company shall make a pro rata allocation of the Shares remaining available for option grant in as uniform and equitable a manner as is practicable. In such event, the Company shall give written notice of such reduction of the number of Shares subject to a Plan Option to each Participant affected thereby and shall return any excess funds accumulated in each Participant's account as soon as practicable after the termination of such Offering Period. (2) The number of shares is 55,000 adjusted for stock dividends subsequent to the date of the original approval of the Purchase Plan. C. ADMINISTRATION The Purchase Plan may be administered by the Board or by a duly appointed committee of the Board. Any subsequent references to the Board shall also mean the committee if it has been appointed. All questions of interpretation of the Purchase Plan or of any Plan Options shall be determined by the Board, and such determinations shall be final, binding and conclusive upon all persons having an interest in the Purchase Plan and/or any Plan Option. Subject to the provisions of the Purchase Plan, the Board shall determine all of the relevant terms and conditions of Plan Options granted pursuant to the Purchase Plan; provided, however, that all Participants granted Plan Options pursuant to the Purchase Plan shall have the same rights and privileges within the meaning of section 423(b)(5) of the Code. All expenses incurred in connection with the administration of the Purchase Plan shall be paid by the Company. D. ELIGIBILITY Any Employee is eligible to participate in the Purchase Plan and any Offering under the Purchase Plan except the following: (i) an Employee who has not completed three months of continuous employment with the Company or Designated Subsidiary as of the commencement of the Offering Period (as hereinafter defined); and (ii) an Employee who (a) owns or (b) holds options to purchase, or who, as a result of participation in the Purchase Plan, would (a) own or (b) hold options to purchase, stock of the Company possessing five percent or more of the total combined voting power or value of all classes of the Company within the meaning of section 423(b)(3) of the Code. E. OFFERING DATES (i) OFFERING PERIODS. The Purchase Plan shall be implemented by four annual offering periods of three months' duration (each of which referred to herein as an "Offering Period"), commencing on the first day of each calendar quarter (January 1, April 1, July 1, and October 1) and ending on the last day of each calendar quarter (March 31, June 30, September 30, and December 31). The first Offering Period shall commence on July 1, 1991. The Board may, however, establish a different term for one or more future Offerings and/or different commencing and/or ending dates for such Offerings without Shareholder approval, if such change is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering Period to be affected. An employee who becomes eligible to participate in the Purchase Plan after an Offering Period has commenced shall not be eligible to participate during such Offering Period. The first day of an Offering Period shall be the "Offering Date" for such Offering Period. (ii) GOVERNMENT APPROVAL; SHAREHOLDER APPROVAL. Notwithstanding any other provisions of the Purchase Plan to the contrary, any Plan Option granted pursuant to the Purchase Plan shall be subject to (a) obtaining all necessary governmental approvals and/or qualifications of the sale and/or issuance of the Plan Options and/or the Shares, and (b) in the case of Plan Options with an Offering date after an amendment to the Purchase Plan, obtaining any necessary approval of the shareholders of the Company required by paragraph R below. F. PARTICIPATION IN THE PURCHASE PLAN (i) INITIAL PARTICIPATION. An eligible Employee may elect to become a Participant effective on the first Offering Date after satisfying the eligibility requirements set forth in paragraph D above by delivering a subscription agreement authorizing payroll deductions (a "Subscription Agreement") to the Company's payroll office at such time at least seven (7) days prior to an Offering Date as may be established by the Company (the "Enrollment Date"). An eligible Employee who does not deliver a Subscription Agreement to the Company's payroll office prior to the Enrollment Date for the first Offering Date after becoming eligible to participate in the Purchase Plan shall not participate in the Purchase Plan for that Offering Period or for any subsequent Offering Period unless such Employee subsequently enrolls in the Purchase Plan by filing a Subscription Agreement with the Company prior to the applicable Enrollment Date for such subsequent Offering Date. (ii) AUTOMATIC PARTICIPATION IN SUBSEQUENT OFFERINGS. A participant shall automatically participate in each succeeding Offering Period until such time as such Participant withdraws from the Purchase Plan pursuant to paragraph K below or terminates employment with the Company. A Participant is not required to file an additional Subscription Agreement for such Offering Periods in order to automatically participate therein. G. RIGHT TO PURCHASE SHARES Subject to the limitations set forth in paragraphs B, I(iii), I(v), and J(ii), on each Offering Date, each Participant shall be granted a Plan Option to purchase (at the purchase price determined under paragraph H) a number of whole Shares arrived at by dividing (a) an amount equal to 10% of the Participant's base Compensation for the Offering Period beginning on such Offering Date determined at the rate of such Participant's base Compensation in effect as of such Offering Date by (b) 85% of the fair market value of a share of the Company's Common Stock on the Offering Date. "Compensation" includes all amounts paid in cash and includable as "wages" subject to tax under section 3101(a) of the Code without applying the dollar limitation of section 3121(a) of the Code. Accordingly, "Compensation" includes salaries, commissions, bonuses and contributions made at the direction of the Participant pursuant to certain qualified cash or deferred arrangements. "Compensation" does not include reimbursements of expenses, allowances, or any amount deemed received by a Participant without the actual transfer of cash or any amounts directly paid pursuant to the Purchase Plan or any other stock purchase or stock option plan. The fair market value of a share of the Company's Common Stock shall be determined in accordance with paragraph H. H. PURCHASE PRICE The purchase price at which Shares may be acquired in any Offering under the Purchase Plan shall be set by the Board. Unless otherwise provided by the Board before the commencement of an Offering Period, the purchase price for the Offering Period shall be 85% of the lesser of (i) the fair market value of the Company's Common Stock, as determined by the Board, on the Offering Date of such Offering Period or (ii) the fair market value of the Company's Common Stock, as determined by the Board, on the last day of the Offering Period. In no event may the purchase price be lower than the price specified in the previous sentence. The fair market value of the Company's Common Stock at any point in time has been determined to be the average of the high and low sales prices of the Company's Common Stock on such date as reported on the National Association of Securities Dealers Automated Quotation ("NASDAQ") National Market System. I. PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS (i) ACCUMULATION OF PAYROLL DEDUCTIONS. The purchase price of Shares to be acquired in an Offering Period shall be accumulated by payroll deductions over the Offering Period. Except as set forth below, the amount of Compensation to be withheld from a Participant's Compensation during each pay period shall be determined by the Participant's subscription agreement. (ii) DECREASE OF PAYROLL DEDUCTIONS. During an Offering Period, a Participant may elect to decrease the rate of payroll deductions from his or her Compensation by filing an amended Subscription Agreement with the Company on or before the "Change Notice Date". The "Change Notice Date" shall initially be the seventh day prior to the end of the first pay period for which such election is to be effective; however, the Company may change such Change Notice Date from time to time. (iii) MAXIMUM DEDUCTIONS. The amount of payroll deductions with respect to the Purchase Plan for any Participant during any pay period shall not exceed 10%, or such other rate as may be determined from time to time by the Board, of the Participant's Compensation (as hereinabove defined) for such pay period; provided, however, that in the event the Offering Period is shorter than 13 weeks, the maximum withholding percentage shall be adjusted to equal 10%, or such other rate as may be determined from time to time by the Board, multiplied by 13 and divided by the number of weeks in the Offering Period. (iv) COMMENCEMENT OF PAYROLL DEDUCTIONS. Payroll deductions shall commence on the first payday following the Offering Date of an Offering Period and shall continue to the end of such Offering Period unless sooner altered or terminated as provided in the Purchase Plan. (v) CERTAIN RULES TO BE ESTABLISHED BY COMPANY. The Company may, from time to time, establish (i) a minimum required amount of payroll deductions for participation in any Offering, (ii) limitations on the frequency and/or number of changes in the amount of payroll deductions during an Offering, (iii) such other limitations or procedures as deemed advisable by the Company in the Company's sole discretion which are consistent with the Purchase Plan. (vi) NO INTEREST ON PAYROLL DEDUCTION. Interest shall not be accrued or paid on payroll deductions from a Participant's Compensation. (vii) PARTICIPANT ACCOUNTS. Individual accounts shall be maintained for each Participant. All payroll deductions from a Participant's compensation shall be credited to the Participant's account under the Purchase Plan and shall be deposited with the general funds of the Company. All payroll deductions received or held by the Company may be used by the Company for any corporate purpose. J. PURCHASE OF SHARES (i) PURCHASE. On the last day of an Offering Period, each Participant who has not withdrawn from the Offering or whose employment has not terminated on or before such last day shall automatically purchase that number of whole Shares arrived at by dividing the total amount credited to Participant's account pursuant to paragraph I(vii) above by the Purchase Price established pursuant to paragraph H above (subject to the limitation in paragraph J(ii) below). All additional cash remaining in the Participant's account for such completed Offering shall be refunded to the Participant as soon as practicable after the last day of the Offering Period. In the event the cash to be returned to a Participant pursuant to the preceding sentence is an amount less than the amount necessary to purchase a whole Share, the Company shall maintain such cash in the Participant's account to be applied toward the purchase of Shares in the next subsequent Offering. (ii) FAIR MARKET VALUE LIMITATION. No participant shall be granted a Plan Option which would permit the Participant to purchase Shares under the Purchase Plan (and all similar plans of the Company and any Subsidiary) at a rate which exceeds $25,000 of the fair market value of such Shares (determined at the time of grant) for each calendar year in which such Plan Option is outstanding. (iii) RIGHTS AS A SHAREHOLDER AND EMPLOYEE. A Participant shall have no rights as a shareholder by virtue of the Participant's participation in the Purchase Plan until the date of issuance of a certificate or certificates for the Shares being purchased pursuant to the exercise of the Participant's Plan Option. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date such certificate or certificates is issued. Nothing in the Purchase Plan shall confer upon a Participant any right to continue in the employ of the Company or interfere in any way with any right of the Company to terminate the Participant's employment at any time. (iv) WITHHOLDING TAX. At the time the Shares are purchased for a Participant, the Company shall withhold from the Participant's Compensation the amount necessary to make adequate provision for federal and state withholding obligations of the Company, if any, which arise upon such purchase. K. WITHDRAWAL (i) NOTICE OF WITHDRAWAL. A participant may withdraw all, but not less than all, of the payroll deductions credited to his account under the Purchase Plan by signing and delivering to the Company's payroll office a written notice of withdrawal on a form provided by the Company for such purpose. Such withdrawal may be elected at any time prior to the end of the Offering Period. Unless otherwise indicated, withdrawal from an Offering does not result in a withdrawal from the Purchase Plan or any succeeding Offering pursuant to the Purchase Plan. A Participant is prohibited from again participating in the current Offering upon withdrawal from such Offering at any time. (ii) RETURN OF PAYROLL DEDUCTIONS. Upon withdrawal from an Offering the Participant's interest in that Offering shall terminate, and, as soon as practical after the withdrawal, the withdrawn Participant's accumulated payroll deductions shall be returned to the Participant. (iii) WITHDRAWAL FROM THE PURCHASE PLAN; SUBSEQUENT PARTICIPATION. A Participant may withdraw from the Purchase Plan by signing and delivering to the Company's payroll office a written notice of withdrawal on a form provided by the Company for such purpose. In the event a Participant voluntarily elects to withdraw from the Purchase Plan, the Participant may not resume participation in the Purchase Plan during the same Offering Period, but may participate in any succeeding Offering under the Purchase Plan by filing a new authorization for payroll deductions in the same manner as set forth above for initial participation in the Purchase Plan. L. TERMINATION OF EMPLOYMENT Termination of a Participant's Continuous Status as an Employee for any reason, including retirement or death, or the failure of a Participant to remain an Employee eligible to participate in the Purchase Plan, shall terminate the Participant's participation in the Purchase Plan immediately. Upon such termination, the payroll deductions credited to the Participant's account shall be returned to the Participant (or in the case of the Participant's death, to the Participant's legal representative) and all rights under the Purchase Plan shall terminate. A Participant whose participation has been so terminated may again become eligible to participate in the Purchase Plan by again satisfying the requirements of paragraph D above. M. DESIGNATION OF BENEFICIARY A Participant may file a written designation of a beneficiary who is to receive Shares and/or cash, if any, from such Participant's account under the Purchase Plan in the event of such Participant's death at a time when cash or Shares are held for his account. Such designation of beneficiary may be changed by the Participant at any time by written notice. In the event of the death of a Participant in the absence of a valid designation of a beneficiary who is living at the time of such Participant's death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant; or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant; or if no spouse, dependent or relative is known to the Company, to such other person as the Company may reasonably designate. N. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION Subject to any required action by the shareholders of the Company, the number of Shares covered by each Plan Option under the Purchase Plan which has not been exercised and the number of shares of Common Stock which have been authorized for issuance under the Purchase Plan but have not yet been placed under option (collectively, the "Reserves"), as well as the price per share of Common Stock covered by each Plan Option under the Purchase Plan which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, stock dividend, combination or reclassification of the Common Stock or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to a Plan Option. In the event of a proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. 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, each outstanding Plan Option under the Purchase Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the "Acquiring Corporation"). If the Acquiring Corporation elects not to assume or substitute for the outstanding Plan Options, the Board may, in its sole discretion and notwithstanding any other provision herein to the contrary, adjust the ending date of the then current Offering Period to a date on or before the effective date of such proposed transaction. If the Board makes such an adjustment to the ending date of the Offering Period, the Board shall notify the Participants of such new ending at least ten days in advance thereof. The board may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding Plan Option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of shares of its outstanding Common Stock, and in the event of the Company being consolidated with or merged into any other corporation. O. TRANSFERABILITY Neither payroll deductions credited to a Participant's account nor any rights with regard to the exercise of a Plan Option or to receive Shares under the Purchase Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in paragraph M hereof) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with paragraph K. P. REPORTS Each Participant who purchases Shares in an Offering period shall receive as soon as practical after the last day of each Offering Period a report of such Participant's account setting forth the total payroll deductions accumulated, the number of Shares purchased and the remaining cash balance to be refunded or retained in the Participant's account pursuant to paragraph J(i) above, if any. Q. TERM OF THE PURCHASE PLAN The Purchase Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the shareholders of the Company. The Purchase Plan shall continue until terminated by the Board or until all of the Shares reserved for issuance under the Purchase Plan have been issued, whichever shall come first. R. AMENDMENT OR TERMINATION OF THE PURCHASE PLAN The Board may at any time amend or terminate the Purchase Plan, except that such termination cannot affect Plan Options previously granted under the Purchase Plan, nor may any amendment make any change in a Plan Option previously granted under the Purchase Plan which would adversely affect the right of any Participant (except as may be necessary to qualify the Purchase Plan pursuant to section 423 of the Code), nor may any amendment be made without obtaining the approval of the shareholders of the Company within 12 months of the adoption of such amendment if such amendment would authorize the sale of more shares than are authorized for issuance under the Purchase Plan, or change the designation of the employees (or class of employees) eligible for participation in the Purchase Plan, or materially increase the benefits which may accrue to Participants under the Purchase Plan. S. NOTICES All notices or other communications by a Participant to the Company in connection with the Purchase Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. T. SHAREHOLDER APPROVAL The Purchase Plan and any increase in the number of shares reserved under the Purchase Plan must be approved by the holders of a majority of the outstanding shares of voting stock of the Company within twelve months before or after the date the Purchase Plan has been adopted or the increase in the number of Shares reserved under the Purchase Plan has been approved by the Board. U. CONDITIONS UPON ISSUANCE OF SHARES Shares shall not be issued with respect to a Plan Option unless the exercise of such Plan Option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of a Plan Option and if required by applicable securities laws, the Company may require the Participant for whose account the Plan Option is being exercised to represent and warrant at the time of such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. V. ERISA AND INTERNAL REVENUE CODE SECTION 401 The Purchase Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended and is not qualified under section 401(a) of the Code. EX-99 5 EX. 99.2 1989 NON-QUALIFIED STOCK OPTION PLAN CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan Page 1 of 6 EXHIBIT 99.2 Cupertino National Bancorp 1989 Non-Qualified Stock Option Plan As amended effective May 16, 1996 CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan (As Amended Effective May 16, 1996) Section 1. DESCRIPTION OF PLAN. This is the Non- Qualified Stock Option Plan, dated as of January 19, 1989 (the "Plan") of Cupertino National Bancorp, a California corporation (the "Company"). Under this Plan, directors of the Company or any of its subsidiaries, to be selected as below set forth, may be granted common options ("Options") to purchase shares of the Common Stock of the Company ("Common Stock"). For purposes of this Plan, the term "subsidiary" means any corporation 50% or more of the voting stock of which is owned by the Company or by a subsidiary (as so defined) of the Company. It is intended that the Options under this Plan will not qualify for treatment as incentive stock options under Section 422A of the Internal Revenue Code of 1954, as amended (the "Code"). Section 2. PURPOSE OF PLAN. The purpose of this Plan and of granting Options to directors who are not bank employees is to further the growth, development and financial success of the Company and its subsidiaries by providing additional incentives to such directors by assisting them to acquire shares of Common Stock and to benefit directly from the Company's growth, development and financial success. Section 3. ELIGIBILITY. The persons shall be eligible to receive grants of Options under this Plan shall be the directors of the Company or any of its subsidiaries. A person who holds an Option is herein referred to as an "Optionee". More than one Option may be granted to any one Optionee. Section 4. ADMINISTRATION. The Plan shall be administered by a committee (the "Non-Qualified Option Committee" or "Option Committee" herein) to be composed of not less than three persons who shall be members of the Board of Directors (the "Board"). Members of the Option Committee shall be appointed originally and as vacancies occur by the Board, to serve at the pleasure of the Board. The Board may serve as the Option Committee. The initial Option Committee shall be the three members of the Executive Committee who are not also bank employees. The Option Committee shall meet at such times and places as it determines. A majority of its members shall constitute a quorum, and the decision of a majority of those present at any meeting where a quorum is present shall constitute CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan Page 2 of 6 the decision of the Option Committee. A memorandum signed by all of its members shall constitute the decision of the Option Committee without necessity, in such event, for holding an actual meeting. The Option Committee is authorized and empowered to administer the Plan and, subject to the Plan, (i) to select the Optionees, to specify the number of shares of Common Stock with respect to which Options are granted to each Optionee, to specify the Option Price and the terms of Options, and in general to grant Options; (ii) to determine the dates upon which Options shall be granted and the terms and conditions thereof in a manner consistent with this Plan, which terms and conditions need not be identical as to the various Options granted; (iii) to interpret the Plan; (iv) to prescribe, amend and rescind rules relating to the Plan; and (v) to determine the rights and obligations of participants under the Plan. The interpretation and construction by the Option Committee of any provision of the Plan or of any Option granted under it shall be final. No member of the Option Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted under it shall be final. No member of the Option Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted under it. Section 5. SHARES SUBJECT TO THE PLAN. The aggregate number of shares of Common Stock which may be purchased pursuant to the exercise of Options granted under the Plan shall not exceed 110,000(1) shares. Upon the expiration or termination for any reason of an outstanding Option which shall not have been exercised in full, any shares of Common Stock then remaining unissued which shall have been reserved for issuance upon such exercise shall again become available for the granting of ______________________ (1) 75,000 shares, adjusted for stock dividends subsequent to the date of the original approval of the Plan, plus 35,000 shares pursuant to an amendment to the Plan effective May 16, 1996. CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan Page 3 of 6 additional Options under the Plan. Stocks remaining in the Plan upon its expiration shall be returned to the status of authorized but unissued shares. Section 6. EXERCISE OF OPTIONS. Subject to all other provision of this Plan, each Option shall be exercisable for the full number of shares of Common Stock subject thereto, or any part thereof, in such installments and at such intervals as the Option Committee may determine in granting such Option. Each Option shall terminate and expire, and shall no longer be subject to exercise, as the Option Committee may determine in granting such option, but in no event later than ten (10) calendar years after the date of grant thereof. The Option shall be exercised by the Optionee by giving written notice to the Company specifying the number of full shares to be purchased and accompanied by payment of the full purchase price therefore in cash, by check or in such other form of lawful consideration as the Board may approve from time to time, including without limitation the assignment and transfer by the Optionee to the Company of outstanding shares of the Company's Common Stock theretofore held by the Optionee in a manner intended to comply with the provision of Rule 16b-3 under the Securities Exchange Act of 1934. Section 7. ISSUANCE OF COMMON STOCK. The Company's obligation to issue shares of its Common Stock upon exercise of an Option granted under the Plan is expressly conditioned upon the completion of the Company of any registration or other qualification of such shares under any state and/or federal law or rulings or regulations or other representations and undertakings by the Optionee (or his legal representative, heir or legatee, as the case may be) in order to comply with the requirements of any exemption from any such registration or other qualification of such share which the Company in its sole discretion shall deem necessary or advisable. Such required representations and undertakings may include representations and agreements that such Optionee (or his legal representative, heir or legatee): (a) is purchasing such shares for investment and not with any present intention of selling or otherwise disposing thereof; and (b) agrees to have placed upon the face and reverse of any certificates evidencing such shares a legend setting forth (i) any representations and undertakings which such Optionee has given to the Company or a reference thereto, and (ii) that, prior to effecting any sale or other disposition, Optionee will not violate the applicable requirements of state and federal laws and regulatory agencies. Section 8. NONTRANSFERABILITY. No Option shall be assignable or transferable except by will or by the laws of descent and distribution. During the lifetime of an Optionee, any Option granted to him shall be exercisable only by him. After the death of an Optionee, the Option granted to him may be exercised, prior to its termination, only by his legal representative, his legatee or a person who acquired the right to exercise the Option by reason of the death of the Optionee. Section 9. RECAPITALIZATION, REORGANIZATION, MERGER OR CONSOLIDATION. If the outstanding shares of Common Stock of the Company are increased, decreased or exchanged for different securities through reorganization, merger, consolidation, recapitalization, reclassification, stock split, stock dividend or like capital adjustment, a proportionate adjustment shall be CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan Page 4 of 6 made: (a) in the aggregate number of shares of Common Stock which may be purchased pursuant to the exercise of Options granted under the Plan, as provided in Section 5, and (b) in the number, price and kind of share subject to any outstanding Option granted under the Plan. Upon the dissolution or liquidation of the Company or upon any reorganization, merger or consolidation in which the Company does not survive, the Plan and each outstanding Option shall terminate, provided that in such event: (a) each Optionee to whom no Option has been tendered by the surviving corporation in accordance with all of the terms of provision (b) immediately below shall have the right until five (5) days before the effective date of such dissolution, liquidation, reorganization, merger or consolidation, in which the Company is not the surviving corporation, to exercise, in whole or in part, any unexpired Option or Options issued to him without regard to the installment of Section 6 of the Plan or any option agreement; or (b) in its sole and absolute discretion, the surviving corporation may, but shall not be so obligated, tender to any Optionee an Option or Options to purchase shares of the surviving corporation, and such new Option or Options shall contain such terms and provisions as shall be required substantially to preserve the rights and benefits of any option then outstanding under the Plan. To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided in this Section 9, the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number or price of shares of Common Stock subject to any Option shall not be affected by, and no adjustment shall be made by reason of, any dissolution, liquidation, reorganization, merger or consolidation, or any issue by the Company of shares of stock of any class, or rights to purchase or subscribe for stock of any class, or securities convertible into share of stock of any class. The grant of an Option under the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structures or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or any part of its business or assets. Section 10. SUBSTITUTE OPTIONS. If the Company at any time should succeed to the Business of another corporation CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan Page 5 of 6 through a merger or consolidation, or through the acquisition of stock or assets of such corporation, Options may be granted under the Plan to those directors of such corporation or its subsidiaries who, in connection with such succession, become employees of the Company or its subsidiaries, in substitution for Options to purchase stock of such corporation held by them at the time of the succession. The Option Committee shall in its sole and absolute discretion determine the extent to which such substitute Options shall be granted (if at all), the persons to receive such substitute Options (who need not be all Optionees of such corporation), the number of Options to be received by such person, the Option Price of such Option and the terms and conditions of such substitute; provided, however, that the Option Price of each such substituted Option shall be an amount such that, in the sole and absolute judgement of the Option Committee and in compliance with Section 425(a) of the Code, the economic benefit provided by such Option is not greater than the economic benefit represented by the option in the acquired corporation as of the date of the Company's acquisition of such corporation. Any Option substituted for another option in accordance with this Section 19 shall expire upon the earlier of the expiration date of such other option or ten (10) years from the date such Option is granted, and, notwithstanding, the provisions of Section 6 hereof will be exercisable during the period in which the other option would have been exercisable. Any provision of this Section 10 to the contrary notwithstanding, no Option shall be granted, nor any action taken, permitted or omitted, which would have the effect of causing the Plan, or any Option granted hereunder as to which Rule 16b-3 under the Securities and Exchange Act of 1934 may apply, not to comply with such Rule. Section 11. OPTION AGREEMENT. Each Option granted under the Plan shall be evidenced by a written stock option agreement executed by the Company and accepted by the Optionee, which (a) shall contain each of the provision and agreements herein specifically required to be contained therein, including, without limitation, in the case of Options granted prior to the approval of the Plan by the shareholders of the Company as set forth in Section 15, a provision specifically stating that such Option may not be exercised unless and until such approval is obtained; (b) shall contain such other terms and conditions as the Option Committee may deem desirable and which are not inconsistent with the Plan. Section 12. RIGHTS AS SHAREHOLDER. Any Optionee or a transferee of an Option shall have no rights as a shareholder with respect to any shares covered by his Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan Page 6 of 6 distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 6. Section 13. TERMINATION OF OPTIONS. Each Option granted under the Plan shall set forth a termination date thereof, which date shall not be later than ten (10) years from the date such Option is granted. In any event, all Options shall terminate and expire upon the first to occur of the following events: a) the expiration of three (3) months from the date an Optionee is no longer serving as a director, except that if an Optionee is then disabled (within the meaning of Section 105(d)(4) of the Code), the expiration of one (1) year from the date such Optionee is no longer serving as a director; b) The expiration of twelve (12) months from the date of the death of an Optionee if his death occurs while he is a director of the Company or any of its subsidiaries, or c) the termination of the Option pursuant to Section 10 of the Plan. The termination of service as a director or an Optionee by death or otherwise shall not accelerate or otherwise affect the number of shares with respect to which an option may only be exercised; provided, however, that an Option may only be exercised with respect to that number of shares which could have been purchased under the Option had the Option been exercised by the Optionee on the date of such termination. Section 14. WITHHOLDING OF TAXES. The Company shall deduct and withhold from the wages, salary, bonus and other compensation paid by the Company to the Optionee the requisite tax upon the amount of taxable income, if any, recognized by the Optionee in connection with the exercise in whole or in part of any Option or the sale of Common Stock issued to the Optionee upon exercise of the Option, all as may be required from time to time under any federal or state tax laws and regulations. This withholding of tax shall be made from the Company's concurrent or next payment of wages, salary, bonus or other income to the Optionee of the required withholding tax, as the Option Committee may determine. Section 15. EFFECTIVENESS AND TERMINATION OF PLAN. The Plan shall be effective as of the date on which it is adopted by the Board of Directors of the Company; provided, however, that no Option shall be exercisable unless and until the Plan has been approved by the affirmative vote of the holders of a majority of that voting stock of the Company which is represented and is CUPERTINO NATIONAL BANCORP 1989 Non-Qualified Stock Option Plan Page 7 of 6 entitled to vote at a duly held meeting of the Company's shareholders; provided, further, that no Option may be granted hereunder on or after that date which is ten (10) years from the effective date of the Plan. The Plan shall terminate when all Options granted hereunder either have been fully exercised, and all share of Common Stock which may be purchased pursuant to the exercise of such Options have been so purchased, or have expired; provided, however, that the Board of Directors of the Company may in its absolute discretion terminate the Plan at any time. No such termination, other than as provided for in Section 9 hereof, shall in any way affect any Option then outstanding. Section 16. AMENDMENT OF PLAN. The Board may make such amendments to the Plan, and, with the consent of each Optionee affected, in the terms and conditions of granted Options, as it shall deem advisable, including but not limited to, accelerating the time at which an Option may be exercised, but may not, without the written consent of approval of the holders of a majority of that voting stock of the Company which is represented and is entitled to vote at a duly held shareholders' meeting, (a) increase the maximum number of shares subject to Options, except pursuant to Section 9 of the Plan; (b) change the designation of the class of persons eligible to receive Options; or (c) in any manner materially increase the benefits accruing to participants under the Plan, or otherwise modify the Plan such that it fails to meet the requirements of Rule 16b-3 of the Securities and Exchange Commission for the exemption of the acquisition, cancellation, expiration or surrender of Options from the operation of Section 16(b) of the Securities Exchange Act of 1934. -----END PRIVACY-ENHANCED MESSAGE-----