-----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, FquAnrGZAnaEvnqIPtEidmp6DR116Ok0ha/wZ+OztMFeSFpdjeGAQLabZgyriTey FCMthok6i1SWeH4S0SbCSA== 0000891618-96-002835.txt : 19961120 0000891618-96-002835.hdr.sgml : 19961120 ACCESSION NUMBER: 0000891618-96-002835 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961115 EFFECTIVENESS DATE: 19961115 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL COAST BANCORP CENTRAL INDEX KEY: 0000921085 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 770367061 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16257 FILM NUMBER: 96668069 BUSINESS ADDRESS: STREET 1: 301 MAIN ST CITY: SALINAS STATE: CA ZIP: 93901 BUSINESS PHONE: 4084226642 MAIL ADDRESS: STREET 1: P O BOX 450 CITY: SALINAS STATE: CA ZIP: 93902 FORMER COMPANY: FORMER CONFORMED NAME: SALINAS VALLEY BANCORP DATE OF NAME CHANGE: 19940330 S-8 1 FORM S-8 1 As filed with the Securities and Exchange Commission on: November 7, 1996 Registration No. 333-___________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- CENTRAL COAST BANCORP (EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER) CALIFORNIA 77-0367061 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 301 MAIN STREET, SALINAS, CALIFORNIA 93901 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) ---------------------------------------- AMENDED AND RESTATED CENTRAL COAST BANCORP 1994 STOCK OPTION PLAN (FULL TITLE OF THE PLAN) ---------------------------------------- NICK VENTIMIGLIA CENTRAL COAST BANCORP 301 MAIN STREET, SALINAS, CALIFORNIA 93901 (NAME AND ADDRESS OF AGENT FOR SERVICE) --------------- (408) 422-6642 (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE OF PROCESS)
==================================================================================================================== CALCULATION OF REGISTRATION FEE ==================================================================================================================== Proposed Maximum Proposed 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 311,901(1) $19.50(2) $6,082,069.50(2) $1,843.05 ====================================================================================================================
1 Issuable upon exercise of options to be granted under the Amended and Restated Central Coast Bancorp 1994 Stock Option Plan 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 October 31, 1996, pursuant to Rule 457(h). This Registration Statement, including exhibits, consists of 17 sequentially numbered pages. The Exhibit Index is located at page 5. 2 This Registration Statement is being filed pursuant to General Instruction E to Form S-8 to register additional shares of Common Stock of the Registrant with respect to its Amended and Restated Central Coast Bancorp 1994 Stock Option Plan (the "Plan"). Shares of Common Stock offered pursuant to the Central Coast Bancorp 1994 Stock Option Plan were registered with the Commission pursuant to Registration Statement No. 33-89948, filed March 3, 1995 (the "Prior S-8"). Except as modified herein, the contents of the Prior S-8, including exhibits filed with it, are incorporated by reference. The following additional required information is not contained in the Prior S-8: ITEM 4. DESCRIPTION OF SECURITIES The stock of the Registrant being registered is 311,901 additional shares of Common Stock, no par value, of which the Registrant 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 preemptive 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 Registrant 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 Registrant, are entitled to share ratably in all assets remaining after the payment of all liabilities. ITEM 8. EXHIBITS See Index to Exhibits. 3 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 Salinas , California, on this 31st day of October, 1996. CENTRAL COAST BANCORP By: /s/ Nick Ventimiglia --------------------------- Nick Ventimiglia President and Chief Executive Officer Power of Attorney Each person whose signature appears below on this Registration Statement hereby constitutes and appoints Nick Ventimiglia and Thomas A. Sa and each of them, with full power to act without the other, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities (until revoked in writing) to sign registration statements pursuant to the Securities Act of 1933, as amended, relating to the registration of shares of Common Stock of Central Coast Bancorp to be offered pursuant to the Amended and Restated Central Coast Bancorp 1994 Stock Option Plan and to sign any and all amendments (including post-effective amendments and amendments thereto) to such registration statements, 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 each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she 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 or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. 4 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Nick Ventimiglia President, Chief October 31, 1996 - --------------------- Nick Ventimiglia Executive Officer and Director /s/ Thomas A. Sa Chief Financial October 31, 1996 - --------------------- Thomas A. Sa Officer (Principal Financial and Accounting Officer) /s/ Andrew E. Ausonio - --------------------- Director October 31, 1996 Andrew E. Ausonio /s/ C. Edward Boutonnet Director October 31, 1996 - ----------------------- C. Edward Boutonnet /s/ Bradford G. Crandall - ------------------------ Director October 31, 1996 Bradford G. Crandall Director October 31, 1996 - ----------------------- Roger G. Emanuel /s/ Alfred P. Glover Director October 31, 1996 - ----------------------- Alfred P. Glover - ----------------------- Director October 31, 1996 Richard C. Green /s/ Duncan L. McCarter Director October 31, 1996 - ----------------------- Duncan L. McCarter /s/ Robert M. Mraule Director October 31, 1996 - ----------------------- Robert M. Mraule /s/ Louis A. Souza Director October 31, 1996 - ----------------------- Louis A. Souza 5 EXHIBIT INDEX
Exhibit Sequential No. Page No. - --- -------- Exhibit Name ------------ 5 Opinion of Counsel: 6 Bronson, Bronson & McKinnon LLP 23.1 Consent of Independent Auditors: 7 Deloitte & Touche LLP 23.2 Consent of Counsel (See Exhibit 5) 24 Power of Attorney (see signature pages) 99 Amended and Restated Central Coast Bancorp 1994 Stock Option Plan 8-17
EX-5 2 OPINION OF BRONSON, BRONSON & MCKINNON LLP 1 Exhibit 5 October 28, 1996 Board of Directors Central Coast Bancorp 301 Main Street Salinas, CA 93901 Re: Amended and Restated Central Coast Bancorp 1994 Stock Option Plan Gentlemen: We refer to the Registration Statement on Form S-8 to be filed by Central Coast Bancorp (the "Company") with the Securities and Exchange Commission under the Securities Act of 1933, as amended, relating to an additional 311,901 shares of the Company's Common Stock, no par value, issuable under the Amended and Restated Central Coast Bancorp 1994 Stock Option Plan. 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 purposes of this opinion and, upon the basis of such examination, advise you that in our 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, BRONSON, BRONSON & McKINNON LLP jwc/jwc EX-23.1 3 INDEPENDENT AUDITORS' CONSENT 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Central Coast Bancorp on Form S-8 of our report dated January 31, 1996 relating to the financial statements of Central Coast Bancorp appearing in the Form 10-K of Central Coast Bancorp for the year ended December 31, 1995. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE, LLP Salinas, California November 12, 1996 EX-99 4 AMENDED AND RESTATED STOCK OPTION PLAN 1 Exhibit 99 AMENDED AND RESTATED CENTRAL COAST BANCORP 1994 STOCK OPTION PLAN TABLE OF CONTENTS
Page 1. PURPOSE 1 2. ADMINISTRATION 1 3. ELIGIBILITY 2 4. THE SHARES 2 5. EXERCISE PRICE, DURATION, EXERCISABILITY AND TERMINATION OF OPTIONS 3 6. ADDITIONAL TERMS AND CONDITIONS OF OPTIONS 5 7. ADJUSTMENT OF, AND CHANGES IN, THE SHARES 6 8. AMENDMENT AND TERMINATION OF THE PLAN 7 9. EFFECTIVENESS OF THE PLAN 8 10. INFORMATION TO OPTIONEES 8 11. PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE 8 12. NOTICE OF SALE 8 13. INDEMNIFICATION 8
2 AMENDED AND RESTATED CENTRAL COAST BANCORP 1994 STOCK OPTION PLAN 1. PURPOSE The purpose of this Central Coast Bancorp 1994 Stock Option Plan (the "Plan") is to provide a method whereby those key employees and nonemployee directors of Central Coast 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 paragraph (b) below, the Plan shall be administered by the Board of Directors or by one or more duly appointed committees of the Board. 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. (b) Discretionary grants of options to officers and directors of the Company, including directors who are not also employees of the Company, may be made by and all discretion with respect to the material terms of such options may be exercised by either (i) the Board of Directors, or (ii) a duly appointed committee of the Board composed solely of two or more Non-Employee Directors having full authority to act in the matter. The term "Non-Employee Directors" 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"). 1 3 (c) The Board and any such committee(s) referred to in Section 2(a) or 2(b) is referred to hereinafter as the "Committee," except where otherwise expressly provided or where the context requires otherwise. (d) The Committee shall effect the grant of options under the Plan 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 Sections 422(b) or 423(a) of the Code; (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) 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 (vii) 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, officers and directors of the Company (including directors of the Company who are not also employees of the Company) and persons who became employees of the Company within thirty days of the date of grant of an option ("Eligible Persons").. Notwithstanding any other provision of this Plan no Eligible Person shall be granted options to purchase more than an aggregate of 65,000 shares of the Company's common stock under this Plan, as adjusted pursuant to Section 7. 4. THE SHARES The shares of stock subject to options authorized to be granted under the Plan shall consist of 539,398 shares of the Company's 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. Upon the expiration or termination for any reason of an outstanding option under the 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 2 4 exercise price of an option pursuant to Section 6(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 6(c) shall again become available for the grant of options under the Plan. 5. EXERCISE PRICE, DURATION, EXERCISABILITY AND TERMINATION OF OPTIONS Options, in the discretion of the Committee, may be granted at any time prior to the termination of the Plan to Eligible Persons. Options granted by the Committee pursuant to the Plan shall be subject to the following terms and conditions: (a) Grant of Options. Options granted pursuant to the Plan may be either incentive stock options or nonstatutory stock options; provided, however, that Eligible Persons must be an employee of the Company or its affiliates to be granted an incentive stock option. 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. (b) Exercise 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 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. 3 5 (d) Termination of Employment or Director Status. Upon the termination of an optionee's status as an employee or director 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 service as a director 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 termination to exercise the option to the extent the optionee was entitled to exercise such option on the date of such termination; 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 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 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. For the purpose of this paragraph, termination of employment shall be deemed to occur when the Company dispatches notice or advice to the optionee that the optionee's employment is terminated, and not at the time of optionee's receipt thereof. OTHER REASONS: If an optionee's employment or service as a director 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, 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. 4 6 6. ADDITIONAL TERMS AND CONDITIONS OF 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. To the extent permitted by an optionee's stock option agreement, 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 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, 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 transferable 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. To the extent permitted in an optionee's stock option agreement, 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 5 7 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. (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 of the Company, nor limit in any way the right of the Company to terminate an optionee's employment at any time. 7. ADJUSTMENT OF, AND CHANGES IN, THE SHARES (a) Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of common stock covered by each outstanding option, and the number of shares of common stock which have been authorized for issuance under the Plan but as to which no options have yet been granted, as well as the price per share of common stock covered by each such outstanding option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the common stock, or any other increase or decrease in the number of issued 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 of Directors, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance 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 an option. (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 6 8 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 7. 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 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 Section 7 hereof. 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 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 Section 422 of the Code, any successor rules, or other regulatory authority. Except as provided in Section 7, 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 effect 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, unless sooner terminated, shall terminate on March 21, 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. 7 9 9. EFFECTIVENESS OF THE PLAN The Plan became effective upon adoption by the Board of Directors on March 21, 1994 and was approved by the shareholders of the Company at the 1994 annual meeting of shareholders. 10. 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. 11. PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE 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 before any options are granted under the Plan and before any Shares are issued pursuant to the exercise of such options. 12. 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. 13. 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 8 10 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. BBMSF2: 166666 ver 3 October 22, 1996 9 -----END PRIVACY-ENHANCED MESSAGE-----